Simplifying the business planning process

Business Plans Simplified Chris Greenhill Greenhill Consulting

Why have one? • Objectively focuses the mind • Check your business idea and assess viability • Set objectives that will help the business grow • Shared vision • Help monitor success Who is it for? • You • Business partners, directors, associates • Those you need help from – banks, investors Business plans What’s the point?

*PeterDrucker Snapshot of the business Management and resources Marketing plan Getting and keeping customers* Operational plan What needs to be done and when Financial plan Funding the business and tracking money Risk analysis Predicting possible pitfalls Business Plan

Snapshot of the business Management and resources People – Skills, experience, qualifications Physical assets – Buildings, equipment, funds Contacts – Phone, website address

Marketing Plan Mission – What is our market? Brand – How do we want customers to feel about us? What makes us different (USP)? Priorities – SMART objectives Internal – Strengths and weaknesses External – My business sector and the world in general Segmentation – Who is most likely to buy your product or service? Strategy – Different ways to connect with different customer groups. The ‘7Ps marketing mix’ Research ObjectivesStrategy Getting and keeping customers

Operational Plan Mission – What is our market? Brand – How do we want customers to feel about us, what makes us different (USP) Priorities – SMART objectives Internal – Strengths and weaknesses External – My business sector and the world in general Segmentation – Who is most likely to buy your product or service? Strategy – Different ways to connect with different customer groups. The @marketing mix’ Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Task 1 Task 2 Task 3 Task 4 Task 5 Task 6 Priorities – Important verses urgent or interesting Return on investment – Time & money Capacity – Does it compromise something else? What needs to be done and when

Financial Plan Funding – Loans, investor, savings Capital costs – Major purchases Profitability – Break-even, sales targets, cost control Accounting – Cash flow, P+L My new business Cash flow Forecast January Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Total SALES (receipts) Product/Service A £1,000 £800 £1,500 £1,500 £1,000 £800 £1,500 £1,500 £1,200 £1,500 £500 £1,200 £14,000 Product/Service B £5,500 £6,500 £7,000 £5,500 £2,500 £2,500 £6,000 £4,500 £6,000 £5,000 £5,500 £9,500 £66,000 Product/Service C £3,000 £3,000 £2,500 £3,500 £3,500 £2,000 £7,000 £2,500 £3,000 £2,500 £3,000 £3,000 £38,500 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 (A) Total Sales £9,500 £10,300 £11,000 £10,500 £7,000 £5,300 £14,500 £8,500 £10,200 £9,000 £9,000 £13,700 £118,50 0 DIRECT COSTS Materials £950 £1,030 £1,100 £1,050 £700 £530 £1,450 £850 £1,020 £900 £900 £1,370 £11,850 Misc production costs £475 £515 £550 £525 £350 £265 £725 £425 £510 £450 £450 £685 £5,925 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 (B) Total Direct Costs £1,425 £1,545 £1,650 £1,575 £1,050 £795 £2,175 £1,275 £1,530 £1,350 £1,350 £2,055 £17,775 INDIRECT COSTS (Overheads) Salaries £4,968 £4,968 £4,968 £4,968 £4,968 £4,968 £4,968 £4,968 £4,968 £4,968 £4,968 £4,968 £59,616 Electricity £312 £312 £312 £312 £312 £312 £312 £312 £312 £312 £312 £312 £3,744 Water £150 £150 £150 £150 £150 £150 £150 £150 £150 £150 £150 £150 £1,800 Rent £2,000 £2,000 £2,000 £2,000 £2,000 £2,000 £2,000 £2,000 £2,000 £2,000 £2,000 £2,000 £24,000 Telephone £250 £250 £250 £250 £250 £250 £250 £250 £250 £250 £250 £250 £3,000 Insurance £0 £0 £1,650 £0 £0 £0 £0 £899 £0 £0 £0 £0 £2,549 Accountant £0 £0 £0 £0 £0 £0 £0 £0 £1,500 £0 £0 £0 £1,500 Advertising £200 £200 £200 £200 £200 £200 £200 £200 £200 £200 £200 £200 £2,400 Bank charges £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 (C) Total Indirect Costs £7,880 £7,880 £9,530 £7,880 £7,880 £7,880 £7,880 £8,779 £9,380 £7,880 £7,880 £7,880 £98,609 NET CASHFLOW A - (B+C) 195.00 875.00 -180.00 1,045.0 0 - 1,930.0 0 - 3,375.0 0 4,445.0 0 - 1,554.0 0 -710.00 -230.00 -230.00 3,765.0 0 Opening bank balance. 2,000.00 2,195.00 3,070.00 2,890.00 3,935.00 2,005.00 -1,370.00 3,075.00 1,521.00 811.00 581.00 351.00 Closing bank balance. (D+C) 2,195.00 3,070.00 2,890.00 3,935.00 2,005.00 -1,370.00 3,075.00 1,521.00 811.00 581.00 351.00 4,116.00 SALES Q1 Q2 Q3 Q4 Funding the business and tracking money

Risk analysis How likely is it that something will happen? How severe are the consequences if it does? Predicting possible pitfalls

Compiling your plan Make it appropriate for the audience Paper document Presentation Mindmap Template supplied by another If it’s electronic, make use of hypertext links and embedded documents

An effective business plan = structured thinking + simplicity + appropriate format