Professional Documents
Culture Documents
And Preparing A Business Plan: Anjana Vivek
And Preparing A Business Plan: Anjana Vivek
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WHAT are the strengths that you bring to this business WHAT are the constraints that you have to either
Address or Accept (and work keeping this in mind)
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Before starting on preparing the business plan, think through the following:
PUT YOURSELF IN THE READERS PLACE What is the reader looking for in a business plan? What is the message you are trying to convey through the business plan?
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Different persons may view the business plan differently Try to understand background and experience of person/group to whom plan is shown
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Just because someone rejects or scoffs at your idea, does not mean it is bad Try to take some learnings from rejections
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You may prepare a detailed plan in sections, which you may be stand alone and kept for different purposes, ie sections for internal use, for investor and for banker Keep a track on versions to minimise confusion and possible errors Keep control of access to the document
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BUSINESS PLAN
The document must be self speaking: ie minimum clarification must be required from your end (particular attention to be paid to explaining abbreviations/short forms and technical terms) The document must be reader friendly: key information that you want to convey should not be hidden amongst too much details
Do not think only of what you want to tell, rather think about what your target would want to hear
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BUSINESS PLAN
Plan on format of report and how data, information, analysis, comments etc. are to be presented
To move what is not essential to flow of document to main report Think of content required to capture attention of reader; avoiding excessive information overload
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BUSINESS PLAN
Avoid using graphs for the sake of using graphs; tables for the sake of using tables etc. without substance in the document Avoid information overload, i.e. temptation to disclose all you know and demonstrate your knowledge and experience about the business Make attempts to protect your intellectual property if any
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CONTENTS
Table of contents Executive summary Sections/chapters/paras Summary/conclusion Appendix of abbreviations, references, other annexures
Graphs, tables, figures to be numbered and labelled
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CHAPTERS - Illustrative
Company and background information Management team, organisation structure Business idea, strategy and implementation plan Marketing plan Financial details Other information such as implementation schedule, statutory environment applicable etc.
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CHAPTERS - Illustrative
Background history if existing company; current status Rationale for existing business or new start up General industrial environment of business Brief background of promoters
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CHAPTERS - Illustrative
Vision and mission statement Goals and objectives Key business drivers and key constraints; SWOT and business strategy Other key information to make initial background information complete
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CHAPTERS - Illustrative
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CHAPTERS - Illustrative
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CHAPTERS - Illustrative
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CHAPTERS - Illustrative
Marketing plan
Target market size Market research details Customer profiles; existing, potential/pipeline Marketing strategy Pricing strategy
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CHAPTERS - Illustrative
Financial details
Past financials: Balance sheet, P&L account and cash flow summary for five year period if available Future forecast five years in summary (detailed schedules may be in appendix) Details of how funds will be raised and utilised Details of contribution from promoters (cash/kind)
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CHAPTERS - Illustrative
Financial details
Sensitivity analysis for key parameters, eg sales variations of + / - 10% Scenario analysis:
optimistic, normal and pessimistic (budget)
Key ratios, break even, project IRR Other information such as quality of key parameters, ie revenue based on geography Cash burn, i.e. monthly requirement of cash and requirement for capital investment in phases
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CHAPTERS - Illustrative
Other information
Time lines, implementation schedule, expected date of commercialisation Regulatory environment if applicable, ie environmental laws for pharma company Other information which may be relevant to the business Include any required references, contact information, data and statistics
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PREPARING THE
BUSINESS PLAN
PREPARING THE
BUSINESS PLAN
Document should be consistent, flow well (date formats, number formats, serial number flow, prefix to names, grammar and tense used, avoid long sentences, spell check, US/British English not to be mixed etc.) Source information for data, content to be disclosed
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PREPARING THE
BUSINESS PLAN
Format and style should be neat, consistent, professional giving attention to details of:
format styles, font sizing, colours not too light, legibility, header, footer, headings, para alignment, spacing
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BUSINESS PLAN
Points to consider
You must believe in the idea to sell it Homework before hand, adequate knowledge Credibility is important, ie if caught with one falsehood, nothing said would be believed
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Points to consider
If there has been substantial change, update the plan The difficulty is when there are too many versions which are around
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Points to consider
If there is inconsistency between one plan and the other, this is to be reconciled, at least for internal records if not for external communication While the plan is to be updated to reflect reality and changes, too many such changes give wrong signals
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In preparing a presentation
Avoid clutter (generally not more than 5 points per slide) Pay attention to details: colour combinations, business logo legibility, consistency of message Clarity, tone, steady speed in speaking
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APPENDIX
Planning for a business Plan for advisors / accountants / lawyers Educate oneself about the law and regulations to be followed Educate oneself on basics of managing a business and finance Plan for long term impact of decisions taken with regard to hiring employees, taking office space etc.
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