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Transcript of Sponsored by Organized by The Thailand International Development Cooperation Agency The Mekong...
Sponsored by
Organized by
The Thailand International Development Cooperation Agency
The Mekong InstituteKhon Kaen in Thailand
Development of SME Clusters and Export Consortia 4 – 29 July 2011
Compiled by Dr. Ed Canela
Business Plans
For SME Clusters/ECs
Why a Business Plan?
• Strategic Guide. Where is the market? Big investment for Governments) and SMEs as investors.
• Lenders. Multilaterals, governments, etc.
• Investors SMEs relocating or expanding due to the presence of a SME cluster and export consortia.
Strategic Guide
• Where Do You Want To Go?• How Are You Going to Get There?• What Market Niches?• How Much is it Going to Cost?• Greatest Profit Opportunity?
Lender Expectations
• Good Business Track Record• Ability to Repay• Staying Power• Collateral
Investor Expectations
• Competitive Advantage• Huge Market• Strong Management Team• Strong Marketing and Sales Plan• Some Skin in the Game• Obscene Return• Exit Strategy
Entrepreneurs Start Businesses:
• To Capitalize on an Invention• To Pursue a Passion• To Be Their Own Boss• To Get Rich
---All Need an Exit Strategy
Exit Strategies
• Selling the Business• Transferring the Business to a Family Member• Taking the Company Public• Being Acquired by a Larger Company
Funding Sources:
• Savings (tax, land reserves, etc.)• Friends and Family (countries)• Financial Institutions / Banks (Multilaterals, commercial)
• Angel Investors• Venture Capital
Business Plan Content
• Executive Summary• Company Description• The SME Cluster/EC Description• Industry Overview• Market Analysis• Competitors
Business Plan Content
• Customers (SMEs, Foreign Investors, service institutions, etc.)
• Marketing and Sales Plans (How to attract the customers, incentives, information, innovation, services, etc.
• Development (Plans, buildings or plot allocation, development, programs, services to SMEs, etc.)
• Operations (look at the chain+services)• Management (administration, finance, database, security, etc.)
Business Plan Content
• Personnel• Financial Summary• Financials• Offering• Appendices
Executive Summary
• A mini-business plan in one or two pages• Highlights the most important points of your business plan
• It is NOT an introduction to the plan• It must grab your reader, and entice him/her to read further
Executive Summary
• Identify the company, its background, structure and location
• Describe what the company does, and the market it serves
• Describe the market potential for the company’s products and services, market trends, etc.
Executive Summary
• Outline the backgrounds and experience of the top management team
• Describe the funding required, the purposes for which it will be used, the collateral available (if for a lender), and the expected outcomes
The SME Cluster/EC Description
• Brief SME Cluster/EC Introduction– Mission-vision statement– Location, size, history– Market, products and services– Overview of company capabilities– Objectives
Products/Services
• Products / Services of the SME Clusters/EC– What will it do? What will it deliver to the SMEs?– Uniqueness– Competitive Advantage
• Technology– Brief description– Applications
• Commercialization Status– Brief overview
Industry Overview
• Set The Stage• Industry Definition and Description
– Major players within the industry– Factors driving dynamics– New products and developments
• Country Legislations & Policies Driving the Industry• Historical and Future Trends
Market Analysis
• Market Definition– Primary Market (Main SMEs)– Secondary Markets (Services to the SMEs relocating to the Cluster/ECs)
• Market Size and Trends– Current total revenues– Predicted annual growth rate
Competitors
• Direct Competitors (Similar or related Clusters)– Who are they?– Size and product breadth– Revenues and profitability– Strengths and weaknesses– Market shares
• Indirect Competitors (Other Clusters in the country)
Customers
• Customer Characteristics (Target SMEs)– Who are they? What are they doing now?– Why will they relocate/join the cluster?– Needs satisfied by the cluster?– How is the need currently filled?– What are the alternatives?– Who makes the decision to relocate/join?– Do they have business plans? When will they relocate/join?
Marketing and Sales Plans
• Statement of Opportunity• Marketing and Sales Objectives• Target Customers (SMEs)• Potential Customers (Others, who will relocate/Join)
– Prospects targeted– How prospects will be targeted and qualified
Marketing Strategies
• Product/Service Strategy (Areas available for SMEs, large, medium & small), services available
• Pricing Strategy How much• Distribution Strategy Real estate agents, etc.• Advertising and Promotion Strategy• Sales Strategy• Marketing and Sales Forecasts (Sales from rent and other services annually in US$)
Marketing and Sales Plans
• Marketing Programs– Direct Mail using a good brochure with designs– Trade Shows– Advertising– Internet– Publicity/Public Relations– Marketing Budget
• Pricing– Basis for targeted price point– Margins and profitability by volume levels
Marketing and Sales Plans
• Sales Plan– Sales force structure – (direct or reps)– Sales expectations/quotas– Margins given to intermediaries– Service and warranties– Sales Budget– Organizational chart indicating planned growth
Development
• R & D Plan– Objectives– Milestones and current status– Difficulties and risks– Staffing– R & D Budget and assumptions
Operations• Manufacturing/Production Plan
– Objectives– Facilities– Staffing– Subcontractors– Quality Control– Budget / Operating Expenses– Storage & Warehouse– Security– Logistics and Transports– Personnel training– Common services (reception, conference rooms, database, etc.)– Support services (utilities, repairs, maintenance, fire station, medicals,
etc.)
Management
• Company Organization• Management Team• Administrative Expenses
Management Team
• President• VP Finance• VP Sales• VP Marketing• VP Manufacturing• Board of Advisors
• SME Cluster Timetable
Personnel
• Human Resource Plan– Staffing Objectives– Organizational Structure– 3-5 year growth plan– Budget
Summary of Financials
• Financial Objectives– Time to Cash Flow Positive– Time to profitability
• Financial Assumptions• Capital Requirements• Exit Scenario
Financials
• Investment Plan• Pro-forma Cash Flow Projections• Pro-forma Profit & Loss Statements• Pro-forma Balance Sheet
Offering
• Investment Requirements• Pro-forma Valuation of Business• Offer
Appendices
• Resumes of Key Management• Patent Information• Customer List• Testimonials• Supplemental Financial Spreadsheets• References