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Process of Writing a Business Plan:Writing a business plan can be an overwhelming task. These feelings often translate int...
9. Review & Editing: Remember, you only have one shot at making a good impression. A well-writtenbusiness plan that opens ...
Business Plan Outline ExtrasThe extras are what take a plan from 10 pages to 20 pages. More in-depth and detailed for high...
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Unit 2 business-plan

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Unit 2 business-plan

  1. 1. Process of Writing a Business Plan:Writing a business plan can be an overwhelming task. These feelings often translate into immobilizationor confusion as to how to start the business plan. Starting a business plan begins with the first step:1. Audience & Funding Type: When writing a business plan, you must determine who will be reading it.This decision will shape the business plan. Do you plan to go for debt or equity financing? Each form offunding for your business has pros and cons. For instance, the venture capital market can be very timeconsuming and competitive. Do you have the time to write the business plan for investor funding and tonetwork within the community?Writing a business plan for investors is 15-30 pages with in-depth analysis and full details of facts andfigures to support assumptions of the market. Writing a business plan for the bank is 10-15 pages andfocused with the banks concern with risk. A venture plan presents the upside and potential return oninvestments, whereas a bank plan reduces the risks and sells the ability to repay the loan.2. Business Plan Outline: A business plan outline is the second most important starting point onceyouve pre-determined your audience. The business plan outline should be prepared before the actualresearch and writing of the business plan.3. Research & Information Collection: Once you have made the decision of the type of funding yourbusiness requires, it is time for the research. Business plan research covers several key areas: Insight from your experience working and observing the industry you will enter. This data will have to be backed but by the next two sources. Published information from library, Internet, and paid database services will provide information on the market growth, overall industry perspective, and customer profiles. Field research covers interviews with customers, suppliers, competitors, and industry experts. This provides the real insight behind all the published facts.4. Collection Files: The easiest way to go about collecting all your experiences, interviews, and researchis to create files for each section of the business plan. These files can be: paper-based, computer files orset-up using business planning software. As you start the research and collection phase of planning, fillyour files with notes and printouts.5. General Industry Overview: Begin the research process with an overview of the industry; uncoveringindustry and association reports. By having a general understanding of the industry, you will avoidembarrassment in contacting experts with basic questions. Begin the field research once you have agood grasp of the industry fundamentals and need answers to the hard-to-find information.6. Analysis: Once the bulk of the data has been collected, the process of analysis begins. Look atbuilding a competitive profile, contingency plan, risk assessment, etc.7. Financials: Start the financials when you have found some average industry ratios for your business.Work closely with your accountant to develop realistic projections. Being overly optimistic will raiseeyebrows with your investors or banker.8. Executive Summary: Save the first section for last. When you have thoroughly, completed all sectionsof the business plan, write the summary. Highlight the key points and include the return on investment orloan payback requirements.
  2. 2. 9. Review & Editing: Remember, you only have one shot at making a good impression. A well-writtenbusiness plan that opens doors and wins the money is a plan that has been revised and reviewed. Do notforget this important step. Ask others for feedback. Make certain to edit, proofread, proofread, andproofread.Business planning is not easy but by following these critical steps to writing a business plan, you willensure your business has a chance at funding and success in the future.Business Plan outline:A business plan outline is the second most important starting point once youve pre-determined youraudience. The business plan outline should be prepared before the actual research and writing of thebusiness plan. Once your outline has been set; organize your research files around the layout of yourplan.Every business plan follows a generic outline but not every business plan is the same. Business planoutlines differ on 2 factors:1. Type of Business: Details of critical success factors for businesses in your industry must be includedin the plan. Technology companies will discuss R & D, intellectual property, and time to market. A retailerwill feature pricing methods, inventory control, merchandising and location. Ensure that your plan iscomplete by addressing factors important to your industry.2. Type of Audience: A banker business plan will be different from an investor plan. Bankers like to seerisk assessment and planning, loan amounts, repayment terms and collateral. Investors want a return oninvestment, an exit strategy, and planned growth with the funds.Business Plan Outline GeneralExecutive Summary: overview of most important points of business plan and selling your business.Company Description: mission statement, company overview, industry briefing, corporate history, legalstructure.Products & Services: description, R & D, pricing, delivery, production.Marketing & Sales: market definition, customer profile, competitive & SWOT analysis, strategy, sales &promotion.Operations: Legal & government issues, staffing, suppliers, alliances, policies, risk assessment, facilities,location, insurance, milestones.Management: key job descriptions, responsibilities, management team, organizational chart, advisors.Financials: Profit & loss, cash flow, balance sheet, financing, debt schedule, use of funds andassumptions, break-even analysis.
  3. 3. Business Plan Outline ExtrasThe extras are what take a plan from 10 pages to 20 pages. More in-depth and detailed for higher levelsof funding and a greater complexity of investors. No real need for extras if your plan does not require it.Heres a brief description of some of the extras that can be added to your business plan outline: SWOT Analysis: As part of your competitor profile, adding a Strengths, Weaknesses, Opportunities and Threats analysis can show your investors you understand the competitive landscape and your business can operate within that environment. Porters Five Forces: Michael Porters 5 forces framework is a standard business tool used by companies to evaluate an industrys key forces. This is an important extra to add to your business plan outline especially if you are a start-up or an existing business entering a new market. Glossary: If your business plan audience is not well-versed in your industry jargon, a glossary adds value to your overall plan. If you are writing a biotech business plan on gene therapy agents, determine the level of knowledge your target audience has on the subject. Publishing Value-Adds: These are simply publication elements to improve the readability and presentation of your plan. This can include: a cover page with logos, graphics, charts, and table of contents.Environmental analysis- search and scan:Scanning of environment is the close examination of environment to develop an understanding ofeconomic, socio-cultural, legal aspects and other developmental factors in order to ensure that theperceived entrepreneurial opportunity is compatible with them.Environment analysis is the process by which strategies monitor the environmental factors to determineopportunities for and threats to their firm. It is not always necessary that the idea perceived by theentrepreneur may turn into a successful project. T o make a project a success, entrepreneur need to doenvironmental scanning.Why environmental scanning?It is proved that the firms that do environment scanning gets financial advantages.Environmental scanning is needed for: 1) Effective utilization of resources: Link Book Enterpreneurship BY K.P. Sharmafff

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