3. Why write a Business Plan
1. Because I have to…
– Needed for financing
– Strategic partnering
– Attract key people/investors
– Organize my thoughts
4. Why write a Business Plan
2. Because I Need to Understand My Business
– The Plan is the result of a planning process
– People Don’t Plan to Fail; They Fail to Plan
• Who are my customers?
• Why will they buy my product or service?
• What will they pay?
• How will I make and deliver/sell the service/product?
• What resources (people, money, technology) do I need?
• Can I make money / create value?
• Do I have the right team on board?
5. Elements of the Business Plan
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Executive Summary
The opportunity, company, product/service, vision, mission & objectives
Market research/analysis / SWOT Analysis
Marketing plan
Design and development plan
Manufacturing and operations plan
Management team
Financial plan (Capital Required, Projections, Returns)
Company Formation
Action Plan
Investors’ Presentation
6. The Right Ingredients
•
•
•
•
A TEAM with Relevant Experience
Market Size
Idea
Technology
• Competitive Advantage
• Reasonable Projections
• Exit Strategy
8. Business Planning Steps
1.
2.
3.
4.
5.
6.
7.
Idea generation, Vision, Mission, Objectives,
Strategies
Market research and Analysis
Marketing strategy
Production planning
Management and Organization
Financial plan
Company formulation
9. Business Planning Steps
1.
2.
3.
4.
5.
6.
7.
Idea generation, Vision, Mission, Objectives,
Strategies
Market research and Analysis
Marketing strategy
Production planning
Management and Organization
Financial plan
Company formulation
10. 1. The Idea
• Innovative product or service
• Visualize a market gap – you can
add value
• Imported idea
11. Planning Model
VISON
Evaluation
Environmental
Scanning
Strategy Formulation
Strategy Implementation
&
Control
External
Country
Analysis:
PEST Forces
Industry
Analysis:
Porter 5 Forces
Internal
Company
Analysis:
Value Chain
Mission
Reasons
for
existence
Objectives
What
Strategies
results to
accomplish Plan to
when
achieve
mission &
objectives
Policies
Broad
guidelines
for
decision
making
Programs
Activities
Budget
needed
to
Cost of the
accomplish
programs
a plan
Feedback Learning
Procedures
Sequences
of steps
needed to
do the job
Performance
Actual
Results
12. SWOT Analysis
Strengths
How maximize them
Internal
Weaknesses
How minimize their effects
Opportunities
How you capitalize on them
External
Threats
How you avoid them
13. Vision
Where do you want to go at
the end?
Vision
Objectives
What is the road
map and major mile
stones?
4th Objective
Strategy
3rd Objective
SMART
Specific
Measurable
Achievable
Relevant
Time-Bound
2nd Objective
1st Objective
How will
you reach
your
objectives?
14. Who are your stakeholders and what is
your mission to each one of them?
Religion
Community
Country
Family
Mission:
Stakeholders
Work
Friends
15. Who are your stakeholders and what is
your mission to each one of them?
Suppliers
Community
Country
Shareholders
Mission:
Stakeholders
Employees
Customers
16. Business Planning Steps
1.
2.
3.
4.
5.
6.
7.
Idea generation, Vision, Mission, Objectives,
Strategies
Market research and Analysis
Marketing strategy
Production planning
Management and Organization
Financial plan
Company formulation
17. 2. Market Analysis
• Market size
– How big is it NOW?
– Trends – how fast is it or will it grow?
• Market Players – Competitors
– Competitive Advantage
– Estimated market shares
– Existing/planned products in the marketplace
• Is this the RIGHT TIME for my product?
• Is there a GAP that I can fill?
18. Business Planning Steps
1.
2.
3.
4.
5.
6.
7.
Idea generation, Vision, Mission, Objectives,
Strategies
Market research and Analysis
Marketing strategy
Production planning
Management and Organization
Financial plan
Company formulation
19. 3. Marketing Strategy
• Who are my TARGET customers?
• Why would they buy my product?
• How much would they pay?
• What are the special features in my product?
• What is my competitive advantage
It is all about your EDGE
20. Marketing Plan Process
Defining Target Market
Needs, Wants, Demand
Marketing Mix
4 Ps
Marketing Research
Product
Segmenting Targeting
Positioning
Price
Place
Promotion
Variety
Quality
Design
Features
Brand
Packaging
Size
Services
Warranty
Return
Price List
Discounts
Allowances
Payments
Credit
Channels
Coverage
Promotions
Advertising
Location
Sales Force
Inventory
Transport
Public
relation
Push / Pull
Direct
marketing
21. Business Planning Steps
1.
2.
3.
4.
5.
6.
7.
Idea generation , Vision, Mission, Objectives,
Strategies
Market research and Analysis
Marketing strategy
Production planning
Management and Organization
Financial plan
Company formulation
22. 4. Production plan
• Technology
• Equipment
• Raw Material Sourcing
• Operation Plan and Capacity
23. Business Planning Steps
1.
2.
3.
4.
5.
6.
7.
Idea generation , Vision, Mission, Objectives,
Strategies
Market research and Analysis
Marketing strategy
Production planning
Management and Organization
Financial plan
Company formulation
24. 5. Management Plans
• Getting the RIGHT Team on board
• Training
• Delegation
• Empowerment
25. Business Planning Steps
1.
2.
3.
4.
5.
6.
7.
Idea generation , Vision, Mission, Objectives,
Strategies
Market research and Analysis
Marketing strategy
Production planning
Management and Organization
Financial plan
Company formulation
26. Financial Section
What Investors is looking for in Financial Section:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Total Investments
Breakdown of Investments (Land, Building, Equipment, People, Working
Capital, …etc.)
Income Statement Projections
Cash Flow Statement Projections
Initial Balance Sheet
Net Present Value (NPV)
Internal Rate of Return (IRR)
Breakeven Analysis
Payback Period
27. Financial Plans
• Income Statement Projections
–
–
–
–
–
Revenues Assumptions
Costs/Expenses Assumptions
Depreciation Assumptions
Interest Expenses Assumptions
Taxes
• Cash Flow Projections
–
–
–
–
Initial investment
Working Capital (Payables vs Receivables)
Capital Expenditure (Capex)
Debt Assumptions
28. Income Statement
Statement
Income
Objective: provides information about the firm’s operating activities over a specific
period of time.
Revenue:
100
100%
60
40
60%
40%
8
8%
Sales & Marketing
- Total Operating Expenses
Earning Before Interest, Tax, Depreciation & Amortization (EBITDA)
- Depreciation & Amortization
Earning Before Interest and Tax (EBIT)
- Interest Expenses
Net Income Before Tax
-Taxes
12
20
20
5
15
5
10
2
12%
20%
20%
5%
15%
5%
10%
2%
Net Income
8
8%
- Cost of Goods Sold (COGS):
Gross Profit (Profit Margin)
Operating Expenses:
General & Administration
29. Cash Flow Statement
Objective: provides information about the firm’s cash position and sources of cash in and cash-out
1- Cash Provided from Operations:
+ Net Income
8
+Depreciation & Amortization
-Increase in Receivables
+Increase in Payables
5
(1)
4
Total Cash from Operations
2- Cash Provided from Investing:
-Capital Expenditure
16
+Sale of equipment, land..etc
+Sale of stocks in portfolio
(3)
1
1
Total Cash from Investing
3- Cash from Financing:
(1)
-Repayment of debt
+Sale of common stock
-Cash Dividends
Total Cash from Financing
Total Cash Flow
(1)
1
(5)
(5)
10
30. Balance Sheet
Objective: provides summary of what the business owns and what it owes
to both lenders and investors. (Assets = Liability + Shareholder's Equity)
Liabilities
Assets
Current Assets:
Cash and securities
Account Receivables
Inventories
15
10
25
Total Current Assets 50
Plant
Land
Furniture
30
15
5
Total Assets
100
Current Liabilities:
Accounts Payables 10
Short-term borrowing
Total Current Liabilities
Long Term Debt
Total Liabilities
15
25
25
50
Shareholders’ Equity
Common Stocks
Retained earnings
20
30
Total S.E.
Total Liab. + S.E.
50
100
33. 7. The Company
• Name – logo - slogan
• Legal structure
• Location
34. Elements of the Business Plan
1.
2.
3.
4.
5.
6.
7.
8.
9.
Executive Summary
The opportunity, company, product/service, vision, mission & objectives
Market research/analysis / SWOT Analysis
Marketing plan
Design and development plan
Manufacturing and operations plan
Management team
Financial plan (Capital Required, Projections, Returns)
Company Formation
10. Action Plan – Objectives
11. Investors’ Presentation
35. Finally: No Risk … No Gain
“If we all did the things we are really capable of doing, we would
literally astound ourselves”
Thomas Edison
