Business Plan

What is a Business Plan?

A business plan is a written description of your business’s future, a document that tells what you plan to do and how you plan to do it.

A business plan is the first step you take toward turning your invention into a marketable reality.

Potential investors may understand a business proposal much better than they understand the technology of an invention. Investors will look at the profit-and-loss possibilities

Why develop a Business Plan?

“A business plan is vital for enterprises needing investment, grant funding or significant borrowing; more so for innovation ventures, as the greater number of ‘unknowns’ makes it even harder to attract backing. But don’t make the mistake of thinking that only other people need your business plan. It’s primarily a tool to reveal possibly awkward truths about your business to you.”

Comprehensive Plan

1. Executive Summary

*Problem

*Solution

2. SWOT Analysis

3. Mission & Vision

* Vision Pillars

4. Business Model / Action Plan

5. Unique Selling Point

6. Marketing Plan

7. Competition

8. Management and Staffing

1. Executive Summary

• Define problem, solution, business model, and why your solution is better

• Write it last

• Grab readers attention

• No more than 2 pages!

• Most important part of your plan and usually written last

2. Problem

• What problem are you solving?

• Describe how the “state of the art” is insufficient

• Get your reader to agree that the current situation isn’t optimal

• If there isn’t a problem, take your idea back to the drawing board

3. Solution

• How do we solve the “Problem”?

• Explain what you sell

• State your value proposition

A value proposition is a clear statement of the tangible results a customer gets from using your products or services. The more specific your value proposition is, the better.

Strong value propositions deliver tangible results like:

• Increased revenues

• Faster time to market

• Decreased costs

• Improved operational efficiency

• Increased market share

• Decreased employee turnover

• Improved customer retention levels

• First Sentence:

• For (target customer)

• who (statement of the need or opportunity), the (product/service name) is a (product/service category) that (statement of benefit).

Second Sentence:

• Unlike (primary competitive alternative),

• our product (statement of primary differentiation).

4. Mission & Vision

A strategic vision concerns a firm’s future business path -- “where we are going”

• Markets to be pursued

• Future technology-product-customer focus

• Kind of company that management is trying to create

Writing the Mission Statement

• Explains the core purpose of your business

• Expresses the values of the business

• Should be brief and to the point

• Easy to understand

• If possible, try to convey the unique nature of your business and the role it plays that differentiates it from others

5. Business Model

• Explain how you make money

– Who pays you?

– How do you collect?

– What are your channels of distribution?

– How do you integrate suppliers?

6. Unique Selling Point

• Use examples if necessary

• Be complete

• Describe your technology, process improvement, etc.

• Use charts, diagrams, schematics, as much as possible

• Understand your Intellectual Property

7. Marketing Plan

• Define your primary, secondary, and other audiences

• Show some numbers

• How will you find, sell, and retain customers?

• Advertising and promotion budget

• Identify your leverage points

8. Competition

• Everyone has competitors!

• Provide a complete view of the competitive landscape

• Direct and indirect competitors

• Current and anticipated competitors

• Competitor strengths and weaknesses

• Your competitive advantages

9. Management and Staffing

• Describe your key players

– Management Team

– Board of Directors

– Board of Advisors

– Major Investors

• Who are you missing?

What is Strategic Planning?

• A process used by government departments, organizations and businesses to develop blueprint for action and change

• An inclusive process to pro

• Forces you to make choices on what you will do and what you will not do

Importance of Strategic Planning

• Defines mission, vision & values

• Establishes realistic goals, objectives & strategies

• Ensures effective use of resources

• Provides base to measure progress

• Develops consensus on future direction

• Builds strong teams

• Solves major problems

Executive Summary

• Define problem, solution, business model, and why your solution is better

• Write it last

• Grab readers attention

• No more than 2 pages!

• Most important part of your plan and usually written last

Marketing Plan

• Define your primary, secondary, and other audiences

• How will you find, sell, and retain customers?

• Identify your leverage points

Target markets-- Don’t be afraid of leaving someone out. You can’t sell to everyone.

Do your market research, market size, and psychographics.

Marketing Strategy- it needs to work without breaking the bank. Where will you spend money on marketing? Use a supplementary budget when crafting your plan.

What are the key leverage points in your Marketing Strategy? How many contacts must be made, etc. Make sure that you tell the reader that you understand the importance of having a good strategy.

Competition

• Everyone has competitors!

• Provide a complete view of the competitive landscape

• Direct and indirect competitors

• Current and anticipated competitors

• Competitor strengths and weaknesses

• Your competitive advantages

No one is burying money in the back yard waiting for your product to hit the market. Make sure that your readers know that you understand the industry and external environment.

Be thorough! Too much is better than too little

Don’t be dismissive. Samsung is not, “Too big and slow.” They are, “Well capitalized and market savvy.”

Tell your readers why your product is good, not why the competition is bad.

Management Team

• Describe your key players

– Management Team

– Board of Directors

– Board of Advisors

– Major Investors

• Who are you missing?

One paragraph on each person will do. Not a resume. It’s okay for start-ups to have unproven managers. Describe what skills they bring to the business. Put your management team together first.

SWOT analysis is a tool for auditing an organization and its environment. SWOT analysis is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal SWOT factors. Opportunities and threats are external SWOT factors.

Workshop 1: Status (SWOT) Assessment

SWOT ANALYSIS

Strengths

• Those things that you do well,

• High value or performance points

• Core Competencies

v Good leadership

v high skilled workforce

Weaknesses

• Things that prevent you from doing what you really need to do

• Internal in nature- they are within your control

v Bad leadership,

v unskilled workforce

v insufficient resources

Opportunities

• Potential areas for growth and higher performance

v marketplace,

v unhappy customers with competitor’s

Threats

• Challenges confronting the organization

v shifts in consumer behavior,

v Substitute products

Workshop 2: Practical Visioning

(Creation of vision pillars/vision statement)

v Focus Question: What do you want to see or hear people say about your business by 2016?

Workshop 3: Strategic Directions

What strategies must we undertake to pursue our vision for our business?

v How do we get there? How do we achieve our vision?

v Revisit our current realities and see some hindering factors that prevent us from achieving our mission vision

v Identification of Key Result Areas

ACTION WORDS, e.g.

v Intensify, hasten, increase, etc. (when referring to positive present situations and their desired futures), or

v Decrease, minimize, etc. (when referring to negative situations and their desired futures)

vFocus on “how to”.

Workshop 4: Conceptualizing the strategies

v Focus Questions: What are the strategies you need to undertake to pursue your vision pillars?

Writing the Mission Statement

• Explains the core purpose of your business

• Expresses the values of the business

• Should be brief and to the point

• Easy to understand

• If possible, try to convey the unique nature of your business and the role it plays that differentiates it from others