B USINESS PLAN A business plan is crucial for all businesses. A business plan is a document setting out a description of the business, its market, its competitive advantage, its objective and the strategies it will follow. It helps us To organize the business and its resources It clearly sets out the goal you want to achieve It keeps the business on track to achieve them

W HY YOU NEED A BUSINESS PLAN ? To understand up coming problems Sets Aims and objectives for the performance evaluation Key to success Business plan should be comprehensive Finance in internal documents can be informal Finance in external documents should be formal It is simple but systematic

P URPOSE OF BUSINESS PLAN Set all the detail for new business Keep the business on track Measure business performance Confidence in the business Gather information

P LAN, P LAN, P LAN …… P LAN What to do Why to do How to do Who will do it When it will be done Where to do ( Location, Location & Location) 4 Business Plan

WAYS TO DO BUSINESS Sole traders Partnerships Limited companies Franchises

B USINESS PLAN Business plans ensure an efficient and coordinated use of resources and help minimize costly mistake. Business plan outline the use of resources in Marketing Production People (HR) Finance

F ACTORS TO CONSIDER WHEN SETTING UP A NEW BUSINESS What is our competitive advantage? What management skills do we have? What staff will we need? What will our cash flow be like? Do we have a reliable accountant? Where will we get finance? Will it be profitable? Where will we locate? What is our industry? How will we make our product? How much can we sell? What price will we charge?

O UTLINE OF SAMPLE BUSINESS PLAN Introduction (Business details, aims and objectives) Executive Summary Industry Analysis Product range/service Manufacturing/production Marketing Risks assessment Financial Information Management and staffing strategy Supporting documents and miscellaneous

P LANNING PROCESS Understanding where you are? Deciding where you wants to go ? How to get there?

U NDERSTANDING WHERE YOU ARE ? Define your position against your competitor Define your target market S.W.O.T analysis

D ECIDING WHERE YOU WANTS TO GO ? Define the aim of your business, Mission statement The objectives must be SMART

H OW TO GET THERE ? Coordination of management functions Develop marketing mix Marketing plan Allocation of financial resources

A DVANTAGES OF BUSINESS PLAN Future of business Decision making Consequences of actions Forecast future challenges

W HAT A BUSINESS PLAN LOOKS LIKE ? All business plans depends on nature of business Business plan provides information about the market and finance. It also define the operation of business Laws and regulations which should be fulfilled Information about the business industry

C ONSIDERATION BEFORE MAKING A PLAN Very clear about the audience Plan should be concise enough that covers all pros and cons Do not exaggerate or overestimate the importance of your business idea Identify the target segment The plan should be SMART Plan should be free from errors Plan operations should be defined

U SING PLAN TO OBTAIN FINANCE Define the target financer(banker, investor) Forecasted cash flow Cash needed Time for cash needed Analyze financial ratio Profitability criteria

T HE BANKER ’ S VIEW The plan shows the chances of success Bankers are dealing in finance but they are not in the business of risk Cope the bank rules and regulations of lending money Show acceptable level of risk How the money will be repaid

C ONTD … Two important factors Break even points Financial risk Firms track record Financial performance

T HE EQUITY INVESTOR Quality proposal Good executive summary Two points to be focused Business opportunities Competitive advantages Venture capital report 33 % for the idea 33 % for the management 33 % for the money

C ONTD … Investors are interested in dividends and interests Capital gains Exit routes and time scales should be considered “Hands on” approach “Hands off” approach

Business not grow through finance but through Big IDEA’S REMEMBER…!!