Business Plan Buliding Course Business Staregy Lecturer Dr

Business Plan Buliding Course: Business Staregy Lecturer: Dr. Roosta Shahid Beheshti University By: S. M. H. Hosseini

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

The Components of Successful Entrepreneurial Ventures Opportunity The Entrepreneur Organization Business Plan Strategy Resources

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 w Formal Process used by organizations to help plan, organize and allocate resources. w Typically an annual plan w Shows up in the mission statement, goals, objectives, intent, and functional policies.

Reasons for Writing a Business Plan u To sell yourself on the business u To obtain bank financing u To obtain investment funds u To establish strategic alliances u To obtain initial contracts u To attract key employees u. To motivate and focus your management team

Types of Business Plans u. Summary u. Special Project u. Feasibility u. Mini u. Start-up u. Presentation u. Internal u. 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 u An economically viable product or service with attractive markets. u An established attack plan that can be replicated. u 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 w Seven common parts of a good Business Plan are: 1. Executive Summary 2. Business Concept 3. Market Analysis 4. Management Team 5. Marketing Plan 6. Financial Plan 7. Operations and Management Plan

What Should a Business Plan Contain? w w w 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 w 6. Appendices

A Typical Business Plan Contents 1. Letter of Transmittal 2. Title Page 3. Table of Contents 4. Executive Summary and Fact Sheet 1. Introduce your business plan to the reader 2. 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 subheadings 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 Continued

A Typical Business Plan 5. Body of the Plan Company and the Industry Product-Service Offering Market Analysis 1. History and current situation of your company 2. Goals and objectives for the business 3. 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 competition 4. Estimate your expected sales and market share Continued

A Typical Business Plan 5. Body of the Plan (Continued) Your Marketing Plan 1. 2. Detail the marketing strategy you plan to use Describe your marketing plan insofar as your sales strategy, advertising and promotion plans, pricing policy, and channels of distribution Your Development 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 Production/Operations Plan 1. Outline the operating side of your business 2. Describe your location, kind of facilities, space requirements, capital equipment needs, and labour requirements Continued

A Typical Business Plan 5. Body of the Plan (Continued) Your Management Team 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 Implementation Schedule 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. Continued

A Typical Business Plan 5. Body of the Plan (Continued) Your Financial 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 Continued

A Typical Business Plan 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

The key differences between strategic planning and business planning Strategic Plan Business Plan An externally focused document that provides more detailed information on the proposed An overarching plan that sets the development of an organization, strategic direction of the and is likely to be shared with organization 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.

The key differences between strategic planning and business planning Strategic Plan Business Plan Can provide a basis for more It may be more difficult to present detailed planning including the level of detail required within a business plans, marketing business plan in a pictorial format. strategies and funding strategies. A strategic plan generally covers a Is normally no more than one year period of 3 to 5+ years Is for established businesses, organizations and business owners Could be for new businesses and that are serious about growing their entrepreneurs who are startups. organization.

The key differences between strategic planning and business planning Strategic Plan Business Plan Focuses on building a sustainable Is used to assess the viability of a competitive advantage and is business opportunity, and is more futuristic in nature. 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.

Strategy vs. Business Model : What is the Difference? w 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. w 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 Business Strategy Business Model Business Plan