general outline for a business plan - ian reid. the topic the business plan – real value to the...

General Outline For a Business Plan - Ian Reid

The Topic

The Business Plan –

REAL value to the business or a waste of time?"

Agenda

Who is Platinum Black? Business Planning.

– Constructing the Business Plan.– The Value Thread.– Strategic Intent.– Marketing – Financial Viability

The “7 Hats” How to Unlock Profitability Conclusion and List of

Contents for the Business Plan

Who is Platinum Black?

Business Restructuring Specialists Been in operation for almost a decade Successfully worked with over 400 clients Focus on structuring for “Extraordinary profits” Drive our clients to succeed Objective is redundancy within 3 – 6 months Strive to consistently EXCEED clients

expectations Our methodology WORKS !!

How Effective Are We?

“With us having improved our sales by 38 % and our nett profit

before tax (audited results received today) by 205 %, this

bears testament to your methodology.”

Bob Cork – MD - BCA SA (Pty) Ltd

“The greater the difficulty, the more glory in surmounting it.

Skillful pilots gain their reputations from storms and

tempests.” Epicurus, 341-270 BC

Greek Philosopher

Business planning is hard work…..

The Effect of Not Planning

Purpose of a Business Plan

To take an objective and critical look at the businessTo provide direction to the business To assist the business in achieving shareholders goals (if correctly implemented) To communicate ideas of entrepreneurs to othersTraditionally used to raise money, but

has become a strategic tool to run the business effectively

WHY the entrepreneur believes that the proposed business will be successful

WHAT the entrepreneur is planning to do

HOW he or she will do it

WHEN it is to be done and

WHAT value to any investor

WHAT are the key success factors for the proposed business?

The Plan Should Indicate…

Constructing The Business Plan

Drive

down of

Vision,

Mission,

Objectives

and Goals

Performance

Management

Budget

Business Plan

Shareholders Expectations

Strategy & Action

Shareholders

Expectations

Appraisal value

Financial indicators

Operational

Measures

DCF

ROE

Value Drive

rs

The Value Thread

NPV

Performance

Management

Drive

down of

Vision,

Mission,

Objectives

and Goals

The most important part of the business plan is the Strategic

aspect

The numbers can change – but the STRATEGIC INTENT must be

stable

Strategic Intent

Great ideas need landing gear

as well as wings !!

C D Jackson

However….

The fast track..

Identify priorities for writing itIdentify likely readers and their needs, preferences and prejudicesDraw up a list of contentsWrite a first draft of the Executive summaryThink about what the conclusion will sayMake a start on a list of Strengths, Weaknesses, Opportunities and Threats

Research Components

The research or investigation has two components:

a market feasibility study

a financial viability study.

This information is then used to prepare a marketing plan. Decisions must be taken

on:

the exact product or service; how customers will be persuaded to

buy the product or service; how the product or service will be

made available; and what price will be charged

Content of a Business Plan

These decisions form the marketing mix and change to suit the

requirements of the potential customers

The REAL Question….

Do YOU believe in the numbers ?

Is the plan believable and attractive – to you??

“Excellence or high performance comes from moving beyond

customer satisfaction to customer delight”

Jim Clemmer

But Remember ….

Financial Viability

Projected Budgets

Projected Cash flows

Fixed assets required

Operating Expenses

Fixed costs

Profit margin & Break-even

Ratio analysis

The “7 Hats”

Operations

Human Resources

Admin & Finance

Marketing

R & DI

T

Management

The “Hats”– Methodology

Visualise the structure needed for a “hat” in 6 months’ time – to the exclusion of all othersAnalyse where that structure is nowIs there a plan to move to 6 month position?Is the plan allocated a: - priority, timing, responsibility and authority?If so – remove the ”hat” and move to next one

If not – Rectify the situation and DO IT!

Going concern…Example of “The Marketing Hat”

Identification of products and client needs

Identify target market

Analysis of “Past”, “Present” and “Future” clients

Sales plan and Marketing plan? – What worked

before ?

What data base will you need

Advertising procedures and plan and PR program?

Brag Book or web site?

Launch of new product program protocol?

How to Unlock Profitability

Passion and Motivation – with Drive and Focus

Ensuring customer satisfaction with great

products

Adhere to fundamental ratios parameters

Adherence to budgetary and cash flow controls

Structure business in terms of “7 Hats.”

Adapt to changing circumstances – be flexible

“The harder you work, the luckier you get.”

“Because its purpose is to create a customer, the business enterprise

has two – and only these two – basic functions: Marketing and innovation

Marketing and innovation produce results;

all the rest are “costs”Peter Drucker

A Word Of Caution….

Conclusion

A Business Plan definitely adds REAL value

but only if you REALLY apply your mind to it

If you Fail to Plan…..You Plan to Fail !!

List Of Contents1. Contents2. Preliminary details

Contact informationDocument controlProfessional advisersDefinitions

3. Executive Summary4. Current Situation

Basic corporate informationVision, mission, valuesHistoryBusiness organizationProducts and servicesCore competencies

5. External EnvironmentThe economyMarket analysisCompetitor analysisCompetitive advantages

6. Strategy PlansObjectivesBusiness strategyOperating plan

7. Financial AnalysisBreakeven analysisSales projectionsCapital spendingOperating costsProfit and loss accountBalance sheetCash flow and funding required

8. Risk AnalysisOverviewSWOT – strengths. weaknesses, opportunities & threatsLimiting factorsCritical success factorsAlternative scenariosSpecific risks and their solutions

9. Conclusion10. Annexes

A. Current projectsB. Detailed financial dataC. Biographies for the top management