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Business plan preparation specific guidelines

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Rotimi Olukorede
Rotimi Olukorede

This document provides guidelines for creating an effective business plan, including the purpose and qualities of an effective plan, target audiences, common plan sections and their contents, and tips for the executive summary, company description, product/service, market analysis, marketing plan, operational plan, management team, financial plan, funding, and conclusion sections. The key sections of a business plan are outlined as the executive summary, company description, product/service, market analysis, marketing plan, operational plan, management team, and financial plan. An effective plan clearly presents the business or product, target market, marketing strategy, operational details, management team, and financial projections.

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Specific Guidelines WEALTHY PLACE BUSINESS SEMINAR1 BUSINESS PLAN PREPARATION
PURPOSE OF BUSINESS PLAN WEALTHY PLACE BUSINESS SEMINAR2  Provides clarity of thought and purpose  Allows you to think through your business A-Z  Introduces Business Model  Introduces the company and the team  Attempts to persuade investors  Highlights risks and challenges  Serves as an entry point for further discussions
Qualities of a good business plan WEALTHY PLACE BUSINESS SEMINAR3  Well structured  Simple but informative  Concise  Attractive  Understandable to a 15 year old  Use Diagrams and Charts to make your BP attaractive
TARGET AUDIENCE WEALTHY PLACE BUSINESS SEMINAR4 Who is the Plan for –Internal or External firms that see many plans Usually smart and knowledgeable Referrals – very critical VC’s objective to assess quantum, type, and manageability of risks Hence, business plan is an important document though not the “be-all, end-all” A must for launching a new business or changing (growing) an existing one
BP answers the following questions WEALTHY PLACE BUSINESS SEMINAR5  What is your current situation  What is your goal  How will you reach the goal  What will you offer  How big is the business you are entering  Who are the key players  How will you differentiate yourself  What are your marketing plans  What are the economics of your business  What is the capital requirement to get your business started of growing the business
Executive Summary Company Description Product/Service Market Analysis Target Market Market Size Market Trends Key success factors Competitive Analysis Marketing Plan Overview Product Price Place promotion Operations Plan Financial Plan Overview Set up Cost Cash Flow Forecast Management Team Conclusion Business Plan Contents WEALTHY PLACE BUSINESS SEMINAR6
Executive Summary WEALTHY PLACE BUSINESS SEMINAR7 The most important section of the plan, often the only read section! Compact version of the big plan Stick to hard facts; no room for exaggerated optimism Limit to a concise summary; no more than a couple of pages Summary is the prelude to further meetings
Executive Summary 2 WEALTHY PLACE BUSINESS SEMINAR8  Summary should answer questions:  What sort of company is it?  What’s the product/service and what’s special?  Who are the managers?  How much money do you need? In what stages? What will it be used for?
THE COMPANY DESCRIPTION WEALTHY PLACE BUSINESS SEMINAR9  A brief history of the company  How you started? What was the original idea? Share your mistakes and what you learnt; adds credibility  Share financials; actual vs. planned; if applicable  Should lead up to the discussion as to where you intend to go from here
PRODUCT/SERVICES WEALTHY PLACE BUSINESS SEMINAR10  What is your value proposition?  How are you going to solve their problem better than your competitor?  Than what they are doing now?  Any patent protection possible?  Technology details: defensible? Unique? Sustainable competitiveness?  Time to market? Ability to execute?  What prevents someone else from doing it more cheaply?
MARKET ANALYSIS WEALTHY PLACE BUSINESS SEMINAR11  Who is your target market?  Profile of the people? What is their behavior pattern?  Any complementary products or services?  How large is your market? Growth rates?  What are the trends in the market?  How do you see the market evolving?
MARKETING PLAN WEALTHY PLACE BUSINESS SEMINAR12  Detailed note on how you will convert large market into revenue  Provide different marketing tactics – cheapest to most expensive  Costs and strategy of acquiring customers  Sales and Marketing strategies  Respect your competitors  Risks and Unknowns  Strategies for reducing risks
OPERATIONAL PLAN WEALTHY PLACE BUSINESS SEMINAR13  How will you make the product or service ?  How will it be available to your customers?  What’s involved in running the company?  Location, equipment needs  Labor requirements  Risks at different levels and how best to mitigate risks
MANAGEMENT TEAM WEALTHY PLACE BUSINESS SEMINAR14  Provide CVs of the key members  Relevance of past experience  Start-up experience  Market creation experience  Team dynamics – very critical when more than one founder  Clarity of roles  GREAT TEAM + MEDIOCRE PLAN =  MEDIOCRE TEAM + GREAT IDEA =
FINANCIAL PLAN WEALTHY PLACE BUSINESS SEMINAR15  Detailed numbers not the key  Assumptions very critical  Key drivers of revenue  Realistic projections  Exercise prudence  Benchmark your model  Revenue estimate: bottoms-up  Expenses – past and/or industry average
FUNDING WEALTHY PLACE BUSINESS SEMINAR16  Capital –  Brand building  Scaling the business  Funding based on 18 – 24 months projections?  Till customer traction?  Choose funding partner with care – it’s a marriage!  Exit strategy for the investor; not the entrepreneur  Exit could be merger, acquisition, or IPO  Each strategy should be plausible and defensible
CONCLUSION WEALTHY PLACE BUSINESS SEMINAR17  A WEAK PLAN IS BETTER THAN NON AT ALL  YOUR PLAN WILL DETERMINE HOW FAR YOU WILL GO  A BUSINESS WITHOUT A PLAN IS A BUSINESS GOING NOWHERE  A BUSINESS WITHOUT A PLAN IS A BUSINESS WITHOUT A VISION  MY ADVICE : PLAN PLAN PLAN  THANK YOU

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Business plan preparation specific guidelines

  • 1. Specific Guidelines WEALTHY PLACE BUSINESS SEMINAR1 BUSINESS PLAN PREPARATION
  • 2. PURPOSE OF BUSINESS PLAN WEALTHY PLACE BUSINESS SEMINAR2  Provides clarity of thought and purpose  Allows you to think through your business A-Z  Introduces Business Model  Introduces the company and the team  Attempts to persuade investors  Highlights risks and challenges  Serves as an entry point for further discussions
  • 3. Qualities of a good business plan WEALTHY PLACE BUSINESS SEMINAR3  Well structured  Simple but informative  Concise  Attractive  Understandable to a 15 year old  Use Diagrams and Charts to make your BP attaractive
  • 4. TARGET AUDIENCE WEALTHY PLACE BUSINESS SEMINAR4 Who is the Plan for –Internal or External firms that see many plans Usually smart and knowledgeable Referrals – very critical VC’s objective to assess quantum, type, and manageability of risks Hence, business plan is an important document though not the “be-all, end-all” A must for launching a new business or changing (growing) an existing one
  • 5. BP answers the following questions WEALTHY PLACE BUSINESS SEMINAR5  What is your current situation  What is your goal  How will you reach the goal  What will you offer  How big is the business you are entering  Who are the key players  How will you differentiate yourself  What are your marketing plans  What are the economics of your business  What is the capital requirement to get your business started of growing the business
  • 6. Executive Summary Company Description Product/Service Market Analysis Target Market Market Size Market Trends Key success factors Competitive Analysis Marketing Plan Overview Product Price Place promotion Operations Plan Financial Plan Overview Set up Cost Cash Flow Forecast Management Team Conclusion Business Plan Contents WEALTHY PLACE BUSINESS SEMINAR6
  • 7. Executive Summary WEALTHY PLACE BUSINESS SEMINAR7 The most important section of the plan, often the only read section! Compact version of the big plan Stick to hard facts; no room for exaggerated optimism Limit to a concise summary; no more than a couple of pages Summary is the prelude to further meetings
  • 8. Executive Summary 2 WEALTHY PLACE BUSINESS SEMINAR8  Summary should answer questions:  What sort of company is it?  What’s the product/service and what’s special?  Who are the managers?  How much money do you need? In what stages? What will it be used for?
  • 9. THE COMPANY DESCRIPTION WEALTHY PLACE BUSINESS SEMINAR9  A brief history of the company  How you started? What was the original idea? Share your mistakes and what you learnt; adds credibility  Share financials; actual vs. planned; if applicable  Should lead up to the discussion as to where you intend to go from here
  • 10. PRODUCT/SERVICES WEALTHY PLACE BUSINESS SEMINAR10  What is your value proposition?  How are you going to solve their problem better than your competitor?  Than what they are doing now?  Any patent protection possible?  Technology details: defensible? Unique? Sustainable competitiveness?  Time to market? Ability to execute?  What prevents someone else from doing it more cheaply?
  • 11. MARKET ANALYSIS WEALTHY PLACE BUSINESS SEMINAR11  Who is your target market?  Profile of the people? What is their behavior pattern?  Any complementary products or services?  How large is your market? Growth rates?  What are the trends in the market?  How do you see the market evolving?
  • 12. MARKETING PLAN WEALTHY PLACE BUSINESS SEMINAR12  Detailed note on how you will convert large market into revenue  Provide different marketing tactics – cheapest to most expensive  Costs and strategy of acquiring customers  Sales and Marketing strategies  Respect your competitors  Risks and Unknowns  Strategies for reducing risks
  • 13. OPERATIONAL PLAN WEALTHY PLACE BUSINESS SEMINAR13  How will you make the product or service ?  How will it be available to your customers?  What’s involved in running the company?  Location, equipment needs  Labor requirements  Risks at different levels and how best to mitigate risks
  • 14. MANAGEMENT TEAM WEALTHY PLACE BUSINESS SEMINAR14  Provide CVs of the key members  Relevance of past experience  Start-up experience  Market creation experience  Team dynamics – very critical when more than one founder  Clarity of roles  GREAT TEAM + MEDIOCRE PLAN =  MEDIOCRE TEAM + GREAT IDEA =
  • 15. FINANCIAL PLAN WEALTHY PLACE BUSINESS SEMINAR15  Detailed numbers not the key  Assumptions very critical  Key drivers of revenue  Realistic projections  Exercise prudence  Benchmark your model  Revenue estimate: bottoms-up  Expenses – past and/or industry average
  • 16. FUNDING WEALTHY PLACE BUSINESS SEMINAR16  Capital –  Brand building  Scaling the business  Funding based on 18 – 24 months projections?  Till customer traction?  Choose funding partner with care – it’s a marriage!  Exit strategy for the investor; not the entrepreneur  Exit could be merger, acquisition, or IPO  Each strategy should be plausible and defensible
  • 17. CONCLUSION WEALTHY PLACE BUSINESS SEMINAR17  A WEAK PLAN IS BETTER THAN NON AT ALL  YOUR PLAN WILL DETERMINE HOW FAR YOU WILL GO  A BUSINESS WITHOUT A PLAN IS A BUSINESS GOING NOWHERE  A BUSINESS WITHOUT A PLAN IS A BUSINESS WITHOUT A VISION  MY ADVICE : PLAN PLAN PLAN  THANK YOU