1. Exercise 3 The complete business plan To be presented 06.02 Send the written business plan to us by 05.02

2. The business plan According to ”Fra idé til ny virksomhet” the business plan should consist of: –Summary –The business idea –The management –The market plan –The business model and organization –The plan to carry it through –Financial plan –Risks

3. The business model and organization The business model –Describes the activities in a company that are necessary to develop and deliver a product –Make or buy decisions. I.e. describes what your company will do and not do to deliver a product. –Can be a source of competitive advantage in itself

4. The business model and organization R&D ProductionDistributionMarketing & sales Service PurchaseManufacturingAssemblyLogistics The internal value chain Customers Suppliers

5. The business model and organization R&D ProductionDistributionMarketing & sales Service PurchaseManufacturingAssemblyLogistics The internal value chain Customers Suppliers Make or buy? Partnerships?

6. The business model and organization Determinants of make or buy can be: –Costs –Availability / Uncertainty –Strategic importance –Value added Partnerships –How and what for?

7. The business model and organization SuppliersPC makerDistributor Retailers Resellers Integrators Final customer SuppliersDell Final customer Indirect value chain Direct value chain

8. The business model and organization CMs/OEMs Repair & support companies 3rd party HW & SW suppliers System integrators Component suppliers Customer Distributors Dell Logistic companies Physical flows Information flows The value network

9. The business model and organization Organization –Describe what activities each group member will have responsibility for –Describe needed additional competences E.g. industry specialists to the board Additional personnel as the firm grows R&DProductionEconomicsMarketing Human resource CEO Board

10. The plan of action A plan that describes the activities needed to realize the product. Prepare a plan on 3-5 year horizon What are the important milestones Be realistic Q 1 2007 Q 2 2007 Q 3 2007 … Development Marketing Production

11. Profitability / Financial plan –How much money do you need? Calculate your financial needs based on assumptions and estimations of your costs and revenues. –3-5 years Monthly, quarterly or yearly? Depends on your business, i.e. how fast you expect to go through the ”valley of death”

12. Financial plan 1.Sales forecast Time frame Assumptions about sales per customer, number of customers, growth rate of sales Calculation of the sales forecast 2.Costs forecast Assumptions about the costs of doing business Calculations of the costs associated with the projected sales 3.Income and cash flow forecast Assumptions about the timing of cash receivables and payables Calculation of the income and cash flow associated with the projected sales and costs 4.Balance sheet Assumptions of the value of cash and assets Calculated based on the income and cash flows from step 3

13. Risks Identify the risks –E.g. in the firm, technology, the market … Describe how you will handle them PEST - Political - Economic - Social - Technological Loss Profit 0 Time T Best case Worst case SWOT - Strengths - Weaknesses - Opportunities - Threats Sensitivity analysis

14. Exercise E-mail everything that is to be in the business plan, but with focus on: –The business model and organization –Action plan –Financial plan –Risk assessment Send it to us by the 5 th

15. Sensitivity analysis Loss Profit 0 Time T Best case Worst case