business plan

Business Plan Business Plan DevelopmentDevelopment

Prof. Purvish ShahProf. Purvish Shah

BE , PGDBM (Mech)BE , PGDBM (Mech)

Think before you Think before you start…start…

Know the IndustryKnow the Industry Find your Competitive AdvantageFind your Competitive Advantage Analyze RisksAnalyze Risks Develop Your Idea MethodicallyDevelop Your Idea Methodically Acquire InvestorsAcquire Investors Find Support Find Support Secure FinancingSecure Financing…….SHOULD I START THIS VENTURE??.SHOULD I START THIS VENTURE??

Business Plan SectionsBusiness Plan Sections


Narrative SectionNarrative Section– Business DescriptionBusiness Description– Products and/or ServicesProducts and/or Services– Industry AnalysisIndustry Analysis– OperationsOperations– Clientele/Target MarketsClientele/Target Markets– CompetitionCompetition– Marketing PlanMarketing Plan– Personnel/ManagementPersonnel/Management– Long-term GoalsLong-term Goals– Risks and ContingenciesRisks and Contingencies


Financial ProjectionsFinancial Projections– Financial NarrativeFinancial Narrative– Start-up Expenses and Start-up Expenses and

WorksheetWorksheet– Revenue AssumptionsRevenue Assumptions– Financial AssumptionsFinancial Assumptions– 3-5 Year Financial Projections3-5 Year Financial Projections

Statement of Cash FlowsStatement of Cash Flows Income StatementIncome Statement Balance SheetBalance Sheet Relevant ratiosRelevant ratios


Supporting DocumentsSupporting Documents– Resume/CV Resume/CV – Relevant documents/contractsRelevant documents/contracts– Past 3 years of tax returns (if Past 3 years of tax returns (if

seeking conventional financing)seeking conventional financing)– Academic researchAcademic research– Marketing research resultsMarketing research results– OtherOther

Products and ServicesProducts and Services

Clear, concise descriptionsClear, concise descriptions Divide into separate sectionsDivide into separate sections

– ProductsProducts– ServicesServices– Further subdivide into categories Further subdivide into categories

Value propositionValue proposition Price menuPrice menu Pricing approach/structurePricing approach/structure

Industry AnalysisIndustry Analysis

Your Goal:Your Goal:– Give a comprehensive Give a comprehensive

understanding of the industryunderstanding of the industry– Defend your business relevance!Defend your business relevance!

How?How?– Describe current situation Describe current situation – Relevant trendsRelevant trends– Intervening factorsIntervening factors– Size of industry/market potential Size of industry/market potential

(total # businesses, annual (total # businesses, annual revenues, etc.)revenues, etc.)

– Growth potentialGrowth potential

OperationsOperations

StraightforwardStraightforward (If retail) “paint a picture” of the (If retail) “paint a picture” of the

space space (as you walk in you will (as you walk in you will see/experience etc.)see/experience etc.)

Procedures and controlsProcedures and controls Distribution channelsDistribution channels Payment procedures (in/out)Payment procedures (in/out) Business-specific detailsBusiness-specific details

Clientele/Target Clientele/Target MarketsMarkets

Primary Clientele (>= 50%)Primary Clientele (>= 50%) Secondary Clientele (>= 20%)Secondary Clientele (>= 20%) Tertiary ClienteleTertiary Clientele Detailed descriptionsDetailed descriptions

– DemographicsDemographics– PsychographicsPsychographics– SpendingSpending– Total market size per market segmentTotal market size per market segment

Use for Revenue ProjectionsUse for Revenue Projections

CompetitionCompetition Match Apples to Apples: Segment Match Apples to Apples: Segment

your competitionyour competition Your Value PropositionYour Value Proposition Your Competitive AdvantageYour Competitive Advantage 2 Types of competitors:2 Types of competitors:

– DirectDirect– IndirectIndirect

Discuss each significant competitor in Discuss each significant competitor in depth, can group othersdepth, can group others

Identify potential threats and talk Identify potential threats and talk about them directlyabout them directly

(c) 2009 Debra Askanase(c) 2009 Debra Askanase

Step Back from the Step Back from the Project!Project!

1)1) SWOT Analysis/PEST Analysis SWOT Analysis/PEST Analysis (next lecture)(next lecture)

2)2) Do you have a Do you have a realreal Value Value Proposition? USP?Proposition? USP?

3)3) Do you want to start this Do you want to start this business?business?

4)4) Begin financial projectionsBegin financial projections

Marketing PlanMarketing Plan Your GoalYour Goal: you understand : you understand

your market, industry, your market, industry, competitive and competitive competitive and competitive advantage advantage

Within the narrative, consider Within the narrative, consider and describeand describe– Marketing channelsMarketing channels– PersonnelPersonnel– Geographic reach and richnessGeographic reach and richness– ToolsTools– 4 (or 5) Ps4 (or 5) Ps– Pricing strategy related to Pricing strategy related to

marketingmarketing

Marketing PlanMarketing Plan

Quantifiable Goals/Objectives = Quantifiable Goals/Objectives = specific deadline dates, and specific deadline dates, and numerical goalsnumerical goals

Specific, detailed activitiesSpecific, detailed activities Complete budget Complete budget MetricsMetrics Several plans:Several plans:

– Start-up/awarenessStart-up/awareness– First yearFirst year– First three yearsFirst three years– Marketing calendars are useful Marketing calendars are useful

toolstools

HRMHRM

Organizational ChartOrganizational Chart ResponsibilitiesResponsibilities SalariesSalaries Professional AdvisorsProfessional Advisors Advisory BoardAdvisory Board

Risks and Risks and ContingenciesContingencies

Shows you understand your Shows you understand your businessbusiness

Deals with investor concerns up Deals with investor concerns up frontfront

Make them realMake them real AddressAddress at leastat least two real risks two real risks