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BusPlan1.ppt PGDM 7
BusPlan1.ppt PGDM 7
IDENTIFICATION AND ARTICULATION OF: Opportunity, Market, Customers Management Capable of Seizing It Minimal Required Resources Entry Strategy & Tangible Vision for Growth Financial Requirements, Cash Flow & Deal Critical Risks & Assumptions Harvest Options
Source: Ed Marram, Babson College
5.5
Questions:
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What are my motivations for owning a business? Should I start or buy a business? What and where is the market for my product or service? How much will it cost to own the business, where will I get the money? Should my company be domestic or global? How will growth be managed? What is involved in running a successful family business?
5.6
Questions:
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Table of Contents Executive Summary Industry, Products or Services Market Research Marketing Plan Management Team Development Plan Operations Plan
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Clear description of the idea Overview of industry to suggest need/opportunity Evidence that demand exists (or can be created or stolen) Clear description of resource requirements:
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Expected Return
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Decision to Invest
Perceived Risk
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General Guidelines l Clear, concise, professional style l Well-researched and documented l Consistent and cohesive Business plans are: l Very specific l Not promotional tools, selling is subtle
Industry Section
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Industry Overview
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Product Overview Competitive Advantage Fit with Corporate Objectives Entry and Exit Strategies
Market Research
Identify Market Area and Size Description of Primary Customers
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Marketing Plan
Promotional Strategy Support Policies Sales Projections On-going Evaluation
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Management Team
Responsibilities Biography
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Development Status and Tasks Costs Difficulties and Risks Proprietary Issues (partial, not complete) Product Improvement and New Products
Operations Plan
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Facility and Location Requirements Equipment Requirements Non-managerial staffing Sources of Supply Production Process and Controls Distribution logistics Regulatory and other compliance issues
Schedule
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Evaluate impact should risk occur Describe how the risk will be mitigated and how you will respond should it happen
Ask others what holes they see in your plan. What can go wrong ? Entrepreneurs frequently get too close to their ideas. You need unbiased views here ...
Financial Plan
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Breakeven Concerns
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Avoid describing your assumptions. The goal here is to convey the characteristics of your business briefly.
Executive Summary
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Overview of Industry, Market, Need, Demand Benefits to Customer / Company Fit with Company Objectives
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Lists, specs, pictures of products, systems, software List of customers, suppliers, references Appropriate location factors, facilities or technical analysis Independent reports by technical expert, consultants Detailed resumes of founders, key managers Any critical regulatory, environmental or other compliance, licenses or approvals Sales or other financials assumptions (in brief)
Key Considerations
Have a story to tell Be confident but objective and dispassionate Understand the financial characteristics of your business Avoid promises and self-aggrandizement Tease to stimulate interest, never bore
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Miscellaneous Concerns
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Length is typically 20-40 pages, excl. exhibits Required appendices l Financial statements (3-5 years) l Statement of Start-up Costs l Breakeven Chart l Resumes Use bullet points, tables, and small charts Dont use first person (I, We, Our) Format and Spelling Count (a lot)
Remember:
A business plan is a specific plan to open a new business or to expand an existing one, not the writers wishes and dreams !
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Seeking premature approval Believing Plan is more important than Orders Develop Complete Business Plan First v. Floating Trial Balloons Selling the plan to the wrong audience Selling the plan to the right audience poorly
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Phantom or Gingerbread Advisors Spreadsheet Diarrhea (Financials = Business) Poor understanding of product acceptance Under-estimation of competitive reaction Pricing strategy too low Capital requirements too low or undefined
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Evidence of Customer Acceptance: Orders Evidence of Focus / Niche Appreciation of Financial Goals Proprietary Position, Exclusivity Team with experience, commitment, and integrity
Great Mousetrap Fallacy Projects which deviate excessively from industry norms Unrealistic growth projections Inadequate management experience / depth