The business of compost Session 5

Developing a business plan

Developing a business plan What is a business? What does a business do? Why start a business? Do you need a business? Noun 1. an occupation, profession, or trade: 2. the purchase and sale of goods in an attempt to make a profit. 3. a person, partnership, or corporation engaged in commerce, manufacturing, or a service; profit-seeking enterprise or concern. A business solves a problem in exchange for goods, services, or money. Legal protections, ability to finance, ability to grow, etc

Developing a business plan Who is it for? - its for YOU - its for Investors - its for Stakeholders A business plan, at its core, is simply your plan to run the business. It shows you have thought things through and can serve as a guiding document, although it is mostly an educated guess. A business plan is a living document. It must change and adapt to the realities you are seeing on the ground.

Developing a business plan What goes in it? - Executive Summary - Company Description - Organization and Management - Service or Product Line - Market Analysis - Marketing and Sales - Financial Projections

Developing a business plan Problem- a problem box was included because several businesses do fail applying a lot of effort, financial resources and time to build the wrong product. It is therefore vital to understand the problem first. Solution- once a problem has been recognized the next thing is to find an amicable solution to it. As such, a solution box with the Minimum Viable Product “MVP” concept was included. Key Metrics- a startup business can better focus on one metric and build on it. The metrics include the range of products or services you want to provide. It is therefore crucial that the right metric is identified because the wrong one could be catastrophic to the startup. Unfair Advantage- this is basically the competitive advantage. A startup should recognize whether or not it has an unfair advantage over others. Key Activities and Key Resources- Ash found out that they were more outside-focused when gauged with the entrepreneur’s needs. They had also been covered in the Solution box. Customer Relationships- a deeply focused startup business should establish customer relationships from the beginning. As such, these were covered in the Channels box. Key Partners- Ash removed this category regarding the fact that most startups don’t require specific key partners when putting up because they deal in unknown and untested products. As such, it would be a waste of time trying to build such relationships. The Lean Canvas - http://leanstack.com/

Record keeping and finances Profit = What you earn – what you spent You can’t manage what you don’t measure Track Everything Learn accounting or hire an accountant QuickBooks Do what makes sense to you and your organization If you aren’t paying yourself, you aren’t earning a profit.

Cost savings and business opportunities Vertical integration Horizontal integration Business spinoffs Partnerships Efficiency and cost savings Vertical integration: the combination in one company of two or more stages of production normally operated by separate companies. Horizontal integration is a strategy where a company creates or acquires production units for outputs which are alike - either complementary or competitive. One example would be when a company acquires competitors in the same industry doing the same stage of production for the creation of a monopoly. Spin offs can be the opposite of the vertical integration. Externalizing parts of the process to focus on your core mission. Partnerships – Co-opetition or mutually beneficially relationships cab help move things along. Efficiency and cost savings. When you start a new venture, it will not be efficient, not matter how well it is planned. Capturing data allows you to find the waste and expenses which may be trimmed.