Business Plan & Executive Summary

Intro to EntrepreneurshipL III

narendrakale@coep.org.in

Where we are:• Session by Prof Sutaone- Introduction to

Entrepreneurship• Session by Prof Inamdar – Ideas• Session by Prof Sutaone- Team building• Session on Ideas presentation & selection• Team formation & Mentor sources – • http://www.aarewah.com/xp/modules/mediawiki/i

ndex.php?title=E_Mentor_Directory• TIE - http://pune.tie.org/• Pan-IIT Alumni India Mentorship program

Travel-Idea to Opportunity• What is the NEED?- Problem it would solve• Who would you sell to ? -Target Market• How would you make money?- Revenue Model• How would you differentiate?- USP• What are entry barriers? -For the Competition• What is the market size & competition?- For

You• What are the growth prospects?- For You• IDEA only beginning not the END!!• Idea may not be yours but you can be the

leader & successful entrepreneur!!

Protecting your idea

• Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats.

• Venture capitalists see thirty different versions of same idea

• It is not the IDEA but perfect execution by the team that matters!

• Non disclosures agreements

Business Plan- What

• What is business plan?– formal statement of goals, the reasons why

they are believed attainable, and the plan for reaching those goals.

• The format depends on its presentation context. It is not uncommon for businesses, especially start-ups to have three or four formats for the same business plan:

Forms of presentations• Elevator pitch - a three minute summary of the business plan's

executive summary. Purpose-as a teaser to awaken the interest of potential funders, customers, or strategic partners.

• Presentation - entertaining slide show and oral narrative Purpose -to trigger discussion and interest potential investors in reading the written presentation. limited to the executive summary and a few key graphs showing financial trends and key decision making benchmarks.

• Written presentation for external stakeholders - a detailed, well written, and pleasingly formatted plan targeted at external stakeholders.

• Internal operational plan - a detailed plan describing planning details that are needed by management but may not be of interest to external stakeholders. Such plans have a somewhat higher degree of candor and informality than the version targeted at external stakeholders.

Why ?Because I Need to Understand yourself and your business

Plan is a result of a PLANNING PROCESS People don’t Plan to Fail; they Fail to Plan

• Why write a business Plan?– Because you have to...know the wickets & scoreboard– Needed for financing– Strategic partnering– To explain business to customers/suppliers– To attract key people

• Planning–Who are your customers?–Why will the buy your service or product?–What will they pay?–How will you make and deliver the service/product–What resources (people, money, technology) will you need?–Can you make money/create value?

What ?

• The Plan is a SELLING DOCUMENT– Yourself, team, financiers, customers &

partners• Don't lose sight of the vision• The excitement must come through• The Plan should project your image• But………….

– The Plan Must Be Defensible!!

BUSINESS PLAN BASICS

• What Should Be In A Business Plan?• Elements of a Plan• –Executive Summary • –The Opportunity and the Company and its Services/Products • –Management Team• –Market Research/Analysis –• –Economics of the Business • –Marketing Plan • –Design and Development Plan • –Manufacturing and Operations Plan • –Schedule • –Critical Risks, Problems and Assumptions • –The Financial Plan • –Appendices

What Should Be In A Business Plan?

• –Cover Page

• •Name of Company

• •Address

• •Telephone/fax/email

• •Confidentiality legend

• •Control numbering of copies

Executive Summary

• An Executive Summary is• –NOT an introduction• –NOT a preface• –NOT a random collection of highlights• •An Executive Summary IS the Business Plan in miniature

• •Size –Two pages (preferable) to five pages (max)• •The Executive Summary must be• –Logical• –Clear• –Interesting/Exciting• •The Executive Summary is like a RESUME• –If it gets the reader’s attention, the rest gets read• –The Elevator Speech is to the Exec Summary

Executive Summary- Continued• The Executive Summary tells

–Who you are–What your strategy/vision is–What you are doing and/or propose to do–What is the market–How many $$$$ do you need and what will you do with them–What your SUSTAINABLE COMPETITIVE ADVANTAGE is

• When the reader is finished he or she should be able to tell someone what you are up to.

SO The Executive Summary Should Contain:–Description of the Business Concept and the Business–The Opportunity and Strategy–The Target Market and Projections–The Competitive Advantages–The Economics, Profitability and Harvest Potential–The Team

Address the following questions• Who are your customers? • How will you reach these customers? • What is it that your customers want and how do you know this? • How does your business provide customer wants? • Do you know your business and how it should operate? • Do you know your industry and the current trends in the market? • How are you qualified to do what you want to accomplish? • Do your assumptions make sense to someone unfamiliar with your

business? • Are your financial projections believable and do they make sense? • How will you measure your progress financially and in other ways? • What will you do to make it easy for people to do business with you? • What differentiates your business from all the others in your

industry?