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Starting up your Starting up your business: business:

your business planyour business plan

How to avoid problems and be How to avoid problems and be reasonably sure of being reasonably sure of being

successfulsuccessful

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DIFFICULTIES in DIFFICULTIES in STARTING UP A STARTING UP A

BUSINESSBUSINESS

Registration and permitsRegistration and permits

Find clientsFind clients

Find creditFind credit

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Why a business plan?Why a business plan?

For the bank?For the bank?

No, for myself!No, for myself!

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Why a business plan?Why a business plan?

At an international level, At an international level, about 1/3 of new about 1/3 of new companies close down in 3 companies close down in 3 years timeyears time

We want to avoid opening We want to avoid opening and closingand closing

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Questions Questions I should ask myselfI should ask myself

Do I have the qualities to be an entrepreneur?Do I have the qualities to be an entrepreneur?

Do I meet all requirements requested by Do I meet all requirements requested by regulations to start up that type of business?regulations to start up that type of business?

Which legal type of company should I choose? Which legal type of company should I choose?

Is my business economically sustainable?Is my business economically sustainable?

Can I find grants? Can you obtain loans?Can I find grants? Can you obtain loans?

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Is my business Is my business economically economically sustainable?sustainable?

Which means:Which means:

–Will I make money?Will I make money?

–Or will I loose Or will I loose money?money?

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Writing a business plan Writing a business plan helps you answer this helps you answer this

question:question:will I make or loose will I make or loose

money?money?

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How to write a business How to write a business planplan

You do not need to be a You do not need to be a specialist in economicsspecialist in economics

You need to be honest You need to be honest with yourself and have a with yourself and have a lot of good senselot of good sense

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Business PlanBusiness Plan

Not only calculations!Not only calculations!

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The parts of my business The parts of my business planplan

My businessMy business

The marketThe market

The futureThe future

The financesThe finances

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Description of my Description of my businessbusiness

Where it will be located, how it will Where it will be located, how it will be organized (who will do what), be organized (who will do what), the personnel and the ownershipthe personnel and the ownership

Products/servicesProducts/services Legal considerations Legal considerations

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The marketThe market

Market researchMarket research Market targetsMarket targets Your customersYour customers Your competitorsYour competitors Advertising and salesAdvertising and sales

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The futureThe future

Vision and missionVision and mission

Goals/objectivesGoals/objectives

Action planAction plan

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The financesThe finances

1.1. Set up investments Set up investments

2.2. Fixed costsFixed costs

3.3. Variable costsVariable costs

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The financesThe finances

4.4. revenuesrevenues

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The financesThe finances5) Will I make or loose 5) Will I make or loose

money?money?

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6) The first 3 months!!6) The first 3 months!!

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7) Cash flow forecast-first 7) Cash flow forecast-first 12 months12 months

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8) OVERDRAFT FINANCING8) OVERDRAFT FINANCINGA problem that can be A problem that can be

foreseenforeseen

The enterprises who get paid from The enterprises who get paid from their clients at longer terms in their clients at longer terms in comparison to the terms they have comparison to the terms they have to pay their suppliersto pay their suppliers

And the companies who must keep And the companies who must keep a stock of goods for several a stock of goods for several months. For example if the goods months. For example if the goods that are bought to be sold, remain that are bought to be sold, remain unsold for 12 months it means I unsold for 12 months it means I have to finance this stock of unsold have to finance this stock of unsold goods. goods.

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Overdraft financingOverdraft financing

A simple example: if I get payed A simple example: if I get payed after 120 days I issue my invoice after 120 days I issue my invoice and I have to pay after 60 days, it and I have to pay after 60 days, it is evident I’ve got a problem. is evident I’ve got a problem.

Another example: if I buy some Another example: if I buy some goods and I resell them after an goods and I resell them after an average time of 12 months, this average time of 12 months, this fact has a strong impact on the fact has a strong impact on the necessity of financing for my necessity of financing for my enterprise.enterprise.

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XX== number of days after which my clients number of days after which my clients pay mepay me

YY== number of days my stock stays unsoldnumber of days my stock stays unsold ZZ==number of days after which I pay my number of days after which I pay my

supplierssuppliers

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Now some practice!!Now some practice!!

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Break even point Break even point calculationcalculation

Fixed costsFixed costs________________________________________________

Revenues per unit – variable expenses per unitRevenues per unit – variable expenses per unit

(Notice: revenues – variable expenses is an (Notice: revenues – variable expenses is an amount called “contribution margin” per unit)amount called “contribution margin” per unit)

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