business planning by bode pedro

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Business Planning & Writing By Bode Pedro

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Learn business plan writing skills. A project of the Global Shapers, Lagos hub of the World Economic Forum.

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Page 1: Business Planning by Bode Pedro

Business Planning & WritingByBode Pedro

Page 2: Business Planning by Bode Pedro

”Welcome

Page 3: Business Planning by Bode Pedro

Brought to you by

Global Shapers Lanre Messan

Infinite Impact Company Lola Talabi-Oni

Brent Consulting Bode Pedro

Veda Technology Sponsors

Veda Technology Brent Consulting Infinite Impact Company

Page 4: Business Planning by Bode Pedro

All About Me

Personal Profile Bsc. Computer and Electrical

Engineering, University of Maryland, BC

MD, Veda Technology Limited 2009 Young IT Entrepreneur of the

Year at the Nigerian Telecoms Award

2010 Nominee Young IT Entrepreneur of the Year

2011 Winner Business Owner of the Year at the Future Awards

Career Profile Entertainment, Technology,

Real Estate and Hospitality Managing Director, Veda

Technology Chairman, Bainstone Limited

(Bellanaija.com) Director, Southern Sun Hotels,

Ikoyi Director, Transnational

Technologies Limited

Page 5: Business Planning by Bode Pedro

Key Topics

Business Planning Elements of an Outstanding Business Plan Factors to Business Success Questions & Answers

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Why are we here?

For Young Upcoming Entrepreneurs Starting a new business

For Current Business Owners To have a birds eye view of current business Where to improve on within your business For Potential Investors For Banks and Short Term Investments

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Appetizer

Common Misconception: 1 Size Fits All: There is not standard Business Plan Different Business Plan for Different Readers 90% of the work is Preparation Business Plan is only as good as Ingredients Focus should always be on the important parts of the

business Business Plan should not be a Novel. No Fool-Proof Business: Its all about understanding,

calculating and managing risk versus potential

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Business Planning Content

Executive Summary Company Products / Services Marketing Financials Appendix

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”“

Executive Summary

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Who We Are

Introduce yourself and your company. This should be a summary of what you talked about in detail in the company chapter of your plan.

Recap the main points from that chapter. Think about who is going to read this. Tell your story, and make them want to read more.

Page 11: Business Planning by Bode Pedro

What We Sell

Talk about the products or services you offer Give your readers a recap of the major points you

will make in the Products and Services chapter keep it brief. Save the full details for later

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Who We Sell To

Talk about your target customers and how you plan to get your message to them. Remember, this should be a summary of your main points from the Target Market chapter.

Just focus on the most salient details here

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Financial Summary

Your projected sales and expenses. This should be a summary of what you talked about

in the Financial Plan chapter. Talk about the logic you used to come up with your sales forecast.

If you are starting a business, when do you plan to show a profit?

Page 14: Business Planning by Bode Pedro

Objectives

Think of the top three or four goals you want to achieve for your business.

Choose goals which you can track and measure. For example, number of new customers, total billing, total

commissions, number of sales vs. returns, and so on. Find the balancing point between realistic and challenging.

Be specific and measureable, such as "increase sales by 10% this year." Then pick the timeframe for each goal to measure your progress — by day, week, month, or year.

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Critical Success Factors

Focus on a list of activities, actions, items, resources or objectives that in your opinion are critical to the success of the business

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”“

Company

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Company Overview

talk about how the company was started. Think of it as "introducing" your company to someone.

How long have you been in business? What is the main company address? Are there any other locations? If this is a new business, will you be starting from a home office? Who owns the company? Is that ownership shared? Who else (besides yourself) are members of your management team?

You can use the other topics in this section to break down this information and give the reader more details. If you do, then this topic should cover only the main points from those topics.

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Management Team

List the members of the management team, starting with yourself. Describe what each of you are responsible for doing within the

company. Include summaries of their backgrounds and experience. Give as much detail as you can to show how you and your team will handle the needs of running the business.

If you are just getting started, will you be covering multiple functions by yourself? What area do you feel the most qualified to handle? What functions do you feel least qualified? Do you plan to hire someone else to handle these in the future? When do you plan to fill those gaps? Will you be hiring a full-time person or an outside contractor?

You can also Include your Board of Directors or Advisory Board if any

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Vision & Mission Statement

Your company vision is meant to propagate the expected achievements, successes or breakthrough of the company within a period of time (3 to 10 years).

Your mission statement is meant to be a simple, internal message for you and your employees:

What is the core value and purpose of the company? What is the vision, which will guide company decisions, now and

in the future? Think of it as the rally cry for you and your future investors,

partners and employees; this is the reason why you do what you do, every day. All other goals should support this mission

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”“

Products and Services

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Products

explain the products and services you sell to your customers.

Describe the main features of each. What need does the product or service fill for your customers?

If you sell products or services but not both, you can rename the present titles to better match your business offering.

Page 22: Business Planning by Bode Pedro

Competitors

Every business will have competition for their customers. Who competes with your company? Do they compete directly with you (for example, gas stations, restaurants, and dry cleaners)? Or are you a storefront competing with an online catalog?

The more you know about them, the better you can compete against them. List who your main competitors are. What they do well? What do you think your company does better? Why?

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”“

Target Market

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Market Overview

"who is your customer?" what need your product or service fills for your customers. how (or where) will your customers find you how do they buy from you? Do your products appeal to a certain age group? Do you sell more to men, or more to women? Why? Based

on shared reasons or traits, you can divide them into groups and choose the best groups to market your products to.

You also want to show what's going on with this market (growth, trends), and how your business fits into the larger industry that meets this market's needs.

Page 25: Business Planning by Bode Pedro

Market Needs

This is where you want to step back and look at your business through your customers' eyes. What problem does your business solve for them? What do you offer them that they can't get anywhere else? Are your competitors failing them in some key way?

If you have more than one group of customers you will be marketing to, do this exercise for each group. You may find the needs of the groups are very different. You want your marketing message to match the solution your product gives to each customer group.

Page 26: Business Planning by Bode Pedro

Market Trends

"The only constant is change." This is an old saying, and not just in business. But having a business is a perfect way to see change in action. Just when you think you have your market figured out, it changes. What you think your customers want or need changes. There's a shift in direction.

Change can happen for many different reasons. No matter the reason, it is important to be able to recognize when a change can or will affect your business. If you're just getting started, you might be planning your business around a current trend.

Either way, you want to look for, and be aware of, market trends. Think of trends as a way to get ahead of the market by knowing where it is going before it gets there.

Page 27: Business Planning by Bode Pedro

Market Growth

Where is the market for your business going? Is it moving in a different direction from where it has been? How can you use your strengths to take advantage of this growth?

Confirmed market growth can enhance the implied value of your business. It is important to find data which supports your market estimates. Especially if you will be presenting your plan for outside funding, look to market research firms, trade associations, or credible journalists, and include their findings here. The Internet is a great place to search for this type of content.

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Industry Analysis

Here you want to talk about your industry, not just your company. What type of industry is it? What common traits best describe the industry? How do businesses in this industry make, buy, sell, and deliver their products or services? How do customers for this industry make their buying decisions? For example, is reputation more important than price?

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”“Strategy and

Implementation

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Effective Marketing

Effective marketing is one of the most important — and often neglected — factors for small-business success. You can have the best product in the world, but if you can't find customers or convince them to try it, your venture won't get far.

Fortunately, marketing is mostly common sense, not rocket science. It's about answering basic questions about your business. Who has a need for what you offer? How do you stack up against the competition? How much will you charge? How will you promote your products? Will you sell directly or through third parties? The items below will walk you through those details and more.

Page 31: Business Planning by Bode Pedro

Marketing Plan

Overview how you differentiate your business from your

competitors; how you will communicate that difference; how you target your message to the right audience.

The point of your marketing plan is to generate qualified leads. Your sales plan, which comes later, will address how to close the sales.

Page 32: Business Planning by Bode Pedro

Pricing

What does it cost you to create the product or offer the service? Will your price cover those costs?

Will you offer free or low-cost pricing as a promotion? Will you offer discounts to your loyal customers? What will these promotions or discounts cost you?

Is pricing part of how you will position your company to the market? Does your pricing list support that positioning message?

How does your pricing relate to your competitors' price lists, and pricing in the industry in general?

Page 33: Business Planning by Bode Pedro

Distribution

How do your reach your customers? How do your customers reach you Will your products be delivered to a store (or more

than one store) who will sell to your customers? These are examples of distribution = getting your products to your customers for sale.

Do you need partners? What type of distribution do you need? What will it

cost?

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Milestones

KEY EVENTS When will equipment be shipped and how long will it take to be installed How soon will you find the right team When do you plan to launch this business When will the new product you are developing start generating revenue?

Identify the milestone events that are strategically important for your business, and make your best guess at when you will achieve them. Be careful not to get too granular here.

Page 35: Business Planning by Bode Pedro

SWOT Analysis

Strengths Start your SWOT analysis by describing the strongest aspects of

your business. What do you do best? What unique or enviable resources do you have that give you a competitive advantage? Have you invented a better mousetrap? Do you have a great location in a high-traffic area? Do all the kids in town wear your T-shirts because your branding is so hip? Do you make the best pizza in all of Brooklyn

Remember, strengths aren't always tangible things like equipment or seed money. Less concrete assets are often just as valuable, things like existing customer relationships, a reputation for quality and timeliness, or a strong knowledge of the market.

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SWOT Analysis

Weaknesses Describe your company's shortcomings as clearly and honestly as

you can. Don't be embarrassed about this. Every business has weak points, and acknowledging yours is not a sign of weakness itself but a signal that you are committed to improvement

Weaknesses, like strengths, should be internal factors that are under your control. (External market factors will come next in opportunities and threats.) Also, it sounds counterintuitive, but you may find that your weaknesses are closely related to your strengths. (BARCELONA)

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SWOT Analysis

Opportunities Now shift your focus outward from your company to the market and

customer base that you serve. What opportunities do you see just waiting for the right company to

come along?. Be sure to think about the timing for each opportunity. Opportunities are mostly External Factors

Page 38: Business Planning by Bode Pedro

SWOT Analysis

Threats Identifying the major outside threats to your business. What challenges do you face? What potential threats are keeping you up at night? Be sincere, confident and open in discussing these threats

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Sales Plan

You create a marketing plan to reach new customers. Your sales plan is the process to close the deals that your marketing plan opens. You want your sales plan to explain: The steps you follow to close a sale. How you reward your salespeople; do they receive a commission

for each sale? How you process and track the order once it's received. How you keep in contact with your customers throughout the sales

process. Do you store customer information by hand, or on a computer?

What is the final step in your sales plan?

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Sales Forecast

Prepare Sales Forecast Put into words how you decided on the numbers in your sales

forecast. What information helped you come up with your numbers? Did you start with customers in your target group to estimate your

sales? Did you use a % to show a rise in sales over time? What % did you choose, and why? Will there be higher (or lower) sales

at different times of the year?

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Others

Strategic Alliances Partners Service Providers and Consultants

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”“

Operations

Software and TechnologyPersonnel PlanOffice and Equipment

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”“

Financials

Sales ForecastCash Flow AssumptionsBudgetProfit and Loss StatementLoan Portfolio

Page 44: Business Planning by Bode Pedro

Cash Flow Assumptions

Chart Explain how you came up with the plan's

assumptions on credit sales, payment delays, and other cash flow details.

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Budget

What will it cost to operate your business? Remember that any direct costs of sales are entered in the Sales

Forecast table, not here. Those are costs that are directly involved in creating or delivering your products or services — for example, the wood to build furniture or the ingredients for recipes at a restaurant. Direct costs generally go up or down in direct correlation with the amount you sell. That's why they are included in the sales forecast.

Include startup expenses — things like up-front lease costs, furniture, equipment purchases, and so on. You can add them as one-time or short-term expenses in the early months of your plan. Just be sure they are included in your budget.

Page 46: Business Planning by Bode Pedro

Profit and Loss Statement

The profit and loss statement (also known as the "income statement") is the most common of the standard financial reports that bankers and investors will expect to see in your business plan. It shows your revenues, your expenses, and the difference between the two — that is, your net profit or "bottom line." Is your company going to make more money that it spends?

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Assumptions and Sensitivity Analysis Key variables and assumptions Risk Analysis

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Appendix

Mini Library of Information It holds the entire plan’s supporting documents in a

clear, well-organized fashion. The appendix consists of an array of documentation

that ranges from receipts and bank statements to contracts and inventories. It should be used on an as-needed basis and include only essential information.

Financials, Inventory, Loans, Contracts Details should be discretionary based on reader

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Appendix

Sales Forecast Personnel Plan Budget Profit and Loss Statement

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10 Elements of a Good Business Plan

1. Understanding the Reader2. Clear and Concise Identification of an Opportunity3. Very good knowledge of the Market or Customer4. Understanding Consumer Behaviour5. Understanding Finance and Money Management6. Description of Leadership & Management Team7. Understanding Operational Priorities8. Well Written Cash Flow Statement: Cash is King9. Understanding Risk and Assumptions10. Personal and Professional Investment in the Business

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6 Points to Business Success Great Products / Services Great team Reputation Market Knowledge Financial Planning Evolution

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Questions, Comments

Business Planning What Investors are Interested in My Experiences

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”“

Thank You