Essentials of business planning Ron Beirens Lecturer Advanced
Essentials of business planning Ron Beirens Lecturer Advanced Bachelor International Management
Structure of a business plan 1. Executive Summary This is an overview of your business and your plans. It comes first in your plan and is ideally only 1 -2 pages (VISION). 2. Company Overview The company overview provides a quick review of the company’s legal structure and location, as well as some background on the company’s history if you’re writing the plan for an existing business. 3. Products and Services What are you actually selling and how are you solving a problem (or “need”) for your market (SOLUTION)? 4. Target Market Who are you selling to? If there are multiple market segments for your business, this is where you flesh out the details (MARKET OPPORTUNITY). Ron Beirens 2
Structure of a business plan 5. Marketing and Sales Plan How are you going to reach your target market? What marketing and sales tactics will you be using (MARKET OPPORTUNITY)? 6. Milestones and Metrics If you’ve accomplished some key milestones in the process of building your business, detail them here. This chapter also defines how you measure success. 7. Management Team Investors look for great teams in addition to great ideas. Use this chapter to describe your current team and who you need to hire (COMPETENCE). 8. Financial Plan Your business plan isn’t complete without a financial forecast. We’ll tell you what to include in your financial plan (REVENUE MODEL). Ron Beirens 3
Balance sheet Ron Beirens 4
Income statement Ron Beirens 5
Biggest difficulties for students 4. Target Market Who are you selling to? 5. Marketing and Sales Plan How big is that market? Making estimates! I can not calculate!!! You have to!!!! Start from a total population (country-several countries) Narrow down to age/gender/lifestyle … according to your defined target. Once you estimated the size take a percentage of the target that you will sell to. However wrong this will be it will be of use once you’ve launched the product/service to recalculate your forecast. Ron Beirens 6
Conclusion If you want to go quick…… Go alone. If you want to go far …. . Go in team Ron Beirens 7
Biggest difficulties for students Forecasting: investors need to see a forecast. And you need it as well to adapt your estimations to reality once you’ve started. Ron Beirens 8
Biggest difficulties for students Forecasting: investors need to see a forecast. And you need it as well to adapt your estimations to reality once you’ve started. Ron Beirens 9
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Most common errors in business plans Business idea developing a new product a new sort of device (invention). Just a different marketing approach can be enough. Booking. com Underestiming the workload and as a result the salary cost! Salary cost can be up to 80% of the operating charges (e. g. Restaurants). A question of make or brake! Ron Beirens 12
Most common errors in business plans Distinction between cash flow and profit/loss. There is a annual profit of 20. 000€: conclusion I need no loan. Look at your cash. An investment might be needed because you need it in the first months. Without a liquidity prognosis on monthly basis you would be wrong. Ron Beirens 13
Most common errors in business plans: I have a profit so I don’t need a loan Oh yes you do The monthly cash flow forecast Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total REVENUE (1) debtors Miscellaneous 0 0 0 10 10 50 80 170 Total revenu 0 0 0 10 10 50 80 170 10 30 10 10 10 120 30 40 10 10 10 150 40 - 10 - 10 - 10 - 0 0 40 70 60 20 10 - 20 - 30 - 30 - 30 - 10 80 EXPENDITURE (2) Purchases operating cost (charges) investments Miscellaneous total expenses balance 1 -2 Balance beginning of month 20 my profit Loan of 60 is not sufficient Balance end of month CONCLUSION Ron Beirens 14
Conclusion: a loan of 90 and you stay out of trouble Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total REVENUE (1) debtors 0 0 0 10 10 50 80 170 10 30 10 10 10 120 30 40 10 10 10 150 0 0 0 0 40 0 70 40 0 0 40 110 Miscellaneous Total revenu EXPENDITURE (2) Purchases operating cost (charges) investments Miscellaneous total expenses balance 1 -2 Balance beginning of month Loan of 90 Balance end of month Ron Beirens 40 - 10 - 10 - 1090 50 40 30 20 10 0 20 my profit 15
The idea may be perfect but The devil is in the execution! Two brothers Mc Donald had a excellent idea. Mc. Donald's (or simply as Mc. D) is an American hamburger and fast food restaurant chain. It was founded in 1940 as a barbecue restaurant operated by Richard and Maurice Mc. Donald. In 1948, they reorganized their business as a hamburger stand, using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955 and subsequently purchased the chain from the Mc. Donald brothers for 1 million$. Ron Beirens 16
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