How to Write a Business Plan - PDF

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					How to Write a
Business Plan
What is a Business Plan

•   Business Plan is a tool,
    designed to transmit
    information to a wide range of
    people.
•   Financiers, staff, head office,
    etc.
•   The plan is a selling
    document.
•   Never forget to tell the reader
    what response is wanted and
    ask for it because, just as with
    any selling process closing
    the deal is crucial.



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Avoid Jargon




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You are telling a Story

• Avoid using jargon,
  mnemonics or
  abbreviations that the
  reader will not understand.
• Proposals are often passed
  on by the original recipient
  – who may understand
  technical terms to a
  general manager or a
  finance manager, who may
  not and could find the
  jargon confusing and off-
  putting.


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You are telling a Story

• Before beginning to write
  you must have clear idea
  of the story you are telling.
• The story should have
  beginning, a middle and an
  end.
• A story grabs the attention
  of the reader and
  stimulates interest and
  imagination . It flows ……..
  So should a business plan.




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Use Action words

• Think of your plan as an action story, not literary criticism.
• Use as much as possible to say what you will do and when,
  rather than describing scenery.
• You must stimulate the reader’s enthusiasm for your project
  so that he or she will ‘buy in’ to it.
• The story of you, your business and what you propose to do
  with it is a fascinating story, tell it that way.




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Structure of The
Plan
Summary

• You probably have a few minutes to make a good
  impression with your plan. By the time the reader has
  finished the summery and maybe the introduction you have
  won or lost.
• The summary should never be more than a page long. It
  should not include all the evidence for your case just an
  outline of the most important points. It says what the
  situation is and what is proposed.




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The Background

• As the story, it is important to set the scene. Let the reader
  know the history of the organization or business. For new
  enterprise give some history of the market or service, how it
  has developed and where you think it is going.
   –   What does organization do?
   –   Where does it do it?
   –   How does it do it?
   –   Does it sell product or service and, if so, how?
   –   Does it have key suppliers, customers or staff?
   –   How many outlets or factories does it have?
   –   How big it is? ( turnover? profits? Staff ?)




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For start-ups with no trading history there should be some
background to the market, competitors and management
team. If the background suggests operational problems
explain how they arose, what has been learned and how they
will be or have been resolved.

                   START-UPS

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The People

• Say something about yourself and rest of the people who
  run the organization.
• The most important factor for investors in evaluating a
  proposal is the management team.
• This is the place to review the organization structure and the
  skills of the organization as a whole and key people within
  it.
• Show your organizational structure.
• For fund raising document it will probably be appropriate to
  put a more detailed CV for each key manager in an
  appendix.




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The outline of the business/organization

• You must educate the
  reader and get the key
  facts over quickly.
• There are three sections to
  this explanation.
   – What product or service
     you provide.
   – The market place you
     operate in.
   – The mechanics of you
     provide the product or
     service.




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Be selective. Don’t go into pages of detail, just describe what
is necessary. Every business or organization will be different
so there is way of defining what should be included.

   THE PRODUCT OR SERVICE

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Why are You Different

• If your product or services
  are unique make that clear.
• Superiority is something
  you should shout about-
  so do. Make sure the
  reader doesn’t have to
  search for reason to back
  you.
• Talk about your
  competitors. Show that
  you know who they are,
  how they are organized.



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The Mechanics

• Supply – Do you have
  unique source of supply.
• Processes – What are your
  key processes.
• Distribution – How do you
  deliver your product.
• Premises – Do you have
  factories, offices,
  showrooms, shops?




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What can go wrong?

• People who read business
  plans tend to ask, “ what is
  my risk, what can go
  wrong, and what would be
  my exposure be?”
• Dispel concern. Your
  reader does not want to
  back a business that can
  be shut down at the whim
  of a far-off authority or as a
  result of a small error.




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                         The market

• Define your market and describe its key features.
   – Segmentation, structure, size, and trends
       • Are you trading in a particular niche within a larger market. If so,
         explain the segmentation.
       • Is the market growing, static, shrinking? The reader want to know
         what might happen, how ever speculative.
   – Competitors
       • Issues that determine competitive success include distribution,
         pricing, brand strength, packaging and promotion as well as
         financial strength. Set out these issues briefly.
       • Explain who are your relevant competitors are.
       • Are there alternative products? These are also competitors.




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Trading Summary

• For an existing trading business, summarize its past
  performance and its future expectations.
• Don’t put masses of detailed figure in the body of the plan-
  put them in appendix and summarize them here.
   –   Turnover
   –   Gross Profit
   –   Overheads
   –   Profit before interest and tax.
• Assumptions – Set out the key assumptions you have made
  in any forecast. These determines the reader believes your
  proposal, so give some evidence to support them.
• The reader wants explanation not just data.


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Cash… Cash…. Cash

• A business plan show a
  fabulous profit projection
  but if you run out of cash
  you will never achieve it.
  Cash in a sense more
  important than profits.
• Business never collapse
  because they are losing
  money but because they
  run out of cash to pay their
  bills or to reinvest.




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The Market

• How do you compete?
   – Explain whether the market is price-sensitive, dependent upon
     location of outlets, driven by quality of product or service, etc.
   – Describe important factors about the key competitors. The
     reader needs enough information to assess whether you can
     compete effectively.
• Customers
   – Who are your customers?
   – Is your customer store or supermarket buyer.
   – Do you have any dominant customer who represent very high
     proportion of your sell?




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Forecast

• If you are certain to go ahead with your numbers then be
  sure you have convincing arguments supported by
  evidence, not just ambition; then try to pursued the reader.
• Give supporting evidence.
• Show breakeven of business.
• Show your fixed and variable cost.
• It is better to surprise with good results than to disappoint
  with bad results.




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The Proposal

• State your proposal clearly. Don’t forget to tell them why
  you are here.
• Reiterate your requirement in the summary at the beginning
  of your business plan. Make sure the reader has not turned
  the first page before knowing what you want.
• How much are you investing. There are many ways but non
  as persuasive as money.
• Show salaries and fees clearly; justify them if necessary.
• State if funds have already been raised towards total
  requirement.




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Risks

• Help the reader by telling them what might go wrong but
  also what you will do about it.
• Each risk is evaluated.
• The response to things going wrong is given.




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DOCUMENT INFO
Description: This presentation will help in creating and developing business plans for small business. This is brief about how to create a business plan