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Detailed Plan - Belk College Of Business - University of North


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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
                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
• Action plans that indicate what you are
  doing (Win)
• Financial data that proves your plan
                              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

• 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
                 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
                                     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.

• 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
• 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
                       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
       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
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
• 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.
  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
• They will be separate in most large
• 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
• 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
Responsible: Mary Smith, QC Manager
Methodology: In conjunction with Johnson &
  Johnson Consultants
  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:

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
   – 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:

•   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

• 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
• Business casual dress is fine – more formal
  is also okay.
• Each presenter should introduce the next
• Act like a team.
• Be enthusiastic.
• Use good oral presentation techniques.
• Be convincing!
                      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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