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1 | The Business Plan.

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Presentation on theme: "1 | The Business Plan."— Presentation transcript:

1 1 | The Business Plan


3 A Business Plan is… a blueprint of how the business should look like in your mind. “tell a story” and explain how the business will achieve its objectives in a coherent manner. The “story” should focus on customer’s needs. To identify the market, its growth prospects, target customers and main competitors.

4 A Business Plan is… Based upon a credible set of assumptions to which the success of the business is most sensitive. To identify the risks facing the business, the potential downsides and actions should be taken to mitigate the risks. To describe its differences from its competitors: its source of competitive advantage and how it will be sustained in longer term.

5 A Business Plan is… To describe the experience and track record of the management team. To identify the funding being sought from potential investors.

6 A Good Business Plan Checklist
Tells a coherent, consistent and customer focused story; Clearly defines market, its prospects, the customers, suppliers and competitors; Contains credible business planning assumptions and forecasts; Describes how business will achieve sustainable competitive advantage; Identifies assumptions to which business is most sensitive, the potential risks and any mitigating actions;

7 A Good Business Plan Checklist
Is supported by those that must implement it; Contains description of individuals involved in managing the business; Identifies funding requirement for the business.

8 Who is this business plan for and why?

9 A Business Plan should…
Focus on market growth and the sources of sustainable competitive advantage for the business. Emphasis on strategy, tactics and financial projections, rather than on operational detail.

10 A Business Plan should…
Provide basis for creation of business process, job descriptions and operational budgets. Provide basis for monitoring and analyzing performance.

11 A Business Plan in Another Situation
A business unit in a large organization will prepare business plans in order to gain approval for new business initiatives from senior management and the board. However, the following questions may be asked. Is the plan consistent and supportive of the business’s overall strategy? What is the impact on overall financial performance of the business in terms of revenue growth and profitability.

12 A Business Plan in Another Situation
Will adopting the business plan require additional fundraising? Does the business plan reinforce the position of the business’s brand? Is the business plan feasible and within the scope of the organization’s capabilities? Will adoption of this business plan have impact on other areas of the business? What alternative opportunities could be pursued?

13 A Business Plan Template
Executive Summary Current business situation Vision, mission, objectives Definition of the current business and its market Current state of the business Corporate history, major events and past financial performance Products and services Current business and market position Strategy and sources of sustainable competitive advantage Core competencies Customer acceptance Current business organization and outline business infrastructure Summary financial forecasts Money required, timing and deal on offer Strategic analysis Basic business information Political, economic, social and technological analysis and impacts Title Key differentiators and unique selling points Contents VRIO analysis Contact information Document control Configuration of resources Professional advisers Value add analysis Definitions Legal structure and corporate data

14 A Business Plan Template
Value add analysis Strategic plan Value chain analysis Vision, mission and objectives Value system Sources of sustainable competitive advantage Resource audit Competitive position Operations resources Marketing positioning Human resources Brand strategy Organizational resources Portfolio strategy Financial resources Business design Industry life cycle Industry structure Marketing plan Competitor analysis Marketing segments, size and growth SWOT analysis Description of customers and customer needs Target market segment Product positioning and value proposition Marketing mix

15 A Business Plan Template
Description of products and services Engineering and design support Pricing and discounting Quality control plans Advertising and promotional plans Staffing requirements Channel and distribution strategy Sources of supply of key materials Guarantees and warranties After-sales service and customer care Research and development Comparison with competition Objectives Performance and economics Organization Marketing forecasts Plans Resources Operations/production Physical location Management and organization Make or buy considerations Organization chart The production process Top management Facilities, equipment and machinery Management’s ability to deliver the plan Scalability of operations

16 A Business Plan Template
Corporate governance and shareholder control Discounted cash flow Staffing Payback Recruitment Breakeven Training Benchmarks Labour relations Sensitivity analysis Office space and amenities Employment and related costs Financing Summary of operations prior to financing Forecasts and financial data Current shareholder loans outstanding Summary of performance ratios Funds required and timing Sales forecast Use of proceeds Assumptions underpinning financial forecasts The deal on offer Profit and loss account (income statement) Anticipated gearing and interest cover Balance sheet Exit routes for investors Cash flow statement Evaluation criteria and valuation

17 A Business Plan Template
Risk analysis Appendices Risk overview Glossary of terms Limiting factors Details of market research Critical success factors Consultants’ reports Alternative scenarios and strategic responses Product specifications Specific risks and risk-reduction strategies Marketing collateral Orders in hand Business controls Organization charts Curricula vitae Information technology Detailed financial forecasts Financial Technical data Sales and marketing Operations Details of patents, copyright Other controls

18 Layout and Style Document should be: Attractive Impressive
Easy to read General appearance: logo, contact details, etc. Page layout: A4, 12 pt, ring bind, etc. Writing style: Clear, concise, evidence, etc.

19 Getting Started Basic business information: Title Content
Contact information Document control Professional advisers Definitions Legal Structure and corporate data

20 Getting Started Legal structure and corporate data:
Full name of business Corporate status of business Its capital structure Address of registered office Registration number Head office address

21 Getting Started Executive Summary-The most important section: The 1st section to be read it must engage readers and excite them about the potential of the business idea. It should NOT be an introduction to the business plan; it should be most carefully written of all the sections. It contains: Current state of the business Products and services and the customers Sources of sustainable competitive advantage Shareholder objectives and business strategy Summary financial forecasts Decision or funding being sought


23 Your group should start thinking your new business ideas
Your group should start thinking your new business ideas. Go through the concepts and business plan template just learned.

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