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Transcript of Business Plan
What is Business PlanA business plan is a summary of an entrepreneurs proposed business venture.
Components of a Business Plan operational
details financial details marketing opportunities marketing strategies personnel skills and abilities
Functions of a Business Plan
Guide the companys operations by charting its course for the future and devising a strategy for following it. Providing the tools necessary for business growth such as mission statement, goals, objectives, budgets, financial forecasts, target markets, strategies. Attract lenders and investors. The business plan is an instrument by which you can increase actual performance against set targets.
Factors to consider when preparing a Business Plan When applying for a loan or trying to attract lenders
or investors a plan should be highly polished and professional in form and content if it has to influence others that it will be able to repay its loan and produce pleasant rates of return. going to produce a poorly run business. Investors can get hurt in the process. They could loose their money.
A badly written business plan is more than likely
Factors to consider when preparing a Business Plan contd
A business plan takes on the reflection of the one who wrote it, therefore serious thought must go into its preparation. It is important that an entrepreneur knows everything that he/she stated in the business plan being presented to the lender. A lender wants to feel confident that an entrepreneur has realistically evaluated the risks involved in the proposed business and has strategies for addressing them.
Factors to consider when preparing a Business Plan contdThe two-thirds rule: only two thirds of entrepreneurs with a sound viable new business venture will find financial backing. those
who do, will only get two thirds of what they asked for and it will take them two thirds longer to get the financing they anticipated.
ELEMENT OF A BUSINESS PLANExecutive Summary Mission Statement Company History Business & Industry Profile Business Strategy Description of Product/Service Marketing Strategy Competition analysis Management Team Financial Statements
Description of Product/Service
Describe companys overall product line. Draw diagrams and illustrations especially if product is highly technical. Write products service description. A statement of a products position in the product life cycle. Include any patents, trademarks, copyrights that protect the products from any infringement by competitors. Give honest statements about uniqueness of product/service and information on the new type of product/service that the company will be bringing on stream in the future.
Description of Product/Service contdIt must be clearly understood that product/service description is also defining the benefits that can be derived by customers who purchase the companys products/services. Your product description must not only address issues relating to the good quality of the product it must also treat with how good people will feel using them.
Describe your target market and its characteristics, and its potential. Define target market, make business exactly what customers need. The marketing plan is very important in implementing the marketing strategy.
Points to consider when preparing a marketing plan:
Who are my customers- age, gender, income level and other demographic characteristics? Where do they live, work and shop? How many potential customers are in my area of business?
Be able to assess competition realistically. Theres very little space where there is no competition (information can be gathered from trade shows journals and customers association) Demonstrate your advantage over your competitors. Who are the companys key competitors? What are their strengths, weaknesses, image in the market place and rate of success. The difference of your product/service from the other products/services ensure that your companys strategy is customer focused.
Management Team Describe
the quality of the management team their experience and qualifications, their percentage of ownership in the company. Ideas and products do not succeed, but people do, therefore showcase the talent of those persons holding prominent positions in the company.
Financial Statements Prepare
two to three year statements if business is in existence. It is essential to make all forecasts realistic. Include a statement of assumptions on which financial projections are based, investors and lenders will want to know how your figures were derived.
THINGS THAT DO NOT IMPRESS A LENDER/INVESTOR need
money for working capital need money for modernization need money for expansion
THINGS THAT WIN APPROVAL OF LENDERS/INVESTORS need
money to modernize production facilities by purchasing.. need money to build inventory sales, peak season. These requests should be supported by adequate data which should include present and forecasted production levels.
TYPES OF BUSINESS PLANSWorking business plan one which an entrepreneur uses to guide his/her business Presentation business plan one which an entrepreneur uses to present to a lender or investor
Packaging Business PlanMake sure that the Business Plan has: an attractive cover free from grammatical, spelling and typo errors visually pleasant use colour charts, diagrams and graphics a table of contents
BUSINESS PLAN PRESENTATIONBe enthusiastic about the venture. Explain opportunities and any benefits to the investor/lender. Talk about the highlights details will come later. Limit your early discussion to only a few points. Avoid the use of technical jargon that may be over the head of the lender/investor.
BUSINESS PLAN PRESENTATION contdUse visual aids if possible, but do not let it overshadow you. Remember you are the entrepreneur not your aids. Close by restating and reinforcing the benefits of the proposed business and why it should be supported. Do not beg or try to get sympathy Prepare for questions After the presentations remember to follow up with investors/lenders.