16 april

Saturday, April 22, 2023

BUSINESS PLAN



BUSINESS PLAN


a systematic evaluation of a venture’s chances for success.

a way to determine the risks facing a venture.

a game plan for managing a business successfully.

a tool for comparing actual and target results.

an important tool for attracting capital.


Why is a business plan important?

1. Serves as a developmental tool for the organizational founders

2. Useful for helping to clarify the venture’s vision and mission

3. Defines planning and evaluation guidelines for managing the ongoing entrepreneurial venture

4. Helps an entrepreneur secure needed financial resources

5. Its an effective tool for guiding growth


WHO WRITE A BUSINESS PLAN

New business owner

New business owner seeking outside funding

Existing business owner seeking outside funding for expansions

Any Business owner who want to increase the success of their business.


GENERAL RULES

Make it an interesting read!◦ Bullet points◦ Balance creativity while still getting your point

across◦ Use short (1-3 sentence) paragraphs◦ Be careful with using industry jargon

Write with objectivity◦ Consider using the third-person

Focus more on initial future (1-2 years), less on later years

Average 30-40 pages ( length depends on the business and industry), take 6 months to 1 year).


GENERAL RULES Ten characteristics

1. Clear, realistic financial projections2. Detailed market research3. Detailed competitor research4. Descriptions of key decision makers5. Thorough summary6. Proof of vision7. Good formatting clear writing8. Brief and concise9. Writing that demonstrates and

understanding of the importance of the bottom line

10. A plan that captures “you”


OUTLINE OF A BUSINESS PLAN

INTRODUCTORY SECTIONBUSINESS SECTIONFINANCIAL STATEMENTSAPPENDICES

Identity informationThe words “Business Plan”Your name and business nameCompany logoAddressTelephone numberFax NumberEmail AddressWeb Address (URL)Submission dateLooks vs. content

COVER SHEET

Executive SummaryMost important part of the planConcise explanation

◦Venture objectives◦Market prospects◦Financial forecasts◦Sources and uses

WRITTEN LASTAverage 2-3 pagesInteresting to read.

Table of ContentsInclude page numbersList of headings

◦Major◦Subsections

Same font!


BUSINESS SECTIONINDUSTRY

An overview of the industry, competitors, growth in the market.

If market is not growing then, the plan must convince the investors about the potential of business


BUSINESS SECTIONPRODUCT OR SERVICE

In-depth and clear description of product and services provided in the market.

Describe the product and service considering the audience in mind.

Also in this section, investors look for identification of a core competency.


BUSINESS SECTIONTHE MARKET

Evaluation of target market, customers and competitors.

What is the gap between your product and competitors product.


BUSINESS SECTIONMARKETING PLAN

How Business plans to attract, educate and retain customers.

It includes selected medium to advertise your business


BUSINESS SECTIONMANAGEMENT

Most important section, as most of the investors thinks that without right team none other part of the business really matters.

Invest in people not in ideas

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FINANCIAL STATEMENTS Thousands of potentially successful businesses fail because of poor

financial management. Providing financial data in a business plan is necessary for all

businesses The financial section of a business plan begins with a brief narrative

summarizing the projections, addressing key figures including those for sales, expenses, net income, and total growth in assets and net worth (Arkebauer, 1995).

including an income statement, balance sheet, statement of cash flows, and break-even analysis.

Typically, five-year projections are used, with month-to-month projections for the first year, quarterly for the second and third year, and annual projections for the fourth and fifth years.

Readers of business plans realize that projections are a “best guess” but similar to the pricing of products or services.

If the assumptions are realistic and logically developed they are more believable. Before presenting a business plan to a prospective financier, it is recommended that the owner have the financials reviewed by a certified accountant.3/25/2011

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Income statement

The principal purpose of the income statement is to report whether or not the entity operated at a profit for the reporting period.

The income statement begins by stating revenues from operating activities.

Revenues are measured by the amount of cash received or expected to be received from a transaction.

To calculate net income, the costs and expenses incurred in generating those revenues are subtracted.

The income statement is also valuable as a planning tool to control business operations (Brown, 1996).

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Balance sheet

A balance sheet reports what assets, liabilities, and owners’ equity an entity has at a given point in time.

The business plan should include a current balance sheet in addition to a projected balance sheet showing the expected growth.

In writing a business plan for a start-up business a personal balance sheet for the owner, outlining personal assets and liabilities, is also included.

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Statement of cash flows

The statement of cash flows is the most important of the financial statements because the single thing that distinguishes a business that is going to make it from one that is not is the capacity of the entrepreneur to manage the cash flow (Gracie, 1997).

This is because one of the greatest threats to start-up businesses is lack of liquidity. Using expected cash inflows and outflows can help management determine when additional cash will be needed throughout the year and plan accordingly.

the cash flow statement is also critical because of its importance to the readers of business plans. Bankers use it to determine how the loan will be repaid, and an equity investor uses it to determine the compensation expected from the investment (O’Hara, 1995).

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Appendix of a business plan

Writing a business plan requires an entrepreneur to use a variety of assumptions in order to forecast future events.

These assumptions range from how fast the market will grow, to how the competition will react to a new entrant into the marketplace.

The appendix also includes any information to supplement important references in the business plan.

Appendix information typically includes research data, additional financial information, diagrams, and personal testimonials.

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Documents

16 april