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| Date post: | 15-Jul-2015 |
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Business |
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BEFORE YOU START
Spend some time on some analysis
WHAT is the purpose of the business plan – Is it for internal use– Is it for investors (VC/bank/angel
investor)–For other purpose (incubation)
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BEFORE YOU STARTThink through
WHAT are the strengths – that you bring to this business
WHAT are the constraints that you have to either –Address or–Accept (and work keeping this in
mind)3www.bizkul.com
AT THE STARTING POINT Before starting on preparing the
business plan, think through the following:
PUT YOURSELF IN THE READER’S PLACE
–What is the reader looking for in a business plan?
–What is the message you are trying to convey through the business plan?
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AT THE STARTING POINT Different persons may view the
business plan differently Try to understand background and
experience of person/group to whom plan is shown
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AT THE STARTING POINT Just because someone rejects or
scoffs at your idea, does not mean it is bad
Try to take some learnings from rejections
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THE PLAN DOCUMENT You may prepare a detailed plan in
sections, which you may be stand alone and kept for different purposes, ie sections for internal use, for investor and for banker
Keep a track on versions to minimise confusion and possible errors
Keep control of access to the document
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BUSINESS PLAN The document must be self speaking:
ie minimum clarification must be required from your end (particular attention to be paid to explaining abbreviations/short forms and technical terms)
The document must be reader friendly: key information that you want to convey should not be hidden amongst too much detailsDo not think only of what you want to tell, rather think about what your target would want to hear 8www.bizkul.com
Plan on format of report and how data, information, analysis, comments etc. are to be presented –To move what is not essential to flow
of document to main report–Think of content required to capture
attention of reader; avoiding excessive information overload
BUSINESS PLAN
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Avoid using graphs for the sake of using graphs; tables for the sake of using tables etc. without substance in the document
Avoid information overload, i.e. temptation to disclose all you know and demonstrate your knowledge and experience about the business
Make attempts to protect your intellectual property if any
BUSINESS PLAN
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CONTENTS Table of contents Executive summary Sections/chapters/paras Summary/conclusion Appendix of abbreviations,
references, other annexuresGraphs, tables, figures to be numbered and labelled
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CHAPTERS - Illustrative Company and background information Management team, organisation structure Business idea, strategy and
implementation plan Marketing plan Financial details Other information such as implementation
schedule, statutory environment applicable etc.
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CHAPTERS - Illustrative Company and background information
– Background history if existing company; current status
– Rationale for existing business or new start up– General industrial environment of business– Brief background of promoters
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CHAPTERS - Illustrative Company and background information
– Vision and mission statement– Goals and objectives– Key business drivers and key constraints; SWOT
and business strategy – Other key information to make initial background
information complete
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CHAPTERS - Illustrative Management team, organisation
structure–Experience and qualification of
promoters and key team–Organisation structure–Any key organisation/HR policies
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CHAPTERS - Illustrative Business idea, strategy and
implementation plan, including inter-alia:– Vision, mission– Product/service offered– Operational details– USP(unique selling point); barriers to
competition– Differentiator – Strategy to handle competition
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CHAPTERS - Illustrative Business idea, strategy and
implementation plan, including inter-alia:– Details of any in-house techonology/process or
idea; or source of technology, ie technology transfer through collaboration
– Details of alliance partners, current as well as proposed
– Details of any intellectual property associated with the business
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CHAPTERS - Illustrative Marketing plan
–Target market size–Market research details–Customer profiles; existing,
potential/pipeline–Marketing strategy–Pricing strategy
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CHAPTERS - Illustrative Financial details
– Past financials: Balance sheet, P&L account and cash flow summary for five year period if available
– Future forecast – five years in summary (detailed schedules may be in appendix)
– Details of how funds will be raised and utilised– Details of contribution from promoters
(cash/kind)
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CHAPTERS - Illustrative Financial details
– Sensitivity analysis for key parameters, eg sales variations of + / - 10%
– Scenario analysis:optimistic, normal and pessimistic (budget)
– Key ratios, break even, project IRR – Other information such as quality of key
parameters, ie revenue based on geography– Cash burn, i.e. monthly requirement of cash
and requirement for capital investment in phases
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CHAPTERS - Illustrative Other information
– Time lines, implementation schedule, expected date of commercialisation
– Regulatory environment if applicable, ie environmental laws for pharma company
– Other information which may be relevant to the business
– Include any required references, contact information, data and statistics
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PREPARING THE
BUSINESS PLAN PRESENTATION IS THE KEY
CAPTURE THE READER’S INTEREST
Think through the format of report and how data, information, analysis, comments etc. are to be presented
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Document should be consistent, flow well (date formats, number formats, serial number flow, prefix to names, grammar and tense used, avoid long sentences, spell check, US/British English not to be mixed etc.)
Source information for data, content to be disclosed
PREPARING THE
BUSINESS PLAN
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Format and style should be neat, consistent, professional giving attention to details of:– format styles, font sizing, colours not
too light, legibility, header, footer, headings, para alignment, spacing
PREPARING THE
BUSINESS PLAN
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BUSINESS PLAN Points to consider
–You must believe in the idea to sell it–Homework before hand, adequate
knowledge–Credibility is important, ie if caught
with one falsehood, nothing said would be believed
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UPDATES &CHANGES IN BUSINESS PLAN Points to consider
– If there has been substantial change, update the plan
–The difficulty is when there are too many versions which are around
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UPDATES &CHANGES IN BUSINESS PLAN Points to consider
– If there is inconsistency between one plan and the other, this is to be reconciled, at least for internal records if not for external communication
–While the plan is to be updated to reflect reality and changes, too many such changes give wrong signals
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PRESENTATION OFBUSINESS PLAN Content, value to listener, any
take away? In preparing a presentation
–Master slide can be useful– Include page numbers–Use clear headers to demonstrate
slide topic
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PRESENTATION OFBUSINESS PLAN In preparing a presentation
–Avoid clutter (generally not more than 5 points per slide)
–Pay attention to details: colour combinations, business logo legibility, consistency of message
–Clarity, tone, steady speed in speaking
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APPENDIX Planning for a business Plan for advisors / accountants /
lawyers Educate oneself about the law and
regulations to be followed Educate oneself on basics of managing
a business and finance Plan for long term impact of decisions
taken with regard to hiring employees, taking office space etc.
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