Related terms(topics) Entrepreneur/Entrepreneurship Pre-Feasibility Study Feasibility Study/Project Analysis Business Plan Project Management
Venture Product/Service Development Nike Laser Honda Pepsi Corn Flake Post It Food Ingredients Etc.
- Economics Change - Social, Culture and Demographic Change - Technological Change - Political/legal Change - Competition New Idea Opportunity
Sources of Idea 1. Current Job 2. Special Interest 3. Friends 4. Media
Venture (Business concept) Feasibility Study Business Plan
Feasibility Study Industry Product and Service Customers Investment Human resources Chance to be successful???
Feasibility Study Before committing time and energy to prepare a business plan, the entrepreneur should do a quick feasibility study of the business concept. - Are their any barriers to success? - Can the product be marketed, produced and financed? - Are goals and objectives of the venture clearly defined? - To provide a framework for business plan
Planning as a part of the business operations : –Marketing/Sales Plan –Financial Plan –Operations (Production) Plan –Human Resource Plan –Etc.
1. What is the Business Plan? 2. Who write the plan? 3. Skills needed 4. Who read the plan? 5. How to evaluate the plan 6. What information required? 7. Writing the business plan 8. Presenting the plan Discussion Topics
The Business Plan is a written document prepared by the entrepreneur that describes all the relevant external and internal elements involved in starting a new venture. It is often an integration of functional plans such as marketing, finance,manufacturing(operations), and human resources. 1.What is the Business Plan ?
Importance of Business Plan To determine the viability of the venture To provide guidance to organize and plan To serve as an important tool in helping to obtain financing
2. Who write the plan? Entrepreneur Lawyer Accountant Consultant Engineer Etc.
3. Skills needed Planning Forecasting Market Research Sales/Marketing Management Human Resource Management Product Design/Production Legal Issues Financial, Accounting and Taxes Organizing
4. Who read the plan? Investor Banker Supplier Employee Customer Consultant/Advisor
Three perspectives to be considered Entrepreneur perspective –Creativity and technology by entrepreneur Marketing perspective –Someone would buy it in the eye of customer Investor perspective –Financial projections
5. How to evaluate the plan? Analysis of business opportunity Ability to pay back the Debt including Interest with a designated period of time Analysis of all potential risks
6. Information Required Marketing Information Operations Information Financial Information
Information for Planning: Market Information: –Market potential for the product or service –Size of the market –Target market –Market goals Sources: –Trade associations –Government reports –Internet –Research –Published studies
Information for Planning: Operations Information : –Location :to access customers,suppliers and distributors –Manufacturing Operations: Machine, assembly, subcontract –Raw materials : suppliers’ names,addresses,cost –Equipment : lists,purchase or lease –Labor Skills : unique skill,number,pay rate,where and how to obtain –Space : amount of space,owned or leased –Overhead : manufacturing supports, tools,supplies,utilities
Information for Planning: Financial Information : Expected sales and expense figures for at least the first three years Cash flow figures for the first three years Current balance sheet and pro forma balance sheets for the first three years
7. Writing the Business Plan 1. Executive Summary 2. Business Profile 3. Environmental and Industry Analysis 4. Business Objectives 5. Marketing Plan
6. Operations Plan 7. Organizational Plan 8. Financial Plan 9. Implementation Plan 10. Risk Assessment and Contingency plan 11. Appendix
8. Presenting the Plan To provide a short presentation/Executive Summary Audiences :Partners,potential investors,bankers and others –To sell their business concept –Why this would be a good investment ? –To give opportunity to ask the questions –Request for negotiations –Leading to final investment decisions
Using and implementing the Business Plan As a Business direction To measure the progress Updating the Plan for the changes
Why do Business Plans fail? Goals are unreasonable and/or immeasurable. Total commitment to the business was never made. Entrepreneur has insufficient experience and knowledge. Customer’ need was never established. Entrepreneur has no sense of potential threats or weaknesses to business.