business plan basics-vinod manvi (savoire faire oct 2010
DESCRIPTION
This slide deck was presented by Vinod Manvi (Saviore Faire) at the TiE Institute Knowledge Series session for Growth Stage Entrepreneurs for Scaling UpTRANSCRIPT
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Vinod ManviPrincipal Consultant
Savoir faire Management Services Pvt Ltd
Evaluating Potential-Understanding Scale & Growth
October 23, 2010
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Road Map Understand what growth means to us Understanding Scale/Scope Strategies for growth Key functions Achieving Sustainability What to do “now” ?
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Growth Object of Growth
Bigger,Larger,Stronger,Higher Smaller,Leaner,Flexible,Faster
The impossibility of Freeze Frame Questions –
Growth for Grow into
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Growth Metamorphosis
When Where How much Outcome
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Metamorphosis When
Is the time to grow now or later? Indian condition – demographic boom The Exponential Rule-doubling time
Where Products Sectors
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Metamorphosis How much
Volume Value Rate
Outcome Financials Non-Financials
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Key Points Purpose Vantage Point Be in the driver’s seat Desired Outcome
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Road Map Understand what growth means to us Understanding Scale/Scope Strategies for growth Key functions Achieving Sustainability What to do “now” ?
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Understanding Scale & Scope Economy of Scale Economy of Scope
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Understanding Scale Economies of Scale
Mass Production Lower transaction frequency Seeks to lower per unit cost Size matters
Basics Designing of business Concept of “Sunk Cost”
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Understanding Scope Economies of Scope
Increased Customisation Thrives on Flexibility High Product Proliferation Small is beautiful
Basics Market/Customer oriented Limitations of volume
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Considerations of Business Design Timing Funding Resources
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Road Map Understand what growth means to us Understanding Scale/Scope Strategies for growth Key functions Achieving Sustainability What to do “now” ?
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Growth Strategies The tasks of Strategic management
Develop Strategic Vision and Business Mission Set Objective Prepare strategy to achieve objective Implement or Execute above strategy Evaluate Performance Revise all of the above whenever needed
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Growth Strategies Generic Strategies
Cost Leadership Differentiation Focus Benchmarking Continuous Improvement
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Growth Strategies Moving beyond generic strategies
Continuity of strategy Continual Innovation Choosing new battlefields
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Moving Beyond Generics Continuity in Strategy
Cost Leadership- Lowest cost to Best Value Alliances 360 degree integration
Continual Innovation Definition of Ever changing Customer Value Transfer of Passion Speed
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Moving Beyond Generics Choosing new battlefields
Understanding hidden Value Creating “Blue Oceans”. Granularity of Customisation
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Key Points The strategic management process Understanding and implement Generic
strategies Go beyond the Generics Revise whenever needed
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Road Map Understand what growth means to us Understanding Scale/Scope Strategies for growth Key functions Achieving Sustainability What to do “now” ?
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Key functions Seek to serve Seek to operate Seek to earn Seek to manage
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Key Functions Seek to serve Seek to operate Seek to earn Seek to manage
• Customers • Markets• Sales•After Sales•Customer Support
• Operations• Production• Quaility of Output• Delivery• Managing Money
• Costing• Working Capital
• Resource Planning• Recruitment & Staffing• Training and Development
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Key Functions Seek to serve Seek to operate Seek to earn Seek to manage
•MARKETING
•OPERATIONS
• FINANCE• HUMAN RESOURCES
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Key functions Marketing
Marketing Plan Brand Building Sales Promotion
Finance Funding Options Investment Mix Working Capital Management
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Key functions Operations
Systems thinking Ensuring Quality and Performance Managing Costs
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Road Map Understand what growth means to us Understanding Scale/Scope Strategies for growth Key functions Achieving Sustainability What to do “now” ?
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Sustainability Clarity of thought Consistency in action Inequity in effort
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Clarity of thought Clarity of purpose of growth Clarity about implementability of the plan Built in scalability considerations of the plan Built in flexibility in the plan
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Consistency in Action Consistency in the thought processes Consistency in the key functions Consistency in monitoring of functions
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Inequity in action Understanding the current and near future
focus areas Adjusting the emphasis based on the current
needs Having a plan B ready. Taking time off to reflect- and act swiftly
whenever required.
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Road Map Understand what growth means to us Understanding Scale/Scope Strategies for growth Key functions Achieving Sustainability What to do “now” ?
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Key points for action Articulate the purpose of growth Have some clarity of the kind of organisation
that you wish to grow into Articulate what kind of economy that you wish
to adopt Articulate broadly the kind of strategy for
growth Have a vision of how and what your key
functions will look like Make a business plan for growth
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Vinod ManviPrincipal Consultant
Savoir faire Management Services Pvt Ltd
Starting Up – Creating a Business Plan
June 19, 2010
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Stability Rigidity
Flexibility Confusion
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Road Map Understand the “Customer” of the Business
Plan Egg or Hen – starting point for the business
plan Where do I start? – Market or Capabilities Assumptions Tie-up the loose ends
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Customer of the Business Plan
Long Term Investor Lender
Venture Capitalist/ Private Equity Customer
Yourself
Long Term Profit Earning Potential
Scalability; Exit
Will my money be
safe?
Intention of showing the Business Plan to
the Customer?!
Convincing yourself
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Road Map Understand the “Customer” of the Business
Plan Egg or Hen – starting point for the business
plan Where do I start? – Market or Capabilities Assumptions Tie-up the loose ends
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Balance Sheet Basics
Money Required
Fixed Assets
Working Capital
Money Funded
Share Capital
+ ReservesLoaned Funds
Net Worth
Source of Funds
Application of FundsFinancing Investing
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Egg or Hen? This is what I require…. ஃ this is the funding
required ……. OR This is the funding available … ஃ this is what
I’ll do with that fund
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Sourcing options Venture Capital Seed Capital Angel Investor Private Equity Lender Boot Strap
• Long Term• Managerial and Tech expertise• High risk, High return• Long term influence in the venture
• Friends and relatives• Pre-revenue stage• To attract the attention of the Venture Capital• To get the business off the ground•“At risk” investment of promoters
• More favourable terms than other type of investors• For the person than the project• Focus on helping the business succeed than huge profit for the future
• Not quoted on exchanges• Revival, multiple investors• Buy, Strip and Flip
• Building company from own finances
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Road Map Understand the “Customer” of the Business
Plan Egg or Hen – starting point for the business
plan Where do I start? – Market or Capabilities Assumptions Tie-up the loose ends
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Market or Capabilities Key factor/ Limiting Factor/ Constraint I know the size of the market I am going to
address I know the amount I require to run my
business to start with
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Road Map Understand the “Customer” of the Business
Plan Egg or Hen – starting point for the business
plan Where do I start? – Market or Capabilities Assumptions Tie-up the loose ends
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Assumptions Ockham’s razor (Pluralis non est
ponenda sine neccesitate) Explicit vs implicit assumptions
Understand the domains of control and influence
Info.Sources
Growth
Timing
Controls
Valid Assumption
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BeyondInfluence &
Control
Within
Sphere of Influence
Domains of Influence and control
WithinSpan of Control
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Assumptions
Assumptions proving incorrect Mistrust the obvious
Ockham’s razor (Pluralis non est ponenda sine neccesitate)
Explicit vs implicit assumptions
Understand the domains of control and influence
Info.Sources
Growth
Timing
Controls
Valid Assumption
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Road Map Understand the “Customer” of the Business
Plan Egg or Hen – starting point for the business
plan Where do I start? – Market or Capabilities Assumptions Tie-up the loose ends
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Purpose
Process
People
Prosper
49494949Sales Plan
Production
Plan
Cost Plan
Projected Profit and Loss Account
Investment Plan
Debt/ EquityPlan
Projected Balance Sheet
Cash Flow StatementMilestone
reporting
Assumptions
Charts/ Graphs
and Pictures
Critical Annexure
s
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What makes a good plan?
Simple Is it easy to understand
and to act on? Does it communicate its contents easily and practically?
Specific Are its objectives
concrete and measurable? Does it include specific actions and activities, each with specific dates of completion, specific persons responsible and specific budgets?
Simple
Specific
Realistic
Complete
Follow up
Actions
Results
Plan
• Realistic• Are the sales goals,
expense budgets, and milestone dates realistic? Is the plan complete?
• Complete• Does it include all the
necessary elements?
