Entreprenuer ship businessplan


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Entreprenuer ship businessplan

  1. 1. By Sravan kumar.M T21100
  2. 2. Importance of Plan for Success of a Venture  Translating a good idea into an effective business requires meticulous planning.  Business plan visualizes what all challenges may emanate on the way, and how the same would be responded to.  Taking action without detailed planning results in teething problems that ultimately lead to failure.  Detailed planning helps in improving the chances of success.
  3. 3. Start-ups Face Greater Challenges in Planning In regard to making a range of untested assumptions on following counts:  The take up rate of your product or service.  The price you can charge.  Distribution channels and time to market.  Cost of production.  Staffing.  Access to capital.
  4. 4. Characteristics of High Growth Potential Ventures Effective Management Team Customer needs Innovative solutions for which customers will willingly pay premium Well-identified target market for sustained money making Over a period of time
  5. 5. Areas for Innovative Businesses  Energy: technology, solar ,wind, fuels for automobiles and in other applications.  Water :scarcity of water, irrigation and other uses of water  Environment :increasing impact of pollutants, need for coming out with environment-friendly and green technologies.  Biotechnology: cultivation of plants, technology, blood screening tests, artificial organs, animal drugs etc.  Internet: web designing, internet marketing, small business equipment, video games, multimedia techniques, books and magazines.  Health: health clubs, exercise machines, healthy food, mobile medical and door to door services, traditional health practices like yoga, Ayurveda
  6. 6. 6 • Childcare and old age care: child care centers, rent-a- grandparent services, old age care etc • Specialty and extravagant goods: laptops, designer baby clothes, beauty parlor services, meat such as of buffalo, ostrich, elk (large northern deer), venison etc • Children’s products and services: health care for new borns, furniture for schools and homes, software for learning maths and science, tutions, games and many • Home and office products: home décor and furnishing, safety and security devices, home and office furniture, technical equipment etc • Stylish, elegant and smart appliances: digital cellular phones, radios, interactive TV, multi sensory robotics, voice recognition products. • Professional development: customized on site computer training, computer literacy, video conferencing organizers etc • Pet pampering: pet hotels, pet grooming and travelling vans, emergency clinics, car furniture, clothing stores
  7. 7. What is a Business Plan? Business plan is a formal written expression of the entrepreneurial vision, describing the strategy and operations of the proposed venture. Business plan is a written document describing all relevant internal and external elements, and strategies for starting a new venture. Contd…
  8. 8. What is a Business Plan?  Business plan is any plan that works for a business to look ahead, allocate resources, focus on key points, and prepare for problems and opportunities.  Business plan is a document that brings together the key elements of a business that include details about products and services, cost, sales and expected profits.
  9. 9. What is a Business Plan? Justification Clear P R O C E S SIt is a . . . that provides . . . that are . . . resulting in a . . . Increases the probability of success Operating plan Evidence Reasons Verifiable Convincing Blueprint Feasibility study that. . .
  10. 10. Why Write a Business Plan? Communication Tool Analytical Tool Operating Tool
  11. 11. When and for Whom is a Business Plan Necessary? A Business in Search of Capital A Company in Trouble A Entrepreneur Looking for partners A Company Facing Rapid Change An Individual With an idea
  12. 12. Things to Remember While Preparing Business Plan • Business should get aligned with your skills and strengths. • Start a business which you passionately like and love. • A dedicated and determined founding team. • Idea should have a business model in place? • Can we really make money with this business concept? • Be focused about the target customers, and how would you reach them? • Will the finished product reflect well on the investor and the entrepreneur to create an image? • Will the idea really be adding value for all the stakeholders?
  13. 13. Business Plan Drivers
  14. 14. Strengths (S)  Strong and Loyal Customer Base  Second Largest Market Share  Low cost of Production  Skilled Manpower  Higher Operational Efficiency  Capable to Compete Internationally Weakness (W)  No Global presence  Product need Enhancement  Low investment in R&D  Poor Infrastructure  Inadequate Systems and Procedures Opportunities (O)  International Market Opportunities increasing  Acquisition Opportunities Threats (T)  Global Competition Increasing  Raw Material Cost Rising  Appreciation of rupee  Excise Rate going to Increase Fig. SWOT Analysis for Identifying Values Drivers and Developing Strategies Favorable Unfavorable
  15. 15. Clear Vision Purpose - Direction and Purpose -Mission Satisfy Real Customer Needs and Serve Real Customers Clear vision purpose Satisfy real customer need & Serve customer Differentiate from competitor Resource Focus, Organization and Commitment to satisfy customer need Business Plan Driver Fig: Business Plan Driver
  16. 16. Differentiate From Competitors - On extraordinary edged over Cost , Quality, Performance, Product availability, Technology, Leadership, Timely Delivery, Service, Durability and Post selling customer support. - Developing Unique Selling Proposition (USP) Resource Focus, Organization And commitment to Satisfy Customer needs
  17. 17. Example: SOWT Analysis Wall-Mart Strengths  A Market Leader with cost advantage on account of the scale of operation gives a competitive edge.  Low Cost Leadership in delivering a wide range of merchandise to customers.  Strategy to expand Internationally Weakness  Labour Intensive and hence cause labour-ralated dispute and Litigation.  Time lost In litigation that also cause labour relation  Huge Premises required at strategic location that may be very costly.  A company may have to vacate premises, If taken on the lease termination, which may affect business incase it requires to shift to another
  18. 18. Opportunities  Emerging business potential for retail sector in emerging markets.  Internet marketing can give a big boost to the business.  Focus on the grocery and food will be beneficial; because of trend in favor of eating at home , health emerges.  Increasing working couples having less and less time for shopping prefer Wal-Mart type of outlets. Threats  Increasing warehousing facility at strategic location.  Volatility I commodity prices and inflation will squeeze profit margins.  Affiliation of the labour force with recognized unions brings in interference from trade unions.  Local retailers apply utmost resistance for the opening of Wal-Mart type outlets.
  19. 19. Business Failures - 32% because of inadequate research and development - 23% were bad ideas - 14% Due to Uncontrolled Cost - 13% Because of weak marketing strategies - 10% erred with bad Timing - 8% Succumbed to competitor activity
  20. 20. PERSPECTIVES TO BE CONSIDERED IN BUSINESS PLAN PREPARATION  There are as many different perspectives on business planning because it has to cater to the needs & requirements of different stakeholders.  Business plan is a valuable instrument for entrepreneur and potential investors 1) Determining the viability of the venture 2) Providing guidance and the basis to he entrepreneur for channelizing resources and organizing activities 3)Serving as an important instrument to obtain financial resources
  21. 21. PERSPECTIVES OF ENTREPRENEUR An ENTREPRENEUR translate their ideas into reality that would give rise to sustainable growth ,greater heights Competitive advantage to become leaders in their business An entrepreneur should keep his heart and soul into the business Focus on the process and operational issues They have to take care there plan to ensure sucess
  22. 22.  They have to identify there strength and weakness areas under basic categories such as  Accounting , planning , forecasting , marketing research, sales , human resources management product design and development , legal aspects all these help them to build a good team
  23. 23. Marketing perceptive Focuses on the customer and knowing the requirements Unique selling proposition Knowing the features and traits of ones product or services Physical attributes of one’s product or services Benefits –tangible and intangible
  24. 24.  Customer satisfaction and how we are providing it and what are the key concerns of the customer like way of treatment of sales person  We have to build long lasting relation ship with the customer
  25. 25. INVESTORS PERSPECTIVE  Investors mostly look on the profits and some take high risk that make business success  Investors invest money on the early stage companies as more lucrative  They give success to the start up ventures  They should have a good network that plays a key role for recruiting employees at right time  Focus in the business plan about other stack holders such as  Government :- business activity results in social improvement and jobs and tax revenue for the development of infrastructure
  26. 26.  Communities  Activist Groups  Suppliers  Employees
  27. 27. WHO SHOULD PREPARE BUSINESS PLAN An entrepreneur should prepare the business plan as they are the ones who have conceived an idea into opportunity One should have a depth of the data analysis to make a proper plan with some figures
  28. 28. BASICS & STRUCTURE OF BUSINESS PLAN  A written document describing all relevant internal and external elements and strategies for starting a new venture.  Should address both short-term & long-term decision making for the first few years. ALL THEIR ISSUES AND CONCERNS MUST BE ADDRESSED WHO READS THE PLAN ? Venture Capitalists Employees Investors Bankers Suppliers Customers Advisors Consultants
  29. 29. WRITING THE BUSINESS PLAN A BUSINESS PLAN MUST CONTAIN THE FOLLOWING  Introductory Page  Executive Summery  Vision/Mission Statement  Business Environment & Competitor Analysis  Market Research and Analysis  Marketing Plan  Financial Plan & Funding Needs  Technology Manufacturing & Operational Plan  Intellectual Property  Legal Considerations & Insurance Requirements  Management Team  Risks Problems & Assumptions  Launching a Business & Measuring Plan Progress  Growth & Exit Strategy  Appendices
  30. 30. INTRODUCTION The Company's name, address, telephone, fax, e-mail and website address, if any.  The name and designation of the contact person  Names of organizations from where funding is being sought.  The Company's logo -which could be an image, design or picture representing the company's ideology pictographically.
  31. 31. EXECUTIVE SUMMERY  It’s the 1st Eye catcher for your B-Plan  First to be presented & last to be written  Grab the attention of the reader  Accurate definition of nature of business venture  Precise , catchy and powerful  Define nature of business  Target market &competition  Competitive advantage  Growth prospects  Funding requirements  Strength of management team
  32. 32.  Vision/Mission Statement  Business Environment & Competitor Analysis  Market Research and Analysis  Marketing Plan  Financial Plan & Funding Needs
  33. 33.  Technology Manufacturing & Operational Plan  Intellectual Property  Legal Considerations & Insurance Requirements  Management Team  Risks Problems & Assumptions  Launching a Business & Measuring Plan Progress  Growth & Exit Strategy  Appendices
  34. 34. Operational Plan /(Production Plan) Manufacturing Process »Contractors or Subcontractors »Reasons for selecting them »Costs of Subcontracted Manufacturing (Include copies of written contracts or Quotations) »Layout of Production Process [step by step] »Machinery & Infrastructure required »Cost analysis & Sources of Machinery & Infrastructure »Raw material required »Details of Raw Material Suppliers »Alternatives during Emergencies [on supply or demand sides] »Future Capital Requirements (for further scaling etc.) For a Service or Retail Operation Details of Suppliers [Include copies of Contracts or Quotations] How will the Inventory Control System operate A Blue Print of the Entire Operational Plan from SUPPLIER>>COMPANY>>END USER Technology Deployed in the Operations Storage Needs Chronologically the steps involved in a Business Transaction
  35. 35. •Firstly indicate the potential risks to the new venture •Analyze the probable consequences if these risks become reality •Develop a Contingency Plan that will be employed to Avoid or Minimize the Risks. Risk Analysis • Economic /Financial • Legal • Operational • Marketing • Growth • Competitor TYPES OF RISKS INVOLVED
  36. 36. APPENDIX  Contain back up Material  Supporting Letter  Market Research data  Leases or Contracts  Price Quotations from Suppliers etc.  Agreement Letters
  37. 37. What is Most Important in a Plan? • Cash flow is the heart of a business plan which is very vital for the existence, sustenance and growth of the business. • Implementation details and acumen of the management team. • Inputs in the business plans that focus on improvement of a venture on continuous basis.
  38. 38. Pitching a Business Plan • 10 seconds focuses on gut feel about the opportunity • 100 seconds is called elevator pitch • 10 minutes focuses on gist of the presentation • 20- 25 minutes concise presentation • 45 minutes full presentation • 90 minutes whole story with detailed question answers Pitching a plan involves presentation in a clear, concise and convincing manner to ensure capabilities of the management team to stakeholder. There are different time slots for pitching an idea that have their own relevance, such as pitching in
  39. 39. Key Tips to Effectively Present Business Plan Presenting Business Plan Be clear about your audience Tell a story or incident Be positive, optimistic and keep winning attitude Be clear about details and basis of assumptions Use powerpoint slides judiciously Make realistic assumptions and be clear about numbers Practice the presentation  Be clear about who your audience are  Tell a story or incident  Be Positive, Optimistic and Possess a Winning attitude while preparing  Be clear about details and assumptions made  Use PowerPoint Judiciously  Make Realistic assumptions and be clear about numbers  Practice the Presentation
  40. 40. Elevator Pitch • Sixty seconds process to catch fire in the mind of listeners to get attracted about the business proposition. • Quick and clear description of a business. • Entrepreneur should be able to express their business proposition, why it would succeed in the market and what fund support they are looking for from investors. • Clear strategy to express thoughts without jumbling them and using powerful words and pictures. Start your elevator with a business situation and by giving a story, incident and example, personalize your presentation by clearly identifying with the audience.
  41. 41. Executive Pitch Deck—Content • Should not exceed 20 slides. • Three broad sections namely: – First three slides with a focus on executive summary—problem, size of opportunity, solution and its status and team effectiveness. – Maximum 15 more slides with details of plan. – Last two slides of appendix: supporting facts, figures, research and agreements/contracts – While presenting, team should be ready to jump around, change order as per on the spot requirements and interest shown by investors. • Separate emphasis on team. • Focus on revenue model, business model, strategic milestones and risks with exit strategy. • Clearly highlight vision and create excitement and interest amongst listeners.
  42. 42. Dos and Don’ts for Pitching
  43. 43. 1. Lack of Well – defined Vision
  44. 44. 2. Unreasonable and Unpractical goals
  45. 45. 3. Lack of quantification of goals and objectives
  46. 46. 4. Starting the business for wrong reasons
  47. 47. 5. Poor Management and Lack of Commitment
  48. 48. 6. Inadequate Capital
  49. 49. 7. Lack of Experience and Knowledge of the Business
  50. 50. 8. Government Regulatory Measures
  51. 51. 9. Lack of Strategies and Preparedness to Respond to Potential threats
  52. 52. 10. Lack of clarity about target markets and Customer needs
  53. 53. 11. Unreliable Suppliers