BUSINESS PLAN
1
CONTENTS
Elements of a Business Plan
• Executive Summary
• Business Description
• Define Your Market
• Identify and Analys...
INTRODUCTION
What is a Business Plan?
• A business plan is a document which
highlights (for the given year):
– The plan as...
INTRODUCTION (I)
Why should I create a business plan?
• A business plan forces a business to assess
the market place
• It ...
INTRODUCTION (II)
There are seven essential sections of a
business plan. These are the:
• Executive Summary
• Business Des...
EXECUTIVE SUMMARY
The executive summary follows the title page
of the business plan
The purpose of the executive summary i...
Key Elements of an Executive
Summary
1. THE BUSINESS CONCEPT
• What is the business you are proposing, its
products and th...
Key Elements of an Executive
Summary (I)
4. CURRENT BUSINESS POSITION
• This includes any relevant information
about the c...
Business Description
This section often begins with a short
description of the industry, its present
outlook and future po...
Business Description (I)
Describe the product or service you
intend to market
Show how your business will gain the
competi...
Define Your Market
Define the entire market for your
industry
• in terms of size, structure, growth
prospects, trends and ...
Define Your Market (I)
After defining your market you must:
• Estimate your market share for the period
of time the busine...
Identify and Analyse Your
competition
Determine who your competitors are
What strategies are they using to sell
their prod...
Design and Development Plan
The design and development plan
allows investors to understand:
• The design of your product
•...
Design and Development Plan
(I)
The sections included in the development
plan include:
• Product development
• Market deve...
Operations and Management
Plan
Describes how the business functions
• It explains business logistics:
– The responsibiliti...
Financial Statements
The three common financial statements
are:
• The balance sheet
– A statement of your assets, liabilit...
Introduction
Focus your thinking
Establish realistic strategy
Financing and other support
Reaction by others
18
Definition
Document that can convince the reader
that the business can produce enough
revenue to make a satisfactory profi...
Many reasons to build one
BP should sell the writer/reader on the
business:
• Writer: so that you can go out and do it,
• ...
Many Purposes in real life
Bank Financing
Strategic alliances
Large contracts
Key employees
Mergers and acquisitions
Mgt t...
Principles of BP
No right way: plans can differ
Be creative but set a limit
Concise and focused
Captures energy and person...
Sections of Business Plan
Cover Page: contact name and info
Table of contents
Executive summary
The company: past, present...
Sections of Business Plan -
continued
Sales and Promotion
Financial projections
• Profit and loss
• Balance sheet
• Cash f...
OTHER SECTIONS: TECHNOLOGY
BASED
Management team: people who fund
other people value management skills
above “ideas”
Risk ...
PACKAGING THE PLAN
It is a ”living” document
No right/wrong way: the need of reader
is essential
What are the challenges/ ...
Packaging the Plan
Include supporting materials
Don’t make unsupported statements
Designate an outside reviewer/ reader
th...
EXAMPLE………
28
What’s the Business
Objective?
Long Term ISP business
Growth and Sale
National Agenda
Leverage from other activities
Risk ...
Business Planning Process
Identify Market opportunity
Identify Costs
Model Tariffs
Model Business Requirements
30
Market Identification
Define Market segment
• size
• uptake
• competitive position
• market position
31
Identifying Costs
Capital Costs
Recurrent Costs
Marketing Costs
Staff and Administrative Costs
32
Capital Costs
Equipment
• Core routers
– capital cost depreciation at 30% p.a.
• Access servers
– capital cost depreciatio...
Capital Costs
• service platforms
– ratio of service platforms to customer numbers
– depreciation at 30% pa
• staff equipm...
Recurrent Costs
equipment housing costs
• equipment location costs
lease line costs
• Telco Leases
• Radio Equipment Costs...
Marketing costs
advertising
staff
publications, seminars, other marketing
activities
Total can be considered as a
connecti...
Staff and Administrative costs
technical support staff
• usually fixed number
• staff churn cost (30%)
support desk staff
...
Lets put this together for a
medium sized national ISP
Cost Totals
Cost proportions
Scaling overheads as a percentage of
c...
Costs
Leased Line costs - recurrent
expenditure
Link Cost Calculation Worksheet
The costs used here are not derived from a...
International Line costs
International Circuit cost calculation
Capacity of the circuit Kbps 2048
Cost of the circuit - to...
Domestic Line costs
Domestic Circuit cost calculation
Capacity of the circuit Kbps 2048
Average cost of the circuit - tota...
Marginal Transmission cost
Traffic Balance
International 65% 0.24$
Trunk 22% 0.01$
Local 13% -$
Total Delivered cost per M...
Marginal Cost
Total Delivered cost per Mb 0.25$
Overheads
Fixed rate overhead calculation 20%
Marginal Cost 0.30$
• Calcul...
Capital Investment cost
Marginal Cost 0.30$
Return on cashflow 5%
Target Average Retail Price per delivered Megabyte 0.31$...
Retail Pricing Model
Use a 64K access line as the basic unit
of connection
Assume an average line loading of
business usag...
Retail Pricing Model
Retail Model
64K connection Costs
Maximum delivery capacity (Mb) monthly 21427
Average line occupancy...
Risk Reduction
Reduce risk of over exposure by using
‘high’ and ‘low’ volume tariff steps
Client Spread
0
10
20
30
40
50
0...
Stepped Retail Tariff
Fixed Flat rate tariff Monthly 1,806.46$
Dual Rate Tariff 40%
Low band average line occupancy 18%
Hi...
Additional Services
Offer services at a variety of access
speeds
Use differential tariffs to encourage
reselling
Use a fla...
Additional Services
Tiered Access Pricing
Tier Factor
leased PSTN modem, rated at 19.2K 19.2 1.40
64K 64 1.20
128K 128 1.1...
Dial Access
Transmission is a minor cost for dial
access
Also must factor in:
• modem capital cost and limited service lif...
Dial Access
Modem Access Pricing
Cost per modem hour
Average modem speed kbps 26
MBytes/hour 10.4
Average line loading lev...
The Business Challenge
How to manage exponential
GROWTH
53
The Business Plan
Establish tariff position
Estimate Market size for the service
Calculate Revenue
Calculate service provi...
Estimate Demand
Business Plan
Year 1 Year 2 Year 3 Year 4
Services In Operat ion (SIO)
Type
dial 300 2000 4000 10000
dial ...
Calculate Revenue
Revenue $ $ $ $
Connection charges 210,000 588,000 832,000 2,250,000
Access charges
dial 73,962 394,466 ...
Capacit y calculat ion
Calc Line Lease 132 427 1,116 2,827
Act ual Line Lease 128 512 1,024 3,036
Scale the Network
Estima...
Cost s
Equipment 140,000 420,000 640,000 1,800,000
Line Lease 82,500 330,000 660,000 1,956,797
Staff 250,000 350,000 450,0...
The Bottom Line
Revenue 391,093 1,212,584 2,304,541 5,567,800
Cost s 592,500 1,270,000 1,990,000 4,606,797
Profit / loss (...
THANK
YOU
60
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Business plan( for all )

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it just a format of business plan,for more info on about you project and plan plz mail or contact with me.
soundsleep39@yahoo.com

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  • Reference: Tiffany, Laura, “Elements of a Business Plan”, http://wwww.entrepreneur.com/article/print/0,2361,287355,00.html, March 2001
    “Purpose Of The Marketing Plan”, Online Women's Business Center,
    http://www.onlinewbc.gov/docs/market/mk_plan_why.html, May 1997
  • Business plan( for all )

    1. 1. BUSINESS PLAN 1
    2. 2. CONTENTS Elements of a Business Plan • Executive Summary • Business Description • Define Your Market • Identify and Analyse Your competition • Design and Development Plan • Operations and Management Plan • Financial Statements 2
    3. 3. INTRODUCTION What is a Business Plan? • A business plan is a document which highlights (for the given year): – The plan as to how the company will be run – The goals of the company – The money required to meet those goals – The strategy employed to meet those goals (including marketing) 3
    4. 4. INTRODUCTION (I) Why should I create a business plan? • A business plan forces a business to assess the market place • It forces a business to identify a clear marketing strategy • It also serves as a benchmark which the companies performance can be measured against. 4
    5. 5. INTRODUCTION (II) There are seven essential sections of a business plan. These are the: • Executive Summary • Business Description • Define Your Market • Identify and Analyse Your competition • Design and Development Plan • Operations and Management Plan • Financial Statements 5
    6. 6. EXECUTIVE SUMMARY The executive summary follows the title page of the business plan The purpose of the executive summary is to explain to the reader what the business wants The summary should be short and concise (maybe half a page, typically no longer than a page) • People do not have time to waste reading long documents 6
    7. 7. Key Elements of an Executive Summary 1. THE BUSINESS CONCEPT • What is the business you are proposing, its products and the advantages over the competition 2. THE FINANCIAL FEATURES • Highlight the forecasted sales, profits, cash flows and return on investment 3. THE FINANCIAL REQUIREMENTS • What are the start-up costs and the cost of expansion. How will this money be used? 7
    8. 8. Key Elements of an Executive Summary (I) 4. CURRENT BUSINESS POSITION • This includes any relevant information about the company, its formation date, its owners and key personnel 5. MAJOR ACHIEVEMENT • Are there any developments which are essential to the success of the business? These may include prototypes, patents or crucial contracts 8
    9. 9. Business Description This section often begins with a short description of the industry, its present outlook and future possibilities • Include any products or developments that might affect your business State whether the business is new or already in existence; and the type of operation, e.g. is it retail, food service, manufacturing or service-oriented? State who your customers will be and how your product will be distributed and advertised 9
    10. 10. Business Description (I) Describe the product or service you intend to market Show how your business will gain the competitive edge Explain how the business will be profitable 10
    11. 11. Define Your Market Define the entire market for your industry • in terms of size, structure, growth prospects, trends and sales potential Define the specific market that you will be targeting (market segmentation) Define your niche in this market 11
    12. 12. Define Your Market (I) After defining your market you must: • Estimate your market share for the period of time the business plan covers • Position your business • Price your product • Determine the distribution strategy • Create a promotion plan • Estimate your sales potential 12
    13. 13. Identify and Analyse Your competition Determine who your competitors are What strategies are they using to sell their products or service What are they strengths and weaknesses 13
    14. 14. Design and Development Plan The design and development plan allows investors to understand: • The design of your product • How it is produced • How it will be marketing • The development budget required to allow the company to meet its goals 14
    15. 15. Design and Development Plan (I) The sections included in the development plan include: • Product development • Market development • Organisational development Each of these sections should be described from a funding point of view Finally, identify measurable goals for the overall design and development plan 15
    16. 16. Operations and Management Plan Describes how the business functions • It explains business logistics: – The responsibilities of the management team – The task assigned to each company division – Capital and expense requirements related to the operation of the business • And the financial tables – The operating expense table – The capital requirements table – The cost of goods table 16
    17. 17. Financial Statements The three common financial statements are: • The balance sheet – A statement of your assets, liabilities and equity • The Income statement – Reflects when sales are made and expenses are incurred • The statement of cash flows shows – The amount of cash required to meet obligations, when it is required and from where it will come 17
    18. 18. Introduction Focus your thinking Establish realistic strategy Financing and other support Reaction by others 18
    19. 19. Definition Document that can convince the reader that the business can produce enough revenue to make a satisfactory profit and therefore attractive as an investment opportunity 19
    20. 20. Many reasons to build one BP should sell the writer/reader on the business: • Writer: so that you can go out and do it, • Reader: to invest in it Confidence of knowing the issues Improve chances of success 20
    21. 21. Many Purposes in real life Bank Financing Strategic alliances Large contracts Key employees Mergers and acquisitions Mgt team motivation Ours here : Investment by VC or Angels 21
    22. 22. Principles of BP No right way: plans can differ Be creative but set a limit Concise and focused Captures energy and personality of business leader Include negatives and issues Spend some time on it 22
    23. 23. Sections of Business Plan Cover Page: contact name and info Table of contents Executive summary The company: past, present and future The market The Product/service 23
    24. 24. Sections of Business Plan - continued Sales and Promotion Financial projections • Profit and loss • Balance sheet • Cash flow 24
    25. 25. OTHER SECTIONS: TECHNOLOGY BASED Management team: people who fund other people value management skills above “ideas” Risk factors: shows that you know what could go wrong and plan to avert it Marketing plan: if this is “innovative” how are you going to get people to use it 25
    26. 26. PACKAGING THE PLAN It is a ”living” document No right/wrong way: the need of reader is essential What are the challenges/ questions that can be raised by reader: answer these. 26
    27. 27. Packaging the Plan Include supporting materials Don’t make unsupported statements Designate an outside reviewer/ reader that can critique plan 27
    28. 28. EXAMPLE……… 28
    29. 29. What’s the Business Objective? Long Term ISP business Growth and Sale National Agenda Leverage from other activities Risk protection 29
    30. 30. Business Planning Process Identify Market opportunity Identify Costs Model Tariffs Model Business Requirements 30
    31. 31. Market Identification Define Market segment • size • uptake • competitive position • market position 31
    32. 32. Identifying Costs Capital Costs Recurrent Costs Marketing Costs Staff and Administrative Costs 32
    33. 33. Capital Costs Equipment • Core routers – capital cost depreciation at 30% p.a. • Access servers – capital cost depreciation at 30%pa – capital cost per access port charged to customer 33
    34. 34. Capital Costs • service platforms – ratio of service platforms to customer numbers – depreciation at 30% pa • staff equipment – fixed capital cost per staff member – can be converted to recurrent via capital depreciation at a rate of 30% pa 34
    35. 35. Recurrent Costs equipment housing costs • equipment location costs lease line costs • Telco Leases • Radio Equipment Costs – can be converted to recurrent cost of ownership at 20% depreciation of capital value 35
    36. 36. Marketing costs advertising staff publications, seminars, other marketing activities Total can be considered as a connection cost per client 36
    37. 37. Staff and Administrative costs technical support staff • usually fixed number • staff churn cost (30%) support desk staff • usually incremental off the customer base administrative staff • usually fixed number Other administrative costs • billing costs • debt risk factor 37
    38. 38. Lets put this together for a medium sized national ISP Cost Totals Cost proportions Scaling overheads as a percentage of capacity costs generation of the business model via marginal cost examination 38
    39. 39. Costs Leased Line costs - recurrent expenditure Link Cost Calculation Worksheet The costs used here are not derived from any particular network - they are a simple example only Target Line Loading Factor50% Line loading before more bandwidth is required 39
    40. 40. International Line costs International Circuit cost calculation Capacity of the circuit Kbps 2048 Cost of the circuit - total lease cost monthly 120,000$ Megabytes monthly 685,670 Max sustainable loading factor 50% Max sustainable traffic level 342835 Break even cost per megabyte at target load 0.35$ 40
    41. 41. Domestic Line costs Domestic Circuit cost calculation Capacity of the circuit Kbps 2048 Average cost of the circuit - total lease cost monthly 8,000$ Megabytes monthly 685,670 Max sustainable loading 50% Max sustainable traffic level 342,835 cost per megabyte 0.02$ line imbalance 0.75 Topology Factor 1.5 cost per megabyte 0.02$ 41
    42. 42. Marginal Transmission cost Traffic Balance International 65% 0.24$ Trunk 22% 0.01$ Local 13% -$ Total Delivered cost per Mb 0.25$ 42
    43. 43. Marginal Cost Total Delivered cost per Mb 0.25$ Overheads Fixed rate overhead calculation 20% Marginal Cost 0.30$ • Calculate staff and equipment costs as a fixed overhead on the traffic volume - this allows the business to generate working capital to expand 43
    44. 44. Capital Investment cost Marginal Cost 0.30$ Return on cashflow 5% Target Average Retail Price per delivered Megabyte 0.31$ • The enterprise will require initial capital investment which must generate positive earnings, which must be factored into the model 44
    45. 45. Retail Pricing Model Use a 64K access line as the basic unit of connection Assume an average line loading of business usage • average line occupancy of 20% Determine retail pricing from marginal cost at average line occupancy Flat Rate pricing 45
    46. 46. Retail Pricing Model Retail Model 64K connection Costs Maximum delivery capacity (Mb) monthly 21427 Average line occupancy 27% Average line delivery (Mb) monthly 5,785 marginal cost 0.31$ Net service cost (transmission) monthly 1,806.46$ Max service liability (avg traffic flow) monthly 6,690.60$ Max service liability (absolute risk) monthly 9,450.00$ Fixed Flat rate tariff Monthly 1,806.46$ 46
    47. 47. Risk Reduction Reduce risk of over exposure by using ‘high’ and ‘low’ volume tariff steps Client Spread 0 10 20 30 40 50 0% 20% 40% 60% 80% 100% Line Occupancy NumberofClients 47
    48. 48. Stepped Retail Tariff Fixed Flat rate tariff Monthly 1,806.46$ Dual Rate Tariff 40% Low band average line occupancy 18% High band average line occupancy 59% Low monthly 1,204.31$ High monthly 3,934.07$ 48
    49. 49. Additional Services Offer services at a variety of access speeds Use differential tariffs to encourage reselling Use a flater tariffs to strength direct retail position 49
    50. 50. Additional Services Tiered Access Pricing Tier Factor leased PSTN modem, rated at 19.2K 19.2 1.40 64K 64 1.20 128K 128 1.10 256K 256 1.05 512K 512 1.00 Retail Schedule Fixed 2 Tier Low High leased PSTN modem, rated at 19.2K 759$ 281$ 918$ 64K 2,168$ 1,445$ 4,721$ 128K 3,974$ 2,649$ 8,655$ 256K 7,587$ 5,058$ 20,654$ 512K 14,452$ 9,634$ 31,473$ 50
    51. 51. Dial Access Transmission is a minor cost for dial access Also must factor in: • modem capital cost and limited service life • phone support with large after hours component • marketing cost • customer churn rate • target market capture level (competitive price sensivity) 51
    52. 52. Dial Access Modem Access Pricing Cost per modem hour Average modem speed kbps 26 MBytes/hour 10.4 Average line loading level 10% At Marginal Retail 0.32$ Service Activity Loading 300% Retail - minimum level hourly 1.30$ Initial retail marketing margin 30% Retail hourly 1.69$ 52
    53. 53. The Business Challenge How to manage exponential GROWTH 53
    54. 54. The Business Plan Establish tariff position Estimate Market size for the service Calculate Revenue Calculate service provision costs Revenue - costs = bottom line 54
    55. 55. Estimate Demand Business Plan Year 1 Year 2 Year 3 Year 4 Services In Operat ion (SIO) Type dial 300 2000 4000 10000 dial modems 30 200 400 1000 pstn 10 20 40 150 64K 20 40 100 200 128K 4 6 15 40 256K 0 2 8 25 512K 0 0 5 15 TOTAL 64 268 568 1430 55
    56. 56. Calculate Revenue Revenue $ $ $ $ Connection charges 210,000 588,000 832,000 2,250,000 Access charges dial 73,962 394,466 739,623 1,479,246 pstn 7,587 15,174 30,349 113,807 64K 72,837 145,673 364,183 728,365 128K 26,707 40,060 100,150 267,067 256K 0 29,210 116,842 365,131 512K 0 0 121,394 364,183 TOTAL 391,093 1,212,584 2,304,541 5,567,800 56
    57. 57. Capacit y calculat ion Calc Line Lease 132 427 1,116 2,827 Act ual Line Lease 128 512 1,024 3,036 Scale the Network Estimate communications capacity to service the client base 57
    58. 58. Cost s Equipment 140,000 420,000 640,000 1,800,000 Line Lease 82,500 330,000 660,000 1,956,797 Staff 250,000 350,000 450,000 500,000 Marketing 0 50,000 100,000 150,000 Overheads 120,000 120,000 140,000 200,000 TOTAL 592,500 1,270,000 1,990,000 4,606,797 Estimate Costs Factor in service provision costs 58
    59. 59. The Bottom Line Revenue 391,093 1,212,584 2,304,541 5,567,800 Cost s 592,500 1,270,000 1,990,000 4,606,797 Profit / loss (201,407) (57,416) 314,541 961,003 Am I winning or losing at this tariff and market level? 59
    60. 60. THANK YOU 60

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