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The Venture Planning The Venture Planning ProcessProcess

How to Develop a Venture How to Develop a Venture PlanPlan

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What is a Venture What is a Venture Plan?Plan? A A Venture Plan Venture Plan

is a road map for is a road map for running a running a venture- a venture- a written summary written summary of what the of what the venture can venture can accomplish and accomplish and how.how.

A Venture Plan is A Venture Plan is a tool you can a tool you can use to use to communicate communicate with potential with potential investors, investors, bankers, bankers, partners, and partners, and employees.employees.

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A Venture Plan should A Venture Plan should Include:Include: A A Mission StatementMission Statement that describes your that describes your

vision for the venture, including your aims and vision for the venture, including your aims and objectivesobjectives

The The Marketing Research Marketing Research you have done, you have done, and s detailed description of your target and s detailed description of your target marketmarket

A list of the A list of the Financial, Material and HumanFinancial, Material and Human ResourcesResources you need to make your plan work you need to make your plan work

An explanation of An explanation of How the Business will How the Business will OperateOperate

AA Plan for Raising the Money Plan for Raising the Money you need to you need to start the venturestart the venture

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ReasonsReasons to Prepare a Venture to Prepare a Venture Plan:Plan: Helps Helps identify your marketidentify your market, understand , understand

your your customerscustomers, choose the best , choose the best pricing pricing strategystrategy, and get to know the , and get to know the competitioncompetition

A plan forces you to take a A plan forces you to take a realistic viewrealistic view of your idea and logically of your idea and logically assess your assess your goalsgoals

Introduces you to others as a Introduces you to others as a careful careful plannerplanner (First impressions are important) (First impressions are important)

A plan identifies benchmarks that help A plan identifies benchmarks that help you you evaluate and improveevaluate and improve the the performance of the ventureperformance of the venture

A written plan makes day-to-day A written plan makes day-to-day management easier as management easier as procedures can be procedures can be reviewed and adjustedreviewed and adjusted as necessary as necessary

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Sections in a Business Sections in a Business Venture Plan:Venture Plan: Executive Executive

SummarySummary Market AnalysisMarket Analysis Resource Resource

AnalysisAnalysis Operating Operating

StrategyStrategy Financial Financial

StrategyStrategy

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Executive Summary- Executive Summary- Section 1Section 1

An executive summary is An executive summary is a one- or two page a one- or two page summary of the most summary of the most important points in your important points in your plan.plan.

It is intended to introduce It is intended to introduce the venture and capture the venture and capture the attention of the the attention of the readerreader

It should be flawless and It should be flawless and to the point to create a to the point to create a good first impression!good first impression!

Cannot be written until Cannot be written until all other sections of the all other sections of the plan are completeplan are complete

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A Great Executive A Great Executive Summary:Summary: Opens with a Mission StatementOpens with a Mission Statement Includes an accurate description of the Includes an accurate description of the

BusinessBusiness Includes the names of the contact person and Includes the names of the contact person and

management team members and how these management team members and how these people can be reachedpeople can be reached

The name of the venture and a description of The name of the venture and a description of its nature and objectivesits nature and objectives

Information about the goods and services Information about the goods and services offered, what makes this venture unique, the offered, what makes this venture unique, the location of the business, and the proposed location of the business, and the proposed timelines for its developmenttimelines for its development

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Executive Summary Executive Summary also includes:also includes: Information about Information about

security that can security that can be offered to be offered to investors in investors in exchange for the exchange for the investmentinvestment

Information about Information about business loans business loans requiredrequired

Key highlights of Key highlights of the Business planthe Business plan

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Market Analysis- Market Analysis- Section 2Section 2

The The Marketing Marketing AnalysisAnalysis section section describes the describes the marketing marketing research research conducted and conducted and the conclusions the conclusions you drew from you drew from the researchthe research

A A Market Market AnalysisAnalysis (Needs (Needs Assessment) can Assessment) can help you identify help you identify potential potential customers, analyze customers, analyze competition, set competition, set prices, and plan prices, and plan ways to advertise ways to advertise the venturethe venture

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A Market Analysis Should A Market Analysis Should IncludeInclude:: Demographics of potential customers Demographics of potential customers

(age, gender, location, buying habits, etc.)(age, gender, location, buying habits, etc.) The types of Products or Services you The types of Products or Services you

think your customers will buy and how you think your customers will buy and how you knowknow

Description of trends that suggest this is Description of trends that suggest this is the right time to introduce your product or the right time to introduce your product or serviceservice

Who your competitors are, where they Who your competitors are, where they are, and how successful they areare, and how successful they are

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Market Analysis (cont.)Market Analysis (cont.)

How you plan to make your How you plan to make your product or service better than or product or service better than or different from your competitors’different from your competitors’

How much you will charge for How much you will charge for your product or serviceyour product or service

How you plan to advertise your How you plan to advertise your product or service to your target product or service to your target marketmarket

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PricingPricing Pricing is an Pricing is an

important part of the important part of the market analysis that market analysis that can make or break a can make or break a new venture.new venture.

Price too high may Price too high may discourage salesdiscourage sales

Price too low, Price too low, customers may customers may perceive product or perceive product or service as low qualityservice as low quality

How can my price be How can my price be competitive and still competitive and still provide a suitable provide a suitable profit margin?\profit margin?\

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An An Advertising PlanAdvertising Plan should should include:include:

An assessment of An assessment of the various forms the various forms of advertising of advertising availableavailable

The types of The types of customers you customers you hope to reachhope to reach

The costs involvedThe costs involved Registration of the Registration of the

venture nameventure name

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Registering a Registering a Company Name:Company Name:

First determine the type of ownership: sole First determine the type of ownership: sole proprietorship, partnership, or corporationproprietorship, partnership, or corporation

If you use your own name as a company If you use your own name as a company name and you are a sole proprietor, you are name and you are a sole proprietor, you are not required to register (Deb Rice)not required to register (Deb Rice)

If you add any words to the name (Deb Rice If you add any words to the name (Deb Rice Café) it is necessary to register the business Café) it is necessary to register the business name and pay a fee before you use itname and pay a fee before you use it

Registering your business name ensures that Registering your business name ensures that only you can use this name for advertising only you can use this name for advertising and legal purposes in the province of and legal purposes in the province of registrationregistration

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RESOURCE ANALYSIS- RESOURCE ANALYSIS- Section 3Section 3

All good venture All good venture ideas need ideas need resources to resources to make them workmake them work

All business plans All business plans must have a must have a resource analysisresource analysis sectionsection

The entrepreneur The entrepreneur needs to consider the needs to consider the following types of following types of resources needed for resources needed for the venture:the venture:

Material ResourcesMaterial Resources Human ResourcesHuman Resources Financial Financial

ResourcesResources

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Material ResourcesMaterial Resources

Includes all materials Includes all materials needed to operate the needed to operate the venture, both raw venture, both raw materials and finished materials and finished products (equipment products (equipment such as: storage such as: storage bins,paper, computers, bins,paper, computers, delivery trucks, etc.)delivery trucks, etc.)

Some of theses are Some of theses are consumable resourcesconsumable resources while others are while others are fixed fixed resources resources which can be which can be used over and overused over and over

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Human ResourcesHuman Resources

The people needed to The people needed to operate the ventureoperate the venture

Look for people Look for people whose skills whose skills complement your complement your own and fill in the own and fill in the gapsgaps

How many people will How many people will you need to start you need to start your business? to your business? to help it grow?help it grow?

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Financial ResourcesFinancial Resources

The money needed The money needed to start and to start and operate your operate your ventureventure

This includes money This includes money to buy equipment, to buy equipment, materials, pay staff, materials, pay staff, rent, electricity, rent, electricity, advertising costs, advertising costs, etc.etc.

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Resource Section of Resource Section of Plan Plan Needs to Consider:Needs to Consider: What tools and equipment is needed What tools and equipment is needed

and where you will get themand where you will get them What human resources you will needWhat human resources you will need Where your venture will be locatedWhere your venture will be located How much space you will requireHow much space you will require Whether you plan to buy or rent your Whether you plan to buy or rent your

facility or whether your business can facility or whether your business can be operated without a bricks-and-be operated without a bricks-and-mortar sitemortar site

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Resource Section of Resource Section of Plan Plan Needs to Consider Needs to Consider (cont.)(cont.) Whether you will manufacture your Whether you will manufacture your

products yourself or hire a contract products yourself or hire a contract organization to do it for youorganization to do it for you

Which sources of raw materials you Which sources of raw materials you intend to use and how much these will intend to use and how much these will costcost

How often your suppliers will deliver How often your suppliers will deliver materials and what return and refund materials and what return and refund policies they offer on their productspolicies they offer on their products

The total cost of all resources you need The total cost of all resources you need to start and operate your businessto start and operate your business

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OPERATING STRATEGY-OPERATING STRATEGY- Section 4Section 4

The The Operating Operating StrategyStrategy tells tells you how you will you how you will manage the manage the material and material and human resources human resources in the day-to-day in the day-to-day operation of the operation of the businessbusiness

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ACCOUNTING:Jeff MacKinnonbudgetingaccounts payableaccounts receivablepayroll and benefitstax

ASSISTANT MANAGER:Janis Richardsonrecruiting/hiringstaff trainingstaff scheduling/ sales supervision

SHIPPING/ RECEIVINGMatt Hardimancustomer servicescheduling pickups and deliveriesorder checkingparts inventorymaintenance

OWNER / MANAGER:Mrs. D Richardson

ORGANIZATIONAL CHART: Human resources

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Operating Strategy Operating Strategy (cont.)(cont.)

• An An organizational chartorganizational chart is a good way to present a is a good way to present a visual plan for Human Resourcesvisual plan for Human Resources

• Operating Strategy also deals with the Operating Strategy also deals with the production production processprocess and how necessary supplies will be obtained and how necessary supplies will be obtained

• It describes how It describes how the facilitythe facility will be set up, including will be set up, including its size, location(s), special needs, the ownership its size, location(s), special needs, the ownership terms, or the lease termsterms, or the lease terms

• The plan also describes the facility’s present and The plan also describes the facility’s present and potential potential production capacityproduction capacity, minimum levels of , minimum levels of production needed to sustain the operation, and any production needed to sustain the operation, and any overhead operating costs.overhead operating costs.

• This section includes inventory needs, record keeping This section includes inventory needs, record keeping and and contingency planscontingency plans if regular suppliers cannot if regular suppliers cannot fill your ordersfill your orders

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The The Operating StrategyOperating Strategy should should include:include:

Who will do each job Who will do each job and how the work and how the work will be supervisedwill be supervised

How the people will How the people will work togetherwork together

What the operating What the operating facility will be likefacility will be like

How the production How the production process will be process will be organizedorganized

Where the supplies will Where the supplies will come from and who come from and who will be in charge of will be in charge of ordering themordering them

What records must be What records must be kept and who will keep kept and who will keep themthem

How the venture can How the venture can keep its cost to a keep its cost to a minimumminimum

What rules and What rules and regulations, including regulations, including environmental ones environmental ones apply to the ventureapply to the venture

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FINANCIAL STRATEGY:FINANCIAL STRATEGY: Section 5Section 5 A A Financial StrategyFinancial Strategy

is based on is based on projected projected resultsresults

The financial plan The financial plan involves involves researchresearch

Possible sources of Possible sources of capitalcapital for a venture for a venture include: bankers, include: bankers, government agencies, government agencies, credit unions, friends, credit unions, friends, family family

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The Financial Strategy The Financial Strategy will explain:will explain: How much it will How much it will cost to startcost to start the venture the venture How much it willHow much it will cost to keep the cost to keep the

venture goingventure going after startup after startup The The expected costs and revenueexpected costs and revenue for the for the

venture (give best and worst-case venture (give best and worst-case scenarios)- give high and low estimate for scenarios)- give high and low estimate for the futurethe future

How much How much capitalcapital will be will be requiredrequired and and when it will be neededwhen it will be needed

What What sources of capitalsources of capital are available are available

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Financial Details to Financial Details to include:include:

Detailed cash-Detailed cash-flow projectionsflow projections

Sales forecastsSales forecasts Anticipated Anticipated

selling costsselling costs Expected gross Expected gross

profitsprofits Administrative Administrative

costs costs

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Financial plans also Financial plans also include:include: Expected pretax Expected pretax

profitprofit Balance sheetBalance sheet Rate of return on Rate of return on

investmentinvestment Working capitalWorking capital Repayment Repayment

proposalproposal CollateralCollateral

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Importance of the Venture Importance of the Venture PlanPlan

Planning and Planning and Organization are vital to Organization are vital to the success of any the success of any ventureventure

Preparing a venture plan Preparing a venture plan helps you assess helps you assess potential risks and potential risks and problemsproblems

Venture Planning Venture Planning provides a framework to provides a framework to measure successmeasure success

Putting your plan in Putting your plan in writing provides a record writing provides a record of what has been decidedof what has been decided

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MentorshipMentorship

Mentorship occurs Mentorship occurs whenever an whenever an experienced person, experienced person, the mentor, offers the mentor, offers advice and support to advice and support to a less experienced a less experienced personperson

In the business world, In the business world, mentorship can be an mentorship can be an invaluable help to an invaluable help to an entrepreneur in early entrepreneur in early stages of a venturestages of a venture