Business Plan: Creating and Starting The Venture

For Fashion Entrepreneurs

Business Plan
• Document that can convince the reader that the business can produce enough revenue to make a satisfactory profit and therefore attractive as an investment opportunity

Business Plan
• The business plan is a written document prepared by the entrepreneur that describes all the relevant internal and external elements and strategies for starting a new venture. • It is an integration of functional plans such as marketing, • finance, • manufacturing, • sales and • human resources.

• accountants.Who should write the plan? • The business plan should be prepared by the entrepreneur. • The entrepreneur may consult with many other sources in its preparation. • marketing consultants and engineers . such as • lawyers.

bankers) .Who is it for? • Self • Investor/Venture capitalists • Equity • Key employees • Significant others (suppliers.

venture capitalists • bankers.Scope and Value of the Business Plan – Who Reads The Plan? • The business plan may be read by • employees. • investors. suppliers • customers. advisors. and consultants • the entrepreneur himself • There are three perspectives which should be considered in preparing the plan : • Perspective of the entrepreneur • Marketing perspective • Investor’s perspective .

Scope and Value … • The business plan is valuable to the entrepreneur. . its goals and objectives. potential investors or even new personnel who are trying to familiarize themselves with the venture. • It helps in determining the viability of the venture in a designated market • It provides guidance to the entrepreneur in organizing his or her planning activities • It serves as an important tool in helping to obtain financing.

Many reasons to build one • BP should sell the writer/reader on the business: • Writer: so that you can go out and do it. • Reader: to invest in it • Confidence of knowing the issues • Improve chances of success .

Many Purposes in real life • • • • • • Bank Financing Strategic alliances Large contracts Key employees Mergers and Acquisitions Management team motivation • Investment by Venture Capitalists .

Principles of Business Plan • No right way: plans can differ based upon business types • Be creative but set a limit • Concise and focused • Captures personality of business leader • Include negatives and issues .

• In this typical forum the entrepreneur would be expected to provide a short (perhaps 20minutes or half-hour) presentation of the business plan.Presenting The Plan • It is often necessary for an entrepreneur to orally present the business plan before an audience of potential investors. .

the entrepreneur should do a quick feasibility study of the business concept • The information. revenue). • and production (location. • finance (list of all possible expenditures. labor skills. obtainable from many sources should focussed on • marketing (segmenting. . manufacturing operations. targeting. demand forecast. overhead) . raw materials. equipment. space.Information Needs • Before committing time and energy to preparing a business plan. and positioning). • Internet can be a valuable resource.

Sections of Business Plan • • • • • • Cover Page: contact name and information Table of contents Executive summary The company: past. present and future The market The Product/service .

Sections of Business Plan • Sales and Promotion • Financial projections • Profit and loss • Balance sheet • Cash flow .

Components of the Plan • • • • • • • • • • • Executive Summary (2-3 pages) • Company Description (0.5-1 page) • Products and Services (2-4 pages) • Markets (1-2 pages) • Technology (2-3 pages) • Competition/Competitive Advantage (1-2 pages) • Business Model/Key Customers (2-3 pages) • Operations (1-2 pages) • Management (1 page) • Financial Projections (1 page) • Financing and Use of Proceeds (0.5-1 page) .

Executive Summary .

Honestly analyze personal strengths and weaknesses: business experience and education. c.Parts of a business plan DECIDING TO GET INTO BUSINESS 2. Personal shortcomings are best dealt with and should be candidly acknowledged at this very preliminary stage. ANALYZE YOURSELF a. b. Learning from mistakes is costly .

r. ii. Identify the interplay between absolute confidence and absolute knowledge of a particular sector in the industry c. Boldly passes the test of uniqueness (w. It is grossly unwise to choose something that is little known (needed) b. Pick a product or service that: i.3. USP and FAB with the target customers and competition’s frame of reference . to practical judgement) v. Will grow faster than the economy in general iii. You have lots of information about. You can get excited about and transform that excitement into profits iv.t. CHOOSE A PRODUCT OR SERVICE a.

Where do they live and shop. At what price. etc. How they buy..4. How much do they earn. RESEARCH MARKETS Who are my customers. What makes them buy. .

Studies done earlier iv. Journals iii.a. Defining the need for facts ii. Chambers of commerce ii. Competition b. Source of information: i. The target market – strength. Get to know all relevant facts and figures i. Consultants . Finding facts iii. Analyzing facts iv. Taking appropriate action c. growth rate and approachability ii. The research process: i.

b. FORECAST SALES REVENUES a. Second year – quarterly iii. Estimation of market share based on reasonable assumptions taking into account the number and size of competitors and the amount of time it will take them to achieve their goals.5. Market potential has to be accurately estimated . Third year – annually c. First year – monthly ii. Express this market share in form of sales revenues as follows: i.

Accuracy in these forecasts is important – Based on these planning following expenditures are done: i. equipment.FORECAST SALES REVENUES d. land and other fixed assets ii. Buying/leasing long lived assets – buildings. Inventories and supplies – taking into account the lead times iii. Hiring of workforce .

Catering maps (serviceability of clients) . Hometown? c. CHOOSE SITE a. Possible terror stricken areas h. Customers e.6. Suppliers d. Proximity of parking lots/centrality i. Climate b. Financial support f. Geological hazards (earthquake zones) g.

Create flowchart of the transformation process ii.7. Make best use of the workforce’s time iv. DEVELOP PRODUCTION PLAN a. Maintain flexibility for expansion c. Minimize manual handling iii. Scale of operations b. Processes required to convert raw mat finished products i. Quality control .

Selling strategies e. Packaging . Distribution channels and servicing activities c. Pricing f. Advertising and sales promotions d. How to create profitable customers b. DEVELOP MARKETING PLAN a.8.

Personnel management plan 10. Reporting structures c.9. DEVELOP ORGANISATIONAL PLAN a. DEVELOP LEGAL PLAN a. tax benefits and personal wealth c. Form of business venture: sole proprietor. Job profiles ii. Seeking legal advice . Recruitment policies b. partnership b. Staffing i. Personal preference.

Handle information at a low cost iii. Prospective severity of losses c. DEVELOP INSURANCE PLAN a. Ensure a high degree of accuracy ii. Minimize theft and fraud 12. Turn reports quickly and periodically iv. How to treat these risks . Protection from unforeseen events b.11. Measure of magnitude and direction b. Should have a record and book keeping system before and not after the venture starts i. DEVELOP ACCOUNTING PLAN a.

WRITE COVERING LETTER .13. • 4. • 3. ii. iii. Translate all the above plans into money (common denominator) i. Cash budgets • 1.How to finance assets Profitgraphs – Break-even chart 14. • 2. DEVELOP FINANCIAL PLAN a. How and when money is required Process-wise details How it will be spent How soon can it be repaid (to investors) Income statements and Balance sheets .

Other sections: technology based • Management team: people who fund other people value management skills above “ideas” • Risk factors: shows that you know what could go wrong and plan to avert it .

.Packaging the Plan • It is a “living” document • No right/wrong way: the need of reader is essential • What are the challenges/ questions that can be raised by reader: answer these.

Packaging the Plan • Include supporting materials • Don’t make unsupported statements • Designate an outside reviewer/ reader that can critique plan .

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