1. Constructing the ‘Elementary’ Business Plan *Based on inputs from venture capitalists and from commercial banks

2. Session Objectives To list the uses of a business plan To lay out the steps involved in writing a business plan To list out data required in drawing up a business plan To understand the ‘Elementary’ business plan To understand the structure and composition of various sections of a business plan To list the various appendices and exhibits needed in a business plan

3. Uses of a Business Plan Equity funding Bank finance Alliances Recruitment Clarify the business Others

4. The Elementary Business Plan 1.What is the product/service? 2.Who is your customer? 3.How will you reach the customer? 4.Why you? How will you defend your market? 5.How will we make money?

5. Kinds of Business Plans Summary Plan Executive summary Full Business Plan Operational Business Plan The oral presentation – Slide Deck

6. Steps in Writing a Business Plan Define purpose Collect Information Put it down The rough draft Financial analysis Finishing Review

7. Data Required Company details – Documents relating to formation – Shareholding details – Permits and registrations Management – Organization chart – Details of key employees – Consultants and advisors – Compensation and other employee agreements Industry and Competitors – Market statistics from secondary sources – Reports on trends, etc – Competitor data – Customer surveys

8. Data Required Operations – Product specifications – Contracts and purchase orders for raw materials – Competitive advantages – Details of Intellectual Property (Patent, license, and trademarks) – Regulatory approvals – Industry standards as per regulations – Plant layout and operations plan – Research and development plans

9. Data Required Marketing and Sales – Marketing plan – Advance orders, if any – Marketing materials Financial Information – Data on fixed and variable costs to be incurred – Financial forecasts

10. Schilit (1987, Business Horizons) 1.Executive summary 2.Background and purpose 3.Objectives 4.Market analysis 5.Development and production 6.Marketing 7.Financial plans 8.Organisation and management 9.Ownership 10.Critical risks and problems 11.Summary and conclusions 12.Appendices

11. Key Sections of a Business Plan Executive summary The company The management team The industry and the market Operations The marketing plan Financial plan Risks and contingencies Appendices

12. Executive Summary The executive summary is probably the most important section of the business plan. It is basically the whole business plan condensed into a few pages The main objective of the executive summary is to entice the reader to go through the entire plan.

13. The Company History Current Status Future

14. The Management Team Technical and professional qualifications Quality of work experience Experience in the relevant sector Reputation in the business community Evidence of moral integrity Financial capacity Networking with other vital people in the industry

15. The Industry and the market An industry is a collection of sellers A market is a collection of buyers – Concentrate on the relevant segments Competition

16. Operations Gantt chart outline setup Technology Raw material strategy Production planning Quality HR policy

17. Marketing Target Segments Branding Product Packaging Pricing Distribution Promotion

18. Finance Funds sought Projected financial statements Costing details Break even and payback analysis

19. Risks and Contingencies Identify major threats and risks Outline strategies for countering them

20. Appendices 1.Copy of documents pertaining to incorporation or formalization of partnership. 2.CV’s of the entrepreneur/s and of key employees 3.Copies of various permits or permissions granted. 4.Copies of papers pertaining to sale or lease of land for the business 5.Copies of documentation of proprietary intellectual property 6.Graphical representation of schedule including milestones and dates 7.Photographs of location 8.Factory or plant layout 9.Graphical representation of production process

21. Appendices 10.Findings of market survey conducted 11.Photograph of product or prototype 12.Storyboards or mock-ups of advertisements 13.Projected balance sheets 14.Projected profit and loss accounts 15.Projected cash flow statements 16.Sensitivity analysis of P&L a/c 17.Break even analysis 18.Financial ratios