BusinessPlan eom.pdf ..
- 1. The Business Plan Creating and Starting The Venture
- 4. Planning as Part of The Business Operation • Planning is a process than never ends for a business. • As the venture grow up to mature business, planning will continue …
- 5. What is a Business Plan? • A business plan is a written document prepared by the entrepreneur that describes all the relevant internal and external elements and strategies for starting a new venture. • It is a integration of functional plans such as marketing, finance, manufacturing, sales and human resources.
- 6. Who should write the plan? • The business plan should be prepared by the entrepreneur. • The entrepreneur may consult with many other sources in its preparation, such as lawyers, accountants, marketing consultants, and engineers.
- 7. Who Reads The Plans? • The business plan may be read by employees, investors, bankers, venture capitalists, suppliers, customers, advisors, and consultants. • There are three perspectives should be considered in preparing the plan : – Perspective of the entrepreneur – Marketing perspective – Investor’s perspective
- 8. Why Have a Business Plan? • The business plan is valuable to the entrepreneur, potential investors, or even new personnel, who are trying to familiarize themselves with the venture, it goals, and objectives. – It helps determine the viability of the venture in a designated market – It provides guidance to the entrepreneur in organizing his or her planning activities – It serves as an important tool in helping to obtain financing.
- 9. Presenting The Plan • It is often necessary for an entrepreneur to orally present the business plan before an audience of potential investors. • In this typical forum the entrepreneur would be expected to provide a short (perhaps 20- minutes or half-hour) presentation of the business plan.
- 10. Information Needs • Before committing time and energy to preparing a business plan, the entrepreneur should do a quick feasibility study of the business concept to see whether there are any possible barriers to success. • Internet can be a valuable resource.
- 11. Outline of a Business Plan • Introductory Page – Name and address of business – Name(s) and address(es) of principal(s) – Nature of business – Statement of financing needed – Statement of confidentially of report
- 13. Outline … • Executive Summary – Three to four pages summarizing the complete business plan – What is the business concept or model? – How is this business concept or model unique? – Who are the individuals starting this business? – How will they make money and how much?
- 14. Outline … • Environmental and Industry Analysis – Future outlook and trends – Analysis of competitors – Market segmentation – Industry and market forecasts • Description of Venture – Product(s) – Service(s) – Size of business – Office equipment and personnel – Background of entrepreneurs
- 15. Outline … • Production Plan – Manufacturing process (amount subcontracted) – Physical plant – Machinery and equipment – Names of suppliers of raw materials • Operational Plan – Description of company’s operations – Flow of orders for goods and/or services – Technology utilization
- 16. Outline … • Marketing Plan – Pricing – Distribution – Promotion – Product forecasts – Controls • Organizational Plan – Form of ownership – Identification of partners or principal shareholders – Authority of principals – Management-team background – Roles and responsibilities of members of organization
- 17. Outline … • Assessment of Risk – Evaluate weakness of business – New technologies – Contingency Plans • Financial Plan – Pro forma income statement – Cash flow projections – Pro forma balance sheet – Break-even analysis – Sources and applications of funds
- 18. Outline … • Appendix (contains backup material) – Letters – Market research data – Leases or contracts – Price lists from suppliers.
- 19. Using and Implementing The Business Plan • The business plan is designed to guide the entrepreneur through the first year of operations. • Implementation of the strategy contain control point to ascertain progress and to initiate contingency plan if necessary. • Business plan not end up in a drawer somewhere once the financing has been attained and the business launched.
- 20. Measuring Plan Progress • Entrepreneur should check the profit and loss statement, cash flow projections, and information on inventory, production, quality, sales, collection of accounts receivable, and disbursements for the previous month. – Inventory control – Production control – Quality control – Sales control – Disbursements
- 21. Updating the Plan • The most effective business plan can become out-of-date if condition change. • If the change are likely to affect the business plan, the entrepreneur should determine what revisions are needed. • In this manner, the entrepreneur can maintain reasonable targets and goals and keep the new venture on a course that will increase probability of success.
- 22. Why Some Business Plans Fail • Goals set by the entrepreneur are unreasonable. • Goals are not measurable • The entrepreneur has not made a total commitment to the business or to the family. • The entrepreneur has no experience in the planned business. • The entrepreneur has no sense of potential threats or weaknesses to the business. • No customer need was established for the proposed product or service.