business plan

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BUSINESS PLAN BUSINESS PLAN

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Page 1: Business Plan

BUSINESS PLANBUSINESS PLAN

Page 2: Business Plan

What is Business PlanWhat is Business Plan

A business plan is a summary A business plan is a summary of an entrepreneur’s of an entrepreneur’s proposed business venture.proposed business venture.

Page 3: Business Plan

Components of a Business PlanComponents of a Business Plan

operational detailsoperational details financial detailsfinancial details marketing opportunitiesmarketing opportunities marketing strategiesmarketing strategies personnel skills and abilitiespersonnel skills and abilities

Page 4: Business Plan

Functions of a Business PlanFunctions of a Business Plan Guide the company’s operations by Guide the company’s operations by

charting its course for the future and charting its course for the future and devising a strategy for following it. devising a strategy for following it.

Providing the tools necessary for Providing the tools necessary for business growth such as – mission business growth such as – mission statement, goals, objectives, budgets, statement, goals, objectives, budgets, financial forecasts, target markets, financial forecasts, target markets, strategies.strategies.

Attract lenders and investors. The Attract lenders and investors. The business plan is an instrument by which business plan is an instrument by which you can increase actual performance you can increase actual performance against set targets. against set targets.

Page 5: Business Plan

Factors to consider when preparing Factors to consider when preparing a Business Plana Business Plan

When applying for a loan or trying to attract When applying for a loan or trying to attract lenders or investors a plan should be highly lenders or investors a plan should be highly polished and professional in form and content polished and professional in form and content if it has to influence others that it will be able if it has to influence others that it will be able to repay its loan and produce pleasant rates of to repay its loan and produce pleasant rates of return.return.

A badly written business plan is more than A badly written business plan is more than likely going to produce a poorly run business. likely going to produce a poorly run business. Investors can get hurt in the process. They Investors can get hurt in the process. They could loose their money.could loose their money.

Page 6: Business Plan

Factors to consider when preparing Factors to consider when preparing a Business Plan cont’da Business Plan cont’d

A business plan takes on the reflection of the one who A business plan takes on the reflection of the one who wrote it, therefore serious thought must go into its wrote it, therefore serious thought must go into its preparation.preparation.

It is important that an entrepreneur knows everything It is important that an entrepreneur knows everything that he/she stated in the business plan being presented that he/she stated in the business plan being presented to the lender.to the lender.

A lender wants to feel confident that an entrepreneur A lender wants to feel confident that an entrepreneur has realistically evaluated the risks involved in the has realistically evaluated the risks involved in the proposed business and has strategies for addressing proposed business and has strategies for addressing them.them.

Page 7: Business Plan

Factors to consider when preparing Factors to consider when preparing a Business Plan cont’da Business Plan cont’d

The two-thirds rule:The two-thirds rule: only two thirds of entrepreneurs with only two thirds of entrepreneurs with

a sound viable new business venture a sound viable new business venture will find financial backing.will find financial backing.

those who do, will only get two thirds those who do, will only get two thirds of what they asked for and it will take of what they asked for and it will take them two thirds longer to get the them two thirds longer to get the financing they anticipated.financing they anticipated.

Page 8: Business Plan

ELEMENT OF A BUSINESS PLANELEMENT OF A BUSINESS PLAN

Executive Summary Executive Summary Mission Statement Mission Statement Company HistoryCompany History Business & Industry ProfileBusiness & Industry Profile Business StrategyBusiness Strategy Description of Product/ServiceDescription of Product/Service Marketing StrategyMarketing Strategy Competition analysisCompetition analysis Management TeamManagement Team Financial StatementsFinancial Statements

Page 9: Business Plan

Description of Product/ServiceDescription of Product/Service

Describe company’s overall product line. Describe company’s overall product line. Draw diagrams and illustrations especially if Draw diagrams and illustrations especially if

product is highly technical. product is highly technical. Write products service description.Write products service description. A statement of a product’s position in the product A statement of a product’s position in the product

life cycle. Include any patents, trademarks, life cycle. Include any patents, trademarks, copyrights that protect the products from any copyrights that protect the products from any infringement by competitors.infringement by competitors.

Give honest statements about uniqueness of Give honest statements about uniqueness of product/service and information on the new type product/service and information on the new type of product/service that the company will be of product/service that the company will be bringing on stream in the future.bringing on stream in the future.

Page 10: Business Plan

Description of Product/ServiceDescription of Product/Servicecont’dcont’d

It must be clearly understood that It must be clearly understood that product/service description is also defining product/service description is also defining the benefits that can be derived by the benefits that can be derived by customers who purchase the company’s customers who purchase the company’s products/services.products/services.

Your product description must not only Your product description must not only address issues relating to the good quality address issues relating to the good quality of the product it must also treat with how of the product it must also treat with how good people will feel using them.good people will feel using them.

Page 11: Business Plan

Marketing StrategyMarketing Strategy Describe your target market and its characteristics, and its Describe your target market and its characteristics, and its

potential.potential.

Define target market, make business exactly what Define target market, make business exactly what customers need.customers need.

The marketing plan is very important in implementing the The marketing plan is very important in implementing the marketing strategy.marketing strategy.

Points to consider when preparing a marketing plan:Points to consider when preparing a marketing plan:

Who are my customers- age, gender, income level and Who are my customers- age, gender, income level and other demographic characteristics?other demographic characteristics?

Where do they live, work and shop?Where do they live, work and shop? How many potential customers are in my area of business?How many potential customers are in my area of business?

Page 12: Business Plan

Competition analysisCompetition analysis

Be able to assess competition realistically. There’s Be able to assess competition realistically. There’s very little space where there is no competition very little space where there is no competition (information can be gathered from trade shows (information can be gathered from trade shows journals and customers association)journals and customers association)

Demonstrate your advantage over your Demonstrate your advantage over your competitors.competitors.

Who are the company’s key competitors?Who are the company’s key competitors? What are their strengths, weaknesses, image in the What are their strengths, weaknesses, image in the

market place and rate of success.market place and rate of success. The difference of your product/service from the The difference of your product/service from the other products/services ensure that your company’s other products/services ensure that your company’s

strategy is customer focused.strategy is customer focused.

Page 13: Business Plan

Management TeamManagement Team

Describe the quality of the Describe the quality of the management team – their management team – their experience and qualifications, their experience and qualifications, their percentage of ownership in the percentage of ownership in the company.company.

Ideas and products do not succeed, Ideas and products do not succeed, but people do, therefore showcase but people do, therefore showcase the talent of those persons holding the talent of those persons holding prominent positions in the company.prominent positions in the company.

Page 14: Business Plan

Financial StatementsFinancial Statements

Prepare two to three year statements Prepare two to three year statements if business is in existence. It is if business is in existence. It is essential to make all forecasts essential to make all forecasts realistic.realistic.

Include a statement of assumptions Include a statement of assumptions on which financial projections are on which financial projections are based, investors and lenders will based, investors and lenders will want to know how your figures were want to know how your figures were derived.derived.

Page 15: Business Plan

THINGS THAT DO NOT IMPRESS A THINGS THAT DO NOT IMPRESS A LENDER/INVESTORLENDER/INVESTOR

need money for working capitalneed money for working capital need money for modernizationneed money for modernization need money for expansionneed money for expansion

Page 16: Business Plan

THINGS THAT WIN APPROVAL OF THINGS THAT WIN APPROVAL OF LENDERS/INVESTORSLENDERS/INVESTORS

need money to modernize production need money to modernize production facilities by purchasing………..facilities by purchasing………..

need money to build inventory sales, need money to build inventory sales, peak season.peak season.

These requests should be supported These requests should be supported by adequate data which should by adequate data which should include present and forecasted include present and forecasted production levels.production levels.

Page 17: Business Plan

TYPES OF BUSINESS PLANSTYPES OF BUSINESS PLANS

Working business planWorking business plan one which an entrepreneur uses to one which an entrepreneur uses to

guide his/her businessguide his/her business

Presentation business planPresentation business plan one which an entrepreneur uses to one which an entrepreneur uses to

present to a lender or investorpresent to a lender or investor

Page 18: Business Plan

Packaging Business PlanPackaging Business Plan

Make sure that the Business Plan has: Make sure that the Business Plan has: an attractive cover an attractive cover free from grammatical, spelling and free from grammatical, spelling and

typo errorstypo errors visually pleasantvisually pleasant use colour charts, diagrams and use colour charts, diagrams and

graphicsgraphics a table of contentsa table of contents

Page 19: Business Plan

BUSINESS PLAN PRESENTATIONBUSINESS PLAN PRESENTATION

Be enthusiastic about the venture.Be enthusiastic about the venture. Explain opportunities and any benefits to Explain opportunities and any benefits to

the investor/lender.the investor/lender. Talk about the highlights details will come Talk about the highlights details will come

later.later. Limit your early discussion to only a few Limit your early discussion to only a few

points.points. Avoid the use of technical jargon that may Avoid the use of technical jargon that may

be over the head of the lender/investor.be over the head of the lender/investor.

Page 20: Business Plan

BUSINESS PLAN PRESENTATIONBUSINESS PLAN PRESENTATIONcont’dcont’d

Use visual aids if possible, but do not let it Use visual aids if possible, but do not let it overshadow you. Remember you are the overshadow you. Remember you are the entrepreneur not your aids.entrepreneur not your aids.

Close by restating and reinforcing the Close by restating and reinforcing the benefits of the proposed business and why benefits of the proposed business and why it should be supported.it should be supported.

Do not beg or try to get sympathyDo not beg or try to get sympathy Prepare for questionsPrepare for questions After the presentations remember to After the presentations remember to

follow up with investors/lenders.follow up with investors/lenders.

Page 21: Business Plan

THE ENDTHE END