Business Plan Basics-Vinod Manvi (Savoire faire oct 2010

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This slide deck was presented by Vinod Manvi (Saviore Faire) at the TiE Institute Knowledge Series session for Growth Stage Entrepreneurs for Scaling Up

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Business Plan Basics-Vinod Manvi (Savoire faire oct 2010

  1. 1. 1 Vinod Manvi Principal Consultant Savoir faire Management Services Pvt Ltd Evaluating Potential-Understanding Scale & Growth October 23, 2010
  2. 2. 22 Road Map  Understand what growth means to us  Understanding Scale/Scope  Strategies for growth  Key functions  Achieving Sustainability  What to do “now” ?
  3. 3. 33 Growth  Object of Growth  Bigger,Larger,Stronger,Higher  Smaller,Leaner,Flexible,Faster  The impossibility of Freeze Frame  Questions –  Growth for  Grow into
  4. 4. 44 Growth  Metamorphosis  When  Where  How much  Outcome
  5. 5. 55 Metamorphosis  When  Is the time to grow now or later?  Indian condition – demographic boom  The Exponential Rule-doubling time  Where  Products  Sectors
  6. 6. 66 Metamorphosis  How much  Volume  Value  Rate  Outcome  Financials  Non-Financials
  7. 7. 77 Key Points  Purpose  Vantage Point  Be in the driver’s seat  Desired Outcome
  8. 8. 88 Road Map  Understand what growth means to us  Understanding Scale/Scope  Strategies for growth  Key functions  Achieving Sustainability  What to do “now” ?
  9. 9. 99 Understanding Scale & Scope  Economy of Scale  Economy of Scope
  10. 10. 1010 Understanding Scale  Economies of Scale  Mass Production  Lower transaction frequency  Seeks to lower per unit cost  Size matters  Basics  Designing of business  Concept of “Sunk Cost”
  11. 11. 1111 Understanding Scope  Economies of Scope  Increased Customisation  Thrives on Flexibility  High Product Proliferation  Small is beautiful  Basics  Market/Customer oriented  Limitations of volume
  12. 12. 1212 Considerations of Business Design  Timing  Funding  Resources
  13. 13. 1313 Road Map  Understand what growth means to us  Understanding Scale/Scope  Strategies for growth  Key functions  Achieving Sustainability  What to do “now” ?
  14. 14. 1414 Growth Strategies  The tasks of Strategic management  Develop Strategic Vision and Business Mission  Set Objective  Prepare strategy to achieve objective  Implement or Execute above strategy  Evaluate Performance  Revise all of the above whenever needed
  15. 15. 1515 Growth Strategies  Generic Strategies  Cost Leadership  Differentiation  Focus  Benchmarking  Continuous Improvement
  16. 16. 1616 Growth Strategies  Moving beyond generic strategies  Continuity of strategy  Continual Innovation  Choosing new battlefields
  17. 17. 1717 Moving Beyond Generics  Continuity in Strategy  Cost Leadership- Lowest cost to Best Value  Alliances  360 degree integration  Continual Innovation  Definition of Ever changing Customer Value  Transfer of Passion  Speed
  18. 18. 1818 Moving Beyond Generics  Choosing new battlefields  Understanding hidden Value  Creating “Blue Oceans”.  Granularity of Customisation
  19. 19. 1919 Key Points  The strategic management process  Understanding and implement Generic strategies  Go beyond the Generics  Revise whenever needed
  20. 20. 2020 Road Map  Understand what growth means to us  Understanding Scale/Scope  Strategies for growth  Key functions  Achieving Sustainability  What to do “now” ?
  21. 21. 2121 Key functions  Seek to serve  Seek to operate  Seek to earn  Seek to manage
  22. 22. 2222 Key Functions  Seek to serve  Seek to operate  Seek to earn  Seek to manage • Customers • Markets • Sales •After Sales •Customer Support • Operations • Production • Quaility of Output • Delivery• Managing Money • Costing • Working Capital • Resource Planning • Recruitment & Staffing • Training and Development
  23. 23. 2323 Key Functions  Seek to serve  Seek to operate  Seek to earn  Seek to manage •MARKETING •OPERATIONS • FINANCE • HUMAN RESOURCES
  24. 24. 2424 Key functions  Marketing  Marketing Plan  Brand Building  Sales Promotion  Finance  Funding Options  Investment Mix  Working Capital Management
  25. 25. 2525 Key functions  Operations  Systems thinking  Ensuring Quality and Performance  Managing Costs
  26. 26. 2626 Road Map  Understand what growth means to us  Understanding Scale/Scope  Strategies for growth  Key functions  Achieving Sustainability  What to do “now” ?
  27. 27. 2727 Sustainability  Clarity of thought  Consistency in action  Inequity in effort
  28. 28. 2828 Clarity of thought  Clarity of purpose of growth  Clarity about implementability of the plan  Built in scalability considerations of the plan  Built in flexibility in the plan
  29. 29. 2929 Consistency in Action  Consistency in the thought processes  Consistency in the key functions  Consistency in monitoring of functions
  30. 30. 3030 Inequity in action  Understanding the current and near future focus areas  Adjusting the emphasis based on the current needs  Having a plan B ready.  Taking time off to reflect- and act swiftly whenever required.
  31. 31. 3131 Road Map  Understand what growth means to us  Understanding Scale/Scope  Strategies for growth  Key functions  Achieving Sustainability  What to do “now” ?
  32. 32. 3232 Key points for action  Articulate the purpose of growth  Have some clarity of the kind of organisation that you wish to grow into  Articulate what kind of economy that you wish to adopt  Articulate broadly the kind of strategy for growth  Have a vision of how and what your key functions will look like  Make a business plan for growth
  33. 33. 33 Vinod Manvi Principal Consultant Savoir faire Management Services Pvt Ltd Starting Up – Creating a Business Plan June 19, 2010
  34. 34. 3434 Stability Rigidity Flexibility Confusion
  35. 35. 3535 Road Map  Understand the “Customer” of the Business Plan  Egg or Hen – starting point for the business plan  Where do I start? – Market or Capabilities  Assumptions  Tie-up the loose ends
  36. 36. 3636 Customer of the Business Plan Long Term Investor Lender Venture Capitalist/ Private Equity Customer Yourself Long Term Profit Earning Potential Scalability; Exit Will my money be safe? Intention of showing the Business Plan to the Customer?! Convincing yourself
  37. 37. 3737 Road Map  Understand the “Customer” of the Business Plan  Egg or Hen – starting point for the business plan  Where do I start? – Market or Capabilities  Assumptions  Tie-up the loose ends
  38. 38. 3838 Balance Sheet Basics Money Required Fixed Assets Working Capital Money Funded Share Capital + Reserves Loaned Funds Net Worth Source of Funds Application of Funds Financing Investing
  39. 39. 3939 Egg or Hen?  This is what I require…. ஃ this is the funding required ……. OR  This is the funding available … ஃ this is what I’ll do with that fund
  40. 40. 4040 Sourcing options  Venture Capital  Seed Capital  Angel Investor  Private Equity  Lender  Boot Strap • Long Term • Managerial and Tech expertise • High risk, High return • Long term influence in the venture • Friends and relatives • Pre-revenue stage • To attract the attention of the Venture Capital • To get the business off the ground •“At risk” investment of promoters • More favourable terms than other type of investors • For the person than the project • Focus on helping the business succeed than huge profit for the future • Not quoted on exchanges • Revival, multiple investors • Buy, Strip and Flip • Building company from own finances
  41. 41. 4141 Road Map  Understand the “Customer” of the Business Plan  Egg or Hen – starting point for the business plan  Where do I start? – Market or Capabilities  Assumptions  Tie-up the loose ends
  42. 42. 4242 Market or Capabilities  Key factor/ Limiting Factor/ Constraint  I know the size of the market I am going to address  I know the amount I require to run my business to start with
  43. 43. 4343 Road Map  Understand the “Customer” of the Business Plan  Egg or Hen – starting point for the business plan  Where do I start? – Market or Capabilities  Assumptions  Tie-up the loose ends
  44. 44. 4444 Assumptions  Ockham’s razor (Pluralis non est ponenda sine neccesitate)  Explicit vs implicit assumptions   Understand the domains of control and influence Info.Sources Growth Timing Controls Valid Assumption
  45. 45. 4545 Beyond Influence & Control Within Sphere of Influence Domains of Influence and control Within Span of Control
  46. 46. 4646 Assumptions  Assumptions proving incorrect  Mistrust the obvious  Ockham’s razor (Pluralis non est ponenda sine neccesitate)  Explicit vs implicit assumptions   Understand the domains of control and influence Info.Sources Growth Timing Controls Valid Assumption
  47. 47. 4747 Road Map  Understand the “Customer” of the Business Plan  Egg or Hen – starting point for the business plan  Where do I start? – Market or Capabilities  Assumptions  Tie-up the loose ends
  48. 48. 4848 Purpose Process People Prosper
  49. 49. 4949 Sales Plan Product ion Plan Cost Plan Projected Profit and Loss Account Invest ment Plan Debt/ Equity Plan Projected Balance Sheet Cash Flow Statement Milestone reporting Assumpti ons Charts/ Graphs and Pictures Critical Annexures
  50. 50. 5050 What makes a good plan?  Simple  Is it easy to understand and to act on? Does it communicate its contents easily and practically?  Specific  Are its objectives concrete and measurable? Does it include specific actions and activities, each with specific dates of completion, specific persons responsible and specific budgets? Simple Specific Realistic Complete Follow up Actions Results Plan • Realistic • Are the sales goals, expense budgets, and milestone dates realistic? Is the plan complete? • Complete • Does it include all the necessary elements?
  51. 51. 51 Have a satisfied customer to have satisfied investor Thank you vinod@sfccostmanagment.com www.sfccostmanagement.com +919867851919

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