Business Plan

Business Plan How to successfully write a Business Plan Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 1 Presenter Christian Ziegler Managing Partner Co-founder of ClusterStar | Student Business Consultants Student of Business and Law in Augsburg, Germany Experience as project manager in over 50 internal and 10 external projects ClusterStar KG Werderstr. 1 86159 Augsburg Germany Office +49 (0) 821 26 12 084 Cell +49 (0) 176 213 003 52 c.ziegler@clusterstar.com www.clusterstar.com Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 2 Content Content 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 General overview Finance Business Strategy Operating Plan Industry Analysis Competitor Analysis Marketing Executive Summary Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 3 1.1.1 Definition A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 4 1.1.2 Disciplined Balance A Business Plan: The disciplined balance A BP has to meet various requirements. It… …should… be visionary be for today be a formal plan be innovative and creative …but also. be logical be for the next 3-5 years be easy to understand follow the rules Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 5 1.1.3 Entrepreneurial Persons Believe that Startup ventures can succeed Early contact with successful entrepreneurs Parents who are/were entrepreneurs Exposure to success stories and case studies Gain practical real world experience before, during and after university studies Agree to Embrace Risk, and possibly failure Be willing to be unconventional Want to change status quo/leave a large company Live in a society that sees the above as normal, not a strange exception Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 6 1.1.4 Types of Ownership Sole proprietorship Partnership American Limited Liability Company (LLC), British Ltd, German GmbH, French S.A.R.L. There is not one choice that fits every business. An entrepreneur should pick the form that best meets his /her needs. The following aspect should be considered: The potential risks and liabilities of the business The formalities and expenses involved in establishing and maintaining the various business structures The income/corporate tax situation and the investment needs Risks and liabilities Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 7 1.1.5 The Right Business Name A business name that draws business in itself. Checklist for the right business name: Memorable and easy to spell Needs a visual element Has to have positive connotations Needs to include information about what your business does. Should be fairly short Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 8 1.2.1 Options for Entrepreneur´s funding Personal funds Mezzanine Financing 3Fs IPO Funding M&A Venture Capital Business Angel Borrowings Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 9 1.2.2 Turnover Plan Number of contacts Sales Cycle Lead The sales cycle is the sequence of phases that a typical customer goes through when deciding to buy something. As a rule, the sales cycle is described from the customer's perspective. The first phase of the sales cycle may be either the customer's perception of a product, or a perception of a need that the product might satisfy. Prospect Shortlist Decision Win/Loss Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 10 1.2.3 Financial Plan A financial plan can be A budget plan, which determines spending and saving future income. This budget plan allocates future income to various types of expenses, such as rent or utilities, and also reserves some income for short-term and long-term savings. An investment plan, which allocates savings to various assets or projects expected to produce future income, such as a new business or product line, shares in an existing business, or real estate. The financial plan section of the business plan consists of three financial statements: The income statement The cash flow projection and The balance sheet and a brief explanation of these three statements. Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 11 1.2.3 Financial Plan Start up expenses are all costs of getting a business up Start up expenses may include: Business licensing and permits Business registration fees Starting inventory Rent deposits Down payments on equipment Down payments on property Utility set up fees Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 12 1.2.3 Financial Plan Operating expenses are all costs of keeping the business running Operating expenses may include: Salaries Rent or mortgage payments Telecommunications utilities Distribution Promotion Raw materials storage Loan payments Office supplies Maintenance Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 13 1.2.4 Bootstrapping Financial bootstrapping is a term used to cover different methods for avoiding using the financial resources of external investors. Owner financing Personal savings, credit card 3Fs = Friends, Family and Fools Minimization of accounts receivable Factoring Reward fast payment Terminate relationship with slow paying customers Joint utilization Share office, supplies, equipment, employees Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 14 1.2.4 Bootstrapping Delaying payment Negotiate terms Lease equipment Selling by commission instead of wages Minimizing inventory Using formal routines to minimize inventory needed Seeking best possible terms from suppliers Subsidy finance Governmental grants Research grants Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 15 1.2.4 Bootstrapping Executive Summary Name your first ten customers Be brief Business Plan Be optimistic but realistic Know your competitors well Advisors Get advisors with grey hair involved at a very early stage and understand that investors will call them Focus on why prospective customers will buy from you and what makes them pay you money Define milestones Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 16 1.2.5 Planning Top-Down Total Market Market Sector Market Share - E.g. Automotive market -E.g. compact SUV market -E.g. Mitsubishi Outlander Bottom-Up What can you achieve with the recources given Resources in the enterprise Projected turnover Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 17 1.2.6 Management Plan The Management Plan contains an outline of the legal structure and the management resources, including the internal management team, external management resources and human resources needs. The Management Plan section describes the management team involved and how the business ownership is structured. People reading the business plan will be looking to see not only who is on the management team but also how the skills of the management and staff will contribute to the bottom line. Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 18 1.3.1 Business Strategy Business Strategy is the art of formulating, implementing and evaluating crossfunctional decisions that will enable an organization to achieve its objectives. It is the process of specifying the organization's objectives, developing policies and plans to achieve these objectives and allocating resources to implement the policies and plans to achieve the organization's objectives. Manufacturing strategy Make or buy Definition of unique capabilities and processes Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 19 1.3.2 Business Strategy Outsourcing Strategy Human Resources Management Corporate & Strategic Management Information Management Financial Management Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 20 1.3.3 Outsourcing High contestability High measurability Medium contestability Low contestability Buy inputs Low Medium measurability measurability Buy services Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 21 1.4 Operating Plan An operating plan is a subset of a strategic work plan. It describes short-term ways of achieving milestones and explains how a strategic plan is put into operation during an operational period. It must contain a description of physical location facilities and equipment types of employees needed inventory requirements and suppliers any other applicable operating details Keeping focused on the bottom line helps the company organize this part of the business plan Outline of the capital and expense requirements the business will need to operate from day to day Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 22 1.5 Industry Analysis An overview of the industry sector which your business will be a part of, including industry trends, major players in the industry, and estimated industry sales. General industry overview Size of your industry Sectors which this industry includes Major competitors in this industry Markets and customers for this industry Industry's estimated sales this year, last year, and the year before Economic trends that have affected this industry National and economic trends that might affect it in the future Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 23 1.6 Competitor Analysis A competitor analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats. The competitive analysis section can be the most difficult section to compile when writing a business plan. Before you can analyze your competitors, you have to investigate them. Focal points: Markets or market segments that your competitors serve Benefits which the competitors offer Why customers buy from the competitors Competitor’s products and/or services, pricing, and promotion Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 24 1.7 Marketing The Marketing section is a detailed explanation of the sales strategy, pricing plan, promotion activities, and product or service's benefits. The Marketing section explains how the business is going to get its customers to buy its products. The Marketing plan mainly includes the 4Ps: Product Place Promotion Price Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 25 1.8.1 Executive Summary An executive summary is a report of usually one page or less. The executive summary contains enough information for the reader to become acquainted with the full document without reading it. Therefore, a business plan’s executive summary should include: A description of your company, including your products and/or services Mission and vision statement The business’ management The market and your customer Marketing and Sales The competition The business’s operations Financial projections and plans Major conclusions Why is this a winning business? Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 26 1.8.2 Executive Summary Golden rules Focus on providing a summary Keep the language strong and positive Do not weaken the executive summary with weak language The executive summary should be no more than two pages long Do not include details or pleas Polish your executive summary Make it clear and succinct Tailor the executive summary of your business plan to your audience (e.g. investors) Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 27 Contact Please feel free to get in touch with us: ClusterStar KG Werderstr. 1 86159 Augsburg Germany Office +49 (0) 821 26 12 084 Cell +49 (0) 176 213 003 52 c.ziegler@clusterstar.com clusterstar www.clusterstar.com Amsterdam — Athens — Augsburg — Barcelona — Berlin — Budapest — Cologne — Dublin — Edinburgh — Frankfurt — Gothenburg — Hamburg — Helsinki — Lisbon — Ljubljana — London — Lyon — Madrid — Manchester — Milan — Munich — Paris — Rome — Seville — Stockholm — Stuttgart 28