Business plan - Entrepreneurship
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A business plan is a document that brings together the key elements of a business that include details about the products and services, the cost, sales and expected profits.
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Business plan - Entrepreneurship
- 2. BUSINESS PLAN • A written document that outlines the future activity for an existing or proposed business venture. • Is the formal written expression of the entrepreneurial vision, describing the strategy and operations of the proposed venture. • A business plan is a document that brings together the key elements of a business that include details about the products and services, the cost, sales and expected profits. • Blue Print
- 3. Purpose of a Business Plan • Alignment of team(s) • Operating plan • Communication across company, division, department, business partners • Investment capital • Expansion capital (banks, leases) • Merger/acquisition process
- 4. BUSINESS PLAN Drivers Clear Vision of Purpose The direction the business venture wants to achieve. A long term view Satisfy Real Customers Needs & Serve Real Customers Exceptional customer service that results in the loyalty of customers, repeat purchases by them and greater customer retention. Differentiate from Competitors Positioning unique differentiating factors. Continuously making improvements to sustain a leadership position. Resource Focus, Organization & Commitment to satisfy Customer needs Resources should be optimally utilized to ensure that maximum possible value gets added to satisfy customer needs.
- 5. What Investors Look For • How does the team think? • How detail oriented is the team? • How big is this market? • Is there sustainable competitive advantage? • What’s the growth plan? • What does the technology roadmap look like, short term or long term play
- 6. Financial Projections • Build 5 years • Detail near years, extrapolate out years • Build from single unit economics • Document assumptions • Compare against top down • Validate with market comparables
- 7. 10 Must Answer Questions • How large is your addressable market? • How fast is the market growing? • Who’s make up your management team? • What’s your “secret sauce?” • What are the barriers to entry/competitive advantage? • What do your 5 year financials look like? • What’s your path to profitability? • Why is this a company versus a product/service? • Who’s your competition and how do you beat them? • Why can’t Microsoft or Google do this? (or name any big, established company…)
- 8. Creating Your Company’s Strategy • Building a strategy is harder work than building your product • Think about – What do you want your business to be when it grows up – Looking back from 5 years in future – Perspectives of all stakeholders – Anything that could go wrong • Hope is not a strategy
- 9. Competitive Analysis • You always have competitors • Dig deep, be detailed, be honest • Compare features and benefits • Technology comparison • Whole product offering (pricing, support, etc.) • Channels, funding, customers…
- 10. Sustainable Competitive Advantage • Create barriers to entry • Continually add value for your customers (and your investors) • Anticipate competition and make plans for dealing with it – Better widget, price erosion, market share, different business model….. • Avoid the trap of believing that your main competitor is your exit strategy
- 11. Format of Business Plan • TITLE PAGE Name of the business Owner /Owners Contact Details (Addresses, Phone & email etc) EXECUTIVE SUMARY Business ideas & Goals : Over view of business Marketing : Products & services being sold? Operations : Business Location & staff Finances : Breakeven period, finance required.
- 12. Format of Business Plan • BACKGROUND Mission Statement Company history ( existing business) Business Goals (Short term/Long term) MARKETING Market Research Market Analysis (Industry / Seasonality /Competitors /SWOT ) Marketing Plan (Target market/ distribution channel /pricing) Evaluation of Marketing
- 13. Format of Business Plan • OPERATIONS & PRODUCTION Legal & Licensing requirements Management details Organization structure & staffing Insurance & Security needs FINANCIAL PROJECTIONS Income & Expenses Financial forecasts IMPLEMENTATION TIME TABLE Time needed to set up & run the business