Busines Plans

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    Business Plan

    By Anjan Mohapatro

    By Anjan Mohapatro

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    What

    When

    Who

    Where

    Why

    How

    What is a Business Plan

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    Business Plan

    A Business Plan (BP) can be defined as a document that describes

    an organization's current status and forecasts / plans for thegrowth in the times ahead..

    How it intends to Produce, market and sell a product or service

    profitably

    It is a selling document

    Who You are, what you do, how you will do it, financial resourcesare required to carry it, how you intend to secure these resources

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    Business Plan

    initial planning document for a new business

    serves as a tool to communicate the idea of the new

    venture to potential investors, bankers, key employees

    serves as a record to monitor and compare results

    consider important aspects and decide whether to go

    or not to go

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    Business Plan

    It can be used by managers and executives forinternal planning

    It can be used as the basis for loan applications

    from banks and other lenders

    It can be used to persuade investors that acompany is a good investment.

    For start-up ventures, the process of preparing abusiness plan serves as a road map to the future

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    Primary Reason - Business Plan

    Business Plan

    ProvideDirection

    Provefeasibility

    AttractCapital

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    Business Plan-How it helps

    obtain bank financing

    seeking investment funding: this is the document most venture capitalists first askfor

    arranging strategic alliances: small/large companies

    obtaining large contracts: proof of recognition to large companies checking outsmall ones

    attracting key employees: can help an executive come over to your side

    completing mergers and acquisitions: for selling and buying companies

    motivating management team: causes everyone to be working toward the samegoal, reduces customer confusion, lays out financial, marketing and production goals

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    Business Plan

    Attract Necessary financing by demonstrating feasibility of your venture

    First step Establish Goals

    Goals to be reviewed and approved by the Board

    Allocation of resources

    Filter to screen wide range of possible business opportunities

    Goals may seek to achieve

    Revenue Generation

    Employment Generation

    Neighbor hood Development Strategy

    Clearly identified and Quantifiable Goals

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    Business Plan

    Advantage Disadvantage

    Board

    May have important skills and insights regarding

    business planning or Industry May have limited time and availibility

    Staff

    Greater Sense of ownership of plan

    details,free,will be responsible for

    implementation of the plan

    May not have the time ,may not have the

    expertise, may detract from ongoing tasks

    and workload

    Has knowledge of the organisation and good

    expertise,No additional cost May not have the planning skills

    Consultant

    Expected to devote full time and attention to

    the product,has necessary skills and knowledge

    of business planning and the industry

    May not know the organizations capacities,

    No ownership of the plan, no involvement in

    implementation, high cost

    Volunteers Free,May bring knowledge and Skills Limited involvement in implementation

    l f l

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    10

    5. Marketing and sales

    6. Business system and organisation

    7. Implementation schedule

    Businessconcept

    Draft

    businessplan

    Final

    businessplan

    Focus of this phase

    Part of this phase

    Importance

    1. Executive summary

    2. Product or service

    3. Management team

    4. Market and competition

    8. Opportunities and risks

    9. Financial planning and financing

    Elements of Business Plan

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    11

    Executive Summary

    Who r u (describe ur organisation

    What you are planning (Describethe product or service)

    Why u r planning it (Discussdemand and supply )

    How you will operate ur business

    When u will be inoperation,expected net profit

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    12

    Executive Summary

    Business Concept

    What is your business idea? Inwhat way does it fulfil thecriterion of uniqueness?

    Who are your target customers?

    What is the value for thosecustomers?

    What market volumeand growth rates do

    you forecast?

    What competitiveenvironment do you face?

    What additional stages ofdevelopment are needed?

    How much investment isnecessary (high level estimation)?

    What long term goals have you

    set?

    Draft Business Plan

    What do you estimate yourfinancing needs to be?

    What are the sales, cost and profitsituations?

    What are the most importantmilestones along the way to yourgoal?

    What test customers have you

    approached/could you approach?

    What distribution channels willyou use?

    What partnerships would you liketo enter into?

    What opportunities and risks doyou face?

    What is the picture on patents

    Final Business Plan

    What are the results of yourdetailed business planning?

    What are your exact financingneeds?

    How will you delegate managementtasks?

    How much production capacity isnecessary?

    How will the implementation ofyour business idea be organised?

    What are your next concrete steps?

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    Company Description

    CompanyDescription

    What type of business you are planning?

    Home ownership development

    Wholesale

    Retail

    Manufacturing or service

    Legal structure Corporation or Partnership

    Brief overview of Industry and current growth

    trends

    Documents supporting trend analysis

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    Product or Service

    Product/Service

    What are the features or functions of the

    product/service? Who are the target customers?

    What value propositions does the product/serviceprovide to the customers? (e.g., tabulate

    customers unfulfilled needs and ways the

    product/service addresses those needs)

    Define customer base or market for yourproduct/service

    Describe Competition

    Location where you will produce or distributeyour product or services.

    Discuss advantage of location

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    Product or Service

    Product/Service

    What is the development status of the product?What remains to be done to convert the business

    idea into a tangible product or service?

    Has this business model been proven elsewhere?What are some successful examples?

    What is the plan to maintain the loyalty ofcustomers?

    Provide a realistic estimate of the price for yourproduct or service and discuss the rationale

    behind it.

    Where it positions you in the market place :at thehigh end, low end or in the middle of the existing

    range of prices for a similar product or service

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    Management Team & Staffing

    ManagementTeam/Staffing

    Who are the founders/founder groups and what are

    their qualifications, experience and pastachievements

    How critical is the idea originator to the future successof the venture?

    How are the management responsibilities sharedamong the team? (e.g., a table of team members with

    their position and key activities/responsibilities)

    What is the plan to reinforce management team in thefuture? (e.g., schedule of future management hiring

    and skills required)

    Staff required to operate your business

    Tasks they will carry out

    Skills they need

    Recruitment process

    Initial and ongoing training

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    Equipment and Materials

    Equipment &

    Materials

    What kind of equipment will you need.

    Describe machinery and vehicles necessary inthe production ,packaging and distribution of

    product.

    Type of material and its sourcing.

    FacilityDescribe the type of facility- building/land

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    Market & Competition

    Market &Competition

    What is the potential market size for the product/service?(e.g., calculation derived from number of target

    customers, units sold, value of sales)

    What is the expected market growth and which majorfactors influence that growth?

    Who are the likely competitors? What do they offer?

    What are the strengths and weaknesses of competitors?What is your competitive positioning vis--vis

    competitors?)

    How will you inform your target market about yourproduct or services and how will you convince customers

    to purchase it. Characteristics of target Markets

    Demographic

    Geography

    Socioeconomic status

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    Marketing & Sales

    Marketing &Sales

    What are the specific plans to promote theproduct/service?

    How will the product/service be distributed? Whichpartners