ENT600 Blueprint Format PDF

5/23/2018 ENT600 Blueprint Format PDF

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TECHNOLOGY-BASED BUSINESS IDEA

BLUEPRINT

FORMAT & CONTENTS

COVER

TABLE OF CONTENTS

THE BODY OF BUSINESS BLUEPRINT

1. EXECUTIVE SUMMARY

2. PRODUCT/SERVICE DESCRIPTION

3. TECHNOLOGY DESCRIPTION

4. MARKET ANALYSIS AND STRATEGIES

5. MANAGEMENT TEAM

6. FINANCIAL ESTIMATES

7. PROJECT MILESTONES

8. CONCLUSIONS

9. APPENDICES


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BLUEPRINT OUTLINE

Note:

Before you begin writing within this section make sure that you have done some research.

Blueprint research helps you make informed decisions and create a successful direction foryour blueprint.

Gather information sources

Record relevant information

Analyze the information you have gathered and note the associated opportunities andrisks

If you are going to submit the blueprint to investors, research what types of investmentopportunities are available to you, why you need investment (banks, government,private equity investors, etc.)

1. EXECUTIVE SUMMARY

The executive summary is usually short and concise. The summary articulateswhat the opportunity conditions are and why they exist, who will execute theopportunity and why they are capable of doing so, how the company will gain entryand market penetration; it answers the questions: for what reason does thisventure exist and for whom?

Essentially, the executive summary needs to reflect the criteria presented in theBusiness Opportunity Analysis Exercises. This is your chance to clearly articulatehow your business is durable and timely, and how it will create or add value to theend user. This summary is usually prepared after the other sections of the blueprintare completed.

1.1. Brief description of the business and product concepts

1.2. The target market and projections

1.3. The competitive advantages


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1.4. The profitability

1.5. The management team


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2. PRODUCT OR SERVICE DESCRIPTION

2.1. Describe in some detail the product or service to be produced/sold.

2.2. Discuss the application of the product or service and describe the primary end useas well any significant secondary applications.

2.3. Emphasise any unique features of the product or service and how these will createor add significant value; also, highlight any differences between what is currentlyon the market and what you will offer that will account for your market penetration.

2.4. Define the present state of development of the product or service and how muchtime and money will be required to fully develop, test, and introduce the product orservice. Provide a summary of the functional specifications and photographs, ifavailable, of the product.


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2.5. Describe any patents or other proprietary features of the product or service.

2.6. Discuss any opportunities for the expansion of the product line or the developmentof related product or service.


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3. TECHNOLOGY DESCRIPTION

Areas to be covered are the key components related to the product/service ortechnology, the intellectual property involved, specialized knowledge, experienceand skills involved and regulations that may govern the use of the technology todeliver the product/service. It should also cover research & development (which

outlines your plans for the future), and future technology trends that you and themarket can foresee.


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4. MARKET RESEARCH AND ANALYSIS

Information in this section needs to support the assertion that the venture cancapture a substantial market in growing industry and stand up to competition.Because of the importance of market analysis and the critical dependence of other

parts of the blueprint on this information, you are advised to prepare this sectionfirst.

4.1. Customers

a. Discuss who the customers for the product or service are or will be. Potentialcustomers need to be classified by relatively homogeneous groups havingcommon, identifiable characteristics (e.g., by major market segment).

b. Show who and where the major purchasers for the product or service are in themarket segment. Include national regions and foreign countries, as appropriate.

c. Indicate whether customers are easily reached and receptive, how customers buy(wholesale, through manufacturers representative, etc.).


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4.2. Market Size and Trends

a. Show for three years the size of the current total market and the share you willhave, by market segment, and/or region, and/or country for the product or serviceyou will offer, in units, ringgit, and potential profitability.

b. Describe also the potential annual growth for at least three years of total market foryour product or service for each major customer group, region or country, as

appropriate.

c. Discuss the major factors affecting the market growth (e.g. industry trends, socio-

economic trends, government policy, and population shifts).


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4.3. Competition and Competitive Edges

a. Make a realistic assessment of the strengths and weaknesses of competitors.

Competitors Strengths Weaknesses

b. Compare competing and substitute products or services on the basis of marketshare, quality, price, performance, delivery, timing, service warranties, and otherpertinent features.

c. Compare the fundamental value that is added or created by your product or

service, in terms of economic benefits to the customer and to your competitors.

d. Discuss the current advantages and disadvantages of these products or servicesand say why they are not meeting customers needs.


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4.4. Estim ated Market Share and Sales

a. Based on your assessment of the advantages of your product or service, themarket size and trends, customers, competitors and their products, estimate theshare of the market and the sales in units and ringgit that you will acquire in eachof the next three years. Remember to show assumptions used.

Product/service Market Share and Sales

Year

Market share (%)

Total sales in units

Total sales in RM

4.5. Marketing Strategy

a. Overall marketing strategy. Describe the specific marketing philosophy andstrategy of the company, given the value chain and channel of distribution in thetarget market. Include, for example, a discussion of the types of customer groupsthat you are targeting for initial intensive selling effort those that you are targetingfor later selling efforts.

b. Pricing. Discuss the pricing strategy, including the prices to be charged for yourproduct and service, and compare your pricing policy with those of your majorcompetitors.


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c. Sales tactics. Describe the method (e.g., own sales force, sales representatives,direct mail, or distributors) that will be used to make sales and distribute theproduct or service.

d. Service and warranty policy. If your company will offer product that will requireservice, warranties, or training, indicate the importance of these to customerspurchasing decisions and discuss your method of handling service problems; also,highlight the kind and term of any warranties to be offered, whether service will behandled by company service people, agencies, dealers and distributors, or returnto the factory.

e. Advertising and promotion. Describe the approaches the company will use to bringits product or service to the attention of prospective buyers.

f. Distribution. Describe the methods and channels of distribution you will employ.


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5. MANAGEMENT TEAM

This section includes a description of the function that will need to be filled, adescription of the key management personnel and their primary duties, an outlineof the organisational structure for the venture, a description of the board ofdirectors, a description of the ownership position of any other investors, and soforth. You need to present indications of commitment, such as the willingness ofteam members to initially accept modest salaries, and of the existence of the

proper balance of technical, managerial, and business skills and experience indoing what is proposed.

5.1. Organisation

a. Present the key management roles in the company and the individuals who will filleach position.

Key Management Roles Name

b. If it is not possible to fill each executive role with a full-time person without addingexcessive overhead, indicate how these functions will be performed (e.g., usingpart-time specialists or consultants to perform some functions), who will performthem, and when they will be replaced by a full-time staff members.

5.2. Key Management Personnel

a. For each key person, describe in detail career highlights, particularly relevantknow-how, skills, and track record of accomplishments that demonstrate his/herability to perform the assigned role.


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Names & Positions Career Highlights


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b. Describe the exact duties and responsibilities of each of the key members of themanagement team.

Names & Positions Duties & Responsibilities


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5.3. Management Compensation and Ownership

a. State the salary to be paid, the share ownership planned, and the amount of equityinvestment (if any) of each key member of the management team.

Names & Positions Monthly salary Share ofownership

Amount ofEquity Invested

5.4. Supporting professional advisors and services

a. Indicate the supporting services that will be required.

a. Indicate the names and affiliations of the legal, accounting, advertising, consulting,and banking advisors selected for your venture and the services each will provide.

Name of Professional Advisors Services Provided


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6. FINANCIAL PLAN

Sound financial management is one of the best ways for the business venture toremain profitable and solvent. In this section think through some of the generalissues you will have to address in your formal business plan.

To effectively manage your venture finances, plan a sound, realistic budget bydetermining the actual amount of money needed to start your venture (start-upcosts) and the amount needed to keep it open (working capital or operating costs).

6.1 Start-up Cost

Estimate the costs incurred in conjuction with one-time activities that the ventureundertakes when it opens a new facility, introduces a new product or service,conducts business in a new territory or with a new class of customer or beneficiary,initiates a new process in an existing facility or commences some new operationafter considerable research and discussion.


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6.2 Working Capital

Working capital represents the amount of initial expenditure required to finance thedaily operation until the business gets its first sale. The amount of working capitalis therefore dependent upon the period until the firm can generate enough sales tocover its short-term expenditure.


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6.3 Start-up Capital and Financing

Total start-up capital incorporates both start-up cost and working capital needed tostart a project. The most common source of finance for new venture is theentrepreneurs own equity contribution. The equity contribution can be in the formof cash or assets. The next most common source of finance is term loan. This is a

form of long term financing offered by most commercial banks. The term loan canbe used to finance fixed assets as well as working capital requirements. Theinterest rate and the loan period depend on the current interest rate and theamount of loan required respectively.

6.4 Cash Flow Statement

A cash flow pro-forma statement refers to the projected statement of cash inflowand outflow throughout the planned period. Under normal circumstances, the proforma cash flow statement is prepared between three to five consecutive years.However, longer periods are sometimes needed depending upon the projectsundertaken. The pro forma cash flow statement must be able to show the followinginformation:

Cash inflowsthe projected amount of cash flowing into the company.

Cash outflowsthe projected amount of cash flowing out of the company.

Cash deficit or surplus the difference between cash inflows and cashoutflows.

Cash positionthe beginning and ending cash balances for a particular period.


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6.5 Income Statement

The next step in developing a financial plan is to prepare the pro forma incomestatement which shows the expected profit or loss for the planned period, usuallyfor three to five consecutive years. Generally, the pro forma income statementconsists of the following elements:

Cost of good manufactured (production cost)

Gross profit

Net profit

Cost of goods manufactured (also known as production costs) refers to the totalproduction cost involved in producing the finished goods. It includes all costs suchas direct materials, direct labour, manufacturing overheads and the differentialvalue between the beginning and ending balances of the work-in-progress (if any).Gross profit is the gross margin realised after deducting the cost of goods soldfrom sales. It represents the amount of profit before deducting other operatingexpenditure. Net profit (or net loss) is defined as the difference between grossprofit and operating expenses for the planned period.


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6.6 Balance Sheet

While the pro forma income statement shows the financial performance of the

company for the planned period, the pro forma balance sheet shows the financialposition of the company at a specific point in time in terms of assets owned andhow those assets are financed. The pro forma balance sheet is prepared for aperiod between three to five years.


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7. PROJECT MILESTONES

This section includes a month-by-month schedule that shows the deadlines ormilestones of activities critical to the ventures success. Examples of activities thatare critical to the success of the venture are: Incorporation of the venture,completion of design and development, completion of prototypes, obtaining ofsales representatives, signing of distributors and dealers, ordering of materials in

production quantities, starting of production or operations, receipt of first orders,delivery of first sales.

Activities Deadlines

8. CONCLUSIONS

9. APPENDICES

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