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Constructing the Elementary
Business Plan
*Based on inputs from venture capitalists and from commercial banks
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Session Objectives
To list the uses of a business plan
To lay out the steps involved in writing a businessplan
To list out data required in drawing up a businessplan
To understand the Elementary business plan
To understand the structure and composition of
various sections of a business plan To list the various appendices and exhibits needed in
a business plan
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Uses of a Business Plan
Equity funding
Bank finance
Alliances
Recruitment
Clarify the business
Others
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The Elementary Business Plan
1. What is the product/service?
2. Who is your customer?
3. How will you reach the customer?
4. Why you? How will you defend your market?
5. How will we make money?
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Kinds of Business Plans
Summary Plan
Executive summary
Full Business Plan
Operational Business Plan
The oral presentation Slide Deck
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Steps in Writing a Business Plan
Define purpose
Collect Information
Put it down
The rough draft
Financial analysis
Finishing
Review
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Data Required
Company details Documents relating to formation
Shareholding details
Permits and registrations
Management Organization chart
Details of key employees
Consultants and advisors
Compensation and other employee agreements
Industry and Competitors Market statistics from secondary sources
Reports on trends, etc
Competitor data
Customer surveys
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Data Required
Operations Product specifications
Contracts and purchase orders for raw materials
Competitive advantages
Details of Intellectual Property (Patent, license, andtrademarks)
Regulatory approvals
Industry standards as per regulations
Plant layout and operations plan
Research and development plans
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Data Required
Marketing and Sales Marketing plan
Advance orders, if any
Marketing materials Financial Information
Data on fixed and variable costs to be incurred
Financial forecasts
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Schilit (1987, Business Horizons)
1. Executive summary
2. Background and purpose
3. Objectives
4. Market analysis
5. Development and production6. Marketing
7. Financial plans
8. Organisation and management
9. Ownership
10. Critical risks and problems11. Summary and conclusions
12. Appendices
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Key Sections of a Business Plan
Executive summary
The company
The management team
The industry and the market Operations
The marketing plan
Financial plan
Risks and contingencies
Appendices
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Executive Summary
The executive summary is probably the most
important section of the business plan.
It is basically the whole business plan condensed
into a few pages
The main objective of the executive summary is
to entice the reader to go through the entire
plan.
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The Company
History
Current Status Future
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The Management Team
Technical and professional qualifications
Quality of work experience
Experience in the relevant sector
Reputation in the business community
Evidence of moral integrity
Financial capacity
Networking with other vital people in theindustry
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The Industry and the market
An industry is a collection of sellers
A market is a collection of buyers
Concentrate on the relevant segments
Competition
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Operations
Gantt chart outline setup
Technology
Raw material strategy
Production planning
Quality
HR policy
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Marketing
Target Segments
Branding
Product
Packaging
Pricing
Distribution
Promotion
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Finance
Funds sought
Projected financial statements
Costing details
Break even and payback analysis
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Risks and Contingencies
Identify major threats and risks
Outline strategies for countering them
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Appendices
1. Copy of documents pertaining to incorporation or
formalization of partnership.2. CVs of the entrepreneur/s and of key employees
3. Copies of various permits or permissions granted.
4. Copies of papers pertaining to sale or lease of land
for the business5. Copies of documentation of proprietary intellectual
property
6. Graphical representation of schedule including
milestones and dates7. Photographs of location
8. Factory or plant layout
9. Graphical representation of production process
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Appendices
10. Findings of market survey conducted
11. Photograph of product or prototype
12. Storyboards or mock-ups of advertisements
13. Projected balance sheets14. Projected profit and loss accounts
15. Projected cash flow statements
16. Sensitivity analysis of P&L a/c
17. Break even analysis
18. Financial ratios
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O I O
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