Business Planning Workshop Business Planning Workshop Presentation on

Business Planning - Workshop -

Presentation on Business Planning & A Prelude for the Business Planning Workshop On November the 26 th in U. C. C • By Phil O’Sullivan • Our workshop today will be between 45‐ 50 mins with a Q & A afterwards.

Presentation on Business Planning & A Prelude for the Business Planning Workshop On November the 26 th in U. C. C • Blas na h. Eireann & UCC/FITU Lecture Series • Business Planning Workshop • UCC, 26 th November

• The difference between an idea and an opportunity • Why complete a business plan (B. P) ? • The views about business planning & the effects, negative and positive? Todays Workshop Business Planning • The types of people involved in a team, their styles and approaches to BP’. • Types of planning – e. g. going on your holidays. • What’s in a business plan? • 5 things to put in place for a successful business planning day • The top 7 elements to a business plan & tools used • What’s the benefits of completing a business plan • Distribution Modelling • = content for you to read Later !

• Business to Business Models: (Competitor research, Customer research) Consumer research My Experience • Business to consumer Models: • (Distribution research, Customer research, Consumer research with in depth insights) ___________ • All under pinned by consumer Trends !

Business to Consumer Business to Business

Business Idea vs Business Opportunity • What is a Business idea? • A business idea is a concept that can be used to make money*. • • • Relevant (must fulfill customers’ needs or solve their problems) Innovative Unique Clear focus Profitable in the long run • What is a Business Opportunity? • A business opportunity is a proven concept that generates on‐going income. It is a business idea that has been researched upon, refined and packaged into a promising venture that is ready to launch. • • It must have high gross margins. It must have the potential to reach break‐even cash flow within 12 months – 36 months. The startup capital investments must be realistic and within the range of what you can provide. You must have the strength and ability needed to drive the business to success. Your level of enthusiasm for the business must be very high. It must have the potential for residual income. It must have the potential to keep on improving with time. It must have a low level of liability risk. * Mercantile Exchange

Why are we in Business ? • Why are we in Business ? To make money Logical thinking would suggest we make a business plan !

Views on Business Planning • What’s your thoughts on business planning ? • Not all people in business think BUSINESS PLANNING is great! • Some SME’s views on business planning "Time and money wasted" "Just do them to satisfy accountants and bankers"

Views on Business Planning • Some peoples perceived purpose of business plans ‐‐‐ 70% said ‘to obtain money from Bank or State Agency’ ‐‐‐ Only 29% saw them as part of the management and control system

Some peoples view's on Business Planning……

Outcomes without Plans Comparison of Outcome without Plans Sales Gross Margin Fixed Assets Achieved 51% of projected levels Achieved 75% of Target 92% higher than planned Working Capital Planned Actual Debtors 80 days 170 days Inventory 87 days 193 days Creditors 30 days 195 days

Outcomes vs Plans • Problems are created as a result of a poor planning process and No Facilitator to guide!! • It is essential that we all take the planning process more seriously and give it time. "Which would you rather do -- talk to customers now and find out you were wrong or talk to customers in a year and thousands of Euros down the road and still find out you were wrong? ”

The benefits of a Business Plan • A Business plan helps to ﬂesh out our objectives and outlines • How much money it plans to make! • Explaining what the business does to make Money • What products or service does it sell / provide • The markets it plans to operate in • The Financial forecasts it is setting • The timeline to achieve the Goals

Business Model Canvas • Customer Segments: Who are your customers? • Value Proposition: Why do customers buy from you? What is the gain you provide or the need you satisfy? • Channels: How are your products and services delivered to the market? • Customer Relationships: How do you get, keep, and grow your customers? • Revenue Streams: How does your business earn money? • Key Resources: What unique strategic resources does your business have or need? • Key Activities: What unique strategic activities does your business perform to deliver your value proposition? • Key Partnerships: What non‐key activities can you outsource to enable you to focus more on your key activities. • Cost Structures: What are the major costs incurred by your business?

Beneﬁts of Business Planning Given Structure and Focus to Owners / Managers Thoughts Benchmark for Performance Measurement Facilitates for Performance Measurement Benefits of Business Planning Provides a Framework For Managing The Business Ensures Efficient Use of Resources Supports Case For Finance 13

What's in a Business Plan ? Vision Mission strategy Goals Targets & objectives Performance Values

What's in a Business Plan ? Developing Plan’s and strategies • Vision > Mission > Values > Goals > Strategies > Products and Services • ‐‐‐Target markets • • ‐‐‐Sales & marketing strategies ‐‐‐Staﬃng & operations ‐‐‐Product/service development ‐‐‐Financial proﬁle and targets

Benefits of Strategy ‐‐‐Business Plan

Belbin team roles : Raymond Meredith Belbin

What do we need for a Business planning Workshop? • We need 1. The right environment – ideally away from the our business ‐ no interruptions 2. The right people in the room – with a clear set of rules for engagement for the day – It’s NOT A BASHING session 3. Have the correct questions with the right Frame work for populating the outputs from the Workshop. 4. If Possible have an outside facilitator to help with managing the time and the allocation of tasks which arise. 5. All actions and tasks should be logged (in an action tracker) and allocated to people under the headings of responsible and accountable. (we need to manage our performance as a team. )

Effective Business planning Realistic and Implementable Specific and Measurable Simple but Flexible If it’s to work it needs Effective Business Planning Clear Definition of Responsibility For Implementation Top Down and Bottom Up Ownership and Accountability Must Clearly Fit the Business Need Well Communicated 1

Ten Critical Success Factors (Key performance indicators) 1. 2. Volume Product performance and quality C. S. F ’ s 3. 4. Costs and eﬃciency Margin 5. 6. Cash ﬂow Innovation 7. 8. Lead times, cycle times, delivery times Customer service and support 9. Management and control 10. Human resource development K. P. I ’S We need to constantly measure

Types of Planning Business Planning 8

Types of Planning Examples of Planning? Personal development, education, Fitness Social, meeting friends etc Personal ﬁnancial planning Career planning Holiday planning Business planning 7

Business planning vs. your Holiday Your Holiday • Destination • Dates • Budget • Flight times • Airport • Type of clothes • Hotel • Half Board, Pool • Creche –Kids club • Research nice places to go • Holiday rep in the Hotel 9

Business planning vs. your Holiday Your Holiday 1. Destination 2. 3. 4. 5. Dates Budget Flight times Airport 6. Type of clothes 7. Hotel – which one? 8. 9. 10. 11. Half Board, Pool Crèche – Kids club Holiday Insurance Research nice places to go 12. Holiday rep in the Hotel Business plan 1. Where do you want to be in the future (Vision, Mission, Turnover- Profit- Expansion) 2. Timeline to implement. 3. Budget to implement plan – KPI’s 4. Opening times – production times 5. Distribution plans – Trucks , vans, our service we offer, pricing , shared margins. 6. How are we looking to the out side world–re branding , reputation. 7. Our Location – size of facility – Standards required 8. The right resources in place. 9. Well trained staff , trusted staff, 10. Evaluate risk – KPI’S, Metrics 11. Research market &competitors and offerings- KPI’s points of differentiation, Promotions. 12. Business Advisor- professional help

Market forces Market & Research ENERGY, BELIEF, ATTITUDE

Developing Strategies • Strategies are the means chosen to achieve the objectives which will full ﬁll the organisations Mission and Vision – External Environment (Swot, Pestle) – Internal Environment (Swot , Pestle)

Capability Analysis SWOT Analysis When the External and Internal environments have been analysed we can then complete a S. W. O. T analysis of the business

External Environment PESTLE Analysis Political Tax policy, unions, employment laws, environmental regulations, trade restrictions and reform, tariﬀs and political stability. Economic growth/decline, interest rates, exchange rates, inﬂation, wage rates, minimum wage, working hours, unemployment (local and national), credit availability, living standards etc. Societal Cultural norms and expectations, health consciousness, population growth rate, age distribution, career attitudes, emphasis on safety, global warming Technological Legal Environmental Rapid changes in technology, telephony, communications make may products obsolete at an early stage of their lives. Health & safety, employment, consumer, trade etc legislation can have major impact on the business’s plans. Ecological and environmental Global warming

Pestle Analysis Political • Ecological/Environmental issues • Current legislation home market • Future legislation • International legislation • Regulatory bodies and processes • Government policies • Government term and change • Trading policies • Funding, grants and initiatives • Home market lobbying/Pressure groups • International pressure groups • Wars and Conflicts Economic • Home economy situation • Home economy trends • Overseas economies and trends • General taxation issues • Taxation specific to product/ services • Seasonality/weather issues • Market and trade cycles • Specific industry factors • Market routes and distribution trends • Customer/end‐‐‐user drivers • Interest and exchange rates • International trade/monetary issues

PESTLE Analysis Technological Social • Lifestyle trends • • Demographics • Consumer attitudes and opinions • • Competing technology development Research funding Associated/dependent technologies • • • Replacement technology/ solutions Maturity of technology Manufacturing maturity and capacity Information and communications Consumer buying mechanisms/ technology • • • Technology legislation Innovation potential Technology access, licencing, patents Intellectual property issues Global communications • Media views • Law changes aﬀecting social factors • Brand, company, technology image • Consumer buying patterns • Fashion and role models • Major events and inﬂuences • Buying access and trends • Ethnic/religious factors • Advertising and publicity • Ethical issues

PESTLE Analysis Legal Environmental • Regulatory bodies and processes • European/international legislation • Corporate Social Responsibility awareness and expectations • Political agenda on the environment • Future legislation • Public awareness of environmental issues • Current legislation Note: PESTLE • Environmental legislation analysis can be useful before SWOT analysis because PEST LE helps to identify SWOT factors. PESTLE and SWOT are two different perspectives but can contain common factors. SWOT stands for strengths, weaknesses, opportunities, threats.

Value Chain Analysis The Objective is to Create Value for the customer How do we do this ? - By reducing buyers costs And or - Improving quality To do this eﬀectively you must understand how your Value Chain works - Identify value activities (the building blocks of value oﬀered to the customer) Identify the factors determine their performance Identify critical activities Assign costs to all the value activities Eliminate non value adding activities Identity the cost drivers Identify linkages (how one activity impacts the other) Seek ways of exploiting linkages to reduce cost or enhance value 45

Capability Analysis 46

Capability Analysis Resources 1. Human Number, productivity, skills, motivation, potential 2. Financial Cash, borrowing capacity 3. Material Raw materials, consumables, components, value, availability, suitability, yield 4. Technology and equipment Age, state of repair, suitability, productivity, capacity, utilisation, development potential 5. Information and knowledge KPI’s, market intelligence, research data 6. Building and space Value, availability, suitability, utilisation, development potential 7. Intangibles Brand, customer relationships, loyalty etc

Output from Research ‐ Strategy Selection • The SWOT - PESTLE analysis will enable us identify and select the strategies that are most appropriate for the business - Selecting what’s feasible and realistic but challenging - Rejecting unrealistic and unachievable strategies - Aligning resources, systems , structures and culture to deliver the strategies - Identifying and ﬁlling any resource gaps • The selected strategies then need to be converted into speciﬁc goals and objectives and tactical plans • This will form the operating basis of the BUSINESS PLAN 54

Marketing & Sales • Everything begins in the MARKET PLACE • The Marketing and the Sales elements of the Business Plan are vitally important !!! • All other parts of the Plan are derived from it! 55

Target Markets / Market Analysis growing or declining

Marketing research ‐ Considerations https: //www. bordbiaconsumerlifestyletrends. ie/toolkit/ Source https: //www. bordbia. ie/industry/insights/consumer‐insights‐team/

Points of differentiation & Parity (value proposition)

Market Analysis (Continued) Who do they supply

Marketing plan – Market Discipline But most important of all is clarity on Market Discipline Three Market Disciplines Product leadership Launching new products and services • Customer intimacy Making existing products better Operational excellence C u l i n g costs You Cannot be all three! • Strategy will fail if you try to be “all things to all men” • Lets look at each and decide which is appropriate for our business 58

Distribution model Your facility Multiple delivery & Sales person costs, 18% / 24% 22% / 38 18 % C. D. C 22% / 38%

Distribution model- (Distribution considerations)

Thank you for listening. Date for the diary 26 th November, UCC Blas na h. Eireann & UCC/FITU Lecture Series Business Planning Workshop The end 91

Helpful tips • Article on Digital planning‐ (Online Marketing Plan for Manufacturing Companies) • https: //www. angle 180. com/insights/online‐marketing‐plan‐for‐ manufacturing‐companies • Verne Harnish “Mastering the Rockefeller Habits”, a great book about business planning. • Ash Maurya Scaling Lean • https: //www. bordbiaconsumerlifestyletrends. ie/toolkit/