Ecorl oer-ysb-business-plan-training-deepening

Business Plan Training

Erasmus Plus ECORL Project

Building a business plan

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Objectives of the training:

▪ Understand the differences between a

business plan and project proposal

▪ Understand the differences between a business

plan and a social business plan

▪ Learn/ Understand the basic parts of a business

plan step by step

▪ Why is the business plan an important document

for different stakeholders

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What is a business plan?

A detailed presentation about your

organization’s (scaling) plans that

demonstrates how it will succeed in

financial terms AND the social impact

that it will create.

A Road Map

Business plans chart

the course to realize the

organization’s vision.

2 new senior

Staff hired

To

Vision

Social

Entrepreneur

Acquisition up

20%

25

Links

between

business &

citizen’s sector

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Why do you Need a Business Plan

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• A planning framework

• Checks business feasibility

• Is a managerial tool for

resource alocation and

decision making

• Helps the manager to think:

o In which stage is the business actually?

o What is it aimining? What

are the future plans

• Evidence of the nonprofit’s ability to conceive and execute scale

• Articulates financial needs and uses of funds

• Shows the business potential tp

produce and grow

• Shows the entrepreneurs level of

knowledge about the business

• Shows a good return on

investment

• Communications Tool

For the Entrepreneur For investors/Donors

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Business Plan Purposes

• Articulates vision and mission • Sets goals and objectives • Defines strategies and specific actions to achieve

objectives • Measures results • Communicates ideas, plans & social value • Projects necessary resources, expenses, & revenues

Provides a basis for SOUND decision-making

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Business Plan vs Project

• Doesn’t change during the

project life

• Process driven

• Donor driven

• It’s a closed document –

within a time limit

• BP is a flexible document that

changes according to market

forces

• Is result driven

• Market driven

• Is a work map

• It’s an open document

Project Business Plan

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General rules

✓Be clear and attractive

• Use bullet points

• Balance creativity while still getting your point across

• Use short paragraphs (1-3 sentences per paragraph)

• Use the jargon of the sector in which the business operates

• Write with objectivity

✓Fokus more on near future (1-2 years), less on later years

(valid especially for small businesses and startups)

Anatomy of a Business Plan

Market

Research

Human

Resource

Plan

Concept & Objectives

Vision

Mission

Operations

Plan

Marketing

Plan

Financial

Plan

Business Plan Structure

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Business Plan Structure

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8 Soci

• Cover

• Executive Summary

• Table of Contents

1. Business Description

2. Market Analysis

3. Organisation

4. Marketing and strategies

5. Financial Management

6. Apendix

Financial

Plan

Financial

Plan

Business plan sections

Vision

Mission

Operations

Plan

Objectives

Human

Resource

Plan

Financial

Plan

Marketing

Plan

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Contingency

Plan 10

Market Research:

Target Market Competitors/external factors

Business Assessment

Cover Sheet

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✓Identity Information

• Your name and the business name

• Business Logo

• Adress

• Phone Number

• E-mail

✓Submission Date

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Executive Summary

▪ Define problem, solution, business model, and why

your solution is better

▪ Most important part of your plan and usually written

last

▪ Grab readers attention

▪ No more than 2 pages!

▪ Write it last!

Most important

questions an

investor asks I

., Executive Summary

Idea description

• What is your business idea? In what way does it

fulfill the criterion of uniqueness?

• Who are your target customers?

• What is the value for those customers?

• What market volume and growth rates do you

forecast?

• What competitive environment do you face?

• What additional stages of development are

needed?

• How much investment is necessary (estimated)?

• What long-term goals have you set?

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Table of Contents

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✓Includes page numbers

✓List of headings

• Major

• Subsections

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Business Description

✓Business Concept

• Shortly describes the business

model

• Mission Statement, Objectives

• Legal structure of the business

• General strategy plan

• The founders/Entrepreneurs

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Business Description

✓Social or/and environmental impact

• The social or envirnomental problem that your

product/service is trying to solve

• Target social beneficiaries: characteristics,

number of beneficiaries (persons or families),

geografic distribution

• How is the social business solving the social

problem

• What type of benefits is your social business

providing to these target groups.

• Social KPIs

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Business Description

✓Detailed description of the product / service.

• How it is made / delivered.

• The experience you have with the process.

• What equipment the process needs (should tie

in with the financial projections later).

• How you will assure quality.

• Why should your customers buy it

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Market Analysis

✓Industry/Sector Analysis:

• Market background

• Industry-wide information, trends

• Local industry information, trends

• Market capture and expectations

• Social, economic, legal, technological issues

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Market Analysis

✓Target Market

• Customer definition, consistency

• Individual customer demographics

– Location, age, gender, occupation

– Ethnic group, lifestyle, education, income

• Business customer demographics

– Sector, location, structure

– Sales level, distribution classification, number of

employees

• Why would your target clients buy your product?

• How much would they pay?

• What is the size of your market?

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Market Analysis

✓Competitors • Everyone has competitors! - Make sure that your readers know

that you understand the industry and external environment

• Provide a complete view of the competitive landscape

• Direct and indirect competitors

• Current and anticipated competitors

• Trends in the competitive companies

• Why your company is superior?

• SWOT Analysis (strengths, weaknesses, opportunities, threats)

Marketing and sales

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• Define your primary, secondary, and other audiences

• Marketing mix: 4 Ps • Product

• Promotion

• Price

• Place

• Marketing Strategies

• Distribution Channels

• How will you find, sell, and retain customers?

• Advertising and promotion budget

• Identify your leverage points

Operations

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✓Activities/Processes and resources

• What are the main acitivities of your business

• What are the physical resources, space, human

resources and financial resources needed?

✓Logistics

• plant location, facilities needed, space requirements,

capital equipment needed, labor requirements

• How will you get your equipments (rent, lease, buy)

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Human Resource Plan

• Management team

• Roles & responsibilities of various actors

• Staffing and recruitment plan

• Necessary know-how

• Incentives and reward systems

• Governance

• Capacity building plan

• Staff, institution, target group

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Financial Management

✓ How much money do i

need?

Determine start up costs and

estimate monthly operating

costs to determine your

working capital needs

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Financial Plan

THE PRIMARY EVALUATING TOOL

◦ Support all information

◦ Make conservative projections

• Start-up Budget: amount needed to

open

• Operating Budget: ongoing

expenses once open

• Sources and Uses Sheet

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Financial Projections

✓Cash Flow Projections

✓Income Projections

✓Balance Sheets

✓Assumptions

• Project for at least 3 years, possibly 5.

• Your numbers need to be “defendable.”

• Make sure that your projections stick with what

you’ve said earlier in your plan.

• Explain your underlying assumptions in terms that

the reader can understand, like # of customers,

market share, hits on your web page, etc

Risk Analysis

• Build capacity to make accurate projections

• Add in buffer for expenses

• Use “what if…” scenarios

• Sensitivity analysis for major decisions

◦ Major expense categories

• Test business plan assumptions

• Objectivity

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27

Soci

Current Status

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✓Describe your major milestones and tasks

• Technology

• Fundraising

• Customer Development, etc.

✓ Where are you now?

✓Brag about your accomplishments

✓Talk about the next steps

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Proposed Offering

• Desired financing

• Offering

• Capitalization

• Use of funds

• Investor’s return

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Apendix

✓Includes suplemental information about the business: • Manager’s CV • Financial Statements • Personal Income Statement • Copies of legal documents • Reference Letters • Every document that might add value to the business plan.

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Behind a success there is always a good plan…

Plan

Fact

Proces

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Business Plan Training