Business Plans
Sul Kassicieh Anderson School of Management
Introduction
• • • • Focus your thinking Establish realistic strategy Financing and other support Reaction by others
Definition
• Document that can convince the reader that the business can produce enough revenue to make a satisfactory profit and therefore attractive as an investment opportunity
Many reasons to build one
• BP should sell the writer/reader on the business:
• Writer: so that you can go out and do it, • Reader: to invest in it
• Confidence of knowing the issues • Improve chances of success
Many Purposes in real life
• • • • • • Bank Financing Strategic alliances Large contracts Key employees Mergers and acquisitions Mgt team motivation
• Ours here : Investment
by VC or Angels
Principles of BP
• • • • No right way: plans can differ Be creative but set a limit Concise and focused Captures energy and personality of business leader • Include negatives and issues • Spend some time on it
Sections of Business Plan
• • • • • • Cover Page: contact name and info Table of contents Executive summary The company: past, present and future The market The Product/service
Sections of Business Plan continued
• Sales and Promotion • Financial projections
• Profit and loss • Balance sheet • Cash flow
Other sections: technology based
• Management team: people who fund other people value management skills above “ideas” • Risk factors: shows that you know what could go wrong and plan to avert it • Marketing plan: if this is “innovative” how are you going to get people to use it
Packaging the Plan
• It is a ”living” document • No right/wrong way: the need of reader is essential • What are the challenges/ questions that can be raised by reader: answer these.
Packaging the Plan
• Include supporting materials • Don’t make unsupported statements • Designate an outside reviewer/ reader that can critique plan
Sites with sample plans
• www.businessplans.org/businessplans.html • www.bplans.com/sp/businessplans.cfm • www.businessplanarchive.org/