1. Enterprise level tools for innovation, business plan
Carmen Nastase
Erasmus IP, Iisalmi 23 May 2005

2. Innovation and entrepreneurship in forestry
Innovation activities are one of the important reactions to the challenges in the forestry sector.
Innovations between:
Product innovation - are successful changes in the output of an enterprise or organization
Process innovation - can either be technological innovations or innovations in the organization of the enterprise or organization.
We distinguish innovations between
They can be either goods or services.

3. The situation regarding innovation an entrepreneurship in forestry
Innovation system presents actors, institutions and their relations and interactions which are involved in the innovations.
Innovation process:
new idea;
interest;
evaluation;
trial stage;
implementation/adaptation.

4. Innovation behavior of the firm
External factors
- market environment characteristics
- regional institutional characteristics
- policy institutions
Internal factors
- organizational
- personal

5. External factors Market environment characteristics - size of market;
- competition, suppliers;
- technical characteristics.
Regional institutional characteristics
- knowledge centers – research;
- workforce education;
- service infrastructure, culture.
Policy institutions
- administrative and legal framework;
- innovation related forest policies

6. Internal factors Organizational - size of company, resources;
- quality of workforce;
- goals;
- strategy;
- organizational structure.
Personal
- entrepreneurial orientation;
- information behavior;
- communication behavior.

7. forest- enterprise macro-level micro- level labour resources knowledge
finance
forest-
enterprise
product-, process-,
innovation
costumers/
consumers
governance
system
extension services,
consultancy
research &
education
markets/
competitors
information
exchange
structural
change
Information exchange

8. Entrepreneurship development
Entrepreneurship can be defined as the process of using private initiative to transform a business concept into a new venture or to grow and diversify an existing venture or enterprise with high growth potential.
Entrepreneurs identify an innovation to seize an opportunity, mobilize money and management skills, and take calculated risks to open markets for new products, processes and services.

9. Innovation idea Sources for innovative ideas Check your idea
Check yourself
Analyse market, customers and environment
Analyse your existing business
Workers or family
Customers
Suppliers
Internet
Partners and networks
Publications, university and research institute

10. Sources for innovative idea
Innovation idea
Sources for innovative idea
Analyze market, customers and environment;
Analyze your existing business
Check your idea;
Check yourself
Evaluation level
Implementation
Results

11. Business plan based of Entrepreneurship The business idea
Business areas
Care isi asuma riscul inceperii afacerii
Mediul in care se desfasoara aceste activitati

12. For preparing a Business Plan we must to answer a 3 questions:
WHAT is a Business Plan?
WHO needs a Business Plan?
HOW prepare a Business Plan?

13. 1. What is a business plan? Business planning is about results.
A business plan is any plan that works for a business to look ahead, allocate resources, focus on key points, and prepare for problems and opportunities.
Businesses need plans to optimize growth and development according to priorities.
A business plan is like a map and a compass for a business.
You need to make the contents of your plan match your purpose.
Unfortunately, many people think of business plans only for starting a new business or applying for business loans. But they are also vital for running a business, whether or not the business needs new loans or new investments.

14. Business plan
working
plan
mini-plan
prezentation
plan

15. The Different Types of Business Plans
Business plans are also called:
strategic plans
investment plans
expansion plans
operational plans
annual plans
internal plans
growth plans
product plans
feasibility plans and many other names.
These are all business plans. In all these different varieties of business plan, the plan matches your specific situation.

16. 2. Who needs a business plan?
You need a business plan if you’re running a business;
You need a business plan if you’re applying for a business loan;
You need a business plan if you’re looking for business investment, new products or new services;
You need a business plan to communicate with a management team.

17. 3. How prepare a business plan?

18. Is There a Standard Business Plan?
A normal business plan, includes a standard set of elements. Plan formats and outlines vary, but generally a plan will include components such as descriptions of the company, product or service, market, forecasts, management team, and financial analysis.
Your plan will depend on your specific situation.
For example, description of the management team is very important for investors while financial history is most important for banks. However, if you're developing a plan for internal use only, you may not need to include all the background details that you already know.

19. Outline of a business plan
Executive summary
- condensed information
on each
of the chapters bellow
Business description:
products and services offered
type of business;
products and services offered;
ownership of the business and its legal structure;
profitability consideration.
operations plan;
- management team.
Market strategies
market and target market;
demand for the product or service;
promotion;
dissemination and delivery;
- pricing strategy.
Competitive analysis
and positioning
capital requirements and sources;
balance sheet;
break-even analysis;
income statement;
- cash flow projection.
competition analysis;
- identification of competitive strenght position.
Operations and
management plan
Financial components

20. Annex
Business aspects advise: adresses for financing advise,legal advice, marketing advice
Figures
Tables
Graphs
Other sectors advice: research institutes, interests groups, administration, other key innovation areas.

21. Planning is a Process, Not Just a Plan

22. Successful implementation starts with a good plan
Is the plan simple?
Is the plan specific? specific budgets?
Is the plan realistic?
Is the plan complete?.
Is it easy to understand and to act on? Does it communicate its contents easily and practically?
Are its objectives concrete and measurable? Does it include specific actions and activities, each with specific dates of completion, specific persons responsible
Are the sales goals, expense budgets, and milestone dates realistic? Nothing stifles implementation like unrealistic goals. Does it include all the necessary elements? Requirements of a business plan vary, depending on the context. There is no guarantee, however, that the plan will work if it doesn't cover the main bases

23. Preparing a business plan
Define and fix objectives, and programs to achieve those objectives.
Create regular business review and course correction.
Define a new business.
Support a loan application.
Define agreements between partners.
Set a value on a business for sale or legal purposes.
Evaluate a new product line, promotion, or expansion.

24. Keys to Better Business Plans
Use a business plan to set concrete goals, responsibilities, and deadlines to guide your business.
A good business plan assigns tasks to people or departments and sets milestones and deadlines for tracking implementation.
As part of the implementation of a business plan, it should provide a forum for regular review and course corrections.
Good business plans are practical.

25. Business Plan "Don'ts"
Don't use a business plan to show how much you know about your business.
Nobody reads a long-winded business plan: not bankers, bosses, nor venture capitalists. Years ago, people were favorably impressed by long plans. Today, nobody is interested in a business plan more than 50 pages long.

26. How Long Should a Business Plan Be?
Page count is not a good way to measure length.
A 20-page plan with dense text and no graphics is much longer than a 35-page plan broken up into readable bullet points, useful illustrations of locations or products, and business charts to illustrate important projections. Measure a plan by readability and summarization.
A good business plan should leave a reader a good general idea of its main contents even after only a quick skimming, browsing the main points, in 15 minutes.
Format, headings, white space, and illustrations make a big difference. Summaries are very important. Main points should show up in a business plan as quickly as they do in a business presentation.

27. The right length of the plan depends on the nature and purpose of the plan
Will it include descriptions of the company and management team for outsiders to read;
Does it need an executive summary good enough to stand alone;
Does it include detailed research, plans, drawings, and blueprints;
Is it worded to withstand legal scrutiny as part of an investment proposal.

28. BUSINESS PLAN
Standard Outline

29. EXECUTIVE SUMMARY Brief Description of the Project
Brief Profile of the Entrepreneur
Project's Contributions to the Economy
Write this last. It's just a page or two of highlights.

30. Section 1MARKETING PLAN
Description of the Product
Comparison of the Product with Its Competitors'
Location
Market Area
Main Customers
Total Demand
Market Share
Selling Price
Sales Forecast
Promotional Measures
Marketing Strategy
Marketing Budget

31. Section 2 PRODUCTION PLAN
Production Process (fixed capital, life of fixed capital)
Planned Capacity - Future Capacity
Terms and Conditions of Purchase of Equipment
Factory Location and Layout
Raw Materials Needed - Cost of Raw Materials - Raw Materials Availability
Labour
Cost of Labour
Labour Availability - Labour Productivity
Factory Overhead Expenses
Production Cost

32. Section 3 ORGANIZATION & MANAGEMENT PLAN
Form of Business
Organisational Structure
Business Experience and Qualifications of the Entrepreneur
Pre-Operating Activities
Pre-Operating Expenses
Office Equipment
Administrative Expenses

33. Section 4 FINANCIAL PLAN
Project Cost
Financing Plan and Loan Requirement
Security for Loan
Profit and Loss Statement
Cash Flow Statement
Balance Sheet
Loan Repayment Schedule
Break-even Point (BEP)
Return on Investment (ROI)
Financial Analysis

34. BUSINESS PLAN GUIDE QUESTIONS EXECUTIVE SUMMARY
What is the nature of the project?
What are the entrepreneur's competencies and qualifications?
What are the project's contributions to the local and national economy?

35. Section 1 MARKETING PLAN
What is the product?
How does it compare in quality and price with its competitors?
Where will the business be located?
Within the market area, to whom will the business sell its products?
What share or percent of this market can be captured by the business?
What is the selling price of the product?
What marketing strategy is needed to ensure that sales forecasts are achieved?
How much do you need to promote and distribute your product?

36. Section 2 PRODUCTION PLAN
What is the production process?
What buildings and machinery (fixed assets) are needed and what will be their cost?
What is the useful life of the building and machinery?
When and where can the machinery be obtained?
How much capacity will be used?
When and how will the machinery be paid for?
Where will the factory be located and how will the factory be arranged?
What is the production cost per unit?

37. Section 3 ORGANISATION & MANAGEMENT PLAN
How will the business be organised?
How will the business be managed and operated?
What is the business experience and qualifications of the entrepreneur?
What pre-operating activities must be undertaken before the business can operate?
What pre-operating expenses will be incurred?
What fixed assets will be required for the office?
What administrative cost will be incurred?

38. Section 4FINANCIAL PLAN
What is the total capital requirement?
Is a loan needed? What will be the equity contribution of the entrepreneur? And how much?
What security (collateral) can be given to the bank?
What does the Profit and Loss Statement indicate?
What does the Cash Flow Statement indicate?
What does the Balance Sheet indicate?
What is the loan repayment schedule?
What is the break-even point (BEP)?
What is the return on investment (ROI)?

39. Remember, strategy is focus. A priority list with 3-4 items is focus
Remember, strategy is focus. A priority list with 3-4 items is focus. A priority list with 20 items is certainly not strategic, and rarely if ever effective. The more items on the list, the less the importance of each.
Sales grow slowly at first, but then shoot up boldly with huge growth rates, as soon as 'something' happens. Have projections that are conservative so you can defend them. When in doubt, be less optimistic.

40. CONCLUSIONS
- A proper business plan serves as a map.
Use it to establish the points along the route, indicating why
each is important and how it can best be reached.
The plan builds from mission and value to justification,
strategies, tactics, actions and expected results.
Comprehensive business planning increases the likelihood
of the venture’s success.

41. Contents and references
Innovation and entrepreneurship - how to introduce new products and services in forestry, Innoforce, EFI Project Centre, Draft 3
The Business Plan Workbook, Borrow C. & Brown R., London, 1992
How to Write a Business Plan, Terrance Mc Garty, 4th Edition, 1994
Innovation and entrepreneurship: practice and principles, Drucker, P., New York, Harper & Row Publishers, 1985.