1. CDU – School of Information Technology Preparing a Business Plan - Slide 1 The business planners should begin by considering the following questions: l Where is the business at present? This leads to information gathering which will also help answer: l What are the objectives and goals that the business is trying to achieve? l What is the most effective way of achieving these goals? HIT241 - BUSINESS PLANNING Beginning

2. CDU – School of Information Technology Preparing a Business Plan - Slide 2 A business planners must undertake a series of specific tasks to answer the 3 questions (previous slide). This involves analysing and documenting: HIT241 - BUSINESS PLANNING Tasks... History Goals Assumptions Quantification Resource allocation Checking Sensitivity analysis Contingency planning

3. CDU – School of Information Technology Preparing a Business Plan - Slide 3 HIT241 - BUSINESS PLANNING Elements of a Successful Business Plan Table of Contents (1 page) Executive Summary (1 page) Company Overview (1 page) Products and Services (1 page) Industry and Market Analysis (~3 pages) Marketing Plan (~4 pages) Operations Plan (~2 pages) Development Plan (~2 pages) Management Plan (~1 page) Financial Plan (~3 pages) Offering (1 page) Appendices (no more than 15 pages)

4. CDU – School of Information Technology Preparing a Business Plan - Slide 4 The Executive Summary of a Business Plan is a one-page distillation of your entire plan, and often is the last section to be written. It’s objective is to capture the reader’s interest,so that they want to read the entire plan. It is not a summary of the plan; rather it should be considered a chance to “sell” the reader on the business opportunity. Remember, most readers will never get any further than your Executive Summary, so make it count! HIT241 - BUSINESS PLANNING Executive Summary

5. CDU – School of Information Technology Preparing a Business Plan - Slide 5 Concept Description: The essence of the business. Opportunity: What is the size of the market & its critical trends? Solution: Describe the product or service & problem solutions. Competitive Advantage: What is unique about the product? Process: How is the product to be produced and delivered? Positioning: What segment of the market are you addressing and how will customers perceive the product or service? Financial: What revenues will be achieved in year 3 or 4 and when will the company breakeven? How much funding is required? What is the exit strategy? Management: Who are they and what is their experience? HIT241 - BUSINESS PLANNING Executive Summary

6. CDU – School of Information Technology Preparing a Business Plan - Slide 6 The Company Overview is a brief (one page) description of the company you have founded or want to set up. It should describe the structure of the company, and how will it be organised. It should include: l Introduction - including name, location & business structure. l Mission statement - a short inspirational statement of vision and goals. l History and current status. l Objectives as a concise statement. HIT241 - BUSINESS PLANNING Company Overview

7. CDU – School of Information Technology Preparing a Business Plan - Slide 7 This section is a detailed description of the products and/or services to be offered. Begin to sell the idea here by generating some excitement about the product/service. Be factual, but be enthusiastic. When readers have finished learning about the product or service, they should be primed to wade into the marketing and financial details of the venture. HIT241 - BUSINESS PLANNING Products & Services Description

8. CDU – School of Information Technology Preparing a Business Plan - Slide 8 This section should include: l An introduction - that evocatively describes the experience of customers dealing with your company as they purchase the product. l Description - what exactly is the product or service. l Market Comparison - position the product or service in its marketplace. l Proprietary rights - what patents, copyrights, trade secrets, non-competitive agreements are in place? l Stage of development - where is the product in its lifecycle (early, growing, mature, declining)? HIT241 - BUSINESS PLANNING Products & Services Description

9. CDU – School of Information Technology Preparing a Business Plan - Slide 9 This section describes and outlines the industry and the marketplace in which you will compete. The focus in this section is on the industry and marketplace as it currently exists – you may not even mention your business here, unless it already a part of the industry. When finished with this section, the readers should understand the dynamics, problems, and opportunities driving the industry and marketplace. HIT241 - BUSINESS PLANNING Industry & Marketplace Analysis

10. CDU – School of Information Technology Preparing a Business Plan - Slide 10 This section should include: l An introduction - summarising the industry and marketplace analysis. l Industry Analysis - providing a big-picture overview of the size and scope of the industry. l Marketplace Analysis - carefully and analytically describe the specific market that it is proposed to operate within. l Marketplace Buyer Analysis - identify and segment the customers in the marketplace. l Marketplace Competitor Analysis - identify potential direct and indirect competitors. HIT241 - BUSINESS PLANNING Industry & Marketplace Analysis

11. CDU – School of Information Technology Preparing a Business Plan - Slide 11 The Marketing Plan will make or break the prospects for the venture. A great idea is meaningless if you cannot find customers, & logical financial projections are irrelevant if nobody buys the product. In the marketing strategy you must convince yourself and the reader, that there is a real market for the product. The strategy is where you show how you are going to fit into the market structure previously described in the Marketplace Analysis. HIT241 - BUSINESS PLANNING Marketing Plan

12. CDU – School of Information Technology Preparing a Business Plan - Slide 12 Create a seven-sentence marketing strategy statement: 1. The first sentence tells the purpose of the marketing strategy. 2. The second tells how you’ll achieve this purpose, focusing upon your benefits. 3. The third tells your target market – or markets. 4. The fourth, the longest sentence, tells the marketing weapons you’ll employ. 5. The fifth tells your niche. 6. The sixth tells your identity. 7. The seventh tells your budget, expressed as a percentage of your projected gross revenues. HIT241 - BUSINESS PLANNING Marketing Plan - Introduction

13. CDU – School of Information Technology Preparing a Business Plan - Slide 13 This section defines the target market, and describes the unmet needs of the target customers. It should consider: l What segment of the market is targeted? l What characteristics define target customers? l How big is the target market? What share will we capture? l Who are the customers, users, OEM's distributors & retailers? l What needs does the product fulfil with the target market? l What problems are we solving for these customers? l What evidence is there that potential customers and the target market wants our product? l How will we position our product with our customers? HIT241 - BUSINESS PLANNING Marketing Plan - Target Market

14. CDU – School of Information Technology Preparing a Business Plan - Slide 14 Describe how the product has been designed to meet the needs of the target customer, and compete in the target market: l What specific product design characteristics meet the needs of your customers? l What differentiates our product in our target market? l How does it differ from that of our competitors? l What are the strengths and weaknesses of our product? l Why will customers in the target market buy our product rather than the competitions? Why will customers switch select us? l How will we differentiate ourselves from our competitors? l How quickly and how effectively can your competitors respond to our business? HIT241 - BUSINESS PLANNING Marketing Plan - Product Strategy

15. CDU – School of Information Technology Preparing a Business Plan - Slide 15 The plan also needs to define the following: l Pricing Strategy and why it will be effective with the target customer in the marketplace. l Distribution Strategy and explain why it is the best for the marketplace. l Advertising and Promotion Strategy - it is critical to inform the target market about the availability of your product or service, and to continue to communicate your benefits to that market. l Sales Strategy - remember, often “Nothing happens until the sale is made”. HIT241 - BUSINESS PLANNING Marketing Plan - Other Strategies

16. CDU – School of Information Technology Preparing a Business Plan - Slide 16 Summarise of your marketing expenses and revenue forecasts here. Include enough information to inform, but not so much that the reader is overwhelmed. For example you might include a table summarising revenues for a simple business that looks like this: HIT241 - BUSINESS PLANNING Marketing Plan - Forecasts

17. CDU – School of Information Technology Preparing a Business Plan - Slide 17 This section outlines how you will run your business and deliver value to your customers. Operations is defined as the processes used to deliver products and services to the marketplace and can include manufacturing, transportation, logistics, travel, printing, consulting, after-sales service, and so on. In all likelihood, about 80% of your expenses will be for operations, 80% of your employees will be working in operations, and 80% of your time will be spent worrying about operating problems and opportunities. HIT241 - BUSINESS PLANNING Operations Plan

18. CDU – School of Information Technology Preparing a Business Plan - Slide 18 The plan should include the following parts: l Introduction - how you will provide value to your customers. l Operations strategy - using operations to fulfil the marketing strategy. l Scope of operations - who, what and why? l Ongoing operations - operating into the future. l Operating Expenses - a brief summary of anticipated costs: HIT241 - BUSINESS PLANNING Operations Plan

19. CDU – School of Information Technology Preparing a Business Plan - Slide 19 In this section, you will outline how you intend to ramp-up your business. This section is often woefully under-developed in many business plans. Assuming you have a dynamic marketing plan and customers do indeed come flocking for your product or service, you must be able to deliver it to them. The Development plan is a road map of how you are going to get from where you are now to where you want to be in the future. It commences with a development strategy to launch the company and its products. HIT241 - BUSINESS PLANNING Development Plan

20. CDU – School of Information Technology Preparing a Business Plan - Slide 20 This is where a Gantt Chart showing the timetable for product development is appropriate. HIT241 - BUSINESS PLANNING Development Plan - Timeline

21. CDU – School of Information Technology Preparing a Business Plan - Slide 21 Include a summary of anticipated development expenses and of the assumptions behind your estimates. HIT241 - BUSINESS PLANNING Development Plan

22. CDU – School of Information Technology Preparing a Business Plan - Slide 22 The purpose of the Management Plan is to convince the reader that you have a great management team to complement a great business concept. When readers are finished with this section, you want them to be confident that your venture is in good hands and will be competently managed -- by you! This plan should include: l Company organisation - describe the business structure. l Management team - who are they, and what are the key roles and responsibilities. What additions are planned? Administrative Expenses - a summary of anticipated administration expenses and of the assumptions behind the estimates. HIT241 - BUSINESS PLANNING Management Plan

23. CDU – School of Information Technology Preparing a Business Plan - Slide 23 It is important that you have strong, well-constructed financial plans. It is highly recommend that you start with your revenue projections then create a schedule or timetable of development and operational activities. The financial plans should include: l Financial Statements - income statements, balance sheets, & cash-flow projections, for at least 3 years into the future. l Ratio Analysis - compare critical financial ratios from your plan to those of your industry. l Financial summary - incorporating income, cash flow, balance sheet, and growth. l Financial Assumptions. l Funding Requirements, and Sources & Uses of Funds. l Business Risks - what are they, & how can they be avoided? HIT241 - BUSINESS PLANNING Financial Plan

24. CDU – School of Information Technology Preparing a Business Plan - Slide 24 HIT241 - BUSINESS PLANNING Summary of Financial Projections

25. CDU – School of Information Technology Preparing a Business Plan - Slide 25 The Offering is where you make your pitch for money. If you are seeking a loan, then you need to indicate to potential lender how the loan will be repaid and what is the interest rate. It is important that you clearly spell out the key terms of the proposal and sell the advantages to the investor/lender. l Investment Requirements - Using your cash flow analysis, what investments do we require to achieve our plans? What is the timing? l Valuation of Business l Offer - What is the structure of the deal we are offering or seeking? How much money do we want? l Exit Strategies - What is our preferred exit strategy? How can investors realise a return on their investment? HIT241 - BUSINESS PLANNING Offering (Funding Request)

26. CDU – School of Information Technology Preparing a Business Plan - Slide 26 The appendices are where you should collect all of the documentation that supports the body of your business plan. HIT241 - BUSINESS PLANNING Appendices Required items Financial Statements -Income Statement -Balance Sheet -Cash Flow -Monthly and Quarterly -Cash Flow Statements -Break-even analysis -Financial assumptions Management resumes Optional items Surveys and survey results. Development timeline. Operations layout. Sample menus, web pages, advertisements, etc. Anything else that will help to illuminate and/or sell your plan.

27. CDU – School of Information Technology Preparing a Business Plan - Slide 27 Writing a business plan is an essential step for the growth of every company. It describes the organisational goals, and how to achieve them. The business plan is especially important for: l Developing new technologies and products. l Obtaining external financial support. l Managing mergers and acquisitions. l Arranging strategic alliances. l Building relationships with customers & suppliers. l Attracting and retaining key employees. HIT241 - BUSINESS PLANNING Conclusion