THE BUSINESS PLAN FRAMEWORK

AGENDA:

1. Develop a Solid Business Plan

2. The Ingredient of Business Plan

3. Failure without proper BP

4. The Business Plan Framework

5. Company Description and Operating History

6. Identify Key Success Factors

7. The Product or Service

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Develop a Solid Business Plan. So why bother?

A well written business plan is a crucial ingredient in preparing for business success.

Without BP…a firm drift without any real direction

BP creates a BENCHMARK against actual company performance

BP allows to replace faulty assumption with facts before making decision to go into business

BP as a source of Financing

BP as a source for entering numerous business plan competitions to win prize money & business

opportunities

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THE INGREDIENT OF BP

A Business Plan tells the story about your business

It address WHY your business concept is VIABLE.

WHO your market is…WHAT you offer to that market

WHY your offer represents a unique value

HOW are you going to reach them

HOW your business is going to be funded

Based on your projections, how it will result in financial success

BUILDING YOUR BUSINESS PLAN

Do you sell product or services? Is your business is a profit of a non-profit organisation? Is your business a start-up operation or an ongoing

business? What kind of business plan do you want to create? Do you include the SWOT Analysis? Will the business have a Web site? Do you prepare and set the target of a series of revenue

and expenses – the Financial aspects of your plan.

For every 3,000 new product ideas:

Four make it to the development stage.

Two are actually launched.

One becomes a success in the market.

On average, new products account for 40% of companies’ sales!!

Creativity is an important source of building a competitive advantage.Source from: Norman (2012), Pearson Global Edition.

FAILURE: WITHOUT A PROPER

BP!

Yes!

The Business Plan FrameworkYour plan should encompass the following sections:1.0 Executive Summary2.0 Company Description and Operating History3.0 The Product or Service4.0 Markets and Competitors5.0 Marketing Plan6.0 Production and Operations7.0 Management and Objectives8.0 Finance9.0 Risks, Return and Exit10. Appendix

2.0 Company Description and Operating History

the progress that has already been made (e.g. test market executed, product development completed, equityfinance committed from other sources, recent trading history etc.) Company

Description and Operating

History

the infrastructure that the company owes

the description of your company(e.g. past and present, vision, mission,

motto, business objectives,business activities)

the stage that your business/product/service

has now reached

Advice:On this section, you should present the RELEVANThistorical event (achievement) which should answer the questions of(i) Where are you now? and(ii) What you have achieved?

Elements of a mission statement:

Purpose of the company: What are we in business to accomplish?

SWOTScan

Environment

Business we are in: How are we going to accomplish that purpose?

Step 1: Develop a Vision and Create a Mission Statement

Vision – the result of an entrepreneur’s dream of something that does not exist yet and the ability to paint a compelling picture of that dream for everyone to see.

A clearly defined vision:Provides directionDetermines decisionsMotivates peopleAllows for perseverance in the face of adversity

Identify Key Success Factors

• Key success factors (KSFs): factors that determine the relative success of market participants.

• The keys to unlocking the secrets of competing successfully in a particular market segment.

• Note Objectives: More detailed, specific targets of performance that are S.M.A.R.T.

• Specific• Measurable• Assignable• Realistic (yet challenging)• Timely

Quick Exercise: Identifying Key Success Factors

List the skills, characteristics, and core competencies that your business must possess

to be successful in its market segment.

Key Success Factor How Your Company Rates

1. Low 1 2 3 4 5 6 7 8 9 10 High

2. Low 1 2 3 4 5 6 7 8 9 10 High

3. Low 1 2 3 4 5 6 7 8 9 10 High

4. Low 1 2 3 4 5 6 7 8 9 10 High

5. Low 1 2 3 4 5 6 7 8 9 10 High

Conclusions:

3.0 The Product or Service

Features vs. Benefits

• Feature – a descriptive fact about a product or service:

“an ergonomically designed, more comfortable handle”

• Benefit – what a customer gains from the product or service feature:“fewer problems or syndrome and increased productivity”

• The summary began with the definition of the business idea and then relates your product/service.

• A precise description of what the product/service is and what it will be used for.

• A realistic assessment of your product’s/service’s:(i) the technology of your product/service has reached

(globally)

The elements should have in this section are:

• A realistic assessment of your product’s/service’s:• (ii) the business idea of your product/service has reached• Product Life Cycle

The elements should have in this section are:

(iii) unique and distinctive advantages and,(iv) the way in which these advantages will translate into benefits for your customers.Advice:Quantification of these benefits if possible(e.g. customers’ financial gain, lower price, lower maintenance costs,saving etc.)

(d) An evaluation of the ease with which competitors might imitate your advantages and match your benefits. Explain how you can protect your product/service.(e) Analysis of the risks associated with the product/service.technical details to an appendix.

The elements should have in this section are:

There are no guarantees for success.

Creating a business plan will be valuable primarily because of the process itself.

The business planning process may provide insight to increase the chances for success.

The business plan: Entrepreneurs benefit; lenders and investors demand it!

Conclusion