BUSINESS PLANS

Gavin D. J. Harperwww.gavindjharper.co.uk

Presentation at:

Institut Supérieur de Commerce InternationalDunkerque, France

March 2009

WHY DO YOU NEED ONE? Business plans are used for a number of

purposes – Fund raising from:

Banks Venture Capital Private Finance

Internal clarification of business goals

Business plans are not a static document that you write at the beginning of starting a business – they are DYNAMIC.Change them as the business environment and

your knowledge evolves.

The Seven P’s

P!$£ Poor PlanningProduces

P!&$ Poor Performance

ENTREPRENEURSHIP In developing your

business plan, you will be developing ‘entrepreneurial skills’.

Entrepreneurs come from a diverse range of backgrounds and integrate and synthesise a wide range of skills.

As a prospective entrepreneur, you will have to get used to wearing “lots of hats”.

IDEAS GENERATION IS THE EASY BIT

REGRET NOTHING If your business “doesn’t work on

paper” and the figures don’t add up – it has less chance of working in real life.

It’s better to waste a week writing a business plan than wasting a year (and lots of cash) trying to start up a venture that is destined to fail.

No…. I regret nothing… I took the time to do a business plan.

BENEFITS OF A BUSINESS PLAN A business plan defines what your

businesses objectives are.“Mission Statement”“Values / Ethos Clarification”

Are your objectives realistic?A business plan makes them “transparent”

How are you going to get there?Roadmap for your business.

GREAT IDEAS NEEDFIRM FOUNDATIONS

Any great idea needs firm foundations.By spending the time writing a business plan,you are building a firm foundation on whichto develop your business.

“A successful man is one who can lay a firm foundation with the bricks others have thrown at him.”

David Brinkley

“Confidence is the foundation for all business relations. The degree of confidence a man has in others, and the degree of confidence others have in him, determines a man's standing in the commercial and industrial world.”

William J. H. Boetcker

FOCUSSING YOUR EMPLOYEES Business plans help get “Everyone on

the same page” – they provide a central vision to which everyone in the business subscribes.

The more people you have to co-ordinate, the more important this becomes.

“Get EveryoneSinging in Tune”

STRUCTURE OF BUSINESS PLANS No two businesses are the same. No two business plans are the same.

It is ok for business plans to vary considerably depending on the type and style of business.

Generic business plans are available for differetn “types” of business, which you can customise for your own ends.

We are now going to look at a very ‘generic’ type of business plan, which provides the basic elements of structure for your plan.

1. EXECUTIVE SUMMARY Outlines what you are looking to

achieve. How are you going to do it with the

resources available. Keep it short, keep it concise and make

EVERY WORD COUNT.

It is the written equivalent to your “Elevator Pitch”.

If you can’t explain what you are doing in a minute, then you will lose your readers attention.

2. CUSTOMERS Who do you anticipate selling your

product or service to? What ‘sort of people’ are they? Where do they live? How many of them are there? What range of ages are your customers? What is their spending power?

3. COMPETITION Know everything about your enemy. What are their:

PricesStrengthsWeaknesses

How does your business differ from theirs?

What are you going to do better than them?

How will you steal their business?

4. SUPPLIERS Who are your suppliers and how will you

rely on them?

Any special requirements for delivery that are specific to your business? E.g./“Cold Chain” for Food-Service“Just In Time” for Automotive Parts

5. MARKETING What is your sales channel? How are you going to reach your

customers? Do you have the funds to market your

product to your consumers?

Innovative marketing models?Pyramid Sellinge-BusinessMail Order

6. HUMAN RESOURCES How many people will you need to run your

business? Who are your “key staff”? What specialist skills are required to produce

and deliver your product or service?Are there enough of these skilled people in your

area – if not where will you recruit them from? Is there a ‘premium’ to be paid for their skills?What is the labour market like in your area?

Do you need to provide training? Can you “outsource” where you can’t find

skills locally?

7. OPERATIONS MANAGEMENT What are the processes you will be

using in your business? Do these processes require specialist

equipment?Capital Investment in

Tooling Infrastructure

8. FINANCIAL Forecasts for the next three – five years.

Cash FlowBalance SheetProfit and Loss Account

How will the proceeds of your funds be spent?Reinvestment in the business?Dividends to shareholders?Remuneration for founders?

9. RISK ANALYSIS What sort of risks is your business likely

to encounter?Turbulent marketplace?Operational Risks?Staffing Risks?Financing Risks?

THINK GREEN:Rising energy prices?Resource scarcity?

10. ETHICS / C.S.R. What is your company’s ethical

position?Sustainability

Social Economic Environmental

How will your company be a ‘responsible’ business citizen?Community engagementBeing “A Good Neighbour”

PRESENTATION IS EVERYTHING Your business plan is an ambassador for

your company. If your business was a country, you wouldn’t

dress your ambassador in a shabby, ill-fitting suit.

Ensure that the plan is laid-out professionally.Print on good quality paper.Give thought to the cover and binding of your

plan.

With desktop-publishing and high quality printing cheaper than ever, there is no excuse for poor-quality presentation.

HOW TO WRITE A BUSINESS PLAN Business plan writing software (provides

a template for you to fill in)Simple but…Generic & Inflexible

Download a “template” for your type of business from the net

Take a course in business planning (this one?)

Hire a consultantSounds easy…But YOU know your business

better

BUSINESS PLANS: JAPAN We can learn a lot from the East about

developing sustainable businesses – some businesses in Japan, have a 500 year business plan. Including big names you might be familiar with.ToyotaHondaSony

NO BUSINESS PLAN? If you haven’t got a coherent and well

presented business plan, what else haven’t you done?

Alarm bells for investors…What does it say about this person’s

business? Late tax returns? Poor organisation? Bad time management?

UNABLE TO RUN A BUSINESS!

To fail to plan……is to plan to fail!