Entrepreneurial Business Plan by jig17619

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									            Business Plan
For the Period January 2008 to December 2010



                    for


      Venture Name
     Submitted for the Pank Prize, 2007



               Prepared by:


               Name of Author
                Contact phone
                Contact email



             Date Prepared:
               25 October 2007
Pank Prize, 2007 submission: Business Plan for (venture name)




   Complete this template by entering information under each of the headings provided
   Delete the text in italics and make sure your text is NOT in italics
   Delete this page and the next
   Remove headings if they are not necessary or change them as appropriate
   Do NOT start each section on a new page – this wastes space
   We prefer that you submit this documents as an Acrobat file
   Remove this box from your document.



IMPORTANT – YOU MUST AVOID some common problems of language and style

Reports are selling documents; they need to be written simply and accurately so that the reader
knows what the writer means. Style, spelling and grammar are important aspects of any written
work and must be correct for the output to be seen as being at a professional level. This section
identifies some common errors and problems.

You can avoid these problems by giving yourself enough time to proofread the report before
submission. It is a good idea to have someone with business experience to read your report to
see if it makes sense and to check the writing style.

Unnecessary use of capital letters

Capital or upper case letters should be used only for proper nouns such as names of people,
companies and countries, or in headings (as shown above). Avoid using capitals unnecessarily.
For example, capital letters should not be used in the following sentence : “.. we found that
Distributors in the Hardware Market depend mainly on Strong Relationships with Key Clients to
protect their Market Share”.

Watch out for “it’s” – this is a VERY common error!

Remember that “it’s” (with an apostrophe) is short for “it is”, while “its” is the possessive form.
For example, “the company needs to increase its promotional activity to make sure that it’s
perceived as market leader”. A simple way to avoid making the error of using the wrong form is
always to spell out “it is”, rather than to use “it’s” as an abbreviation. If you use that approach,
then you will never have to use an apostrophe in “its” and will never make a mistake.

A company is a singular entity

This means that you refer to the company in your report (and in your presentation) in the same
way that you would refer to a single thing. For example, “Hills Industries is market leader and
this is mainly due to its (the company’s) strong relationships with distributors”, instead of “Hills
Industries are market leaders, and this is mainly due to their strong relationships with
distributors”.

Keep the language direct and simple

Simple and direct sentences sound more dynamic, purposeful and convincing than complex
ones. For example, “computer buyers depend on ..” is preferable to “computer buyers are
dependent on ..” and “the Apex brand is the market leader with 50% share” is preferable to “the
Apex brand is the leader, enjoying 50% market share”. Similarly, “The duty for importation of
refrigerators is 25 %.” can be better written as “The import duty for refrigerators is 25%.”
Similarly, “the basis for carrying out rather extensive primary research was to enable the writers
to obtain specific information that would assist in designing this plan” can be written more simply
as “the writers carried out extensive primary research to obtain the information to write the plan”.




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Avoid the unnecessary “the”

Sometimes the word “the” is not necessary and sounds clumsy, as in this example :”Swiftprint is
targeting the small business owners, in preference to the medium to large firms”

Use the right word

One of the problems that arises when using a spell-check facility in a word processing package
is that you are likely to end up with all words spelled correctly - but they may be the wrong words.

For example, some mistakes have included “wrought” instead of “rort”, “complementary” instead
of “complimentary”, “weather” instead of “whether”, “bi products” instead of “by products”,
“product rangers” instead of “product ranges”, “local manufactures” instead of “local
manufacturers”, “there job” instead of “their job”, “simplistic” instead of “simple”.




                                    IMPORTANT NOTICE

                    This software was developed by the Centre for the
                    Development of Entrepreneurs in the University of
                    South Australia (UniSA) and is owned by UniSA

                    UniSA licenses this software to participants in courses
                    delivered by UniSA.
                    This software is licensed to these participants for their
                    own use to prepare feasibility plans for their own
                    business ventures.
                    Course participants are not to use this software for other
                    purposes such as the preparation of feasibility plans for
                    other individuals or companies. Course participants are
                    not to provide copies of this software in any form to any
                    other individual or organisation.

                    UniSA accepts no responsibility for liability arising out of
                    the use of this software. This software has been
                    developed for instructional purposes and participants
                    should obtain the advice of a qualified advisor in
                    preparing reports or plans for business or investment
                    purposes.

                    Peter Balan
                    Centre for the Development of Entrepreneurs
                    University of South Australia
                    25 October 2007




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Pank Prize, 2007 submission: Business Plan for (venture name)




Confidentiality Agreement (if appropriate)

 an agreement to be signed by the reader stating that he/she will not divulge the contents of
   the business plan
 note that VC investors in particular, will not take notice of a confidentiality statement




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Pank Prize, 2007 submission: Business Plan for (venture name)




EXECUTIVE SUMMARY

 Note that this is written as paragraphs, not bullet points.
   This is the most important single section as it needs to paint a vivid picture of the venture
    that will encourage the reader to read further. Most investors will read no further than this
    page if they are not ‘grabbed’ by the business proposition and its potential
 Include:
       the purpose of the business plan; for example, to raise a certain amount of money
     a general statement of the business concept/idea
     why there is an opportunity
     significant product/service features
     the market to be served and market potential
     sustainable competitive advantage
     if appropriate -- a brief description of the entrepreneurial team and why each member is
        important
     development milestones achieved to date (in relation to both the product/service and the
        business)
     a summary of the projected financial results (for example, sales achievement, breakeven
        point, sales and profit growth), and
     a brief statement about how the Pank Prize money would be used, and why it is important
        to the success of this venture.




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Pank Prize, 2007 submission: Business Plan for (venture name)




TABLE OF CONTENTS

1      The Business Opportunity ........................................................................................ 6
2      The Product/Service ................................................................................................. 7
3      Overview of the Organization .................................................................................. 8
4      Strategic Analysis ..................................................................................................... 8
5      Key Strategic Issues ................................................................................................ 11
6      Marketing Plan ....................................................................................................... 13
7      Development Plan................................................................................................... 14
8      Organizational Plan – The Team ............................................................................ 14
9      Financial Plan ......................................................................................................... 15
10        Critical Risks and Problems ............................................................................... 15
11        Action Plan or Program ...................................................................................... 16
12        Appendix 1: Details of the Product/Service ....................................................... 16
13        Appendix 2: Market Research Results ............................................................... 16
14        Appendix 3: Potential Customers and Suppliers ................................................ 16
15        Appendix 4: Financial Details ............................................................................ 16
16        Appendix 5: How the Pank Prize Funds Would Be Used .................................. 16
17        Appendix 6: Applicant Resume.......................................................................... 17



Note: Please follow one section on from another -- to save paper!

1 THE BUSINESS OPPORTUNITY
 what is the business opportunity in the market place (ie what is the gap in the market)?
 what characterizes ways in which the venture will take advantage of the opportunity; for
     example (in particular, what is the combination of ‘things’ that will be done to build a
     business on the basis of the market place opportunity)…
      Proprietary technology?
      Multiple products capable of being spawned from the technology?
      Exceptional team with the "right" experience and balance?
      Excellence of the fit of the product/service with the team capabilities and experience?
      IP protection available?
      Customer need for product? … are there any existing sales?
      Are there any existing or potential legal requirements that would influence customers to
        purchase your product?




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Pank Prize, 2007 submission: Business Plan for (venture name)




     how big is the opportunity (how large is the potential market in $)
     what is the potential market growth trend
       what is the likely amount of value that the venture will generate. In particular, what is the
      $ and % share that the venture is likely to achieve in the target market(s)
       note that international and local markets, as well as distinct market segments, need to be
      described separately
          o     any endorsements from people or organisations with the right profile/ reputation
          o     Any strategic alliances that provide distribution channels for your product?
       would the venture be a price maker or a price taker?




2      THE PRODUCT/SERVICE
This is an overview of the major attributes, strengths and limitations of the service or product (as well as
of your business), as they relate to the target market.



Information about the product or service is best obtained from current and/or potential customers – this is
why you need to carry out primary market research.

In general, the only credible way of preparing this section is to base it on information about the business
from distributors or customers (or perhaps from suppliers). This will allow you to reference sources of
information for Strengths and Weaknesses

Note particularly that “strengths and weaknesses” must relate to the offering and to the market (“which
means that”). For example, a “good corporate culture” is not a strength unless it can be taken advantage of
to provide a benefit to the client.



Depending on how much information you have, you should include in this section your analysis of data
such as:

- past sales (volume, value) by product line. This can give important insights into customer segmentation,
the Pareto effect, product acceptance, geographic segmentation, etc.

- past sales of complementary products. This may give an indication of feasible development strategies.

- product, price, margins, distribution structure, promotional practices

- company budgets (for the product or service) over the last two or three years.

- relevant financial ratio analysis if the data is available and if the results of the analysis appear to be
appropriate and provide useful insights.

You will need to identify the overall competitive advantage. It is possible that an existing business does
not have a competitive advantage. In that case, it is necessary to identify an aspect of the organisation or
its service or product that the business can develop into a competitive advantage.




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Pank Prize, 2007 submission: Business Plan for (venture name)




 brief description of the product(s)/service(s) including diagrams
 status of the product/service in terms of its stage of development and commercialisation
 description of the intellectual property
 who owns the intellectual property
 description of how the product(s)/service(s) satisfies a need
 unique selling proposition (USP) of the product -- what you regard as its competitive
    advantage in the marketplace (as far as target customers are concerned)
 any substitutes for the product(s)/service(s)
 product/service endorsements
 comparison of the main features and benefits of the product compared with competing
    products
 brief overview of research and development (R & D) plans (and the stage at which the
    product/service is in its product development cycle)
 identify the possible strengths and weaknesses of the product/service



3    OVERVIEW OF THE ORGANIZATION
 registered name
 date of commencement of operations
 business structure (ownership of the business)
 history of the business (if any)
 business activities (if any so far)
 mission statement
 founder/entrepreneurial team -- it may be appropriate to include here a summary or
    overview of the capabilities that the venture will need, and identify where and how these
    capabilities could be found (at this stage the venture may consist of only the entrepreneur)
     who or what type of person the entrepreneur wants to bring into the team
     brief resumes of key team members
     who do they know (networks, contacts, affiliations)
     how well are they known (personal achievements of individual team members)
 milestones achieved by the team (if any so far)
 identify the possible strengths and weaknesses of your venture


4    STRATEGIC ANALYSIS
   The market and its dynamics




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Pank Prize, 2007 submission: Business Plan for (venture name)



           o    Define the market – eg travel, entertainment, IT, internet-based. This is a clear and concise
                description of the market for the particular product or service

           o    Estimated size of the market (how big is the market?)

           o    Market location (regional, state, national, etc)

           o    Market growth trend (growing, stable, declining); stage of development of the market
                (embryonic, early growth, growth, mature, declining)

 Key industry characteristics
       barriers to entry and exit
       bargaining power of buyers and seller
       distribution structure, and the ease of access to distributors
       industry profitability
 The competitive environment -- present this in the form of a summary table




           Details             Competitor 1         Competitor 2         Competitor 3         Our Venture
                                  name                 name                 name



 Market Position             (eg leader,
                             follower, niche
                             player)

 Market Strength

 Innovativeness of
 products and services

 Pricing                     (eg premium, me-
                             too, low price)

 Distribution                (eg direct, through
                             wholesaler,
                             distributor)

 Marketing/                  (eg major methods
 Advertising                 of marketing and
 effectiveness               communications)

 Major Weaknesses
 (that could be
 exploited – such as a
 resource gap)

 Major Strengths




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Pank Prize, 2007 submission: Business Plan for (venture name)




        Key success factors (what are the things that business or venture must have in order to
       be a serious player in this industry; e.g. financial resources, technical expertise, wide
       distribution)
        Trends in the competitive environment (emerging competitors, in impact of new
       technologies, and an assessment of how the basis of competition might change in the near
       future)
 The general business environment -- present this as a table summarising the key individual
trends and the possible external business opportunities and threats that might arise from these.


External Business Environment       Implication                          Opportunity/Threat
Trend

Economic:



Demographic:



Social/Cultural:



Political/Legal:



Technology:



Natural Environment:




 Customer analysis -- this needs to be based on primary market research
        the target customers (describe the segments in terms of demographics or other
       descriptors, and their location). These might be individual consumers or businesses (if
       you're selling a business to business product or service)
        target customer behaviour (describe the buying, purchasing and media behaviours of
       your target customers)
        Key customer and user benefits sought (why will they buy your product or service?)



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Pank Prize, 2007 submission: Business Plan for (venture name)




 SWOT Summary -- present this as a table that is based on the preceding analyses (do not
include more than two or three of the most important aspects in each box)


Key Company and Product Strengths                       Key Company and Product Weaknesses

1.                                                      1.



2.                                                      2.



3.                                                      3.



Key External Business Opportunities                     Key External Business Threats

1.                                                      1.



2.                                                      2.



3.                                                      3.




5    KEY STRATEGIC ISSUES
      sales forecasts (growth objectives)
This is possibly the most important number in the business plan. The sales forecast is the measure
(number) that the plan is designed to achieve. It will be stated precisely in terms of sales volume or sales
value for each target product-market. Sales value (dollars) is preferred and is the most frequently used
measure. Market share may be used as a strategic objective, but must still be translated into a value (or
volume) measure for planning purposes.

You cannot just pull a number out of the air, and say that is your sales objective.

You must provide details of calculations leading to sales objectives. For example, if ABS reports or
market research results are used, then they need to be properly referenced. It is important that the reader
should be able to easily and quickly check the calculations and confirm the accuracy of sales objectives.

You will need to specify a sales objective for each of the 3 years as well as for Year 1. The reason is that
it will often take 2 to 3 years for a marketing and business plan program to have a real effect, especially
for a new venture or when the firm has weak market based assets and these need to be developed. A




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Pank Prize, 2007 submission: Business Plan for (venture name)



further reason is that marketing activities in a 1-year period tend to be regarded by many businesses as an
expense, whereas they tend to be seen as an investment when carried out over a longer period of 2 or 3
years. In addition, it is necessary to identify clearly the target segment(s) and to specify how the objective
will be related to these.

It is possible to identify a number of possible marketing strategies that an organisation could take to
achieve a specific sales and business objective. In this section, identify the recommended objective and
then the recommended strategy for the service or product and the target market(s).

What you write here must match the recommendations in the body of the plan. You are likely to find that,
as you spend time thinking about strategies and actions, so you may need to adjust or “flesh out” the
strategies. You will therefore need to refer constantly to this section and update it as necessary as you
write the action decisions. In addition, as you work through your budget, so you may need to change the
strategy depending on financial feasibility.

Selecting the best strategy is often a difficult decision. The marketing strategy can be developed using the:

_   Ansoff matrix to specify the business development option(s). Note that it is likely that all three
    development options will need to be used. Identify clearly the target segments.
_   differentiation as the basis for competitive strategy.


For clarity, you can show the marketing objectives on an Ansoff Matrix to illustrate what effect each
marketing development strategy is expected to have.

Note that your venture may need one basis for competition for market penetration and another basis for
competition for market extension. It is useful to show a table of the development strategies and the bases
for competition that best apply to each.

You will need to be clear about which combination of the possible strategies you will recommend as the
most appropriate, given the analysis of the business environment and of the venture's resources. (This is a
key recommendation of the report, as the selected strategy statement will determine the marketing mix
policies and activities which follow.) The reasons for the recommendation must be very clear.

The recommended strategy is not developed in a vacuum. It is designed to pursue opportunities, defend
against threats, build on strengths, compensate for weaknesses and balance the product or service portfolio
for the business and for the target market(s). In particular, this strategy will be based on the identified
competitive advantage(s) to ensure longer-term operational success. You will also need to state clearly
how the venture’s product or service will be positioned

Discuss specifically how your organisation should go about the important activities of "keeping
customers" and "getting customers" (for market penetration, market extension and product development
strategies).

When writing this section, consider how the strategies are to be implemented. In particular, bear in mind
that the venture may need to have a specific marketing strategy (with a particular basis for competing) for
its distributors, compared with its end-user target segments.



 Assumptions underlying the sales forecast calculations -- these must be detailed here
 strategic growth options over the planning period
 competitive advantage and competitive strategy over the planning period
 strategy for commercialisation, profitability and market dominance
      Is the business scalable for growth? … eg., production, operations, etc.?



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Pank Prize, 2007 submission: Business Plan for (venture name)




6    MARKETING PLAN
 marketing objectives; financial (sales forecasts from the preceding section) and positioning
 how we will dominate the market
 the business model (who are the paying customers, what is the transaction value, and how
    often do they buy, and how value/profits will be captured and retained by the venture)
 reaching the customer; how the venture will access customers directly or through a
    distribution system
      margins in the industry
 marketing mix activities program (or "Galaxy" action program) to achieve the objectives
    and reach the target markets
The marketing mix elements are the key planning variables for the organisation. These are the factors that
the organisation controls and can manipulate to implement the recommended strategies and thus achieve
the marketing objective in response to the external uncontrollable opportunities and threats. These actions,
together with the budget and action timetable constitute the tactical part of the plan. You need to include as
many useful and specific details as you can to make this part of the report come to life.

This part of the plan is likely to take a significant amount of time to devise and to write. People often do
not leave enough time to do this properly – and this lack of time becomes obvious to the company and to
the reader. You may use either the “marketing mix” framework for describing the implementation activities
(if you select a transactional approach to marketing), or the Galaxy framework (if a relational approach is
more appropriate). In the case of the marketing mix framework, the following sections and subsections are
likely to be included:

   the product might need to be modified in some way over the planning period, or the quality might
    need to be changed to support successful entry, or specific packaging may be required for promotion
    as well as for protection

   there may be particular distribution requirements in the market concerned

   specific support services might need to be provided (training, documentation, technical support)

   there may be particular price constraints, or recommended price ranges as well as discount and
    incentive structures

   the marketing communications mix may need to be developed over time. There may need to be a
    different emphasis in terms of media use, point of sale materials

   sales activities might be particularly important and you are likely to need to consider sales and
    technical training and support, as well as incentives for staff.

If a particular aspect of marketing activity, such as support services, is a very important part of the
offering, then it may require a separate section. It is important to identify how these marketing actions will
contribute towards building a relationship with customers and/or distributors.

Note that there is no “5th P” (for people). This is dealt with either under customer service, or sales and/or
under planning implications (for aspects of the organisation's activities that are not under the direct control
of marketing, such as recruitment of warehouse staff or technical staff).




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Pank Prize, 2007 submission: Business Plan for (venture name)




IMPORTANT: if you are targeting two or more different market segments with different needs, buyer
behaviour, etc you may need to develop different marketing programs for each segment. At the least you
will need to clearly indicate how your marketing mix program will address each of the segments you are
targeting.

 marketing budget -- include here a table that summarises the net sales and the key
    marketing expenditure for each year of the planning period (not by month). This information
    can be extracted from the profit and loss statement in the financial templates. Select the
    relevant area of the spreadsheet and use the commands: Edit, Paste Special, Paste As
    Windows Meta File (this ensures that the spreadsheet fits within the margins of this
    document)
 a marketing action program showing a schedule of the marketing activities for the first 12
    months of the planning period
 marketing controls -- how performance will be monitored and checked
 other relevant marketing issues.



7    DEVELOPMENT PLAN
 this concerns how you will organise for the product/service to be manufactured/made
    /assembled/provided.
 This section may include a program or timetable that addresses aspects such as
          plant/service location and layout
          production process and plan
          production capacity
          scheduling
          supplies and inventory
          equipment needs
          production budget
 other relevant production/ operations/ delivery issues.
 This section may include a discussion of how the product/service manufacture/delivery will
    be outsourced



8    ORGANIZATIONAL PLAN – THE TEAM
 although the venture may consist at this stage of the entrepreneur working by themself, it is
    useful to anticipate future development of the human resources aspect of the venture, in
    terms of




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Pank Prize, 2007 submission: Business Plan for (venture name)




           staffing requirements in terms of skills and capabilities – now and over the planning
           period
          what types of capabilities the entrepreneur wants to attract into the venture
          how capabilities will be provided – in-house or out-sourced
          management roles in the new venture
          recruitment and induction strategies
          reward systems
          strategies for encouraging innovation in the organization
          other relevant human resource issues.



9    FINANCIAL PLAN
 NOTE that this is perhaps the second most important part of the plan. If a reader is
    interested, they will have a quick look at the financials. This section therefore needs to be
    clearly presented.
 financial history (if any)
 underlying assumptions, including
      product, service and activity costings
      margins in the industry – are these ‘forgiving’ for the venture?
 financial statements (profit and loss statements, balance sheets, and cash flow statements)
     NOTE: Include key numbers here. Copy and paste detailed tables from spreadsheet into
       an appendix that is part of this report (see later); ie DO NOT submit your spreadsheet as
       a separate file. Remember that the plan is read as one document
 sensitivity analysis
 breakeven analysis
 key financial statement ratios
 funding and expansion plan
 harvest/exit strategy for the entrepreneurial team
      Are there identifiable potential buyers of the business (is it harvestable)?



10 CRITICAL RISKS AND PROBLEMS
 Possible business scenarios (optimistic, reasonable, pessimistic)
 listing of critical risks and problems faced by the business as well as strategies for
    overcoming those risks and problems
 assessment of ‘best’ options




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Pank Prize, 2007 submission: Business Plan for (venture name)




11 ACTION PLAN OR PROGRAM
 specific tasks to get your venture going
    include key milestones – linked to quantitative targets and financial targets
    link plans to milestones
    use a timeline to show how tasks, milestones and plans are linked and coordinated


12 APPENDIX 1: DETAILS OF THE PRODUCT/SERVICE

 details of product - drawings, pictures, specifications, etc if needed



13 APPENDIX 2: MARKET RESEARCH RESULTS
 Market research methods and results (what type of people were surveyed and when, the
   questionnaire that was used, and the key results)
    Note that it is imperative to carry out primary market research for any new venture, and
      at least 20 personal interviews are needed for this kind of exercise


14 APPENDIX 3: POTENTIAL CUSTOMERS AND SUPPLIERS

 lists of potential customers and suppliers




15 APPENDIX 4: FINANCIAL DETAILS

 financial tables (copied and pasted from the spreadsheet – do not embed the whole
   spreadsheet in the word document of the report! ) Include the relevant sheets in this
   document by selecting the relevant area of the spreadsheet and using the commands: Edit,
   Paste Special, Paste As Windows Meta File (this ensures that the spreadsheet fits within the
   margins of this document)



16 APPENDIX 5: HOW THE PANK PRIZE FUNDS WOULD BE USED


Present here an itemised budget for the Pank Prize funds. Also give reasons why the Pank Prize
is important to the development and success of your venture.




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Pank Prize, 2007 submission: Business Plan for (venture name)




17 APPENDIX 6: APPLICANT RESUME


Start with a statement about your capabilities that will make this venture work and be
successful.

Include a brief CV.




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