Chapter5 Business Planning Thutm2021

CHAPTER V: BUSINESS
PLANNING
Lecturer: Do Duy Kien, PhD

• BMC
• Official business plan
2 forms of business plan
• Short version (Business model Canvas)
• Official version
What is a Business Model CANVAS?
• How you
• create,
• deliver,
• and harvest
• value
© 2013 Davender Gupta -
www.startupacademie.com All Rights 4
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What is a Business Model Canvas?
• A visual representation of the various elements
of your Business Model.
• Allows you to:
 see the relationships among the parts of your
model;
 identify hypothesis, assumptions and risks;
 plan validation testing (market, channels,
pricing);
 find ways to add value or reduce cost;
 brainstorm market disruption strategies
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The Business Model Canvas
Value Propositions
Customer Relationships
Key Activities
Customer Segments
Key Partners
Distribution Channels
Key Resources
Cost Structure Revenue Streams

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1. Customer Segments
Customer Segments

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1. Customer Segments
• Who are your most important users and
customers?
• You must create a detailed portrait of
each (“archetype”)
• Look beyond the obvious
• who are the stakeholders?
• who is most motivated?
• who is most underserved?
• who has the most to gain?
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2. Value Proposition
Value Proposition

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2. Value Proposition
• For each Customer Segment:
 What is their PAIN? (B2B)

or their ACHE? (B2C)
 What is the GAIN for them to solve their pain

or ache?
 What is their DECISION TRIGGER?

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The Decision Trigger
• How does your solution change
the customer’s life for the better?
• « What is the RETURN ON
USE »
• Does your offer promise
enough added
value to motivate
your customer to
pull out their credit card?
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3. Distribution Channels

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3. Distribution Channels
• How do you deliver this value at every stage of
the buying process?
• Discovery
• Evaluation
• Purchase
• Delivery
• After sales service
Physical or Virtual channel?

What is the value you add at each step?
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4. Customer Relationships

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4. Customer Relationships
• How do you
• GET,
• KEEP,
• and GROW
• your customer base?
• How do you build a loyal and enthusiastic
tribe around your offer?

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5. Revenue Streams
Revenue Streams

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5. Revenue Streams
• How do you generate cash from each customer segment?
– What VALUE do customers put on the benefits you provide?
– What VALUE are customers willing to pay for?
– What VALUE do customers infer from your pricing?
Revenue Streams = Strategies (What)

Pricing = Tactics (How Much and When)
Consider impact on your

GET-KEEP-GROW strategies

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5. Revenue Streams
Price on VALUE – not on cost
 usage
 subscription
 rent
 license
 intermediation (affiliate)
 freemium (use with caution!)
Where can you generate revenue that others
leave on the table?
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6. Key Resources
Key Resources

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6. Key Resources
• What infrastructure and resources do you need to deliver what
you promise?
– tools, space, locations
– personnel (qualifications, in-house or sub)
– equipment (lease or buy)
– licenses, intellectual property
– supplies (components, assemblies)
– what is scarce or difficult to get
– financial requirements
– acquisition timelines
•Beware of promising
more than you can deliver!

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7. Key Activities
Key Activities

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7. Key Activities
• What major activities (deliverables)
must be produced – when and by who?
• dependencies
• responsibilities

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8. Key Partners
Key Partners

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8. Key Partners
• Partners
• Suppliers
• Developers
• Distributors
• Investors
• Collaborators
• Affiliates
• Competitors
• Alternatives
• How does each partner help
or hinder the business
model? © 2013 Davender Gupta -
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9. Cost Structure
Cost Structure

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9. Cost Structure
• What are the critical elements of the cost
structure?
– Fixed costs
– Variable costs
– Resource, activity, partner costs
– Infrastructure, operational, cost of sales
– Payroll costs, benefits, bonus structure, taxes
– What are the costs of each element of the business
model?
– Where are the economies of scale?
– What are the risks, the unknowns?

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The Business Model Canvas
Value Propositions
Key Activities
Customer Segments
Key Partners
Key Resources
Cost Structure Revenue Streams

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Validating the Canvas
• « The problem is that startups fall in love
with the solution too early.
• They don't focus enough on the foundation
of vision and strategy to make sure it
connects to what people want and use. »
• -- Ash
Mauriya

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Validating The Canvas
• Everything on you put on your canvas is a
HYPOTHESIS.
• You must VALIDATE every element through -
• Discovery (your own data)
• Research (other people’s data)
• Testing (simulation, MVP)
• to uncover the DISRUPT.

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Validating the Canvas
That you know
(belief)
What you know
That you
don’t
know
(hypothesis)
Discover
T
h
a
t
y
www.startupacademie.com All Rights
o 31
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•
The
Offer (What):
Four Disrupts
– New offers (products or services) that did not exist up to now
(invention)
• Process (How):
– New products or methods that allow the offer to be produced faster,
cheaper, more durable, better quality (production)
• Market (Who):
– Opening a new market segment poorly served until now, by making minor
modifications to one’s product or service (marketing)
• Value (Why):
– Meeting a need that is valued by an existing market, but not satisfactorily
met by competing offers, and doing it better than the competition
(positioning)

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Discover the DISRUPT
• How do you change the rules of the
competitive game?
• The gold is in
the
DISRUPT. © 2013 Davender Gupta -
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Official business plan
1. What is a business plan?
• Business plan is a description of an enterprise about
business goals, strategies and tactics in order to achieve
these goals. Business plan also give the persuasive
analysis about the business goals and the plans that all
departments have to implement to achieve these goals,
such as: marketing, financial, human resource, operation
plans
1. What is a business plan?
• In another word, Business plan answers the following
questions:
– Who are you?
– What do you do?
– Where do you want to come (your goals)?
– How and when do you do to achieve these goals?
– Why do you success?
2.Basis contents of a business plan
• Part 1: Business description
– Enterprise description
– Market analysis
– Marketing planning
– Choosing location/ production planning
– Organization and management structure
• Part 2: Financial analysis
– Capital sources and capital using
– Profit plan
– Balance sheet
– Financial analysis
• Part 3: Supportive documents
3. For whom the business plan is made?
The enterprise may make the business plan for the
following readers:
• Internal readers
• Investors
• Lenders
• Partners
• Customers
4. Why do we need an
official business plan?
• Promote the planners to make more specific, visualize
more detailed about the market and products
• Evaluate the feasibility of the idea before investment
• Determine the weakness or some potential problems
• Focus on the goals, objectives
• Give the orientation for executive and policies of the
enterprise
• Be active with the unexpected issues
4. Why do we need an official business plan?
• Improve the decision making, the controlling and
efficiency in the enterprise (through setting standards to
evaluate the performance)
• Increase the chances of success
• Help the enterprise to raise funds/capital (persuade the
investors and lenders that we have a perfect prepared
plan to success)
• Help the business owner, investors, lenders to supervise
the business results
5.Why do you write a business plan by
yourself?
• Improve and develop your management skills

• Combine your goals and the business goals
• Allow you to test many different alternatives in order to
find the best one
• Demonstrate your potential to the managers, investors
…
6. Structure of a business plan
• (1) Cover
• (2) Table of contents
• (3) Overview/General introduction
• (4) Plans: strategy, marketing, operation, human
resources, finance, …
• (5) Risk analysis and the solutions
• (6) Appendices: Tables of data, graphs, charts , …
7. Management mistakes lead to failure
• Entrepreneurship without market research (target market
and competitive market)
• Not determine and not develop the core competencies
• Unsuitable location
• Not develop the business consistently
7. Management mistakes lead to failure
• Trapped in one of the common “financial traps”:
– Price is lower than total costs
– Not take into account all operating costs or can not control
them
– Can not determine the suitable periods of time to
construct the market
– Start the business with a very small amount of working
capital
8. Why do we need to research?
• Confirm your demand for goods/services
• Determine the target customers
• Evaluate the competitors
• Determine the suitable suppliers
• Set a suitable price level
• Decide the methods to promote your enterprise
• Choose the location
• Choose the legal form
• Determine the required capital
• Predict the sales and cost annually
• Develop and analyze the financial statements
References
Copyright (ppt slides): Tran Minh Thu, PhD
Foreign Trade University

Chapter5 Business Planning Thutm2021

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CHAPTER V: BUSINESS

Lecturer: Do Duy Kien, PhD

Cost Structure Revenue Streams

© 2013 Davender Gupta -

© 2013 Davender Gupta -

© 2013 Davender Gupta -

 What is their PAIN? (B2B)

 What is the GAIN for them to solve their pain

 What is their DECISION TRIGGER?

© 2013 Davender Gupta -

© 2013 Davender Gupta -

Physical or Virtual channel?

© 2013 Davender Gupta -

© 2013 Davender Gupta -

© 2013 Davender Gupta -

Revenue Streams = Strategies (What)

Consider impact on your

© 2013 Davender Gupta -

© 2013 Davender Gupta -

© 2013 Davender Gupta -

© 2013 Davender Gupta -

© 2013 Davender Gupta -

© 2013 Davender Gupta -

© 2013 Davender Gupta -

© 2013 Davender Gupta -

Cost Structure Revenue Streams

© 2013 Davender Gupta -

© 2013 Davender Gupta -

© 2013 Davender Gupta -

© 2013 Davender Gupta -

• Improve and develop your management skills

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