BUSINESS

PLANNING

DR SWAPNA PATKER
DR SWAPNA PATKER'S MINDWORKS TRAINING
SYSTEMS

§ There isn’t a customer you don’t have

to convince
§ Don’t use cliché approaches—hockey
stick growth
§ Seek the highest valuation needed to
Some Truths get the right amount of capital from
the right investor
§ Plan to outperform expectations
§ Don’t put yourself in the position of
having to start the business to answer
key questions
11-2
 Feasibility: Test the Concept
Opportunity Environment—Industry-Concept

Market/Distribution Risks/Benefits

Product Service
Market Risks/Benefits Customer
Analysis Financial Risks/Benefits Test

Go Forward/Rework
t

Team
Product/Service
Development & Management
Competition Grid

Industry
Status
DR SWAPNA PATKER'S MINDWORKS TRAINING 11-3
SYSTEMS
 Business Plan: Build the Company
From the Inside Out
Opportunity Environment
Extended Business

Core Business

Values Purpose

Core Contributions
t

Mission

Finance Customers

Suppliers

DR SWAPNA PATKER'S MINDWORKS TRAINING Government 11-4

SYSTEMS
DR SWAPNA PATKER'S MINDWORKS TRAINING
SYSTEMS

§ Feasibility = screening opportunities to decide the

Feasibility Study conditions under which you are willing to go forward
versus Business § Business Plan = execution plan for implementing the
Plan business

11-5
DR SWAPNA PATKER'S MINDWORKS TRAINING
SYSTEMS

§ Reality Check—What’s it going to take?

§ Living Guide to the Business
§ Statement of intent for third parties
Purpose of the § Investors

Business Plan § Bankers/lenders

§ Potential management
§ Strategic partners
§ Suppliers

11-6
DR SWAPNA PATKER'S MINDWORKS TRAINING
SYSTEMS

§ Margins
§ How much room for error?

Bankers/Lender § Cash flow

§ Can you pay them back?
s § Qualifications and track record of management team
§ Do they have what it takes to execute
the plan?

11-7
DR SWAPNA PATKER'S MINDWORKS TRAINING
SYSTEMS

§ Predictors of growth

§ Qualifications and track

record of the

Investors management team

§ Deal structure

§ Exit

11-8
DR SWAPNA PATKER'S MINDWORKS TRAINING
SYSTEMS

§ Growth plans indicate

potential business

Strategic § Ability to pay

Partners § Future management
§ Where do they fit in?

11-9
DR SWAPNA PATKER'S MINDWORKS TRAINING
SYSTEMS

§ The traditional plan

§ About 20 pages plus appendices
§ Inductive approach

§ The e-commerce business plan

Types of § Timeline to launch and trigger points for
Business Plans rapid growth
§ Technology standards
§ Software and hardware needed to operate
§ Internet service provider and capabilities
§ A storyboard of the product or service
11-10
DR SWAPNA PATKER'S MINDWORKS TRAINING
SYSTEMS

§ What need is being served?

§ Do you have a team that can serve

What Every Plan that need?

Needs § Why is now the right time to launch this business

concept?

§ Can you make money at it?

11-11
 § The business plan is a concise and comprehensive
summary of the business.
§ The business plan is the image of your business, your
goals and how they can be achieved. The structure of a
Introduction business plan will vary depending on the nature of the
business.
 § The business plan is a written document that provides
an overview of the company, its future and financial
position.
OVERVIEW § The business plan of the company explaining the
situation, plan the future action plan, how much it will
cost and who will be the associated revenues.
 • The business plan is used by start-up companies
to trace the route of the existing companies to
fulfill its objectives successfully.

ROLE • Often the business plan is associated with the start

up of a business or the filing date of the
application in order to obtain funding.
 • Although they are the most common uses of the
business plan, it can be a valuable element for the
effective operation of the business as all
businesses need plans to optimize the
development process.
ROLE • The role of a business plan is to guide the
Contractor since the first year of operation of the
business.
• The role of the business plan is and to
demonstrate that the business is financed.
§ A business plan contains a description of
your company (products/services), target
market, marketing plan and sales
strategy, a review of financial documents
and the management team. The business
plan is a working tool used to start and
run a business that requires material
resources,human and financial.
 • The business plan is not a form to be filled out at the
request of an officer, an element that must be achieved
for the bureaucracy to get a certain amount from a
financier.
• The business plan is the very essence of your business
and it objectives of the entrepreneur on paper, thus
requiring maximum attention and seriousness. The
Business plan is a way of recognizing a failure,
entrepreneurship, business promoted the idea. (after C.
Bişa)

REMEMBER Any business plan assumes a certain sequence of

operations in 3 steps:
• 1. Gathering the necessary information: prices,
competitors, suppliers, technical data, legal, etc.
• 2. Effective planning of that activity – choosing the right
strategy and finding ways to achieve the objectives set.
• 3. Drafting the plan – the choice of the optimal shape of
the recipient of the presenting stage. (Joel Bessis)
 YOU!!!

The business plan should be a

picture of the goals and vision of
the business Entrepreneur.
Who should write your
business plan?
You can discuss with a person with
experience in writing business
plans, to make sure that you have
covered all the important sections
 • The length of the business plan depends on the type
and its objective. In general, a Business Plan should be
20-40 pages of text, drafted in a classical manner, with
airy schematics, diagrams, and tables and financial
details in appendices.
How long should be
• Experts are of the opinion that a business plan must
your business plan? have a maximum of 50 pages including annexes. The
best criterion for assessing the business plan is the
ability to read and digest.
• A good business plan should leave the recipient a clear
idea about its content after only 15 minutes.
 • Don't ever shorten a business plan through
renunciation to useful charts!!!
• The information must be clear and
understandable! Use charts and diagrams to
illustrate the figures!
• Will be easier to remember!
• Use photos and drawings to these
REMEMBER!!! location/products, but not abuse! Depending on
the magnitude of the work, the degree of
complexity of the business-plan approach can
have different sizes! There are 3 types of business
plans:

• summary plan
• complete plan
• detailed plan
 § executive summary
§ general company description
§ the opportunity
§ industry and market
Contents of § your strategy

a business § the team : management &

organisation
plan § Business model explainantion
§ a marketing plan
§ operational plan
§ financial plan
§ an appendix.
 § The executive summary is probably the most
critical part of the business plan format. Many
business plan readers will read the executive
summary and then decide whether to proceed
further or discard the plan.
§ Key elements that should be included in the executive

Idea summary are:

§ Business concept
Generation § Financial features
§ Financial requirementsCurrent
business position
§ Major achievements
 § The general company description section usually
follows the executive summary in the started business
plan format. It is used to give a high level overview of
the company and the business that it engages in.

§ This introductory section of the plan section should

include:

General § Name of the company, type of legal entity,

company ownership, significant assets

§ Mission statement of the business
description § Company goals and objectives
§ The main features of the industry in which you
will operate
§ The most important company strengths and
core competencies
 § Describe the gap that exists in
the market and explain what has
given rise to this gap, how it was
identified and how it can be
The filled.
Opportunity § Answer the following questions:
§ Where is the gap in the market?
§ What has given rise to this gap?
§ How was this gap identified?
§ How will the gap be filled?
 § The Industry : Describe the forces affecting the industry in
which you will operate. These forces are covered by
discussing barriers to entry, suppliers, customers, substitute
products and competition.

§ Answering the following questions will enable you to cover the

critical issues in discussing the industry:
§ Question 1: What are the barriers to entry in this industry?

Industry & § Question 2: How much power do the customers have?

market
§ Question 3: How much power do the suppliers have?
§ Question 4: Are there substitute offerings for the product or service?
§ Question 5: Who are the competitors and how strong is the
competitive rivalry?
§ Question 6: What are the major changes affecting the industry?

§ The Market : Present your insights into the market in which

you will operate. Focus on the customers for your product or
service by addressing the following questions:
 § You need to describe to readers how the business will compete
in the chosen markets. Your positioning strategy will be affected
by a number of variables related to the motivations and
requirements of your target market as well as what your primary
competitors are doing.

Your Strategy
§
The focus of the business: broad mass market or a specific
niche? How the business will succeed in the market? How will
you create a unique and valuable position, involving a different
set of activities?What is unique about the business? How is the
offering different from that of competitors?What is the value for
the customers? Describe the value proposition for the customer?
 § A list the founders including their qualifications and
experience

§ A description of who will manage the business on a

day-to-day basis. What experience do these individuals
bring to the business? What special or distinctive
Team : competencies do they offer?

Management & § An organisational chart if you have more than 10

employees, showing the management hierarchy and
Organisation responsibility for key functions (including position
descriptions for key employees)

§ Apart from the managers, you should also specify what

type of support staff will be needed for the business to
run efficiently.
 § A business model is the profit-making engine of the business. It is
central to a business’s success. The business model you choose will be
a strong determining point of the future the success of your
business.
§ The important aspects of a business model that should be presented in a
consolidated framework include:
§ The sources of revenue
§ The major costs involved in generating the revenue

Business § The profitability of the business (revenue less costs)

§ The investment required to get the business up and
model running (to get to scale)
§ The critical success factors and assumptions for making
explaination the profit model work
§ Good business model depend on three qualities, finding high-value
customers, offering significant value to customers, and delivering
significant margins.
§ They also avoid three things that can derail a business, namely
difficulties in satisfying customers, trouble maintaining market position,
and problems generating funding for growth.
 § The marketing plan defines all of the
components of the marketing strategy.
The marketing plan should draw on
market research.
§ It should disclose the important marketing
decisions about:

Marketing
§ The product (or service) and why it is valuable to
customers
§ The focused and detailed description of the target market
plan § The positioning of the product or service – how it should
be perceived by customers
§ The pricing strategy with specific price points at which the
product or service will be sold
§ The sales and distribution channels that will be used to get
the product or service to the customer
§ The promotion strategy including public relations
activities, specific promotions, advertising and intended
viral marketing activities
 § Explain the daily operation of the
business, its location, equipment, people,
processes, and surrounding environment.
The operational plan in a standard
business plan format describes how the
business functions on a continuing basis,

Operational as well as the capital and expense

requirements related to the operations of

Plan the business.

§ A description of the operating cycle that describes what the
organisation will do to deliver its service or create and sell its product
§ A description of where all the necessary skills and materials will be
sourced
§ What will be outsourced, what relationships are in place and how those
relationships will be managed
§ The cash receipts and cash payment cycle of the business
 § The financial plan is a reasonable
estimate of your company’s financial
future. Include a few paragraphs on the
main features in the financial plan and
back this up with financial projections.
§ The following are the most important financial
documents to include in the financial plan:

Financial
§ Start-up expenses and capitalisation: a description
and explanation of what it will cost to launch the
business and where you expect to get this money

Plan § 12-month profit and loss projection (month-by-

month) and a three-year profit and loss projection
(quarter-by-quarter)
§ A 12-month cash-flow projection and a three-year
cash-flow projection (quarter-by-quarter)
§ A projected balance sheet at start-up and at the
end of years one to three
§ A break-even calculation
 § The appendix includes additional documents that the reader of
the business plan may want to refer to.
§ Documents that could be included in the appendix:
§ Brochures and advertising materials
§ Industry studies
§ Blueprints and plans
§ Maps and photos of location

Appendix § Magazine or other articles

§ Detailed lists of equipment owned or to be purchased
§ Copies of leases and contracts
§ Letters of support from future customers
§ Any other materials needed to support the assumptions in this
plan
§ Market research studies
§ List of assets available as collateral for a loan
§ Detailed financial calculations and projections.
 § The seed of a project arises merely as
an idea – a need or opportunity that is
weighed, scrutinized, and eventually
developed into a project which is
Screening managed through the project life

and Project cycle.

§ The most critical question one has to
Identification ask would be ‘Are we doing the right
project?’ Because a problem well
understood is half done
 § SEARCH FOR NEW IDEAS
§ •What are the objectives?

§ •Brainstorm to generate alternative solutions.

§ –Emerging market trends.

§ –SWOT analysis.

§ –Other constraints

§ •Shortlist candidate ideas for detailed scrutiny.

§ MOTIVATION
§ •Projects are a means to accomplish

§ –Individual or family objectives

screening
–Organizational objectives

§ –National or global objectives

§ •Project Identification begins in response to the specific need or the objectives

§ OBJECTIVES
§ To increase profits

§ To minimize threats of losses

§ To become more competitive

§ To provide help after a disaster

§ To train people in a new area

§ To reduce pollution in Delhi

§ To become a successful entrepreneur

§ CRITERIA IN SCREENING PROJECTS
§ • Investment
§ • Rate of return
§ • Risk
§ • Likely profit
§ • Payback
§ • Similarity to existing business
§ • Expected life
§ • Flexibility
§ • Environment impact
§ • Competition
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 §Economic

Feasibility
§Marketing
Analysis §Financial
§Technical
 §Evaluation
Project
Planning: §Monitoring
Evaluation §Control
segmentation
 § Heuristics
§ Brainstorming
Creative § Synectics
Problem Solving § Value
Analysis
§ Innovation.
 § Two criteria for judging a project feasibility study
§ There are mainly two criteria to judge feasibility in a
project feasibility study The first one is the cost
required and the second one is the value to be
delivered. A well-designed and well-planned project
feasibility study should offer:

Project Feasibility § A historical background of the business problem or

and Project improvement opportunity

§ A description of the product or service

Appraisal
§ Accounting statements, details of operations and
management

§ Marketing research and policies

§ Financial data, legal requirements and tax obligations
 § Key reasons for conducting a project feasibility study
§ There are a few key reasons for conducting a project feasibility
study which is as follows:
§ Not every project is doable
§ Not every project should be taken up. This will engage otherwise
useful resources in a non-value add project
§ Not every project makes effective use of the resources of an
organization

key § The project feasibility study represents:

§ A definition of a business problem or opportunity to be studied
§ An analysis of the AS-IS level of operations
§ A definition of customer requirements; could be your internal
and external customer
§ An agreed upon course of action
§
 § 5 Benefits of conducting a project feasibility study
§ It gives all stakeholders a clear picture of the
business problem or improvement opportunity
under consideration.

§ 1. Give valid reasons for undertaking the project

§ 2. Make key decisions prior to the project kick-off
benefits § 3. Prioritize business problems and improvement
opportunities

§ 4. Narrow down the scope of the project

§ 5. Determine the success rate of the project
 • Failure to demonstrate clearly what your proposal
relates.
• Summary - too long and too bushy, without conclusions
• Summary too comprehensive
• Failure to demonstrate special, UNIQUE opportunity
MISTAKES TO • Failure in shaping the investment parameters

AVOID! •
•
Failure in generating enthusiasm in the reader
Failure to identify what will be achieved and how
management will make a presentation of general
application,
• Enable the use of a language
• Unorganized, difficult