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B-Plan Preparation

Some Guidelines
The following text has been arranged in a manner that will give you a step-by-step understading of the whole process that is involved in the generation of a business plan. The indexing is as follows: Part 1 – Idea generation and Customer Analysis Idea generation Idea Categories An analysis of existing ideas and some examples the meaning of all this What is exercise? to Good Idea (a fun way of doing Bad Idea it!) Customer AnalysisThe Customer The Analysis An Example Part 2 – Marketing Strategy and the Finances The Marketing StrategyPositioning Packaging Pricing The FinancesSome Costs The sources Year-wise Projection

Profitability

help etc. This trigger comes if you forcefully start thinking on issues you have good knowledge of and/or can show some innovation in. A comprehensive study was recently conducted on training and sequence of group idea generation. out this study. However. a new technology tool to in the working of an issue. These practices made the triggering of creative mode easier and quicker. what just to fifteen minutes daily. They were then further tested in alone-to-group and the group. The quality of ideas also improved due to the training and generated the adoption of the correct sequence. we propose is that you start practicing brainstorming by thinking of new ideas for Hence.idea generation sequences. The final list would compile ideas selected from amongst resource of ideas generated by contribution from each group the vast member. we an initial trigger to set the brain in a creative mode. Idea Categories Go through some failed inventions in the history of human civilization and you will realize that ideas so random as to not fall in any category at all. the experimenters trained volunteers with some idea generation For carrying skills but more importantly gave them practice in idea generation. redefinition of a working system to make it more efficient. Do this in solitude. It was eventually found that the alone-to-group to-alone sequence a larger number of ideas. for a generalization we can be would certainly list some categories in which you can start practicing idea generation: .PART 1 Idea generation Analysis & Customer Idea Generation If we just do a 5 minute brainstorming on arbitrary issues (especially the ones we can better relate can easily come up with loads and loads of ideas. Idea generation actually requires just to). After a few such sessions you would have ten generated enough ideas to open them up for a group discussion and short list some of them based on application and feasibility in development. These ideas could some be applications.Household related ideasWebsites and portals Manufacturing .

Finishing schools. Executive Search firms (CxOs only.Consultancy. pen with a torchlight. s to Flat Screen TV. Modem to ADSL modem. novel and innovative ideas is just a mere 3-4%. if you just follow your heart and let your mind be free. Hence.Setting up shops or stores (Retail) Environment (eg. Example : Low cost airlines (Ryan Air. more users friendly Example : DOS to Windows. The ways in which the existing ideas can be worked upon focus are: I) Enhancement Mean : improvement / refinement of features – cheaper. Cinema Multiplexes. 96% of ideas on the existing ideas.IPR and patent issues Banking/ Finance . you will definitely come up with viable and sustainable ideas. Example : Toothbrush with built in Toothpaste. EasyJet. Desktop PC to laptop PC to Tablet PC. think up of ways of making money out best of it/them. Electronics etc. III) Specialization Mean : Creating your own niche out of a large s field. II) Extension Adding some extra Mean : s features. Air Deccan). Swiss care knife. Then. the changing face of s mobile phones.Human Resource development Hospitality Food Processing Restaurants. Propeller engine to Jet Ordinary TV engine.Core Sciences Material Sciences .Tourism . The message that we would like to put forward is: try to recognize your talents. Hence. marketing or admaking. better. finance professionals only).Hardware and/or software technology products (including Biotechnology. Boutique financial advisory s services.) Telecommunications Entertainment . the things you do and the things that you actually like to do. Super-specialty hospitals (Fortis Heart Centre). Mechanical Watch to Quartz Watch. . Wristwatch with calculators. Memory sticks with MP3 players. SODIT) Rural development Social cause . An analysis of existing ideas and some examples The percentage of truly new. Day centers with tuitions. faster.

let’s just say. Treat these changes as opportunities. every idea is recorded as worthy. Innovative ideas are needed in each kind of work that you would be involved in some years down the line. Bad Idea to Good Idea This is a method of idea generation whilst having fun. attitudes. no one judging another persons ideas. food chewing service etc. it develops idea generation and opportunity recognition skills in the participants . thus becoming a art of the process of thought p innovation. shuffle them and give them in such a way that no team gets the idea it had offered.It wide of options. no ideas go waste.Sense of ownership to each member. expanding thinking to see all perspectives of a problem. providing a . Select the worst from them. Take the ideas from all the teams. . perceptions. demographics giving rise to some gaps in the market. it is required in whatever you may do in future. grow quickly due to contribution of various . What is the meaning of all this exercise? Well.a session.The key to innovation is to recognize and exploit the changes that have taken place in the values.Environment free of criticism Improvements in productivity It must be noted that Business plans are not meant entirely for those people who want to open companies or run businesses. brainstorming is a fabulous tool to generate ideas and to bring all the minds under a single umbrella. Ask each team to generate some really bad ideas (like advertising on footwear. we would be simply If we amaze ourselves.knew how many creative thoughts and ideas we really had. as each idea has the effect of bouncing off another In such person him a new string to start on and suddenly he will have an idea which sparks the ideas giving of another person. Now give some time period to back each for coming up with an innovative presentation on how they would convert this bad idea into team a ood business plan. but also fosters an open and resourceful mindset. A brief-up of the method Tina is: Divide a group of people into various teams of around five members each. range . Moreover. . leading to huge shift in together thinking.Everyone equally involved. outright benefits of brainstorming Some of the are: encourages creativity. g This method not only gives an innovative approach. It is like a virus (in a good way) everyone becomes infected with. This method was contributed to the NEN by Seelig (ED of Stanford Technology Ventures Program).Ideas people .) within 10 minutes. look for new realities and incongruity between people’s perception of the reality and what has become actual reality. Hence. in totality.

An Example Y-axis represents the value in lacs 50 45 40 35 30 25 20 15 10 5 0 Individuals (Professionals) Retailers & Wholesalers Un-Organized Business SME's Large Organizations Customers . This will also help in analyzing the ways enable in which you might need to change your product and present it in different forms as you plan the growth strategy. This is important to make a good judgment of the quantity of the product that would be in demand at a particular time. This will give an indication of the possible or the probable success venture. pie-charts and bar graphs. enable you to further divide your consumer base into sub-categories and study their role This will in determining the demand for your the product. you also even need to study the demand of your competitor’s product (if there is one already). Extension and Specialization – to attract newer customers . Determine whether this base Draw a will or stagnate. Use the three ways – Enhancement.projection of the variation in the consumer base with time. To study the consumer base. of your Another fact you need to define (as being part of your plan) is the time you have in mind that will you to capture the targeted market segment. This also requires determining whether the demand would spread into grow new of the population. The Analysis An effective way of depicting this study is through the use of histograms. Your ultimate goal in all this exercise is to determine whether sectors your product’s market will grow or not. to estimate your capital requirements and financial strategy and to think up of a suitable way of marketing and advertising your product to attract the target-set. You need to identify the sector of the general population that will go on to buy your product/avail your service.Customer Analysis The customer Each category of idea has a target consumer set.

your strategy caters to are the Positioning. you need to be affordable. you need to make sure that you are able to establish a reach in the targeted customer set. take the example of a software tool that you intend to launch for in true different the corporate world.PART 2 Marketing Finances. then you need to be noticeable Keep in and finally. For you will have to determine the steps in which you will carry out your launch. mind that for a successful launch. Websit e separate company sales A team. with to a good estimate of resources that would be required. Packaging It just like the wrappings of the birthday presents. you need to visible first. Strategy & the The Marketing Strategy Once you have been able to identify the consumer/ customer set. pre-plan all the launch-stages even have before execute the you first. But. That itself will be able to position your product terms. Packaging and the Pricing of the The issues that product. For instance. you are in a position to draw out an effective strategy to market your product correspondingly. They not only generate some suspense and anxietywith an anticipation of being something really good) but even the type of packaging raises (along some . another issue that needs be covered is the place of sale. Consultants etc. Hence. But. begina local level launch graduating to the national and then the global in a span of a few years. You mayt just this. The positioning could be done by having the following sources strata of of distribution : Channel Partners: These could be local vendors. Chartered Accountants. Positioning Your product could well be positioned as being an economical tool offering value for money.

do keep some advertisement budget as well. then are various ways of deciding upon your pricing policy. Hence. Hence. there could be vary multiple of their product launched into different markets (catering to different customer -types). They peopleemotional about being slim and loosing off their fat approach them enthusiastically. making him feel that this product is actually made for him. This in turn will help you determine the initial capital requirements. required after . make a proper investment plan as well categorizing will be the expected capital as being required immediately (for the initiation of the whole process). Is guaranteed)? Furthermore. Is practically)? affordable (value for Q3. make sure that you do not play with/ plan upon the emotion of the consumer. The policy may from region to region or from one strata of the society to the other. Is it money)? it easily available (with its serv icing Q4. You never spending the capital all at once.all this and prepare your own plan based on such a study strategy. High price in the beginning launch. Hence. Moreover. distribute the investments over a period of time. However. An example your strategy on the emotion of the consumer is the ‘Sauna-Belt’ ads that you generally of basing see. of the Q1. will to low sales. versions Hence. Pricing First of all if there is a competitor in the market already. It is really important to get reviews from your initial buyer. such really type of portrayal doesn’t do well for long. we expect the gift to be expensive too. The Finances Your market research so far would help you in building a sound execution plan. Some of them are having a trialthere based. the way package your product is essential for the initial response to your you launch. This will help you redesign the launch with the appropriate pricing policy. If the packaging seems expensive.a simulated market for initial review or cheaper rates first-up. keep track of its pricing policy. Is your product robust? it something that actually makes work easier (not on paper but Q2.expectations. As you estimate this capital requirement. package their products in such a way that the desperate have to come to them. if there is no competition and you have a virgin (unexplored) market in front of you. This is generally the case when you go for a trial based launch. Also. packaging is considered done if you are put forward the answers to the following points in A good front public. But. but a lower price will guarantee that your product will at least get lead tested. This actually is a negative that would hurt you badly in the long run if not earlier. The surveys give you directions for planning the details of the actual launch. you need to be able to relate to the target customer. But.

The of setting-up such basic infrastructure also needs to be considered in the initial cost capital investments required. The terms are simple and are agreed upon 2. the various costs capital are: 1.). category. mutually. While. the ratio is 3:1 implying that you have to put in jut one-fourth of of the the corresponding capital 3. This margin is kept from 5 – 20% of the estimate depending upon the inflation lev 4. They will help you out in the stages if you are able to convince them of the potential your idea contains of initial being converted into a long-term viable business. The banks give two types of loans – longterms and/or Working Capital Loans. el.the first phase of execution is over (and similarly for each successive phase) and finally the investments be required later (during the production cycle that would etc. . Investors Start-up or Angel Investors These people fund your idea more than your business strategy. hardware purchase and installation costs. These include the premises rental. investment. These people trust you and your all. Some Costs Some general costs (cost of project) are given below. etc. you need to have some official working place. Working Capital Margin (liquid assets) basically define the costing for a cycle – raw Here we materials Sources 1. The terms differ as regards the fraction of the loans investment being contributed by the banks. Even share holders come under this 4. office equipment and furniture 2. The first three points correspond to the fixed while the rest are called liquid assets. These expenses include the employee pays amongst the various expenditures required before we actually start getting the 3. Contingencie s These are the margins you need to keep over you initial capital requirement estimate. Hence. Office Development For a professional outlook and easy approach. These are required if our estimate proves to be wrong or we have the situation of the costoverrun. They look for determination. in have case working capital loan. Banks This is a source that should always be sought. Credito r One who loans (credits) money to you. dedication and most of passion. Pre Operative Expenses These expenses are incurred until the actual commercial production doesn’t start. Promoter s This is partner money. site development . In case of the long term loans. idea. returns. the ratio is 2:1 implying that you to put in one-third of the investment and the rest will be given by the bank.

Venture Capitalists (VCs) are more shrewd (and more safe players) in the market.72 Depreciation (Dep.22 3.16 264.81 Hence. All this needs to be studied in advance and forms an integral part of your plan. These hope factsnot only help you participate in our own Intra-IIT B-Plan but will also benefit you in preparing will the entries for the v arious open B-Plan competitions that we have at the national and the international levels . you need to be aware of the expenditures at different stages of your venture.28 150. They look for potential in the long-term and trust the business the strategy) more than anything (including else. An example could be as follows: Particular Year 1 Year 2 Year s Sales 500.05 Earning before Int.5.00 3 Operating Expenses 134.04 168. all-in-all. Year-Wise Profitability Projection You need to draw a year-wise profitability projection of the sales trend expected (or planned).00 975. the sources of income (returns) and the sources of funding at different stages.90 592.95 Interest (Int. Article By: Karandeep Singh .83 1202. Tax (EDEBIT) 365.23 Income Tax @ 33% 113.92 802. Thus far was the summary of the two workshops that were held on B-Plan preparation by the EDC.) 18 18 18 Profit before Tax (PBT) 342. They will not fund you in These the of your venture.80 4.96 1816. We that the information proves to be enough for the initial development of a solid plan.00 2000.74 1795.43 PAT 229.) 4.72 824. Dep. but when your venture has safely crossed the start-up stage and start has overcome a few hiccups.76 537.