The Business Plan

Business Model and Plan

This is your opportunity to fully develop the Business
Model – using the BMC.
Once you have a fully developed Business Model,
the ‘Plan’ naturally falls from the ‘Model’.
EBook available from the Library: Business Model
Generation : A Handbook for Visionaries, Game
Changers, and Challengers, by Alexander Osterwalder,
Yves Pigneur, and Tim Clark
Business Model and Plan

The Components for Assessment

Executive Summary
This is meant to be a comprehensive summary of the key points of
your business plan, NOT an introduction. Please keep this mind!

A report example: Report Examples\Australias Research Future

report.pdf

And another example: Report Examples\Boosting-High-Impact-

Entrepreneurship.pdf

A good rule of thumb is to always write the Executive Summary last.

Company Overview
• Company Overview
– You want a paragraph here on who the company is, and
what they are trying to provide to their stakeholders
• Business Description
– Exactly what it is the company is trying to do. This is
where you start to explain your business model, that
is, by what method will this entity make profits?
Company Overview
• The Product or Service
– What is it that you’re selling to the customers?
• Company History
– Pretty self explanatory. If this plan is for a start
up, omit this section.
Company Overview
• The Industry
– Describe the industry in which you will be
doing business. Does it have established
competitors? What is the competitive structure?
Does it have monopolistic characteristics?
• Competitor Analysis
– An analysis of your key competitors and their
perceived strengths and weaknesses.
Company Overview
• Industry Trends
– What is happening in the industry that may
affect future competition?
• Competitive Advantage
– Why should people do business with you
rather than your competition?
– Value proposition.
Marketing Plan

• Market Plan
– An introductory paragraph here.
• Customer Base
– Who exactly we are selling to and how we are
going to sell it to them?
• Pricing Strategy
– Cost plus? Follow the market?
Marketing Plan
Promotion
– Introductory paragraph.
Location
– Where is the business to be located – bricks and
mortar, on-line, how many.
Market Research
How do you know that people want to buy your
product or service? What evidence do you have
that this product or service has a market?
Operations Plan
• Operations Plan
– Introductory paragraph.
• Production
– How is the product or service going to be
produced? Are any parts of it going to be
outsourced? Who are your suppliers?
• Logistics
– How are you going to get the product/services
to the customer.
Operations Plan
• Facilities
– What type of physical plant are you going to
need? A shopfront? A warehouse? A factory?
• Geographic Location
– Where are we going to do this? Townsville or
Cairns, Queensland, Worldwide?
Operations Plan
• Control Systems
– What is your quality assurance program?
• Labor Force
– What types of staff will you need? Is there a
sufficient number of suitable staff available in
your location?
Operations Plan
• Staffing
– How are you going to recruit such staff as
you do need? In house? Employment
agency? Headhunter?
• Training
– What types of training will you need to give
your staff, both upon entry and ongoing?
Financial Plan
• Financial Plan
– Another, brief, introductory paragraph.
• Start-up Costs
– How much money are you going to need to
start this up? How much do you have access
to? Few sources are willing to risk their
money with you unless you are willing to take
a financial risk yourself. Are you willing to bet
your house?
Financial Plan
• Profitability
– So, how much money are we going to make
here? Warren Buffett money, or something
less? Be convincing, but leave off the wild
exaggerations.
Financial Plan
• Cash Reserves
– Quite often you can express this as: “Cash
reserves will exceed six months’ operating
expenses. We plan to grow our cash reserves
as sales and market conditions dictate.”
• Projected Income
– A summary of what the P&L statement in the
appendix will tell us.
Financial Plan
• Projected Cash Flow
– A summary of what the statement of cash flows
will tell us.
• Exit or Harvest Strategies
– If this plan is meant to be presented to venture
capitalists, they’re going to want to know when
they get their money, how they’re going to get it,
and a most-likely estimate of how much.
Critical Risks and Assumptions
• What could go wrong?
• What have you, can you, do about it? You really
need to think this through.
• Are there people upon whom the organizational
critically depends?
• How about protection of intellectual property
(IP)?
Appendices – These Are Required
• Appendix A: Resumes and Biographies of
Key Personnel
Appendices – These Are Required
• Appendix B: Financial Statements
– One of the keys here is to make the
statements believable.
– Be sure to avoid making too rosy projections!
– Don’t understate your expenses or overstate
your potential earnings.
Appendices – These Are Required

Appendix B: Financial Statements

– Projected Profit and Loss Statement
• Insert a pro forma P&L Statement here, in
spreadsheet form for the next three years.
– Projected Cash Flow Statement
• Insert a pro forma Cash Flow Statement here, in
spreadsheet form, for the next three years.
– Projected Balance Sheet
• Insert a pro forma Balance Sheet here, in spreadsheet
form, for the next three years.
Appendices – These Are Required
• Appendix C: Supporting Documentation
– Documents you might want to include would be:
• If this is a franchise, a copy of the franchise
agreement.
• Articles of incorporation and corporate by-laws.
• Partnership agreement, if this is a partnership.
• ABN and registration of business name.
Appendices – These Are Required
Appendix C: Supporting Documentation
• Any pending or issued patents or
trademark registrations.
• Proposed or executed lease or purchase
agreement for building space.
• An organization chart.
Appendices – These Are Required
• Appendix D: Timeline
– A timeline can help to visualize the issues
the new business will face—and when those
issues might be critical.