My Own Business

Summarized by Jedda de Jesus

Topics for discussion

What is a business plan? Why create a business plan? What to avoid in your business plan? A vision statement The people Your business profile Economic assessment Cash flow assessment Marketing and expansion plans Damage control plan 8 steps to a great business plan Does your plan include these necessary factors? Formulate (and reformulate) your business plan Top ten do’s and don’ts Q and A

What is a business plan?

A written outline that evaluates all aspects of the economic

viability of your business venture including a description and

analysis of your business prospects.

Why create a business plan?

The business plan is your roadmap to chart the course of your

business.

Note: You cannot ultimately predict the changing conditions

that will surface, you may make adjustments to the plan

through the course of time.

Why create a business plan?

• A business plan defines your objective using appropriate information

and analysis.

• You can use it as a selling tool in dealing with important relationships

including your lenders, investors and banks.

• Your business plan can uncover omissions and/or weaknesses in your

planning process.

• You can use the plan to solicit opinions and advice from people.

Source: http://www.myownbusiness.org/s2/

What to avoid in your

business plan?

• Long-range planning – stick to short-term

• Optimism – be conservative with timelines, sales, budgets, etc.

• Language that is difficult to understand – be understandable

• Dependency on inventions and uniqueness – stick to good

economics

A vision statement

This will be a concise outline of your business purpose and

goals.

The people

You are the most important ingredient for your success.

• Highlight your experiences and how it applies to your new business.

• Prepare employee resumes for investor and client reviews.

Your business profile

Define and describe your intended business and exactly how

you plan to go about it. Try to stay focused on the specialized

market you intend to serve.

As a rule, specialists do better than non-specialists.

Source: http://www.myownbusiness.org/s2/

Economic assessment

Provide and economic assessment, including your business’

appropriateness to the regulatory agencies and the

demographics you wish to interact with.

Cash flow assessment

Create a one-year cash flow that contains your capital

requirements, including what could go wrong and how you

plan to tackle problems.

Marketing and expansion

plans

Expansion plans – should describe how you plan to test

markets and products.

Damage control plan

All businesses will experience distress periods. Survival

depends on how well prepared you are to cope with

challenges.

Plan for at least a 12-month liquidity.

8 steps to a great business

plan

1. Review the two sample plans furnished in this session. 2. Focus and refine your concept based on the data you have compiled. 3. Gather all the data you can on the feasibility and the specifics of your

business concept. 4. Outline the specifics of your business. Using a “what, where, why, how”

approach might be useful. 5. Include your experience, education, and personal information. 6. Fill in the templates at the end of each session with clear language and

realistic projections. 7. Print off the business plan templates from each session into an MS Word

document. 8. You may wish to enhance your presentation with bar charts, pie charts and

graphics.

Does your plan include these

necessary factors?

A sound business concept – The biggest mistake an entrepreneur can make is not selecting the right business initially. Understanding your market – Do an initial test of your product in your chosen market A healthy, growing and stable industry – Success comes to those who find businesses with great economics and not necessarily great inventions or advances to mankind. Capable management – Hire the people who have skills you admire and lack.

Does your plan include these

necessary factors?

Able financial control – Entrepreneurs need to have a good understanding an practice of accounting. Financial management skills – build a qualified team to evaluate best options for utilizing retained earnings. A consistent business focus – As a rule, people who specialize in a product or service will do better than people who do not specialize. A mind set to anticipate change – Keep a fluid mind set and be aggressive in making revisions as needed. Include plans to take your business online – E-commerce is set to grow exponentially in the next decade.

Formulate (and reformulate)

your business plan

• Expect your first plan to be provisional and subject to revision. • Ask yourself if your expertise gives you the right to an opinion on your specific opportunity. • Identify the potential variables that are likely to prove fatal to the venture. • Clearly identify what you see as the key drivers of success. • Raise money with a cushion for contingencies. • Delay hiring key managers until initial rounds of experimentation have produced a stable business model. • At some point, take the plunge and test your product or service on a small scale. • Test and refine your business model before expanding your operations.

Donald N. Sull, associate professor of management practice at the London Business School, in an article in the MIT Sloan Management Review, offers some practical suggestions on managing inevitable risks while pursuing opportunities.

Source: http://www.myownbusiness.org/s2/

Do’s Don’ts

1. Prepare a complete business plan for any business you are considering.

1. Be optimistic in estimating future sales

2. Use the business plan templates furnished in each session.

2. Be optimistic in estimating future costs.

3. Complete sections of your business plan as you proceed through the course.

3. Disregard or discount weaknesses in your plan. Spell them out.

4. Research (use search engines) to find business plans that are available on the internet.

4. Stress long-term projections. Better to focus on projections for your first year.

5. Package your business plan in an attractive kit as a selling tool.

5. Depend entirely on the uniqueness of your business or the success of an invention.

6. Submit your business plan to experts in your intended business for their advice.

6. Project yourself as someone you’re not. Be brutally realistic.

7. Spell out your strategies on how you intend to handle adversities.

7. Be everything to everybody. Highly focused specialists usually do best.

8. Spell out the strengths and weaknesses of your management team.

8. Proceed without adequate financial accounting and accounting know-how.

9. Include a monthly one-year cash flow projection. 9. Base your business plan on a wonderful concept.

10. Freely and frequently modify your business plans to account for changing conditions.

10. Pursue a business not substantiated by your business plan analysis.

Top ten do’s and don’ts

Q and A