How to build Your Business Plan
                      Khawla AlShurafa
                      16, February 2008
Why Three Apples?
Why Three Apples?
Why Three apples

Business
Plan
Three
Basics
What is more important
  Plan or Planning?
Workshop Papers

         Financial
           Plan




 PEST
Dynamic Balancing of Your
    Business Wheel



     Customer   Innovation
                                         If you...
The Tree of Business
                     From Strong Roots To Superior Results

                                         ...
“If you don’t know where you’re
going, it doesn’t matter which
road you take.”
                . . .anonymous
Strategic Management Model
Strategy Formulation

                          Vision & Mission


                  External Opportunities & Threats


  ...
Refresh
Write Your Dream
     In Life?
        In



       ?
To accomplish great things, we
   must not only act, but also
 dream; not only plan, but also
            believe
Key Terms


Vision Statement –
 What do we want to become?


Mission Statement –
 What is our business?
Articulate Your Vision

"Leaders inspire people with clear visions of
how things can be done better." The best
leaders do ...
Examples of a Corporate Vision




GE          We bring good things to life.

Ford        To become the world's leading co...
Refresh
MenaItech Vision

To provide the highest quality and
most comprehensive enterprise level
HR solutions that fit the MENA
re...
Mission


Peter Drucker: -- Think through
the overall mission of a
business. Ask the key question:
“What is our Business?”
Mission Statement


•   Purpose/reason for organization
•   Promotes shared expectations
•   Communicates public image
•  ...
MenaItech Mission

To provide HR solutions that maximize
 the return on the human capital
 investment for all MenaITech
 c...
Long-term Objectives




   Mission-driven pursuit of specified
     results more than one year out
Long-term Objectives

Essential for ensuring the firm’s
   success
   •   Provide direction
   •   Aid in evaluation
   • ...
Strategies



  Means by which long-term objectives
             are achieved
The Three Hierarchical Levels of Strategy




                 Corporate
                  Strategy
            Business y...
The Organization Life Cycle

               Introduction      Growth        Maturity          Decline
               stage...
STRATEGY FORMULATION


            Identify
            Mission

           Derive
          Objectives

            Ident...
Competitive Strategies

                                                  – producing and marketing a good quality
       ...
Strategies

Some Examples
  •   Geographic expansion
  •   Diversification
  •   Acquisition
  •   Market penetration
  • ...
Annual Objectives




 Short-term milestones that firms must
  achieve to attain long-term objectives
Policies




  Means by which annual objectives will
              be achieved
Strategy Implementation



                          Annual Objectives

                              Policies

          ...
Strategic Management
 achieves a firm’s success
 through integration ––

     Management               Marketing
  Finance...
Strategy implementation


   Most difficult stage
   Mobilization of employees &
    managers
   Interpersonal skills c...
Strategy Implementation
                          Success Rates and Major Impeding Factors




    Planned implementation ...
Strategy Evaluation



                        Internal Review

                        External Review

                 ...
Strategy Evaluation



Final Stage of Strategic Management

Subject to future modification
Today’s success no guarantee ...
And In Conclusion:
   Plan-Do-Check-Act
.P. considers both the preplanning and
 strategic planning processes;
.D.encompass...
Strategic Planning
      New Dynamic Model for the New Era of Rapid
                     Change
                          ...
Refresh
Organization Environment
                  Societal-environment


      Economic                                Legal
    ...
Opportunities and Threats
(External)




 Largely beyond the control of a single
              organization
Opportunities & Threats
      (External)

Analysis of Trends:
   •   Economic
   •   Social
   •   Cultural
   •   Demogra...
Environmental Scanning
     (Industry Analysis)




Process of conducting research and
 gathering and assimilating externa...
Strengths & Weaknesses
(Internal)




   Controllable activities performed
        especially well or poorly
Strengths & Weaknesses
   (Internal)
Typically located in functional areas of the firm
   •   Management
   •   Marketing
...
Assessing the Internal
Environment



                       Financial Ratios


                     Performance Metrics
 ...
SWOT Analysis
                Internal                                   External


    Build on STRENGTHS                ...
A word of caution,
 SWOT analysis can be very subjective. Do
  not rely on it too much.
 Two people rarely come-up with ...
Simple rules for
successful SWOT analysis
   be realistic about the strengths and weaknesses of your
    organization
  ...
Refresh
MenaItech SWOT
Refresh
What is PEST Analysis?
Porter’s Model
            Factors That Determine Competitiveness Within an Industry

                                    ...
Analysing the environment -
      Five Forces Analysis

    Five forces analysis helps the marketer to
    contrast a com...
The threat of entry.
 Economies of scale.
 The high or low cost of entry
 Ease of access to distribution
  channels
 C...
The power of buyers
 This is high where there a few, large
  players in a market
 If there are a large number of
  undif...
The power of suppliers
   The power of suppliers tends to be a
    reversal of the power of buyers.
   Where the switchi...
The threat of substitutes

 Where  there is product-for-
  product substitution
 Where there is generic
  substitution (...
Competitive Rivalry
 This is most likely to be high where
  entry is likely; there is the threat of
  substitute products...
Financial Analysis

Financial Ratios are Important –

  –Ration Analysis

    •Liquidity ratios
    •Profitability ratios
...
Financial Analysis
  Basic Steps
    1. Historical income statements/balance
       sheets
    2. Compare historical state...
Altman’s Bankruptcy Formula

 Z = 1.2x1 + 1.4x2 + 3.3x3 + 0.6x4 + 1.0x5
where
x1 = Working capital divided by total assets...
Altman’s Bankruptcy Formula


  Z<1.81      significant credit Problem


  Z>3.00       Healthy Organization


1.81<Z<3.00...
Refresh
Overview & Current Situation

The largest retailer, discount store chain in the world
 (Sales $345 b 2007 FY & 1.9 m assoc...
SBUs growth & Percent of total sales

                                                 Wal-Mart
             Wal-M Stores ...
 Current    Financial Performance

       PM%     ATO   ROA%   ROE%     LTD b$
2007   3.6    2.44   8.8     22       27.2...
 Current          Financial Performance
           Net Sales $b CSSI*% Stock price
2002              201.2               ...
Recommended Strategy
1. Growth (USA) via related (concentric) Diversification with
   Focused Horizontal Growth portfolio ...
Business Plan
“What we think, know, or believe in is,
 in the end, of little consequence. The
   only consequence . . . is what we
     ...
What is a Business Plan?

A business plan is a written
description of the goals and
objectives of the business and how
the...
Why need Business Plan?
1. To Map the Future

      2. To Support Growth
      and Secure Funding

 3. To Develop and
 Com...
PLAN YOUR PLAN



 Believe it or not, part of planning
your plan is planning what you'll do
                with it
PLAN YOUR PLAN
             Do you intend to use your plan to help you
             understand your organization situation...
Do you need to an estimate of your start-up costs?


Do you need to make revenue estimate (by defining your
market -- who ...
Refresh
 Job   Interview
How Effective Is the
           Business Plan?
   How effective a Business Plan is depends
    on how well the following ...
Key Components of a Business
           Plan
 The business plan covers areas:
 1. Executive Summary


 2.   The Industry, ...
Executive Summary

   Always “ Leave it until the End”

      1. Business name
      2. Business Location
      3. What P...
The Industry, the Company, and
         the Products
This section of the business plan
describes the business venture in a...
The Industry

Present the current status and outlook for the industry in
which the business will operate.

   New product...
The Company


Write a detailed description of the proposed
business venture, the products and services it
will offer, and ...
The Products or Services


Describe in detail the products or services to be sold, as
well as the application of the produ...
Market Research and Analysis

This section of the business plan presents enough facts
obtained through market research and...
Types of Market Research

PRIMARY RESEARCH = DO IT YOURSELF:

     Observation
     Surveys
     Interviews

SECONDARY ...
Types of Market Analyses


The information obtained through primary and
secondary research techniques can be analyzed in a...
Customers

Identify your target market and develop a
customer profile.

   Demographic profile

   Lifestyle patterns

...
Competition

List the strengths and weaknesses of competitive
products and services and list the companies that
supply the...
Market Share and Sales


Summarize what it is about your product or
service that will make it sell in the face of
current ...
Marketing Plan

This section of the business plan describes the company’s
marketing goals and objectives and how they will...
Overall Market Strategy


Describe the general marketing philosophy and strategy
of the company.

   Derived from market ...
Sales Tactics

Describe specific actions that will be taken to generate sales and
distribute the product or service to cus...
Advertising and Promotion


Describe approaches the company will use to
bring the product or service to the attention of
t...
Marketing Plan Outline

A marketing plan outline is a useful tool for pulling together
information related to the marketin...
Operational Plan


    Detailed information on
 development specifics such as
  who might be supplying your
products, how ...
Financial Plan

•Important Assumptions
•Key Financial Indicators
•Break-even Analysis
•Projected Profit and Loss
•Projecte...
What to Avoid in Your
         Business Plan
   Place some reasonable limits on long-
    term, future projections. (Long...
 Avoid optimism.
 Do not ignore spelling out what your
  strategies will be in the event of
  business adversities.
 Us...
What are the key steps to
     preparing Action Plan?

   Step 1.
     Take (you're Targets of Financial,
      Marketin...
What are the key steps to
          preparing Action Plan?
    Step 2: Create an action plan, An action
     plan has fiv...
   Step 3 :For each activity identify
    resources, responsibilities and timelines.
 Step 4: Review your plan.
 Step 5...
You're Action Plan is SMART,
             How?

Specific

              Measurable :

Achievable:
                  Realis...
How To Build Bp   Menaitech Workshop 2 2 08
How To Build Bp   Menaitech Workshop 2 2 08
How To Build Bp   Menaitech Workshop 2 2 08
How To Build Bp   Menaitech Workshop 2 2 08
How To Build Bp   Menaitech Workshop 2 2 08
How To Build Bp   Menaitech Workshop 2 2 08
How To Build Bp   Menaitech Workshop 2 2 08
How To Build Bp   Menaitech Workshop 2 2 08
How To Build Bp   Menaitech Workshop 2 2 08
How To Build Bp   Menaitech Workshop 2 2 08
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How To Build Bp Menaitech Workshop 2 2 08

  1. 1. How to build Your Business Plan Khawla AlShurafa 16, February 2008
  2. 2. Why Three Apples?
  3. 3. Why Three Apples?
  4. 4. Why Three apples Business Plan Three Basics
  5. 5. What is more important Plan or Planning?
  6. 6. Workshop Papers Financial Plan PEST
  7. 7. Dynamic Balancing of Your Business Wheel Customer Innovation If your business wheel is STRATEGY unbalanced, it will roll neither far nor fast. Finance Processes More information at 1000ventures.com: “Balanced Approach to Business Systems”
  8. 8. The Tree of Business From Strong Roots To Superior Results Deliver Superior Value Marketing, Selling, “Profits should be a reflection not of a corporate greed but a Servicing, Partnering vote of confidence from society that what is offered by the firm is valued.” – Konosuke Matsushita Live Your Vision Strategies, “Vision without action is a daydream. Organization, Action without vision is a nightmare.” – Japanese proverb Processes, Innovation Strengthen Your Roots Vision, Values, Capabilities, Resources “For every thousand hacking at the leaves of evil, there is one striking © 2006 Vadim Kotelnikov at the root.” – Henry David Thoreau © Vadim Kotelnikov More information at 1000ventures.com: “The Tree of Business”
  9. 9. “If you don’t know where you’re going, it doesn’t matter which road you take.” . . .anonymous
  10. 10. Strategic Management Model
  11. 11. Strategy Formulation Vision & Mission External Opportunities & Threats Internal Strengths & Weaknesses Long-Term Objectives Alternative Strategies Strategy Selection
  12. 12. Refresh
  13. 13. Write Your Dream In Life? In ?
  14. 14. To accomplish great things, we must not only act, but also dream; not only plan, but also believe
  15. 15. Key Terms Vision Statement – What do we want to become? Mission Statement – What is our business?
  16. 16. Articulate Your Vision "Leaders inspire people with clear visions of how things can be done better." The best leaders do not provide a step-by-step instruction manual for workers. The best leaders are those who come up with new idea, and articulate a vision that inspires others to act.  Create and project a clear vision  Articulate a few clear stretch goals for your company  Make sure you have the very best people to carry your vision out. More information at 1000ventures.com: “Vision, Mission, Goals”
  17. 17. Examples of a Corporate Vision GE We bring good things to life. Ford To become the world's leading consumer company for Motor Co automotive products and services. Microsoft To enable people and businesses throughout the world to realize their full potential.
  18. 18. Refresh
  19. 19. MenaItech Vision To provide the highest quality and most comprehensive enterprise level HR solutions that fit the MENA region’s requirements, utilizing the latest technologies and best HR business practices
  20. 20. Mission Peter Drucker: -- Think through the overall mission of a business. Ask the key question: “What is our Business?”
  21. 21. Mission Statement • Purpose/reason for organization • Promotes shared expectations • Communicates public image • Who we are; what we do; what we aspire to
  22. 22. MenaItech Mission To provide HR solutions that maximize the return on the human capital investment for all MenaITech customers by providing accurate and reliable management information, improving access to information, and reducing costs of operating the HR solution.
  23. 23. Long-term Objectives Mission-driven pursuit of specified results more than one year out
  24. 24. Long-term Objectives Essential for ensuring the firm’s success • Provide direction • Aid in evaluation • Create synergy • Focus coordination • Basis for planning, motivating, and controlling
  25. 25. Strategies Means by which long-term objectives are achieved
  26. 26. The Three Hierarchical Levels of Strategy Corporate Strategy Business you should be in Business Strategy Tactics to beat the competition Functional Strategy Operational methods to implement the tactics More information at 1000ventures.com: “Enterprise St
  27. 27. The Organization Life Cycle Introduction Growth Maturity Decline stage stage stage stage concentration Integration Diversification Retrenchment Industrysales Revenue 0 Industryprofits Time
  28. 28. STRATEGY FORMULATION Identify Mission Derive Objectives Identify Alternative Strategies Evaluate Alternatives Select Preferred Alternatives
  29. 29. Competitive Strategies – producing and marketing a good quality Cost Leadership product or service at a lower cost than your competitors. – creating a product or service that is Differentiation perceived as being unique "throughout the industry". – addressing a "focused" segment Focus of the marketplace, product form or cost management process Source: “Competitive Advantage”, Michael Porter 1000ventures.com
  30. 30. Strategies Some Examples • Geographic expansion • Diversification • Acquisition • Market penetration • Retrenchment • Liquidation • Joint venture
  31. 31. Annual Objectives Short-term milestones that firms must achieve to attain long-term objectives
  32. 32. Policies Means by which annual objectives will be achieved
  33. 33. Strategy Implementation Annual Objectives Policies Employee Motivation Resource Allocation
  34. 34. Strategic Management achieves a firm’s success through integration –– Management Marketing Finance/Accounting Production/Operations Research & Development MIS
  35. 35. Strategy implementation  Most difficult stage  Mobilization of employees & managers  Interpersonal skills critical  Consensus on goal pursuit
  36. 36. Strategy Implementation Success Rates and Major Impeding Factors Planned implementation according to 100% strategic plan Actual implementation as reported by 50% managers themselves Actual implementation as estimated by 10% outside observers Adapted from “Strategic Management”, Alex Miller, 1998 More information at 1000ventures.com: “Strategic Mana
  37. 37. Strategy Evaluation Internal Review External Review Performance Metrics Corrective Actions
  38. 38. Strategy Evaluation Final Stage of Strategic Management Subject to future modification Today’s success no guarantee of future success New & different problems Complacency leads to demise
  39. 39. And In Conclusion: Plan-Do-Check-Act .P. considers both the preplanning and strategic planning processes; .D.encompasses both the deployment and implementation of the plan; .C. tracks progress, measures results and outcomes, and evaluates all three. .A. feeds the evaluation back to the system and either adjusts or standardizes the system based upon that feedback.
  40. 40. Strategic Planning New Dynamic Model for the New Era of Rapid Change TRADITIONAL STATIC MODEL Effective if change cycle is longer than duration of your project Planned Planning Implementation Results NEW DYNAMIC MODEL Effective if change cycle is shorter than duration of your project External Change : technology x market x competition Planning (+ adapting + anticipating) Internal change: learning x capabilities Results •Planned •Modified Implementation •New © Vadim Kotelnikov More information at 1000ventures.com: “Strategic Planning”
  41. 41. Refresh
  42. 42. Organization Environment Societal-environment Economic Legal Task-environment Internal: Culture Structure Resources Competitors Distributors Social Physical Technological
  43. 43. Opportunities and Threats (External) Largely beyond the control of a single organization
  44. 44. Opportunities & Threats (External) Analysis of Trends: • Economic • Social • Cultural • Demographic/Environmental • Political, Legal, Governmental • Technological • Competitors
  45. 45. Environmental Scanning (Industry Analysis) Process of conducting research and gathering and assimilating external information
  46. 46. Strengths & Weaknesses (Internal) Controllable activities performed especially well or poorly
  47. 47. Strengths & Weaknesses (Internal) Typically located in functional areas of the firm • Management • Marketing • Finance/Accounting • Production/Operations • Research & Development • Computer Information Systems • Culture • Structure
  48. 48. Assessing the Internal Environment Financial Ratios Performance Metrics Internal Factors Industry Averages Survey Data
  49. 49. SWOT Analysis Internal External Build on STRENGTHS Exploit OPPORTUNITIES • What is your competitive advantage? • What trends may impact your business? • What are your core competences? • How can you exploit external changes? • What are your distinctive capabilities? • How to turn problems into opportunities? • Other strengths • Other opportunities Revolve WEAKNESSES Avoid THREATS • What are your weak point? • What obstacles do you face? • What problems do you have? • What your competitors could do? • What necessary expertise do you lack? • What could damage your business? • Other weaknesses • Other threats 1000ventures.com
  50. 50. A word of caution,  SWOT analysis can be very subjective. Do not rely on it too much.  Two people rarely come-up with the same final version of SWOT.  TOWS analysis is extremely similar. It simply looks at the negative factors first in order to turn them into positive factors. So use it as guide and not a prescription!
  51. 51. Simple rules for successful SWOT analysis  be realistic about the strengths and weaknesses of your organization  analysis should distinguish between where your organization is today, and where it could be in the futures  be specific. Avoid grey areas.  always analyse in context to your competition i.e. better than or worse than your competition  keep your SWOT short and simple. Avoid complexity and over analysis  SWOT is subjective.
  52. 52. Refresh
  53. 53. MenaItech SWOT
  54. 54. Refresh
  55. 55. What is PEST Analysis?
  56. 56. Porter’s Model Factors That Determine Competitiveness Within an Industry New entrants Threat of new entrants Bargaining INDUSTRY power of COMPETITORS suppliers Suppliers Buyers Bargaining Intensity of rivalry power of buyers Threat of substitutes Substitutes Source: “Competitive Strategy”, Michael E. Porter 1000ventures.com
  57. 57. Analysing the environment - Five Forces Analysis  Five forces analysis helps the marketer to contrast a competitive environment.
  58. 58. The threat of entry.  Economies of scale.  The high or low cost of entry  Ease of access to distribution channels  Cost advantages.  Will competitors retaliate?  Government action  How important is differentiation?
  59. 59. The power of buyers  This is high where there a few, large players in a market  If there are a large number of undifferentiated, small suppliers  The cost of switching between suppliers is low
  60. 60. The power of suppliers  The power of suppliers tends to be a reversal of the power of buyers.  Where the switching costs are high  Power is high where the brand is powerful.  There is a possibility of the supplier integrating forward  Customers are fragmented (not in clusters) so that they have little bargaining power
  61. 61. The threat of substitutes  Where there is product-for- product substitution  Where there is generic substitution (competing for the currency in your pocket)  We could always do without e.g. cigarettes.
  62. 62. Competitive Rivalry  This is most likely to be high where entry is likely; there is the threat of substitute products, and suppliers and buyers in the market attempt to control.  This is why it is always seen in the centre of the diagram.
  63. 63. Financial Analysis Financial Ratios are Important – –Ration Analysis •Liquidity ratios •Profitability ratios •Activity ratios •Leverage ratios
  64. 64. Financial Analysis Basic Steps 1. Historical income statements/balance sheets 2. Compare historical statements over time 3. Calculate changes individual items- cumulative 4. Change as percentage and absolute amount 5. Adjust for inflation if significant factor
  65. 65. Altman’s Bankruptcy Formula Z = 1.2x1 + 1.4x2 + 3.3x3 + 0.6x4 + 1.0x5 where x1 = Working capital divided by total assets. x2 = Retained earnings divided by total assets. x3 = Earnings before interest and taxes divided by total assets. x4 = Market value of equity divided by total liabilities. x5 = Sales divided by total assets. Z = Overall index of corporate fiscal health.
  66. 66. Altman’s Bankruptcy Formula Z<1.81 significant credit Problem Z>3.00 Healthy Organization 1.81<Z<3.00 ?????????????????
  67. 67. Refresh
  68. 68. Overview & Current Situation The largest retailer, discount store chain in the world (Sales $345 b 2007 FY & 1.9 m associates) Global company since 1991 (2007 > 6,700 stores) Masters of Cost leadership Strategy Three operating SBUs
  69. 69. SBUs growth & Percent of total sales Wal-Mart Wal-M Stores Sam’s Club International % Total % Total % Total No No No Sales Sales Sales 2007 3443 65.6 % 579 12.1% 2757 22.3% 2006 3289 67.9% 567 12.9% 2181 19.2% 2005 3151 68.1% 551 13.2% 1480 18.7% % No increase 9.3 5.1 86.3 2007/2005
  70. 70.  Current Financial Performance PM% ATO ROA% ROE% LTD b$ 2007 3.6 2.44 8.8 22 27.2 2006 3.6 2.58 9.3 22.9 26.4 2005 3.6 2.72 9.8 23.1 20.1 2004 3.5 2.77 9.7 22.4 17.1 2003 3.5 2.74 9.6 21.8 16.5 2002 3.2 2.81 9.0 20.7 15.6 2001 3.1 3.0 9.3 23.0 12.5 2000 3.3 3.06 10.1 25.5 13.7
  71. 71.  Current Financial Performance Net Sales $b CSSI*% Stock price 2002 201.2 6 56.98 2003 226.5 5 2004 252.8 4 2005 281.5 3 2006 309 3 2007 345 2 46.37 *CSSI: Comparable Store Sales Increase in USA
  72. 72. Recommended Strategy 1. Growth (USA) via related (concentric) Diversification with Focused Horizontal Growth portfolio (outside USA) via: a- Internal development of new stores type (high quality up-scale goods, image & profits) to fit urban locations b- Acquisition of local chains (having such image or specialty chains) c- Focus locations portfolio choice (Expand in NA, China, India & Slow growth in Europe) b- Establish JV (instead of Acquisition)
  73. 73. Business Plan
  74. 74. “What we think, know, or believe in is, in the end, of little consequence. The only consequence . . . is what we do..” (Haines, 1995)
  75. 75. What is a Business Plan? A business plan is a written description of the goals and objectives of the business and how they are going to be achieved. It includes the mission of the business along with the production, organizing, marketing, and financing intentions.
  76. 76. Why need Business Plan? 1. To Map the Future 2. To Support Growth and Secure Funding 3. To Develop and Communicate a Course of Action 4. To Help Manage Cash flow 5. To Support a Strategic Exit
  77. 77. PLAN YOUR PLAN Believe it or not, part of planning your plan is planning what you'll do with it
  78. 78. PLAN YOUR PLAN Do you intend to use your plan to help you understand your organization situation? Do you intend to use your plan to help you raise money? Do you intend to use your plan to start up new Business? Do you anticipate showing your plan to suppliers to demonstrate that you're a worthy customer?
  79. 79. Do you need to an estimate of your start-up costs? Do you need to make revenue estimate (by defining your market -- who your customers will be -- and the percentage of the market you can expect to reach)? Do you intend to use your plan to attract talented employees?
  80. 80. Refresh
  81. 81.  Job Interview
  82. 82. How Effective Is the Business Plan?  How effective a Business Plan is depends on how well the following questions are answered:  Who are we?  What do we do?  What do we have to offer?  Why will someone pay for our products/service?  What resources do we have?  Where are we going?  What do we need to get there?  Why will we be successful?  Why should someone participate or invest?  How will we measure performance?
  83. 83. Key Components of a Business Plan The business plan covers areas: 1. Executive Summary 2. The Industry, the Company, and the Products 3. Market Research and Analysis 4. Marketing Plan 5. Operating Plan 6. Management Team 7. Financial Plan
  84. 84. Executive Summary  Always “ Leave it until the End” 1. Business name 2. Business Location 3. What Product or services you sell 4. Purpose of Plan
  85. 85. The Industry, the Company, and the Products This section of the business plan describes the business venture in a detailed but concise manner. You must clearly describe:  The nature of the industry  The proposed business  The product the business plans to offer
  86. 86. The Industry Present the current status and outlook for the industry in which the business will operate.  New products and developments  New markets and customers  General trends affecting the business  Identify sources of information used to describe trends
  87. 87. The Company Write a detailed description of the proposed business venture, the products and services it will offer, and the principal customers.  Mission statement with goals and objectives  Ownership and legal form of the company  Reasons why the business will be successful
  88. 88. The Products or Services Describe in detail the products or services to be sold, as well as the application of the product or service.  Benefits to the customers  Competitive advantages  Unique features  Current state of development
  89. 89. Market Research and Analysis This section of the business plan presents enough facts obtained through market research and analysis to determine if the product or service has a substantial market in a growing industry despite a competitive market.  Customers  Market Size and Trends  Competition  Market Share and Sales
  90. 90. Types of Market Research PRIMARY RESEARCH = DO IT YOURSELF:  Observation  Surveys  Interviews SECONDARY RESEARCH = USE EXISTING DATA:  Public Library  College or Universities  Chamber of Commerce  Business Publications  Trade Shows  The Internet  Census Information  Sales Tax Data
  91. 91. Types of Market Analyses The information obtained through primary and secondary research techniques can be analyzed in a variety of ways.  Economic Trend Analysis  Political and Social Analysis  Customer Analysis  Market Potential Analysis  Competitive Analysis
  92. 92. Customers Identify your target market and develop a customer profile.  Demographic profile  Lifestyle patterns  Expectations
  93. 93. Competition List the strengths and weaknesses of competitive products and services and list the companies that supply them.  Identify and list current and future competitors  Assess the competition on the basis of price, quality, performance, service, etc.  Discuss advantages and disadvantages of competing products or services
  94. 94. Market Share and Sales Summarize what it is about your product or service that will make it sell in the face of current and future competition.  Identify and list major customers and estimate potential sales  Estimate share of the market  Estimate sales in units and dollars for the next two to five years
  95. 95. Marketing Plan This section of the business plan describes the company’s marketing goals and objectives and how they will be achieved.  Overall Market Strategy  Pricing  Sales Tactics  Advertising and Promotion  Packaging  Marketing Plan Outline
  96. 96. Overall Market Strategy Describe the general marketing philosophy and strategy of the company.  Derived from market research and analysis results  Include discussion of markets targeted for sales promotions  List short-term and long-term marketing objectives  Discuss specific marketing tactics
  97. 97. Sales Tactics Describe specific actions that will be taken to generate sales and distribute the product or service to customers.  Analyze effectiveness of everything available within the sales system  List channels such as salespeople, agents, dealers, and direct mail services  Describe methods that will be used to distribute products to customers  Describe merchandising techniques
  98. 98. Advertising and Promotion Describe approaches the company will use to bring the product or service to the attention of the target market.  List advertising methods along with benefits and costs  Discuss promotional efforts and strategies  Publicity
  99. 99. Marketing Plan Outline A marketing plan outline is a useful tool for pulling together information related to the marketing plan. The marketing plan outline should include information on the following:  Marketing situation  Marketing objectives  Marketing Strategies  Budget  Action plan  Evaluation
  100. 100. Operational Plan Detailed information on development specifics such as who might be supplying your products, how will it be shipped, personnel and resources management. © COPYRIGHT 2004 BANGKOK BUSINESS CHALLENGE®
  101. 101. Financial Plan •Important Assumptions •Key Financial Indicators •Break-even Analysis •Projected Profit and Loss •Projected Cash Flow •Projected Balance Sheet •Business Ratios
  102. 102. What to Avoid in Your Business Plan  Place some reasonable limits on long- term, future projections. (Long-term means over one year.) Better to stick with short-term objectives and modify the plan as your business progresses. Too often, long-range planning becomes meaningless because the reality of your business can be different from your initial concept.
  103. 103.  Avoid optimism.  Do not ignore spelling out what your strategies will be in the event of business adversities.  Use simple language in explaining the issues.  Make it easy to read and understand.  Don't depend entirely on the uniqueness of your business or even a patented invention.
  104. 104. What are the key steps to preparing Action Plan?  Step 1.  Take (you're Targets of Financial, Marketing, Sales…) , Group strategies and tactics.  Detail the activities necessary to achieve each outcome.
  105. 105. What are the key steps to preparing Action Plan?  Step 2: Create an action plan, An action plan has five elements : 1. Outcomes 2. Activities 3. Resources 4. Responsibilities 5. Timeline
  106. 106.  Step 3 :For each activity identify resources, responsibilities and timelines.  Step 4: Review your plan.  Step 5 :For each year or new project create a new action plan.
  107. 107. You're Action Plan is SMART, How? Specific Measurable : Achievable: Realistic: Time specific :

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