business plan

Conchur De Barra

HOSPITALITYENTREPRENEUR

In the business news today…

Homework

• Review Chapter 5 Q & A. Could be worth more qa significant amount of your end of year exams…

• Bring laptops to class for Business Plan work.

What Is a Business Plan?

• Business Plan • A business plan is a written narrative, typically

25 to 35 pages long, that describes what a new business plans to accomplish.

• Dual-Use Document • For most new ventures, the business plan is a

dual-purpose document used both inside and outside the firm.

Business Plan Why bother?

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The Business Plan could be the best investment you’ll ever make to help decide if your business idea will be a success.

Helps shape the original vision into a better opportunity by raising critical questions, researching answers for those questions, and then answering them.

Allows the entrep’ to articulate the business opportunity to various stakeholders in the most effective manner, not just necessary for finance but also potential partners

Business Plan Why bother?

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Surveys have shown that entrepreneurs with written business plans have 50% greater sales and 12% higher profit

Out of 2,877 entrepreneurs surveyed 1,556 (54%) had not completed a business plan.

Of those who did complete a business plan:

64% had experienced business growth, 36% had secured a loan and another 36% had secured capital, while those without a plan saw 43% with business growth, 18% had secured a loan and 18% had secured capital. (ref: http://goo.gl/IbWA2j)

Who Reads the Business Plan—And What Are They Looking For?

There are two primary audiences for a firm’s business plan

Audience What They are Looking For

A Firm’s Employees

Investors and other external

stakeholders

A clearly written business plan helps the employees of a firm operate in sync and

move forward in a consistent and purposeful manner.

A firm’s business plan must make the case that the firm is a good use of an investor’s

funds or the attention of others.

Guidelines for Writing a Business Plan 1 of 5

• Structure of the Business Plan • To make the best impression a business plan should

follow a conventional structure, such as the one we will follow in Entrepreneurship class.

• Although some entrepreneurs want to demonstrate creativity, departing from the basic structure of the conventional business plan is usually a mistake.

• Typically, investors are busy people and want a plan where they can easily find critical information.

Guidelines for Writing a Business Plan 2 of 5

• Structure of the Business Plan (continued) • Software Packages

• There are many software packages available that employ an interactive, menu-driven approach to assist in the writing of a business plan.

• Some of these programs are very helpful. However, entrepreneurs should avoid a boilerplate plan that looks as though it came from a “canned” source. For class purposes this is not allowed to use.

• Sense of Excitement • Along with facts and figures, a business plan needs

to project a sense of anticipation and excitement about the possibilities that surround a new venture.

Guidelines for Writing a Business Plan 3 of 5

• Content of the Business Plan • The business plan should give clear and concise

information on all the important aspects of the proposed venture.

• It must be long enough to provide sufficient information yet short enough to maintain reader interest.

• For most plans, 25 to 35 pages is sufficient.

• Types of Business Plans • There are three types of business plans, Summary,

Full and Operational.

Guidelines for Writing a Business Plan 4 of 5

Types of Business Plans

Guidelines for Writing a Business Plan 5 of 5

• Recognizing the Elements of the Plan May Change • It’s important to recognize that the plan will

usually change while written. • New insights invariably emerge when an

entrepreneur or a team of entrepreneurs immerse themselves in writing the plan and start getting feedback from others.

Business Plan Common Mistakes

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• The plan is poorly written, no excuses for seplling misatkes, bad grammar and over/under use of punctuation &!$@#

- Plan presentation is sloppy

• The plan is incomplete, think of all the components

• The plan is too vague, secrecy isn’t a virtue!

• The plan is too detailed, it is common for students to over detail components of the Business Plan they more familiar with to compensate for areas they have less research. Motto: keep it relevant!

Business Plan Common Mistakes

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• The plan makes unfounded or unrealistic assumptions which expose the Business Plan’s lack of credibility, and along with it the credibility of the Entrepreneur.

• The plan includes inadequate research. Avoid using phrases such as I feel the market is growing, instead replace with the market is showing increasing signs of expansion year on year growing revenues/sales/unit in proven markets.

• Ridiculous claims about no risk or no competition.

• The Plan not being a plan at all, it’s meant to be an indicator of future performance. Get feedback!

Business Plan The Story Model

• Think of who will be reading the story, what stakeholders involved.

• All good stories have a theme, a unifying thread that ties the setting, characters and plot together.

• You need to capture the reader’s attention

• Too many business plans are text laden, dense manifestoes.

• The BP needs to be visually attractive not just content rich.

Business Plan MBA example

• Review a former MBA Business Plan

• This is not a perfect Business Plan but does give you an idea of what is expected and what reads well and does not read well.

• You should note the use of imagery and it’s power to convey a message.

• Also it is following mostly the academic guidance of what is expected.

• Note the important use of referencing.

BA3 Outline of Business Plan

• The Outline of BA3 Business Plan • A suggested outline of a business plan is shown on

the next several slides. • Most business plans do not include all the elements

introduced in the sample plan; you will include all sections on your Business Plan.

• Later in life each Entrepreneur may decide which elements to include in his or her plan.

BA3 Business Plan Sections

• Cover • Executive Summary • Table of Contents • Management Team i.e.

You!!

• Industry, Customer & Competition Analysis

• Company & Product Description

• Marketing Plan • Operations Plan • Development Plan • Critical Risks • Offering • Financial Plan • Appendix

BA3 Business Plan

• No time like the present.

• Let’s get started!

• Use Word Doc/Pages to create a template with cover page, table of contents, and heading on each page!

• Add text to each page, and write any comments you may wish to come back to at a later stage.

• We no longer have time to procrastinate!

Business Plan The Cover

Business Plan The Cover

Needs to include the following: • Company name • Tagline • Logo (Go to http://tinyurl.com/hy99gjx & logomaker.com) • Contact person • Company address • Contact telephone number • Email address • Date • Disclaimer and copy number.

Should be eye-catching and relevant

Business Plan The Cover - Taglines

• A tagline is a phrase that accompanies your brand name to quickly translate your business's positioning and brand identity into a single line that means something to consumers.

• A tagline is meant to provide consumers with an indication of your brand and its market position in just a few memorable words.

• Good idea to put as a footer of Business Plan, reminding reader of it.

Business Plan The Cover - Taglines

Great taglines have a number of common attributes.

When writing your tagline, see that it meets these criteria:

• It’s memorable. You hear it, memorize it quickly, and repeat it with ease.

• It’s short. Great taglines often have as few as ten syllables so that they’re quick to recite and easy to tuck in alongside logos.

• It conveys a brand’s point of difference. The tagline tells what sets your brand apart from others.

Business Plan The Cover - Taglines

Great taglines have a number of common attributes.

• It clarifies a brand’s market position and key benefits. Especially if the brand name doesn’t quickly communicate the brand’s offerings and distinctions.

• It differentiates a business from all others. In fact, a great tagline is so unique that it doesn’t work when linked to a competitor’s brand name.

• It reflects the brand’s identity, character, promise, and personality. It also needs to be believable and original.

Business Plan The Cover - Taglines

A great tagline manages to excel on most or all of these fronts while also avoiding a couple of major tagline mistakes:

• It invokes positive feelings without running the risk of triggering sarcastic retorts.

• It appeals to consumers. In other words, the tagline needs to work as a consumer magnet.

• It adds to the meaning of the brand name without repeating any of the same words or concepts

Business Plan The Cover

Executive Summary

Key Insights • In many instances an investor will ask for a copy of a firm’s executive summary and will ask for a copy of the entire plan only if the executive summary is sufficiently convincing. • The executive summary, then, is arguably the most important section of a business plan.

Executive Summary

Executive Summary

• Most important section of the BP. If reader is not impressed by the Executive Summary then may not read further.

• Hook the reader: 1st sentence/paragraph needs to encapsulate the potential of the business idea.

• Sub sections can include: Description of the opportunity, business concept, industry overview, target market, competitive advantage, business model and economics, team and offering, financial snapshot. An image is not lost here e.g. revenues, expenses, profit graph etc..

• All of these are covered throughout the Business Plan, so keep them brief and to the point. Even though is 1st for the reader, should be finished lastly as you will need complete overview of your business before completing.

Table of Contents

• Is the roadmap for the reader to know where to look for each section.

• Depending on the reader, different sections of the BP will appeal differently so may skip over ‘irrelevant’ sections so make it as easy as possible for the reader to navigate.

• Sub-section where relevant.

Table of Contents

Management Team. 1 Of 3

• Team Bios and Roles: Remember you’re writing a story and the entrepreneur and the team are the main characters.

• Depending on your reader it may be necessary to list any board members, advisory boards, external members and their roles in the business.

• Compensation and ownership: as entrepreneurs are expected to take lower salary initially they will be compensated in the future, the investor will eagerly want to read this section.

Management Team Characteristics Of Successful Entrepreneurs

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Four Primary Characteristics

Although no one is “born” to be an entrepreneur, there are common traits and characteristics of successful entrepreneurs

• A moderate risk taker

• Persuasive

• Promoter

• Resource assembler/leverager

• Creative

• Self-starter

• Tenacious

• Tolerant of ambiguity

• Visionary

• Optimistic disposition

• A networker

• Achievement motivated

• Alert to opportunities

• Self-confident

• Decisive

• Energetic

• A strong work ethic

• Lengthy attention span

Management Team Characteristics Of Successful Entrepreneurs

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