Sponsored by Organized by The Thailand International Development Cooperation Agency The Mekong Institute Khon Kaen in Thailand Development of SME Clusters and Export Consortia 4 – 29 July 2011 Compiled by Dr. Ed Canela

Business Plans For SME Clusters/ECs

Why a Business Plan? Strategic Guide. Where is the market? Big investment for Governments) and SMEs as investors. Lenders. Multilaterals, governments, etc. Investors SMEs relocating or expanding due to the presence of a SME cluster and export consortia.

Strategic Guide Where Do You Want To Go? How Are You Going to Get There? What Market Niches? How Much is it Going to Cost? Greatest Profit Opportunity?

Lender Expectations Good Business Track Record Ability to Repay Staying Power Collateral

Investor Expectations Competitive Advantage Huge Market Strong Management Team Strong Marketing and Sales Plan Some Skin in the Game Obscene Return Exit Strategy

Entrepreneurs Start Businesses: To Capitalize on an Invention To Pursue a Passion To Be Their Own Boss To Get Rich ---All Need an Exit Strategy

Exit Strategies Selling the Business Transferring the Business to a Family Member Taking the Company Public Being Acquired by a Larger Company

Funding Sources: Savings (tax, land reserves, etc.) Friends and Family (countries) Financial Institutions / Banks (Multilaterals, commercial) Angel Investors Venture Capital

Business Plan Content Executive Summary Company Description The SME Cluster/EC Description Industry Overview Market Analysis Competitors

Business Plan Content Customers (SMEs, Foreign Investors, service institutions, etc.) Marketing and Sales Plans (How to attract the customers, incentives, information, innovation, services, etc. Development (Plans, buildings or plot allocation, development, programs, services to SMEs, etc.) Operations (look at the chain+services) Management (administration, finance, database, security, etc.)

Business Plan Content Personnel Financial Summary Financials Offering Appendices

Executive Summary A mini-business plan in one or two pages Highlights the most important points of your business plan It is NOT an introduction to the plan It must grab your reader, and entice him/her to read further

Executive Summary Identify the company, its background, structure and location Describe what the company does, and the market it serves Describe the market potential for the company’s products and services, market trends, etc.

Executive Summary Outline the backgrounds and experience of the top management team Describe the funding required, the purposes for which it will be used, the collateral available (if for a lender), and the expected outcomes

The SME Cluster/EC Description Brief SME Cluster/EC Introduction – Mission-vision statement – Location, size, history – Market, products and services – Overview of company capabilities – Objectives

Products/Services Products / Services of the SME Clusters/EC – What will it do? What will it deliver to the SMEs? – Uniqueness – Competitive Advantage Technology – Brief description – Applications Commercialization Status – Brief overview

Industry Overview Set The Stage Industry Definition and Description – Major players within the industry – Factors driving dynamics – New products and developments Country Legislations & Policies Driving the Industry Historical and Future Trends

Market Analysis Market Definition – Primary Market (Main SMEs) – Secondary Markets (Services to the SMEs relocating to the Cluster/ECs) Market Size and Trends – Current total revenues – Predicted annual growth rate

Competitors Direct Competitors (Similar or related Clusters) – Who are they? – Size and product breadth – Revenues and profitability – Strengths and weaknesses – Market shares Indirect Competitors (Other Clusters in the country)

Customers Customer Characteristics (Target SMEs) – Who are they? What are they doing now? – Why will they relocate/join the cluster? – Needs satisfied by the cluster? – How is the need currently filled? – What are the alternatives? – Who makes the decision to relocate/join? – Do they have business plans? When will they relocate/join?

Marketing and Sales Plans Statement of Opportunity Marketing and Sales Objectives Target Customers (SMEs) Potential Customers (Others, who will relocate/Join) – Prospects targeted – How prospects will be targeted and qualified

Marketing Strategies Product/Service Strategy (Areas available for SMEs, large, medium & small), services available Pricing Strategy How much Distribution Strategy Real estate agents, etc. Advertising and Promotion Strategy Sales Strategy Marketing and Sales Forecasts (Sales from rent and other services annually in US$)

Marketing and Sales Plans Marketing Programs – Direct Mail using a good brochure with designs – Trade Shows – Advertising – Internet – Publicity/Public Relations – Marketing Budget Pricing – Basis for targeted price point – Margins and profitability by volume levels

Marketing and Sales Plans Sales Plan – Sales force structure – (direct or reps) – Sales expectations/quotas – Margins given to intermediaries – Service and warranties – Sales Budget – Organizational chart indicating planned growth

Development R & D Plan – Objectives – Milestones and current status – Difficulties and risks – Staffing – R & D Budget and assumptions

Operations Manufacturing/Production Plan – Objectives – Facilities – Staffing – Subcontractors – Quality Control – Budget / Operating Expenses – Storage & Warehouse – Security – Logistics and Transports – Personnel training – Common services (reception, conference rooms, database, etc.) – Support services (utilities, repairs, maintenance, fire station, medicals, etc.)

Management Company Organization Management Team Administrative Expenses

Management Team President VP Finance VP Sales VP Marketing VP Manufacturing Board of Advisors SME Cluster Timetable

Personnel Human Resource Plan – Staffing Objectives – Organizational Structure – 3-5 year growth plan – Budget

Summary of Financials Financial Objectives – Time to Cash Flow Positive – Time to profitability Financial Assumptions Capital Requirements Exit Scenario

Financials Investment Plan Pro-forma Cash Flow Projections Pro-forma Profit & Loss Statements Pro-forma Balance Sheet

Offering Investment Requirements Pro-forma Valuation of Business Offer

Appendices Resumes of Key Management Patent Information Customer List Testimonials Supplemental Financial Spreadsheets References