Business Plan And Resources Flashcards
What is a business plan?
What is the importance of a business plan
business plan is a written narrative typically 25 to 35 pages long, that describes what a new business intends to accomplish and how it intends to accomplish it.
To articulate the merits, requirements, risks, and potential rewards of the opportunity and how it will be seized.
●To demonstrate how an opportunity reveals itself by converting all the research, careful thought, and creative problem solving into a thorough document
State four things the business plan reveals
The business’ ability to:
●create or add significant value to a customer or end user
●solve a significant problem, or meet a significant want or need for which someone will pay a premium
●have a robust market, margin, and moneymaking characteristics
●Fit well with the founder(s) and management team at the time, in the marketplace, and with the risk-reward balance.
Who develops the business plan?
Which people read the plan?
The entrepreneur or the professional
●It is advisable not to hire an outside professional for the following reasons:
•Consequences of different strategies and tactics can be considered
•Human and financial requirements for launching and building the venture can be examined
Who reads it?
Employees: a clearly written business plan, which articulates the vision of the firm, is both important for the management team and the rank and file of employees.
●Investors: investors would want to understand your offering and what they stand to gain from investing
●Potential Customers: clients, especially large ones would find aspects of your business plan important.
Explain the types of business plan
Summary business plan
●Full business plan
●Operational business plan
Summary business plan: brief plan usually prepared by entrepreneurs asking for funds to conduct analysis in order to write a full business plan.
Operational business plan; mainly for the internal audience and firm’s operations.
What are the contents of a business plan
Must be tailored to the needs of the particular audience and the action the entrepreneur wishes to elicit.
●Start with a document that is detailed and wide in scope – usually referred to as the ‘master’ business plan
●From this master plan, specific plans (written or presented) can be created quickly.
●The master plan should be dynamic
There is no simple answer to this question. As a piece of communication, it should be tailored to the needs of the particular audience and the action the entrepreneur wishes to elicit.
Many entrepreneurs create a ‘master’ business plan that is wide in scope and detailed. From this master plan, specific plans (written or presented) can be created quickly. This master plan is dynamic. It is added to as new information and insights become available.
What are the guidelines for writing a business plan
Structure of the plan; the business plan should follow a conventional structure.
●Content of the plan; it should be clear and concise and give important information on all aspects of the venture.
●Format of the plan; style and format should be carefully thought out.
What ar the differences between opportunist and craft entrepreneurs
Opportunist entrepreneurs – They employ / hire other skilled people to run their businesses
Have no grand vision.
Are interested in what can be exploited in their environment.
Are resourceful
Are quick thinkers when it comes to manipulating resources and opportunities
Are characterized by a level of restlessness – move from one business to another
Tend to lose interest in business once established
Have an appetite for challenges
Craft entrepreneurs – they use their own skills to start and run their business / venture out.
Have vocational qualifications required for the exercise of their profession
Manage the enterprise
Train apprentices
Direct skilled workers.
Participate directly in daily work at final product reflects their competence
Growth entrepreneurs have both the desire and the ability to grow as fast and as
large as possible.
How is a business plan structured
From a big idea to many supporting ideas from which you’ll get many arguments and then evidence which will be obtained from research on your arguments will be used as key supporting facts and visual representation or to support your arguments
The big idea: A major new opportunity
for the business
Opportunity is attractive
given business’s aims and
mission
Supporting ideas:
Market has potential
Low competitive pressures
Clear selling points
Client in good position to exploit
So if your supporting idea is that the market has potential then your arguments will be:
What is the;
Market size
Market growth rate
Stage in life cycle
Sustainable niches
if your supporting idea is low competitive pressure then your arguments will be:
Number of competitors
Size of competitors
Concentration of competitors
Price competition
Product differentiation
your supporting idea is clear selling points then your arguments will be;
Product different to
competitors
Safe to use in clean areas
New regulations regarding toxic
lubricants in food
High performance
your supporting idea is is the client in a good position to exploit, then your arguments will be;
Technology (protectable)
Sales force expertise
Company image
Relationship with distributors
What is the format of a summary business plan
Cover page
●Table of contents
●Description of idea
●Description of market
●Description of production requirements
●Costs
●Finance Plan
What is a business model
business model is how an organization creates, delivers and captures value.
Business Model = Mechanism for generating profit
Business Plan = Enterprise’s Strategy and financial projections
Start-ups are not small versions of large enterprises. They are temporary organisations designed to search for a repeatable and scalable business model while small and large enterprises have discovered their business models and execute these.
Business models are different from business plans. But business models are at the centre of business plans.
What is a Business model canvas
A tool that helps to model business concepts.
A way of mapping out an idea so that it can be understood, tested and improved
It asks who will help you(key partners),how do you do it(key activities),what do you need(key resources),what will it cost(cost structure),what do you do(value proposition),
How do you interact(customer relationships)
How do you reach them(distribution channels)
How much will you make(revenue stream)
Who do you help?(customer segment)
Explain customers and value proposition
Check slide for better understanding
Who will be motivated enough to try my offer?
•What are their jobs, tasks and obligations? What are their hopes, dreams and aspirations?
•What are their common characteristics
What is on offer?
•What is the offer doing for my customers?
•Do they care?
Under customer relationship and channels explain things to consider and things to use
Channels and Customer Relationships
Consider the following:
•Number of segments
•Investment required
•Amount of control
•Nature of relation wanted
•Long-term or short term relationship?
•Personal contact or technology?
•Acquire or retain customers?
Use any of the following:
•Own channels?
•Personal selling? Internet? Telephone? Email?
•Partner channels
•Retailers? Agents? Distributors?
•After sale service?
Under Cost Structure and Revenue Streams
What questions will you ask
Cost Structure and Revenue Streams
•How will money move through the business?
•What are the quantities and frequencies of costs and revenues?
•Which customer segments contributes the most revenue?
•What type of costs are associated with serving a particular customer segment
Under Key Resources, Key Activities and Key Partners
What questions will you ask
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Key Resources, Key Activities and Key Partners
How will the business work “behind the scenes”?
What/Who are the vital ingredients, important processes and invaluable allies?
How would I get access to them?
