business plan workshop

Business Plan DevelopmentBusiness Plan DevelopmentWorkshopWorkshop

Business Plan DevelopmentBusiness Plan DevelopmentWorkshopWorkshopWorkshopWorkshopWorkshopWorkshop

[email protected]@e2bconsulting.com

e2B Consulting Sdn Bhde2B Consulting Sdn Bhd

Workshop Agenda

• Part 1General Introduction to what is a Business

Plan

• Part 2How to prepare a Business Plan. Practical

aspects of preparing a Business Plan

Copyright e2B Consulting SdnBhd

Importance of a BusinessPlan

Success for businesses of all sizes are positively correlated tohaving a Business Plan.

Vast majority of INC. magazine 500 fastest growing companieshad business plans from the start – Timmons (1999)had business plans from the start – Timmons (1999)

Firms that spent time planning and developing a business planare those that experience rapid growth – Woo (1989)

93% of fast growth firms of the total studied had writtenBusiness Plan – Kinsella (1993)


What is a Business Plan

A Business Plan is a written statement thatdescribes and analyzes your business andgives detailed projections about its future.

• Helps get the money

• Helps decide to proceed or stop

• Helps improve business concept

• Helps improve odd of success

• Helps keep on track


Business Plan - ownership• The business plan should be owned and accepted

by the management team. Venture Capitals willwant to learn what you plan to do, not see howwell others can write for you!

• Professional advisers can provide a vital role inhelping to give the plan the appropriate focus.

• It is you who must come up with the plan anddefend it.


The Planning Process

The Business Plan is just like a road-map.Planning it is like planning a trip. It is a3 stage process:3 stage process:

1. Understanding WHERE YOU ARE

2. Deciding WHERE YOU WANT TO GO

3. Planning HOW TO GET THERE


Understanding where youare

• Understanding your product/service – yourcompetitive advantage (Unique Selling Point)

• Understanding your customers – who, why andhow are they going to buy from youhow are they going to buy from you

• Understanding your strengths and weaknesses(Internal)

• Understanding the opportunities and threats(External)


Deciding where you want to go

• Decide the general aims of your business – insome organization the aims are also referredto as the ‘mission statement’ of theorganization

• Set specific objectives for the business. TheObjectives should be:

• Quantifiable

• Bounded in time

• Realistically achievable


Planning how to get there

• Need to develop strategies to enable thebusiness to achieve the targetedobjectives

• Need to develop a Marketing Plan• Need to develop a Marketing Plan

• Need to develop Resource Plan

• Need to draw-up financial budgets

• Projected Profit & Loss

• Cash-flow forecast


The business planning process

Personal aimsMission Statement

Businessobjectives

Internal Appraisal• Strengths

• Weaknesses

Customer analysisMarket segmentation

Operating Plans• Financial plans• Resource plans

External Appraisal• Opportunities

•ThreatsMarketing

Plan


Writing

The

Business PlanBusiness Plan


Business details

• Name and address of business

• Personal/Applicants information andaddress

• Business type: soleproprietor/Partnership/Sdn Bhd/Bhdproprietor/Partnership/Sdn Bhd/Bhd

• Business activity

• Business information: Paid-up capital,company secretary, auditors, Directors,Shareholdings etc

• Licenses (if any)

• ReferencesCopyright e2B Consulting Sdn

Bhd

1. Executive Summary

• All Business Plan starts with an ExecutiveSummary

• Fill this up LAST

• Executive Summary (Maximum 500 words) –This is only the extraction/summary fromwhat you have written.


2. Value Proposition

• What does this mean?– This DEFINES the value of your proposed

product or service– Value proposition is

• a description of the customer problem,• a description of the customer problem,• the solution that addresses the problem,

and• the value of this solution from the

customer's perspective.– Should answer the questions:

• "Why should I buy this product orservice?" as well as "Why should I doanything at all".


2. Value Proposition … cont.

• Why do I need to define my valueproposition?– If you only have 5 minutes to explain

your ideas to a potential investor - thenyour ideas to a potential investor - thenexplain your value proposition.

– A good value proposition• makes investors sit up and listen!• shows that you have put a LOT of

research and thought into your idea


2. Value Proposition… cont.

• How do I explain and write my valueproposition?

– The following is a template for creatinga value proposition, which may bereferred to as a positioning statement.a value proposition, which may bereferred to as a positioning statement.

– Note the first portion of the valueproposition asserts the value of theoffering and the second sentenceasserts the positioning of that value.


2. Value Proposition… cont.

– First Sentence:

• For (target customer)

• Who (statement of the need oropportunity),

• The (product/service name) is a• The (product/service name) is a(product/service category)

• That (statement of benefit).

– Second Sentence

• Unlike (primary competitive alternative)

• our product (statement of primarydifferentiation).


3. Business Model & MarketPotential

• What is a Business Model?

– A business model (also called a business design)is the mechanism by which a business intendsto generate revenue and profits.to generate revenue and profits.

– It is a summary of how a company plans toserve its customers. It involves both strategyand implementation.

• What is Market Potential?

– Normally it means market size

– It should be supported by some credibleresearch - not something you pick off the air


3. Market Potential &Business Model

• How do I write this out?

a) Identify target market(s),industries/sectors/sub-sectors/geography andindustries/sectors/sub-sectors/geography anddescribe business model including revenuestream (maximum 250 words)

b) Describe market size and growth opportunityfor identified market supported by Marketresearch.


Business Model Template

INFRASTRUCTURE CUSTOMERYOUR OFFER

CORECAPABILITIES

PARTNERS

VALUECONFIGURATION

VALUEPROPOSITION

CUSTOMERRELATIONSHIP

DISTRIBUTIONCHANNELS

TARGETCUSTOMER

FINANCECOST

STRUCTUREREVENUESTREAMS

Fill up the “dark yellow boxes” and you can pretty muchexplain your business model


Discussion/Q&A

• Time check

• Q&A


4. Competitive Analysis

• What is Competitive Analysis?– Describes the “strength” of your

product or idea. Noproducts/ideas/services is perfect - butproducts/ideas/services is perfect - butby identifying the strengths,weaknesses, opportunities and threatswithin the business industry - it will helpthe entrepreneur to “attack themarket”.


4. Competitive Analysis …cont.

• Direct and Indirect Competitors?– Do research

• Identify Direct competitors• Identify Direct competitors• Indirect competitors• Old school competitors

– Differentiating factors?• How are you/your product unique?


4b. Competitive Analysis

• Conduct a SWOT analysis

– Strengths

• Attributes of your business that helps in achievingyour business success

• What makes your ideas better than others

• What capabilities you have that makes the businessviable

• What capabilities you have that makes the businessviable

– Weaknesses

• Attributes of your business that are harmfultowards achieving your business success

• Your Weaknesses - and be honest about it!

• Define by perhaps cost, resources, product weaknessetc


4b. Competitive Analysis …cont.

• Conduct a SWOT analysis

– Opportunities

• Opportunities that you see in the market

• Your competitors’ weaknesses - is YOURopportunity

• Your competitors’ weaknesses - is YOURopportunity

– Threats

• Your competitors strengths - are THREATSto your business

• Don’t forget your indirect competitors too!


SWOT - Strengths

• Advantages of proposition?

• Capabilities?

• Competitive advantages?

• USP's (unique selling points)?

• Resources, Assets, People?

Innovative aspects?Location and geographical?Price, value, quality?Accreditations,

qualifications, certifications?Processes, systems, IT,

• Resources, Assets, People?

• Experience, knowledge, data?

• Financial reserves, likelyreturns?

• Marketing - reach,distribution, awareness?

Processes, systems, IT,communications?Cultural, attitudinal,

behavioural?Management cover,

succession?


SWOT - Weakness

• Disadvantages ofproposition?

• Gaps in capabilities?

• Lack of competitivestrength?

Cashflow, start-up cash-drain?Continuity, supply chain

robustness?Effects on core activities,

distraction?Reliability of data, planstrength?

• Reputation, presence andreach?

• Financials?

• Own known vulnerabilities?

• Timescales, deadlines andpressures?

Reliability of data, planpredictability?Morale, commitment, leadership?Accreditations, etc?Processes and systems, etc?Management cover, succession?


SWOT - Opportunities

• Market developments?

• Competitors'vulnerabilities?

• Industry or lifestyletrends?

Geographical, export, import?New USP's?Tactics - surprise, major contracts,

etc?Business and product

development?trends?

• Technology developmentand innovation?

• Global influences?

• New markets, vertical,horizontal?

• Niche target markets?

development?Information and research?Partnerships, agencies,

distribution?Volumes, production, economies?Seasonal, weather, fashion

influences?


SWOT - Threats

• Political effects?

• Legislative effects?

• Environmental effects?

• IT developments?

• Competitor intentions -

Vital contracts and partners?Sustaining internal capabilities?Obstacles faced?Insurmountable weaknesses?

• Competitor intentions -various?

• Market demand?

• New technologies,services, ideas?

Insurmountable weaknesses?Loss of key staff?Sustainable financial backing?Economy - home, abroad?Seasonality, weather effects?


Mingle … Network …Mingle … Network …

Promote Your Ideas …Promote Your Ideas …Promote Your Ideas …Promote Your Ideas …

Expand Your Business RelationshipsExpand Your Business Relationships

5. Marketing Plan

• What is a Marketing Plan?

– A Marketing Plan is a written document thatdetails the actions necessary to achievemarketing objectives.

– It can be for a product or service, a brand, or– It can be for a product or service, a brand, ora product line.

– It can cover one year (referred to as an annualmarketing plan), or cover up to 5 years.

– Solid marketing strategy is the foundation of awell-written marketing plan.

• While a marketing plan contains a list of actions, amarketing plan without a sound strategic foundationis of little use.


5. Marketing Plan … CONT.

– MARKETING STRATEGY, whichcovers:• Market share objectives• Market share objectives• Product Mix• Pricing Strategy• Promotion Strategy• Distribution Strategy


5a. Go to market & salesstrategy

• Below is a list of items that you may want toconsider while developing your marketing plan

• Market share objectives– State the market share by customer segment or geographical

markets

• Product Mix• Product Mix– Do you have plans to bundle the product with other products

or service

• Pricing Strategy– Define the pricing objective, method, strategy

– Figure out your break-even point

• Promotion Strategy– Define promotional goals, advertising mix, sales force/sales

channels requirements, publicity

• Distribution Strategy– Define by geography, market segments, distribution channels,

• Product development scheduleCopyright e2B Consulting Sdn

Bhd

6. Technology Plan• What is a Technology Plan?

• It should cover:

– Product Development Strategy

• How do you plan to develop the product: personal, in-house,outsource, with a partner?

• How long will it take and how much?

• What are the key milestones?• What are the key milestones?

– Design

• Technical Architecture (briefly explained)

– Functional Specs

• List of Product Functions

– Technology Platform

– How your technology is different from competitors

– Prototyping Plan

• Explain what functions will be developed

• How long will it take to develop?Copyright e2B Consulting Sdn

Bhd

7. Financial Plan

• Projections for 3 years or 5 years

• What is a Financial Plan?

– This is basically the strategy of fundingyour business proposalyour business proposal

– Sales and Cost of Sales

– To plan out what your next plan ofaction is crucial so that you do notwaste time when you move to the nextstage or when your prototype is done


7a. Profit &Loss

• The P&L gives you a feel of the businesspotential & the bottom line

• It will also help you in visualizing how muchmoney you actually need to kick off yourbusinessbusiness

• An good analysis of the P&L will help you inyour financial planning & strategy

• Filling up the Pre-seed form is quitestraight-forward. Please refer to theForm


7b. Sample P/LYear 1 Year 2

RM RM

SALES

less: COST OF SALES

GROSS PROFIT 0 0

less:

General & Administrative Expenses

Professional fees

Directors' remuneration

InsuranceInsurance

Medical fee

Rental of premises

Salaries, allowances & bonus

Utilities

Upkeep of office

R&D expenses

Others:-

Others:-

Others:-

Total G&A 0 0


7b. Sample P/L cont

Sales & M arketing Expenses

Advertisem ent

Enterta inm ent

Printing and stationarySalaries andcom m issions

Tender fee

Travelling expenses

U pkeep of m otor vehic le

O thers:-

O thers:-

O thers:-O thers:-

Tota l S&M 0 0

O ther Incom e 0 0

PBD IT 0 0

less: Am ortisation

D eprecia tion

PBIT 0 0

less: F inanc ia l Charges

PRO FIT /(LO SS) BEFO R E T AX ATIO N 0 0

LES S: T AX AT IO N

PRO FIT /(LO SS) AFTER TAX ATIO N 0 0


8. Resource Plan

• What is a Resource Plan?

– Provides an indication of resources and typesof resources required for thecommercialization of the businesscommercialization of the business

– list the types of resources you require for thenumber of years of projection

– Listing this out will help you develop thefinancial projections later.

– Refer to Pre-seed Form


8b. Sample Resource PlanNo Description/Job title Year 1 Year 2 Year 3

Management Staff

1 Chief Executive Officer

2 Chief Operating Officer

3 Chief Financial Officer

Technical StaffTechnical Staff

1 Senior Engineer

2 Operations Executive

3 Programmer

Administration Staff

1 Receptionist

2 Support Executive

3 Accounts Assistant


AppendixAppendixAppendixAppendix

Supporting documentationSupporting documentation••Curriculum VitaeCurriculum Vitae

••Project Activities, Deliverables,Project Activities, Deliverables,••Capital Expenditure checklistCapital Expenditure checklist

••Company documentation & licensesCompany documentation & licenses

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