Creating And Starting Venture

The Business Plan

Nouman Dar

Todays Topics
    What is Business Plan Scope and Value of Business Plan Information Needs Writing Business Plan (Outlines of Business Plan)

To Be An Entrepreneur
Three basic ways of to be an Entrepreneur are
1. Buying a Current Operation 2. Buying a Franchise 3. Starting One From Scratch

Getting into Business Venture

 To run a business venture hundred of little tasks (activities) must be done.  These are the activities the business has to be concerned with  However, before any of them are carried out the prospective owner needs a formal business plan  He needs to seek the answer of following questions

o What is the business going to do? o Where will it get the necessary starting capital? o What kind of management, marketing and financial problems will it face?

Business Plan
Written Document Describing All Relevant Internal and External Elements and Strategies for Describing a Business Venture

Business Plan
 It is often integration of functional plans such as marketing, finance, manufacturing and human resources  It addresses both short term and long term decision making  Business plan show what the company is going to do, its projected expenses & earnings and its plans for repaying the loans  Stands as the entrepreneurs description & prediction of his/her venture

Business Plan
 Referred to the Game Plan or Road Map

 It forces owner to answer

o Where am I going? o How will I get? o What opportunities &problems will I run into along the way? o How will, ideal with them?

Who Should Write Business Plan

 Should be prepared y Entrepreneur  May consult with many other sources in its preparation

Scope & Value of Business Plan

Who Reads the Business Plan? Investors Bankers Venture Capitalist Advisors and Consultants Suppliers??? Employees???

Scope & Value of Business Plan

Three Perspectives Should Be Considered in Preparing the Plan
1. Perspective of the entrepreneur 2. Marketing perspective 3. Perspective of investor (Entrepreneur should try to review his business through eyes of investor)

Scope & Value of Business Plan

 It helps determine the viability of the venture in a designated market  Provides guidance to the entrepreneur in organizing his or her planning  Serves as an important tool in helping to obtain financing  Provides a self of assessment by the entrepreneur Does the idea make sense? Will it work? Who is my customer? Does it satisfy customer needs? What is the level of competition? What protections have to made?

How Do Potential Lenders & Investors Evaluate Plan

 Lenders or investors will likely vary in terms of their needs & requirements in the Business Plan  Primarily interested in the ability of the new venture to pay back the debt including interest with in a designated period of time  Four Cs of Credit: Character, Cash Flow, Collateral & Equity Contribution

Information Needs
 Market Information Needs  Operational Information Needs  Financial Information Needs

Market Information Needs

 To ascertain the size of the market  It is first necessary for the entrepreneur to define the market  A well defined target market will make it easier to project market size & subsequent market goals for the new venture  In order to build a strong marketing plan the entrepreneur need to gather information on the industry and market

Operational Information Needs

       Location Manufacturing Operations Raw Materials Equipment Labor Skills Space Overhead

Financial Information Needs

     Capital Cost Financing Requirement Sources of Financing Cash Flows Operating Profits

Writing Business Plan Outline of Business Plan

 Introductory Page
o o o o Name and Address of Business Name (S) and Address(es) of Participant(s) Statement of Financing Needs Statement of Confidentiality of Report

 Executive Summary Complete Business Plan

Summarizing

the

Writing Business Plan Outline of Business Plan

 Industry Analysis
o o o o o o o o o Future Outlook and Trends Analysis of Competitors Market Segmentation Industry and Market Forecast Products Services Size of Business Office Equipment and Personnel Background of Entrepreneurs

 Description of Venture

Writing Business Plan Outline of Business Plan

 Production Plan
o o o o Manufacturing Process Physical Plant Machinery and Equipment Suppliers of Raw Materials

 Operational Plan
o Description of Company Operations o Flow of Orders for Goods and Services o Technology Utilization

Writing Business Plan Outline of Business Plan

 Marketing Plan
o o o o o o o o o o Pricing Distribution Promotion Product Forecasts Controls Form of Ownership Identification of Partners or Principals Shareholders Authority of Principals Management Team Background Roles and Responsibilities

 Organizational Plan

Writing Business Plan Outline of Business Plan

 Assessment of Risk
o Evaluate Weakness of Business o New Technologies o Contingency Plans

 Financial Plan
o o o o o Pro Forma Income Statement Cash Flow Projections Pro Forma Balance Sheet Break Even Analysis Sources and Application of Funds

Writing Business Plan Outline of Business Plan

 Appendix (Contains Backup- Material)
o o o o Letters Market Research Data Leases or Contracts Price Lists From Suppliers

Thank You