BUSINESS PLANNING
BUSINESS PLANNING WRITING A BUSINESS PLAN Frankie Lim S2_Writing a Business Plan 1 Aims & Objectives You will be familiar with the overview of the business plan (s) You will be introduced to the first steps of writing the business plan So you can make a start! Frankie Lim S2_Writing a Business Plan 2 Your plan should Describe the purpose of your business Explain its goals and objectives Show that there is a need for your product ‘Perceived Value’ Appealing to investors Frankie Lim S2_Writing a Business Plan 3 This research should enable you to: Refine your business idea to make sure that you are offering the right product to the market, in the right quantity, at the right price, in the right place, at the right time Frankie Lim S2_Writing a Business Plan 4 Addressing the needs of your audience Investors Banks/lenders Future management Strategic partners To plan ahead Develop new ideas Buying a new business/franchise/taking over a family business Frankie Lim S2_Writing a Business Plan 5 Writing The Plan How do investors read a business plan, and what do they look for? Frankie Lim S2_Writing a Business Plan 6 Executive Summary Write this at the end! (Or at the beginning!) As the experience of writing the plan helps formulate ideas BUT has to be well written to get attention Clear, concise, not too long ‘Elevator speech’ Enthusiasm Frankie Lim S2_Writing a Business Plan 7 Elevator pitch From the 1 st - 10 th floor! What benefits does it offer the customer? What is the RoI ? How is the customer to be reached? Which methods are to be used? Frankie Lim S2_Writing a Business Plan 8 Business Plans The business idea Ownership & company structure The team; leadership, board of directors, accountants, lawyers The family - drawing from the succession plan Franchisor details and management structure Frankie Lim S2_Writing a Business Plan 9 Business Plans The Product The Patent situation Distribution Competitors Customers (The Market) Frankie Lim S2_Writing a Business Plan 10 Planning Templates Design your own? Use a template? Verify that it is suitable Write in report format 3rd person Frankie Lim S2_Writing a Business Plan 11 Cover page of Business Plan Cover page normally starts with a cover page stamped confidential This contains name & address of the author Title page may also include a mission statement Often a standard disclaimer on the title page Frankie Lim S2_Writing a Business Plan 12 Naming the Business Name must describe in some way the market offering Customer driven companies - i.e. Fat Man Tailors; Weight Watchers’ Delights Industry driven names - i.e. Kraft foods Personality or Image Driven companies - Ben & Jerry’s Homemade Frankie Lim S2_Writing a Business Plan 13 Legal Issues FedEx FedExtra ? Trademark check Obvious names are usually taken Company name should be registered and trademarked, & internet domain has been secured Show these are pending in your plan – shows awareness Frankie Lim S2_Writing a Business Plan 14 Business (Company) Description Introduction Company History - about you here! i.e.Legal Status & Ownership - founder’s/shareholder’s agreement - split of equity Legal Entity Mission Statement Tagline Products Frankie Lim S2_Writing a Business Plan 15 Business Description - Background If suitable/applicable i.e. was the idea invented somewhere prestigious Involvement of industry experts Celebrity endorsement Won prizes/awards Frankie Lim S2_Writing a Business Plan 16 Business Description The business idea Innovative/creative/invention What is the idea - define How will the process operate normally? How will you take advantages as an entrepreneur? Are there changes? Frankie Lim S2_Writing a Business Plan 17 Business Description What problem does the product solve? What are the advantages for the customer? What are the advantages over competing products Positioning over rivals Frankie Lim S2_Writing a Business Plan 18 Business Description Identified Changes The unexpected in the marketplace Process need Industry changes Changes in market structure Demographics New ideas A niche - no competition Family succession Critical incident Frankie Lim S2_Writing a Business Plan 19 Industry Analysis A group of firms producing a similar product i.e. electronic games, airplanes. Industry sectors vary Size, growth rate, structure, financial characteristics & overall attractiveness Frankie Lim S2_Writing a Business Plan 20 Industry Analysis Only focus on the firm’s industry - not the target market This is different Target markets for a particular time Logically precedes the target market discussions & Marketing strategy later in the plan Frankie Lim S2_Writing a Business Plan 21 Industry Analysis This also helps guide the rest of the plan i.e. Financial forecasts - justify numbers Product selection Target market Operations plan Frankie Lim S2_Writing a Business Plan 22 Industry Analysis Examples Growth industry Business attire women - more women entering business workforce Industry made up of small companies Capital costs of setting up a store are relatively low Barriers to entry - level of competition Frankie Lim S2_Writing a Business Plan 23 Industry Analysis Market size, industry sector size Demographic profile of target market/customers Trends in market, technology, consumer tastes and preferences Competitor profiling: number, size, strengths and weaknesses BCG matrix; Shell Directional Policy Matrix Kodak Competitor Map -Kotler Frankie Lim S2_Writing a Business Plan 24 Industry Analysis Profitability in the sector Pricing policies, promotion and advertising practices Proposed location: size, facilities, rents and activity patterns Appropriate channels of distribution Frankie Lim S2_Writing a Business Plan 25 Industry Analysis Secondary data Research of suppliers etc. Porter’s 5 forces Web searches Growth market? SWOT Innovations, patents required Frankie Lim S2_Writing a Business Plan 26 Any Questions ??? Reflections Frankie Lim S2_Writing a Business Plan 27
