Developing business and regional/rural development plans Arr720s: applied regional and rural economic development

outline Business plan: rationale, guidelines and outline Regional/rural development planning: rationale, planning systems and important steps

objectives To learn how draw up a business plan (theme I) To study how to develop a regional or rural development plan (theme II) To engage students and assess their understanding through interactive discussions

Theme I How to draw up a business plan

What is a business plan? A written document which details information about the structure, operating plan, resources etc. for a business

Why write a business plan? Helps to evaluate the feasibility of a new business idea: marketing, management and profitability Lays out operating plan: opportunities; production, administrative and marketing plans; budgeting and projections

Why write a business plan? (cont’d) Communicates ideas and serves as marketing tool: financing, profitability, return on investment, cash flow and liquidity Helps to connect with relevant audience: formal and informal business plans

Basic business plan guidelines Owners should be involved in planning process No planning (or poor planning) is a recipe for failure

Basic business plan guidelines: executive summary Included at the beginning of complex business plans Usually about 3-5 pages

Basic business plan guidelines: executive summary Included at the beginning of complex business plans Usually about 3-5 pages

Basic business plan guidelines: section one Written section describing management and marketing aspects of business Should be thorough, but concise and to the point Comprises headlines, graphs and bullets Usually ranges from 10-20 pages

Basic business plan guidelines: section two Comprises financial projections Numbers describing outcome of business strategies and plans Should be based on facts and research

Basic business plan guidelines: section three Contains supplemental information Reinforces information in sections one and two Content varies depending on type of business

Ten ways to ruin your business plan Submitting an unkempt or rough copy Outdated historical financial information Unsubstantiated assumptions Failure to consider prospective pitfalls Lack of understanding of financial information Lack of specific, detailed strategies

Ten ways to ruin your business plan (cont’d) No indication that the owner has anything at stake Unwillingness to personally guarantee any loans Starting the business with unrealistic loan amounts or terms Too much focus on collateral

Business plan outline Cover sheet: business name, address, phone numbers, principals Executive summary or statement of purpose Table of contents

Business plan outline: section one (the business) Description of business Products/services Market analysis Marketing plan Location Competition Management and operations Personnel Application and effect of loan or investment

Business plan outline: section two (financial data) Projected financial statements: income statements, cash flow statements, balance sheets, assumptions to projected financial statements Breakeven analysis Sources and uses of funds

Business plan outline: section three (supporting documents) Historical financial statements Tax returns Resumes Reference letters Personal financial statements Facilities diagrams Letters of intent Purchase orders Contracts

Drawing a business plan Important questions Class exercise: drawing a mock business plan

Theme I: discussion questions What is a business plan? Why is it necessary to write a business plan? Discuss the basic guidelines associated with writing a business plan. Outline ten ways to ruin a business plan. Examine the outline of a business plan.

Theme II How to draw up a regional or rural development plan

introduction Regional development planning entails: Decentralisation plus resource allocation “Holistic and integrated rural development, basic needs-orientated development and unified approach to development” (ILRI, 1983).

Developing a regional economic development strategy Where are we now? Where do we want to be? How do we get there? How do we measure, evaluate and communicate our results?

Steps in regional development planning Defining regional goals and objectives National context, consultations Conducting in-depth research Socio-economic conditions, resource potentials, needs, barriers to growth and development, historical backgrounds, experiential lessons and social attitudes Developing the plan Timelines, reflect findings of research process, represent physical and socio-economic features Formulation of programmes and/or projects Monitoring and evaluation

Designing a development vision Choose your priorities Balance geographical perspectives Allocate resources based on priorities Consider different perspectives among stakeholders to get the big picture Articulate your vision

Smart growth economic development strategy “A strategy that builds upon existing assets, takes incremental actions to strengthen communities, and builds long-term value to attract a range of investments”. Economic decline and lack of diversification Resource depletion, globalisation, change in consumer preferences etc.

Smart growth economic development strategy: core components Supporting businesses Supporting workers Supporting quality of life

Preparing a Smart growth economic development strategy: key principles Distinguish between “growth” and “investment” Be tactical and strategic Be focused Start where there is already momentum Find the right partners for specific goals Communicate and coordinate

Preparing a Smart growth economic development strategy: major steps Select a focus area Define the context Set goals Identify existing assets and barriers Select the right tools

setting goals in a smart growth economic development strategy: Supporting businesses Retain existing businesses Attract new businesses Promote entrepreneurship Encourage business growth in in-fill locations

setting goals in a smart growth economic development strategy: Supporting workers Improve access to local employment opportunities Increase access to advanced education, workforce development and employment opportunities Improve quality of education

setting goals in a smart growth economic development strategy: supporting quality of life Promote a vibrant downtown or commercial district Attract stores and services for daily needs Encourage a wide range of affordable housing types Increase access to open, green and recreational spaces Preserve natural spaces

setting goals in a smart growth economic development strategy: supporting quality of life (cont’d) Improve walking and biking facilities Maintain character and distinctive community assets Allow a mix of land uses in appropriate locations Ensure compatibility of adjacent land uses Prepare for climate change

Format: presenting your strategic thinking Design an attractive cover Introduce the regional/local economic development authority and its strategy Summarise your strategy development process Discuss your regional analysis Discuss possible future scenarios Consider stakeholders’ strategies and priorities Describe your vision for the future of the region List and explain your ends Explain the next steps Place credits and contact information on the back cover

Issues of emphasis in regional development planning Social and economic problems Economic growth and development Focus on action Targeting poverty Participation Inception level, sub-regional and community level, production of economic goods and services Resource utilisation Strengthening information base

Regional or rural development plan: outline Executive summary Preamble Background and processes Analysis of the regional economy: SWOT etc. Economic development strategy: strategies for specific sectors based on comparative advantages Summary and conclusion

Drawing up a regional/rural development plan Case study: Katutura

Theme Ii: discussion questions Discuss four main questions to consider in developing a regional economic development strategy. Assess the steps involved in regional development planning. What is a smart growth economic development strategy? Discuss the core components associated with a smart growth economic development strategy. Assess the key principles and major steps entailed in preparing a smart growth economic development strategy. Assess the visioning process in the formulation of a regional economic development strategy. What are the major elements which comprise the format or outline for a regional economic development strategy?

references Board of Directors of Nova Scotia’s Regional Economic Networks (2014). Guide to developing a regional economic development strategy. Office of Sustainable Communities: US Environmental Protection Agency (2016). Framework for creating a smart growth economic development strategy. Washington D.C.. Sahlman, W. A. (1997) How to write a great business plan. Harvard Business Review. SBDC (n. d.) Writing a business plan. Woldemichael, A.T. (2016). Regional development planning: an overriding pathway to inclusive growth and development. Addis Ababa: Rehobot Printers Plc.