Opportunity, Strategy & the Evaluation of the Business Plan? - The nature of opportunity, How entreprneeurs really work, can and do entrepreneurs use a business plan?, Business plan or business model?, Forecasting, formats, and evaluation

1. Opportunity, Strategy & the Evaluation of the Business Plan? Mohd. Murray Hunter

2. Discussion Today Forecasting The nature of opportunity Formats How entrepreneurs really work Evaluation Can and do entrepreneurs use a business plan? Business Plan or Business Model?

3. Small Business Verses Entrepreneurship

6. ©Hunter (2011)

12. The forms of opportunity ©Hunter (2011)

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25. Four potential firm opportunity seeking typologies

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29. Two ways to scan for opportunities Matching product to some marketspace Matching marketspace to some product

32. ©Hunter (2011)

37. How Entrepreneurs Really Work

38. Creativity The Summarised Entrepreneurial Process Idea Turn into Opportunity Innovation Final Commitment NPD Start-Up Strategy Growth Sales Sustainability Resource Gathering

39. ©Hunter (2011)

42. Can and do entrepreneurs use a business plan?

43. The Secret

51. Business Plan Or Business Model?

59. Perspectives

60. Where does the information come from?

74. Format

77. Forecasting

89. Checklists

90. Questions you should ask about financial viability?

111. What are the competitive advantages of firms already in business?

112. How long will it take for firms to respond?

114. How much will each customer buy and how many customers are there?

116. What share of the market will the company capture?

117. How long will it take to capture?

118. Who will perform the selling functions?

119. How will prices be set?

120. How will they compare with competitors prices?

121. How important is location and how will it be determined?

122. What distribution channels will be used – wholesale, retail, agents, direct?

123. What are the sales targets? By when should they be met?

125. Or will it use a combination of these two strategies?

126. Are sources of suppliers available at reasonable prices?

127. How long will delivery take?

128. Have adequate lease arrangements for premises been made?

129. Will the needed equipment be available on time?

130. Do any special problems with plant setup exist?

131. How will quality be controlled?

132. How will returns and servicing be handled?

134. Who will have to be hired? By when? How will they be found and recruited?

135. Will a banker, accountant, lawyer or other advisors be needed?

136. How will replacements be obtained if key people leave?

138. Will any special controls be required? What are they?

140. How much will be needed for setting up operations?

141. How much will be needed for working capital?

142. Where will the money come from?

143. Which assumptions in the financial forecasts are most critical and uncertain?

144. What will be the return on equity, sales?

145. How does it compare with the rest of the industry?

146. When and how will investors get their money back?

147. What will be the need from the bank?

150. No real insight into the market

151. Inadequate understanding of technical requirements

152. Poor financial understanding

153. Lack of Venture uniqueness

155. No business plan

156. No managerial focus

157. Inadequate records

158. Lack of profit focus

159. Cash flow

160. Inadequate systems

161. Failure to plan for taxation

162. Inadequate resource management

164. Executive Summary 5 Outstanding (thorough and complete in all areas) 4 Very good (most areas covered but could use improvement in detail) 3 Good (some areas covered in detail but other areas missing) 2 Fair (a few areas covered but very limited detail) 1 Poor (no written plans)

165. Description of the Business What type of business will you have? What products or services will you sell? Why does it promise to be successful? What is the growth potential? How is it unique? 5 Outstanding (thorough and complete in all areas) 4 Very good (most areas covered but could use improvement in detail) 3 Good (some areas covered in detail but other areas missing) 2 Fair (a few areas covered but very limited detail) 1 Poor (no written plans)

166. Marketing Who will be your customers? How big is the market? Who will be your competitors? How are their businesses prospering? 5 Outstanding (thorough and complete in all areas) 4 Very good (most areas covered but could use improvement in detail) 3 Good (some areas covered in detail but other areas missing) 2 Fair (a few areas covered but very limited detail) 1 Poor (no written plans) How will you promote sales? What market share do you want? Do you have a pricing strategy? What A&P strategy will you use?

167. Operations Have you identified a specific location? Have you identified the advantages of this Location? Are there any zoning or tax considerations? Will you have access to transportation? 5 Outstanding (thorough and complete in all areas) 4 Very good (most areas covered but could use improvement in detail) 3 Good (some areas covered in detail but other areas missing) 2 Fair (a few areas covered but very limited detail) 1 Poor (no written plans) Will your suppliers be conveniently located?

168. Management Who will manage the business? What qualifications do they have? How many employees will you have? What will they do? 5 Outstanding (thorough and complete in all areas) 4 Very good (most areas covered but could use improvement in detail) 3 Good (some areas covered in detail but other areas missing) 2 Fair (a few areas covered but very limited detail) 1 Poor (no written plans) How much will you pay them? What consultants do you need? What legal form of organisation will you have? What regulations will affect your business?

169. Financial What is your total expected business income for the year? Quarterly for the next two years? (Forecast) What is your expected monthly cash flow during The year? Have you included a method of paying yourself? What sales volume do you need to make a profit during the three years? What will be the break even point? 5 Outstanding (thorough and complete in all areas) 4 Very good (most areas covered but could use improvement in detail) 3 Good (some areas covered in detail but other areas missing) 2 Fair (a few areas covered but very limited detail) 1 Poor (no written plans) What are your projected assets, liabilities, net worth? What are your financial needs? What are your funding sources?

170. Critical Risks What are the potential problems you have identified? Have you calculated the risks? What alternative courses of action Exist? 5 Outstanding (thorough and complete in all areas) 4 Very good (most areas covered but could use improvement in detail) 3 Good (some areas covered in detail but other areas missing) 2 Fair (a few areas covered but very limited detail) 1 Poor (no written plans)

171. Harvest Strategy How have you planned for the Orderly transfer of the venture Assets if ownership of the venture is Passed to a corporation? Is there a continuity of business Strategy for orderly transition? 5 Outstanding (thorough and complete in all areas) 4 Very good (most areas covered but could use improvement in detail) 3 Good (some areas covered in detail but other areas missing) 2 Fair (a few areas covered but very limited detail) 1 Poor (no written plans)

172. Milestone Schedule How have you set your objectives? Do you have deadlines for each Stage of your growth? 5 Outstanding (thorough and complete in all areas) 4 Very good (most areas covered but could use improvement in detail) 3 Good (some areas covered in detail but other areas missing) 2 Fair (a few areas covered but very limited detail) 1 Poor (no written plans)

173. Appendix & Bibliography Have you included any documents Drawings, agreements, or other Materials needed to support The plan? Are there any names of references, Advisors, or technical sources You should include? Are there any other supporting documents? 5 Outstanding (thorough and complete in all areas) 4 Very good (most areas covered but could use improvement in detail) 3 Good (some areas covered in detail but other areas missing) 2 Fair (a few areas covered but very limited detail) 1 Poor (no written plans)

174. Summary

175. Score 50 Outstanding (the ideal business plan) 45-49 Very Good 40-44 Good (the plan is sound with a few areas that need to be refined) 35-39 Above Average (this plan has some good areas but needs improvement Before presentation) 30-34 Average (some areas covered in detail yet other areas show Weaknesses) 20-29 Below average (most areas need greater detail and improvement) Below 20 Poor (plan needs to be researched and documented much better)

176. Thank You