Busines Plans
-
Upload
anjan-mohapatro -
Category
Documents
-
view
225 -
download
0
Transcript of Busines Plans
-
7/30/2019 Busines Plans
1/34
Business Plan
By Anjan Mohapatro
By Anjan Mohapatro
-
7/30/2019 Busines Plans
2/34
What
When
Who
Where
Why
How
What is a Business Plan
-
7/30/2019 Busines Plans
3/34
Business Plan
A Business Plan (BP) can be defined as a document that describes
an organization's current status and forecasts / plans for thegrowth in the times ahead..
How it intends to Produce, market and sell a product or service
profitably
It is a selling document
Who You are, what you do, how you will do it, financial resourcesare required to carry it, how you intend to secure these resources
-
7/30/2019 Busines Plans
4/34
Business Plan
initial planning document for a new business
serves as a tool to communicate the idea of the new
venture to potential investors, bankers, key employees
serves as a record to monitor and compare results
consider important aspects and decide whether to go
or not to go
-
7/30/2019 Busines Plans
5/34
Business Plan
It can be used by managers and executives forinternal planning
It can be used as the basis for loan applications
from banks and other lenders
It can be used to persuade investors that acompany is a good investment.
For start-up ventures, the process of preparing abusiness plan serves as a road map to the future
-
7/30/2019 Busines Plans
6/34
Primary Reason - Business Plan
Business Plan
ProvideDirection
Provefeasibility
AttractCapital
-
7/30/2019 Busines Plans
7/34
Business Plan-How it helps
obtain bank financing
seeking investment funding: this is the document most venture capitalists first askfor
arranging strategic alliances: small/large companies
obtaining large contracts: proof of recognition to large companies checking outsmall ones
attracting key employees: can help an executive come over to your side
completing mergers and acquisitions: for selling and buying companies
motivating management team: causes everyone to be working toward the samegoal, reduces customer confusion, lays out financial, marketing and production goals
-
7/30/2019 Busines Plans
8/34
Business Plan
Attract Necessary financing by demonstrating feasibility of your venture
First step Establish Goals
Goals to be reviewed and approved by the Board
Allocation of resources
Filter to screen wide range of possible business opportunities
Goals may seek to achieve
Revenue Generation
Employment Generation
Neighbor hood Development Strategy
Clearly identified and Quantifiable Goals
-
7/30/2019 Busines Plans
9/34
Business Plan
Advantage Disadvantage
Board
May have important skills and insights regarding
business planning or Industry May have limited time and availibility
Staff
Greater Sense of ownership of plan
details,free,will be responsible for
implementation of the plan
May not have the time ,may not have the
expertise, may detract from ongoing tasks
and workload
Has knowledge of the organisation and good
expertise,No additional cost May not have the planning skills
Consultant
Expected to devote full time and attention to
the product,has necessary skills and knowledge
of business planning and the industry
May not know the organizations capacities,
No ownership of the plan, no involvement in
implementation, high cost
Volunteers Free,May bring knowledge and Skills Limited involvement in implementation
l f l
-
7/30/2019 Busines Plans
10/34
10
5. Marketing and sales
6. Business system and organisation
7. Implementation schedule
Businessconcept
Draft
businessplan
Final
businessplan
Focus of this phase
Part of this phase
Importance
1. Executive summary
2. Product or service
3. Management team
4. Market and competition
8. Opportunities and risks
9. Financial planning and financing
Elements of Business Plan
-
7/30/2019 Busines Plans
11/34
11
Executive Summary
Who r u (describe ur organisation
What you are planning (Describethe product or service)
Why u r planning it (Discussdemand and supply )
How you will operate ur business
When u will be inoperation,expected net profit
-
7/30/2019 Busines Plans
12/34
12
Executive Summary
Business Concept
What is your business idea? Inwhat way does it fulfil thecriterion of uniqueness?
Who are your target customers?
What is the value for thosecustomers?
What market volumeand growth rates do
you forecast?
What competitiveenvironment do you face?
What additional stages ofdevelopment are needed?
How much investment isnecessary (high level estimation)?
What long term goals have you
set?
Draft Business Plan
What do you estimate yourfinancing needs to be?
What are the sales, cost and profitsituations?
What are the most importantmilestones along the way to yourgoal?
What test customers have you
approached/could you approach?
What distribution channels willyou use?
What partnerships would you liketo enter into?
What opportunities and risks doyou face?
What is the picture on patents
Final Business Plan
What are the results of yourdetailed business planning?
What are your exact financingneeds?
How will you delegate managementtasks?
How much production capacity isnecessary?
How will the implementation ofyour business idea be organised?
What are your next concrete steps?
-
7/30/2019 Busines Plans
13/34
Company Description
CompanyDescription
What type of business you are planning?
Home ownership development
Wholesale
Retail
Manufacturing or service
Legal structure Corporation or Partnership
Brief overview of Industry and current growth
trends
Documents supporting trend analysis
-
7/30/2019 Busines Plans
14/34
Product or Service
Product/Service
What are the features or functions of the
product/service? Who are the target customers?
What value propositions does the product/serviceprovide to the customers? (e.g., tabulate
customers unfulfilled needs and ways the
product/service addresses those needs)
Define customer base or market for yourproduct/service
Describe Competition
Location where you will produce or distributeyour product or services.
Discuss advantage of location
-
7/30/2019 Busines Plans
15/34
Product or Service
Product/Service
What is the development status of the product?What remains to be done to convert the business
idea into a tangible product or service?
Has this business model been proven elsewhere?What are some successful examples?
What is the plan to maintain the loyalty ofcustomers?
Provide a realistic estimate of the price for yourproduct or service and discuss the rationale
behind it.
Where it positions you in the market place :at thehigh end, low end or in the middle of the existing
range of prices for a similar product or service
-
7/30/2019 Busines Plans
16/34
Management Team & Staffing
ManagementTeam/Staffing
Who are the founders/founder groups and what are
their qualifications, experience and pastachievements
How critical is the idea originator to the future successof the venture?
How are the management responsibilities sharedamong the team? (e.g., a table of team members with
their position and key activities/responsibilities)
What is the plan to reinforce management team in thefuture? (e.g., schedule of future management hiring
and skills required)
Staff required to operate your business
Tasks they will carry out
Skills they need
Recruitment process
Initial and ongoing training
-
7/30/2019 Busines Plans
17/34
Equipment and Materials
Equipment &
Materials
What kind of equipment will you need.
Describe machinery and vehicles necessary inthe production ,packaging and distribution of
product.
Type of material and its sourcing.
FacilityDescribe the type of facility- building/land
-
7/30/2019 Busines Plans
18/34
Market & Competition
Market &Competition
What is the potential market size for the product/service?(e.g., calculation derived from number of target
customers, units sold, value of sales)
What is the expected market growth and which majorfactors influence that growth?
Who are the likely competitors? What do they offer?
What are the strengths and weaknesses of competitors?What is your competitive positioning vis--vis
competitors?)
How will you inform your target market about yourproduct or services and how will you convince customers
to purchase it. Characteristics of target Markets
Demographic
Geography
Socioeconomic status
-
7/30/2019 Busines Plans
19/34
Marketing & Sales
Marketing &Sales
What are the specific plans to promote theproduct/service?
How will the product/service be distributed? Whichpartners will be needed in the distribution channel?
What will be the pricing strategy? (e.g., how much will youcharge for different customer segments, quantities)
Present an estimate of how many people you expect willpurchase your product or services
Estimate should be based on the size of the market
Characteristics of your customers
Share of market you will gain over your competition
Year should be broken down monthly/quarterly
Account for initial presentation and market penetrationand seasonal variations in sales
-
7/30/2019 Busines Plans
20/34
Business Organization and systems
Business
Organization
and Systems
What is the proposed organisational structure of the
company? How will this organisational structure help achieve
business goals?
What skills will be required and what is the hiring plan?(e.g., a table that shows total number of positions and the
functional description of positions, skills required for top
3 positions in each department)
What is the scope of the business? (i.e. what will beperformed internally and what will be outsourced?)
Have strategic partnerships been identified? If yes, howwill these partners be secured? If no, what is the plan to
get partners?
Have key vendors been identified? If yes, how will thesevendors be secured? If no, what is the plan to get
vendors?
l h d l
-
7/30/2019 Busines Plans
21/34
Implementation Schedule
Implementation
Schedule
What is the detailed short term implementation plan?(e.g., Gantt chart showing detailed activities by month)
Who is responsible for each of the tasks?What are major milestones?
What are interdependencies between tasks? What is the 5-year implementation plan? (e.g., Gantt
chart showing activities by quarter)
Who is responsible for each of the tasks?What are major milestones?
What are possible long term options for the business?
l i h d l
-
7/30/2019 Busines Plans
22/34
Implementation Schedule
Activity M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12
Filing of Legal
Incorporationdocuments
Identifying and securing
suitable space
Designing and
developing the product
Requird license or
permits
Securing necessary
Financing
Leasing or purchasing
equipment
Training staff
Purchasing materials
marketing activities
Opening
-
7/30/2019 Busines Plans
23/34
P i l P bl /Ri k d i i
-
7/30/2019 Busines Plans
24/34
Potential Problems/Risks and opportunities
The competition drops its priceNot enough customers
Production costs exceeds estimates
Difficulty in finding qualified employees
Environmental or Governmental Changes
POTENTIAL PROBLEMS
Risk and Opportunities
What are the best case and worst case scenarios for the 5-year financial projections? What are the key assumptions
on the key parameters? (e.g., market shares, profit margin)What does the sensitivity analysis show? (i.e., by varying
key assumptions in isolation)
What mitigating steps are planned in order to minimiserisks?
Fi i l Pl i
-
7/30/2019 Busines Plans
25/34
Financial Planning
For the next 5 years (and at least 1 year beyond breakeven point),what are the projections for
Income statementCash flow statementCompany valuation, utilising
Discounted cash flow analysis
Revenue multiplesBalance sheet
What are the key assumption used in the financial performance?(e.g., cost of capital, market share, margin)
What are the financial requirements for the business and whatsources of financing have been identified? (e.g., financial
schedule with amount needed and possible financing sources
C h Fl
-
7/30/2019 Busines Plans
26/34
Cash Flow
CashflowShows the amountof money a
business has: onhand at the
beginning of a timeperiod receiptscoming into thebusiness money
going out of thebusiness during thesame period
Ca
shflow
Show a cash flowstatement: bymonth for the firstyear of operations,
by quarter for thesecond and thirdyears
C h Fl
-
7/30/2019 Busines Plans
27/34
Cash Flow
I t t t
-
7/30/2019 Busines Plans
28/34
Income statement
P&LA
ccountShows sales
revenues,expenses, and netprofit or loss
P&LA
ccountObjective is to
come up with anapproximation ofwhat sales
revenues andexpenses
P&LA
ccountwill be Helpful to
break sales downby product line(or services) to
determine:
a best-case scenario
a worst-case scenario
a most likely scenario(somewherebetween the two
extremes)
I t t t
-
7/30/2019 Busines Plans
29/34
Income statement
B l Sh t
-
7/30/2019 Busines Plans
30/34
Balance Sheet
BalanceSheetA financial
document thatshows theassets,
liabilities, andowners equity
for a business Balan
ceSheetDifference
between assetsand liabilities isthe net worth
of the business also calledcapital B
alanceSheetUsed to
calculate keyratios, such asdebt to equity
and currentratio todetermine thefinancial healthof the business
Balance Sheet
-
7/30/2019 Busines Plans
31/34
Balance Sheet
Breakeven Analysis
-
7/30/2019 Busines Plans
32/34
Breakeven Analysis
Breakev
enAnalysis Point at which
sales and costsare equal and abusiness is
neither makingnor losingmoney
Breakev
enAnalysis Reinforce
financialprojections bycomparing
them toindustryaverages foryour chosenindustry
Breakev
enAnalysisUsed to
compareprojectedfinancial ratios
to industryaverages toestablish abenchmark
Breakeven Analysis
-
7/30/2019 Busines Plans
33/34
Breakeven Analysis
-
7/30/2019 Busines Plans
34/34
THANK YOU