Making a business plan

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Basics of how to make a business plan

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Making a business plan

  1. 1. MAKING A BUSINESS PLAN
  2. 2. Objectives • To understand how a business plan is divided into sections • To list the uses of a business plan • To lay out the steps involved in writing a business plan • To list out data required in drawing up a business plan • To discuss about the various types of business plan • To understand the significance of an executive summary • To understand the structure and composition of various sections of a business plan • To list the various appendices and exhibits needed in a business plan
  3. 3. Uses of a Business Plan • Equity funding • Bank finance • Alliances • Recruitment • Clarify the business • Others
  4. 4. Kinds of Business Plans • Summary Plan • Executive summary • Full Business Plan • Operational Business Plan • The oral presentation
  5. 5. Steps in Writing a Business Plan • Define purpose • Collect Information • Put it down • The rough draft. • Financial analysis • Finishing • Review
  6. 6. Data Required • Company details – Documents relating to formation – Shareholding details – Permits and registrations • Management – Organization chart – Details of key employees – Consultants and advisors – Compensation and other employee agreements • Industry and Competitors – Market statistics from secondary sources – Reports on trends, etc – Competitor data – Customer surveys
  7. 7. Data Required • Operations – Product specifications – Contracts and purchase orders for raw materials – Competitive advantages – Details of Intellectual Property (Patent, license, and trademarks) – Regulatory approvals – Industry standards as per regulations – Plant layout and operations plan – Research and development plans • Marketing and Sales – Marketing plan – Advance orders, if any – Marketing materials • Financial Information – Data on fixed and variable costs to be incurred – Financial forecasts
  8. 8. Key Sections of a Business Plan • Executive summary • The company • The management team • The industry and the market • Operations – Starting up • The marketing plan • Financial plan • Risks and contingencies • Appendices
  9. 9. Executive Summary The executive summary is probably the most important section of the business plan. It is basically the whole business plan condensed into a few pages The main objective of the executive summary is to entice the reader to go through the entire plan.
  10. 10. The Company • History • Current Status • Future
  11. 11. The Management Team • Technical and professional qualifications • Quality of work experience • Experience in the relevant sector • Reputation in the business community • Evidence of moral integrity • Financial capacity • Networking with other vital people in the industry
  12. 12. The Industry and the market • An industry is a collection of sellers • A market is a collection of buyers – Concentrate on the relevant segments • Competition
  13. 13. Operations • Gantt chart outline setup • Technology • Raw material strategy • Production planning • Quality • HR policy
  14. 14. Marketing • Target Segments • Branding • Product • Packaging • Pricing • Distribution • Promotion
  15. 15. Finance • Funds sought • Projected financial statements • Costing details • Break even and payback analysis
  16. 16. Risks and Contingencies Identify major threats and risks Outline strategies for countering them
  17. 17. Appendices • Copy of documents pertaining to incorporation or formalisation of partnership. • CV’s of the entrepreneur/s and of key employees • Copies of various permits or permissions granted. • Copies of papers pertaining to sale or lease of land for the business • Copies of documentation of proprietary intellectual property • Graphical representation of schedule including milestones and dates • Photographs of location • Factory or plant layout • Graphical representation of production process
  18. 18. Appendices • Findings of market survey conducted • Photograph of product or prototype • Storyboards or mock-ups of advertisements • Projected balance sheets • Projected profit and loss accounts • Projected cash flow statements • Sensitivity analysis of P&L a/c • Break even analysis • Financial ratios

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