Writing an Effective Business Plan: Building a Roadmap to Success
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Presentation on theme: "Writing an Effective Business Plan: Building a Roadmap to Success"— Presentation transcript:
1 Writing an Effective Business Plan: Building a Roadmap to Success Entrepreneurship7Writing an Effective Business Plan: Building a Roadmap to Success
2 “There is real magic in enthusiasm “There is real magic in enthusiasm. It spells the difference between mediocrity and accomplishment.”--Norman Vincent Peale
3 Business PlanA detailed road map for converting a recognized opportunity into a profitable businessDescribes the business modelPersuades potential investorsContributes to the ultimate success of the venture
4 A Living DocumentA business plan changes often as a new business develops.Do just enough business planning to get the new company started.Refine the plan with information gathered from running the new venture.
5 Model of Successful Business Planning Prepare arelativelysimple planStart thebusinessRefine thebusiness planContinue togrow thebusiness
6 Key Aspects of Information in Business Plans Capabilities offounding teamAttractivenessof productor servicePotentialmarket,competitorsPotentialreturnsDecisions about providing funds
7 Business Plan Components What is the basic idea?Why is the new product appealing—and to whom?How will the idea be realized?Who are the entrepreneurs?How will the venture be structured?How much funding is needed? What type of funding? How will it be used? How will you realize a return?
8 A Successful PlanOrderlySuccinctPersuasiveIn proper form
9 Executive Summary Your elevator pitch Provides a brief, clear, and persuasive overview of the new ventureTarget 2 to 3 pages
10 Business Plan Sections Background, purpose, and opportunityMarketingCompetitionDevelopment, production, and locationManagementFinancial sectionRisk factorsHarvest or exitScheduling and milestonesAppendices
11 Background, Product, and Opportunity What is the nature of the idea driving your company and how did it arise?What does the product have to offer?What is the basic nature of the company?What are the company’s goals?
12 Market Analysis What have you done to identify the market? How large is the market?How will products or services be promoted?What do you know about competing products and companies?How will the product or service be priced?
13 Development, Production, and Location Where are the products or services in the development process?What are the projected costs and timetable for making the product or delivering the service?What steps have been taken to assure quality and safety?
14 Management TeamDo team members have the experience, expertise, skills, and personal characteristics needed?Do team members having good working relationships, defined roles, and clear communication?
15 Financial Plans and Projections Proforma balance sheetProforma income statementCash flow statementBreakeven analysis
16 Critical Risks Price cutting by competitors Unforeseen industry trends Sales projections not achievedCosts exceed estimatesSchedules not metLack of experienceDifficulties raising financingUnforeseen trends
17 Harvest and ExitManagement successionExit strategies
18 Scheduling and Milestones Formal incorporationCompletion of designCompletion of prototypesHiring of initial personnelProduct displaysAgreementsMoving into productionReceipt of ordersFirst salesProfitability
19 The Intangibles The extra “something” Pay attention to organization, clarity, word choice, and styleHave good writers read your planRevise according to their suggestions
20 Seven Deadly Sins Plan is poorly prepared Plan looks too slick Executive summary is too longDevelopment stage of product is unclearFails to answer “Why would anyone ever want to buy one?”Doesn’t state management qualificationsFinancial projections are wishful thinking
21 Venture Capitalist Decision Criteria Market familiarityLeadership ability of foundersProprietary protectionMarket growthNumber of competitorsStrength of competition
22 The Presentation Remember: This is important! Prepare, prepare, prepareChoose content carefullyPersuade, don’t overwhelmShow enthusiasm tempered with realityRehearseDon’t overlook the basicsRespond positively to questions