1. DEVELOPING AN EFFECTIVE BUSINESS PLAN Planning is essential to the success of any undertaking

2. Critical factors must be addressed when Planning 1.Realistic Goals – These must be specific, measurable and set within time parameters. 2.Commitment – The venture must be supported by all involved – family, partners, employees, team members. 3.Milestones – sub goals must be set for continual and timely evaluation of progress. 4.Flexibility – Obstacles must be anticipated and alternative strategies must be formulated.

3. PITFALLS TO AVOID IN PLANNING  No realistic goals  Failure to anticipate roadblocks  No commitment or dedication  Lack of demonstrated experience ( business or technical )  No market NICHE ( segment) – Many entrepreneurs propose an idea without establishing who the potential customers will be. Just because the entrepreneur likes the product or service does not mean others will buy it.

4. WHAT IS A BUSINESS PLAN ? A business plan is the written document that details the proposed venture. It must describe current status, expected needs, and projected results of the new business. Every aspect of the venture needs to be covered : the project, marketing, research and development, manufacturing, management, critical risks, financing and milestones or a time table to be covered in business plan.

5. BENEFITS OF A BUSINESS PLAN The time, effort, research and discipline needed to put together a formal business plan force the entrepreneur to view the venture critically and objectively. The competitive, economic, and financial analyses included in the business plan subject the entrepreneur to close scrutiny of his or her assumptions about the venture’s success. Since all aspects of the business venture must be addressed in the plan, the entrepreneur develops and examines operating strategies and expected results for outside evaluators. The business plan quantifies objectives, providing measurable benchmarks for comparing forecasts with actual results. The completed business plan provides the entrepreneur with a communication tool for outside financial sources as well as an operational tool for guiding the venture toward success.

6. BENEFITS OF A BUSINESS PLAN The business plan provides for financial sources the details of the market potential and plans for securing a share of that market. Through prospective financial statements, the business plan illustrates the venture’s ability to service debt or provide an adequate return on equity. The plan identifies critical risks and crucial events with a discussion of contingency plans that provide opportunity for the venture’s success. The business plan provides a useful guide for assessing the individual entrepreneur’s planning and managerial ability.

7. DEVELOPING A WELL- CONCEIVED BUSINESS PLAN Numerous professionals may be involved with reading the business plan such as venture capitalists, bankers, investors, potential large customers, lawyers, consultants and suppliers, entrepreneurs need to clearly understand three main view points when preparing the plan. 1.In-depth knowledge of the technology or creativity involved. 2.Convincingly demonstrates the benefits to users. 3.Understanding the actual market size and also referred as “Market Driven”.

8. SIX STEPS MANY VENTURE CAPITALISTS USE 1)Determine the characteristics of the venture and its industry. 2)Determine the financial structure of the plan ( amount of debt or equity investment required) 3)Read the latest balance sheet ( to determine liquidity, net worth and debt/equity) 4)Determine the quality of entrepreneurs in the venture (sometimes the most important step ) 5)Establish the unique feature in this venture (find out what is difference) 6)Read the entire plan – at graphs, charts, exhibits and other components.

9. PUTTING THE PACKAGE TOGETHER When presenting a business plan to potential investors, the entrepreneur must realize that the entire package is important.  Appearance  Length  The cover and title page  The executive summary  The table of contents.

10. GUIDELINES TO REMEMBER Keep the plan respectably short Organize and package the plan appropriately Orient the plan toward the future Avoid exaggeration – sales potential, revenue estimates and the venture’s potential growth should not be inflated. Highlight critical risks Give evidence of an effective entrepreneurial team Do not over diversify – should not attempt to create multiple markets or pursue multiple ventures. Identify the target market Keep the plan written in the third person – he, they or them. Capture the reader’s interest.

11. ELEMENTS OF A BUSINESS PLAN Section I : Executive summary Section II : Business description A.General description of the business B.Industry background C.Goals and potential of the business and milestones ( if any ) D.Uniqueness of product or service.

12. ELEMENTS OF A BUSINESS PLAN Section III : Marketing A.Research and analysis 1.Target market ( customers ) identified. 2.Market size and trends 3.Competition 4.Estimated market share B.Marketing plan 1.Market strategy – sales and distribution 2.Pricing 3.Advertising and promotions.

13. ELEMENTS OF A BUSINESS PLAN Section IV : Operations A.Identify location 1.Advantages 2.Zoning 3.Taxes B.Proximity to supplies C.Access to transportation.

14. ELEMENTS OF A BUSINESS PLAN Section V : Management A.Management team – key personnel B.Legal structure – stock agreements, employment agreements, ownership C.Board of directors, advisors consultants.

15. ELEMENTS OF A BUSINESS PLAN Section VI : Financial 1.Profit and loss 2.Cash flow 3.Break -even analysis 4.Cost controls 5.Budgeting plans

16. ELEMENTS OF A BUSINESS PLAN Section VII : Critical risks A.Potential problems B.Obstacles and risks C.Alternative course of action.

17. ELEMENTS OF A BUSINESS PLAN Section VIII : Harvest strategy A.Transfer of asset B.Continuity of business strategy C.Identify successor

18. ELEMENTS OF A BUSINESS PLAN Section IX : Milestone schedule A.Timing and objectives B.Deadlines and milestones C.Relationship of events.  section X : Appendix or Bibliography.

19. THANK YOU