Without a good business model, there would be no profit

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Developing A Business Plan
and Model
Shefiu Olabanjo, MSc. ACCA

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Ice Breaker?
 Which came first?
Business
Plan
Business
Model
OR

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Looking Ahead
At the end of this session, participants should be able to:
 Understand the key concepts.
 Assess the quality of a business plan and model
 Identify the key components of a business plan
and model.
 Appreciate the essence of business plan and
model

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OUTLINE
 Introduction
 Reasons for Business Plan
 Basic Components of Business Plan
 Common Flaws in Business Plan
 Business Model at a Glance
 Components of Business Model
 Process of Designing a Business Model
 Key Takeaways

5. Introduction
01

6. Introduction
Search Results
A business plan is a formal statement of business goals, reasons
they are attainable, and plans for reaching them. It may also contain
background information about the organization or team attempting to
reach those goals.
Business plan - Wikipedia
https://en.wikipedia.org/wiki/Business_plan

7. Introduction…
A Business Plan is a written document that
defines the goals of your business and
describes how you will attain those goals.
A Business Plan is worth your considerable
investment of time, effort, and energy.
A Business Plan sets objectives, defines
budgets, engages partners, and anticipates
problems before they occur.

8. Introduction…
Business plans differ widely in their length,
appearance, content, and the emphasis
placed on different aspects of the business.
Depending on your business and your
intended use, you may need a very different
type of Business Plan:

9. Reasons for Business Plan
02

10. Reasons for Business Plan
1. To attract investors.
2. To see if your business ideas will work.
3. To outline each area of the business.
4. To set up milestones/phases.
5. To learn about the market.
6. To secure additional funding or loans.
7. To determine your financial needs.
8. To attract top-level people.
9. To monitor your business.
10. To devise contingency plans.

11. 03Basic Contents of A
Business Plan

12. Basic Components of A good
Business Plan…
Eight common parts of a good Business Plan
are:
1. Executive Summary
2. Company Description
3. Market Analysis
4. Management Team
5. Product/ Services Description
6. Marketing Plan
7. Financial Plan
8. Conclusion

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Basic Contents of A Business
Plan
The Executive Summary section includes:
• A first paragraph that introduces your
business.
• Your business name and location.
• A brief explanation of customer
needs and your products or services.
• The ways that the product or service
meets or exceeds the customer
needs.
• An introduction of the team that will
execute the Business Plan.
• Subsequent paragraphs that provide key
details about your business, including
projected sales and profits, unit sales,
profitability, and keys to success.
• Visuals that help the reader see
important information, including
highlight charts, market share
projections, and customer demand
 Executive
Summary

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Basic Contents of A Business Plan…
Your company description provides
information on what you do, what
differentiates your business from others, and
the markets your business serves. Company
Philosophies, Goals, Objectives, Mission
Statements
 Company
Description
 Market
Analysis
• A Market Analysis defines the target market
so that you can position your business to
get its share of sales.
• A Market Analysis section:
 Defines your market.
 Segments your customers.
 Projects your market share.
 Positions your products and services.
 Discusses pricing and promotions.
 Identifies communication, sales, and
distribution channels.

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Basic Contents of A Business Plan…
 Manageme
nt Team
 Product/
Service
Description
• Organizational Structure: Highlights the
hierarchy and outlines responsibilities and
decision-making powers.
• Management Team: Highlights the track
record of the company’s managers. You
may also offer details about key employees
including qualifications, experiences, or
outstanding skills, which could add a
competitive edge to the image of the
business.
• Working Structure
• Personnel Plan: Highlights current and
future staffing requirements and related
costs.• What do you sell? Technical Specification
• The value chain,
• How does it benefit your customers?
• What is the product lifecycle?.

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Basic Contents of A Business Plan…
Market Research. Industry Analysis,. Competition.
What do you sell? How does it benefit your
customers? What is the product lifecycle? Company
SWOT. Sales Strategy e.t.c
 Marketing
& Sales
 Financials
The Financial Plan is the most essential part of
your Business Plan. It shows investors the
timeframes you have scheduled to make
profits.
Some elements of the Financial Plan include:
Funding Pattern
Important Assumptions
Break-even Analysis
Projected Profit and Loss
Projected Cash Flow
Projected Balance Sheet
Sensitivity Analysis
Business Ratios

17. 04Common Flaws in Business
Plan

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Common Flaws in Business Plan
 Neglecting Cash flows
 Too much value & Emphasis on the central
idea.
 Not being specific
 Unrealistic Financial Projections
 Being Inconsistent
 Including Too much information
 Inadequate Research

19. 05Business Model at a Glance

20. Introduction
 Today, “ business model” and “strategy” are among the most used
terms in business, they are often stretched to mean everything and
end up meaning nothing.
James C. Collins and Jerry l. Porrat: Built to Last ( HarperCollins, 1994)

21. Introduction…
The similitude of a good business plan
without a good business model is like a
donkey with stacks of books strapped on its
back – no real benefits. No matter how
fantastic a plan you have, a poor business
model would still mar the success of the

22. Introduction…

23. 06Components of Business
Model

24. Components of Business
Model
Since 2000, theorists have created dozens of
lists of business model components, all
differing slightly from one another. Three
Swiss business professors, Alexander
Ostenwalder, Yves Pigneur, and Christopher
L. Tucci, analyzed various models and found
that the components fell into nine major
categories

25. Components of Business
Model
 Good business model will not find you, you have to find the right
business model.

26. 07Process of Designing
Business Model

27. Process of Business Model
Good business model will not find you, you
have to find the right business model.
Building a Business Model requires the
following steps:
Evaluate the business idea
Navigate your environment
Develop your first model
Test the model
Modify the model
Pitch your model

28. Sustaining Your Business
Model

29. Sustaining Your Business Model…
3 roles…
Focus on the business model not just
the product technology or services
Don’t fall in love with your first model.
Iterate rapidly and test your model
early

30. 08Key Takeaways

31. Key Takeaways
Business Plans are critical for the success of
any enterprise but the truth of the matter is
that the era of the fixed business is over, you
need a business module to succeed.
There's not a single business model, and
there's not a single type of electronic content.
There are really a lot of opportunities and a
lot of options and we just have to discover all
of them.
Tim O'Reilly

32. Key Takeaways…
The same products, services or technologies
can fail or succeed depending on the
business model you choose. Exploring the
possibilities is critical to finding a successful
business model. Settling on first ideas risks
the possibility of missing potential that can
only be discovered by prototyping and testing
different alternatives. Alexander Osterwalder.
Business model is just like a team, you can
loose with a good team but you cant win with
a bad team.

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Questions