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Business Plan

Business Plan

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Published by: ecell_iimk on Aug 14, 2009
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02/06/2013

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Business Planning and preparing a Business Plan

Anjana Vivek anjana@bizkul.com
www.bizkul.com 1

BEFORE YOU START
Spend some time on some analysis

WHAT is the purpose of the business plan
– Is it for internal use – Is it for investors (VC/bank/angel investor) – For other purpose (incubation)
www.bizkul.com 2

BEFORE YOU START
Think through

WHAT are the strengths – that you bring to this business WHAT are the constraints that you have to either
– Address or – Accept (and work keeping this in mind)
www.bizkul.com 3

AT THE STARTING POINT

Before starting on preparing the business plan, think through the following:
PUT YOURSELF IN THE READER’S PLACE – What is the reader looking for in a business plan? – What is the message you are trying to convey through the business plan?
www.bizkul.com 4

AT THE STARTING POINT
 

Different persons may view the business plan differently Try to understand background and experience of person/group to whom plan is shown

www.bizkul.com

5

AT THE STARTING POINT

Just because someone rejects or scoffs at your idea, does not mean it is bad Try to take some learnings from rejections

www.bizkul.com

6

THE PLAN DOCUMENT

You may prepare a detailed plan in sections, which you may be stand alone and kept for different purposes, ie sections for internal use, for investor and for banker Keep a track on versions to minimise confusion and possible errors Keep control of access to the document
www.bizkul.com 7

BUSINESS PLAN

The document must be self speaking: ie minimum clarification must be required from your end (particular attention to be paid to explaining abbreviations/short forms and technical terms) The document must be reader friendly: key information that you want to convey should not be hidden amongst too much details Do not think only of what you want to tell, rather think about what your target would 8 want to hear www.bizkul.com

BUSINESS PLAN

Plan on format of report and how data, information, analysis, comments etc. are to be presented
– To move what is not essential to flow of document to main report – Think of content required to capture attention of reader; avoiding excessive information overload
www.bizkul.com 9

BUSINESS PLAN

Avoid using graphs for the sake of using graphs; tables for the sake of using tables etc. without substance in the document Avoid information overload, i.e. temptation to disclose all you know and demonstrate your knowledge and experience about the business Make attempts to protect your intellectual property if any
www.bizkul.com 10

CONTENTS
    

Table of contents Executive summary Sections/chapters/paras Summary/conclusion Appendix of abbreviations, references, other annexures
Graphs, tables, figures to be numbered and labelled
www.bizkul.com 11

CHAPTERS - Illustrative
  

  

Company and background information Management team, organisation structure Business idea, strategy and implementation plan Marketing plan Financial details Other information such as implementation schedule, statutory environment applicable etc.
www.bizkul.com 12

CHAPTERS - Illustrative

Company and background information
– Background history if existing company; current status – Rationale for existing business or new start up – General industrial environment of business – Brief background of promoters

www.bizkul.com

13

CHAPTERS - Illustrative

Company and background information
– Vision and mission statement – Goals and objectives – Key business drivers and key constraints; SWOT and business strategy – Other key information to make initial background information complete

www.bizkul.com

14

CHAPTERS - Illustrative

Management team, organisation structure
– Experience and qualification of promoters and key team – Organisation structure – Any key organisation/HR policies

www.bizkul.com

15

CHAPTERS - Illustrative

Business idea, strategy and implementation plan, including inter-alia:
– – – – Vision, mission Product/service offered Operational details USP(unique selling point); barriers to competition – Differentiator – Strategy to handle competition

www.bizkul.com

16

CHAPTERS - Illustrative

Business idea, strategy and implementation plan, including inter-alia:
– Details of any in-house techonology/process or idea; or source of technology, ie technology transfer through collaboration – Details of alliance partners, current as well as proposed – Details of any intellectual property associated with the business

www.bizkul.com

17

CHAPTERS - Illustrative

Marketing plan
– Target market size – Market research details – Customer profiles; existing, potential/pipeline – Marketing strategy – Pricing strategy
www.bizkul.com 18

CHAPTERS - Illustrative

Financial details
– Past financials: Balance sheet, P&L account and cash flow summary for five year period if available – Future forecast – five years in summary (detailed schedules may be in appendix) – Details of how funds will be raised and utilised – Details of contribution from promoters (cash/kind)

www.bizkul.com

19

CHAPTERS - Illustrative

Financial details
– Sensitivity analysis for key parameters, eg sales variations of + / - 10% – Scenario analysis:
optimistic, normal and pessimistic (budget)

– Key ratios, break even, project IRR – Other information such as quality of key parameters, ie revenue based on geography – Cash burn, i.e. monthly requirement of cash and requirement for capital investment in phases
www.bizkul.com 20

CHAPTERS - Illustrative

Other information
– Time lines, implementation schedule, expected date of commercialisation – Regulatory environment if applicable, ie environmental laws for pharma company – Other information which may be relevant to the business – Include any required references, contact information, data and statistics
www.bizkul.com 21

PREPARING THE

BUSINESS PLAN

PRESENTATION IS THE KEY CAPTURE THE READER’S INTEREST Think through the format of report and how data, information, analysis, comments etc. are to be 22 www.bizkul.com

PREPARING THE

BUSINESS PLAN
Document should be consistent, flow well (date formats, number formats, serial number flow, prefix to names, grammar and tense used, avoid long sentences, spell check, US/British English not to be mixed etc.) Source information for data, content to bewww.bizkul.com disclosed 23

PREPARING THE

BUSINESS PLAN

Format and style should be neat, consistent, professional giving attention to details of:
– format styles, font sizing, colours not too light, legibility, header, footer, headings, para alignment, spacing

www.bizkul.com

24

BUSINESS PLAN

Points to consider
– You must believe in the idea to sell it – Homework before hand, adequate knowledge – Credibility is important, ie if caught with one falsehood, nothing said would be believed

www.bizkul.com

25

UPDATES &CHANGES IN BUSINESS PLAN

Points to consider
– If there has been substantial change, update the plan – The difficulty is when there are too many versions which are around

www.bizkul.com

26

UPDATES &CHANGES IN BUSINESS PLAN

Points to consider
– If there is inconsistency between one plan and the other, this is to be reconciled, at least for internal records if not for external communication – While the plan is to be updated to reflect reality and changes, too many such changes give wrong signals
www.bizkul.com 27

PRESENTATION OF BUSINESS PLAN
 

Content, value to listener, any take away? In preparing a presentation
– Master slide can be useful – Include page numbers – Use clear headers to demonstrate slide topic
www.bizkul.com 28

PRESENTATION OF BUSINESS PLAN

In preparing a presentation
– Avoid clutter (generally not more than 5 points per slide) – Pay attention to details: colour combinations, business logo legibility, consistency of message – Clarity, tone, steady speed in speaking
www.bizkul.com 29

APPENDIX
Planning for a business  Plan for advisors / accountants / lawyers  Educate oneself about the law and regulations to be followed  Educate oneself on basics of managing a business and finance  Plan for long term impact of decisions taken with regard to hiring employees, taking office space etc.
www.bizkul.com 30

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