Business planning Super-project.eu

Importance and benefits of business planning Real value is in the planning process, not in the plan itself Reducing risk and uncertainty in launching a venture Documenting a business and making sure every important aspect has been thought through Forcing potential entrepreneur to look at the business idea in the light of reality Revealing potential problems before launching a venture and committing significant resource Gives everyone involved a sense of direction Attracting lenders and investors

What types of start-ups need business plan and what don’t General consensus on crucial importance of business plan when approaching investors and asking for money Many elements of business change very frequently Yet, without any systematic approach to planning, founders are frequently vague, unfocused and messy about their future business Even for a dynamic start-up venture in a dynamic market, a few pages document should express with clear language main aspects of the future business The more predictable the business and market of a start-up is, the closer should be its business planning practice to the generally recommended and established structure

New venture business plan What is special for new venture business plan compared to one of an established business? Uncertainty about assumptions Works with milestones and real options Used for raising capital

Structure and content Executive summary – emphasizes key issues of the business plan Entrepreneur and team – demonstrates talents, skills and experience of founders and/or management team Vision, mission value proposition and business model Product/service – describes the product/service offered by the venture Opportunity analysis and market validation, Market analysis – presents highlights of market research and reflects your knowledge of the industry Strategy – describes how the business wants to achieve its goals

Structure and content Marketing strategy, sales plan - discusses competition and describes intended marketing instrument People – actual and future requirements for employee, job descriptions, compensation and motivation Resources and operations, Operational plan – how products/services are to be produced Financial plan – financial representation of all the information presented in the other sections Risks – summary of critical risks and their prevention and handling Start-up schedule – outlines plan of the next steps of the start-up process

Form Easy to read – simple (but not oversimplified) text, attractive headlines Attractive but rather decent visual layout Use of figures, charts, pictures, diagrams where relevant Numbered pages and sections Avoiding too small letters (definitely not smaller than 10 pts) Maximum extent of 30-40 pages incl. appendices, i.e. 15 to 25 pages plus appendices Avoid abbreviations that are not previously explained Terminology, analogies and examples must be understandable for target audience Carefully check for mistakes and errors Always include references and sources of secondary data

Different types of business plan Types according to extent and detail One-page business plan Lean plan (mini-plan) Standard business plan Types according to the nature of target audience Working business plan Presentation business plan Types according to purpose Feasibility study Operations plan/annual plan Growth / expansion plan

Dos in business planning Demonstrate understanding of the technology, market, risks, and customer needs Always provide defensible assumptions Include a credible evidence of commitment Provide any available relevant evidence of reputation Follow the common business plan structure, while also adjusting for unique aspects Control the copies and keep distribution records. Be sure to understand every part of the business plan. You need to present it convincingly. Do make your plan readable, use charts and graphics where appropriate, and avoid making it too long.

Don’ts in business planning Don’t try to be everything to everybody. Stay focused. Always build your forecast on real market data backed by primary and secondary market research. Don’t forget the importance of cash flow. Avoid overly simplistic assumptions. Don’t be dishonest. Preparing a business plan is not a one-shot exercise. Don’t let others (i.e. outsiders) to completely prepare your business plan. If it is your first experience, don’t write business plan without seeking the advice. Avoid errors and mistakes.

Scale up business plan Business plan is also useful and important tool for planning the business scale up. Such plan is created in different context, and will have some specific features The main areas to be covered are: Identification and analysis of growth opportunities Description of the current business, including analysis of its strengths and weaknesses Outline of the mid-term growth plan, including very specific 1-2 years strategy and detailed 90 days tactical plan Information on the team + Revision of staffing needs Financial plan + Revision of financial resources needs

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