1. Welcome Business Start-Up Programme Workshop 4 to the ‘Business Planning’

2. Workshop Links Business Planning  Front Page  Executive Summary  The Business  Market  Operations  Finance  SWOT Analysis  Action Plan The Essentials Why start a business? Viability assessment Marketing Management control Legal issues Funding Marketing Product & service Place Price Promotion Finance Profit & Loss Cash flow Balance sheet

3. Business Planning Workshop - Introduction Start-up Workshops Business Plan Action Plan On-going Support 1.The Essentials 2.Marketing 3.Finance 4.Business Planning 5.Bookkeeping 6.Tax & NI

4. Business Planning Workshop - Introduction What is a Business Plan?  Details how and why you will run your business  Details your financial forecasts  Details your market research  Explains how many employees you need and when  Is a live document regularly updated

5. Business Planning Workshop - Introduction Why a Business Plan?  An accurate plan ensures your idea is viable  Demonstrates that you know what you’re doing  Shows how you will make a profit  Gives investors confidence

6. The Business – Reference Information Business Planning Start-up Workshops Business Plan Action Plan On-going Support The Business Organisation & Control The Market Finance SWOT Risk Action Plan Business Name:…………………………………… Director/owner name…………………………………… Address:…………………………………… …………………………………… Telephone…………………………………… Legal status…………………………………… Company Number…………………………………… VAT Number…………………………………… Insurance Details …………………………………… Employee Liability…………………………………… Public Liability…………………………………… Other…………………………………… Telephone…………………………………… Email…………………………………… Website…………………………………… Bank…………………………………… Adviser/Accountant……………………………………

7. The Market – Introduction Business Planning Start-up Workshops Business Plan Action Plan On-going Support Executive Summary The Business Organisation & Control The Market Finance SWOT Risk Action Plan Objective  To prove the viability of your sales and profit forecast. Step 1 Define your product and service offer. Step 2 Establish the demand in the market place for your product and service. Step 3 Confirm your price structure. Step 4 Promote your business to get and keep customer

8. The Market – Product & Service – Competitor Survey Selling Price: Approvals: Warranty: Promotional Methods: WarrantyComparison of Warranty Offers Competitor 1Competitor 2Competitor 3Your Business Approvals StatusComparison of Approvals Competitor 1Competitor 2Competitor 3Your Business Promotion MethodComparison of Promotional Methods Competitor 1Competitor 2Competitor 3Your Business Product DescriptionComparison of Selling Price Competitor 1Competitor 2Competitor 3Your Business Objective  To use competitor information to help develop your marketing plan  Compare pricing, approvals, warranty offers promotional methods and strengths and weaknesses.  Fill in the tables for ease of comparison

9. The Market – Product & Service – Product Offer If you have a skill gap identify it in your action plan and describe what you are to do to bridge the gap Objectives  To have a clear statement of your product offer and the skills needed to supply your customers.  Enter your details following the examples shown in the table below which could be for a landscape gardener  Include product offers that you are to offer now and in the future. Details of Product OfferTimescalesSkills needed Design Building/paving Installation of electrical power Horticulture Garden maintenance Now 6 months Now Design software Planning Legislation Legislation, approvals Planning (Listed Trees etc) Knowledge of plants etc

10. The Market – Product & Service – Service Offer Details of Service OfferCustomer Requirement Responsive Accessible Reliable Flexible Value for money Warranty Quote request followed within 24hrs 24/7 Turn up & deliver as promised Exceed their expectations Quality Peace of mind Objectives  To have a clear statement of your service offers and how they will met customer requirements  Enter your details following the examples shown in the table below which could be for a landscape gardener

11. The Market – Place – Customer Profile & Expectations B2B Profile CustomerResearch Areas Type/Sector Annual Sales Profitability/credit rating Number of employees Premises Standard Industry Classification (SIC code) Customer ExpectationsResearch Areas Accreditations Contracts Licences Standards Buying behaviour Legislation Electronic trading Objectives  To demonstrate the areas of research used to profile your customers

12. The Market – Place – Customer Profile & Expectations B2C Profile CustomerResearch Areas Type/Sector Disposable Income Premises Customer ExpectationsResearch Areas Accreditations Contracts Licences Standards Buying behaviour Legislation Electronic trading Objectives  To demonstrate the areas of research used to profile your customers

13. The Market – Price Considerations  Add a premium for a Niche product or service  Know what the customer is prepared to pay.  Keep track of competitor pricing and the going market rate  Know your break even and cover costs  Top end of the market price implications Enter the percentage difference between you and your competitors average selling price Competitor 1 (Difference (%) Competitor 2 (Difference (%) Competitor 3 (Difference (%) Competitor 4 (Difference (%)

14. The Market – Promotion Objective  Defines the promotional methods to be used to generate sufficient enquiries to meet your sales forecasts.

15. Organisation & Control - Introduction The Business Organisation & Control The Market Finance SWOT Risk Action Plan  Structure  Suppliers  Measuring performance  Management information systems Objectives To show how you will control your business and achieve your sales and profit targets

16. Organisation & Control - Structure Job TitleNameResponsibility Provide summary background and experience of principals or attach CV Objectives  To provide information on the roles, reporting relationships and skills of the people who are to work in the business. Step 1: Show Structure Name / Job Title Step 2 : Show Responsibilities Name / Job Title Step 3 : Show Career History

17. Organisation & Control - Suppliers SupplierPurchased ItemCost (£)Selling Price (£)Gross Profit (%) Objectives  To demonstrate that you have identified the main suppliers for your materials and that you can purchase at prices that are included in your financial forecasts  Enter details of suppliers and purchased items using the table format below.

18. Organisation & Control – Measuring Performance Request for quotation (RFQ) Prepare an estimate & submit a quotation Deliver to customer Complete work Receive an order Prospect for work Send invoice Receive payment Sales & Marketing Operations Finance & Admin  Number and value of enquiries  Source of enquiries  Average time to respond to enquiries  Conversion rate enquiry to order.  Frequency & value of orders  Sales analysis  Material ordered on time (%)  Material delivered on time (%)  Orders started on time (%)  Orders delivered on time (%)  Actual ‘v’ estimated costs  Cost of quality  Budget ‘v Actual P & L  Stock analysis  Value of debtors & creditors  Average debtor & creditor days  Cash at the bank Plan work Employees:  Budget ‘vs’ actual numbers  With contract (%)  With performance targets (%)  With training plans (%)  Absenteeism (%)  Staff turnover (%)  Recruitment plans Objective: To identify the performance measures to be used to control my business.

19. Organisation & Control – Management System Request for quotation (RFQ) Prepare an estimate & submit a quotation Deliver to customer Complete work Receive an order Prospect for work Send invoice Receive payment Sales & Marketing Operations Finance & Admin Plan work Objective: To confirm the performance measures and systems to be used to control your business. Reporting Systems  Manual  Computer based Documentation  Terms & conditions  Quotation form  Purchase order form  Sales invoice form  Receipts form  Completion of work form Sales & Marketing OperationsFinancePeople Enter Performance Measures

20. Finance - Introduction The Business Organisation & Control The Market Finance SWOT Risk Action Plan  Start-up costs.  Profit & loss  Cash flow  Investment Profile Objectives To confirm the viability of your profit and cash flow forecasts

21. Finance – Start-up Costs ItemExistingTo BuyCost (£) Capital Items: Equipment Software Tools Vehicles Property Total Cost (existing) Total Cost (to buy) Working Capital: Insurance Wages Marketing Stock Legal Fees Total Cost (existing) Total Cost (to buy) Objective  To identify the items and costs needed to start-up the business.  Enter each item under the relevant heading using the examples shown below for reference.

22. Finance – Profit & Loss  Market research  Competitor survey  Customer questionnaire  Market testing.  Existing clients  Researched direct and overhead costs.  Depreciation rate.  Loan interest repayment rates.  Discount for volume Sales Examples Costs Examples Objectives  To confirm the assumptions used to justify the credibility of your profit & loss forecast using the relevant examples shown below for reference;  Provide the details to support each example used.

23. Finance – Cash Flow Examples  Average debtor & creditor days agreed with customers and suppliers  Schedule for VAT payment.  Investment profile agreed with investors. Objectives  To confirm the assumptions used to justify the credibility of your cash flow forecast using the relevant examples shown below for reference.  Provide the details to support each example used.

24. Finance – Source of Funding Sources of fundingAmount (£) Personal Loan Bank Loan Grants External Investor Other Total Objectives  To identify the sources of money to be obtained to fund the start up of the business.  The amount of money should cover the total start-up costs.  Enter the value and source of each type of funding using the examples below as references.

25. Finance – Cash Flow – Investment Profile InvestmentValue (£)Investment Profile (Months) 123456 Expenditure Computer Office Furniture Stock Total Income 1000 2500 1500 5000 1000 1500 1000 4000 1000 2500 Income: Own Money Bank loan Grant Total 2000 2500 500 5000 2000 2500 4500 500 Net05000 Objectives  To prepare a cash flow projection based upon the timescales of start-up expenditure and the income of funding.  Include the profile in the business cash flow forecast.

26. SWOT Analysis – Introduction The Business Organisation & Control The Market Finance SWOT Risk Action Plan Objective To Introduce the rules involved in carrying out a SWOT analysis Strengths, Weaknesses, Opportunities & Threats  Identify the aspects of your business plan for each SWOT category that are important in meeting your sales and profit targets  Strengths and weaknesses relate to the internal aspects of your business.  Opportunities and threats come form outside your business.  Cannot have the same aspect in more than one SWOT category.

27. SWOT Analysis – Results StrengthsWeaknesses OpportunitiesThreats Objectives  To review the business plan content and identify the strengths weaknesses, opportunities and threats.  Review the list of items shown below and enter them into the appropriate box.  Add items relevant to your business that are not on the list SWOT Items  Product offer  Service offer  Sales management skills  Financial management skills  Time management skills  Management team  Market knowledge  Size of customer base  Strength of competitors  Product price  Marketing budget.  Material suppliers  Documentation  Management information system  Cash  Business support professionals  Government legislation

28. Risk & Contingency The Business Organisation & Control The Market Finance SWOT Risk Action Plan RiskContingency  Shortfall in sales forecast  Escalating costs  Absence of key employees.  Government legislation  Monitor sales trends and manage costs  Set up standard costs & monitor trends  Set up insurance  Join Chamber of Commerce Objective  To demonstrate that you have thought about the main risks that could prevent you from successfully implementing your business plan and have contingency plans in place to support success.  Enter the risks and contingencies in the table using the following examples for references

29. Action Plan The Business Organisation & Control The Market Finance SWOT Risk Action Plan ActionResponsibilityFinish DateCost (£)  Attend sales training course  Set up management control system  Deliver marketing campaign  Join Chamber of Commerce  Me  Business partner  Me  31.10.08  30.9 08  30 9.08  £125  £800  £500  £150 Objective  To create an action plan to strengthen the weakness, achieve the opportunities and off-set the threats resulting from the SWOT analysis  Enter the actions in the table below using the examples for reference purposes.

30. What Next? 1.Complete the business plan 2.Complete the assigned actions

31. Executive Summary The Business Organisation & Control The Market Finance SWOT Risk Action Plan One page summary of the business plan content:  Outline of what the business does  Summary of ownership  Summary of market and its sales potential  First years sales and profit objectives.  Statement of start-up costs and fund requirements

32. The Market – Market Share Enter information using your information following the example below: Annual Value of orders needed to meet sales & profit targets (From viability assessment):  No. of orders50  Average order value (£)£100  Annual value of orders needed = No. of orders x Ave. order value£50000 Potential annual value of orders in catchments area (From market research):  Catchments areaNational  Customer profileB2B SIC 123  Estimated no. of customers meeting profile 500  Average annual frequency of purchase10  Average order value (£)100  Potential Value = No. of customers x Frequency of purchase x Ave. order value (£)£500000 Estimated potential value of orders/competitor  Potential value of orders in catchments area£500000  Estimated no. of competitors in catchments area 5  Potential Value/ competitor = Potential order value ÷ no. competitors£100000 Estimated market share  Estimated potential value of orders/competitor£100000  Value of orders needed to meet sales & profit targets£50000  (Value of orders needed ÷ Potential order value) x 1005%

33. Keep in touch! Keep in touch with each other, chat and network on Linked in. www.linkedin.com Join the ‘Business Start Up Group’ and then join ‘The Workshop Group’ subgroup to keep in touch!