Business Plan

Importance of a Business Plan

1 New Ventures are in the lime light, also their Business Plans 2 Lots of B Schools have dedicated courses, in B- Schools- IITs, IIMs , SPJIMR 3 TV Channels are also promoting them, CNBC & Bloomberg UVT - Business Plan Completion conducted by Boman Irani 4 Fred Smith of FedEx - Information about the Package is as important as the Package itself

Definition
1. Business Plan is the written representation of the Vision for your business 2. The story of your Business written by you 3. It is an answer to questions - Where am I now ?Where do I what to go & How will I reach there? 4. Business Plan is a Road Map or Game Plan 5. BP is integration of all types of individual Plans 6. Is Planning necessary? 7. BP is the first acid test for aspiring Entrepreneur

2?
1 Who is the BP for ? 2 How should you write it ? 3 Who should write the BP ?

Users of a Business Plan

1. 2. 3. 4. 5. 6. 7. 8. Approach Venture Capitalists Bank Finance Suppliers Customers Recruitment Alliances Others Helps Self

Writing a Business Plan

1. 2. 3. 4. 5. 6. 7. Define the Purpose Collect Information Write Down Things Prepare a Rough Draft Do Financial Analysis Finalize the Plan Get the Plan Reviewed

Types of Business Plans

1. Summery Plan:
1. Prepared to test the investment water 2. Used by experienced organizations 3. Content
1. 2. 3. 4. Convince the Business Idea Management Team Understating of the Business & the Market 8-10 Pages

2. Full Business Plan:

1. Final Stage 50 to 60 pages. 2. Complete with all the Exhibits

Types of Business Plans

3. Executive Summery:
1. Introduces the Business & Executive team

4. Oral Presentation:
1. Important to hear you out & Interact 2. 20 -25 minutes with PPT slides

5. Operational Plan:
1. Prepared once operations have started 2. Acts as a Operational manual 3. 100 pages and keeps on revising

Key Sections of a Business Plan

1. 2. 3. 4. 5. 6. 7. 8. 9. Executive Summery Description of The Company The Management Team The Industry & Market Operations Marketing Plan Financial Plan Risks & Contingencies Appendices

Considerations
Should You make your Plan OR Outsource? Should you Download the Plan?

PTVA's Institure of Management

Executive Summery
1. Most Important Section of the Business Plan 2. It is a concise Business Plan in itself 3. The two Broad approaches in preparing the Executive Summery 4. Contents of ES
1. 2. 3. 4. General Description of Business Management Team Key Strengths Proprietary, Cost, Location adv. Risks involved & Steps taken

5. Review it for its impact

Description of the Business

1. It is the first Section of the Full Business Plan 2. Product/ Service will be delivered and how? 3. History : Few lines on How did it start & the Original Idea, who were the supporters etc. 4. Current Status : Company is resisted, Land is acquired , few people have joined, legal status, Place of operation, Size etc. 5. Future : Direction the company is going to take and few indicative key figures.

The Management Team

1. Special attention on the Entrepreneur/s
1. 2. 3. 4. 5. Professional & Technical Qualification Quality Work Experience Integrity Financial Capacity Networking & Business Contacts

2. Details of the Senior Employees to be included 3. Names & Qualifications of BOD of Ltd. Company 4. How the company is going to be organized & Roles & Responsibilities of key people 5. Compensation package of senior people

Environmental Analysis (Context)

1 Economy : GDP, Unemployment, Disposable income, Exchange rate, Interest rates e.g. Housing Industry 2 Demographics : Old Population, Literacy, Shift from Rural to Urban Area 3 Culture : More women working, Health awareness, environmental protection 4 Government Policies : Deregulation, Cotton Prices, Tax Policy, Policies for raising Capital 5 Technology : Impact of innovations on the industry

Industry
1. Brief description of the Industry
1. Size 2. Composition & Structure

2. Assessment of the Opportunity

1. Sizable & Potential Markets VS Mature Markets 2. Structural Feasibility e.g. Computer Drives VS Financial Information Market.

3. Significant Recent Developments & Future Trends

Software Development field, Stand of US Government & Dollar fluctuation, Bicycle Business

Markets
1. Description of Markets
1. International 2. National 3. Local

2. Target Market e.g. Restaurant in Navi Mumbai Market Research exercise in the local area 3. Do not assume some % of the Market Share 4. Main Competitors & How to counter them 5. Completion for Scarce Resources & Manpower

Operations
1. Execution Part - What needs to be done to get the business started 2. Buying land, Construction of Building & Installing Machinery 3. Securing Permits & Licenses 4. Project Report to be created with Charts 5. Detail the Production Process with Diagrams 6. Current installed Capacity & Expansion 7. Details of IP Competitive Edge

Operations
7 8 9 10 Commitment to Quality ISO, ISI or CMM 5 Employees - Hiring Engineers, Technicians, BPOs HR Policies on how to Train & Retain people Retail Outlet
7 8 9 7 8 9 Location Layout Stocks No of Hits Advertise Delivery of goods

11 Internet Sports Marketing Company

Marketing Plan
1. Pricing is an IMP decision
1. Companys Cost Structure 2. Competitions Pricing 3. How customers Perceive the product

2. Advertising
1. Media Planning 2. Promotion 3. PR

3. Distribution
1. Chanel 2. Commissions

4. Sales Projection 5. Controls

Finance Plan
1. Most looked after Section in the Plan 2. How much money is needed and how it will be used in phases 3. Includes B/S, P &L & Funds flow statements for a period of 3-5 years, with explanations 4. Logic behind these numbers and some sensitivity analysis should be done 5. Breakeven Analysis in the Graphical format 6. All the Statements need to be consistent 7. Ratio analysis should not be overdone

Organizational Plan
1 2 3 4 Decision on the Type of Organization Details of all the Partners/Directors Roles and Responsibilities of people Best is to include the Organization Chart

Risks & Contingencies

1. Financier will be happy to see this Section 2. Threats can come from changes in 1. Government Policies 2. Consumer Preferences 3. Technological Changes 3. Plans have to be made to mitigate the Risks 4. Insurance polices to take care of the regular risks including the Key-Man Insurance

Appendices
1. 2. 3. 4. 5. 6. Certificate of Incorporation or Partnership CVs of Entrepreneurs/Key-People Various Permits/Permissions Copies of lease or Rent of land/premises Intellectual Properties (Trade marks, Patients) Graphical representation of mile stones Photographs of location 7. Factory layout, Process Flow Chart

8. Findings of Market Survey 9. Photographs of Products 10. Sample of Advertisement 11. Projected B/S, P & L, Cash flow, Break-Even 12. Financial Ratios

Assignment
1. Visit a few websites, check up Business Plans 2. Attend one Business Plan Completion. Which is the Best Plan presentation according to you? Compare it with the Judges.