Essentials Of A Business Plan

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Essentials Of A Business Plan

  1. 1. Writing a Business Plan From Idea to Reality
  2. 2. WHY WRITE A BUSINESS PLAN? <ul><li>FOR SURVIVAL AND GROWTH </li></ul><ul><li>TO OVERCOME EMOTIONAL BIAS </li></ul><ul><li>CONVINCE STAKE HOLDERS –EMPLOYEES,CAPITAL PROVIDERS,PARTNERS </li></ul>
  3. 3. Why Develop a Business Plan <ul><li>All the work you do in thinking up your idea, testing it, studying it, and producing it, has been for nothing if you can’t sell it. Whether you start you own business to produce and sell your invention, subcontract out the manufacturing part, or sell your rights in return for a percentage of the proceeds, you need a business plan .” </li></ul><ul><li>- Pamela Riddle Bird, PhD, Inventing For Dummies CEO, Innovative Product Technologies, Inc. </li></ul>
  4. 4. Elements of a Successful Business Plan <ul><li>Executive Summary </li></ul><ul><li>Company Overview </li></ul><ul><li>Industry Analysis </li></ul><ul><li>Marketplace Analysis </li></ul><ul><li>Internal env.analysis </li></ul><ul><li>Competition analysis </li></ul><ul><li>Marketing Plan </li></ul><ul><li>Operations Plan </li></ul><ul><li>Management Plan </li></ul><ul><li>Financial Plan </li></ul><ul><li>Risks and Contingencies </li></ul><ul><li>Appendices </li></ul><ul><ul><li>3-yr P&L </li></ul></ul><ul><ul><li>3-yr Balance Sheet </li></ul></ul><ul><ul><li>3-yr Cash Flow </li></ul></ul><ul><ul><li>1-yr monthly CF </li></ul></ul><ul><ul><li>Other support docs </li></ul></ul>
  5. 5. Company Overview <ul><li>What business will you be in? </li></ul><ul><li>What is new and unique about your business? </li></ul><ul><li>Name and Address of your Business </li></ul><ul><li>Mission Statement </li></ul><ul><li>Business Goals and Objectives </li></ul><ul><li>Legal form of ownership </li></ul><ul><li>(Sole proprietor, Partnership and company ;Why have you selected this form?) </li></ul>
  6. 6. Mission Statement <ul><li>Describes the principal product or service areas and the primary customer needs the company will attempt to satisfy </li></ul><ul><li>The mission statement should be a concise statement of business strategy and developed from the customer's perspective. </li></ul><ul><li>A MISSION STATEMENT CONCERNS WHAT AN ORGANIZATION IS ALL ABOUT </li></ul><ul><li>A VISION STATEMENT IS WHAT THE ORGANIZATION WANTS TO BECOME </li></ul>
  7. 7. Mission Statement <ul><li>Physical Therapy Massage Business Plan:- </li></ul><ul><li>Our mission is to run a profitable business by providing therapeutic massage in a caring, professional environment. We offer massage in a variety of styles - traditional Swedish Massage, Deep Tissue work, Sports Massage, Hot Stone Massage, Reflexology, and others. Our goal is to tailor the client's experience based on initial interview information, as well as in-the-minute feedback during the massage, to insure the client's comfort and satisfaction, and to increase repeat business. We intend to offer massage that is effective, yet respectful of the client's personal boundaries, so that the experience is relaxing and energizing for both the client and the provider. We are mindful of the overall experience - using quality oils and lotions, appropriate scents, and soothing music, nature sounds or silence - as the client prefers </li></ul>
  8. 8. Mission Statement <ul><li>Coffee and bakery retail Business Plan:- </li></ul><ul><li>Cunt aims to offer high quality coffee, espresso, and pastry products at a competitive price to meet the demand of the middle- to higher-income local market area residents and tourists . </li></ul><ul><li>Car Wash Business Plan:- </li></ul><ul><li>The mission of Soapy Ride is to provide top-quality washing and detail service for luxury car owners in Delhi. Soapy Rides will work to keep employees satisfied in order to maintain impeccable customer service </li></ul><ul><li>Regional Airline Business Plan:- </li></ul><ul><li>Manair International Airlines, Inc. has a mission to provide safe, efficient, low-cost consumer air travel service. Our service will emphasize safety as its highest priority. We will operate the newest and best maintained aircraft available. We will never skimp on maintenance in any fashion whatsoever. We will strive to operate our flights on time. We will provide friendly and courteous &quot;no frill&quot; service </li></ul>
  9. 9. Mission Statement <ul><li>Engineering Consulting Business Plan:- </li></ul><ul><li>Our mission is to provide clients across India North with structural engineering services for all types of buildings, from concept planning through to completion, with a highly skilled professional team working together, using common sense and practical experience. </li></ul><ul><li>Health Club Business Plan :- </li></ul><ul><li>Corp Fitness is a health service that helps businesses and individual workers attain one of the greatest gifts of all--that of good health. Personal gains, such as improved self-esteem and self-motivation, combined with measurable benefits will create tremendous advantages for both the employer and the employee. </li></ul><ul><li>Children's Website Business Plan:- </li></ul><ul><li>ProdigyChild.com offers bright children an entertaining place to interact with each other, the Web, educators, and the world in general. It generates traffic first, valuation for investors, and eventually commerce and profits. It is a healthy place for kids to play, for parents and schools to buy, and a creative and fair work environment for employees. </li></ul>
  10. 10. Mission Statement <ul><li>Ethnic Restaurant Business Plan:- </li></ul><ul><li>Midas touch will be an inspiring restaurant, combining an eclectic atmosphere with excellent and interesting food. The mission is to have not only a great food selection, but also efficient and superior service - customer satisfaction is our paramount objective. Midas touch will be the restaurant of choice for a mature and adult crowd, couples and singles, young and old, male or female. </li></ul><ul><li>Employee welfare, participation, and training are equally important to our success. Everyone is treated fairly and with the utmost respect. Our employees will feel a part of the success of Midas touch Restaurant & Lounge. </li></ul><ul><li>Our concept combines variety, ambiance, entertainment and a superior staff to create a sense of 'place' in order to reach our goal of overall value in the dining/entertainment experience. We offer fair profits for the owners and investors, and a rewarding place to work for the employees. </li></ul>
  11. 11. Mission Statement <ul><li>Yoga Center Business Plan: </li></ul><ul><li>The mission of Way2Heaven Yoga Center is to give the student, whether a beginner or advanced a place to practice Yoga. It is our intention to keep the teaching of Yoga as close to the way we have been taught as possible. It is incumbent for the teacher to always act responsibly and with the student's interest in mind. No matter what we learn or from whom we learn the real and only teacher is within . </li></ul><ul><li>Driving School Business Plan: </li></ul><ul><li>The mission of Minkam Driving School is to provide high quality, convenient and comprehensive driver education courses at the lowest cost. The most important aspect of driver education is SAFETY. It is the goal of Minkam Driving School to have graduates of our programs with the safest driving records of any other competitor in the Pacific Northwest and to exploit that reputation to create greater market share . </li></ul>
  12. 12. Mission Statement <ul><li>Wedding Consultant Business Plan : </li></ul><ul><li>Wed heaven Consultants is a full service company that provides complete consulting services for weddings, holy unions and anniversaries. Our consultants are experienced and dedicated professionals with many years of event planning experience. TLC is unique in that we give our clients our undivided attention. We listen to their needs and work with them to create the event of their dreams. Our clients' wishes become our commands. So whether our client wants a Western, Tropical, Las Vegas or more traditional wedding or anniversary party, we can help. Our services include weddings, honeymoons, receptions, anniversary consultations, budget planning, answers to etiquette questions, as well as full-service referrals to florists, hair stylists, entertainers, musicians, etc </li></ul>
  13. 13. Mission Statement <ul><li>Plastics Recycling Business Plan :- </li></ul><ul><li>Replay Plastics is a manufacturing company dedicated to converting waste plastic materials into commercially viable products, utilizing environmentally friendly recycling and manufacturing methods. We intend to make enough profit to generate a significant return for our investors and to finance continued growth and continued development in quality products. We will also maintain a friendly, fair, and creative work environment, which respects diversity, new ideas and hard work. </li></ul><ul><li>Furniture Manufacturer Business Plan :- </li></ul><ul><li>To deliver a high-quality product, on time and within budget while also providing a fast, error free ordering system </li></ul>
  14. 14. Mission Statement <ul><li>Multi Sport Complex Business Plan:- </li></ul><ul><li>The Supreme Courts is a multisport and fitness complex designed to be used by the residents of Henderson and the surrounding areas. It is our mission to provide the best programs, staff, and equipment, to fully meet the various sports and fitness needs of our members, while generating a profit for the owners and investors. Besides providing an excellent value to our customers, The Supreme Courts is determined to create an unmatched sporting atmosphere that will add to the enjoyment of every member and employee of the facility. Dedicated to the community, The Supreme Courts strives to support and sponsor community events, as well as host them whenever possible. Our hope is that through the use of our facility, members' enjoyment and appreciation for sports, fitness, and for life will be enhanced </li></ul><ul><li>Export Watch Manufacturer Business Plan:- </li></ul><ul><li>Grutzen Watches is a watch company that produces wrist watches for sale in the United States - initially in California. The company will build its image as a quality watch first, and then will begin selling higher profit, luxury watches </li></ul>
  15. 15. Industry Analysis <ul><li>National/Regional economic outlook </li></ul><ul><li>Growth potential and opportunity for a business of your size </li></ul><ul><li>What is the total size of your market? </li></ul><ul><li>Demand Trend </li></ul><ul><li>Porter’s Five Forces Model </li></ul><ul><li>Govt. initiative </li></ul>
  16. 16. Industry Analysis <ul><li>What barriers to entry do you face in entering this market with your new company? Some typical barriers are: </li></ul><ul><ul><li>High capital costs </li></ul></ul><ul><ul><li>High production costs </li></ul></ul><ul><ul><li>High marketing costs </li></ul></ul><ul><ul><li>Consumer acceptance and brand recognition </li></ul></ul><ul><ul><li>Training and skills </li></ul></ul><ul><ul><li>Unique technology and patents </li></ul></ul><ul><ul><li>Unions </li></ul></ul><ul><ul><li>Shipping costs </li></ul></ul><ul><ul><li>Tariff barriers and quotas </li></ul></ul><ul><li>How will you overcome the barriers? </li></ul><ul><li>How could the following affect your company? </li></ul><ul><li>(Political ,economic ,social and economic analysis) </li></ul><ul><ul><li>Change in technology </li></ul></ul><ul><ul><li>Change in government regulations </li></ul></ul><ul><ul><li>Change in the economy </li></ul></ul><ul><ul><li>Change in your industry </li></ul></ul>
  17. 17. MARKETPLACE ANALYSIS <ul><li>Target Market/Customer Base </li></ul><ul><li>Characteristics of the target market: - Demographic profile (age, income, sex, education) - Business customer (industry, size, purchaser) - Geographic parameters </li></ul><ul><li>Size of the market/ expected market share </li></ul><ul><li>Market segmentation </li></ul><ul><li>Customer buying habits </li></ul><ul><li>(seasonality, quantity, average expenditure) </li></ul>
  18. 18. Internal Environment Analysis (STRENGTH - WEAKNESS ) <ul><li>MARKETING </li></ul><ul><li>INNOVATION IN MARKETING </li></ul><ul><li>CUSTOMER SERVICE LEVEL </li></ul><ul><li>PRICING </li></ul><ul><li>CHANNEL POSITION </li></ul><ul><li>ADVERTISING </li></ul><ul><li>SALES PROMOTION </li></ul><ul><li>MARKETING COSTS </li></ul><ul><li>PRODUCT MIX AND LINES </li></ul><ul><li>MARKETING COMMUNICATIONS </li></ul><ul><li>PRODUCT </li></ul><ul><li>PRODUCT QUALITY </li></ul><ul><li>PRODUCT DESIGN </li></ul><ul><li>BRAND POWER </li></ul><ul><li>POSITIONING </li></ul><ul><li>DIFFERENTIATION </li></ul><ul><li>STAGE OF THE PRODUCT LIFE CYCLE </li></ul>
  19. 19. Internal Environment Analysis (STRENGTH - WEAKNESS ) <ul><li>FINANCE </li></ul><ul><li>ASSETS </li></ul><ul><li>LIQUIDITY </li></ul><ul><li>COST OF CAPITAL </li></ul><ul><li>PROFITABILITY </li></ul><ul><li>OVERALL RESOURCE POSITION </li></ul><ul><li>KNOWLEDGE AND DYNAMISM IN TAX PLANNING </li></ul><ul><li>OPERATIONS </li></ul><ul><li>CAPACITY OF PRODUCTION </li></ul><ul><li>LOCATIONAL ADVANTAGE </li></ul><ul><li>RAW MATERIALS – </li></ul><ul><li>COST ,QUALITY </li></ul><ul><li>BREAK EVEN POSITION </li></ul><ul><li>INVENTORY MANAGEMENT </li></ul><ul><li>FLEXIBILITY </li></ul><ul><li>PRODUCTION FACILITIES </li></ul><ul><li>MAINTENANCE </li></ul>
  20. 20. Internal Environment Analysis (STRENGTH - WEAKNESS ) <ul><li>NATURE & QUALITY OF R&D CAPABILITY </li></ul><ul><li>INNOVATION/PATEN </li></ul><ul><li>QUALITY,KNOWLEDGE, </li></ul><ul><li>EXPERTISE AND EXPERIENCE OF PERSONNEL </li></ul><ul><li>LABOUR COSTS </li></ul><ul><li>ORGANIZSATIONAL STRUCTURE </li></ul><ul><li>USE IF IT – EXTENT OF USE AND DEGREE OF SOPHISTICATION </li></ul><ul><li>RESOURCES AVAILABLE </li></ul><ul><li>IN TERMS OF MONEY,PEOPLE,TECHNOLOGY ,MATERIALS ETC… </li></ul>R & D GENERAL FACTORS HUMAN RESOURCES
  21. 21. Internal Environment Analysis <ul><li>What are your Competitive Strategies – Both Tangible and Intangible Distinctive Capabilities. </li></ul><ul><li>What Possible Barriers can you create for competition. </li></ul>
  22. 22. Competition Analysis <ul><li>What important competitors offer comparable products and services? </li></ul><ul><li>What new developments are to be anticipated? </li></ul><ul><li>What target groups do the competitors address? </li></ul><ul><li>How does your product or service distinguish itself from that of the competitors? </li></ul><ul><li>What market shares do your competitors hold? </li></ul><ul><li>How profitably do your competitors work now and how </li></ul><ul><li>profitably will they work in the future (estimates)? </li></ul>
  23. 23. Competition analysis <ul><li>What strategies are the competitors pursuing now and what </li></ul><ul><li>will they pursue in the future (estimate)? </li></ul><ul><li>What distribution channel do the competitors use? </li></ul><ul><li>What marketing strategies are the competitors following? </li></ul><ul><li>Compare your competitive strengths and weaknesses with </li></ul><ul><li>those of your competitors; compile them in an overview </li></ul><ul><li>(development, distribution, marketing and location). </li></ul><ul><li>How enduring will your competitive advantage be </li></ul><ul><li>and why? </li></ul><ul><li>How will the competitors respond to your appearing on the market? How do you intend to respond to this reaction? </li></ul>
  24. 24. Competition Analysis Factor Me Strength Weakness Competitor A Competitor B Importance to Customer Products Price Quality Selection Service Reliability Stability
  25. 25. Competitive Analysis Factor Me Strength Weakness Competitor A Competitor B Importance to Customer Company Reputation Location Appearance Sales Method Credit Policies Advertising Image Expertise
  26. 26. Marketing Plan <ul><li>Product/Service description </li></ul><ul><li>Pricing policy/plans </li></ul><ul><li>Promotion Plans </li></ul><ul><li>Distribution plans </li></ul>
  27. 27. Marketing Plan (Sales Forecast) <ul><li>The forecast should be based on your historical sales, competitor sales figures, the marketing strategies, market research, and industry data </li></ul><ul><li>( u se Sales forecast spreadsheet ) </li></ul><ul><li>You may want to do two forecasts: </li></ul><ul><li>1) a &quot;best guess&quot;, which is what you really expect, and </li></ul><ul><li>2) a &quot;worst case&quot; low estimate that you are confident you can reach no matter what happens </li></ul>
  28. 28. Operational Plan <ul><li>Location of the unit/office </li></ul><ul><li>Equipments required </li></ul><ul><li>Furniture and fixture </li></ul><ul><li>Other requirements </li></ul><ul><li>Time schedule </li></ul><ul><li>Total capital required – Fixed and variable </li></ul>
  29. 29. Operational Plan <ul><li>Legal Environment – </li></ul><ul><li>Describe the following: </li></ul><ul><li>Licensing requirements </li></ul><ul><li>Permits </li></ul><ul><li>Health, workplace, or environmental regulations </li></ul><ul><li>Special regulations covering your industry or profession </li></ul><ul><li>Insurance coverage </li></ul><ul><li>Trademarks, copyrights, or patents (pending, existing, or purchased) </li></ul>
  30. 30. Operational Plan <ul><li>Personnel: </li></ul><ul><li>Number of employees </li></ul><ul><li>Type of labor (skilled, unskilled, and professional) </li></ul><ul><li>Where and how will you find the right employees? </li></ul><ul><li>Quality of existing staff </li></ul><ul><li>Pay structure </li></ul><ul><li>Training methods and requirements </li></ul><ul><li>Who does which tasks? </li></ul><ul><li>Do you have schedules and written procedures prepared? </li></ul><ul><li>Have you drafted job descriptions for employees? If not, take time to write some. They really help internal communications with employees. </li></ul><ul><li>For certain functions, will you use contract workers in addition to employees? </li></ul>
  31. 31. Operational Plan <ul><li>Suppliers:- </li></ul><ul><li>Identify key suppliers </li></ul><ul><li>Names and addresses </li></ul><ul><li>Type and amount of inventory furnished </li></ul><ul><li>Credit and delivery policies </li></ul><ul><li>History and reliability </li></ul><ul><li>Should you have more than one supplier for critical items (as a backup)? </li></ul><ul><li>Do you expect shortages or short-term delivery problems? </li></ul><ul><li>Are supply costs steady or fluctuating? If fluctuating, how would you deal with changing costs? </li></ul>
  32. 32. Operational Plan <ul><li>Credit Policies: </li></ul><ul><li>Do you plan to sell on credit? </li></ul><ul><li>Do you really need to sell on credit? Is it customary in your industry and expected by your clientele? </li></ul><ul><li>If yes, what policies will you have about who gets credit and how much? </li></ul><ul><li>How will you check the creditworthiness of new applicants? </li></ul><ul><li>What terms will you offer your customers; that is, how much credit and when is payment due? </li></ul><ul><li>Will you offer prompt payment discounts? (Hint: Do this only if it is usual and customary in your industry. </li></ul><ul><li>Do you know what it will cost you to extend credit? Have you built the costs into your prices? </li></ul>
  33. 33. Operational Plan <ul><li>Inventory : </li></ul><ul><li>What kind of inventory will you keep: raw materials, supplies, finished goods? </li></ul><ul><li>Average value in stock (i.e., what is your inventory investment)? </li></ul><ul><li>Rate of turnover and how this compares to the industry averages? </li></ul><ul><li>Seasonal buildups? </li></ul><ul><li>Lead-time for ordering? </li></ul><ul><li>Flow Chart </li></ul>
  34. 34. Operation plan (Flow Chart) <ul><li>A FLOW CHART IS A PICTURE OR A MAP THAT </li></ul><ul><li>ACCURATELY PORTRAYS THE SERVICE SYSTEM </li></ul><ul><li>OR THE PRODUCTION FLOW SO THAT DIFFERENT </li></ul><ul><li>PEOPLE INVOLVED IN PROVIDING IT CAN </li></ul><ul><li>UNDERSTAND AND DEAL WITH IT OBJECTIVELY </li></ul><ul><li>REGARDLESS OF THEIR ROLES OR THEIR INDIVIDUAL </li></ul><ul><li>POINTS OF VIEW </li></ul>
  35. 35. , Customer calls Driver picks up package Customer Gives package Customer Service order Driver/Logistics Dispatch to Airport Fly to destination Load on truck Load on Airplane Unload and Sort Customer Receives Package Driver Delivers Package Express Mail Delivery Service Sort Packages Sorting center C ustomer
  36. 36. Sugar Milling Process
  37. 38. Glass Bottle Manufacture
  38. 39. Bio-Diesel Production
  39. 40. Management Plan <ul><li>It includes the key people in the business </li></ul><ul><li>Prepare an Organization Chart </li></ul><ul><ul><ul><li>What is their experience </li></ul></ul></ul><ul><ul><ul><li>Education/Work History </li></ul></ul></ul><ul><ul><ul><li>List duties & responsibilities of management - who is doing what & who do they report too. </li></ul></ul></ul><ul><ul><ul><li>Describe and highlight the key support groups for your management team </li></ul></ul></ul><ul><ul><li>(Consultants , Board of Directors, Advisory Council etc ) </li></ul></ul><ul><ul><ul><li>What is the design for the remuneration system. </li></ul></ul></ul><ul><ul><ul><li>Address the weakness of management. </li></ul></ul></ul><ul><ul><ul><li>(Plans to correct these – Financing (hire acct.), Marketing (salesmen, outsource) </li></ul></ul></ul><ul><ul><li>Complete resumes of existing management team members </li></ul></ul><ul><ul><li>should be placed in the appendix. </li></ul></ul>
  40. 41. Financial Plan <ul><li>Start-up costs </li></ul><ul><li>Balance sheets (projected for three years) </li></ul><ul><li>Projected cash flow (monthly first year, quarterly year two and three) </li></ul><ul><li>Profit and loss forecast or statement (annual for three years) </li></ul><ul><li>Pay back period </li></ul><ul><li>Break-even analysis </li></ul><ul><li>( Assumptions used in preparation of financial projections ) </li></ul>
  41. 42. Risks and Contingencies <ul><li>What fundamental opportunities and risks exist for your business project (in regard to technology, customer behavior, competition and the like)? </li></ul><ul><li>In what areas of your company will you have to make adjustments, if certain events occur in the future, and what might those events be? </li></ul><ul><li>How probable is the occurrence of negative events? </li></ul><ul><li>How can you possibly avert these in advance? </li></ul><ul><li>How would you modify your plans in case such an event or such events occur? </li></ul>
  42. 43. Risks and Contingencies <ul><li>What alternative response options do you see for your own company? </li></ul><ul><li>What effects would these potential events have, if you were not to respond? </li></ul><ul><li>To what extent could you, by modifying your plans, limit these effects (in the case of risks) or utilize these effects (in the case of opportunities)? </li></ul><ul><li>How could an expanded capital base help in such a situation? </li></ul><ul><li>What would your planning for the next five business years look like in the best and worst cases? </li></ul>
  43. 44. Include details and studies used in your business plan; for example Brochures and advertising materials Industry studies Blueprints and plans Maps and photos of location Magazine or other articles Detailed lists of equipment owned or to be purchased Copies of leases and contracts Letters of support from future customers Any other materials needed to support the assumptions in this plan Market research studies List of assets available as collateral for a loan
  44. 45. PRESENTATION DETAILS <ul><li>NAME ,LOGO AND NATURE OF THE PROPOSED BUSINESS </li></ul><ul><li>LEGAL ENTITY & LISCENSES REQD. </li></ul><ul><li>LOCATION </li></ul><ul><li>MISSION STATEMENT </li></ul><ul><li>BUSINESS MODEL </li></ul><ul><li>MARKETING PLANS (SWOT,PRICING,SALES,TARGET MARKET,PROMOTION,DISTRIBUTION) </li></ul><ul><li>POSSIBLE ENTRY BARRIERS </li></ul>
  45. 46. PRESENTATION DETAILS <ul><li>RISKS AND CONTINGENCIES </li></ul><ul><li>PRODUCTION/SERVICE FLOW CHART </li></ul><ul><li>ORGANIZATIONAL CHART/KEY PERSONNEL </li></ul><ul><li>TOTAL CAPITAL REQUIRED </li></ul><ul><li>FINANCING PLANS </li></ul><ul><li>INITIAL SET UP COST </li></ul><ul><li>BREAK EVEN SALES </li></ul>
  46. 47. <ul><li>Time’s Yours! </li></ul>

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