1. The Importance of Business Planning for a Venture
Entrepreneurship
The Importance of Business Planning for a Venture
ELIB 203
Week 4

2. The Importance of Business Planning for a Venture
“A goal without a plan is just a wish”

3. The Importance of Business Planning for a Venture
When you decide on a brilliant business idea, the challenge is to provide a clear plan to get the idea executed.
It requires more than one person and people with different skills to plan well.
You can start writing your business plan (or drafts of it) while planning.

4. The Importance of Business Planning for a Venture
From each ten new startups, only one survives within the first two years (the rest fail to continue or go bankrupt)..
If you start your business with no clear plan, you do not know the future of your business.

5. The Importance of Business Planning for a Venture
You can set yourself aside from competition and gain a competitive advantage by planning well.
The business plan documents the plan your team is achieving.

6. How to Set a Good Plan for My Business?
Creating a business plan may seem boring, but you should not neglect it.
A strong business plan is necessary for long-term growth and success. Planning requires gathering the appropriate information and outlining the plan before creating it with all of the necessary elements. Creating a business plan may seem boring, but you should not neglect it. This is the plan that will guide your company and attract investors.
This is the plan that will guide your company and attract investors!

7. How to Start Planning?
Gather and provide documentation about your business
Every member in the organization should contribute to, read, and understand these documents

8. The Documentation you need
Vision statement
Mission statement
SWOT analysis
Before starting a business plan, it is necessary to gather the necessary documentation together. Use the information to guide the business plan.
Documentation to Gather:
• Vision statement: establishes the company’s value and purpose.
• Mission statement: explains the value, interest, and goals of the company and includes the statement of purpose, statement of strategy, statement of value, statement of standards, and statement of benefits.
• SWOT analysis: outlines the strengths, weaknesses, opportunities, and threats that the business faces.
• Financial documentation: include all financial documents and projections that are related to the start up.
Once you have these documents, you are ready to proceed with your business plan

9. What is SWOT analysis
S.W.O.T. is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats.
A SWOT analysis is an organized list of your business’s greatest strengths, weaknesses, opportunities, and threats.
(See End of Class activity about SWOT analysis)

10. What is SWOT analysis
Strengths and weaknesses are internal to the company (such as reputation, patents, employees’ experience, location). You can change them over time
Opportunities and threats are external (suppliers, competitors, current prices of raw materials); they are out there in the market and you cannot change them

11. Internal capabilities that may help a company reach its objectives
SWOT Analysis
Internal
External
Positive Negative S
Weaknesses
Internal limitations that may interfere with a company’s ability to achieve its objectives W
Strengths
Internal capabilities that may help a company reach its objectives O
Threats
Current and emerging external factors that may challenge the company’s performance T
Opportunities
External factors that the company may be able to exploit to its advantage
Note to Instructor: The goal of SWOT analysis is to match the company’s strengths to attractive opportunities in the environment, while eliminating or overcoming the weaknesses and minimizing the threats. Students can be asked to conduct a SWOT analysis for a particular product or service.

13. Example of SWOT Analysis
Internal Factors
Strengths
Weaknesses
External Factors
Opportunities
Threats
Technological skills
Leading brands
Distribution channels
Customer loyalty/relationship
Production quality
Scale
Management
Absence of important skills
Week brands
Poor access to distribution
Low customer retention
Unreliable product/service
Sub-scale
Management
Changing customer base
Closing of geographic markets
Technological advances
Changes in government politics
Tax increases
Change in population age
New distribution channels
Changing customer tastes
Technological advances
Changes in government politics
Lower personal taxes
Change in population age
New distribution channels

14. Example of SWOT Analysis
Internal
Strengths
Weaknesses
External
Opportunities
Threats
Your specialist marketing expertise.
A new, innovative product or service.
Location of your business.
Quality processes and procedures.
Any other aspect of your business that adds value to your product or service.
Lack of marketing expertise.
Undifferentiated products or services (i.e. in relation to your competitors).
Location of your business.
Poor quality goods or services.
Damaged reputation.
A developing market such as the internet.
Mergers, joint ventures or strategic alliances.
Moving into new market segments that offer improved profits.
A new international market.
A market vacated by an ineffective competitor.
A new competitor in your home market.
Price wars with competitors.
A competitor has a new, innovative product or service.
Competitors have superior access to channels of distribution.
Taxation is introduced on your product or service.

15. Example of SWOT Analysis
Internal
Strengths
Weaknesses
External
Opportunities
Threats
Experience: our execs have decades of experiences with plastics, engineering, and successful startups.
Relationships: The company has excellent relationships with firms that collect and distribute PET bottles.
Location: There are no other PET recycler than continue to export to China.
High startup costs: The very high costs of opining a PET plant will require both investments and loans.
Construction time: The recycling and extrusion facility must be built before we can begin processing plastic.
Environmental protection standards: Whenever the government regulations are updated, we need to develop technically and economically feasible recycling solutions that meet the standards.
Material scarcity: Our business model is PET-dependent. If use of PET bottles declines or becomes obsolete, we will lose our supply.
Major facility expansion: The initial PET recycling facility will have a capacity of 46 million pounds, but the current annual stock of recyclable bottle material in California, Oregon and Washington is more than200 million pounds.
R & D: Potential for other uses of PET- recycling by-product.

16. What Should Be Included in a Business Plan?
Executive summary
Market analysis
Company description
Product
Financial
• Executive summary – provides an overview of the company and includes information from other elements. This is typically written last because the introduction is so important.
• Market analysis – provides information about the market that includes industry and pricing.
• Company description – provides information about the nature of the business and which factors will make it successful.
• Management and organization – provides a view of the company’s structure, leadership, and team.
• Sales and marketing – provides information about the sales and marketing that will be used.
• Product/service – explains the value, benefits, and uniqueness of the product.
• Funding/financial – outlines the amount of money the company needs in different scenarios and creates a five-year plan.

17. How to Draft a Business Plan
Focus on your niche
Use clear language
Rewrite frequently
Once the outline is created, it is time to begin drafting the business plan. Drafting the entire plan can be daunting, but there are some tips you can remember to help you create an effective business plan.
• Work on the elements of the plan individually.
• Focus on your niche and what makes your plan stand out (value proposition) .
• Use clear and concise language.
• End with the executive summary.
• Rewrite the draft frequently.
Activity: Refer to the “Writing a Business Plan: The Basics” document in the handouts on pages 2 to 4.

18. Group Activity
In a team, select an industry and a company within this industry; then provide a SWOT analysis
Refer and use the sheet of SWOT analysis in the (Business Modelling Workbook) document in the handouts.
Two teams will be asked to explain their analysis to the class at the end of session