Business Plan

Business Plan

 Business plan is a written document prepared by entrepreneur that describes all the
relevant external and internal elements involved in starting new venture
 Integration of functional plans such as marketing, finance, manufacturing and human
resource plan
 Is a blueprint of step by step process that would be followed to convert business idea into
successful business venture
Business planning process
Significance of business plan

 Clarifies Direction/ Maps the future

 Attracts Financing
 Develops and communicates a course of action
 Provides future vision
 Attracts Team Members
 Helps managing cash flow
 Supports a strategic exit
Contents of a Business Plan

 Ideal length of a plan is 50 pages, although depending on the need for detail, the overall
plan can range from 25 to more than 50 pages if an appendix
 An excellent business plan has 10 key components
 First five provide an overview of the business and the market research to support it
 Second set focuses on financial, strategy marketing, operational and management
strategies
Contents
Critical Risks Segment

 Potential risks should be identified

1. Effect of unfavorable trends in the industry, design or manufacturing costs that have over
estimates, difficulties of long lead times encountered when purchasing parts or materials and
unplanned for new competition
Harvest Strategy Segment

 Every business plan should invest into the future harvest strategy
 Important for the entrepreneur to plan the orderly transition of the venture as it grows and
develops
 Some thought should be given to change management like orderly transfer of the company
assets if ownership of the business changes, continuity of the business strategy during the
transition
 Designation of key individuals to run the business if the current management team changes
Milestone schedule segment
 Provides investors with a timetable for the various activities to be accomplished
 Important to show that realistic time frames have been planned and that the
interrelationship of events within these time boundaries is understood
 Milestones can be established within any appropriate time frame, such as quarterly,
monthly, or weekly
Important in various activities like

1. Incorporation of the venture

2. Completion of design and development
3. Completion of prototypes
4. Hiring of sales representatives
5. Product display at trade shows
6. Signing up distributors and dealers
7. Ordering production quantities of materials
8. Receipt of first orders
9. First sales and first deliveries
10.Payment of first accounts receivable (cash in)
Reasons for Failure of Business Plan

 Unachievable Goals and Aspirations

 Lack of Market Research/False Assumptions
 Productivity and Motivational Issues/ Alignment Issues
 Improper Budgeting
 Lack of harvest/exit strategy
 Lack of proper team
 Failure to implement feedback