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General Outline For a Business Plan - Ian Reid

General Outline For a Business Plan - Ian Reid. The Topic. The Business Plan – REAL value to the business or a waste of time?". Agenda. Who is Platinum Black? Business Planning. Constructing the Business Plan. The Value Thread. Strategic Intent. Marketing Financial Viability

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General Outline For a Business Plan - Ian Reid

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  1. General Outline For a Business Plan - Ian Reid

  2. The Topic The Business Plan – REAL value to the business or a waste of time?"

  3. Agenda • Who is Platinum Black? • Business Planning. • Constructing the Business Plan. • The Value Thread. • Strategic Intent. • Marketing • Financial Viability • The “7 Hats” • How to Unlock Profitability • Conclusion and List of Contents for the Business Plan

  4. Who is Platinum Black? • Business Restructuring Specialists • Been in operation for almost a decade • Successfully worked with over 400 clients • Focus on structuring for “Extraordinary profits” • Drive our clients to succeed • Objective is redundancy within 3 – 6 months • Strive to consistently EXCEED clients expectations • Our methodology WORKS !!

  5. How Effective Are We? “With us having improved our sales by 38 % and our nett profit before tax (audited results received today) by 205 %, this bears testament to your methodology.” Bob Cork – MD - BCA SA (Pty) Ltd

  6. Business planning is hard work….. “The greater the difficulty, the more glory in surmounting it. Skillful pilots gain their reputations from storms and tempests.” Epicurus, 341-270 BC Greek Philosopher

  7. The Effect of Not Planning

  8. Purpose of a Business Plan • To take an objective and critical look at the business • To provide direction to the business • To assist the business in achieving shareholders goals (if correctly implemented) • To communicate ideas of entrepreneurs to others Traditionally used to raise money, but has become a strategic tool to run the business effectively

  9. The Plan Should Indicate… • WHY the entrepreneur believes that the proposed business will be successful • WHAT the entrepreneur is planning to do • HOW he or she will do it • WHEN it is to be done and • WHAT value to any investor • WHAT are the key success factors for the proposed business?

  10. Constructing The Business Plan Shareholders Expectations Drive down of Vision, Mission, Objectives and Goals Strategy & Action Performance Management Business Plan Budget

  11. The Value Thread Shareholders Expectations Drive down of Vision, Mission, Objectives and Goals NPV Appraisal value DCF Performance Management Financial indicators ROE Operational Measures Value Drivers

  12. Strategic Intent The most important part of the business plan is the Strategic aspect The numbers can change – but the STRATEGIC INTENT must be stable

  13. However…. Great ideas need landing gear as well as wings !! C D Jackson

  14. The fast track.. • Identify priorities for writing it • Identify likely readers and their needs, preferences and prejudices • Draw up a list of contents • Write a first draft of the Executive summary • Think about what the conclusion will say • Make a start on a list of Strengths, Weaknesses, Opportunities and Threats

  15. Research Components The research or investigation has two components: • a market feasibility study • a financial viability study.

  16. Content of a Business Plan This information is then used to prepare a marketing plan. Decisions must be taken on: • the exact product or service; • how customers will be persuaded to buy the product or service; • how the product or service will be made available; and • what price will be charged These decisions form the marketing mix and change to suit the requirements of the potential customers

  17. The REAL Question…. Do YOU believe in the numbers ? Is the plan believable and attractive – to you??

  18. But Remember …. “Excellence or high performance comes from moving beyond customer satisfaction to customer delight” Jim Clemmer

  19. Financial Viability • Projected Budgets • Projected Cash flows • Fixed assets required • Operating Expenses • Fixed costs • Profit margin & Break-even • Ratio analysis

  20. The “7 Hats” Management R & D Human Resources IT Operations Admin & Finance Marketing

  21. The “Hats”– Methodology • Visualise the structure needed for a “hat” in 6 months’ time – to the exclusion of all others • Analyse where that structure is now • Is there a plan to move to 6 month position? • Is the plan allocated a: - priority, timing, responsibility and authority? • If so – remove the ”hat” and move to next one • If not – Rectify the situation and DO IT!

  22. Going concern…Example of “The Marketing Hat” • Identification of products and client needs • Identify target market • Analysis of “Past”, “Present” and “Future” clients • Sales plan and Marketing plan? – What worked before ? • What data base will you need • Advertising procedures and plan and PR program? • Brag Book or web site? • Launch of new product program protocol?

  23. How to Unlock Profitability • Passion and Motivation – with Drive and Focus • Ensuring customer satisfaction with great products • Adhere to fundamental ratios parameters • Adherence to budgetary and cash flow controls • Structure business in terms of “7 Hats.” • Adapt to changing circumstances – be flexible • “The harder you work, the luckier you get.”

  24. A Word Of Caution…. “Because its purpose is to create a customer, the business enterprise has two – and only these two – basic functions: Marketing and innovation Marketing and innovation produce results; all the rest are “costs” Peter Drucker

  25. Conclusion A Business Plan definitely adds REAL value but only if you REALLY apply your mind to it If you Fail to Plan….. You Plan to Fail !!

  26. List Of Contents 7. Financial Analysis • Breakeven analysis • Sales projections • Capital spending • Operating costs • Profit and loss account • Balance sheet • Cash flow and funding required 8. Risk Analysis • Overview • SWOT – strengths. weaknesses, opportunities & threats • Limiting factors • Critical success factors • Alternative scenarios • Specific risks and their solutions 9. Conclusion 10. Annexes • A. Current projects • B. Detailed financial data • C. Biographies for the top management 1. Contents 2. Preliminary details • Contact information • Document control • Professional advisers • Definitions 3. Executive Summary 4. Current Situation • Basic corporate information • Vision, mission, values • History • Business organization • Products and services • Core competencies 5. External Environment • The economy • Market analysis • Competitor analysis • Competitive advantages 6. Strategy Plans • Objectives • Business strategy • Operating plan

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