Crafting a Winning

Business Plan
 Business Plan
• Business plan – a written summary of:
– an entrepreneur’s proposed business venture
– its operational and financial details
– its marketing opportunities and strategy
– its managers’ skills and abilities
• It serves two essential functions:
– Guiding the company (Promoter/Team) by charting its
future course and defining its strategy for following it
– Attracting lenders and investors who will provide
needed capital
 A Business Plan Is…
• a systematic evaluation of a venture’s
chances for success.
• a way to determine the risks facing a
venture.
• a game plan for managing a business
successfully.
• a tool for comparing actual and target
results.
• an important tool for attracting capital.
 A Business Plan
• A plan is a reflection of its creator.
• Sometimes the primary benefit of
preparing a plan is the realization that a
business idea just won’t work!
• The real value in preparing a plan is not as
much in the plan itself as it is in the
process of creating it.
 Why Take the Time to Build a
Business Plan?
• Although building a plan does not
guarantee success, it does increase your
chances of succeeding in business.
• A plan is like a road map that serves as a
guide on a journey through unfamiliar,
harsh, and dangerous territory. Don’t
attempt the trip without a map!
 Business Plan Frame-work
Critical Interdependent factors for a new
venture
THE PEOPLE
THE OPPORTUNITY
THE CONTEXT
RISK AND REWARD
 Who are these people?
1.Where are the founders from?
2.Where have they been educated?
3.Where they have worked – for whom?
4.What have they accomplished?
5.What is their reputation with in the
business community?
6.What experience of them is directly
relevant to the opportunity they are
pursuing?
 Who are these people?
7. What skills, abilities, and knowledge they
have?
8.How realistic they are about the venture’s
success and difficulties it will face?
9.Who else needs to be on the team?
10. Are they ready to recruit High quality
people?
11.How they will respond to adversity?
 Who are these people?
12.How committed are they to this venture?
13.What are their motivations?
 THE PEOPLE
Issues
What do they know?

Whom do they know?

How well are they known?

 Business Opportunity
1.Who is the new venture’s customer?

2.How does the customer make decision

about buying this product?

3.To what degree is the product or service is

a compelling factor?
4.How will the product or service be priced?
 Business Opportunity
5.How will venture reach all the customers in
the identified segments?
6.How much does it cost to acquire a
customer?
7.How much does it cost to produce and sell
it to the customer?
8.How easy is to retain a customer?
 CASHFLOW IMPLICATIONS FOR
PURSUING AN OPPORTUNITY
1.When does the business have to buy
resources such as supplies, raw materials,
and people?
2.When does the business have to pay for
them?
3.How much investment is required?
4.How long it take to receive a cheque from
customer?
BUY LOW,SELL HIGH,COLLECT EARLY
AND PAY LATE
 Business competitors
1.Who are the new venture’s current
competitor’s?
2.What resources do they control? What are
their strengths and weakness?
3.How do they respond to the new venture’s
entry in to the business?
4.How can the new venture respond to the
competitor’s response?
 Business competitors
5.Who else might be able to exploit the
same opportunity?
6.Are there ways to forming alliances with
the customer?
 BUSINESS OPPORTUNITY
Business is like playing chess
All opportunities have promise ,all have
vulnerabilities
Entrepreneurial team is aware about good,
bad, and ugly that the new venture can
face
 THE CONTEXT
Macroeconomic environmental factors
- Level of economic activity
- Inflation
- Interest rates
- Exchange rates
 THE CONTEXT
Government rules and regulations
- Deregulation of airline industry
- Allowing global competitors in the
insurance sector
- Nationalization of banks
 THE CONTEXT
Technology
- It define the limits of what a business or it’s
competitors can accomplish.

Sometimes shift in the context turns an

unattractive business in to an attractive
one and vice versa
Ex: Tylenol incident and packaging industry
 THE CONTEXT
Every BP should contain evidence related to
context.
- Heightened awareness of the new
venture’s context
- Awareness about that venture’s context
can change and how it is going to affect
the business.
- Can business affect the context, if yes,
how?
 RISK AND REWARD
- Good BP highlight people, opportunity, and
context as a moving target
- Variations in risk and reward
- True entrepreneurs want to capture all
rewards and give all the risks to others
 FROM WHOM YOU RAISE
CAPITAL
- Financial institutions

- Unsophisticated investors

- Venture capitalists
 Key Elements of a Business Plan
• Executive summary
• Mission statement
• Company history
• Business and industry profile
• Business strategy
• Description of products/services
 Key Elements of a Business Plan
• Marketing Strategy
• Competitor analysis
• Owners’ and managers’ résumés
• Plan of operation
• Financial forecasts
• Request for funding
 Marketing Strategy
• Prove that a market exists
– Show customer interest
– Document market claims with research

• Describe target customers

• Advertising and promotion
• Market size and trends
• Location analysis
• Pricing
• Distribution