Developing a Business Plan

Business Plan

Business Plan “ is a written document that is spells out where you are, where want to be and how want to get there”

It is also called “Project Report”, “Venture Plan”, “Loan Proposal” , “Techno Economical Feasibility Study” and so forth.

Elements of Business PlanExecutive SummaryBusiness DescriptionMarketing OperationsManagementFinancial Critical RiskHarvest StrategyMilestone Schedule

Hints for writing Executive Summaries

No More than 3 pages What, How, Where , When –

summarized Do it at last after finishing the plan.

Hints for writing Business Description

Name of your businessA industry background and history

of your companyThe potential of the ventureUnique feature of this ventureForm of your business – like sole

proprietorship, partnership etc.

Hints for writing Marketing

Give realistic sales projection.Mention how you want to address the

competition and how you will succeed in your venture.

Show market studiesIdentify target market, market position and

market share.Pricing strategy to capture market shareMarketing Mix plan and the cost.

Hints for writing Operations

Describe the location advantage ( like tax benefits, resources abundance, labor availability),

List of infrastructure and machines needed

Describe the supply and logistics advantages

Provide operational cost.

Hints for writing Management

Give resumes of the key personsShare holding patterns ( Sweat capital etc.)

List of advisors, consultants etc.Compensations for the key people.

Hints for writing Financial

Give estimated statements of cash flow.

Present the Source and Use of the funds

Present a capital and revnue budget

Mention the stages of financing and the estimated quantum.

Hints for writing Critical Risk

List of potential risks :Price cutting by competitionChange in the trendPossible Cost and Time over runsVulnerability of the sales projections.Product development risks – cost, product

failure etc.supply chain risksWhat are the de-risking plans

Hints for writing Harvest Strategy

Outline the plan for exit – IPO, Sale etc.

Succession planBusiness continuity plans.

Hints for writing Milestone Schedule

Develop Chart, Schedule ( like CPM, PERT, Gantt etc.) to list the phases of the venture and showing the datelines.

Guidelines to prepare the Business Plan

Keep it short – not more than 15 to 20 pagesKeep it neat and tidy, with table of contents,

exhibits, appendices ,graphs etc.Create excitement by focusing on the emerging

trends and future potentials.Avoid exaggeration

Questions that Business Plan should answer

Who is your customer?Why will they buy your product?Why will they buy from you and not from

competition?Do you have cost advantage?Does your management have relevant

business experience.How much money needed?How will you pay back to the investors and

when?

Suggestions for Business Plan Presentation

Highlight the pain your venture is addressing.Why you and Why now?Highlight the reachable marketExplain the Business Model ie how this venture

is expected to make money.List out the plans and the process of reaching

the target marketMention the metrics to assess the potential and

measure the progress of the venture.Show enthusiasm when you present.