Basics of how to make a business plan

1. MAKING A BUSINESS PLAN

2. Objectives
• To understand how a business plan is divided into
sections
• To list the uses of a business plan
• To lay out the steps involved in writing a business plan
• To list out data required in drawing up a business plan
• To discuss about the various types of business plan
• To understand the significance of an executive summary
• To understand the structure and composition of various
sections of a business plan
• To list the various appendices and exhibits needed in a
business plan

3. Uses of a Business Plan
• Equity funding
• Bank finance
• Alliances
• Recruitment
• Clarify the business
• Others

4. Kinds of Business Plans
• Summary Plan
• Executive summary
• Full Business Plan
• Operational Business Plan
• The oral presentation

5. Steps in Writing a Business Plan
• Define purpose
• Collect Information
• Put it down
• The rough draft.
• Financial analysis
• Finishing
• Review

6. Data Required
• Company details
– Documents relating to formation
– Shareholding details
– Permits and registrations
• Management
– Organization chart
– Details of key employees
– Consultants and advisors
– Compensation and other employee agreements
• Industry and Competitors
– Market statistics from secondary sources
– Reports on trends, etc
– Competitor data
– Customer surveys

7. Data Required
• Operations
– Product specifications
– Contracts and purchase orders for raw materials
– Competitive advantages
– Details of Intellectual Property (Patent, license, and trademarks)
– Regulatory approvals
– Industry standards as per regulations
– Plant layout and operations plan
– Research and development plans
• Marketing and Sales
– Marketing plan
– Advance orders, if any
– Marketing materials
• Financial Information
– Data on fixed and variable costs to be incurred
– Financial forecasts

8. Key Sections of a Business Plan
• Executive summary
• The company
• The management team
• The industry and the market
• Operations
– Starting up
• The marketing plan
• Financial plan
• Risks and contingencies
• Appendices

9. Executive Summary
The executive summary is probably the
most important section of the business
plan.
It is basically the whole business plan
condensed into a few pages
The main objective of the executive
summary is to entice the reader to go
through the entire plan.

10. The Company
• History
• Current Status
• Future

11. The Management Team
• Technical and professional qualifications
• Quality of work experience
• Experience in the relevant sector
• Reputation in the business community
• Evidence of moral integrity
• Financial capacity
• Networking with other vital people in the
industry

12. The Industry and the market
• An industry is a collection of sellers
• A market is a collection of buyers
– Concentrate on the relevant segments
• Competition

13. Operations
• Gantt chart outline setup
• Technology
• Raw material strategy
• Production planning
• Quality
• HR policy

14. Marketing
• Target Segments
• Branding
• Product
• Packaging
• Pricing
• Distribution
• Promotion

15. Finance
• Funds sought
• Projected financial statements
• Costing details
• Break even and payback analysis

16. Risks and Contingencies
Identify major threats and risks
Outline strategies for countering them

17. Appendices
• Copy of documents pertaining to incorporation or
formalisation of partnership.
• CV’s of the entrepreneur/s and of key employees
• Copies of various permits or permissions granted.
• Copies of papers pertaining to sale or lease of land for
the business
• Copies of documentation of proprietary intellectual
property
• Graphical representation of schedule including
milestones and dates
• Photographs of location
• Factory or plant layout
• Graphical representation of production process

18. Appendices
• Findings of market survey conducted
• Photograph of product or prototype
• Storyboards or mock-ups of advertisements
• Projected balance sheets
• Projected profit and loss accounts
• Projected cash flow statements
• Sensitivity analysis of P&L a/c
• Break even analysis
• Financial ratios