Business plan

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  • Small business owners do not necessarily dream of being the next Bill Gates. Many would prefer to stay small and stay in person control of the day to day business. As is discussed in later chapters, high growth firms may oftentimes be grown specifically to be harvested. Whereas small businesses are more likely to be careers for their founders.
  • Business plan

    1. 1. Entrepreneurship Writing an Effective Business Plan: Crafting a Roadmap to Success
    2. 2. Small Business vs. High-Growth Ventures Small Business High-Growth VenturePreferred Funding Owner’s Own Other People’s Source Money Money When Firm’s In Cut Costs Sell More Trouble What’s More Sales Marketing Important Personal Control Retain Involve Key Preference Autonomy Others Focus Efficiency Effectiveness Metastrategy Imitation Novelty7-2
    3. 3. Boundary Resources Creating a place for your business – The money, product knowledge, etc, in location and in people’s minds that make up the business Your Small Business Exchange Intention Moving resources/products/ The desire to start a business services in exchange for moneyThe BRIE Model 7-3
    4. 4. “There is real magic in enthusiasm. It spells the difference between mediocrity and accomplishment.” --Norman Vincent Peale, 1961 7-4
    5. 5. Business Plan• A formal, written expression of the entrepreneur’s vision for converting ideas into a profitable, going business• It is a document describing all relevant internal and external elements and strategies for starting a new venture.• The entry card for serious consideration by venture capitalists, banks, and other sources of funding 7-5
    6. 6. A Living Document• A business plan changes often as a new business develops.• Do just enough business planning to get the new company started.• Refine the plan with information gathered from running the new venture. 7-6
    7. 7. Model of Successful Business PlanningPrepare a Continue to Start the Refine the relatively grow the business business plansimple plan business 7-7
    8. 8. Business Plan Components• What is the basic idea?• Why is the new product appealing— and to whom?• How will the idea be realized?• Who are the entrepreneurs?• How much funding is needed? What type of funding? How will it be used? How will you realize a return? 7-8
    9. 9. Who reads it??? 7-9
    10. 10. A Successful Plan• A serious document prepared by serious people• Orderly• Succinct• Persuasive 7-10
    11. 11. Executive Summary• Your elevator pitch• Provides a brief, clear, and persuasive overview of the new venture• Target 2 to 3 pages 7-11
    12. 12. Business Plan Sections• Background and • Financial purpose information• Marketing • Risk factors• Competition • Harvest or exit• Development, • Scheduling and production, and milestones location • Appendices• Management 7-12
    13. 13. Background, Product, and Purpose• What is the nature of the idea driving your company and how did it arise?• What does the product have to offer?• What is the basic nature of the company?• What is the company’s mission? 7-13
    14. 14. Market Analysis• What have you done to identify the market?• How large is the market?• How will products or services be promoted?• What do you know about competing products and companies?• How will the product or service be priced? 7-14
    15. 15. Market information 7-15
    16. 16. Development, Production, and Location• Location• Manufacturing operations• Raw materials• Equipments• Labour skills• Overhead 7-16
    17. 17. Management Team• Do team members have the experience, expertise, skills, and personal characteristics needed?• Do team members having good working relationships? 7-17
    18. 18. Financial Plans and Projections • Proforma balance sheet • Proforma income statement • Cash flow statement • Break-even analysis 7-18
    19. 19. Critical Risks• Price cutting by competitors• Unforeseen industry trends• Sales projections not achieved• Costs exceed estimates• Schedules not met• Difficulties raising financing• Unforeseen trends 7-19
    20. 20. Harvest and Exit• Management succession• Exit strategies 7-20
    21. 21. Scheduling and Milestones• Formal • Product displays incorporation • Agreements• Completion of • Moving into design production• Completion of • Receipt of orders prototypes • First sales• Hiring of initial • Profitability personnel 7-21
    22. 22. The Intangibles• The extra “something”• Pay attention to organization, clarity, word choice, and style• Have good writers read your plan• Revise according to their suggestions 7-22
    23. 23. Seven Deadly Sins• Plan is poorly prepared• Plan looks too slick• Executive summary is too long• Development stage of product is unclear• Fails to answer “Why would anyone ever want to buy one?”• Doesn’t state management qualifications• Financial projections are wishful thinking 7-23
    24. 24. The Presentation• Remember: This is important!• Prepare, prepare, prepare• Choose content carefully• Persuade, don’t overwhelm• Show enthusiasm tempered with reality• Rehearse• Don’t overlook the basics• Respond positively to questions 7-24

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