C6 – Planning & C6 – Planning & DevelopmentDevelopment

Creating a business Plan

C6 - Creating a business planC6 - Creating a business plan

Aims:• To convey why a plan may be useful, what a plan is

intended for and how to write one. Learning Outcomes:• At the end of this session participants will be able to:• Understand the importance of planning every aspect of

the business, and the reasons for doing so.• Understand what a business plan is and what it is useful

for.• Use a suggested framework for writing a business plan.

Why plan? (1)Why plan? (1)

• "If you fail to plan, you plan to fail.”

Alternatively remember the vital 6 P’s

• Perfect Planning Prevents Pretty Poor Performance

Source: Richard Stutely, The Definitive Business Plan

Why plan? (2)Why plan? (2)

• “When you are a Bear of Very Little Brain, and you Think of Things, you find sometimes that a Thing can seem very Thingish inside you is quite different when it goes out in the open and has other people looking at it.”– AA Milne, The House at Pooh Corner

• i.e. other people may see your idea differently than you do…be prepared for this!

Source: Peter Winter, MSEC

Why plan? (3)Why plan? (3)

• Crystallise & test your ideas.• Enable you and your business partners to agree

objectives, strategy & actions.• Provide direction to employees.• Test your resolve.• Make mistakes on paper.• Provide confidence.• Reveal cash requirements.• Reduce, or at least understand, risk.

Source: Richard Stutely, The Definitive Business Plan

What is a plan?What is a plan?

• A business plan sets out the method for running a specific activity over a specific future period.

• e.g. – Overall business strategy over next 5 years.– Operational & budget detail over next 12

months.

Source: Richard Stutely, The Definitive Business Plan

What is the plan for?What is the plan for?

• A formal expression of the planning process.

• A request for funding.

• A framework for approval.

• A tool for operational [and strategic] business management.

• Any combination of the above.

Source: Richard Stutely, The Definitive Business Plan

How to write your planHow to write your plan

Remember…• There is no unique formula for a business plan,

we will offer you one (of many).• No perfect size or level of detail.• No magic list of contents.And think about…• Who is your target audience?• What is your purpose of your plan?• What are your overall objectives?

……is a complete set of plansis a complete set of plans

The Business Plan

Products & Services

Markets, Marketing & Sales

Design & Development

Manufacturing & Operations

Management

Finance

Risk & Rewards

Objectives & Milestones

The company and it’s industryThe company and it’s industry

• Purpose of the company– What does it do and, more importantly, for whom?– Mission statement (e.g. ‘Kill Kodak’ - Fuji film).

• Company founders and skill sets– The company is you, you (and your management

team) are the company.

• Competitive differentials– What will you do to entice customers to buy what you

are selling? And what will you do to ensure this happens?

MarketsMarkets

• Geographic spread.• Market history.• Market size.• Possibilities for growth.• Customers.• Purchasing decision makers.• Competitors.• Market segmentation.• Expected market share.

Marketing & SalesMarketing & Sales

• Promotion and Sales.• Measuring success.• Product benefits.• Sales expectations*• Market positioning.• Distribution channels.• Customer coverage.• Early prospects and interest.

*a few words about sales expectations…*a few words about sales expectations…

• "Prediction is very difficult, especially if it's about the future."– Nils Bohr, Nobel laureate in Physics

• “Trying to predict the future is a mug’s game. But ... we need to have some sort of idea of what the future’s actually going to be like because we are going to have to live there, probably next week.”– Douglas Adams, The Salmon of Doubt, MacMillan,

2002.

Products/Services Products/Services

• Main products, services and markets.

• Distinctive qualities.

• Technological capacity.

• Licence/patent rights.

• Future potential.

Design and DevelopmentDesign and Development

• Product/Service development stages.

• Risks in the design/development process.

• Design rights and registration.

Manufacturing and OperationsManufacturing and Operations

• Business location.

• Source of supplies and workforce.

• Manufacturing capabilities.

• Machinery/vehicles/plant.

• Production process.

ManagementManagement

• Business owners and directors.

• Non-executive directors and key. Managers.

• Planned staff numbers.

• Recruitment/development/retention.

• Quality systems.

FinanceFinance

• Financial requirements.

• Detailed financial plan.

• Financial highlights, risks and assumptions.

Risks and RewardsRisks and Rewards

• Risks– What are the risks and how does the

management intend to minimise those?

• Rewards

– If the projected forecast materialises, what is the worth of the company?

Objectives and milestonesObjectives and milestones

• Action plans and timetable.

• Personal objectives.

• Business objectives.

Source: Richard Stutely, The Definitive Business Plan

5 things that belong in the 5 things that belong in the annexesannexes

1. Background material to the idea, product, service or process.

2. Detailed product specifications.

3. Marketing brochures & leaflets.

4. Detailed financial analysis.

5. Full CV’s or resumes of owners & managers.

Finally, last but definitely not Finally, last but definitely not least...least...

The Executive Summary (1)The Executive Summary (1)

• Written last but appears first in your plan.

• Should be brief & succinct to summarise all the previous plans, preferably in one concise page.

• Include: Who you are, what you want to do, and what you need to do it.

The Executive Summary (2)The Executive Summary (2)

• Description of business – The product or service and it’s advantages.

• Funding requirement (if any)• Financial projections• Business differentiators

– The market opportunity, & how the business will exploit it.

• Business credibility– The management team.– Any track record so far.

Other useful sources of help:Other useful sources of help:

• http://www.businesslink.gov.uk– Home > Starting up > Considering starting up? > Prepare a business

plan

• http://www.bized.ac.uk/stafsup/options/thebplan.htm

• http://www.business.barclays.co.uk/BBB/A/Content/Files/bif004.pdf– Fact sheet from Barclays

• http://www.natwest.com/smallbusiness/guides/startingup/index.asp?navid=SBS/FINANCIAL_GUIDES/STARTING_UP_GUIDE– NatWest’s start up guide

Last words…Last words…

• “A business has to be involving, it has to be fun, and it has to exercise your creative instincts.” - Richard Branson

• "You can't build a reputation on what you are going to do." - Henry Ford