1. BUG 2011-2012 Workshop 12 (final): Your Business Plan Clive Kerridge 01 March 2012 01-Mar-20121BUG 2011-12 (New Venture Planning)

2. BUG seminar programme 2011-12 Workshop 1 - Envisioning your Business (Clive Kerridge, UoG) Workshop 2 - The Mindset of the Entrepreneur (Philip Allen, Impact for Life) Workshop 3 - Start-up Issues(Peter Doggett, Vistage) Workshop 4 - Sales and Presentation Skills (Paul Clarkson, PA2C) Workshop 5 - Intellectual Property Issues (Steven Murray, Rickerbys Solicitors) Workshop 6 - Is My Business Viable? (Various Members, Chartered Institute of Marketing) Workshop 7 - Marketing Via Social Networking (Workshop Leader TBC) Workshop 8 - Money Matters (Oliver Newbold, Randall & Payne Accountants) Workshop 9 - Sourcing Funding and Business Banking (Neil Griffiths & Darren Hurst, NatWest) Workshop 10 - How To Value Your Business (Brian Dorricott, Meteorical) Workshop 11 - Managing People and Processes (John Down, Chartered Management Institute) Workshop 12 - Putting the Plan Together(Clive Kerridge, UoG) 01-Mar-20122BUG 2011-12 (New Venture Planning)

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4. 01-Mar-2012BUG 2011-12 (New Venture Planning)4 BUG Business Finalists 2011

5. Blackbyrds Pies - Handmade Pies Adventure Labs - Interactive Adventures / Animated Adventures James’ Kitchen - Home Cooked Meal Delivery evoquill- Social, marketing and media network for the arts Monro’s Ice Cream- Ice Cream Lounge/Parlour Digital-SU- Providing digital signage Da Spot - Student entertainment events company BUG Business Projects 2011 01-Mar-20125BUG 2011-12 (New Venture Planning)

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9. A Business Plan Why do you need a biz plan, anyway? The Planning Process: understanding where you are deciding where you want to go planning how to get there Using the [updated!] plan e.g. for funds 01-Mar-20129BUG 2011-12 (New Venture Planning)

10. A business plan is a model of a future business, and this is typically expressed in a printed document that uses a combination of written text and numerical financial projections, perhaps supplemented by diagrams, photographs and other devices, in order to convey this future to a reader. The plan in your mind The plan on paper The plan also exists in your mind - its relationship with the written plan is an important issue What is a business plan anyway? 01-Mar-2012BUG 2011-12 (New Venture Planning)10 Executive Summary The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick silver-brown fox jumped over the lazy dog. The quick, brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick cyan fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick magenta fox jumped over the lazy dog. The quick purple fox jumped over the lazy dog. The quick brown fox jumped over the lazy, pale violet but ageing dog. Page 1 Executive Summary The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick silver-brown fox jumped over the lazy dog. The quick, brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick cyan fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick magenta fox jumped over the lazy dog. The quick purple fox jumped over the lazy dog. The quick brown fox jumped over the lazy, pale violet but ageing dog. Page 1 Executive Summary The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick silver-brown fox jumped over the lazy dog. The quick, brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick cyan fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick magenta fox jumped over the lazy dog. The quick purple fox jumped over the lazy dog. The quick brown fox jumped over the lazy, pale violet but ageing dog. Page 1 Executive Summary The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick silver-brown fox jumped over the lazy dog. The quick, brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. 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The quick brown fox jumped over the lazy, pale violet but ageing dog. Page 1 Executive Summary The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick silver-brown fox jumped over the lazy dog. The quick, brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick cyan fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick magenta fox jumped over the lazy dog. The quick purple fox jumped over the lazy dog. The quick brown fox jumped over the lazy, pale violet but ageing dog. Page 1 Executive Summary The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick silver-brown fox jumped over the lazy dog. The quick, brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick cyan fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick magenta fox jumped over the lazy dog. The quick purple fox jumped over the lazy dog. The quick brown fox jumped over the lazy, pale violet but ageing dog. Page 1 Executive Summary The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick silver-brown fox jumped over the lazy dog. The quick, brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick cyan fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. The quick brown fox jumped over the lazy dog. 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11. Detailed written plan? Detailed mental plan? No Yes No Types of Business Plan 01-Mar-201211BUG 2011-12 (New Venture Planning)

12. Detailed written plan? Detailed mental plan? No Yes Just opening and hoping YesNo All in the mind The Virtual Plan The Non-plan Types of Business Plan 01-Mar-201212BUG 2011-12 (New Venture Planning)

13. Detailed written plan? Detailed mental plan? No Yes Just a formality Just opening and hoping YesNo All in the mind The Virtual Plan The Dead Plan The Non-plan Types of Business Plan 01-Mar-201213BUG 2011-12 (New Venture Planning)

14. Detailed written plan? Detailed mental plan? No Yes Just a formality Just opening and hoping YesNo All in the mind A dynamic document The Virtual PlanThe Living Plan The Dead Plan The Non-plan Types of Business Plan 01-Mar-201214BUG 2011-12 (New Venture Planning)

15. Planning your business Planning and writing your business plan Planning your business and writing your business plan 01-Mar-2012BUG 2011-12 (New Venture Planning)15

16. Benefits of writing a formal business plan 01-Mar-2012BUG 2011-12 (New Venture Planning)16 The process of writing it forces you to to think it through It also helps you to integrate your ideas, plans and sub-plans It helps you to think through strategic issues before start-up – you tend not to have time afterwards! It gives a degree of tangibility to your ideas - this is important It kick-starts the processes of research, analysis and learning that you must continue through the life of your business It communicates your thinking to external audiences It is a portfolio of your work - a showcase for your competence as a management team

17. Management team with appropriate capabilities Clearly defined opportunity Clear competitive advantage A business that might work with the right management team A business that could possibly work if the management team knew what to do about the opportunity The management team are kidding themselves about the competitive advantage A business that Investors and lenders are likely to believe in What you must project in your business plan to win over readers 01-Mar-201217BUG 2011-12 (New Venture Planning)

18. 01-Mar-2012 Fundamentals of a Business Plan: essential themes – ”VAPOUR” V – Vision of the future business: objectives, nature and activities A – Analysis and Assumptions that support the business plan (to be discussed in short exercise 1) P – the Plan itself: the steps that you will take to realise the vision O – Outcomes: the financial and other outcomes you will achieve U – YOU: the management team, who must make the plan work R – Rigour and Robustness, essential qualities of a good plan 18BUG 2011-12 (New Venture Planning)

19. Sales forecasts Plan OutcomesAnalysisVision Cost forecasts Financial forecasts External plan Internal plan Vision and goals Research & analysis The basic structure of a business plan 01-Mar-2012BUG 2011-12 (New Venture Planning)19

20. short exercise(1) For each business…… State two key assumptions which you are making? Do these assumptions relate to external or internal aspects of your plan? What are the implications if your assumptions are – inaccurate? (i.e. subject to revision ) – wrong? (i.e. false) Be prepared to challenge the other person/team’s assumptions? 01-Mar-2012BUG 2011-12 (New Venture Planning)20

21. 01-Mar-2012 Essential Elements of a Business Plan The Business – Business details – name, address, legal form, business activity – Business aims & objectives The Market and your offer – Market information - size, growth, competitors (validated by market research?) – Strengths, weaknesses & competitive advantage – Marketing strategy - marketing mix, positioning etc. Your Operations – Premises and equipment needs – Key people - functions & background – Costs! Financial highlights - turnover, profit, break-even, funding details – Detailed sales forecast – Detailed profit forecast “P+L” – Detailed monthly cash flow forecast 21BUG 2011-12 (New Venture Planning)

22. Quality of presentation (production, structure, style, spelling, grammar, etc.) Quality of business plan Good Poor Good Poor This plan will be taken seriously and generate a halo effect for the management team This plan will raise serious doubts but good presentation may result in an interview This plan will probably result in an interview but raise some doubts about the management team Why quality matters This plan would probably go straight into the waste-basket - or at least not be taken seriously 01-Mar-201222BUG 2011-12 (New Venture Planning)

23. Finding the right style - a problem of balance May seem: Over-cautious and negative May seem: Naively confident and over-optimistic The right balance of professionalism and high commitment Enthusiasm Prudence Both in your written plan and in the interview, your challenge is to project your professionalism and prudence but also your enthusiasm and commitment. This may require finding a fine balance: You can demonstrate this professionalism and balance through: The content and quality of your business plan The language that you use in the business plan Your behaviour and language at interviews/meetings 01-Mar-201223BUG 2011-12 (New Venture Planning)

24. An executive summary, – outlining the opportunity, the business concept, competitive advantage, financial highlights, funding requirements A table of contents An introduction, outlining the market opportunity and the business concept An analysis of the business environment: – markets, competitors, suppliers, trends and forces for change An analysis of the market, supported by market research evidence A marketing plan, – summarising your strategy and marketing activities – explaining how and why the first and subsequent orders are achieved – An explanation of the uniqueness and competitive advantage of your offering - why will you succeed? An operations plan, explaining how the business works; – infrastructure and equipment, orders fulfilment, key processes, staffing, procurement, controls etc. – Human capital requirements at start-up and a development plan to support growth Contents of a good Business Plan (1) – why it’s a good/great business 01-Mar-201224BUG 2011-12 (New Venture Planning)

25. short exercise(2)! Each explain to another person or team: what is your business mission and goals? what timescale until you “break even”? how much money will you need – from investor? (from whom?) – to borrow? (from where?) How many people will you employ? 01-Mar-2012BUG 2011-12 (New Venture Planning)25

26. A sales forecast, explaining assumptions made Financial highlights: sales and profit outcomes, profitability analysis, funding requirements and proposed sources – A profit and loss forecast over (say) three years, in monthly or quarterly periods – A cash flow forecast over the same period, in monthly or quarterly periods note: with clear indication of when and how loans to be received and paid pack – End of period balance sheets (or rolling monthly balance sheet forecasts) An assessments of risks and limitations – Appropriate contingency plans Outline plans for the longer term i.e. – future development of the business – exit routes for the stakeholders? Profile of the management team Appendices including – research data, management team CVs, property details, a floor layout, artist’s impression (if appropriate), partnership or shareholder agreements, details of advisors, accountants, solicitors etc. Contents of a good Business Plan (2) – why it is a good/great financial prospect link to chart link to chart link to end link to end 01-Mar-201226BUG 2011-12 (New Venture Planning)

27. Competitor 3 You ? Competitor 2 A Competitor 1 The basic marketing challenge for any new business: to get from A……. 01-Mar-201227BUG 2011-12 (New Venture Planning)

28. Competitor 3 You ? Competitor 2 You A Competitor 1 B Competitor 3 Competitor 2 Competitor 1 The basic marketing challenge for any new business: to get from A……. to B 01-Mar-201228BUG 2011-12 (New Venture Planning)

29. ABCDE Pre-sales period Initial sales Takeoff and growth Slowdown Steady state Time Sales T1T2 What does a start-up sales forecast look like? - expressed in numbers, which may be sales units or financial sales revenue: A sales forecast models the pattern of sales over time 01-Mar-201229BUG 2011-12 (New Venture Planning)

30. short exercise(3) Forecasting sales: How long will your pre-sales period [T1] be? Draw a growth curve for Year 1 of your business[T2] Compare with another person/group’s business – how and why do they differ? – do you believe their forecast? (why? why not?) – what expenditure will you each have before your first sales? note: Sales forecast is the basis for your financial projections i.e. it’s of vital importance, so needs to be based on good research! 01-Mar-2012BUG 2011-12 (New Venture Planning)30

31. There is a very big difference between ‘Setting up a business’ and ‘Creating a sustainable and profitable business’ You, your investors and your bank are interested in the latter ! 01-Mar-201231BUG 2011-12 (New Venture Planning)

32. ‘I am often asked what it is to be an entrepreneur and there is no simple answer. It is clear that successful entrepreneurs are vital for a healthy, vibrant and competitive economy. If you look around you, most of the largest companies have their foundations in one or two individuals who have the determination to turn a vision into reality.’ Richard Branson 01-Mar-201232BUG 2011-12 (New Venture Planning)