Business Plan Writing for entrepreneurship.
- 1. Entrepreneurship Creating a New Business Business Plan Writing
- 2. The Aim of Today’s Seminar Is to provide you with a clear understanding of the purpose of the business plan and what it should contain to ensure that your businesses are heading somewhere you want them to go!
- 4. What Is a Business Plan? Document that thoroughly explains a business idea and how it will be carried out ◦ Story of what the business is and will be ◦ All costs and a marketing plan ◦ Description of financing ◦ Estimate of projected earnings
- 5. What is the Purpose of Business Plan? To test the commercial viability of your business idea on paper To clarify your thinking To maintain your focus To review your progress To present to potential lenders / investors to raise finance
- 6. Business Plan Components Cover page Table of contents Executive summary Business Description Company description Opportunity analysis Marketing strategy and plan Human resource management and operations Financial analysis and projections Funding request Exit strategy Appendices
- 7. Cover Page Table of Contents Name of the business Name of the principals Date Contact information Confidentiality statement Include enough detail to easily find a section. Avoid excessive detail which uses too many pages. Cover Page & Table of Contents
- 8. Executive Summary Clear—identify concept and purpose Concise—one to two pages long Comprehensive—answer basic who, what, when, where, and how questions Compelling—generate interest Be positive - no “if” or “we could” Written at the last
- 9. Business Description Name and what it does Type of business Your objectives (SMART) Reasons of setting up Background / history/ experience What are the products and services
- 10. Business Description Cont…. Vision—broad “picture” of what you want the organization to become Mission—concise communication of strategy with a business definition and competitive advantage; expressed in a statement Culture—beliefs, values, and behavioral norms of the organization which will form the business “environment”
- 11. Company Description If company is already established… ◦ Summary of company’s founding ◦ Overview of track record: business progress and financial success If a start-up venture… ◦ Brief background story ◦ What has been done so far, and why ◦ Legal form of the business
- 12. Opportunity Analysis Environmental analysis—how community, region, nation, world relates to the business (PEST) Industry analysis—definition, size, and growth/decline of the industry (SWOT) Proof of market—evidence of opportunity in terms of dollars and units (N’s Matrices)
- 13. Marketing Strategy Your USP (unique selling proposition) Product/sales focused Your USB (unique selling benefit) Customer/service focused Your market research Who your customers will be Your competition Your price and why How will your customers find out about you Who will supply you How big is the market (Potential Growth)
- 14. Management and Operations Management team and employees Physical location(s) of facilities with emphasis on logistics and workforce Production processes Inventory control systems Research and development Quality assurance methods
- 15. Financial Analysis and Projections Sources and uses of capital Cash flow projections Cash flow statement shows cash receipts less cash disbursements over a time period Balance sheet projections Assets = Liabilities + Owner’s Equity
- 16. Financial Analysis and Projections (continued) Income statements for three years ◦ Also called profit and loss statements (P&L) ◦ Summarize income and expense activity Breakeven analysis Financial Ratio analysis Risks and assumptions
- 17. Funding Request & Exit Strategy Amount of funds needed Type of financing, including terms Proposed exit scenarios, such as: ◦ Buyout plan ◦ Initial public offering (IPO) ◦ Selling options ◦ Succession plan
- 18. Appendices Management resumes Specifications/photos/diagrams of products and packaging Advertising and promotional schemes Detailed financial projections Other supportive materials
- 19. Presenting the Business Plan Presentations may be formal or informal. Presentation time may be limited to between 5 and 20 minutes. Prepare an “elevator pitch” (15-30 sec.) Multimedia formats work well in formal situations. Business plan competitions may provide cash prizes and access to capital.
- 20. What to do and what to avoid Do Remember investors look at the people not ideas Get someone else to read it Tailor your plan to the need Get help if needed Clear priorities Be concise Avoid Being vague Over estimating sales Poor spelling Poor grammar Under estimating start up costs Over estimating turn over and profits
- 21. Contents of the Business Plan Business details Business aims & objectives Market information - size, growth, competitors SWOT & competitive advantage Details of customers Marketing strategy - marketing mix etc. Premises & equipment needs Key people - functions & background Financial highlights - turnover, profit, break-even, funding details Detailed profit forecast Detailed cash flow forecast Summary
Editor's Notes
- #5: Although many people think you only need to write a business plan if you need to raise finance, in fact all new business ideas should be put through the business planning process in order to check that they are commercially viable. When writing a business plans it becomes much easier to identify possible gaps in your thinking. Yes, potential lenders (investors) are going to want to see your business plan but if you know where you’re going it also helps maintain focus. For instance, using the analogy of a business being like a car, in the initial stages you choose which sort of car would be suitable for your needs. You have to learn to drive and budget enough money to put it on the road and then keep it on the road (insurance, tax, servicing, petrol). Then you’re on the road and reach the Motorway. For many businesses, which don’t have a vision, or mission, a focus, they don’t know where they are going and so can end up going round and round the Motorway. If a business owner decides at the outset that they want to get to Islamabad or Rawalpindi then it is possible to plan the route (this is the business plan for businesses). Along the way, however, there may be unexpected setbacks or issues such as fog, or an accident blocking the road. The car might be diverted but if the driver knows what ultimate destination they are trying to get to they will be able to get back on the right route when possible. This is how business plans help to maintain the focus in businesses and so should not just be written and put in the drawer! Business planning should be an ongoing process.
- #9: SMART S= SPECIFIC M= MEASURABLE A= ACHIEVABLE R= REALISTIC T= TIME BOUND