Business Plans In A Nutshell

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Guide to preparing a business plan Updated January 2015

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Business Plans In A Nutshell

  1. 1. BUSINESS PLANS IN A NUTSHELL The Why, What, when and How?
  2. 2. Do you need a business plan? NO – If you at early stages of setting up a business?
  3. 3. BUT
  4. 4. You become what you think about 4
  5. 5. SO
  6. 6. I RECOMMEND http://leanstack.com/
  7. 7. AS 7 Business Planning is Vital
  8. 8. BUT AT A POINT IN TIME YOU WILL NEED A PROFESSIONAL BUSINESS PLAN DOCUMENT
  9. 9. Business Plan Can Help You To • Attract finance • Clarify and share vision with Employees/Management Team and Customers • Execute – Set & Review Targets
  10. 10. Use a Template – Business Cube I. Executive Summary II. Main Text III. Schedules including financial information IV. Detailed Appendices
  11. 11. Another Business Plan Template • Executive Summary [2 pages] • Promoters and other information [1] • The Proposal [1] • Background Information [1] • The Product / Service [1-2] • Market Opportunity [1] • Marketing Strategy & Sales [1-2] • Management Team [1] • Operations [1] • Strategy for future growth [1] • Financing [1] • Action Plan [1-2] • Appendices [5-10+]
  12. 12. EXECUTIVE SUMMARY • Overview of the Business • Realise why you have such enthusiasm • Share the vision • Outline the Financial returns • Be clear, concise and make the rest of the plan appear interesting from here!
  13. 13. PROMOTERS AND OTHER INFORMATON • Name/Legal Status of the business • Name of directors / Shareholders/Proprietor • Details of Company Secretary • Registered Office / Trading Address • Contact Details • Accountants and Financial Advisers • Bankers • Solicitors and Legal Advisers
  14. 14. CONTENTS • Structure of Document • Appendices • Structure the document correctly and number each page, section and paragraph • Use CONTENTS creator in Word • May need an appendix called Jargon Buster
  15. 15. THE PROPOSAL • What is primary purpose of the Plan? • Raise additional funding, finance working capital, purchase of equipment, fund a promotions campaign? • And what do they get in return? • Outline early what the purpose/objective is to allow the reader to be clear as they read through the plan
  16. 16. BACKGROUND INFORMATION • History of the business • Key Personnel • Financial History • Present Financing arrangements • The reader will want to understand how you got to this point and how it was funded
  17. 17. THE PRODUCT/ SERVICE What it is and what it does! • Features • Benefits to the Customer – The Business Case • Use pictures to illustrate • Address Intellectual Property • Identify the key points about the product, what sets it out from the competition and why this business is going to be successful Image 1319105
  18. 18. MARKET OPPORTUNITY • specific market/demand opportunities the business is seeking to exploit • the size of the Target Assessable Market (TAM) – Number and value of potential customers that your business can address given current business model (route to markets) and resources • the segment of the market to be served/targeted • Typical customer buying behaviour and key purchasing criteria • key/relevant external factors influencing market demand (e.g. social, economic, legislative and technological factors) • This section should enable the potential investor to understand the key demand drivers and potential for growth of your business.
  19. 19. MARKETING STRATEGY • Customer – Profile & The Problem to be Solved • Competition • Pricing • Marketing Communications Plan – Branding & Promotion – Routes to Market/ Partners • Sales Plan • This section should demonstrate domain knowledge and that you have a plan of action (and know the costs involved).
  20. 20. MANAGEMENT TEAM • Brief CV’s of senior management • Details of non-executive team • Qualifications / Skillsets • Present Organisation Chart • How to fill gaps – the non-traditional team
  21. 21. OPERATIONS Dependent on type of business being established • Premises • Distribution • Sourcing materials • Health & Safety
  22. 22. STRATEGY FOR FUTURE GROWTH • Plans for expansion • Growth potential • Future products/services – R&D • Exit Strategy (if applicable)
  23. 23. FINANCING • Outline your assumptions • Your Business Model • Present key financial figures (graphs are great) – Revenues (# Customers & Average Value) – Costs – Resulting Profits • Plus details of Initial or New Investment required – Cash flow to cover operating costs until profit is achieved – Capital expenditure • Be Realistic! • Do not overvalue the business !
  24. 24. Sources of Finance If business needs an initial injection of capital: • Personal Savings • Family & Friends • Suppliers • Financial Institutions – Loans, overdrafts, lines of credit – Hire Purchase • Enterprise Agencies
  25. 25. Financial Projections is First Appendix • Profit and loss, balance sheet and cash flow statements. – Cashflow Year One, broken down by month or quarterly – Annual for year 2 and 3 • Accompanied by notes on how figures were calculated • BANK – personal financial situation and history (they will do a full credit check).
  26. 26. Projections • Both shape and tell the story of the business .. and need to solidify the credibility of the entire plan. • To create clear revenue targets is first task. • Then work out direct costs (Cost of Sales) • And detail all other expenditure (must be logical in terms of scale and growth)
  27. 27. Projections based on • What is reasonable as most likely to occur, your best guess based on research • Using a bottom up approach utilising • Market feedback, knowledge of the industry and general economic trends. • Being a Projection of the future as a Snapshot in Time Incorporating • An estimate of how a proposed financial package will change the future events in the company. 27
  28. 28. Projections will be reviewed Credibility of the financial model • Are costs logical • Are Ratios (gross margin, profit margin etc etc) appropriate for industry • Are assumptions relating to turnover (sales, routes to market and internationalisation) robust • Is the funding available? • Does the overall proposal fit the portfolio
  29. 29. ACTION PLAN • Concrete Actions • Four Key Areas – Product – Marketing – Finance – Team
  30. 30. Schedules & Appendices Schedules • Financial Projections Appendices • SWOT Analysis • Competition • Market Research Summary • CV’s of Major Promoters
  31. 31. HOW TO WRITE YOUR BUSINESS PLAN DOCUMENT Presentation + Message = Meet Objectives
  32. 32. Preparing your Business Plan • Learn how your business works – Business Model … product, market, route to market, customers, and pricing • Develop Financial Projections – How much money is needed? – Formulate your assumptions – bottom up • Write the Document This is what I do with clients
  33. 33. 10 Critical questions for a Startup or New Product 1. Who are you? 2. What is the new product 3. Who will buy your product? 4. Why will they buy your product? 5. What price will your customers pay? 6. How many will they buy at this price? 7. How many can you make? 8. How much does a unit of product cost to make? 9. How much investment do you need? 10.Why are you writing this plan? 33
  34. 34. 34
  35. 35. Brainstorm & use a presentation Prepare a business plan presentation with circa ten slides which summarises key issues for your business: 1. Problem 2. Solution (product/service offering) 3. Unique Selling Point 4. Competition 5. Market 6. Marketing communication 7. Business model 8. Financials – set up investment and projections 9. Promoter & Team 10. Action Plan
  36. 36. Or a mindmap Source: http://www.usingmindmaps.com/mind-map-business-plans.html
  37. 37. What not to do - • Mistake length for substance • Be unrealistic in expectations • Leave unanswered questions • Not identify the critical items amid the detail – e.g. Business Model ... How you make money
  38. 38. • Use a Business Plan Template • Use the plan to emphasise your UVP Unique Value Proposition • Goals Setting Makes Business Planning Real – Don’t let your business plan gather dust • Professional presentation of the business plan is important • Get your plan reviewed by a Business Plan Expert (i.e. Me!) Some final thoughts
  39. 39. Investor Business Plan Presentation 39
  40. 40. This presentation was re-uploaded to slideshare by Donncha Hughes in January 2015 donncha@startuphughes.com www.startuphughes.com

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