Howtoprepareabusinessplan

Jan Kees Mons

20 December 2010E-mail: [email protected]

Webpage: www.jkmconsultancy.com

www.MaxSpiration.com

22-3-2013How to prepare a solid business plan

http://www.jkmconsultancy.com/

http://www.maxspiration.com/


Important questionsTick the boxes!

Is the idea COMMERCIALLY VIABLE?

Has it BEEN DONE BEFORE?

What is the UNIQUE SELLING POINT?

Do you have the PROPER RESOURCES?

What ROADBLOCKS to expect?

Is the idea REALISTIC!?!


Important

questions

Writing the

business plan

Planning, re-

search, analysis

Step 1: Research and AnalysisTarget market

Market Size

Market dynamics: growth, demographics etc

Competition

Hurdles and “break-in” potential

If conclusion is “YES” continue the process, if “NO” come up with a new idea


Important

questions

Writing the

business plan

Planning, re-

search, analysis

Step 2: Strategy and operational plansBusiness model

Objectives

Targeted market share

Assumptions made: be REALISTIC!

Manpower and resources required

Assets required


Important

questions

Writing the

business plan

Planning, re-

search, analysis

Step 3: Financial modeling and forecastingProfit and loss account:Detailed sales projections – realistically derived?

Realistic cost projections: headcount, office, transportation, legal costs, outsourcing costs etc

Cash flow statement and balance sheet

Ratio analysis

Question: can I make a decent Return on Investment (ROI)?

If “YES” continue. If “NO” come up with a new idea


Important

questions

Writing the

business plan

Planning, re-

search, analysis

Step 4: Financing requirements What are financing needs?

Initial investments

Working Capital requirements

Should cover the period in which company generates negative cash flow

Investment of partners vs investment third parties

Do you want to invest money yourself?

What do you have on offer for the 3rd party? It should be a money making proposition!

Majority vs minority interest


Important

questions

Writing the

business plan

Planning, re-

search, analysis


Writing the business plan What is your target audience? Investors, venture capitalists, business angels BankersConsultants, lawyers, suppliers etc

Guidelines Be concise and use proper business language Proper grammar, correct typingAlways detail your assumptions Length should not exceed 40 pagesAppearance should not be sloppy – show professionalism


Important

questionsWriting the

business plan

Planning, re-

search, analysis

Front page and contents Cover and title page should include:

Name of company

Address and phone number

Month and year in which plan is issued

Table of Contents

List each section and subsection and mark pages


ContentsPreliminary

details

Executive

summary

Current

situation

External

environment

Strategy and

plans

Financial

analysis

Risk

AnalysisAnnexes

Preliminary details Associates and contact detailsManagement and competencies are extremely important to

investors!

Jan Kees Mons Jan Kees Mons (1961) has primarily been active in investment banking, where he worked as an equity analyst for Carnegie International, Wesselius and UBS Warburg advising institutional clients on investment ideas both in London and Amsterdam. During the last 6 years Jan Kees was Head of Research Benelux/director and member of the European management team of Cheuvreux, a leading European equity brokerage and subsidiary of Calyon. In 2008 he resigned in order to start-up a consultancy, combining it with studying International Sports Management. His key expertise can be found in company analysis and valuation, strategic analysis, business consulting, monitoring and financial and investment management. Being a lateral thinker Jan Kees’ main mission can be found in the initiation of further growth and development through analysis, cooperation and awareness. Jan Kees has degrees in Business Administration (BBA Nijenrode) and International Business (MIB, University of South Carolina, USA) and currently is trying to obtain a Master in International Sports Management Degree in Amsterdam

Contact details: Jan Kees Mons [email protected] +31652692550

22-3-2013 How to prepare a solid business plan

ContentsPreliminary

details

Executive

summary

Current

situation

External

environment

Strategy and

plans

Financial

analysis

Risk

AnalysisAnnexes

Executive summary Activities, products and services

Strategy and USP’s

Resources and competitive strengths

Financial background and funding requirements


ContentsPreliminary

details

Executive

summary

Current

situation

External

environment

Strategy and

plans

Financial

analysis

Risk

AnalysisAnnexes

Current situationBasic corporate information – short description of the

business model, target group etcVision, mission and valuesBusiness organizationProducts and suppliersCustomersCore competencies,

experience


ContentsPreliminary

details

Executive

summary

Current

situation

External

environment

Strategy and

plans

Financial

analysis

Risk

AnalysisAnnexes

External environmentThe economy

Market analysis

Competitor analysis

Competitive advantages


ContentsPreliminary

details

Executive

summary

Current

situation

External

environment

Strategy and

plans

Financial

analysis

Risk

AnalysisAnnexes

Strategy and plansObjectives

Business strategy

Operating plan


ContentsPreliminary

details

Executive

summary

Current

situation

External

environment

Strategy and

plans

Financial

analysis

Risk

AnalysisAnnexes

Financial analysisProfit and loss account

Detailed sales projections

Operating costs

Profitability and sensitivities

Balance sheet

Cash flow statement and funding requirements

Note that balance sheet, P/L and Cash Flow should balance!


ContentsPreliminary

details

Executive

summary

Current

situation

External

environment

Strategy and

plans

Financial

analysis

Risk

AnalysisAnnexes

-60,000

-40,000

-20,000

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2009 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E

Net profit


Investment in personnel

-90,000

-80,000

-70,000

-60,000

-50,000

-40,000

-30,000

-20,000

-10,000

0

10,000

Q3-09E Q4-09E Q1-10E Q2-10E Q3-10E Q4-10E Q1-11E Q2-11E Q3-11E Q4-11E

Quarterly cash generation Cash requirement


Cash Requirements: Cross over point in Q3-2011

Maximum Cash requirement EUR 77,000

Risk analysisOverview

SWOT

Critical success factors and alternative scenarios


ContentsPreliminary

details

Executive

summary

Current

situation

External

environment

Strategy and

plans

Financial

analysis

Risk

AnalysisAnnexes

Risk analysis: Financial risk

Economic risk

Managerial risk

Reputational risk

Conflict of interest

Critical success factors Attracting top talent

How to be different, creating an edge

Relationship with end clients


AnnexesProfit and loss account

Balance sheet

Cash flow statement

Financial ratios

Valuation

Quarterly profit and loss, balance sheet and cash flow statement (2 years forward)

CV’s partners


ContentsPreliminary

details

Executive

summary

Current

situation

External

environment

Strategy and

plans

Financial

analysis

Risk

AnalysisAnnexes

Ratios 2009 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018EMargins:Gross profit/Net turnover 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

EBITDA /Net turnover -199.0% -37.5% 2.0% 7.5% 19.7% 20.6% 17.9% 26.9% 27.6% 28.4%

EBITA /Net turnover -204.6% -41.6% -1.2% 4.4% 17.3% 18.3% 16.0% 25.2% 25.9% 26.8%

EBITA / Added Value -204.6% -41.6% -1.2% 4.4% 17.3% 18.3% 16.0% 25.2% 25.9% 26.8%

FCF/Net Turnover -167.0% -51.6% -4.2% 5.6% 15.5% 17.8% 15.7% 23.5% 25.2% 26.1%

Efficiency:Number of FTE's 1 1 1.5 2 2 2.5 3 3 3.5 4

Sales / Employee (000) 23,000 91,600 109,667 107,250 133,931 129,519 128,651 151,689 151,999 154,430

Added Value / Empl (000) 23,000 91,600 109,667 107,250 133,931 129,519 128,651 151,689 151,999 154,430

Staff Costs / Employee (000) (68,775) (125,974) (107,443) (99,165) (107,559) (102,855) (105,655) (110,830) (110,027) (110,554)

Cost of sales % Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Depreciation % of sales 5.6% 4.0% 3.2% 3.1% 2.4% 2.3% 1.9% 1.8% 1.7% 1.6%

Capital intensity:Ave FAssets / Sales 28.2% 8.1% 4.6% 3.4% 2.6% 2.2% 1.9% 1.8% 1.7% 1.6%

Ave NWC / Sales -20.9% -5.9% 0.8% 1.4% 1.6% 2.3% 2.2% 2.6% 3.2% 3.3%

Ave NCE / Sales 7.3% 2.1% 5.5% 4.7% 4.2% 4.5% 4.1% 4.4% 4.9% 4.9%

Working capital control:Ave inventories/Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

YE Receivables/Sales 28.3% 14.6% 14.0% 12.5% 12.5% 12.5% 12.5% 12.5% 12.5% 12.5%

Ave days debtors outstanding 103 53 51 46 46 46 46 46 46 46

Ave payables/Total operating costs 12% 12% 10% 11% 12% 11% 11% 12% 12% 12%

YE payables/Total operating costs -23% -12% -12% -13% -13% -13% -13% -13% -13% -13%

Ave days payables outstanding 86 42 43 46 46 46 46 46 46 46

Gearing:Net Debt/Equity -105% -60% -21% -64% -81% -87% -90% -91% -92% -93%

Interest / Ave Net debt 1.2% 6.5% 12.1% 3.6% 1.7% 1.6% 1.7% 1.5% 1.7% 1.7%

EBITDA Interest cover 70.4 x 54.6 x (8.8) (28.9) (52.7) (39.7) (27.6) (35.0) (26.7) (22.5)

EBITA interest cover 72.4 x 60.4 x 5.1 x (17.0) (46.3) (35.3) (24.7) (32.7) (25.1) (21.2)

Capex:

Capex % Sales 9.8% 4.9% 3.0% 2.8% 2.5% 2.3% 2.1% 1.9% 1.8% 1.7%

Capex % Depreciation 176% 122% 94% 91% 103% 100% 110% 110% 110% 110%

Depreciation % Ave FA 19.8% 50.0% 69.3% 92.5% 92.6% 103.0% 98.5% 98.5% 98.5% 98.5%

Returns:ROE -86.6% -231.6% -10.8% 40.9% 65.7% 38.7% 28.9% 34.7% 29.7% 26.4%

ROCE 1771.5% -583.4% -17.1% 106.8% 338.5% 384.7% 375.2% 478.9% 496.3% 512.6%


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Howtoprepareabusinessplan