How to Build A Successful Business Plan for a Small Business Speaker: Omar Shawky

Why write a Business Plan 1. Because I have to… – Needed for financing – Strategic partnering – Attract key people/investors – Organize my thoughts

Why write a Business Plan 2. Because I Need to Understand My Business – The Plan is the result of a planning process – People Don’t Plan to Fail; They Fail to Plan Who are my customers? Why will they buy my product or service? What will they pay? How will I make and deliver/sell the service/product? What resources (people, money, technology) do I need? Can I make money / create value? Do I have the right team on board?

The Right Ingredients A TEAM with Relevant Experience Market Size Idea Technology Competitive Advantage Reasonable Projections Exit Strategy

Company Structure Financials Operations & Production Team Idea Market Competitive Edge Marketing Strategy Business Plan

Business Planning Steps 1.Idea generation, Vision, Mission, Objectives, Strategies 2.Market research and Analysis 3.Marketing strategy 4.Production planning 5.Management and Organization 6.Financial plan 7.Company formulation

Business Planning Steps 1.Idea generation, Vision, Mission, Objectives, Strategies 2.Market research and Analysis 3.Marketing strategy 4.Production planning 5.Management and Organization 6.Financial plan 7.Company formulation

1. The Idea Innovative product or service Visualize a market gap – you can add value Imported idea

Vision 1 st Objective 2 nd Objective 3 rd Objective 4 th Objective Strategy Where do you want to go at the end? What is the road map and major mile stones? How will you reach your objectives? Vision Objectives SMART Specific Measurable Achievable Relevant Time-Bound

Mission: Stakeholders Family Work Friends Religion Country Community Who are your stakeholders and what is your mission to each one of them?

Mission: Stakeholders Shareholders Employees Customers Suppliers Country Community Who are your stakeholders and what is your mission to each one of them?

Business Planning Steps 1.Idea generation, Vision, Mission, Objectives, Strategies 2.Market research and Analysis 3.Marketing strategy 4.Production planning 5.Management and Organization 6.Financial plan 7.Company formulation

2. Market Analysis Market size – How big is it NOW? – Trends – how fast is it or will it grow? Market Players – Competitors – Competitive Advantage – Estimated market shares – Existing/planned products in the marketplace Is this the RIGHT TIME for my product? Is there a GAP that I can fill?

How you capitalize on them How you avoid them How maximize them How minimize their effects Strengths Weaknesses Opportunities Threats Internal External SWOT Analysis

Business Planning Steps 1.Idea generation, Vision, Mission, Objectives, Strategies 2.Market research and Analysis 3.Marketing strategy 4.Production planning 5.Management and Organization 6.Financial plan 7.Company formulation

Who are my TARGET customers? Why would they buy my product? How much would they pay? What are the special features in my product? What is my competitive advantage It is all about your EDGE 3. Marketing Strategy

Marketing Plan Process Marketing Research Segmenting PositioningTargeting Defining Target Market Needs, Wants, Demand Product Variety Quality Design Features Brand Packaging Size Services Warranty Return Price Price List Discounts Allowances Payments Credit Promotion Promotions Advertising Sales Force Public relation Direct marketing Place Channels Coverage Location Inventory Transport Push / Pull Marketing Mix 4 Ps

Business Planning Steps 1.Idea generation, Vision, Mission, Objectives, Strategies 2.Market research and Analysis 3.Marketing strategy 4.Production planning 5.Management and Organization 6.Financial plan 7.Company formulation

4. Production plan Technology Equipment Raw Material Sourcing Operation Plan and Capacity

Business Planning Steps 1.Idea generation, Vision, Mission, Objectives, Strategies 2.Market research and Analysis 3.Marketing strategy 4.Production planning 5.Management and Organization 6.Financial plan 7.Company formulation

5. Management Plans Getting the RIGHT Team on board Training Delegation Empowerment

Business Planning Steps 1.Idea generation, Vision, Mission, Objectives, Strategies 2.Market research and Analysis 3.Marketing strategy 4.Production planning 5.Management and Organization 6.Financial plan 7.Company formulation

What Investors is looking for in Financial Section: 1.Total Investments 2.Breakdown of Investments (Land, Building, Equipment, People, Working Capital, …etc.) 3.Income Statement Projections 4.Cash Flow Statement Projections 5.Initial Balance Sheet 6.Net Present Value (NPV) 7.Internal Rate of Return (IRR) 8.Breakeven Analysis 9.Payback Period Financial Section

Financial Plans Income Statement Projections – Revenues Assumptions – Costs/Expenses Assumptions – Depreciation Assumptions – Interest Expenses Assumptions – Taxes Cash Flow Projections – Initial investment – Working Capital (Payables vs Receivables) – Capital Expenditure (Capex) – Debt Assumptions

Income Statement Objective: provides information about the firm’s operating activities over a specific period of time. Revenue: % - Cost of Goods Sold (COGS):6060% Gross Profit (Profit Margin) 4040% Operating Expenses: General & Administration88% Sales & Marketing1212% - Total Operating Expenses 2020% Earning Before Interest, Tax, Depreciation & Amortization (EBITDA)2020% - Depreciation & Amortization 55% Earning Before Interest and Tax (EBIT)1515% - Interest Expenses 55% Net Income Before Tax 1010% -Taxes22% Net Income 88% Income Statement

Objective: provides information about the firm’s cash position and sources of cash in and cash-out 1- Cash Provided from Operations: + Net Income 8 +Depreciation & Amortization5 -Increase in Receivables(1) +Increase in Payables4 Total Cash from Operations Cash Provided from Investing: - Capital Expenditure(3) +Sale of equipment, land..etc 1 +Sale of stocks in portfolio 1 Total Cash from Investing(1) 3- Cash from Financing: -Repayment of debt(1) +Sale of common stock 1 -Cash Dividends (5) Total Cash from Financing (5) Total Cash Flow 10 Cash Flow Statement

Assets Current Assets: Cash and securities15 Account Receivables10 Inventories25 Total Current Assets 50 Plant30 Land15 Furniture 5 Total Assets 100 Liabilities Current Liabilities: Accounts Payables 10 Short-term borrowing 15 Total Current Liabilities 25 Long Term Debt 25 Total Liabilities 50 Shareholders’ Equity Common Stocks 20 Retained earnings 30 Total S.E. 50 Total Liab. + S.E. 100 Objective: provides summary of what the business owns and what it owes to both lenders and investors. (Assets = Liability + Shareholder's Equity) Balance Sheet

1.Net Present Value (NPV) 2.Internal Rate of Return (IRR) 3.Breakeven Analysis 4.Payback Period *See the excel file for calculations Measuring Performance

Business Planning Steps 1.Idea generation 2.Market research and Analysis 3.Marketing strategy 4.Production planning 5.Management and Organization 6.Financial plan 7.Company formulation

7. The Company Name – logo - slogan Legal structure Location Mission – Values - Objectives

Elements of the Business Plan 1. Executive Summary 2. The opportunity, company, product/service, vision, mission & objectives 3. Market research/analysis / SWOT Analysis 4. Marketing plan 5. Design and development plan 6. Manufacturing and operations plan 7. Management team 8. Financial plan (Capital Required, Projections, Returns) 9. Action Plan

Finally: No Risk … No Gain ”ومن لا يتعلم صعود الجباليعش أبد الدهر بين الحفر“ “If we all did the things we are really capable of doing, we would literally astound ourselves” Thomas Edison

Thank You & May God Bless Omar Shawky