Writing a Business Plan

 What do we learn?

a.     What is busness plan and its purpose?

Ø  What is business plan?

·         Business plan: A business plan is a written narrative, typically 25 to 35 pages long,

·         Describes what a new business plans to accomplish.

Ø  2 primary purpose for writing business plan:

1.      Internal reason: Forces a firm’s founders to systematical think thorough each aspect of their new venture.

2.      External reason: Communicates the merits of a new venture to outsiders, such as investors and bankers.

b.    Who reads a business plan?

Ø  A firm’s employee : helps firm’s rank-and-file employees operate in sync and move forward in a consistent and purposefully manner.

Ø  Investors and other external stakeholders: to oppeal this group, must be realistic and not reflective of overconfidence on the firm’s part.( demonstrate that the business idea is viable and offers potential investrs financial returns).

c.      What are the guidelines to follow for an effective business plan?

Ø  Business plan is typically the first aspect of a proposed venture.

Ø  Structure of a business plan:

·         Conventional structure: outline shown in the next section.

·         Easily find critical information.

Ø  Content of the business plan:

·         Clear and concise information on all the important aspects.

·         Must be long enough to provide sufficient information, yet short enough to maintain the reader interest. ( 25 to 35 pages).

·         Style or format of the business plan: look sharp but not give the impression that a lot of money was spent.

o   Summary plan : a summary business plan is 10 to 15 pages and best for companies early in the development.

o   Full business plan : a full busniness plan 25 to 35 pages spells out a company’s operation more detail than a summary business plan, prepare a business plan for an investor.

o   Operational business plan : primarily for internal audience. Blueprint for a company’s operations. 40 to 100 pages in length.

·         Recognizing the elements of the plan may change : being written and as the business evolves. Usually change while being written. Emerging that opposes the idea of writing a business plan and advocate experimentation and trial-and-error through customer feedback.

d.    Identify and describe a suggested outline of a business plan

Ø  A suggested outline, specific plans may vary, depending on the nature of the business. Most business plans do not include all the elements

·         Exploring each section of the plan :

§  Cover page and table of contents : include à company’s name, address, and phone number (the date, the contact information, company’s website address).

§  The cover letter and the business plan could get separated., include contact information in both places.

;provides a busy reader with everything she needs to know.

o   Industry analysis : the main body firm intends to compete. Industry structure how concentrated or fragmented an industry is. Industry trends should be discussed.

o   Company description : a general description important that demonstrated to your reader. The company history section should be brief idea for the company came from.

·         A mission statement è defines why a company exists.

·         A tagline è phrase that a business plans to use to  reinforce its position in the marketplace.

·         Service’s position è how it is situated relatives to its rivals.

·         Milestone è a noteworthy or significant event.

o   Market analysis : breaks the industry into segment the industry the business will be entering then identify the specific target through market segmentation.

o   Competitor analysis :  is a detailed analysis of a firm’s competitors.

o   The economic of the business:  financial analysis of a business which flashed out in the financial projections.

o   Marketing plan: focuses on how the business will market and sell its product or service.

o   Product (or service) design and development plan: describe the present stage of the development of your product or service.

o   Operation plan: outlines how your business will rn and how your product or service will be produce.

o   Management team and company structure: the management team consist of the founder or founders and a handful of key management personnel.

o   Overall schedule: shows the major events required to launch the business.

o   Financial projections: take the plans you have developed and express them in financial terms. (includes a source and uses of funds statement and assumption sheet)

e.      How to effectively present a business plan?

Ø  Presenting the Business Plan to Investors

·         After writing the business plan, the entrepreneur must prepare to present it effectively to potential investors and possibly others as well.

·         The oral presentation of a business plan: when ask to meet with an investors, the founders of a new venture should prepare a set of power poit slides that will fill the time slot allowed for the presentation portion of the meeting. The entrepreneur should arrive on time.

·         Question and feedback to expert from investor: investors typically focus on wether a real opportunity exists and whether the management team has the experience and skills to pull of new venture.