business plan workshop
DESCRIPTION
The following presentation is a version from a business plan development workshop conducted by Biruwa Ventures at Thames College, Kathmandu on January 11, 2012. Biruwa conducts similar works on issues related to business in colleges across Nepal. If you are an entrepreneur in Nepal, this is a must see presentation for you.TRANSCRIPT
![Page 1: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/1.jpg)
Presented by Biruwa Ventureswww.biruwa.net
twitter.com/biruwaventuresfacebook.com/biruwaventures
business
plangoals mar
ket
analy
sis
market
ingTEA
M
innovati
onopportuni
ties
success
pro
d
uctstrate
gyworkperforma
nce
competi
tion
IDEAS
fina
nce
custo
mer
![Page 2: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/2.jpg)
Why Entrepreneurship?
![Page 3: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/3.jpg)
Looking at a Problem as an Opportunity
![Page 4: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/4.jpg)
Why start a business in Nepal?
• Nepal is a virgin market – unmet demand
• Nepal is full of problems – look at this as an opportunity
• More educated young people, fewer jobs
• Entrepreneurship is not work!
![Page 5: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/5.jpg)
Risk vs. Reward• Starting a business is risky
• Linear returns vs. Exponential returns – socially, financially, personally…
• Be insane, never be scared of failure
“You won’t succeed, unless you try”
- Michael Jordan
![Page 6: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/6.jpg)
Rise of an opportunity• Change is good for
business
– Social
– Demographic
– Economic
– Political
– Technological
– Industry/market
– New technology or innovation
![Page 7: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/7.jpg)
An IdeaGenerat
e
AssessEvolve
![Page 8: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/8.jpg)
The Business Plan
![Page 9: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/9.jpg)
What is a business plan?
• It is NOT a report
• It is the PROCESS of finding out how to develop your business venture
• A business plan describes all the parts of the company necessary to make money
![Page 10: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/10.jpg)
Why Write One?• Plots a course
– Helps you think long term
• Feasibility study– Is your idea viable?
• Become a better decision maker– Helps you anticipate
problems– Will increase your
knowledge
• Reality check– Identify strength and
weaknesses – where you will need help
• Implementation plan– Use it as a guide – Keeps you honest /
accountable– Creates a time line
• Selling tool– Use it to sell to your
potential investors, partners, customers and suppliers
![Page 11: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/11.jpg)
Where to begin?
![Page 12: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/12.jpg)
Business Plan Research• Where to start?
– Talk to other entrepreneurs, business leaders, professors, friends, etc.
– Secondary data• Newspaper, reports,
census, database, etc. – Primary Data
• Questionnaires, focus groups, product sampling, company data etc.
![Page 13: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/13.jpg)
Business Plan Outline
1. Table of Contents
2. Executive Summary
3. Product Overview
4. Industry Overview– Industry trends– Rules & Regulations– Competitive analysis
5. Marketing Strategy– Target Market– Marketing Channel– Pricing Strategy
6. Operational Plan– Supply Chain– Production &
Distribution– Operations– Human resources
7. Financial Plan– Cost Estimates– Cash flow statement– Income statement– Balance sheet
8. Appendix
![Page 14: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/14.jpg)
Executive Summary
• Complete this section at the end
• Why is it important?
– Will help capture interest and support of your readers
– Usually an investor will read this section of the document first and decide if it is worth spending more time on it
• What is it?
– Summary of business opportunity
– Usually around 2-pages
– Demonstrates your knowledge of the business
– Proves that any investment in the venture will yield good return
![Page 15: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/15.jpg)
What to include in the Executive Summary?
• Introduce the business opportunity and vision for your business
• Marketing Highlights– Product/Service
distinctive features– Target market summary– Competitive analysis– Key marketing
strategies
• Operational Highlights– Critical legal issues– Supplier summary– Management team
overview
• Financial Highlights– Summary of finances
and projections– Equity investment of
owners
![Page 16: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/16.jpg)
Case study: Microbrewery
• Create a brew-pub to serve the beer enthusiast market in Kathmandu
• Marketing Highlights– Distinctive taste
– Focus on experience, quality, taste
– Beer enthusiasts and budget conscious customers
– Large brewers (Gorkha Brewery, foreign beers, etc.)
– Strict government Regulation
![Page 17: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/17.jpg)
The Product
![Page 18: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/18.jpg)
Product: the Five W’s
• What you should know:
– Who are you selling to?
– What are you selling?
– Where do you sell?
– When do you sell?
– Why and how do you make money?
![Page 19: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/19.jpg)
Product Description
• Why is it important?
– Communicating your product completely and concisely
– Fill gaps identified in the market
– Identify and use your Value Proposition
• What to include?
– What are your product’s/service’s unique feature?
– What are the value added features?
– How is your product different?
– History of the product in the market
![Page 20: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/20.jpg)
Product Description (Microbrewery)
• We will deliver premium quality draft beer inside the bar and sell to beer enthusiasts at affordable prices
• Better tasting beer, variety, unique bar atmosphere
• More options for customers
• Different taste from competition, constantly changing - evolving
![Page 21: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/21.jpg)
The Industry
![Page 22: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/22.jpg)
Industry Trends
• Why is it important?
– Understand current economic and industry trends
– Identify if your product will meet customer needs
– Provides you strategic information to make your business competitive
– Assists you in determining the longevity of the market
• What to include?
– Changing Environment• Social; Economic;
Demographic; Environmental; Technological; & Political
– Past, present and future industry trends
– Key success factors in your industry
– Barriers to entry, size of industry
![Page 23: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/23.jpg)
Industry Trends (Microbrewery)
• Large number of young professionals (20-35 years in age)
• Increasing disposable income
• Rising consumption of micro-brews in U.S. and Europe; New entry into Indian market
• Customers seeking variety
• Government action against larger corporations
• Dominant position of Gorkha Brewery in market (80% market share)
• Increasing market share of imported beer
![Page 24: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/24.jpg)
• Rs. 31,00,00,000 worth of alcoholic products imported in Nov/Dec 2011
• Rs. 19,00,00,000 of liquor imports last fiscal year
![Page 25: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/25.jpg)
Operating Regulations
• Why is it important?
– Includes all application government regulations required to operate your business
– You have to ensure that your business meets these regulations
• What to include?
– Filing dates
– Restrictions
– Industry specific considerations
– Permits required
– Qualification required
– Quality assurance
– Insurance
![Page 26: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/26.jpg)
Operating Regulations (Microbrewery)
• Liquor permits / license
• Yearly licensing fees• Meeting quality
standards• Regular testing• Can you follow certain
international standards to assure customers?
![Page 27: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/27.jpg)
Competitive Analysis
• Why is this important?
– Helps you differentiate your business
– Helps identify areas / customers not being targeted
– Helps you understand what the market likes of dislikes
– Identify threats
• What to include?
– Years in business
– Product/service description
– Product/service differentiation
– Customer profile
– Pricing
– Strengths/weaknesses
– Opportunity/threats to your business
![Page 28: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/28.jpg)
Competitive Analysis (Microbrewery)
• Gorkha Brewery (80% market share)
– 50-50 Khetan Group and Carlsberg Group
– Large control in market
• Barriers to entry – financial, supply chain, distribution, legal
• Price in market higher than consumer preference - Rs. 200+ a bottle (higher – Rs. 300+ in restaurants)
• Create a brand (Sam Adams Beer)
![Page 29: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/29.jpg)
The Marketing Mix
• What is it?
– Methods you choose to communicate with your target market
– It is a well-defined plan of action that includes timing, costs, and expected return of chosen promotional methods
• Why is it important?
– A new business should create awareness among customers to generate revenue
– The timing of promotional methods will have an direct impact on cash flow
![Page 30: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/30.jpg)
Target Market
• Why is this important?
– Helps you forecast the sales and cash flow projection
– Determines whether there are enough customers in the market to make your business profitable
– Helps you make critical and focused marketing decisions
• What to include?
– Age range
– Income range
– Gender
– Location
– Average / frequency of purchase
– What need does your product fulfill?
– Who influences their purchasing decision
![Page 31: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/31.jpg)
The Marketing Strategy
![Page 32: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/32.jpg)
Target Market (Microbrewery)
• Young professionals: 20-35 yrs
• Medium to high income (Rs. 20,000 and above)
• Mainly male
• Do women prefer fruiter beers?
• Near work areas, offices
• Nepal 1.2 lt per annum (Kathmandu 3.5 lt) = total 3,21,00,000 lt
• Total market value of beer market in Kathmandu = Rs. 3,50,00,000 (Rs. 3.5 arab)
• Need for variety and affordable prices
![Page 33: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/33.jpg)
The Marketing Mix - Channels
• Why is it important?
– A description of how and where you plan to sell your product
– You must match your location and distribution strategy based on buying patterns of your customers
– Always consider your customers preferences before making a move
• What to include?
– How to market?
– Different costs associated with marketing channels
– What is the marketing importance each of the channels?
– Potential for future growth
– Traffic flows at the potential location
– How will your method affect: sales, services, promotion, timing, economics?
![Page 34: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/34.jpg)
The Marketing Mix – Channels (Microbrewery)
• Print vs. Social media
• Target areas near offices or existing bar areas like Thamel or Jhamisikhel
• Usually works near colleges (KU, Manipal)
• Sponsor events, get endorsements
• Need areas with heavy foot traffic
![Page 35: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/35.jpg)
The Marketing Mix - Pricing
• Why is it important?
– This is how you will position yourself in the market against your competitors
– Price is a function of your costs, competition, and your customers
– This will determine your profitability
– An effective pricing strategy can help you enter the market quickly
• What to include?
– Know your costs: labor, cost of materials, overhead, profit margin
– Pricing considerations: Low, Medium, or High
– Customer’s perception of value
– Discounting (trade or volume)
![Page 36: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/36.jpg)
The Marketing Mix – Pricing (Microbrewery)
• High capital equipment cost Rs. 8 lakh for equipment from China
• Government licensing fees
• Sell more, lower margins vs. Sell less, higher margins
• Price lower than Rs. 100 per pint (473 ml)
• Make premium brews for high end customers, make higher margin
![Page 37: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/37.jpg)
The Operational Plan
![Page 38: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/38.jpg)
Supply Chain
• Why is it important?
– Can you find necessary suppliers and equipment?
– Helps you identify suppliers that best fit your business needs
– Answers if you need backward linkages
– How much inventory will you need?
• What to include?
– Pricing
– Trade discounts
– Supply shortages
– Exclusive product rights
– References
– Back up suppliers
![Page 39: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/39.jpg)
Supply Chain (Microbrewery)
• Chinese suppliers vs. local fabrication
• Regular maintenance
• Finding key ingredients for quality brew– Keeping supply local vs.
importing (question about quality)
– Malt extract (liquid or dried), Hops, Specialty grains, Yeast
• Maintain exclusive rights to ingredients
![Page 40: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/40.jpg)
Production / Distribution Plan
• Why is it important?
– Outlines the method of production & distribution
– Ensures that you have considered all components of the production process
– Impacts your physical location, human resources, licensing, etc.
– The ability to protect your intellectual property, patents, trademark – impacts competitive advantage
• What to include?
– Production methodology
– R&D requirements
– Cost analysis (direct and indirect overhead)
– Time requirement
– Equipment and plant requirement
– Facilities description
– Leasehold improvements
– Warehousing requirements
– Sub-contracting arrangements
![Page 41: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/41.jpg)
Sierra Nevada Brewing Co.
•Established in 1980 with $50,000 loan – produced 950 barrels of craft beer
•In 2010, it produced 786,000 barrels of beer
•6th largest brewing company in United States
![Page 42: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/42.jpg)
Production / Distribution Plan (Microbrewery)
• State of the art-equipment, to maintain utmost sterility during production, cooling and storage
• Creating a recipe for great tasting beer; experiment, give free tasting
• First distribute at bar, consider bottling options and distribution at other retailers and bars
• 6-months to set up facility, 6-months to brew the first sellable batch
• Build storage facility to keep brews
![Page 43: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/43.jpg)
Human Resources• What is it important?
– Forces you to do a skills inventory of yourself and develop a plan to “fill the gaps”
– You have limited time, do what you are best at and find help
– If there is a need to hire, factor that into the cost structure
– A strong management team is extremely important for potential investors
• What to include?
– Organizational structure and staffing plan (Full time & Part time)
– Salaries and benefits
– Job description
– Roles and responsibilities
– Service and employee contracts
– Future HR plans
– Business skills audit
![Page 44: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/44.jpg)
Human Resources (Microbrewery)
• Need someone with brewing experience, take training overseas?
• Bar tenders also work as brewers; can share knowledge with customers
• Give training to brewers
• Find someone with distribution/logistics experience
• Account professional brewer into cost structure
![Page 45: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/45.jpg)
The Financial Plan
![Page 46: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/46.jpg)
Financial Statements
• Why is it important?
– Determines your business’ liquidity (Balance Sheet)
• Do you have enough current assets to meet your current liabilities?
• What is your debt to equity ratio?
– Provides overall profitability summary over a period of time (Income Statement)
• What to include?
– Balance sheet• Current assets, fixed
assets, other assets
• Current liabilities, long-term liabilities, shareholders equity
– Income statement• Sales/Revenue
• Expenses (variable and fixed)
• Profit/Loss
• Tax owed
![Page 47: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/47.jpg)
Cash Flow Statement
• Why is it important?
– Shows the actual flow of money in the business
– Determines if the business is viable
– Helps you make purchasing and hiring decisions
– Tells you if you need a loan or cash injection
• What to include?
– Sources of cash: sales, loans, equity investments
– Uses of cash: expenses to be paid, start-up cost,
– Balance (Monthly receipts minus disbursements)
– Factors to consider: seasonality, return on promotions, payment items
![Page 48: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/48.jpg)
Financial Estimates (Microbrewery)
• Start-up costs
– Build-out cost (Building, bar, tables, chairs, electrical, refrigerator, etc.) = Rs. 25 lakh
– Capital Equipment (brewing equipment, barrels, keg fillers, lab equipments, etc.) = Rs. 20 lakh
– Starting Inventory (barley malt, specialty grains, hops, yeast, water, etc.) = Rs. 15 lakh for first year
– Labor Cost (1 brewmaster, 3 bartenders, 1 manager, 3 waiters, 1 help) = Rs. 16 lakh for first year
• Total Start-up cost = Rs. 76 lakhs
![Page 49: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/49.jpg)
Wrapping Up
![Page 50: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/50.jpg)
DILBERT!
![Page 51: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/51.jpg)
Building your Company
Idea Business Plan
Size of the
Opportunity
Customer Discovery
Customer Validatio
n
Theory Implementation
Source: Steve Blank – The Lean LaunchPad
![Page 52: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/52.jpg)
CUSTOMER SEGMENTS
![Page 53: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/53.jpg)
VALUE PROPOSITIONS
images by JAM
![Page 54: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/54.jpg)
CHANNELS
images by JAM
![Page 55: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/55.jpg)
CUSTOMER RELATIONSHIPS
images by JAM
![Page 56: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/56.jpg)
REVENUE STREAMS
images by JAM
![Page 57: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/57.jpg)
KEY RESOURCES
images by JAM
![Page 58: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/58.jpg)
KEY ACTIVITIES
images by JAM
![Page 59: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/59.jpg)
KEY PARTNERS
images by JAM
![Page 60: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/60.jpg)
COST STRUCTURE
images by JAM
![Page 61: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/61.jpg)
images by JAM
customer segments
key partners
cost structure
revenue streams
channels
customer relationships
key activities
key resources
value proposition
![Page 62: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/62.jpg)
images by JAM
![Page 63: Business Plan Workshop](https://reader033.vdocument.in/reader033/viewer/2022061110/545183c8af795909428b489e/html5/thumbnails/63.jpg)
Case Study & Presentation
• Executive Summary
• Product Overview
• Industry Overview
• Target Market
• Marketing Strategy– Marketing Channel
– Pricing Strategy
• Supply Chain
• Rules & Regulation
• Production & Distribution
• Human Resources
• Financial Estimates– Cost Estimates
– Breakeven analysis
– Cash flow statements