Entrepreneurship Management The Business plan Prof Bharat Nadkarni

Entrepreneurship Management Business Plan The business plan, although often criticised for being dreams of glory is probably the single most important document to the entrepreneur at the start-up stage. Potential investors are not likely to consider investing in a new venture until the business plan has been completed. In addition, the business plan helps maintain a perspective for the entrepreneur of what needs to be accomplished. Business plan Written document describing all relevant internal and external elements and strategies for starting a new venture.It is often an integration of functional plans such as marketing, finance, manufacturing and human resources.It also addresses both short term and long term decision making for the first 3 years of operation.

Entrepreneurship Management Business Plan Writing the Business Plan The business plan could take more than 200 hours to prepare, depending on the experience and knowledge of the entrepreneur as well as the purpose it is intended to serve. It should be comprehensive enough to give any potential investor a complete picture and understanding of the new venture and will help the entrepreneur clarify his or her thinking about the business. Many entrepreneurs incorrectly estimate the length of time that an effective plan will take to prepare. Once the process has begun, however, the entrepreneur will realise that it is invaluable in sorting out the business functions of a new venture. The outline of a business plan is covered in next few slides.

Entrepreneurship Management Business Plan Reasons for a Business Plan The reason for compiling a business plan will be different for each situation: If you are starting a new business you will require a plan to clearly assess every aspect of the business and show how it will succeed. Also helps to obtain capital for the venture. If you are buying an already established business you will need to identify the strengths and weaknesses of the business to decide if you will be able to make it a success. If you are already up and running and in need of extra finance you will need a plan to convince those putting capital into your business that you can and will succeed. If you are applying for one of the many grants available.

Entrepreneurship Management Business Plan I Introductory Page Name & address of the business Name(s) & address(es) of principals Nature of business Statement of financing needed Statement of confidentiality of report II Executive Summary Three to four pages summarising the complete business plan

Entrepreneurship Management Business Plan III Industry Analysis Future outlook and trends Analysis of competitors Market segmentation Industry forecasts Demand / Product sales forecasts IV Description of the venture Product(s) / Capacity Service(s) / Capacity Size of business Office equipment and personnel Background of entrepreneurs

Entrepreneurship Management Business Plan V Production Plan Manufacturing process (incl subcontracting, if any) Physical plant Machinery and equipment List of suppliers of raw materials VI Marketing Plan Pricing Distribution Promotion Controls

Entrepreneurship Management Business Plan VII Financial Plan Proforma income statement Cash flow projections Proforma balance sheet Break-even analysis Sources and applications of funds VIII Assessment of Risk Evaluate weakness of business New technologies Environmental Risks Contingency plans

Entrepreneurship Management Business Plan IX Organisational Plan Form of ownership Identification of partners and principal shareholders Authority of principals Management-team background Roles and responsibilities of members of organisation X Appendix (mainly contains back up material) Letters Market research data Leases or contracts Price lists from suppliers

Entrepreneurship Management Business Plan Implementation and Review of the plan The business plan is designed to guide the entrepreneur through the first year of operations. It is important that the implementation of the strategy contain control points to ascertain progress and to initiate contingency plans if necessary. Most important to the entrepreneur is that the business plan not end up in a drawer somewhere once the financing has been attained and the business launched. The progress of the venture should be reviewed periodically with the goals and objectives set in the business plan. Due actions for course corrections must be taken which eventually will lead to the success of the venture.

Entrepreneurship Management Reasons why some businesses fail Mindset Problem. The Marketing aspect a. Ignoring competition b. Ineffective customer service c. Approach not Customer driven d. Internal marketing 3. The Financial aspect a. Lack of foresight b. Cash flow problem 4. The Inappropriate team 5. The Technological aspect 6. The Planning flaws 7. The Personal issues

Entrepreneurship Management Business Plan Thank you