Business Plans

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Information about Business Plans
Business & Mgmt

Published on March 15, 2009

Author: gavindjharper



A presentation by Gavin D. J. Harper, originally delivered at the Institut Supérieur de Commerce International, Dunkerque, France, on writing a business plan. The presentation covers in succinct points why a business plan is neccessary, and the basic components that every business plan should include.

Gavin D. J. Harper Presentation at: Institut Supérieur de Commerce International Dunkerque, France March 2009

 Business plans are used for a number of purposes – Fund raising from:  Banks  Venture Capital  Private Finance  Internal clarification of business goals   Businessplans are not a static document that you write at the beginning of starting a business – they are DYNAMIC. Change them as the business environment and  your knowledge evolves.

In developing your business  plan, you will be developing „entrepreneurial skills‟.  Entrepreneurs come from a diverse range of backgrounds and integrate and synthesise a wide range of skills.  As a prospective entrepreneur, you will have to get used to wearing “lots of hats”.

 If your business “doesn‟t work on paper” and the figures don‟t add up – it has less chance of working in real life. No…. I regret nothing… I took the It‟s better to waste a time to do a  business plan. week writing a business plan than wasting a year (and lots of cash) trying to start up a venture that is destined to fail.

A business plan defines what your businesses objectives are. “Mission Statement”  “Values / Ethos Clarification”   Are your objectives realistic? A business plan makes them “transparent”   How are you going to get there? Roadmap for your business. 

Any great idea needs firm foundations. By spending the time writing a business plan, you are building a firm foundation on which to develop your business. “A successful man is one who can lay a firm foundation with the bricks others have thrown at him.” David Brinkley “Confidence is the foundation for all business relations. The degree of confidence a man has in others, and the degree of confidence others have in him, determines a man's standing in the commercial and industrial world.” William J. H. Boetcker

 Business plans help get “Everyone on the same page” – they provide a central vision to which everyone in the business subscribes. The more people you have to co-ordinate, the more important this becomes.

 No two businesses are the same.  No two business plans are the same. It is ok for business plans to vary considerably  depending on the type and style of business. Generic business plans are available for differetn  “types” of business, which you can customise for your own ends.  We are now going to look at a very „generic‟ type of business plan, which provides the basic elements of structure for your plan.

 Outlines what you are looking to achieve.  How are you going to do it with the resources available.  Keep it short, keep it concise and make EVERY WORD COUNT.  It is the written equivalent to your “Elevator Pitch”.  If you can‟t explain what you are doing in a minute, then you will lose your readers attention.

 Who do you anticipate selling your product or service to?  What „sort of people‟ are they?  Where do they live?  How many of them are there?  What range of ages are your customers?  What is their spending power?

 Know everything about your enemy.  What are their: Prices  Strengths  Weaknesses   How does your business differ from theirs?  What are you going to do better than them?  How will you steal their business?

 Who are your suppliers and how will you rely on them?  Anyspecial requirements for delivery that are specific to your business? E.g./ “Cold Chain” for Food-Service  “Just In Time” for Automotive Parts 

 What is your sales channel?  How are you going to reach your customers?  Do you have the funds to market your product to your consumers?  Innovative marketing models? Pyramid Selling  e-Business  Mail Order 

 How many people will you need to run your business?  Who are your “key staff”?  What specialist skills are required to produce and deliver your product or service? Are there enough of these skilled people in your  area – if not where will you recruit them from? Is there a „premium‟ to be paid for their skills?  What is the labour market like in your area?   Do you need to provide training?  Can you “outsource” where you can‟t find skills locally?

 What are the processes you will be using in your business?  Do these processes require specialist equipment? Capital Investment in  Tooling  Infrastructure 

 Forecasts for the next three – five years. Cash Flow  Balance Sheet  Profit and Loss Account   Howwill the proceeds of your funds be spent? Reinvestment in the business?  Dividends to shareholders?  Remuneration for founders? 

 Whatsort of risks is your business likely to encounter? Turbulent marketplace?  Operational Risks?  Staffing Risks?  Financing Risks?   THINK GREEN: Rising energy prices?  Resource scarcity? 

 What is your company‟s ethical position? Sustainability  Social  Economic  Environmental   How will your company be a „responsible‟ business citizen? Community engagement  Being “A Good Neighbour” 

 Your business plan is an ambassador for your company. If your business was a country, you wouldn‟t  dress your ambassador in a shabby, ill-fitting suit. Ensure that the plan is laid-out professionally.  Print on good quality paper.  Give thought to the cover and binding of your  plan.  With desktop-publishing and high quality printing cheaper than ever, there is no excuse for poor-quality presentation.

 Business plan writing software (provides a template for you to fill in) Simple but…  Generic & Inflexible   Download a “template” for your type of business from the net  Take a course in business planning (this one?)  Hire a consultant Sounds easy…But YOU know your business better 

 Wecan learn a lot from the East about developing sustainable businesses – some businesses in Japan, have a 500 year business plan. Including big names you might be familiar with. Toyota  Honda  Sony 

 Ifyou haven‟t got a coherent and well presented business plan, what else haven‟t you done?  Alarm bells for investors… What does it say about this person‟s business?  Late tax returns?  Poor organisation?  Bad time management?   UNABLE TO RUN A BUSINESS!

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