Business Plan Development Workshop

rik@e2bconsulting.com e2B Consulting Sdn Bhd

Workshop Agenda
Part 1
General Introduction to what is a Business Plan How to prepare a Business Plan. Practical aspects of preparing a Business Plan

Part 2

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Importance of a Business Plan

Success for businesses of all sizes are positively correlated to having a Business Plan. Vast majority of INC. magazine 500 fastest growing companies had business plans from the start Timmons (1999) Firms that spent time planning and developing a business plan are those that experience rapid growth Woo (1989) 93% of fast growth firms of the total studied had written Business Plan Kinsella (1993)

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What is a Business Plan

A Business Plan is a written statement that describes and analyzes your business and gives detailed projections about its future. Helps get the money Helps decide to proceed or stop Helps improve business concept Helps improve odd of success Helps keep on track
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Business Plan - ownership

The business plan should be owned and accepted by the management team. Venture Capitals will want to learn what you plan to do, not see how well others can write for you! Professional advisers can provide a vital role in helping to give the plan the appropriate focus. It is you who must come up with the plan and defend it.
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The Planning Process

The Business Plan is just like a road-map. Planning it is like planning a trip. It is a 3 stage process:
1. Understanding WHERE YOU ARE 2. Deciding WHERE YOU WANT TO GO 3. Planning HOW TO GET THERE

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Understanding where you are

Understanding your product/service your competitive advantage (Unique Selling Point) Understanding your customers who, why and how are they going to buy from you Understanding your strengths and weaknesses (Internal) Understanding the opportunities and threats (External)

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Deciding where you want to go

Decide the general aims of your business in some organization the aims are also referred to as the mission statement of the organization Set specific objectives for the business. The Objectives should be: Quantifiable Bounded in time Realistically achievable
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Planning how to get there

Need to develop strategies to enable the business to achieve the targeted objectives Need to develop a Marketing Plan Need to develop Resource Plan Need to draw-up financial budgets Projected Profit & Loss Cash-flow forecast
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The business planning process

Personal aims Mission Statement Business objectives Customer analysis Market segmentation Marketing Plan Operating Plans Financial plans Resource plans
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Internal Appraisal Strengths Weaknesses

External Appraisal Opportunities Threats

Writing The Business Plan

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Business details
Name and address of business Personal/Applicants information and address Business type: sole proprietor/Partnership/Sdn Bhd/Bhd Business activity Business information: Paid-up capital, company secretary, auditors, Directors, Shareholdings etc Licenses (if any) References
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1. Executive Summary
All Business Plan starts with an Executive Summary Fill this up LAST Executive Summary (Maximum 500 words) This is only the extraction/summary from what you have written.

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2. Value Proposition
What does this mean? This DEFINES the value of your proposed product or service Value proposition is a description of the customer problem, the solution that addresses the problem, and the value of this solution from the customer's perspective. Should answer the questions: "Why should I buy this product or service?" as well as "Why should I do anything at all".
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2. Value Proposition

cont.

Why do I need to define my value proposition? If you only have 5 minutes to explain your ideas to a potential investor - then explain your value proposition. A good value proposition makes investors sit up and listen! shows that you have put a LOT of research and thought into your idea
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2. Value Proposition cont.

How do I explain and write my value proposition? The following is a template for creating a value proposition, which may be referred to as a positioning statement. Note the first portion of the value proposition asserts the value of the offering and the second sentence asserts the positioning of that value.
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2. Value Proposition cont.

First Sentence: For (target customer) Who (statement of the need or opportunity), The (product/service name) is a (product/service category) That (statement of benefit). Second Sentence Unlike (primary competitive alternative) our product (statement of primary differentiation).
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3. Business Model & Market Potential

What is a Business Model? A business model (also called a business design) is the mechanism by which a business intends to generate revenue and profits. It is a summary of how a company plans to serve its customers. It involves both strategy and implementation. What is Market Potential? Normally it means market size It should be supported by some credible research - not something you pick off the air
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3. Market Potential & Business Model

How do I write this out?

a)

Identify target market(s), industries/sectors/sub-sectors/geography and describe business model including revenue stream (maximum 250 words) Describe market size and growth opportunity for identified market supported by Market research.
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b)

Business Model Template

INFRASTRUCTURE YOUR OFFER

PARTNERS CORE CAPABILITIES VALUE CONFIGURATION VALUE PROPOSITION

CUSTOMER RELATIONSHIP DISTRIBUTION CHANNELS

CUSTOMER TARGET CUSTOMER

COST STRUCTURE

FINANCE

REVENUE STREAMS

Fill up the dark yellow boxes and you can pretty much explain your business model
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Discussion/Q&A
Time check Q&A

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4. Competitive Analysis
What is Competitive Analysis? Describes the strength of your product or idea. No products/ideas/services is perfect - but by identifying the strengths, weaknesses, opportunities and threats within the business industry - it will help the entrepreneur to attack the market.

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4. Competitive Analysis cont.

Direct and Indirect Competitors? Do research Identify Direct competitors Indirect competitors Old school competitors Differentiating factors? How are you/your product unique?

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4b. Competitive Analysis

Conduct a SWOT analysis Strengths Attributes of your business that helps in achieving your business success What makes your ideas better than others What capabilities you have that makes the business viable Weaknesses Attributes of your business that are harmful towards achieving your business success Your Weaknesses - and be honest about it! Define by perhaps cost, resources, product weakness etc
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4b. Competitive Analysis cont.

Conduct a SWOT analysis Opportunities Opportunities that you see in the market Your competitors weaknesses - is YOUR opportunity Threats Your competitors strengths - are THREATS to your business Dont forget your indirect competitors too!
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SWOT - Strengths
Advantages of proposition? Capabilities? Competitive advantages? USP's (unique selling points)? Resources, Assets, People? Experience, knowledge, data? Financial reserves, likely returns? Marketing - reach, distribution, awareness? Innovative aspects? Location and geographical? Price, value, quality? Accreditations, qualifications, certifications? Processes, systems, IT, communications? Cultural, attitudinal, behavioural? Management cover, succession?

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SWOT - Weakness
Disadvantages of proposition? Gaps in capabilities? Lack of competitive strength? Reputation, presence and reach? Financials? Own known vulnerabilities? Timescales, deadlines and pressures? Cashflow, start-up cash-drain? Continuity, supply chain robustness? Effects on core activities, distraction? Reliability of data, plan predictability? Morale, commitment, leadership? Accreditations, etc? Processes and systems, etc? Management cover, succession?

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SWOT - Opportunities
Market developments? Competitors' vulnerabilities? Industry or lifestyle trends? Technology development and innovation? Global influences? New markets, vertical, horizontal? Niche target markets? Geographical, export, import? New USP's? Tactics - surprise, major contracts, etc? Business and product development? Information and research? Partnerships, agencies, distribution? Volumes, production, economies? Seasonal, weather, fashion influences?

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SWOT - Threats
Political effects? Legislative effects? Environmental effects? IT developments? Competitor intentions various? Market demand? New technologies, services, ideas? Vital contracts and partners? Sustaining internal capabilities? Obstacles faced? Insurmountable weaknesses? Loss of key staff? Sustainable financial backing? Economy - home, abroad? Seasonality, weather effects?

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Mingle Network Promote Your Ideas Expand Your Business Relationships

5. Marketing Plan
What is a Marketing Plan? A Marketing Plan is a written document that details the actions necessary to achieve marketing objectives. It can be for a product or service, a brand, or a product line. It can cover one year (referred to as an annual marketing plan), or cover up to 5 years. Solid marketing strategy is the foundation of a well-written marketing plan.
While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use. Copyright e2B Consulting Sdn
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5. Marketing Plan CONT.

MARKETING STRATEGY, which covers: Market share objectives Product Mix Pricing Strategy Promotion Strategy Distribution Strategy
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5a. Go to market & sales strategy

Below is a list of items that you may want to consider while developing your marketing plan
Market share objectives Product Mix
State the market share by customer segment or geographical markets Do you have plans to bundle the product with other products or service Define the pricing objective, method, strategy Figure out your break-even point Define promotional goals, advertising mix, sales force/sales channels requirements, publicity Define by geography, market segments, distribution channels,
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Pricing Strategy

Promotion Strategy

Distribution Strategy

Product development schedule Bhd

6. Technology Plan
What is a Technology Plan? It should cover: Product Development Strategy How do you plan to develop the product: personal, in-house, outsource, with a partner? How long will it take and how much? What are the key milestones? Design Technical Architecture (briefly explained) Functional Specs List of Product Functions Technology Platform How your technology is different from competitors Prototyping Plan Explain what functions will be developed How long will it take to develop?
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7. Financial Plan
Projections for 3 years or 5 years What is a Financial Plan? This is basically the strategy of funding your business proposal Sales and Cost of Sales To plan out what your next plan of action is crucial so that you do not waste time when you move to the next stage or when your prototype is done
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7a. Profit &Loss

The P&L gives you a feel of the business potential & the bottom line It will also help you in visualizing how much money you actually need to kick off your business An good analysis of the P&L will help you in your financial planning & strategy Filling up the Pre-seed form is quite straight-forward. Please refer to the Form
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7b. Sample P/L

SALES less: COST OF SALES GROSS PROFIT less: General & Administrative Expenses Professional fees Directors' remuneration Insurance Medical fee Rental of premises Salaries, allowances & bonus Utilities Upkeep of office R&D expenses Others:Others:Others:Total G&A

Year 1 RM

Year 2 RM

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7b. Sample P/L cont

S a le s & M a rk e tin g E x p e n s e s A d ve rtise m e n t E n te rta in m e n t P rin tin g a n d s ta tio n a ry S a la rie s a n d c om m is s io n s T e n d e r fe e T ra ve llin g e x p e n s e s U p k e e p o f m o to r ve h ic le O th e rs :O th e rs :O th e rs :T o ta l S & M 0 0

O th e r In c o m e P B D IT le ss : A m o rtis a tio n D e p re c ia tio n P B IT le ss :

0 0

0 0

0 F in a n c ia l C h a rg e s 0 0

P R O F IT /(L O S S ) B E F O R E T A X AT IO N L E S S : T AX AT IO N P R O F IT /(L O S S ) A F T E R T A X A T IO N

0 0

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8. Resource Plan
What is a Resource Plan?
Provides an indication of resources and types of resources required for the commercialization of the business list the types of resources you require for the number of years of projection Listing this out will help you develop the financial projections later. Refer to Pre-seed Form
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8b. Sample Resource Plan

No Description/Job title Management Staff 1 2 3 Chief Executive Officer Chief Operating Officer Chief Financial Officer Technical Staff 1 2 3 Senior Engineer Operations Executive Programmer Administration Staff 1 2 3 Receptionist Support Executive Accounts Assistant
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Year 1

Year 2

Year 3

Appendix
Supporting documentation Curriculum Vitae Project Activities, Deliverables, Capital Expenditure checklist Company documentation & licenses

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Q&A!
Ask NOW or forever hold your peace!

Thank you