Topics for discussionWhat is a business plan?Why create a business plan?What to avoid in your business plan?A vision statementThe peopleYour business profileEconomic assessmentCash flow assessmentMarketing and expansion plansDamage control plan8 steps to a great business planDoes your plan include these necessary factors?Formulate (and reformulate) your business planTop ten do’s and don’tsQ and A
What is a business plan?A written outline that evaluates all aspects of the economicviability of your business venture including a description andanalysis of your business prospects.
Why create a business plan?The business plan is your roadmap to chart the course of yourbusiness.Note: You cannot ultimately predict the changing conditionsthat will surface, you may make adjustments to the planthrough the course of time.
Why create a business plan?• A business plan defines your objective using appropriate informationand analysis.• You can use it as a selling tool in dealing with important relationshipsincluding your lenders, investors and banks.• Your business plan can uncover omissions and/or weaknesses in yourplanning process.• You can use the plan to solicit opinions and advice from people.Source: http://www.myownbusiness.org/s2/
What to avoid in yourbusiness plan?• Long-range planning – stick to short-term• Optimism – be conservative with timelines, sales, budgets, etc.• Language that is difficult to understand – be understandable• Dependency on inventions and uniqueness – stick to goodeconomics
A vision statementThis will be a concise outline of your business purpose andgoals.
The peopleYou are the most important ingredient for your success. • Highlight your experiences and how it applies to your new business. • Prepare employee resumes for investor and client reviews.
Your business profileDefine and describe your intended business and exactly howyou plan to go about it. Try to stay focused on the specializedmarket you intend to serve.As a rule, specialists do better than non-specialists.Source: http://www.myownbusiness.org/s2/
Economic assessmentProvide and economic assessment, including your business’appropriateness to the regulatory agencies and thedemographics you wish to interact with.
Cash flow assessmentCreate a one-year cash flow that contains your capitalrequirements, including what could go wrong and how youplan to tackle problems.
Marketing and expansionplansExpansion plans – should describe how you plan to testmarkets and products.
Damage control planAll businesses will experience distress periods. Survivaldepends on how well prepared you are to cope withchallenges.Plan for at least a 12-month liquidity.
8 steps to a great businessplan1. Review the two sample plans furnished in this session.2. Focus and refine your concept based on the data you have compiled.3. Gather all the data you can on the feasibility and the specifics of your business concept.4. Outline the specifics of your business. Using a “what, where, why, how” approach might be useful.5. Include your experience, education, and personal information.6. Fill in the templates at the end of each session with clear language and realistic projections.7. Print off the business plan templates from each session into an MS Word document.8. You may wish to enhance your presentation with bar charts, pie charts and graphics.
Does your plan include thesenecessary factors?A sound business concept – The biggest mistake an entrepreneur canmake is not selecting the right business initially.Understanding your market – Do an initial test of your product in yourchosen marketA healthy, growing and stable industry – Success comes to those who findbusinesses with great economics and not necessarily great inventions oradvances to mankind.Capable management – Hire the people who have skills you admire andlack.
Does your plan include thesenecessary factors?Able financial control – Entrepreneurs need to have a good understandingan practice of accounting.Financial management skills – build a qualified team to evaluate bestoptions for utilizing retained earnings.A consistent business focus – As a rule, people who specialize in a productor service will do better than people who do not specialize.A mind set to anticipate change – Keep a fluid mind set and be aggressivein making revisions as needed.Include plans to take your business online – E-commerce is set to growexponentially in the next decade.
Formulate (and reformulate)your business planDonald N. Sull, associate professor of management practice at the London Business School, in anarticle in the MIT Sloan Management Review, offers some practical suggestions on managinginevitable risks while pursuing opportunities.• Expect your first plan to be provisional and subject to revision.• Ask yourself if your expertise gives you the right to an opinion onyour specific opportunity.• Identify the potential variables that are likely to prove fatal to theventure.• Clearly identify what you see as the key drivers of success.• Raise money with a cushion for contingencies.• Delay hiring key managers until initial rounds of experimentationhave produced a stable business model.• At some point, take the plunge and test your product or service on asmall scale.• Test and refine your business model before expanding youroperations. Source: http://www.myownbusiness.org/s2/
Top ten do’s and don’tsDo’s Don’ts1. Prepare a complete business plan for any 1. Be optimistic in estimating business you are considering. future sales2. Use the business plan templates furnished in 2. Be optimistic in estimating future costs. each session.3. Complete sections of your business plan as you 3. Disregard or discount weaknesses in your plan. proceed through the course. Spell them out.4. Research (use search engines) to find business 4. Stress long-term projections. Better to focus on plans that are available on the internet. projections for your first year.5. Package your business plan in an attractive kit as 5. Depend entirely on the uniqueness of your a selling tool. business or the success of an invention.6. Submit your business plan to experts in your 6. Project yourself as someone you’re not. Be intended business for their advice. brutally realistic.7. Spell out your strategies on how you intend to 7. Be everything to everybody. Highly focused handle adversities. specialists usually do best.8. Spell out the strengths and weaknesses of your 8. Proceed without adequate financial accounting management team. and accounting know-how.9. Include a monthly one-year cash flow projection. 9. Base your business plan on a wonderful concept.10. Freely and frequently modify your business plans 10. Pursue a business not substantiated by your to account for changing conditions. business plan analysis.