MITOS Tool 8 Online Business Plan

Transcription

1 MITOS Tool 8 Online Business Plan Published by:

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3 MITOS Tool 8 Online Business Plan A plan to enable distance business 1 Tool: Coached online service and programme, enabling interested migrants or families back in the CoO to develop business plans. Enables tripartite coachmigrant-coo communication. Involves training elements. For advanced target group. 2 Objectives: With the proper use of this tool, your project/institution will be able to: create the need for business plans among the migrants and their potential business partners in the CoO (in this tool called migrant partners ) provide a fully functional online business planning service for migrant partners provide online tutorial and help on finalizing the business plans 3 Target group: a. selected and qualified migrants in destination countries; b. local SME entrepreneurs or investors in the origin countries who could be potential migrant partners; and c. online sponsors like commercial banks, venture capitalists, MFIs, money transfer operators, professional marketing associations, entrepreneurship promoting institutions, NGOs, GOs, chambers of commerce, industries, etc. 4 Problems and potentials of migrants addressed by this tool: A business plan is a formal statement (a declaration) whereby migrant partners of a new or an expanding SME state their: (a) business goals, (b) reasons why the goals will be achieved, (c) factors that may impede the achievement, (d) competencies needed to achieve them, and (e) a solid plan to make the goals happen. It offers the users three very important values: (a) the process, (b) aid in the investment decision; and (c) a management guide. Migrant partners will be taught in planning, this reduces business risks and uncertainties by gathering as much relevant information as possible and making tentative future decisions today. Planning forces migrant partners to take the business idea under a microscope and examine the business objectively and critically. It helps users to identify areas of weakness and strength and to focus their ideas on increasing the business chances of success in realistic ways. It enables users to identify needs that can easily be overlooked, spot problems and resolve them before they happen, establish alternate plans for times of bad business conditions and share a foresight for future expansion. In new or existing businesses, financial issues are vital. So migrant partners should calculate needed funds and identify funding sources. Here, the business plan becomes a veritable communication tool between the migrant partners and the financial institutions that can lend money. The plan supports investment decision-making. With the plan s financial estimates, migrant partners can realistically decide how much will be invested by the partners. When should these investments flow in and in what form (e.g., cash, land, structure, machine, etc.)? They can likewise decide on other funding sources if the partners contribution is inadequate. 1

4 After the decision to continue (or discontinue, in some cases) with the business, the plan becomes an indispensable management guide for the managing partner. However, it is only helpful if used. To use the plan, migrant partners must periodically discuss, review, revise and adjust the content as if writing a diary of the journey towards the goals. This will place the partners on the same page and will avoid confusion, conflicts and prevent the business to fail. Before investing their money, migrant partners should insist on co-elaborating or seeing the business plans. Often, sizable migrant investments fail due to poor planning and poor remote management. In addition to having inadequately trained relatives as partners (see MITOS Tool 14: Migrant Partnerpreneurship in this manual), migrants also easily succumb to poor business planning habits. 90% of new businesses fail in the first two years because of inadequate, poor or lack of planning, respectively non-application of a business plan. And like many other SME entrepreneurs, migrants who for either unfamiliarity or plain laziness avoid elaborating business plans. Computers (and the internet) have eased the journey to the future uncertainties. In business partnerships, many migrants end up either as absentee owners or silent partners. By necessity, they need to delegate a lot (or manage remotely). A well-written plan provides a comprehensive framework for establishing practical control points; including specific migrant aspects like: controlling at distance, proper allocation and utilization of remittances, exploration of potentials arising from migrant cooperation. The plan provides the proposed business present state and future possibilities. It contains performance indicators that show early warning signs of possible future troubles. The migrant partners should watch these indicators and adjust periodically. This online tool will usher the migrant partners through the step-by-step process of developing a business plan. It continues from where MITOS Tool 05: Cash Flow Management, MITOS Tool 07: Business Creation (Start-up), MITOS Tool 11: One Stop Shop Service for Migrants, MITOS Tool 12: Migrant Market Place, MITOS Tool 13: Mentoring or MITOS Tool 14: Migrant Partnerpreneurship left off. It allows the migrant and a local partner in the CoO to jointly prepare a business plan. 5 Description: A business plan should contain whatever information is needed to decide on whether to pursue (or not to) the set goal. For example, a plan submitted to a financial institution when applying for a loan should create a convincing prove for the business ability to repay the loan. The plan should explain why current resources, upcoming growth opportunities, and sustainable competitive advantages will lead to profitability. A good business plan can make a business credible, understandable and attractive to someone who is unfamiliar with it. Writing a good business plan cannot guarantee success, but it can go a long way towards reducing the odds of failure. And despite their time limits, migrant partners must invest time and money to elaborate a sound business plan. Once made, the plan can be presented in one of these four ways: a. Elevator pitch (e.g., a three-minute summary of the plan to tease potential funders, customers, or strategic partners); b. Oral presentation (e.g., a brief infomercial slide show plus narration with graphs, financial trends and product demo meant to invite potential investors in reading the written version); 2

5 c. Written presentation for external stakeholders (e.g. a detailed, well-written, and pleasantly formatted plan aimed at potential external shareholders); and d. Internal plan (e.g. a detailed but less formal operations plan addressed to management that may not be of interest to external shareholders). As migrant partners are generally lacking time and want immediate results, a common process in writing a business plan is to use: (a) template, (b) example, or (c) outline. There are many generic (but not specific to migrants!) examples of each in the internet. A template is an outline where the users can fill in the blank to create the actual plan. The resulting plan will require significant editing to be credible. Standard financial templates must have the assumptions and basis for calculations elaborated under the finance chapter. An example plan is a pre-made business plan sample. It is a full plan that is either the plan of a real business or based on a real business. It shows the actual text, financials and charts for the business. A plan outline is a basic structure of a business plan. There are many generic outlines in books or on the internet. They should be changed to fit the type of business they are used in. To add credence, generic outline users must have trainers guidance and mentoring support as is offered e.g. in CEFE courses. 6 The tool: To apply this tool, you will have to: Attract online sponsors. The tool will need an online sponsors group that will work with your project/institution in managing the site. The sponsors will: generate and update the information needed (e.g., a financial institution for example can publish their interest rates, loan terms and even the credit application as a downloadable document); manage and maintain the site s content, security and back-ups; provide online mentors and coaches; and facilitate the provision of other technical support in business plan preparation. Sponsors should show the commitment to maintain and sustain the site even after the TA project has ended. Campaign for users. The TA project needs both internet (e.g., via the proposed MITOS Tool 01: Migrant Opportunities Website, MITOS Tool 04: Migrant Innovation Treasury, etc.) and in-thefield promotion (e.g., via posters, brochures, presentations, direct mails, former participants of MITOS Tool 07: Business Creation (Start-up), MITOS Tool 11: One Stop Shop Service for Migrants, MITOS Tool 12: Migrant Market Place, MITOS Tool 13: Mentoring or MITOS Tool 14: Migrant Partnerpreneurship events) to attract the right migrant partners. In preparing their plans, users can decide to download the templates and outlines and elaborate the plan offline. Or they can have a separate (and confidential) page where they can prepare it online. Web design and management. The site will contain the following pages: a. steps in preparing business plans for migrant partners b. forum c. blogs d. personal pages of migrant partners currently preparing business plans; e. templates, outlines, financial packages (e.g., including the CEFE International s business plan package in Word and Excel); f. mentors resources; g. the online coach (operated via Skype); h. sponsors listing; and i. a contact page. 3

6 The sponsors should maintain a full time website staff (e.g., the same one maintaining the other sites like MITOS Tool 02: Kiva for Migrants, MITOS Tool 04: Migrant Innovation Treasury, MITOS Tool 14: Migrant Partnerpreneurship, etc.) who will maintain and update the content weekly. Soft launch. A simple launching ceremony. 7 Prerequisites: Government sponsors can increase sustainability and add credibility to this online initiative. Try and mount the other internet-based tools before applying this tool. This tool should be the online workhorse of the project. 8 Particularities and/or difficulties: The tool requires computer literacy of the target group. It addresses rather small to medium-size enterprises than micro ones or the informal sector. The idea of online planning technology may frighten users in the beginning. In fact, it is easier than any comparable paper-based business plan approach. 9 Costs: Costs vary from country to country depending on rates for resource persons and other cost items. A table of estimated average costs for different activities is given as follows: Activity Approximate cost in US$ Gather the online sponsors 1,200 Campaign for users 800 Web design 1,200 Web management and coaching (1 year) 4,500 Soft launch 400 Total 8, Dissemination: This is a low cost, low maintenance but high visibility and high impact initiative. There are already many sites offering business planning software: aspx html etc.) but none caters specifically for migrant partners. The MITOS business plan package is specially suited for migrants. 11 Links to other MITOS tools: MITOS Tool 01: Migrant Opportunities Website MITOS Tool 02: Kiva for Migrants MITOS Tool 04: Migrant Innovation Treasury MITOS Tool 05: Cash Flow Management MITOS Tool 07: Business Creation (Start-up) MITOS Tool 11: One Stop Shop Service for Migrants MITOS Tool 12: Migrant Market Place MITOS Tool 13: Mentoring MITOS Tool 14: Migrant Partnerpreneurship Prepared by: Dr. Eduardo Canela, CEFE International [email protected] 4

7 Annex Ingredients of a Generic Business Plan Cover Page and Table of Contents Executive Summary The Product/Service Business Description Uniqueness of Business with Migrant Background usiness Environment Analysis Industry Background Competitive Analysis The Market The Marketing Plan The Competition Personnel and Workers The Management Team and Distance Cooperation Mode Time-Plan and Milestones Financial Data, Remittances, Assumptions and Projections Supporting Documentation Resources Attachments (e.g., resumes, credit information, quotes or estimates, letters of intent to buy from prospective customers, letters of support from credible people, leases or buy/sell agreements, legal business documents, and census or demographic data) Operations and Logistics 5

8 Published by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Sector Project Migration and Development Registered offices Bonn and Eschborn, Germany Friedrich-Ebert-Allee 40 Dag-Hammarskjöld-Weg Bonn/Germany Eschborn/Germany Phone: Phone: Fax: Fax: [email protected] Authors CEFE International and the global network of CEFE trainers Design andreas korn visuelle kommunikation, Bad Homburg Printed by Aksoy Print & Projektmanagement, Eppelheim Printed on FSC-certified paper Photographs Front cover: GIZ/Ursula Meissner As at July 2012 GIZ is responsible for the content of this publication. On behalf of Federal Ministry for Economic Cooperation and Development, Division Federal government/states/local authorities; migration and employment; returning experts; export credit and investment guarantees Addresses of the BMZ offices BMZ Bonn BMZ Berlin Dahlmannstraße 4 Stresemannstraße Bonn/Germany Berlin/Germany Phone: Phone: Fax: Fax: [email protected]