1. Business Plan Outline Entrepreneurship II 23 February 2016

2. Programme for Today Quiz: 20mins Discuss forms of Financial statements: 10mins Activity on Financial Statements:40mins Break: 20min Business Plan Outline and Activity: 90mins

3. Business Plan: Its uses and Objectives 1.Guides synthesis of new insights and direction 2.Unifies and bring coherence to vision, mission, strategy and business model 3.Guides analysis of information and strategy 4.Communicates potential of the venture, opportunities and ways to exploit them. Communicates to investors and others inside and outside the venture 5.It’s a call to action for owners and management. -Increases flexibility and responsiveness of venture - Assists team organise, prioritise and arrange tasks that need to be executed - It is a tool & checklist of what you need to ensure achievement

4. Business Plan Action Define & Implement Objectives & Activities Analysis Collect & process Information Synthesis Original Strategy Communication Stakeholder support

5. Business Plan and What you have done so far You have done most of the parts of your business plan Now need to articulate it into a particular format Coherency is important Slot key aspects of your work into the business plan Others yet to come Lets go through the business plan outline handout together

6. Business Plan Front Items Cover Page Venture name, logo, address, contact details and names of founders, confidentiality and proprietary clause Table of Contents Contents and page numbers Executive Summary (max 2 pages)

7. Industry Profile Briefly describe industry structure, current status, growth prospects, market size, growth trends, New products and services in industry, new developments, new entrants/ exits National/ economic factors that can affect industry Environmental trends in the industry: energy use, supply chain factors, waste generation, recycling capabilities, new green technologies that will affect industry

8. The Venture, Business Strategy, Objectives & its Products/ Services Mission & Vision statements Venture Goals & Objectives Business Model Brand Positioning Statement Description of Company Product/ Services

9. Entry & Growth Strategy Describe your market type and your marketing strategy and rationale for choosing it. Is there an opportunity? Describe key success factors in your marketing plan, pricing, distribution channels, advertising and promotion plans Summarise how fast you intend to grow in the first three years and your plans for growth beyond the first product/ service Describe how your venture will impact society

10. Market Research & Analysis( Customer Development & Validation) Describe your customer development process in detail( all four stages) Describe your target customers and their profiles, location, age, gender, income level. Where they shop, live and work, hangout, visit. What are their habits/ needs/ wants? What emotions/ needs/ aspirations do they exhibit? How many potential customers are in your target location? How do you plan to position your company in these customers’ minds? Are the customers easily reachable? Are they receptive? Provide evidence. Who are the influencers, early adopters, decision-makers, followers, etc. in this market? How long does it take to make a buying decision? factors affect their decision (price, quality, timing, delivery,, training,, service, personal contacts, peer pressure, etc.) Provide data on customers who bought or used your product/ service; those who showed interest and those who did not show interest. Indicate why they showed interest or why not. Continued Market Evaluation Discuss how you will continue to assess your target markets, customer needs, quality of your service/ product; guide product improvement, new product development, growth, pricing, facility development

11. Market Research & Analysis( Customer Development & Validation) Market Trends Discuss market trends affecting your market: population changes economic trends, lifestyle changes, environmental impact, social trends, Laws & regulations, etc.

12. Competition& Competitive Edges. Assess the strength and weaknesses of competitors and alternative products/ service in the market. List the competitors and their products/ services Compare competing products and alternatives on basis of quality, price, performance, delivery, timing, service, warrantees, market share, etc. Use a table or 2x2 matrix Compare your value added to customer in terms of economic benefit vs your competitor( table or 2x2 matrix) Discuss the current advantages and disadvantages of current products/ services in the market and identify why they are not meeting customer needs What weakness of the competitors’ actions and behaviours leaves a gap in the market need?

13. Competition& Competitive Edges Describe your competitors’ strengths and weaknesses in terms of market share, capabilities, sales, distribution methods, brand positioning, profitability, costs, resources, financial position, etc. also use table to summarize Who are the industry leaders in terms of quality, service, performance, costs, pricing? Discuss why any company has entered or dropped out of the market in recent years Discuss the three or four key competitors and why customers buy from them and why customers leave them? Based on what you know about your key competitors’ operations, explain why you think they are vulnerable and you can capture a share of their market? Discuss also if you think it will be easy or difficult to compete with them

14. Estimated Sales What is so special about your product/ service that it can withstand current competition and new entrants? Indicate customers you have already gained and key future potential customers who will buy most from you Indicating your assumptions, estimate the number of unit sales or revenue you will sell/ get in each of the next three years Indicating your assumptions, show how your estimated sales unit or revenue is related to growth in the industry, the customers and the weakness of your competitors

15. Marketing Strategy & Plan The marketing plan shows how the sales projections will be reached through your marketing strategy and your unique value proposition. It also outlines what needs to be done, how it will be done, when and by whom. Overall Marketing Strategy Strategy- market fit, which market segments, your philosophy, who will you target first and who later, how will you reach and contact the customers, what features of your product/ service are you emphasizing( service, quality, price, etc.), innovations in marketing, seasonal strategies, contracts, customer loyalty approaches, target locations. Describe the approaches you will use to bring your product to the attention of prospective buyers. Develop a schedule/plan and costs of advertising and promotion

16. Pricing Describe your pricing strategy Comparison to price of your competitors Justify your pricing strategy in terms of benefit to customer and value added in terms of : newness, warranty, quality, efficiency, timing, performance, service, cost savings, etc. Discuss your gross profit margin and whether it allows to cover all costs plus profit. Show how your price will help you to: 1) Get market acceptance 2) increase market share 3) produce profits

17. Sales Tactics Describe the methods you will use to sell and distribute the service/ product in the short and long term (own sales force, sales reps, direct mail, distributors, retailers, etc.). Discuss the sales value chain and any payments to be made to the various distributors: wholesalers, retailers, salespeople. How will your sales people or distributors be selected and structured? Criteria and expectations in terms of sales per month, area, expected headcount per month. Expected response rates per media/ channel, costs / media/ 1000. Sales expected per person/ year. Commissions, incentives, salaries and comparison to industry. Develop a sales schedule and sales budget inclusive of all marketing, sales and promotion costs

18. Service and Warranty Policies Will your offering include service, warrantees or training? How important is this to the user buying decision? Describe the type and terms of warrantees if any? Will warrantees be handled by you or external service providers Describe how you will handle service problems What is your proposed charge for service calls? Is it at cost or at profit margin? Did you include these costs in your financials?

19. Distribution Describe how you will distribute your product/ service. Which channels will you use? What is the availability and capacity of these channels? Does shipping costs affect the selling price heavily to affect buying? What challenges or vulnerabilities in distribution do you face? What is the VFB process for distribution of your product/ service? Draw an outline of your distribution process of your product/ service

20. Prototyping, MVP Testing & R&D Plans Development Status & Tasks Describe the current development state of each product/ service. Complete, MVP, prototype. What needs to be done to make it fully marketable? What expertise do you need or do you have to complete the development of the offerings? List customers/ users who are participating/ participated in the design/ development/ testing of the product/ service and what were the customer’s views and insights? Difficulties & Risks Identify any anticipated challenges with design and development and how you will go about solving them. Indicate possible effects of this problem on the cost, timing, development and performance of the product/ service Product Improvement & New Products What other products/ service are you planning for the future after the introduction of your current product/ service? Discuss any compliance issue that is outstanding or that may affect your future development of products/ service. Costs : Provide the design and development budget for next three years: labour, materials, MVP testing, customer development costs etc. Proprietary Issues List any patents, trade secret, trade mark, copyright or intellectual property rights you own or pending. Describe any rights or agreements you have that gives you exclusive rights or proprietary rights

21. Operations VFB: Describe your Value Fulfillment Blue Print for delivering your service or product Operating cycle: describe the operation cycle of your business, lag times, lead times, seasonal variations Business Location: Advantages and disadvantages of location in terms of labor, wage rates, proximity to customers, proximity to suppliers, taxation, access to transportation, utilities, regulation, etc. Facilities & Improvements: Describe if,how and when will you acquire facilities for the business to run the business; will you buy or lease equipment or buy used or new equipment? What is the cost of equipment and facilities? What is the share of the budget spend on facilities and equipment? If you are outsourcing the production, what is the quality of facilities of the firm and how far from you are they located? What are the risks involved in how do you plan to monitor your suppliers? Partnerships & Suppliers. Describe your production/ service processes and what aspects you will outsource. Discuss reasons for outsourcing in terms of costs, capabilities, skills, etc. Describe your potential partners and suppliers and what initial research and findings you have made with regards to partners and suppliers. Describe your quality, production/ service and inventory control procedures that will help your venture reduce customer dissatisfaction and service problems. Provide any sample agreements with partners and suppliers Operations Plan: Develop an operations plans that shows units of production/ service, costs, inventory, sales levels, inputs per month for the first year. Build this based on your Value Fulfillment Blueprint Regulatory & Legal Issues: Describe any relevant regulatory requirements for your business such as licenses, zoning and health permits and environmental approvals, etc. Highlight any pending regulatory changes that might affect your business. Discuss legal and contractual obligation for your business.

22. Management Team Organisation. Provide an organizational chart and key management roles in the venture and the individuals to fill each position. Where each executive position cannot be filled with a fulltime position indicate how that function will be carried out initially (consultant/ part-time) and when it will be filled in the future. Indicate those executive individual who cannot join the company at the start. Were appropriate indicate which of the executive team have worked together before. Key Management Personnel. Describe the qualification, skills, work experience and previous responsibilities of each executive member especially achievements in sales, management, entrepreneurial ventures(failures), new product development and introductions, number of prior subordinates and size of budgets. Further describe the exact roles and responsibilities of each executive member in the venture. Attach CVs of key executives. Management Compensation & Ownership Give the planned salary and share ownership of each key member and the amount of equity investment by each if any. Indicate how much each member was paid in their previous job Other Investors Describe any other investors in your venture and number of shares and percentage shares they have in your company, the share price and when they were acquired. Agreements, Stock Options & Bonus Plans. Describe and provide employment and other agreements with key employees. Describe any performance-based/ incentive stock options and bonus plans for founders and employees. Board of Directors. Discuss the company’s philosophy about the size and composition of the board. Identify proposed board members and give a 1-2 sentence description of their background and what they bring to the board Supporting Professionals & Services. Indicate the supporting services that will required by the venture. List the names of legal, accounting, advertising, consulting and banking advisors selected for your venture

23. Schedule, Risk Management & Assumptions Overall Schedule Prepare a 12 month schedule for your business, showing key activities and milestones month by month. Risks, Problems & Assumptions Discuss your assumptions about customer creation, sales projections, financing, revenue, pricing, etc. Discuss the risks involving your business plan: costs, cash, lead times, suppliers, inputs, distribution, marketing, competition, projections, industry, economic, social, policy, political, etc. Financial Plan Projected Income Statement ( three years) Projected Balance Sheet( first two six months in year one, then end of year for next two years) Projected Cash Flow Analysis( three years) Break Even sales, volume and Charts Costs control: How will you monitor and control costs? Who will be responsible? How often? Financial highlights : cash required, timing of investment needed, amount of equity and debt needed, how and when debt will be repaid, main costs, anticipated increases in expenditure or costs, conclusions

24. Proposed Company Offering & Appendices Desired Financing: how much money do you need? How much from investors, how much from loans and overdraft Offering: Describe what you are offering the investor: type of shares (common shares, debt plus stock, convertible shares) unit price and total amount of shares you are selling, conversion conditions, interest, and maturity date. Percentage of venture the investor will hold after buying shares. Capitalization: How many of the share will be held by key management and how many by investors and how many will remain unissued, how many share will be reserved for employees in the future? Use of Funds: Indicate what the money raised will be used for e.g. marketing, production, equipment, working capital etc. Return on Investment: indicate the rate of return on investment for the investor based on your valuation and proposed ownership shares. Also give options for exit or future involvement of the investor in the venture