2. Contents of Business Plan
Executive summary
Industry and Company and ts products /Services
Market Research and Analysis
Economics of the Business
Marketing Plan
Design and Development Plans
Manufacturing and operations plan
Management Team
Overall Schedule
Critical risk problems and assumptions
Financial Plan
Proposed Company offering
Appendices
3. Executive Summary
Description of the Business Concept and the
Business
Opportunity and strategy
Target market and projections
Competitive advantage
Costs
Sustainability
The Team
The Offering - Finance needed (Debt equity
and your contribution)
4. Industry ,Company and
Product/Service
The industry current state,
size,
growth
competitors,
new product/devp,
environmental profile –energy
intensity, supply chain, waste, green
technology –carbon credits CER)
5. Company and the Concept
Company and the Concept –
present biz, products service
offered /will offer,
background of growth and promoters
involvement,
prior sales and profit performance or
discuss losses and why
and improvements done or envisaged
6. Product or Service
Product and or service – describe of new
product service ,
application of its use ,
delivery system
unique features how they add value,
differentiation from those current available,
possible drawbacks,
present state of development,
first mover of head start advantage
any features which give you unfair
advantage over others like patents trade
secrets or proprietary features,
opportunities of expansion of product lines
7. Entry and Growth Strategy
Entry and growth strategy – Key success
variables in mktg plan
innovative product,
timing advantage,
marketing approach,
pricing ,
channels of distribution
advertising and promotion
8. Market Research and Analysis
Customers
Market size and trends
Competition and competitive edges
Estimated market share and sales
Ongoing market evaluation
9. Customers
Who are they? Classified by groups
segments-common identifiable characteristics
Where are they? Segment and region
How they buy (retail /wholesale), reached
and receptiveness?
Where buying decisions are made and length
of decision cycle, customers purchase
process, basis of decisions (price, quality
timing, delivery training, service personnel,
contacts, political pressures) and can they
change current buying decisions?
10. Customers(2)
What orders contracts or letters of
commitment or potential customers
you have in hand?
What you are doing to overcome
negative customer reaction?
If in existing business , current
customers and sales trends
11. Market Size
Five year projections of size and your share,
by segment, region or country for product or
service
Potential annual growth for at least 3 years
Major factors for market growth ( industry
trends, socio economic trends, govt. policy,
envrt. impact, population shifts)
review previous trends
12. Competition and Competitive
Edge
Realistic SWOT of Competitors, assess
substitute and alternatives ,list of suppliers
of these
Compare competing and substitute products
or services on market share, price ,quality,
performance , delivery, timing service,
warranties, other features
Current advantages and disadvantages of
these products
13. Competition and Competitor’s
Edge
Knowledge of competitors actions that could lead to
improved products (R&D)
Are they awake or asleep?
SWOT of competing companies their market share sales
and distribution
Financial position ,costs and profitability of competitors
Who are service providers
pricing, performance ,cost and quality leaders-why co
exiting or entered the business
Discuss 3-4 key competitors and why customers buy
from them
What you know of competitor’s operations
14. Economics of the business
Gross and operating margins
Profit potential and durability
Fixed variable and semi variable costs
Months to breakeven
Months to reach positive cash flow
15. Marketing plan
Overall marketing Strategy
Pricing
Sales and tactics
Service and warranty policies
Advertising and promotion
Distribution
16. Design and development plan
Development status and tasks
Difficulties and risks
Product improvement and new product
Costs
Proprietary Issues
17. Manufacturing and Operation plan
Operating cycle
Geographical allocation
Facilities and improvements
Strategy and Plans
Regulatory and Legal teams
18. Management team
Organisation
Key management personnel
Management Compensation and Ownership
Other investors
Employment and other agreements and
stock options and Bonus Plan
Board of Directors
Other shareholder’s rights and restrictions
Supporting professional advisers and
services
19. Overall Schedule
A schedule that shows the timing and
interrelationship of the major necessary to
launch the venture and realise its objectives.
Cash conversion cycle will underline key
inputs
Deadlines indicated
Indicates to investors your depth of planning
and resource use
Indicate methods of calculations
20. Critical Risks Problems and
Assumptions
Demonstrate that you have thought
out and can handle them
Description of risks implicit in plan
Assumptons- use objectivity to deal
with it – sales projections, orders
Consequences of adverse outcomes –
industry, company, personnel, product,
market appeal
Unstated negative factors of investors
21. Contingencies – Indicate critical
ones
Running out of cash before orders come in
Price cutting by competitors
Potentially unfavorable industry trends
Costs excess of estimates
Sales projections not achieved’
Unmet product development schedule
Difficulty in procuring long lead items
Difficulties in obtaining bank credit
Increase in R&D costs
Running out of cash after orders come in
22. Financial Plan -Best Estimate of
Reqt.
Indicate venture’s potential and timetable for
financial viability
Operating plan for fin mgt using fin benchmarks
Prepare exhibits
Use three year income statements and balance
sheets and break even analysis. For cash flow
statement use cash system instead of accrual
system
Give assumptions behind -sales levels, growth,
inventory requirements, cash balances,
operating and cash conversion cycles
23. Fin Plan (2)
Proforma income statement – plan for profit
indicates potential fin. feasibility of the venture.
Initially, level of profits cannot finance operating
assets and cannot match the actual cash flow
on a short term basis, hence a forecast of cash
needs should take care of such conditions is
recommended.
24. Fin Plan (3)
Proforma balance sheets are used to
detail the assets required for the
projected level of operations and how
they will be financed (liablilities)
Indicate projected debt equity ratios,
working capital, current ratios, inventory
turnover within the limits required to
justify future financing
25. Financial Plan (2)
acceptable limits to justify future financing
Break even chart showing level of sales that
will cover all costs including those that vary
with production and those that do not
Income statements -In Proforma
statements fully discuss bad debts,
discounts, assumptions for sales expenses,
general and administrative costs
26. Fin Plan(2)
,show effect of sales reduction say 20%,
learning curve and level of productivity
snesitivity of profits to risks
Prepare Balance sheets, cash flow analysis,
Break even charts ,cost control measures
and budget overrun
Highlight important conclusions, including
maximunm amount and timing of cash
required , amount of debt and equity
needed, how fast debts will be repaid
27. Financial Plan
Actual Income Statements and
balance Sheet
Proforma Income statements
Proforma Balance Sheets
Proforma Cash Flow Analysis
Breakeven Chart and Calculations
Cost control
Highlights
28. Proposed Company offering
Amount of money being sought
Nature of security offered to investors
Summary of how the investor can expect to
achieve his targeted rate of return
Terms for financing your company spelt out
here
Description of Uses of Capital
Desired Financing –how much
29. Proposed Company Offering
Offering – common stock, convertible,debentures,
debts with warrants, debt plus stock,unit price, total
amount of securities (if not common , interest
rate,type,maturity and conversions conditions,
percentage others can hold before and after
conversion, private placement –restrictred securities
for a period of time
Capitalisation – current and proposed (post offfering
number of outstanding shares and how the holding
will change after on completion of fnancing),
authorised and issued capital, stock options
30. Offering (3)
Use of funds – how capital raised will
be used- R&D,capital eqpt, marketing ,
working capital
Investors Return- Indicate how your
valuation and proposed ownership
pattern will result in in desired rate of
return for investors whom you have
targeted
31. Appendices
Information too extensive in the body but necessary
Product specification
Photos
List of references
Suppliers of critical components
Special location factors
Facilities
Technical analysis
Consultant reports
Critical regulatory approval or licences