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Business Plan
Two requirements to become
Entrepreneur
• 1. Focus on Building your Assets [ Income source]
• 2. Limit and curtail your liabilities [ Recurring
Expenditure]
6-2
Two biggest investment
• 1. Increase your Knowledge & Skills by devoting both
your time and money
• 2. Money [Seed Capital]
6-3
Three attributes to become
Entrepreneur
• 1. Risk taking ability [ Calculated & Measured]
• 2. Ability to think creatively and
• introduce innovation [differentiation]
• 3. Willingness to act even after consistent failure and
rejection
6-4
Biggest Mantra for achieving
success in Life
• Postponement of Gratification [ Enjoyment & Pleasure]
6-5
When to Act or Right time to
take action
• Life is always swinging like a pendulum
• One End is Notion ( Thoughts & Feeling)
• Other End: Facts & Reality
• Never ever chase Notions, always move as reality shift
• Notion: something that you have in your mind; an idea
6-6
There is always a tug of war
between comfortable zone &
uncomfortable zone:
• Growth is always more in uncomfortable zone and
Extremely less in comfortable zone.
6-7
Decide your Domain
1. Find out and Decide in which area, field, work etc. you
have potential to become the best and achieve excellence.
2. Build up on those areas and move towards become
expert.
3. Gradually announce to the world that you are an expert
in that area
4. Start to commercialize your expertise
6-8
What Is a Business Plan?
•Select a mentor who will guide and keep you
motivated
• Business plan is a written narrative, typically 25 to 35 pages
long, that describes what a new business plans to accomplish.
•Dual-Use Document
• For most new ventures,
• the business plan is a dual-purpose document used both
inside and outside the firm.
6-9
Who Reads the Business Plan—And
What Are They Looking For?
6-10
There are two primary audiences for a firm’s business plan
Audience What They are Looking For
A Firm’s
Employees
Investors and
other external
stakeholders
A clearly written business plan helps the employees of
a firm operate in sync and move forward in a
consistent and purposeful manner.
A firm’s business plan must make the case that the
firm is a good use of an investor’s funds or the
attention of others.
Guidelines for Writing a Business Plan
1 of 5
• Structure of the Business Plan
• To make the best impression a business plan should follow a
conventional structure, such as the outline for the business plan
shown in the chapter.
• Although some entrepreneurs want to demonstrate creativity, departing
from the basic structure of the conventional business plan is usually a
mistake.
• Typically, investors are busy people and want a plan where they can
easily find critical information.
6-11
Guidelines for Writing a Business Plan
2 of 5
• Structure of the Business Plan (continued)
• Software Packages
• There are many software packages available that employ an interactive, menu-
driven approach to assist in the writing of a business plan.
• Some of these programs are very helpful. However, entrepreneurs should
avoid a boilerplate plan that looks as though it came from a “canned” source.
• Sense of Excitement
• Along with facts and figures, a business plan needs to project a sense of
anticipation and excitement about the possibilities that surround a new venture.
6-12
Guidelines for Writing a Business Plan
3 of 5
• Content of the Business Plan
• The business plan should give clear and concise information on all the
important aspects of the proposed venture.
• It must be long enough to provide sufficient information yet short
enough to maintain reader interest.
• For most plans, 25 to 35 pages is sufficient.
• Types of Business Plans
• There are three types of business plans, which are shown on the next
slide.
6-13
Guidelines for Writing a Business Plan
4 of 5
6-14
Types of Business Plans
Guidelines for Writing a Business Plan
5 of 5
•Recognizing the Elements of the Plan May Change
• It’s important to recognize that the plan will usually change
while written.
• New insights invariably emerge when an entrepreneur or a
team of entrepreneurs immerse themselves in writing the plan
and start getting feedback from others.
6-15
Outline of Business Plan
•Outline of Business Plan
• A suggested outline of a business plan is shown on the next
several slides.
• Most business plans do not include all the elements
introduced in the sample plan; we include them here for the
purpose of completeness.
• Each entrepreneur must decide which elements to include in
his or her plan.
6-16
Section 1: Executive Summary
1 of 2
•Executive Summary [Written towards the
completion of Business plan]
• The executive summary is a short overview of the entire business plan.
• It provides a busy reader with everything that needs to be known about
the new venture’s distinctive nature.
• An executive summary shouldn’t exceed two single-spaced pages.
• Even though the executive summary appears at the beginning of the
business plan, it should be written last.
• The plan itself will evolve as it’s written, so not everything is known at the
outset.
6-17
Executive Summary
Key Insights
• In many instances an investor will
ask for a copy of a firm’s executive
summary and will ask for a copy of
the entire plan only if the executive
summary is sufficiently convincing.
• The executive summary, then, is
arguably the most important
section of a business plan.
Section 1: Executive Summary
2 of 2
6-18
Section 2: Industry Analysis
1 of 2
• Industry Analysis
• This section should begin by describing the industry the business will
enter in terms of its size, growth rate, and sales projections.
• Items to include in this section:
• Industry size, growth rate, and sales projections.
• Industry structure.
• Nature of participants.
• Key success factors.
• Industry trends.
• Long-term prospects.
6-19
Industry Analysis
Key Insights
• Before a business selects a target
market it should have a good grasp
of its industry—including where its
promising areas are and where its
points of vulnerability are.
• The industry that a company
participates largely defines the
playing field that a firm will
participate in.
Section 2: Industry Analysis
2 of 2
6-20
Section 3: Company Description
1 of 2
• Company Description
• This section begins with a general description of the company.
• Items to include in this section:
• Company description.
• Company history.
• Mission statement.
• Products and services.
• Current status.
• Legal status and ownership.
• Key partnerships (if any).
6-21
Company Description
Key Insights
• While at first glance this section
may seem less important than the
others, it is extremely important.
• It demonstrates to your reader
that you know how to translate an
idea into a business.
Section 3: Company Description
2 of 2
6-22
Section 4: Market Analysis
1 of 2
•Market Analysis
• The market analysis breaks the industry into segments and
zeros in on the specific segment (or target market) to
which the firm will try to appeal.
• Items to include in this section:
• Market segmentation and target market selection.
• Buyer behavior.
• Competitor analysis.
6-23
Market Analysis
Key Insights
• Most start-ups do not service their
entire industry. Instead, they focus
on servicing a specific (target)
market within the industry.
• It’s important to include a section in
the market analysis that deals with
the behavior of the consumers in the
market. The more a start-up knows
about the consumers in its target
market, the more it can tailor its
products or services appropriately.
Section 4: Market Analysis
2 of 2
6-24
Section 5: The Economics of the Business
1 of 2
• The Economics of the Business
• This section addresses the basic logic of how profits are earned in the
business and how many units of a business’s profits must be sold for
the business to “break even” and then start earning a profit.
• Items to include in this section:
• Revenue drivers and profit margins.
• Fixed and variable costs.
• Operating leverage and its implications.
• Start-up costs.
• Break-even chart and calculations.
6-25
The Economics of the
Business
Key Insights
• Two companies in the same industry
may make profits in different ways.
One may be a high-margin, low-volume business,
while the other
may be a low-margin, high-volume
business. It’s important to check to
make sure the approach you select
is sound.
• Computing a break-even analysis
is an extremely useful exercise for
any proposed or existing business.
Section 5: The Economics of the Business
2 of 2
6-26
Section 6: Marketing Plan
1 of 2
•Marketing Plan
• The marketing plan focuses on how the business will
market and sell its product or service.
• Items to include in this section:
• Overall marketing strategy.
• Product, price, promotions, and distribution.
• Sales process (or cycle).
• Sales tactics.
6-27
Marketing Plan
Key Insights
• The best way to describe a start-up’s
marketing plan is to start by
articulating its marketing strategy,
positioning, and points of
differentiation, and then talk about
how these overall aspects of the
plan will be supported by price,
promotional mix, and distribution
strategy.
• It’s also important to discuss the
company sales process.
Section 6: Marketing Plan
2 of 2
6-28
Section 7: Design and Development Plan
1 of 2
•Design and Development Plan
• If you’re developing a completely new product or service,
you need to include a section in your business plan that
focuses on the status of your development efforts.
• Items to include in this section:
• Development status and tasks.
• Challenges and risks.
• Projected development costs.
• Proprietary issues (patents, trademarks, copyrights, licenses, brand
names).
6-29
Design and Development
Plan
Key Insights
• Many seemingly promising start-ups
never get off the ground because
their product development efforts
stall or the actual development of
the product or service turns out to
be more difficult than thought.
• As a result, this is a very important
section for businesses developing a
completely new product or service.
Section 7: Design and Development Plan
2 of 2
6-30
Section 8: Operations Plan
1 of 2
•Operations Plan
• Outlines how your business will be run and how your product or
service will be produced.
• A useful way to illustrate how your business will be run is to describe
it in terms of “back stage” (unseen to the customer) and “front stage”
(seen by the customer) activities.
• Items to include in this section:
• General approach to operations.
• Business location.
• Facilities and equipment.
6-31
Section 8: Operations Plan
2 of 2
6-32
Operations Plan
Key Insights
• You have to strike a careful balance
between adequately describing this
topic and providing too much
detail.
• As a result, it is best to keep this
section short and crisp.
Section 9: Management Team and Company
Structure
1 of 2
•Management Team and Company Structure
• The management team of a new venture typically consists
of the founder or founders and a handful of key
management personnel.
• Items to include in this section:
• Management team.
• Board of directors.
• Board of advisers.
• Company structure.
6-33
Section 9: Management Team and Company
Structure
2 of 2
6-34
Management Team and
Company Structure
Key Insights
• This is a critical section of a
business plan.
• Many investors and others who
read the business plan look first at
the executive summary and then go
directly to the management team
section to assess the strength of the
people starting the firm.
Section 10: Overall Schedule
1 of 2
•Overall Schedule
• A schedule should be prepared that shows the major events required to launch the
business.
• The schedule should be in the format of milestones critical to the business’s
success.
• Examples of milestones:
• Incorporating the venture.
• Completion of prototypes.
• Rental of facilities.
• Obtaining critical financing.
• Starting production.
• Obtaining the first sale.
6-35
Section 10: Overall Schedule
2 of 2
6-36
Overall Schedule
Key Insight
• An effectively prepared and
presented schedule can be
extremely helpful in convincing
potential investors that the
management team is aware of
what needs to take place to launch
the venture and has a plan in
place to get there.
Section 11: Financial Projections
1 of 2
•Financial Projections
• The final section of a business plan presents a firm’s pro
forma (or projected) financial projections.
• Items to include in this section:
• Sources and uses of funds statement.
• Assumptions sheet.
• Pro forma income statements.
• Pro forma balance sheets.
• Pro forma cash flows.
• Ratio analysis.
6-37
Section 11: Financial Projections
2 of 2
6-38
Financial Projections
Key Insights
• Having completed the earlier
sections of the plan, it’s easy to see
why the financial projections come
last.
• They take the plans you’ve
developed and express them in
financial terms.
Presenting the Business Plan to Investors
1 of 2
• The Oral Presentation
• The first rule in making an oral presentation is to follow directions. If
you’re told you have 15 minutes, don’t talk for more than the allotted
time.
• The presentation should be smooth and well-rehearsed.
• The slides should be sharp and not cluttered.
• Questions and Feedback to Expect from Investors
• The smart entrepreneur has a good idea of the questions that will be
asked, and will be prepared for those queries.
6-39
Presenting the Business Plan to Investors
2 of 2
6-40
Twelve PowerPoint Slides to Include in an Investor Presentation
1. Title Slide
2. Problem
3. Solution
4. Opportunity and target market
5. Technology
6. Competition
7. Marketing and sales
8. Management team
9. Financial projections
10. Current status
11. Financing sought
12. Summary
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Business Plan.pptx
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Business Plan.pptx

  • 2. Two requirements to become Entrepreneur • 1. Focus on Building your Assets [ Income source] • 2. Limit and curtail your liabilities [ Recurring Expenditure] 6-2
  • 3. Two biggest investment • 1. Increase your Knowledge & Skills by devoting both your time and money • 2. Money [Seed Capital] 6-3
  • 4. Three attributes to become Entrepreneur • 1. Risk taking ability [ Calculated & Measured] • 2. Ability to think creatively and • introduce innovation [differentiation] • 3. Willingness to act even after consistent failure and rejection 6-4
  • 5. Biggest Mantra for achieving success in Life • Postponement of Gratification [ Enjoyment & Pleasure] 6-5
  • 6. When to Act or Right time to take action • Life is always swinging like a pendulum • One End is Notion ( Thoughts & Feeling) • Other End: Facts & Reality • Never ever chase Notions, always move as reality shift • Notion: something that you have in your mind; an idea 6-6
  • 7. There is always a tug of war between comfortable zone & uncomfortable zone: • Growth is always more in uncomfortable zone and Extremely less in comfortable zone. 6-7
  • 8. Decide your Domain 1. Find out and Decide in which area, field, work etc. you have potential to become the best and achieve excellence. 2. Build up on those areas and move towards become expert. 3. Gradually announce to the world that you are an expert in that area 4. Start to commercialize your expertise 6-8
  • 9. What Is a Business Plan? •Select a mentor who will guide and keep you motivated • Business plan is a written narrative, typically 25 to 35 pages long, that describes what a new business plans to accomplish. •Dual-Use Document • For most new ventures, • the business plan is a dual-purpose document used both inside and outside the firm. 6-9
  • 10. Who Reads the Business Plan—And What Are They Looking For? 6-10 There are two primary audiences for a firm’s business plan Audience What They are Looking For A Firm’s Employees Investors and other external stakeholders A clearly written business plan helps the employees of a firm operate in sync and move forward in a consistent and purposeful manner. A firm’s business plan must make the case that the firm is a good use of an investor’s funds or the attention of others.
  • 11. Guidelines for Writing a Business Plan 1 of 5 • Structure of the Business Plan • To make the best impression a business plan should follow a conventional structure, such as the outline for the business plan shown in the chapter. • Although some entrepreneurs want to demonstrate creativity, departing from the basic structure of the conventional business plan is usually a mistake. • Typically, investors are busy people and want a plan where they can easily find critical information. 6-11
  • 12. Guidelines for Writing a Business Plan 2 of 5 • Structure of the Business Plan (continued) • Software Packages • There are many software packages available that employ an interactive, menu- driven approach to assist in the writing of a business plan. • Some of these programs are very helpful. However, entrepreneurs should avoid a boilerplate plan that looks as though it came from a “canned” source. • Sense of Excitement • Along with facts and figures, a business plan needs to project a sense of anticipation and excitement about the possibilities that surround a new venture. 6-12
  • 13. Guidelines for Writing a Business Plan 3 of 5 • Content of the Business Plan • The business plan should give clear and concise information on all the important aspects of the proposed venture. • It must be long enough to provide sufficient information yet short enough to maintain reader interest. • For most plans, 25 to 35 pages is sufficient. • Types of Business Plans • There are three types of business plans, which are shown on the next slide. 6-13
  • 14. Guidelines for Writing a Business Plan 4 of 5 6-14 Types of Business Plans
  • 15. Guidelines for Writing a Business Plan 5 of 5 •Recognizing the Elements of the Plan May Change • It’s important to recognize that the plan will usually change while written. • New insights invariably emerge when an entrepreneur or a team of entrepreneurs immerse themselves in writing the plan and start getting feedback from others. 6-15
  • 16. Outline of Business Plan •Outline of Business Plan • A suggested outline of a business plan is shown on the next several slides. • Most business plans do not include all the elements introduced in the sample plan; we include them here for the purpose of completeness. • Each entrepreneur must decide which elements to include in his or her plan. 6-16
  • 17. Section 1: Executive Summary 1 of 2 •Executive Summary [Written towards the completion of Business plan] • The executive summary is a short overview of the entire business plan. • It provides a busy reader with everything that needs to be known about the new venture’s distinctive nature. • An executive summary shouldn’t exceed two single-spaced pages. • Even though the executive summary appears at the beginning of the business plan, it should be written last. • The plan itself will evolve as it’s written, so not everything is known at the outset. 6-17
  • 18. Executive Summary Key Insights • In many instances an investor will ask for a copy of a firm’s executive summary and will ask for a copy of the entire plan only if the executive summary is sufficiently convincing. • The executive summary, then, is arguably the most important section of a business plan. Section 1: Executive Summary 2 of 2 6-18
  • 19. Section 2: Industry Analysis 1 of 2 • Industry Analysis • This section should begin by describing the industry the business will enter in terms of its size, growth rate, and sales projections. • Items to include in this section: • Industry size, growth rate, and sales projections. • Industry structure. • Nature of participants. • Key success factors. • Industry trends. • Long-term prospects. 6-19
  • 20. Industry Analysis Key Insights • Before a business selects a target market it should have a good grasp of its industry—including where its promising areas are and where its points of vulnerability are. • The industry that a company participates largely defines the playing field that a firm will participate in. Section 2: Industry Analysis 2 of 2 6-20
  • 21. Section 3: Company Description 1 of 2 • Company Description • This section begins with a general description of the company. • Items to include in this section: • Company description. • Company history. • Mission statement. • Products and services. • Current status. • Legal status and ownership. • Key partnerships (if any). 6-21
  • 22. Company Description Key Insights • While at first glance this section may seem less important than the others, it is extremely important. • It demonstrates to your reader that you know how to translate an idea into a business. Section 3: Company Description 2 of 2 6-22
  • 23. Section 4: Market Analysis 1 of 2 •Market Analysis • The market analysis breaks the industry into segments and zeros in on the specific segment (or target market) to which the firm will try to appeal. • Items to include in this section: • Market segmentation and target market selection. • Buyer behavior. • Competitor analysis. 6-23
  • 24. Market Analysis Key Insights • Most start-ups do not service their entire industry. Instead, they focus on servicing a specific (target) market within the industry. • It’s important to include a section in the market analysis that deals with the behavior of the consumers in the market. The more a start-up knows about the consumers in its target market, the more it can tailor its products or services appropriately. Section 4: Market Analysis 2 of 2 6-24
  • 25. Section 5: The Economics of the Business 1 of 2 • The Economics of the Business • This section addresses the basic logic of how profits are earned in the business and how many units of a business’s profits must be sold for the business to “break even” and then start earning a profit. • Items to include in this section: • Revenue drivers and profit margins. • Fixed and variable costs. • Operating leverage and its implications. • Start-up costs. • Break-even chart and calculations. 6-25
  • 26. The Economics of the Business Key Insights • Two companies in the same industry may make profits in different ways. One may be a high-margin, low-volume business, while the other may be a low-margin, high-volume business. It’s important to check to make sure the approach you select is sound. • Computing a break-even analysis is an extremely useful exercise for any proposed or existing business. Section 5: The Economics of the Business 2 of 2 6-26
  • 27. Section 6: Marketing Plan 1 of 2 •Marketing Plan • The marketing plan focuses on how the business will market and sell its product or service. • Items to include in this section: • Overall marketing strategy. • Product, price, promotions, and distribution. • Sales process (or cycle). • Sales tactics. 6-27
  • 28. Marketing Plan Key Insights • The best way to describe a start-up’s marketing plan is to start by articulating its marketing strategy, positioning, and points of differentiation, and then talk about how these overall aspects of the plan will be supported by price, promotional mix, and distribution strategy. • It’s also important to discuss the company sales process. Section 6: Marketing Plan 2 of 2 6-28
  • 29. Section 7: Design and Development Plan 1 of 2 •Design and Development Plan • If you’re developing a completely new product or service, you need to include a section in your business plan that focuses on the status of your development efforts. • Items to include in this section: • Development status and tasks. • Challenges and risks. • Projected development costs. • Proprietary issues (patents, trademarks, copyrights, licenses, brand names). 6-29
  • 30. Design and Development Plan Key Insights • Many seemingly promising start-ups never get off the ground because their product development efforts stall or the actual development of the product or service turns out to be more difficult than thought. • As a result, this is a very important section for businesses developing a completely new product or service. Section 7: Design and Development Plan 2 of 2 6-30
  • 31. Section 8: Operations Plan 1 of 2 •Operations Plan • Outlines how your business will be run and how your product or service will be produced. • A useful way to illustrate how your business will be run is to describe it in terms of “back stage” (unseen to the customer) and “front stage” (seen by the customer) activities. • Items to include in this section: • General approach to operations. • Business location. • Facilities and equipment. 6-31
  • 32. Section 8: Operations Plan 2 of 2 6-32 Operations Plan Key Insights • You have to strike a careful balance between adequately describing this topic and providing too much detail. • As a result, it is best to keep this section short and crisp.
  • 33. Section 9: Management Team and Company Structure 1 of 2 •Management Team and Company Structure • The management team of a new venture typically consists of the founder or founders and a handful of key management personnel. • Items to include in this section: • Management team. • Board of directors. • Board of advisers. • Company structure. 6-33
  • 34. Section 9: Management Team and Company Structure 2 of 2 6-34 Management Team and Company Structure Key Insights • This is a critical section of a business plan. • Many investors and others who read the business plan look first at the executive summary and then go directly to the management team section to assess the strength of the people starting the firm.
  • 35. Section 10: Overall Schedule 1 of 2 •Overall Schedule • A schedule should be prepared that shows the major events required to launch the business. • The schedule should be in the format of milestones critical to the business’s success. • Examples of milestones: • Incorporating the venture. • Completion of prototypes. • Rental of facilities. • Obtaining critical financing. • Starting production. • Obtaining the first sale. 6-35
  • 36. Section 10: Overall Schedule 2 of 2 6-36 Overall Schedule Key Insight • An effectively prepared and presented schedule can be extremely helpful in convincing potential investors that the management team is aware of what needs to take place to launch the venture and has a plan in place to get there.
  • 37. Section 11: Financial Projections 1 of 2 •Financial Projections • The final section of a business plan presents a firm’s pro forma (or projected) financial projections. • Items to include in this section: • Sources and uses of funds statement. • Assumptions sheet. • Pro forma income statements. • Pro forma balance sheets. • Pro forma cash flows. • Ratio analysis. 6-37
  • 38. Section 11: Financial Projections 2 of 2 6-38 Financial Projections Key Insights • Having completed the earlier sections of the plan, it’s easy to see why the financial projections come last. • They take the plans you’ve developed and express them in financial terms.
  • 39. Presenting the Business Plan to Investors 1 of 2 • The Oral Presentation • The first rule in making an oral presentation is to follow directions. If you’re told you have 15 minutes, don’t talk for more than the allotted time. • The presentation should be smooth and well-rehearsed. • The slides should be sharp and not cluttered. • Questions and Feedback to Expect from Investors • The smart entrepreneur has a good idea of the questions that will be asked, and will be prepared for those queries. 6-39
  • 40. Presenting the Business Plan to Investors 2 of 2 6-40 Twelve PowerPoint Slides to Include in an Investor Presentation 1. Title Slide 2. Problem 3. Solution 4. Opportunity and target market 5. Technology 6. Competition 7. Marketing and sales 8. Management team 9. Financial projections 10. Current status 11. Financing sought 12. Summary
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