making a business plan _v1

8/2/2019 Making a Business Plan _v1

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Constructing the Elementary

Business Plan

*Based on inputs from venture capitalists and from commercial banks


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Session Objectives

To list the uses of a business plan

To lay out the steps involved in writing a businessplan

To list out data required in drawing up a businessplan

To understand the Elementary business plan

To understand the structure and composition of

various sections of a business plan To list the various appendices and exhibits needed in

a business plan


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Uses of a Business Plan

Equity funding

Bank finance

Alliances

Recruitment

Clarify the business

Others


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The Elementary Business Plan

1. What is the product/service?

2. Who is your customer?

3. How will you reach the customer?

4. Why you? How will you defend your market?

5. How will we make money?


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Kinds of Business Plans

Summary Plan

Executive summary

Full Business Plan

Operational Business Plan

The oral presentation Slide Deck


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Steps in Writing a Business Plan

Define purpose

Collect Information

Put it down

The rough draft

Financial analysis

Finishing

Review


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Data Required

Company details Documents relating to formation

Shareholding details

Permits and registrations

Management Organization chart

Details of key employees

Consultants and advisors

Compensation and other employee agreements

Industry and Competitors Market statistics from secondary sources

Reports on trends, etc

Competitor data

Customer surveys


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Data Required

Operations Product specifications

Contracts and purchase orders for raw materials

Competitive advantages

Details of Intellectual Property (Patent, license, andtrademarks)

Regulatory approvals

Industry standards as per regulations

Plant layout and operations plan

Research and development plans


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Data Required

Marketing and Sales Marketing plan

Advance orders, if any

Marketing materials Financial Information

Data on fixed and variable costs to be incurred

Financial forecasts


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Schilit (1987, Business Horizons)

1. Executive summary

2. Background and purpose

3. Objectives

4. Market analysis

5. Development and production6. Marketing

7. Financial plans

8. Organisation and management

9. Ownership

10. Critical risks and problems11. Summary and conclusions

12. Appendices


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Key Sections of a Business Plan

Executive summary

The company

The management team

The industry and the market Operations

The marketing plan

Financial plan

Risks and contingencies

Appendices


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Executive Summary

The executive summary is probably the most

important section of the business plan.

It is basically the whole business plan condensed

into a few pages

The main objective of the executive summary is

to entice the reader to go through the entire

plan.


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The Company

History

Current Status Future


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The Management Team

Technical and professional qualifications

Quality of work experience

Experience in the relevant sector

Reputation in the business community

Evidence of moral integrity

Financial capacity

Networking with other vital people in theindustry


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The Industry and the market

An industry is a collection of sellers

A market is a collection of buyers

Concentrate on the relevant segments

Competition


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Operations

Gantt chart outline setup

Technology

Raw material strategy

Production planning

Quality

HR policy


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Marketing

Target Segments

Branding

Product

Packaging

Pricing

Distribution

Promotion


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Finance

Funds sought

Projected financial statements

Costing details

Break even and payback analysis


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Risks and Contingencies

Identify major threats and risks

Outline strategies for countering them


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Appendices

1. Copy of documents pertaining to incorporation or

formalization of partnership.2. CVs of the entrepreneur/s and of key employees

3. Copies of various permits or permissions granted.

4. Copies of papers pertaining to sale or lease of land

for the business5. Copies of documentation of proprietary intellectual

property

6. Graphical representation of schedule including

milestones and dates7. Photographs of location

8. Factory or plant layout

9. Graphical representation of production process


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Appendices

10. Findings of market survey conducted

11. Photograph of product or prototype

12. Storyboards or mock-ups of advertisements

13. Projected balance sheets14. Projected profit and loss accounts

15. Projected cash flow statements

16. Sensitivity analysis of P&L a/c

17. Break even analysis

18. Financial ratios


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O I O