Week 23

Management of InnovationBusiness Plan – Polish and Finish

- Dr Guru Tej S

Assessment System:A quick sneak peak

Assessment Type

Description of item Week Due

Coursework E-PORTFOLIO comprising range of items completed on an going basis throughout the year.

3-24

Checklist for portfolio – final submission week 13 (2nd Semester)

Weightage

1 Video of presentation Assessment mark sheet from observing group Written feedback from the observing group Written response from the presenting group Group contribution log

Presentations week 8

Feedback from observing group by week 10

18%

2 Written assignment (1500 words) Feedback comments from tutor Response to feedback from student (500 words)

Individual submission week 12

20%

3 Written assessment (1500 words) Feedback comments from tutor 

Individual submission week 18Feedback in week 21

20%

4 Group work Design a product or service for a social entrepreneur Diagram brief or leaflet demonstrating features Group contribution log

In class group work weeks 17-19

18%

5 Written assessment (1500 words) Business Plan outline

Individual submission week 23Feedback from tutor 24

20%

6 Competence based CV Week 24 4%

Learning Objectives• Purpose of a business plan

• How a business plan can be a dual-use document

• Process and polishing the business plan document

• Presentation of the business plan

What is a Business Plan?

• Business Plan

– A business plan is a written narrative about your business idea!

– Typically 25 to 35 pages long

– Describes what a new business idea is to accomplish

• Dual-Use Document

– For most new ventures, the business plan is a dual-purpose document

used both inside and outside the firm

• Inside the firm, the plan helps the company develop a “road map” to

follow in executing its strategies and plans

• Outside the firm, it introduces potential investors and other stakeholders

to business opportunity the firm is pursuing

Who reads the Business Plan – and what do they looking for?

There are two primary audiences for a firm’s business plan

Audience What do they look for!

A Firm’s Employees A clearly written business plan, which articulates the

vision and future plans of the firm, helps the employees

of a firm operate in sync and move forward in a

consistent and purposeful manner.

Investors and Other

External Stakeholders

A firm’s business plan must make the case that the firm

is a good use of an investor’s funds.

The key is to include facts generated through a

properly conducted feasibility analysis.

A business plan rings hollow if it is based strictly on

what an entrepreneur or team of founders “thinks” will

happen.

Writing a Good Business Plan

Structure of the Business Plan

– To make the best impression, a business plan should follow a conventional structure, such as the outline for the business plan shown in chapters.

– Although some want to demonstrate creativity in everything they do, departing from the basic structure of the plan format is usually a mistake.

– Typically, investors are very busy people and want a plan where they can easily find critical information.

4-7

• Sense of Excitement– Along with facts and figures, the plan needs to project a sense of anticipation and

excitement about the possibilities that surround a new venture.

• Content of the Business Plan– The business plan should give clear and concise information on all the important aspects of

the proposed venture.

– It must be long enough to provide sufficient information yet short enough to maintain reader interest.

– For most plans, 25 to 35 pages is sufficient.

• Types of Business Plans– There are three types of business plans.

Writing a Good Business Plan

Outline of a Good Business Plan

Cover Page and Table of Contents

– The cover page should include the name of the company, address, phone number and contact information for the lead entrepreneur.

The Business Plan template is taken from paloalto.comReference used for educational purposes only. No copyright infringement intended

Outline of a Good Business Plan

The Executive Summary

– The executive summary is a short overview of the entire business plan

– It provides a busy reader with everything that needs to be known about the new venture’s distinctive nature.

• In many instances, an investor will first ask for a copy of the executive summary

• Then would request a copy of the full business plan only if the executive summary is sufficiently convincing.

The Business

– The most effective way to introduce the business is to describe the opportunity the entrepreneur has identified

– ie., the problem to solve or the need to be filled

– and then describe how the business aims to address the issue.

– The description of the opportunity should be followed by a brief history of the company, along with the company’s mission statement and objectives.

– If a new venture, what expertise do the owners of the potential business carry to encash the business opportunity.

– An explanation of the company’s competitive advantage and a brief description of the business model to be followed.

Outline of a Good Business Plan

• Management Team

– One of the most important things investors want to see when reviewing the viability of new ventures is the strength of its management team.

– If the team doesn’t have the right people, most investors won’t read further.

– The material in this section should include

• A brief summary of qualifications of members of the management team

• His/her relevant employment and professional experiences

• Significant accomplishments, and educational background

Outline of a Good Business Plan

Company Structure, Ownership, and Intellectual Property

– Start can be with describing the structure of new venture, including the reporting relationships among the top management team members.

– The next part of the section should explain how the firm is legally structured.

– The third part of this section should discuss the intellectual property the firm owns, including patents, trademarks, and copyrights (if any).

Outline of a Good Business Plan

Industry/Market Analysis

– This section should begin by discussing the major trends in the industry in which the firm intends to compete along with important characteristics of the industry, such as its size, attractiveness, and profit potential.

– This section should also discuss how the firm will diminish or sidestep the forces that suppress its industry’s profitability.

– The firm’s target market should be discussed next, along with an analysis of how it will compete in that market.

Outline of a Good Business Plan

Marketing Plan

– Marketing plan should immediately follow the industry analysis and should provide details about the new firm’s products or services.

– After reading this section of the plan, an investor should be confident that the firm’s overall approach to its target market and its product strategy, pricing strategy, channels of distribution and promotional strategy make sense.

Outline of a Good Business Plan

Operations Plan

– This section of the plan deals with day-to-day operations of the company.

– An overview of the manufacturing plan (or service delivery plan) should be followed by a description of the network of suppliers, business partners, and service providers that will be necessary to build the product or produce the service the firm will sell.

– Any risks or regulations pertaining to the operations of the firm should be disclosed, such as non-routine regulations regarding waste disposal and worker safety.

Outline of a Good Business Plan

Financial Plan

– The financial section of the plan must demonstrate the financial viability of the business.

– A careful and serious investor in the plan will thoroughly scrutinize this section.

– The financial plan should begin with an explanation of the funding that will be needed by the business during the next three to five years along with an explanation of how the funds will be used.

– The next portion of this section includes financial projections, which are intended to further demonstrate the financial viability of the business.

– It is important to remember that the financial plan should be based on realistic projections.

Outline of a Good Business Plan

Critical Risk Factors– Although a variety of potential critical risks may exist, a business should tailor

this section to depict its truly critical risks.

Appendix– Any material that does not easily fit into the body of a business plan should

appear in an appendix.

– Examples of materials that might appear in the appendix include:• Resumes of the top management team members

• Pictures or diagrams of product or product prototypes

• Certain financial data

• Market research projections etc

Outline of a Good Business Plan

Presenting the Business Plan to Investors

Making a Presentation to Investors

– If the business plan successfully elicits the interest of potential investors, the next step is to meet the investors and present the plan in person.

– The first meeting with an investor is generally very short, about one hour.

– The investor will typically ask the presenter to make a 20 – 30 minute presentation using PowerPoint and use rest of the time to respond to questions.

– If the investor is impressed and wants to learn more about the venture, the presenter will be asked back for a second meeting.

Presenting the Business Plan to Investors

Tips on Making an Oral Presentation to Investors

– When asked to meet with an investor, the founders of a new venture should prepare a set of PowerPoint slides that will fill the time slot permitted.

– The presentation should be smooth and well rehearsed. The slides should be sharp and not cluttered with material.

• The first rule in making an oral presentation is to follow instructions.

• If an investor tells an entrepreneur that he or she has one hour and that the hour will consist of a 30-minute presentation and a 30-minute question-and-answer period, the presentation shouldn’t last more than 30 minutes.

Presenting the Business Plan to Investors

Ten PowerPoint Slides to Include in an Investor Presentation1. Title slide

2. Problem

3. Solution

4. Business model

5. Management team

6. Industry and target market

7. Competition

8. Intellectual property

9. Financial projections

10. Current status, amount of money requested, and projected use of funds

Task for your Learning Journal

Please work on your fifth and sixth assignment!

Submission time and date: before 12 noon, 15th Dec 2014

Submission to: RTE Department

Presentation on your Business Plan and Viva Voce with the Faculty Member and evaluators:

Information would be updated on notice board by 19th Dec 2014 .

Thank youFuture Entrepreneurs