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Developing the Business Plan

Developing the Business Plan

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Published by Rendi Aditya

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Published by: Rendi Aditya on Jul 03, 2009
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08/09/2013

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eveloping theBusiness Plan
for
Your Rapidly GrowingCompany 
DD
 
A. BUSINESS PLAN BASICS
Goals
For rapidly growing companies, a business planis a key management tool that can be used for avariety of reasons:
q
Attract debt or equity financing
q
Promote relationships with joint venturepartners and large customers, suppliers, anddistributors
q
Provide strategic guidance, operating tacticsand objectives
q
Furnish a standard against which to judgefuture business decisions and results.
q
Evaluate strengths and weaknesses andidentify viable alternative strategies
q
Establish the operational and financialstructure of a management buy-outRegardless of the exact impetus, a business planis a fundamental requirement for all start-up andrapidly growing businesses.Due to the array of business plan goals and theendless variety of circumstances, there is no suchthing as a standard business plan. Furthermore,a business plan should not be static.Over its lifetime, a business typically goesthrough several stages. Although the numberand names of these stages vary by economist, it issafe to speak of at least three stages: start-up,growth, and maturity. Generally, each stage inthe life of a business represents an increase inrevenues and employees -- and perhaps inproduct lines, assets, etc. -- and requires a greaterdelegation of routine functions. The transition toa new stage represents a critical phase in the lifeof a business. This transition, along with changesinherent in a business's growth, changing marketconditions, evolving company strategies, andactual financial results, signals the need toupdate the business plan.The outline presented below has been formulatedbased on PricewaterhouseCoopers LLP'sexperience with start-up ventures and rapidlygrowing businesses. You will need to makecertain modifications to your business plandepending on whether your company is in thetechnology, manufacturing, service, retail orexport industry. However, the basics are thesame. Regardless of your business, it isimportant to remember that this outline shouldbe used as a guide, not as a rigid, all-encompassing format.
i
Developing
The
Business
Plan
For
 Your
Rapidly 
Growing
Company 
 
A Few Generalizations AboutBusiness Plans
q
The executive summary is critical:
This twoto three page summary of the business plan iswhat most investors turn to first; it oftendetermines whether they will read theremainder of the plan or decline theopportunity. This section should always bewritten last.
q
Clarify the focus:
The plan should be clearabout the products to be developed and themarkets to be addressed by the business. Tryto avoid saying that the company willdevelop a widget and sell it to GeneralMotors and the grocery store down the streetwithout explaining how it will actually bedone.
q
Transition into a rapidly growingenvironment:
Businesses that are emergingfrom less dynamic environments need toprovide an accurate critique of pastperformances (i.e., strengths/weaknesses)More importantly, they need to clearlydescribe what has changed about thebusiness and the reasons for the changes.
q
Avoid superlatives:
The "trust me" school of thought does not work in business plans. If your product is going to be the best in themarket, thoroughly explain why.
q
Quantity does not equal quality:
A wellwritten plan should be succinct and to thepoint and is usually 30 to 50 pages.
q
First impressions are lasting impressions:
There are many things that can sink a planincluding incorrect spelling, grammar orpunctuation; the use of unprofessionallanguage; numbers that do not total; or poororganization. Take the time to have the planreviewed by at least three other members of your team.
q
"Slick" plans can be a turnoff:
Expensivelooking plans are often perceived as formover substance, frivolous and a waste of scarce financial resources. To give yourbusiness plan a professional look, considerincluding a plastic binding, a title pageincluding your company name, address, date,contact name and copy number, numberedpages, and a detailed table of contents.
q
Support assumptions with independentsources:
Assumptions made with regard tothe target market and competition should besupported by independent, third-party datawhenever possible. This lends credibility tothe plan in the eyes of the reader.
q
Avoid the use of non-assertive language:
Vague, qualifying words such as "might","probably", "maybe" and "perhaps" can havea subtly negative effect on the reader. Bepositive and definitive.
ii
Developing
The
Business
Plan
For
 Your
Rapidly 
Growing
Company 

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