2. (d) Business Plan Preparation
Written documents (20 to 40 Pages)
An organized and effective response to a situation which may arise in future.
Not only for start up firm but also growing firm
To establish realistic goals or targets to achieve and to determine the current position.
To help make crucial start-up decisions; to reassure lenders, investors or backers; to measure
operational progress; to test planning assumptions; to adjust forecasts; and to set the standard
for good operational management.
3. The reasons for preparing a business plan are
• Entrepreneurs reap benefits from the planning activity itself.
• A business plan is used to get finance from banks or to get equity funding from angel
investors or venture capitalists.
• It can also be used to attract business partners and key employees or to make business
alliances.
• If the business plan is prepared within a large organization, then it enables the board of
directors to make capital investment decisions.
• The act of writing the plan will force the entrepreneur and his team to think through all
the key elements of the business.
• The plan provides a basis for measuring actual performance against expected
performance.
• The plan acts as a vehicle for communicating to others what the business is trying to
accomplish.
5. Cover Page and Table of Contents
• Cover Page
• Name of the business or project.
• The company’s name, logo, address, telephone and fax numbers, Web site address, e-
mail address.
• The name and designation of the contact person.
• The table of contents
• is usually on the second page of the business plan and gives at a glance the topics
covered in the business plan. The table of contents should be written for easy
navigation to the rest of the plan by numbering each topic.
6. Executive Summary
• It is a snapshot of the entire business plan and usually written last. The executive summary is a concise
presentation of the main points of the business plan and gives a brief overview of the business venture.
• The executive summary is a formal statement and should include the following information:
• A brief description of the industry and market environment in which the business opportunity will
develop and flourish.
• The uniqueness of the business opportunity and the key strategies for success.
• Profiles of the company’s management team.
• Financial requirements and budget allocation.
• The anticipated risk and reward of the business.
7. • Business Concept
• The history of the business, the basic nature, and the purpose of the business.
• It gives the usage, description, and specifications of the products and services to be offered.
• If the product/service prototype is ready, high-quality photographs are included.
• Business Strategy
• SWOT analysis of the firm and analysis of the business environment.
• Strategy is the game plan of the business.
• It is about differentiation and competitive advantage.
• This section should give the mission, vision, future plan, and exit strategy of the business.
8. • Management Summary
• What is the profile of the founders, the team’s management philosophy, and their reputation in the business
community?
• Who are the current owners, and what percentages do they control?
• How is ownership evidenced—for example, in terms of common and preferred stock?
• Have any options, warrants, or convertible bonds that could expand ownership been issued?
• Which owners are involved in the day-to-day working of the business?
• Marketing Plan
• The market’s size and growth, defining the target market, and articulating the value proposition.
• Operations Plan
• It gives an overview of the flow of the daily activities of the business operation and the strategies to support
them.
• Describes the physical necessities of the business’s operation, such as the business’s physical location, raw
materials, technology, human resource, facilities, and equipment.
9. • Financial Plan
• the financial plan section of the business plan consists of an analysis of financial statements such as the
income statement, the cash flow projection, projected balance sheet, break-even charts, cost of the
project, sources, and uses of funds.
• Appendix
• It contains the market survey report, financial projections, product and technological specifications,
process flow charts, photographs of the existing or proposed firm, lists of plants and machinery,
organizational charts, and résumés of each member of the management team.
11. Elevator Pitch
• It's a short description of an idea, product, or company. It's meant to be shorter than an elevator ride,
meaning, 30 seconds or less. The concept also applies to pitching yourself, as an individual, to
introduce yourself and or land a job- but we'll be focusing on the company/startup version of this. So-
an elevator pitch should be enough to explain your startup idea and leave the investor curious for
more.
12. Elevator Pitch Should Contain
• An attention-grabbing first line- Start your pitch with a statement or question that makes your listener
want to hear more.
• A description of your product or service and its market- Briefly describe what you sell and who will
buy it-not the technology it's based on. Explain how your product or service will solve a problem, meet
a need, or exploit an opportunity.
• A description of the people behind the business- Tell a little about your background and your team's
strengths.
13. Elevator Pitch Should Contain
• The benefits of investing in your business- Why would the investor want to take a risk with you? What
are the benefits? Communicate how you and your business stand out over the competition.
• A call to action- Finish your pitch with a request. Do you want to set up a meeting? Have the investor
look over your Business Plan? Have the listener recommend you to an angel investor or venture
capitalist?
• You- Show the uniqueness of your concept and your passion through the enthusiastic delivery of your
elevator pitch.
14. Examples
• Airbnb Elevator Pitch
• Most tourists booking online care about price- and hotels are one of the highest costs for when
traveling.
• On the other hand, platforms like Couch surfing have proven that over half a million people are willing
to lend their couches or spare bedrooms.
• We have created a platform that connects travelers with locals, letting them rent our rooms, or even
entire places. Travelers save money, and locals can monetize their empty rooms- we just take a 10%
commission.
• How does that sound?
15. • A few pointers here:
- Notice how I started mentioning tourists, not just any traveler. Airbnb doesn't necessarily target
business.
- It's easy to agree that people looking to travel care about price, so there's no market research or
validation needed to come up with that statement,
- On the other hand, it might be arguable that people will be willing to rent out their homes to strangers. I
used the Couchsurfing validation to avoid that statement being questioned.
16. • WeWork Elevator Pitch
• There are 40MM independent workers in the US: consultants, freelancers, and small business owners.
Solving office space is tough and expensive, especially in cities like New York. We created the concept of
space as a service. We have 20 locations in the city- where people can rent a desk or an office without
any of the complications of a traditional lease, effectively saving at least 25% of the cost. They get
access to a shared front desk, mailroom, and a community of like-minded people.
17. • Slack Elevator Pitch
• There is no publicly available pitch deck for Slack, but let's assume the company is just
starting up:
• The average office worker receives 304 emails per week. They also attend an average
of 62 monthly meetings, half of which they consider 'wasted time'. Slack was made to
make work more efficient. It organizes conversations by channels and drastically
reduces the need for emails or meetings. It's integrated with 100s of productivity tools
like Google Docs, Calendars, Email, Dropbox, Zoom... so you can receive automatic
notifications and take action without leaving the interface.
20. WHY DO SOME BUSINESS PLANS FAIL?
Unnati P. thakkar
21. • Failure to address the customer’s problems and needs
• Unrealistic goals set by the promoters
• Lack of commitment to the business by the promoters
• Lack of experience of the promoters
• Lack of professionalism
22. COMPAQ
Compaq used to be one of the major suppliers of
PC in the past bus they experienced business
failure because they failed to predict
the market shift and were unable to keep up.
Competition soon became tense and the company
was bought for about 24.5 billion dollars by
Hewlett-Packard.
23. • BLOCKBUSTER
• In 2004, blockbuster employed over 80,000 people worldwide with over 9,000 rental
shops. Even though the company was at its peak, I think it was poor foresight and a
terrible strategy that led to a decision like that.
• In short, blockbuster filed for bankruptcy in 2010 due to a debt of over eight hundred and
fifty million dollars. It did not help that a small struggling company called Netflix posed a
very serious competition. It was just accepted that blockbuster paved the way for other
movie streaming sites like Netflix.
24. • TOMMY CLOTHINGS
• Tommy Clothings was a really popular clothing store in Lagos at a time. They made customised wear
and even styled some celebrities. I remember my sister bought shoes from them around 2012. Well,
Tommy Clothings was started by a young man called Tomiwa Akintola. He was a very talented tailor and
could do things I had never seen any other tailor do before.
• Tommy decided to expand his business and manage a clothing store where he sold his own designs,
and other brands as well. The only problem was that Tomiwa, although a good tailor, was a terrible
businessman. He found it very difficult to separate business from friendship.
• His friends will troop in and take things on credit. His stock soon started to decrease until there was
nothing more to sell. He kept following up on debtors and couldn’t have enough funds to continue his
business.
