Not planning is planning for failure Planning is for future and for success only The deeper, farther and more accurate is the foresight – lower are the chances of plan failure. Plans are important but results are what count Prospective investors need a written business plan to asses the security and attractiveness of their investment. Vast majority of Business plans go unsuccessful. Not all Business plans succeed in raising money and not all plans that raise money succeed in delivering.
1: Plans that are focused on the entrepreneur ,their ideas and statement of why both are unique and wonderful.2: Most are “my-idea” focused rather than “customer” focused.3: Investors care more about how customer problems are handled4: Investor wish to know both the merits and perils of the business proposal, their balance sheet, road map for utilising the merits and overcoming the perils.5; Investors wish to know the evidences on which assumptions have been made.
Opportunities created by macro-trends Opportunities found by living and experiencing the customer problem Opportunities created by scientific research Opportunities proven elsewhere that you can pursue where you hope to do business.
OBJECTIVE – to be able to differentiate myth f and wrong assumptions from ground realities and gather evidences to support assumptions. Sources of data (processed and formatted information) – - Primary – your own field study, personal interaction and interventions- necessary for identifying your industry, Critical success factors and assessing your entrepreneurial team - Secondary- Trade magazines, Trade shows, Govt. indu7sry data, professional economic and trade services, Books and publications, academic research papers
Feasibility report – is an account of whether the proposed business in sustainable under current and projected economic environment at the proposed location, time frame and technological regime. To convince yourself the ‘correctness’ of your decision. To provide supportive data and information to prospective investors and stake holder of to take decision of supports.
Business Plan describes the road map which would enable best exploitation of identified opportunities, elasticity of actions to identified uncertainties and ways of overcoming identified macro and micro environmental treats. May or may not be part of feasibility report. More internal and Management oriented than external factors. Reflects management team’s mind set
1: Executive Summery –Briefly says what you are going to tell in the report to follow.2: MICRO level of market assessment : - Target Market and its SWOT - Target Market’s size and growth rate - Options of growing into other/related segments
3: Macro level Market assessment : - Overall market size and growth - Macro trend analysis to asses future market growth and assessment.4: Macro level Industry assessment : - Whether the industry is attractive- growth – rate and direction. - Likely trends
5: Micro level Industry assessment; - Proprietary elements - Superior organizational, technological, process, resource capabilities that cannot be duplicated. - Economic viability of business model : - Revenue forecast - Customer acquisition and retention cost. - Gross margins - capital investment required - Break even analysis - Operating cash cycle characteristics
6: Team Assessment : - Team’s mission, aspirations and propensity for risk - Team’s ability to execute the CFSs in the industry - Team’s connectedness up down, across the value chain7: Summery and Conclusion - Tell what “You” have been told - Why this opportunity is attractive and what are domains on which your case rests.
Not just YOUR ideas and technology- but- the uniqueness / differentiated (better, faster, cheaper) way you propose to address customer problems and pains. Is your target market large enough to accommodate a NEW Entrant and can YOU grow their to an Economics scale of operation. Entry barriers, YOUR strength to overcome them and the strength of competition to beat YOU at it. That YOUR initial advantage can be sustained.
Quality and commitment level of the lead entrepreneur. Quality of the team / managerial group. Cash flow projections The commitment of the entrepreneur to risk his own money. The quality of reference material used to develop feasibility. Check on false and overtly aggressive and sweeping statements made in the reports/presentations/ discussions.