virtual enterprise: developing a business plan marcus catsouphes and nicholas giglia october 17,...

Virtual Enterprise:Developing a Business Plan

Marcus Catsouphes and Nicholas GigliaOctober 17, 2008

Copyright © 2008 Deloitte Development LLC. All rights reserved. 2

Agenda

Business Planning Overview

Defining the Business

Market Analysis

SWOT Analysis

Marketing Plan

Operating Procedures

Financial Analysis


Who Prepares a Business Plan?

• It is NOT necessarily a new business.• Business plans can be prepared by:

– Inventors/Entrepreneurs– Companies seeking start-up capital– Established companies with new initiatives.– Borrowers from a bank– Companies going public– A division within a larger business– Any business owner or manager


Why Prepare a Business Plan?

A good business plan connects the facts of the present with a vision of the future.


Business Plan Recipe

The Problem• Industry Overview• Solution

Value Proposition• Why will people

buy from you?• Unique Selling

Point

Team• Team makeup• Qualifications

Financials• Financial

projections• Include funding

requests here

Business Model• Operating

procedures• Company set-up• SWOT

Marketing• Attracting and

retaining customers


Finding Information

Research in a business plan is crucial – but where can you find the information?

Company Data

PreviousPlans

Financial Statements

Competitor Business Plans

Government Reports

Public Filings

Trade Publications

Online Sources


Elements of a Business Plan

INTRODUCTORY Statement of Purpose Objective Company Description Personnel

MARKET ANALYSIS

MARKETING PLAN

OPERATINGPROCEDURES

SWOT ANALYSIS

FINANCIAL DATA

PRESENTATION

DISCUSSION OF RISKS

FEASIBILITY

WRITING SKILLS

SUPPORTING DOCUMENTS

15%

8%

8%8%

15%

8%

23%

8%

8%

Note: Percentages are rounded


Structure of a Business Plan

Company Description(Products and Services)

Strategic Objectives

MARKET ANALYSIS

SWOT ANALYSIS

MARKETING PLAN

OPERATING PROCEDURES

FINANCIALANALYSIS

Statement Of Purpose

DISCUSSION OF RISKS


SHARED VALUESSHARED VALUESWhat type of organization do we seek to be?What type of organization do we seek to be?

VISIONVISION

What do we wantWhat do we wantthe business tothe business tolook like 5 yearslook like 5 years

from now?from now?

STRATEGYSTRATEGY

How do we make How do we make profits and beat profits and beat the competition?the competition?

MISSIONMISSION

Why are we inWhy are we inbusiness?business?

Vision: An idealized view of an organization’s future state. Where or what an organization would like to be in the future.

Mission: An enduring statement of purpose. An organizations reason for being. Describes what an organization does, who it does it for, and how it does it.

Strategy: An expression of the manner in which the organization will achieve the goals necessary to accomplish its mission and fulfill its vision.

Values: A set of commonly held fundamental beliefs that describe the type of behavior it will take to realize the organization’s vision.

Intro – Defining the Business


Intro – Company Description

• Management Background• Company History• Stage of the Business

– Pioneer, Growth, Mature

• Current-Year Initiatives– Internal Projects– Investments– Alliances or Joint Ventures


Market Analysis

• Industry Overview• Market Segmentation• Customer Profiles (vs.

Company Offering)• Market Size• Remember the Budget…

– Sales Potential– Pricing & Margin

INDUSTRY OVERVIEW

MARKET ANALYSIS

MARKETINGPROGRAM

Analysis of market segments and customers will drive the marketing program … as well as the financial plan.

MARKET SEGMENT

CUSTOMER PROFILES

MARKET SIZE

& SHARE


Opportunities

Elements of SWOT Analysis

INTERNAL /FACTUAL

EXTERNAL / POTENTIAL

NEGATIVEPOSITIVE

Threats

Strengths Weaknesses


SWOT Analysis

• More Relevant for Existing Companies• May Reflect Strategic Choices• Generally Forward-Looking• Provides Insight for Business Plan

SWOT Analysis brings a strategic element to the planning process: how well can this company compete?


Company’s Response

• Primary Benefit of SWOT is Company’s Response• Address Results of Each Quadrant

– Actions to Exploit or Remedy– Explanation of Other Items

• Intended Future Action• Explanation of Mitigating Factors

– Time Horizon for Significant Items

• How does our SWOT compare with competitors?• How will we manage risk?


Marketing Plan

• Advertising• Brand Image• Promotional Initiatives• Sales Support• Demand Management• Remember the Budget…

– Sales Impact (Indirect)– Cost Impact (Direct)

The detailed customer understanding gained from market analysis helps to select the right marketing

tools.


Marketing Plan (cont.)

• Marketing P’s: Product, Price, Placement, Promotion, Positioning– Product – Covered in Business Definition– Price – Explored in Segment Analysis

• Placement, Promotion & Positioning– Related to Distribution Channels– Seasonal or Continuous– Provides Customer with:

• Purchase Incentive• Information


Operating Procedures

• Sourcing– Raw Materials, Finished Goods, Other Supplies (Maintenance,

Administration)

• Production / Preparation– How? When? How Much?

• Sales and Marketing Process• Distribution / Delivery

– How? Where? How Fast? How Often? Channels?

• Customer Service and Quality Control• Remember the Budget… What Will It Cost?


Financial Analysis• Break-Even Analysis

– Breakeven Point = Fixed Costs/(Unit Selling Price – Variable Costs)

– Tells a business how many units it needs to sell to make a profit. It is not an indicator of demand

• Operating Budget– The projected cost of running your business– Tells a business the things on which it spends money, and the

ways it makes money

• Cash Flow– Shows how and from where money flows into and out of a

company– Shows how changes in the Balance Sheet and Income

Statement affect cash– Shows how easily a company can pay its bills


Funding & Capital Structure

• Debt – amount of money borrowed by the firm (debtor) from a creditor, to be re-paid at a later date with interest (loans)

• Equity – the amount of funds contributed by the owners (stockholders) of the business, or trading a percentage of the business for a specific amount of money

• Capital Structure is how a firm finances its overall operations and growth by using different sources of funds (debt, equity)

• Composition of a firm’s liabilities

Why It Matters: Tells you how much more $$$ you need to obtain to run your business!


Results of Financial Analysis

• Based on the financial analysis management may:– Decide whether to continue or discontinue certain aspects of

their business– Make or purchase certain items for the manufacture of

company products or delivering of services– Assist in negotiating with obtaining additional funding– Provide information that will assist management in making

decisions for conducting their business

Why It Matters: Ensures that you know what is going on with your business!


About DeloitteDeloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

virtual enterprise: developing a business plan marcus catsouphes and nicholas giglia october 17,...

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