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New Tools for Strategic Planning Chapter 8 Entrepreneurial Business Plans and Presentations T. A. Sgritta University of North Carolina at Charlotte Planning Formal Business Plans • Project/Product Development • Annual Profit Plan/Budget • Strategic Plans • Status Reports on Above Plans • Entrepreneurial Business Plans Additional Applications • Actual business plans – large corporations • Proposals for projects – small groups • Entrepreneurial requests for financing, partnering, suppliers, etc. • Proposals to customers/clients Planning Outline • Situation (SWOT analysis, material from Schrello/feasibility study/marketing study) • Objective • Detailed action plan – Detailed by the specific functions/actions that need to be accomplished • Logistics/Finance • Management, communication and control Keys to Effective Plans • You are trying to “sell” your idea or plan, therefore you need to be convincing • Review your presentation from the audience’s perspective • You need to have a balance between a good concept and a good presentation. Keys to effective plans, cont’d • Make it easy to understand • Use simple to read/understand material • Display enough “facts” to make your point – And be prepared for challenges! • Believe in the plan yourself • Remember why your audience is there! Three Pillars of the Plan • Facts and data that explain the situation (Real) • Action plans that indicate what you are doing (Win) • Financial data that proves your plan (Worth) Level of Detail Include enough detail to be convincing of your points. Base your plan on: Facts- establishing your need Objectives- that represent objectively (in metric form) the needed results Actions- to reach the objectives Quantifications (measurements - metrics)- to prove the results but do not overkill – keep some detail in reserve. Use financial and market planning tools! Purposes of the Action Plan Details • The action plans are to: – Convince the audience that the overall plan is workable and realistic – Indicate that the overall plan has been well thought out – Develop (and show) the control procedure. Remember Your Audience • Frequently sharp people • They want to know: – Why you are taking action (situation) – What the measurable goals of the plan are – Who is responsible for actions (action plans) – What milestones will be reached (action plans) – When will the milestones be reached (action plans) – How the action will be accomplished (action plans) Specifics vs. Generics • Avoid generics in the plan – Generic means the process, not the actual case at hand. Don’t say, “We should do a SWOT analysis.” Do it. – Remember, you are key members of the team, not disinterested students, act that way! – Your management/audience will evaluate you on your demonstrated capabilities to perform, not to talk about the process – so be specific! Generic Avoidance, Cont’d • Avoid – “Competition is a threat” Is there a specific action that is a threat now? Competition is always a threat to act or react, therefore include it only if unusual. – “Costs may increase” – “We may not be successful” • Do – Focus on the task/plan/project at hand. What specific items or actions effect the plan? Avoid generalities. Do Not • Do not use “approximately”, we “feel”, we “believe”, we “think”, “if” (sometimes, but rarely okay). • Do not use adjectives that are not necessary. These are sales presentations, but they are not suppose to look like sales presentations. • Do not think that you are making a product sales presentation. Do • Quote facts. • If facts are not available, estimate them, but make them sound like facts – be confident. • Tie numbers and plans together. • Help each other! Tables, Charts and Graphs • A picture is worth a thousand words! • Use them often • Keep them simple and easily understandable • Make them self supporting • Include them in both written and oral plans Tables, Charts and Graphs • Uses: – Market data • Market size, market preferences, survey data, sales and margin data – Action plans • Timing, relationships, responsibilities, costs – Financial • P&L, balance sheet, cash flow. • Excel sheets can be imported into PowerPoint Planning the Plan • Who will participate • What they will say • When they will say it • How they will say it Typical Presenters • Participants- 5 section entrepreneurial plans – Situation presentation w/ mission – Marketing/Sales section – Product development section – Operations section – Accounting and finance section And possibly management, communication and control sections presented by the situation presenter What they will say: Situation • Introduce the overall plan and your team • Present the situation analysis • Present the organization’s mission and its goals (measurable goals!) • Mention the key initiatives, but don’t go too deeply; let the others do that. • If appropriate, present the key items from the last section – probably at the end Detailed Plan: Marketing • What/how/why is the overall marketing/competitive strategy? (A KFS or other analysis may be helpful) • Explain the marketing plan: • Describe the key results from the feasibility study including customer identification, market size, how you will get sales, and the 4P’s of marketing. • Identify the pricing and margin plans • Indicate specific marketing action plans • Include staff or other administrative considerations Marketing Data, New Hot Sauce Market, units 100% 200,000 Estimated 12% 24,000 share/sales Price, ea. $2 Revenue $48,000 Cost, each $1.25 Total cost $30,000 Cont. Margin $18,000 Market Strategy: Pilot Schools • Pricing: List less 30% school discount to place us under competition. • Promotion: Sponsor scholarships to school if they buy our aircraft. • Channel: Direct sales by sales manager. • Timing: First two units placed by, July 1996. • Responsibility: John Quon, Sales Manager Pilot School Market • Pricing: $132,000, based on average resale price to new price. • Promotion Budget: – Magazines (list names) $ 45,000 – Shows (Oshkosh, two more) 30,000 – Pilot training, etc. 15,000 – Total $ 90,000 Pilot School Market • Distribution objectives 9/96: – Domestic – Contract 10 flight schools in state Pilot School Market – Distribution Project Responsible: Sally Medina, Distribution Manager Methodology: Personal contact with former and recommended new dealers. Milestones: Identify candidates: complete Sign first contract Mar 15 Complete 10 agreements July 1 Sales budget: $35,000. Market/Sales - Note • These are different jobs with different skill requirements • They will be separate in most large companies • Some large companies and most entrepreneurial combine them although they are different functions Detailed Plan: Product Development Relate new products to the market’s needs for features (first presented in the marketing presentation) • Describe new product’s functioning to achieve the market’s needs • Explain your development plan. You may use a Gantt or Pert chart or other method. Include enough verbage to explain the chart or detail in words your plan. Detailed Plan: Product Development . • If a general plan, cover capabilities improvement, new technology, etc. as action plans. Detailed Portion of Action Plan Product Development Management • Add the plan to obtain additional resources if necessary for the product development portion of the plan. Do you need people? Equipment? New technology? Outsourcing? What is the timing and cost of these items? – again, present action plans. Detailed Plan:Operations • Indicate plans for sourcing, production, procedures, equipment and people. Indicate costs associated with these. • Provide a chart (standard, Gantt, Pert as appropriate) indicating timing. Be sure to coordinate with marketing and product development sections on timing. Detailed Plan:Operations Operations (Cont’d) • Indicate logistic considerations • Indicate special or potential problems that you may see. • Remember that operations always seeks improvements in quality and cost. Be sure to indicate these action plans. Quality Assurance ISO 9001 Project Responsible: Mary Smith, QC Manager Methodology: In conjunction with Johnson & Johnson Consultants Milestones: Consultant contract: Feb. 1, 1996 Preliminary review Mar 15 Documentation complete July 1 Final review August 1 Certification Sept. 1, 1996 Budget: $ 160,000. Detailed Plan: Finance/Accounting Perform a pro-forma financial analysis for the plan – Make a detailed P&L for the first 24 months – Make a simple balance for the same period – Make summary P&L & balance sheets for the years. – Provide a ROI calculation for each year • Make a list of capital expenses and indicate where the capital will come from • List accommodations you must make within your rresponsibility for any project(s) Detailed Plan: Finance/Accounting • Indicate action plans for at least: – Initial and subsequent financing per the balance sheets you prepare – Acquiring/installing accounting software – Anything else that is key – line renting buildings, etc. Project Profitability, Burgers Project Contribution Margin Margin, ea. $1.04 # per day X 100 Days/year X 365 Total Margin $38,000 Action Plans • Action plans indicate the leadership and direction of the organization, department or project. Use the keys: – Who: In the real world you would put a name here – the person that the company holds accountable for accomplishing the objective Action Plans – Does what – here indicate the metric that is the goal or objective of the action. – When – indicate the time that the above goal will be met – How – indicate the basic methodology for accomplishing the task. This is a plan, so this section is to convince the audience that the objective is reasonable and has been thought out. Do not become too detailed. Project Tips • Price vs. cost • Margin vs. profit • Do SWOT using the four areas (or portion thereof); do not use the term SWOT • Use the term “project chart,” not “Gantt” chart • Avoid terms wasted on the current audience (our great customers, etc.) • I, we and they • Avoid “due to the fact that”, “in the amount of” Class Project Considerations • Some/much data is not available - you must logically invent it • You may use other formats, but the plan requirements must be covered • Be creative • Be Brief! – Too long of a plan will not be accepted by your audience – but include metrics to make the plan believable Presentations • This is your chance to be convincing in front of others (real world situation!) • Be creative • Use visual aids (PowerPoint is nice) • Be careful – you have limited time for your presentation. Use your time wisely Presentations • Business casual dress is fine – more formal is also okay. • Each presenter should introduce the next presenter. • Act like a team. • Be enthusiastic. • Use good oral presentation techniques. • Be convincing! Creativity Teamwork Career Impact • 10% Quality of work • 30% How you look doing work • 60% Who sees your work All go hand-in-hand Real World!
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