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Key Learnings No standard and single format exists; what you convey depends on your business opportunity and focus Length not more than 3 Pages Contents of a concise executive summary Need for a crisp, comprehensive executive summary Executive Summary is the pitch to enthuse interest in reading the entire B – Plan National Entrepreneurship Network
Citation preview
Sneak Peek Exercise
National Entrepreneurship Network
Comparing Notes• Which summary do you think includes as well
as adequately describes the:1.Product/ Service2.Market and Opportunity3.Industry and Growth Potential4.Experience of the promoters/founding team5.Business Model6.Financials7.Risk& Mitigation
National Entrepreneurship Network
Key Learnings
• No standard and single format exists; what you convey depends on your business opportunity and focus
• Length not more than 3 Pages• Contents of a concise executive summary • Need for a crisp, comprehensive executive
summary • Executive Summary is the pitch to enthuse
interest in reading the entire B – Plan
Elements of a Business Plan
National Entrepreneurship Network
Business Planning
"In preparing for battle I have always found that plans are useless, but planning is indispensable."
-Dwight Eisenhower
“Those who fail to plan, plan to fail.”-George Hewell
National Entrepreneurship Network
• Understanding business plans is not only important for those who are starting businesses
• More and more banks are requiring business plans for loans, for new projects and on-going operations
• Business plans are used in large companies to justify projects
• No matter where you work, it is increasingly likely that you will need to evaluate somebody else’s business plan
The Business Plan
National Entrepreneurship Network
• Executive Summary• Company Overview• Market Environment• Industry and Opportunity• Marketing and Sales Strategy• Team Composition• Operations• Financial Plan• Risk Analysis and Mitigation
The (very) Basics of a Business Plan
National Entrepreneurship Network
Your Business Plan Will...
• Discuss a particular market opportunity• Examine the markets that you will compete in, and
explain who your customers will be• Describe the products or services that your company will
provide• Your competition, and how you will defend against it• The operation that you will put in place in your company• The management team that will implement the plan• The size and profitability of your company
National Entrepreneurship Network
Executive Summary
• The written version of the “One minute pitch”• Many people who read your plan, will only read your
Executive Summary...• ...and then they may read your financials.• NOT an introduction, but a short version of the whole
plan
National Entrepreneurship Network
Company Overview• Explanation of history, structure, and organization of
your company• Strategic direction– Mission statement– Goals and objectives– Values and vision
• People– Relevant skills and expertise of management team– Directors– Relationships with experts in the field
National Entrepreneurship Network
The Opportunity and Industry Analysis
• The industry background and overview• Significant trends• Growth rate• Product or service feature• Customer benefits• Uniqueness and Intellectual property or other
defendable positions• Future plans
National Entrepreneurship Network
Marketing and Sales Strategy• Target market • Market size and trends• Competition analysis• Marketing plan– Brand strategy– Distribution strategy– Product strategy– Pricing strategy– Promotion
National Entrepreneurship Network
Team Composition
• Capability of the management team to run a promising business
– The Management team– Professional experience and past successes
National Entrepreneurship Network
Operations
• Practical details required to meet the plan• Facilities• Manufacturing or out-sourcing• Personnel• Varies widely depending on type of business
National Entrepreneurship Network
Financial Plan
• Three key reports, in a five-year plan:– Income statement– Balance sheet– Statement of cash flows
National Entrepreneurship Network
Risk Analysis & Mitigation
• Risk scenario– Market risk– Competition risk– Technology risk– Regulatory risk– Financial risk– Management risk
• What measures are proposed to counter these risks?
National Entrepreneurship Network
Writing a great business plan
“A great business plan is one that focuses on a series of questions relating to the four factors critical to the success of every new venture: the people, the opportunity, the context, and the possibilities for both risk and reward.” – William Sahlman
1. The questions about people revolve around three issues: – What do they know? Whom do they know? How well are they
known? 2. As for opportunity, the plan should focus on two questions: Is the
market for the venture's product or service large or rapidly growing (or preferably both)?
3. Is the industry structurally attractive?
Source: How to write a Great Business Plan, William Sahlman, Harvard Business Review
National Entrepreneurship Network
Outline of Business PlanSection Suggested#
of pages
Executive summary 2-3Market opportunity and Market Size 2-4Your offering/product/service/IP 2-5 Competitive landscape -analysis with data 1-2Marketing Strategy- Positioning, Differentiation, Pricing, Distribution
1-2
Financial Plan – Projections, Use of Funds 5-6Risk scenario & mitigation 1-2Your team 2-4Supporting data, research, resume 5-10
National Entrepreneurship Network
Evaluating Business Plans – what does one look for?
1. The questions about people revolve around three issues: – What do they know? Whom do they know? How
well are they known? 2. As for opportunity, the plan should focus on two
questions: Is the market for the venture's product or service large or rapidly growing (or preferably both)?
3. Is the industry structurally attractive?
Source: How to write a Great Business Plan, William Sahlman, Harvard Business Review
National Entrepreneurship Network
Evaluating a Business Plan: Tips
• Objectivity is ensured when the criteria for evaluation are clearly laid out
• Eliminate possible bias – e.g, you like the idea, you like/are familiar with the industry, you like the student
• Prioritize content over format and presentation• Relevant Content (market opportunity, attractive industry,
investment potential, business model and distinctive competence) earns more weightage than a well laid out incomplete plan
National Entrepreneurship Network
Opportunity to Business Model to B Plan Evaluation – What is common?
All three Focus on • Market/Customers• Industry/Competition• Team/People
National Entrepreneurship Network
Is there any standard format of a B-Plan?• Many formats exist • Each business plan has to be unique – general
templates/software may not be effective to communicate your idea
• We provide you with a Detailed Guide for writing a B plan and a Sample B Plan – Available on the NEN CD: Kick-Starting the Entrepreneurial Campus
National Entrepreneurship Network
National Entrepreneurship Network
Videos and Web Links
• EY Business Plan Guide
• How to write a great Business Plan
• NEN Videos on B plan
National Entrepreneurship Network
Credits
• Ed Rubesch, Thammasat Business School, Thailand
• Indus Khaitan, Venture Partner, Morpheus Ventures, Bangalore, India