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Writing a Business Plan
If you fail to plan, then you plan to fail – Harvey Mackay
the plan is useless, but planning is essential - Dwight D. Eisenhower
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About the speaker
Mohd Fadhilullah Tudun Bin Haji Hassan @Mohd Hasbolah Bobby
Entrepreneur, Computer Trainer and Business Counsellor
Interests: IT, Biz and EducationContact:
Phone: +673 8651632E-mel: [email protected]
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Introduction
Getting to know each otherNameFrom WhereHobby and InterestsOccupation/Employment/BusinessReason for Attending Workshop
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Business Plan Series Dates
Session 1 (24 June 2011) Introduction to Business Plan Business Plan Structure Company Profile and Startup Table
Session 2 (1 July 2011) Products and Services Market Research, Analysis and Strategy Human Resource Management
Session 3 (8 July 2011) Financial Analysis Making a Business Plan Using IT Presentation
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What is a Business Plan?
It is a medium to communicate your business idea
It is a document that shows the inner workings of the business.
Business Blueprints and Roadmap
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Business Plan Crash Course
Business Plan StructureBusiness ProfileProducts and ServicesMarket Research and Market StrategyOrganizationOperation StrategyFinancial StrategyWinning Strategy
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What’s the Purpose of a Business Plan?
Business Profile – To convince investors/bankers of the business feasibility.
The Business Roadmap – To clarify the structure of the business and how it will be managed.
Operations Manual – To communicate to employees on their responsibilities in relation to the company objectives.
The Style of the Business Plan will differ with different purposes.
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What Biz Ideas Can You Plan?
Conventional but Feasible e.g. restaurant, stall, bakery, workshop,
retail shop, SchoolSimpleevaluated by the business plan writing,
and how you can make it different.
Innovative but Unprovene.g. new franchise, technology company,
new inventionsChallenging evaluated by the Business idea and its
feasibility
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The Perfect Business Idea
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Where to learn to create a Biz Plan?
Books – Bookstores, LibrariesInternet –
www.bplans.com, www.sba.gov, www.shell-livewire.com, www.livewire-brunei.com, www.howstuffworks.com, www.soyouwanna.com, www.entrepreneur.com, www.google.com.
CoursesSinaut Entrepreneurial Development CentreLiveWIRE – Business Plan Series iCentre - Think Big Biz Plan Workshops
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Formal Business Plan Structure
Cover Table of Contents Executive Summary Business Profile Products and Service Operations Strategy Marketing Analysis Market Strategy
Organization Strategy Operation Strategy Financial Analysis and Forecasts Milestones, Future Plans and Exit Strategy Appendices
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Executive Summary
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Executive Summary
Often Written Last, Shown First.Make it interesting for the reader.Make the reader want to read more.Make it simple point form for every
section, or a simple abstract summary.1 or 2 pages Maximum.E.g. 30 second Movie Preview
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Business Profile
Introduce the business Legal Structure of Business
Sole Proprietor, Partnership, Sendirian Berhad, Koperasi
Nature of business Food, Service, Manufacturing, IT,
Mission and Objectives Startup Cost Milestones/Achievements
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Products and Service
What is it?Who are you going to sell it to?What problem is it solving?How much will it cost them?What makes it unique?Intellectual Property Involved?Sales Forecast
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Market Analysis
Who are you going to sell to? Who are your competition? What do they do? SWOT Analysis (Strengths, Weaknesses,
Opportunities, Threats) - What are the Market Forces that affects you? Political, Economic, Social, Technological
(PEST) – Factors for Success
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Market Strategy
How are you going to tell your customers that you are there?
4 P’sProductPricePlace and DistributionPromotion
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Human Resource Management
Who are involved? Organization Chart Personnel Roles and
Responsibilities Personnel
Qualifications Key
Roles/Management Payroll Cost
Manager
Worker 1 Worker 2
Assistant
Worker 3
Admin
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Operations Strategy
How is the business going to run? How is the business making money? Location and Working hours Product Life Cycle - e.g. Agricultural vs Retail Production Process
Input Process Output Technology/equipment Involved Sales Forecast in relation to Operations or
Season (can also be in product section)
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Financial Analysis and Forecast
Start up costs Sales Forecast Personnel/Payroll
Cost Profit and Loss Cash flow Forecast Balance Sheet Break-even analysis
0102030405060708090
1st Qtr 2ndQtr
3rd Qtr4th Qtr
nett income
Expenses
nett
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Future Plans and Exit Strategy
What are you going to do with the business in the long-term: Expand Sell Handover to family member Go Public Get Merged or Acquired
or if anything goes wrong. If Bankrupt or unsuccessful what will you do?
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Appendices
Marketing MaterialsResearch Materials and ResultsSample of AdvertisementsSurveyResults
Full Financial Tables2-5 years
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Business Profile
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Business Profile
Introduce the business and its history “Biodata” of the Business
Name, Location, Contact no., Year Started, etc.Legal Structure of Business
Sole Proprietor, Partnership, Sdn Bhd, Cooperative
Nature of business Food, Service, Manufacturing, IT, etc
Startup Cost or Milestones/Achievements
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Vision and Mission
Vision vs MissionMission – What is the desired GoalVision – How you see the future
Why does the Business Exist?The Purpose of the Business.Usually Intangible, Broad, and Abstract
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Examples of Mission
Google's - to organize the world's information and make it universally accessible and useful.
Rich Dad Company’s - to elevate the financial well-being of humanity
Microsoft’s - To help people and businesses throughout the world realize their full potential
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Objectives
What you need to do to achieve the mission Objectives are SMART:
Specific Measurable Attainable/Achievable Relevant Timely
This might be clearer after the biz plan is done
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Examples
To earn $1 million dollars in revenue in the 2nd Year
to sell 1000 units in the first yearto achieve 50% market share in the 2nd
year.
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Exercise
Create you Business ProfileBusiness NameLegal StructureNature of BusinessProducts and ServicesMission and Objectives
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Startup Costs – Accounting Terms
Capital – money that was put in by the owner. Liability – money put in by banker/investor to
be paid back. Assets – property that can be turned to cash Expenses – purchases or payments that
cannot be redeemed for cash Income – Money coming in from business
operations or sales.
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Startup Costs – Assets and Expenses
Assets Assets Purchase
Equipment Furniture Building
Current Assets Cash in hand Raw materials Work In Progress
Intangible Assets (IP)
Expenses Legal Expenses
Registration Business License
Initial Operation Expenses Rental Deposit Utilities Marketing Employees
Decorations and Design
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Exercise
Create your Startup TableAssets
Fixed AssetsCurrent Assets Intangible Assets
ExpensesLegal Initial OperationRenovations
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Products or Services
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Know your product or service
What do you provide?What are the Features and Benefits.What makes it unique?To who do you provide?
Business to Business (B2B)Business to Customer (B2C)
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Features vs Benefits
What you offer E.g.
Food Phone House Hotel Room Furniture Gym
What customers get E.g.
Satisfaction/Full Communications Home Rest/Sleep Comfort Health/Look Good
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Intellectual Property Rights
Copyright – Books, Software, Audio, Video
Trademark – Logo, Signage
Patent – Inventions, Mechanisms
Design – Physical Appearances
E.g. Android OS, iOS
Android Logo, Apple Logo
The combination of the chips and circuits
The look and feel of the phone.
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What to Who? Product to Consumer Matrix
PCConsumer
High End Medium Low End
Student
Professionals
Office
Geeks/Gamers
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Market Research
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Resources on Marketing
Books Ziglar on Selling – zig ziglar Salesdogs – Blair Singer
Websites Smallbusiness.yahoo.com, bnet.com,
salesdogs.com, howstuffworks.com, en.wikipedia.org
Courses LiveWIRE BSOM EDC – Pemasaran yang berkesan, Jurujual
Profesional
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Why is Market Research Necessary?
To know your customers See what type of people or how many would be
interested? Where can you get your customers? How much people will want to pay?
To know your competitors Who they are What they do/provide? What are their Pros and Cons
To see how feasible your biz idea is.
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What you need to know first
Understand your products or service Its benefits, quality
Your basic operations and product life cycle e.g. farming, manufacturing, etcSeasonality (weeks, months, years)
Your Product’s HistoryPrice, Promotions, Distribution
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Where can you get Market Research?
Primary Research – research you get and analyze yourself
Secondary research – research that has already been done
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Primary Research
Phone Call SMS Interview Survey Letters
Design, Print, Photocopy, Gather, Data entry and Analyze
Use Internet e.g. Facebook and Survey Poll.
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Secondary research
www.depd.gov.bn – Department of Economic Development and Planning Perancangan Kemajuan Jangka Panjang NBD Brunei Statistical Yearbook 2004
Other Government Newsletters Internet
Internet statistics www.internetworldstats.com Cia world factbook www.cia.gov
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What you need to Ask?
How Big is the market?Market Segmentation. Who are your
Customers? (Don’t say everyone)Age group, Geographic Location,
Employment, Income Level, etc.Who are your Competitors/Allies
What they do well or badly.What your targets wants in your
product/service?Price, quality, feature, benefits.
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PEST factors
Political Factors – how does the government affect your market.
Economic Factors – how does the economic status affect your market.
Social Factors – cultural and social trends.
Technological Factors – technology that affects the market.
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SWOT
Internal Strength Weakness
External Opportunities Threats
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Porter’s 5 Forces
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Exercise
Product and Market ResearchWhat are your Product(s) or Service(s)Who do you Sell to? Market Size?
Segmentation e.g. Age, Income, OccupationWho else is trying to get your customers?How does the market affect your business?
PEST, or porter 5 forcesWhat are your SWOT’s
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Market Strategy
“Getting someone, who has a need, to know, like and trust you”
– John Jantsch (Duct Tape Marketing)
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Why do you need a Marketing Strategy?
Focuses your Marketing efforts more effectively
So you can decide how and when are you going to Market yourself.
So you can allocate the Budget for Marketing Strategies
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How do you choose a strategy?
Choose thoseThat focuses on your target marketAffordableEffective
Not energy consumingNot time consuming
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What is your Marketing Mix?
The 4 P’sProduct – Unique Selling Advantage,
Packaging and Value added servicesPrice – Pricing of the products compared to
competitors.Place – Location of your business or/and
Distribution of your productsPromotion – Advertising, Public Relations,
Word of Mouth, Point of Sale.
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What Promotion Strategies can you do?
Fliers Posters Newspaper Brochures Business Cards Exhibition TV Radio Letters/faxes Stationery and gifts
Referrals Word of Mouth Direct Selling New Technologies
E-mail Website Web advertising Social networking Blogs
And Many More!!!
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Market Strategy Implementation
Marketing Calendar – when are you going to implement the strategies? Look at your production capacityLook at the market seasonality
Marketing Budget – how much will it cost during those times.
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Marketing Costs
Month 1 2 3 4 5 6 7 8 9 10 11 12 Total
Fliers
Business Card
Online
Exhibition
Total
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Marketing Costs Pie Chart
$500.00 , 25%
$300.00 , 15%$1,000.00 , 50%
$200.00 , 10%
Fliers
Posters
Online
Exhibition
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Exercise Marketing Strategy
Keep in mindWhat is are your products?Who do you sell to?Who is also trying to sell to them?
How are you going to reach your customers?What are your 4P’sWhat does your marketing cost you?
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Organization Strategy/ HR Management
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Why do you need an organization strategy?
Judges see this as how strong your team can build the business
Investors see this as how good the people are that can make their money.
To calculate costs for Personnel / PayrollTo see any management gaps
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Management Team and Gaps
Briefly describe who are in your team (who you already have)
A summary of each team member’s CVAlso mention what gaps you may have
(Team member you may lack)Mention advisors you may haveInclude CV in appendices
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Organization Chart
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Roles and Responsibilities
Roles or positions Responsibilities Qualifications Salary
Roles Responsibilities Qualifications Salary
CEO Manages Company Degree, MBA $2,000
CFO Manages Finances Degree, MBA $1,500
CIO Manages IT ND or Degree $1,500
MD Manages Department ND or MBA $1,200
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Payroll/Personnel Cost
Month 1 2 3 4 5 6 7 8 9 10 11 12
CEO
CFO
CIO
MD
TAP
SCP
Total
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Operations Strategy
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Operation Strategy
What is your business model? How does your business make money?
How do you receive your payment? Cash or Credit/Accrual
What are your business activities? What do you do? Services or products?
What is the business/product cycle? When do you produce your products/service
What are the overhead costs? What are the monthly running costs?
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Sales Forecast Table
Month 1 2 3 4 5 6 7 8 9 10 11 12 Total
UnitsSold
Sales Price
Cost Price
Total Sales
TotalCost
Gross Profit
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How to base the Sales
By Supply/Capacity How much you can handle and when Services like restaurants or internet cafe– look at
capacity (number of chairs) Products – look at how much or when it can be
produced, stored, or how fast it can be reordered.
By Demand How much people often want to use your service or
buy your product, this can be derived from market research.
Services like restaurants or tailoring look at seasonal behavior of customers
Products look at customer’s use of products. E.g. addiction to cigarettes
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Overhead Costs
Fixed Costs that are related to running the operations.
May be Unrelated to costs such as:- Cost of goods (COGs) Variable Marketing costs Payroll costs
Examples: Stationery Rental Utility Bills
Electricity, Water, Phone, Internet Access Maintenance Loan Repayments License Fees Insurance Taxes
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Financial Analysis
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Resources
Financial BooksAccounting for non accountants, accounting
for dummies, InternetCourses
LiveWIRE – BSOMEDC – Accounting CoursesBICPA-FTMS – certified accounting courses
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Why do you need Financial Analysis?
To see that the business is feasible in terms of cash
To see that you are making moneySo you can plan your expenditures more
carefully
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Financial Analysis
Break-even analysis Profit and LossCash Flow ForecastBalance Sheet
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Break-even analysis
What is the purpose? To see how many units
need to be sold to make money.
What you need to know? Units Sold Sales per unit Cost per unit Fixed Costs
Note: this is for a single product,
for multiple products you may use average.
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
0 100 200 300
Units Sold 0 100 200 300Fixed Costs $2,400 $2,400 $2,400 $2,400 Unit Sales 0 2000 4000 6000Unit Cost 0 500 1000 1500Fixed Costs + Variable Cost $2,400 $2,900 $3,400 $3,900
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Profit and Loss Forecast
Calculates the amount of money going in (from sales) and out (from operations cost)
Factors Income from Sales of Goods or other items Expenses from
Direct Cost of Goods Expenses , Controllable and Fixed Costs
Calculate Gross Profit and Gross Margin Net Profit
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Profit and Loss Forecast Sample
1 2 3 4 5 6 7 8 9 10 11 12 Total
Gross Sales
Direct Cost of Goods
Gross Profit
Expenses
Nett Profit
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Cash Flow forecast
Similar to Profit and Loss, But it looks at: Other factors of money going in or out other than
monthly business operations. In-flow – additional loans, owner’s capital, Out-flow – business taxes, assets purchase, renovations,
expansion, owner’s draw/dividends Nett-flow (profit or loss)
and accumulated cash (money in bank) Actual Money going in or out
Especially useful if you are buying/selling by using credit. Ensuring there is money in the bank.
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Cash Flow forecast sample
Month 1 2 3 4 5 6 7 8 9 10 11 12 Total
In-Flow
Out-flowOverheadPayrollmarketing
Nett Flow
Accumulated Cash
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Sample Cash-flow Chart
-10000
-5000
0
5000
10000
15000
1 2 3 4 5 6 7 8 10 11 12
Nett Flow Accumulated Cash
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Balance Sheet
Assets Current Assets
Stocks, Cash, Accounts Receivable Fixed Assets
Equipment, Furniture, Land, Building, Vehicles Intangible Assets
Patents, Copyrights, Goodwill
Liabilities Current Liabilities
Accounts Payable, Taxes, Long-Term Liabilities
Mortgages, Contract Payments
Net Worth = Assets - Liabilities
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Balance Sheet Sample
Assets $ Liabilities $
Current Assets Current Liabilities
Stocks and WIP 500 Accounts Payable 500
Cash 5,000 Taxes 200
Accounts Receivable 500 Long-Term Liabilities
Fixed Assets Bank Loan, Mortgages 10,000
Furniture 2,000 Contract payment 1,000
Equipment 5,000 Total Liabilities 11,700
Other Assets
Trademark 500
Total Assets 13,500 Net worth 1,800
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Using IT
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Using the IT to create a biz plan
Using Word Templates, styles and TOCs, Header and Footer,
Page number Inserting Graphics, Organization Chart, Tables
Using Excel Using Formulas and relative addresses, importing into word Creating Cash flow and Graphs
Using PowerPoint Slide Design, Animation Schemes, Footers and
Printing
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Writing and Presentation Tips
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Plan to Make Your Business Plan
Allocate the time you need to do certain parts of the Business PlanUse Calendar/Planner/Diary/JournalCreate a deadline for specific tasks
If you are doing in a group (highly recommended) allocate specific tasks for a specified person
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Writing Tips
ClearConciseOrganizedWell Laid OutNaturalPositive
Well interpreted factsDo not jump to conclusionsShow SourcesProofreadMake it PerfectWell written executive summary
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Presentation Tips
10-15 slides 10-15 minutes Keep it Simple Make it to the point Tell a Story Dress Professionally Practice
In front of mirror In front of someone
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Tell a Story
Introduction (breaking the ice)Existing Problem/Pain/SituationSolution (Product/Service) your are
providingMarket Research and StrategyWho are involvedHow you can succeed
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10 tips from David S. Rose
Do not look at the screen Do not read your speech Do not do a Live Demo Always use a Remote control Remember handouts are not your presentation Do not tell Jokes.. Ever Do not stroll or fidget Pace the presentation smoothly and evenly Check equipment, own laptop and projector Only the CEO give the money pitch
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Quick Tips
Your idea doesn’t just make money, but helps people: Creates jobs, or provides a service, or provide a
solution, alleviates a pain/discomfort Its not just an idea, but a work in progress. You have the numbers to back you up. You have qualified people (employees or
partners) involved. Be passionate in your presentation
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Your Mission
1. Start and Complete Your Business Plan!2. Choose a business Idea3. Plan to create biz plan4. Create a draft Biz plan or exec summary5. Design and implement market research6. Analyze Market Research7. Adapt Biz Plan Strategy to meet Market
Analysis
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Thank You,
Good bye, and
Good luck!