1. Gtech
Business Plans

2. Learning Objectives
Define and apply commonly used new venture business planning concept, skills and tools
Demonstrate a comprehensive understanding of the principles and process of forming a strategic business plan

3. What is a Business Plan? A tool for analysis A tool for synthesis
Creating the plan becomes a guide to gathering the relevant information that ensures the direction of the business is achievable and financially lucrative
A tool for synthesis
Converts vision into a strategy for the start-up, with respective action
A tool for communication
Communicates potential to stakeholders
A call for action

4. The Business Plan: A tangible product of the ongoing planning process
Articulates the vision of the start-up team
Tells others that the entrepreneur is serious
Often a requirement for funding from investors and financial institutions
Is a constant work in process:
Businesses evolve and change their strategies/ markets/ offerings

5. The Nonconformist Entrepreneur becomes the Planner
A traditional business plan includes:
Executive summary
Description of the business opportunity
Marketing and promotional strategy
Management strategy
Operational strategy
Financial forecasts
Information on suppliers
Entrepreneurs are often driven by:
A unique idea
Drive and determination
An intuitive approach
Gut feelings
Heuristics- “it gets the job done”
Bricolage- trying, testing, playing around
Heueristic describes an approach to problem solving that employs a method that is practical, and not guaranteed to be optimal or perfect, but sufficient for the immediate goals.
Bricolage often involves using whatever you have around to create something new and unique-
Do these two columns seem mutually exclusive? Discuss why an entrepreneur may feel a business plan is unnecessary (slows things down, can’t focus on that right now, doesn’t match style, etc.)
Why might an entrepreneur think he/she does not need a business plan?

6. Who Cares about a Business Plan?
Owners (often the entrepreneurs)
A way to assess the feasibility of a business idea
Set objectives: what is the direction of this business? Targets?
Determine budgets and how much funding is needed
Managers
Clarify ideas- bringing it all together
Establish what is known and what is not
Determine staffing needs/Build or reorganize a team
Practice analysis and presentation
Describe target competitor segment
You need to start by describing who you are looking at and why. This will avoid gathering data that does not answer your question/fill your need.
Define research objectives- Now what do you want to get our of this segment. As you do this part, you may find yourself going back to the first step and reevaluating the segment if it does not seem to fit your needs.

7. Who Cares about a Business Plan?
Investors:
Is this a good investment?
Capital Investors: Will I get a return?
Financial Institution: Will this company be able to keep up with its payments?
Interested in forecasts and how you got to them
Great idea, but can they pull it off?
What is the management structure?
What will the money go towards?
Describe target competitor segment
You need to start by describing who you are looking at and why. This will avoid gathering data that does not answer your question/fill your need.
Define research objectives- Now what do you want to get our of this segment. As you do this part, you may find yourself going back to the first step and re-evaluating the segment if it does not seem to fit your needs.

8. Format of a Business Plan
Who are we?
Business idea, brand, and nature of the value added
The current market environment and how we fit in
The competition
The owners and management team
Where are we going?
Targets and Forecasts
Objectives
Goals
How to measure progress
Predicted changes to market environment
How will we get there?
Resource management
Marketing plan
Financial forecasts
Funding requirements
There are three types of research, exploratory, descriptive and causal, sometimes called explanatory. Exploratory is where you are looking at a situation to see if there are any problems. Descriptive is a way of identifying the various factors that may be influencing an action (such as the make up of your customers) and causal is an attempt to identify the reasons for a specific action.
Stokes and Wilson (2006)

9. Discussion Questions Does every start-up need a business plan?
Start-ups that need external funding? Why/why not?
Start-ups that are fully funded? Why/why not?
Who should be involved in creating a business plan?
How often should a business plan be changed/updated?
Does every start-up need a business plan?
There are theories both ways here- little evidence has been found that a business plan solidly decides whether a company stays in business or not; however, some literature argues that business plans make a company more lucrative down the road and helps w’ need for direction change.
In any case, even if funding is not needed at startup, funding may be needed at a critical juncture, and having a business plan is a good way to ensure you are ready when you need to solicit funding.
Who should be involved in creating a business plan?
One could easily argue that more than just the entrepreneur, since his/her skill set is often not in this kind of discipline. Other staff, friends, colleagues can help, and others should always review first. Seeking guidance from a financial institution is a good way to start- helps you know what they are looking for.

10. Case study: Gtech
Company selling cordless electric products, primarily sweepers/vacuum cleaners, garden tools, and electric bikes
Established 2001
Based in Worcestershire
Sells products internationally and domestically
Sells products online, in stores, and on television

11. Gtech In their own words (from the company website):
Armed with a passion for design and a few savings to last him 18 months, Nick Grey resigned his position as Head of Product Development at a vacuum manufacturer.
Working initially from his Worcestershire home, he developed the world’s first cordless power sweeper.
Since then, Gtech have gone from strength to strength. Today, we’ve sold over 22 million products in 19 countries and have employees in the United Kingdom, United States of America and the People’s Republic of China, making us experts in the field of cordless innovation.

12. Pre-video Discussion
Based on Gtech’s financial situation at start-up, do you what do you believe will be the owner’s view on business plans and
Do you think Gtech still uses business plans at present?
What role do you think the business plan might play at their current state of operation?
Noting that the business began in 2001, it is not at the ‘startup’ phase, but is changing/evolving ever since.

13. Video
Show video

14. Case Study Discussion Questions
Discuss the role of the business plan in Gtech
Who appears in charge of the ‘tangible’ aspects of the business plan?
What is the owner’s role in the composition of the business plan?
Think of your enterprise/start-up idea. Make three columns: Who we are; where are we going; how will we get there. List things you know under each category, as well as things you would need to do further research to include in a business plan.
Look at the business plan template just handed out to you. How did the items in your three columns match or not match what the bank is looking for?
Hand out the business plan template AFTER the third activity (making three columns). You can find a business plan template online from banks, Barclays and HSBC provides templates via their websites here:
And
If students have more questions, HSBC provides its own take on what it looks for in a business plan (although this is not a template and thus would not work as well with the activity above)

15. References
Stokes, D., Wilson, N. (2006). Small business management and entrepreneurship. Cengage Learning EMEA, Hampshire, UK.