business plan guidline

7/28/2019 Business Plan guidline

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HOW TO WRITE A

SUCCESSFUL

BUSINESS PLAN

Prof. Jinesh Desai


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IDENTIFICATION AND ARTICULATION OF:

Opportunity, Market, Customers

Management Capable of Seizing It

Minimal Required Resources

Entry Strategy & Tangible Vision for Growth

Financial Requirements, Cash Flow & Deal

Critical Risks & Assumptions

Harvest Options


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Goals of a Business Plan

Getting the Answers of the Questions like: Where am I now?

Where am I Going?

How will I get there?

Evaluate feasibility of the idea

Development of strategy

Entry, early growth, acquisition, LBO, harvest, etc.

Assist in obtaining resources/approval

Establish credibility


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Business Plan Outline Table of Contents

Introductory Page

Executive Summary

Industry Analysis

Market Research

Description of Venture

Production Plan

Operational Plan

Marketing Plan

Organizational Plan

Critical Risks

Financial Plan

Appendices


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Elements of a Successful Plan Clear description of the idea

Overview of industry to suggest need/opportunity

Evidence that demand exists (or can be created or stolen)

Clear description of resource requirements:

marketing, operations, financing

Background of management team

Schedule

Discussion of risks, rewards, and offer


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Business Plans: Investor Decision Process

Market AttractivenessMarket NeedSize of MarketMarket GrowthAccess to Market

Managerial CapabilitiesManagement Skills

Marketing SkillsFinancial SkillsReferences

Resistance to ThreatsBarriers to EntryObsolescence Risk

Downside RiskEconomic Cycle Risk

Product Differentiation

UniquenessProduct LifeProfit MarginValue Added

Expected Return

Perceived Risk

Decision to

Invest

+

--


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Key Points to Remember

General Guidelines Clear, concise, professional style

Well-researched and documented

Consistent and cohesive

Business plans are:

Very specific Not promotional tools, selling is subtle


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Introductory Page

Name & Address of a Business

Name(s) & Address(es) of Principal(s)

Nature of Business

Statement of Financing Needed

Statement of Confidentiality of Report


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Executive Summary

34 pages summarizing complete Business Plan

Clear description of idea

Arguments for success Overview of Industry, Market, Need, Demand

Benefits to Customer / Company

Fit with Company Objectives

Team

Financial Characteristics

Sales, profits, investment, risk and returns


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Industry Analysis

Future Outlook & Trends

Analysis of Competitors

Market Segmentation

Industry & Market Forecast

Fit with Corporate Objectives

Entry and Exit Strategies


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Market Research

Identify Market Area and Size

Description of Primary Customers

Who, how many, what they want, what they do

Research and Support for Demand

Competitor Analysis

Positioning map, strengths, weaknesses, likely

competitive response


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Description of Venture

Product(s)

Service(s)

Size of Business

Office Equipment & Personnel

Background of Entrepreneurs


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Production Plan

Manufacturing Process [Amount Subcontracted]

Physical Plant

Machinery & Equipment

Names & Suppliers of Raw Material


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Operational Plan

Description of Companys

Operations

Flow of order for Goods & / orServices

Technology Utilization

Facility and Location

Requirements

Equipment Requirements

Non-managerial staffing

Sources of Supply

Production Process andControls

Distribution logistics

Regulatory and other

compliance issues


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Marketing Plan

Mission Statement

Pricing

Distribution / Sales Channel Strategies

Promotion

Product Forecasts

Control / Ongoing Evaluation


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Organizational Plan

Form of Ownership

Identification of Partners or principal shareholders

Authority of Principals

Management Team Background

Roles & Responsibilities of members of organization


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Critical Risk Assessment

Evaluate the Weakness of Business

New Technologies

Contingency Plans

Evaluate impact risk should occur

Describe how the risk will be mitigated and how you

will respond should it happen


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Financial Plan

Start-up Requirements (Investment required)

Review of Financial Characteristics

Sales, margins, profits

Return Measures (IRR, ROI, EVA) Be careful not to promise

Breakeven Concerns

Sales level, time to cash stability

Extraordinary financial events

Projected Statements

Cash Flow, Income Statement, Balance Sheet etc.


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Appendices [Backup Materials]

Market Research Data

Lists, specs, pictures of products, systems, software

List of customers, suppliers, references

Appropriate location factors, facilities or technical analysis

Independent reports by technical expert, consultants

Detailed resumes of founders, key managers

Any critical regulatory, environmental or other compliance, licenses orapprovals, Leases or Contracts

Sales or other financials assumptions (in brief)


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Key Considerations

Have a story to tell

Be confident but objective and dispassionate

Understand the financial characteristics of your

business

Avoid promises and self-aggrandizement

Tease to stimulate interest, never bore


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Miscellaneous Concerns

Length is typically 20-40 pages, excl. exhibits

Required appendices

Financial statements (3-5 years)

Statement of Start-up Costs

Breakeven Chart Resumes

Use bullet points, tables, and small charts

Dont use first person (I,We,Our)

Format and Spelling Count (a lot)


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Remember:

A business plan is a specific

plan to open a new businessor to expand an existing one,

not the writers wishes anddreams !


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What Investors Look For

Evidence of Customer Acceptance: Orders

Evidence of Focus / Niche

Appreciation of Financial Goals

Proprietary Position, Exclusivity

Team with experience, commitment, and integrity


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What Turns Investors Off

Great Mousetrap Fallacy

Projects which deviate excessively from

industry norms

Unrealistic growth projections

Inadequate management experience /

depth


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THANK

YOU

business plan guidline

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