Business Plans

Business PlansSul KassiciehAnderson School of ManagementIntroduction•Focus your thinking•Establish realistic strategy•Financing and other support•Reaction by othersDefinition•Document that can convince the reader that the business can produce enough revenue to make a satisfactory profit and therefore attractive as an investment opportunityMany 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 successMany Purposes in real life•Bank Financing•Strategic alliances•Large contracts•Key employees•Mergers and acquisitions•Mgt team motivation•Ours here : Investment by VC or AngelsPrinciples 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 itSections of Business Plan•Cover Page: contact name and info•Table of contents•Executive summary•The company: past, present and future•The market•The Product/serviceSections of Business Plan -continued•Sales and Promotion•Financial projections•Profit and loss•Balance sheet•Cash flowOther 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 itPackaging 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 planSites with sample plans•www.businessplans.org/businessplans.html•www.bplans.com/sp/businessplans.cfm•www.businessplanarchive.org/