Business Plan

Format and Contents

Contents of Business Plan 
           

Executive summary Industry and Company and ts products /Services Market Research and Analysis Economics of the Business Marketing Plan Design and Development Plans Manufacturing and operations plan Management Team Overall Schedule Critical risk problems and assumptions Financial Plan Proposed Company offering Appendices

Executive Summary 
      

Description of the Business Concept and the Business Opportunity and strategy Target market and projections Competitive advantage Costs Sustainability The Team The Offering - Finance needed (Debt equity and your contribution)

waste. environmental profile ±energy intensity. growth competitors. size. green technology ±carbon credits CER) . new product/devp.Company and Product/Service       The industry current state. supply chain.Industry .

products service offered /will offer. prior sales and profit performance or discuss losses and why and improvements done or envisaged .Company and the Concept      Company and the Concept ± present biz. background of growth and promoters involvement.

present state of development. delivery system unique features how they add value. first mover of head start advantage any features which give you unfair advantage over others like patents. application of its use . opportunities of expansion of product lines or related products.Product or Service          Product and or service ± describe of new product service . differentiation from those current available. . trade secrets or proprietary features. possible drawbacks.

Entry and Growth Strategy        Entry and growth strategy ± Key success variables in mktg plan innovative product. timing advantage. pricing . channels of distribution advertising and promotion . marketing approach.

Market Research and Analysis      Customers Market size and trends Competition and competitive edges Estimated market share and sales Ongoing market evaluation .

reached and receptiveness? Where buying decisions are made and length of decision cycle. basis of decisions (price. political pressures) and can they change current buying decisions? . contacts. customers purchase process. delivery training. quality timing. service personnel.Customers     Who are they? Classified by groups segments-common identifiable characteristics Where are they? Segment and region How they buy (retail /wholesale).

Customers(2)    What orders contracts or letters of commitment or potential customers you have in hand? What you are doing to overcome negative customer reaction? If in existing business . current customers and sales trends .

impact.Market Size     Five year projections of size and your share. socio economic trends. population shifts) review previous trends . envrt. by segment. govt. region or country for product or service Potential annual growth for at least 3 years Major factors for market growth ( industry trends. policy.

other features Current advantages and disadvantages of these products . assess substitute and alternatives . performance .Competition and Competitive Edge    Realistic SWOT of Competitors. timing service.list of suppliers of these Compare competing and substitute products or services on market share. price .quality. warranties. delivery.

Competition and Competitor¶s Edge         Knowledge of competitors actions that could lead to improved products (R&D) Are they awake or asleep? SWOT of competing companies their market share sales and distribution Financial position .costs and profitability of competitors Who are service providers pricing.cost and quality leaders-why co exiting or entered the business Discuss 3-4 key competitors and why customers buy from them What you know of competitor¶s operations . performance .

Economics of the business      Gross and operating margins Profit potential and durability Fixed variable and semi variable costs Cost to breakeven Time to reach positive cash flow .

Marketing plan       Overall marketing Strategy Pricing Sales and tactics Service and warranty policies Advertising and promotion Distribution .

Design and development plan      Development status and tasks Difficulties and risks Product improvement and new product Costs Proprietary Issues .

Manufacturing and Operation plan      Operating cycle Geographical allocation Facilities and improvements Strategy and Plans Regulatory and Legal teams .

Management team         Organisation Key management personnel Management Compensation and Ownership Other investors Employment and other agreements and stock options and Bonus Plan Board of Directors Other shareholder¶s rights and restrictions Supporting professional advisers and services .

Cash conversion cycle will underline key inputs Deadlines indicated Indicates to investors your depth of planning and resource use Indicate methods of calculations .Overall Schedule      A schedule that shows the timing and interrelationship of the major necessary to launch the venture and realise its objectives.

orders Consequences of adverse outcomes ± industry. personnel. product.use objectivity to deal with it ± sales projections. market appeal Unstated negative factors of investors . company.Critical Risks Problems and Assumptions      Demonstrate that you have thought out and can handle them Description of risks implicit in plan Assumptons.

Contingencies ± Indicate critical ones           Running out of cash before orders come in Price cutting by competitors Potentially unfavorable industry trends Costs excess of estimates Sales projections not achieved¶ Unmet product development schedule Difficulty in procuring long lead items Difficulties in obtaining bank credit Increase in R&D costs Running out of cash after orders come in .

Financial Plan -Best Estimate of Reqt. For cash flow statement use cash system instead of accrual system Give assumptions behind -sales levels. cash balances.      Indicate venture¶s potential and timetable for financial viability Operating plan for fin mgt using fin benchmarks Prepare exhibits Use three year income statements and balance sheets and break even analysis. growth. operating and cash conversion cycles . inventory requirements.

hence a forecast of cash needs should take care of such conditions is recommended.Fin Plan (2)   Proforma income statement ± plan for profit indicates potential fin. level of profits cannot finance operating assets and cannot match the actual cash flow on a short term basis. . Initially. feasibility of the venture.

working capital. inventory turnover within the limits required to justify future financing .Fin Plan (3)   Proforma balance sheets are used to detail the assets required for the projected level of operations and how they will be financed (liablilities) Indicate projected debt equity ratios. current ratios.

Financial Plan (2)    acceptable limits to justify future financing Break even chart showing level of sales that will cover all costs including those that vary with production and those that do not Income statements -In Proforma statements fully discuss bad debts. assumptions for sales expenses. discounts. general and administrative costs .

cash flow analysis. learning curve and level of productivity snesitivity of profits to risks Prepare Balance sheets. how fast debts will be repaid .Fin Plan(2)    . amount of debt and equity needed.cost control measures and budget overrun Highlight important conclusions.show effect of sales reduction say 20%. including maximunm amount and timing of cash required . Break even charts .

Financial Plan        Actual Income Statements and balance Sheet Proforma Income statements Proforma Balance Sheets Proforma Cash Flow Analysis Breakeven Chart and Calculations Cost control Highlights .

Proposed Company offering     Amount of money being sought Nature of security offered to investors Summary of how the investor can expect to achieve his targeted rate of return Terms for financing your company spelt out here Description of Uses of Capital Desired Financing ±how much   .

percentage others can hold before and after conversion.unit price. stock options . debt plus stock. interest rate.maturity and conversions conditions. private placement ±restrictred securities for a period of time Capitalisation ± current and proposed (post offfering number of outstanding shares and how the holding will change after on completion of fnancing).Proposed Company Offering   Offering ± common stock. authorised and issued capital. convertible.debentures. debts with warrants. total amount of securities (if not common .type.

working capital Investors Return. marketing .Offering (3)   Use of funds ± how capital raised will be used.Indicate how your valuation and proposed ownership pattern will result in in desired rate of return for investors whom you have targeted .R&D.capital eqpt.

Appendices  Information too extensive in the body but necessary Product specification Photos List of references Suppliers of critical components Special location factors Facilities Technical analysis Consultant reports Critical regulatory approval or licences .

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