Presentation Chapter#7 The Business plan: Creating & Starting the Venture

2. Presentation Chapter#7The Business plan:Creating & Starting the Venture Presented to: Sir Ghulam Abbas

3. Group members • Kiran Shakoor • Nazish Yaqoob • Razeena Ameen • Ayesha Yaseen

4. Learning Objectives • To define what the business plan is, who prepares it, who reads it, and how it is evaluated. • To understand the scope and value of the business plan to investors, lenders, employees, suppliers, and customers • To identify information needs and sources for each critical section of the business plan. • To enhance awareness of the ability of the internet as an information resource and marketing tool. • To present examples and a step by step explanation of the business plan. • To present helpful questions for the entrepreneur at each stage of the planning process. • To understand how to monitor the business plan.

5. Planning as Part of The Business Operation • Planning is a process than never ends for a business. • It is extremely important in the early stages of any new venture when the entrepreneur will need to prepare a preliminary business plan. • As the venture grow up to mature business, planning will continue … • Plan may be short term or long term, strategic or operational.

6. What is Business Plan? • The business plan is a written document prepared by the entrepreneur that describes all the relevant internal and external elements and strategies for starting a new venture. • It is a integration of functional plans such as marketing, finance, manufacturing, sales and human resources.

7. Who should write the plan? • The business plan should be prepared by the entrepreneur. • The entrepreneur may consult with many other sources in its preparation, such as lawyers, accountants, marketing consultants, and engineers.

8. Scope and Value of the Business Plan – Who Reads The Plans? • The business plan may be read by employees, investors, bankers, suppliers, customers, advisors, and consultants. • There are three perspectives should be considered in preparing the plan : • Perspective of the entrepreneur • Marketing perspective • Investor’s perspective

9. Scope and Value … • The business plan is valuable to the entrepreneur, potential investors, or even new personnel, who are trying to familiarize themselves with the venture, it goals, and objectives. • It helps determine the viability of the venture in a designated market • It provides guidance to the entrepreneur in organizing his or her planning activities • It serves as an important tool in helping to obtain financing.

10. How do Potential Lenders and Investors Evaluate The Plan? • Four Cs of Credit: • Characters • Cash flow • Collateral • Equity of Contribution

11. Nazish Yaqoob 07-11

12. Presenting the plan • Entrepreneur present their business plan in a competitive and structured setting. • Present highlights of business plan in a defined time. • Entrepreneur must decide what to say and how to present information? • Benefits for this competition is in rewards or also in to attract the attention of the

13. Audience at this presentation usually include • Potential investors • Professional investors (venture capitalists, private investors) • Some investors describe these presentation as elevator pitches..

14. Information needs • Information obtainable from many sources, should focus on marketing, finance and production. • Goals and objectives are defined for the business plan. • Internet is the valuable resource of information for entrepreneur.

15. Market information • Market potential for the product or service • Size of market Is the product is purchased by both men and women? People of high and low income Rural and urban dwellers? Highly and less educated people?

16. Operations Information needs • Location • Manufacturing operation • Raw material • Equipment • Labor skills • Space • Overhead

17. Financial information needs • Preparation of budget (includes sales revenues expenditures) • Need identification of the benchmark for preparing pro forma statement in financial plan.

18. Using the internet as a resource tool • Internet is the important source of information in the business plan for such segments like • Industry analysis • Competitor analysis • Planning • Marketing strategy • Use search engine that assist entrepreneur in writing business plan.

19. Razeena Ameen 07-25

20. Writing the business plan:

21. Outline of a business plan: • Introductory Page • Executive Summary • Environmental and Industry Analysis • Description of Venture • Production Plan • Operational Plan • Marketing Plan

22. Organizational Plan • Assessment of Risk • Financial Plan • Appendix (contains backup material)

23. Introductory Page • Name and address of business • Name and address of entrepreneur • Nature of business • Statement of financing needed • Statement of confidentially of report

24. Executive Summary: • What is the business concept or model? • How is this business concept or model unique? • Who are the individuals starting this business? • How will they make money and how much?

25. Environmental and Industry Analysis: • Future outlook and trends • Analysis of competitors • Market segmentation • Industry and market forecasts

26. Description of Venture: • Product(s) • Service(s) • Size of business • Office equipment and personnel • Background of entrepreneurs

27. Ayesha Yaseen 07-30

28. Production plan • Details how the product will be manufactured • Manufacturing process • Physical plant • Machinery and equipment • Names of suppliers of raw materials • Operational Plan • Description of company’s operations • Flow of orders for goods and/or services • Technology utilization

29. Marketing plan • Describes market conditions and strategy related to how the product services will be distributed, priced and produced • Organizational Plan • Form of ownership • Identification of partners or principal shareholders • Authority of principals • Management-team background • Roles and responsibilities of members of organization

30. Assessment of Risk:-Identifies potential hazards and alternatives strategies to meet business plan goals and objective • Financial plan:-Projections of key financial data determine economic fesibilty and necessary financial investment commitment

31. Using and Implementing The Business Plan • The business plan is designed to guide the entrepreneur through the first year of operations. • Implementation of the strategy contain control point to ascertain progress • Business plan not end up in a drawer somewhere once the financing has been attained and the business launched.

32. Updating the Plan. • The most effective business plan can become out-of-date if condition change. • If the change are likely to affect the business plan, the entrepreneur should determine what revisions are needed. • In this manner, the entrepreneur can maintain reasonable targets and goals and keep the new venture on a course that will increase probability of success.

33. Why Some Business Plans Fails • Goals set by the entrepreneur are unreasonable. • Goals are not measurable • The entrepreneur has not made a total commitment to the business or to the family. • The entrepreneur has no experience in the planned business. • The entrepreneur has no sense of potential threats or weaknesses to the business. • No customer need was established for the proposed product or service.