Business Plan Buliding

Course: Business Staregy

Lecturer: Dr. Roosta

Shahid Beheshti University

By: S.M.H.Hosseini

Agenda

Business Plan definition Types of Business Plans Elements of a Business Plan Strategic plan vs. business plan Strategic plan vs. Business Model

The Components of Successful Entrepreneurial Ventures

StrategyStrategy

ResourcesResources

OpportunityOpportunity

OrganizationOrganization

The EntrepreneurThe Entrepreneur

Business PlanBusiness PlanBusiness PlanBusiness Plan

Business Plan

A “Business Plan” is a “Selling Document” that conveys the excitement and promise of your business to any potential backers and stakeholders.

Business Plan

Formal Process used by organizations to help plan, organize and allocate resources.

Typically an annual plan Shows up in the mission statement, goals,

objectives, intent, and functional policies.

Reasons for Writing a Business Plan

To sell yourself on the business To obtain bank financing To obtain investment funds To establish strategic alliances To obtain initial contracts To attract key employees To motivate and focus your management team

Types of Business Plans

Summary Special Project Feasibility Mini Start-up Presentation Internal Growth

Types of Business Plans

1. The Summary Business Plan: 10 pages

Used for:

Bank Loan Application

Lifestyle business

To gauge initial investor interest

Types of Business Plans

2. The Full Business Plan: 25-40 pages

Used for:

Seeking a substantial amount of financing

Looking for a Strategic Partner

Types of Business Plans

3. The Operational Plan: 40+ pages

Used for:

Complex, rapidly growing companies

Part of an annual planning process

Key Elements of a Business Plan

An economically viable product or service with attractive markets.

An established attack plan that can be replicated.

A seasoned management team that has demonstrated it can carry out the attack plan.

What Should a Business Plan Contain?

Seven Common Parts of a Good Business Plan Seven common parts of a good Business Plan are:

1. Executive Summary2. Business Concept3. Market Analysis4. Management Team 5. Marketing Plan6. Financial Plan7. Operations and Management Plan

What Should a Business Plan Contain?

1. Letter of Transmittal 2.Title Page 3.Table of Contents 4.Executive Summary and Fact Sheet 5.Body of the Plan

The Company and Industry

The Product/Service Offering

Market Analysis

The Marketing Plan

The Development Plan

The Production/Operations Plan

The Management Team

Implementation Schedule and Risks Associated with the Venture

The Financial Plan

6.Appendices

A Typical Business Plan

1.Letter of Transmittal

2.Title Page

3.Table of Contents

4.Executive Summary

and Fact Sheet

1. Introduce your business plan to the reader2. Outline the major features that may be of

interest

1. Provide identifying information about you and your proposed business. Name, address and contact numbers for the business as well as key company contacts

1. A list of the major headings and sub-headings contained in your plan.

1. A 1-2 page summary of the most important points in your plan

2. May be the most important part of your business plan

3. Your Fact Sheet summarizes the basic information that relates to the venture

Business Plan Contents

Continued

A Typical Business Plan

5.Body of the Plan

1. History and current situation of your company

2. Goals and objectives for the business3. Principal characteristics and trends in the

industry

1. Detailed description of your product or service

2. Outline stage of development and proprietary position

1. Describe the profile of your principal target customers

2. Indicate current market size, trends, and seasonal patterns

3. Assess the nature of your competition4. Estimate your expected sales and market

share

Company and the Industry

Product-Service Offering

Market Analysis

Continued

A Typical Business Plan

1. Detail the marketing strategy you plan to use2. Describe your marketing plan insofar as your

sales strategy, advertising and promotion plans, pricing policy, and channels of distribution

Your Marketing Plan

1. Outline of the development status of your product and what is still required to get it to a market-ready state

2. Are there regulatory, testing or other requirements that still have to be met?

Your Development Plan

1. Outline the operating side of your business2. Describe your location, kind of facilities, space

requirements, capital equipment needs, and labour requirements

Your Production/Operations

Plan

Continued

5.Body of the Plan

(Continued)

A Typical Business Plan

Continued

1. Present an overall schedule indicating what needs to be done to launch your business and the timing required to bring it about.

2. Discuss the major problems and risks that you will have to deal with as well.

Your Implementation Schedule

1. Identify your key management people, their responsibilities and their qualifications.

2. Indicate the principal shareholders of the business, your principal advisors and the members of your Board of Directors.

Your ManagementTeam

5.Body of the Plan

(Continued)

A Typical Business Plan

1. Indicate the type and amount of financing you are looking for and how the funds will be used.

2. Outline your proposed terms of investment, the potential return to the investor, and what benefit is being provided.

3. Provide an overview of the current financial structure of your business.

4. Prepare realistic financial projections that reflect the effect of financing. Include:

• Cash flow forecasts• Pro forma profit and loss

statements• Pro forma balance sheet• Breakeven analysis

Your Financial Plan

Continued

5.Body of the Plan

(Continued)

6.Appendices

Supporting material for your plan including:• Detailed resumes of the

management team• Product literature and photographs• Names of possible customers and

suppliers• Consulting reports and market

surveys• Copies of legal documents• Publicity material• Letters of reference

A Typical Business Plan

The key differences between strategic planning and business planning

Strategic Plan Business Plan

 An overarching plan that sets the strategic direction of the organization

An externally focused document that provides more detailed information on the proposed development of an organization, and is likely to be shared with potential investors - funding bodies for the voluntary and community sector.

Primarily used as an internal planning tool, although it may be

shared with users or external stake holders. It can be used to motivate,

inspire and lead staff and volunteers, and to communicate the

future direction of the organization to users and funders.

Will usually include more detailed information on the financial position of the organization, financial forecasts, and competitor and market analysis.

Strategic Plan Business Plan

Can provide a basis for more detailed planning including business plans, marketing strategies and funding strategies.

It may be more difficult to present the level of detail required within a business plan in a pictorial format.

A strategic plan generally covers a period of 3 to 5+ years

Is normally no more than one year

Is for established businesses, organizations and business owners that are serious about growing their organization.

Could be for new businesses and entrepreneurs who are startups.

The key differences between strategic planning and business planning

Strategic Plan Business Plan

Focuses on building a sustainable competitive advantage and is futuristic in nature.

Is used to assess the viability of a business opportunity, and is more tactical in nature.

Larger organizations with multiple business units and a wide variety of products frequently start their annual planning process with a corporate-driven strategic plan.

Smaller companies and startup companies typically use only a business plan to develop all aspects of the business on paper, obtain funding and then start the business.  Many smaller companies including startups never develop a Strategic Plan.

The key differences between strategic planning and business planning

Strategy vs. Business Model :What is the Difference?

Strategy

1. Deals with a company’s competitive initiatives and business approaches.

2. strategy consists of the set of competitive moves and business approaches that management is employing to run the company.

Business Model

1. Concerns whether the revenues and costs flowing from the strategy demonstrate that the business can be amply profitable and viable.

2. business model addresses “How do we make money in this business?”

Relationship between three concepts