Griffith Innovation Challenge Writing an Effective Business Plan
Writing an Effective Business Plan Presented by: Kenneth C. Bennett Griffith Business School This presentation contains information adapted from online and original sources and may not be duplicated without the written permission of the author. Copyright 2005
Business Planning Contest The Griffith Innovation Challenge is a university-wide business plan competition, which has received initial financial support via a grant from the Australian Government's National Innovation Awareness Strategy, and from 2007 from the Vice Chancellor. Aims are to encourage multi-disciplinary teams of students to work on new ideas and to foster innovation, develop new entrepreneurs and create new opportunities and businesses for the benefit of Queensland and Australia.
The really nice thing about not planning is that failure comes as a complete surprise and is not preceded by long periods of worry and depression!
Essential basic elements: What is a Business Plan? Description of the Business Management Plan Production/Operations Plan Marketing Plan Financial Plan
What is an Effective Business Plan? Details, specifics, descriptions.. And, above all, describing a true picture of who you are, what you are, what you do, how you do it and where you intend on going.. And details on how you intend on getting there and who is standing in your way or guiding you along..
What is an Effective Business Plan? A business plan focuses on the overall operations of the business. The contents of a business plan can vary depending upon the purpose of the plans, the nature of the products and services, and the relationship between business activities and the other operations of the business. Some sections commonly found in a business plan include: An executive summary highlighting the key points of a business plan in one-to-three pages; an overview (introduction) introducing the reader to the business; a description of the products and services, particularly with respect to redesign or adaptation required (and introduces Competitive Advantage); an overview of intended markets, including competitive environment; a market entry strategy summarizing the product, promotion, pricing and distribution strategies for the intended markets; an implementation plan (comprehensive Action Plans); a financial plan. The financial plan typically consists of a cash flow budget or budgeted net income statement that summarizes projected revenues and expenses (expenditures). A Profit/Loss Statement.
What is a Business Plan Description of the Business History: Business History (Background) Growth and Financial Objectives Legal Structure and Ownership Location and Facilities Plans for Financing the Business
What is a Business Plan Description of the Business Introduction: Products/Services Unique Competitive Advantages Growth Opportunities Goals and Objectives
What is a Business Plan Management Plan Organisation: Team Members Organisational Structure Other Key Employees, Contacts and Relationships Principle Stockholders Legal Issues Support Systems Organisational Systems Employee Management
What is a Business Plan Production Plan Production/Manufacturing/Operations Plan: Available Plant Production & Capacity Required Plant Production & Capacity Production/Manufacturing/Operations Issues Quality Issues, Assurance and Controls Labor Force (Requirements/Availability) Suppliers Regulations/licenses Layout Inventory controls Equipment Training/Skilling
What is a Business Plan Marketing Plan Market Analysis: Summary Industry Analysis Target Market(s) Customer/Consumer Profile(s) Competitors & Participants Market Segmentation Projected Market Growth & Market Share Objectives
What is a Business Plan Marketing Plan Product/Service: Product/Service Summary Product/Service Uniqueness Product/Service Descriptions Competitive Comparisons/Differentiation Research and Development Patents, Trademarks, Intellectual Property Protection Quality Improvement Process (QIP)
What is a Business Plan Marketing Plan Marketing Strategy: Creating & Maintaining Customers (Consumers) Product Pricing Strategy Product Positioning Sales and Distribution Plan Partnering Strategy Promotional Strategy
What is a Business Plan Financial Plan Financial Plan and Analysis: Estimated Income Estimated Costs Cash Flow Planning Financial Requirements (inc. Personal) Financing Options Risk Management
What is a Business Plan Risk Management What is Risk? Risk occurs when results can change with the occurrence of each event. In risk analysis and management you have to understand the difference between correlation and causation. Risk appears in the gap between the data you have and the information you need. Effective business plans manage risks to people, property, business continuity and reputation.
What is a Business Plan Risk Management With Risk, What you think, is not what you know: What is, or what will, can or could be needs to be identified. And risks mitigated.
What is a Business Plan Risk Management Free Risk Templates Free Risk Management Kit including Risk Templates www.method123.com
What is a Business Plan Start-Up Considerations Getting There: The Bennett Matrix Time Cost Control Risk What combinations suit you, suit others, suit the situation, or suit the future? Copyright: Kenneth C. Bennett 2005
What is a Business Plan Start-Up Considerations Getting There: What is your SCA? Sustainable Competitive Advantage The specific capability of a company that will allow it to attain a sustainable winning position in the targeted market with respect to its major competitors What makes you unique or innovative?
What is a Business Plan Start-Up Considerations What exactly is a Product? A Product usually consists of: Core Features Expected Features Added Features Symbolic Features All of which contribute towards innovation and competitiveness.
What is a Business Plan Start-Up Considerations Getting There: Innovation Usually your Product A good A service An idea An organisation A person Combination of all elements
What is a Business Plan Start-Up Considerations Growth Planning (Potential): What are your intentions, where do you think your opportunities are, and to what extent do they really exist (as far as you can substantiate)? Investigation of the marketplace Competitive/competitor analysis Environmental Scan SWOT Analysis
What is a Business Plan Start-Up Considerations Getting There: The next step is to determine how you are going to finance your business.
What is a Business Plan Investors In the beginning.. The Three F s Family, Friends and other Fools
What is a Business Plan Investors Other Options: Venture Capital These investors look for a high return in a timeframe of approximately 3-7 years. They work almost exclusively with companies that may go public or can be sold for a significant profit going public is very rare and is unattainable for most companies. Angel Investor These investors typically are looking for a high return but are more flexible in their timeframe. Angels are typically less sophisticated than venture capitalists or institutional investors, and will become involved in your business because of a personal relationship with you.
What is a Business Plan Investors Other Options: Government Grants/Incentives Loans Key Note: Venture capital (grants, loans or investment from F s) cannot be used to pay back YOUR initial investments (including time, effort or cash)! Investment is meant to grow the business!
What is a Business Plan Exit Strategy Leaving: Entrepreneurs live for the struggle of launching their businesses. But one thing they often forget is that decisions made on day one can have huge implications down the road. You see, it's not enough to build a business worth a fortune; you have to make sure you have an exit strategy, a way to get the money back out. Stever Robbins June 27, 2005 Entrepreneur.com
What is a Business Plan Investors Getting There And Leaving: Investors In order to attract investment dollars, it's critical to supply an exit plan to investors so they can get their money back (hopefully with a healthy return) and exit your business. The exit strategy section of your business plan should also outline your long-term plans for your business. Begin by asking yourself why you are getting into business. It's important to think through these issues and decide what you intend to do with your business before you can adequately answer the questions, and address the issues, concerning how you/your investor will exit the business. Note: The requirements of each investor will vary in terms of return and exit strategy they seek.
What is a Business Plan Exit Strategy Possible exit strategies to consider: Initial Public Offering (rare for start-ups) Merger/Acquisition Buyout by partner in business Franchise the business Hand down the business to another F Close up shop
Business Planning Considerations Effective Business Planning -Considerations- Plans should describe both strategic considerations (longer-term) and tactical (shorter-term) issues.
Business Planning Strategic Considerations SWOT Analysis Business Environmental Scan Identifying & Developing Competitive Advantage (CA/USP) Identifying and Prioritizing Critical Success Factors (CSF) Objectives for Growth and Profit Identifying and Prioritizing Key Change Activities Performance Evaluation (Benchmarking) Risk Identification (and Management) Financial Evaluation
Five Tests for a Good Strategic Business Plan 1. Comprehension Can the reader understand it? 2. Appropriateness Are strategic/business directions proposed aligned with the business proposed? 3. Sustainability Am I satisfied that the strategic/business directions proposed are of a nature and quality that should ensure the future? 4. Feasibility All implications of the strategic/business directions proposed have been considered. Implementation is possible, and all supporting goals, objectives and strategies are realistic, practically achievable, affordable and comprehensive? 5. Accountability Management accountability is clearly defined. Management is adequately resourced and well prepared to implement this plan. Effective remedial action has been planned in the event a management shortcoming occurs with plan implementation.
Guidelines for preparing an Effective Business Plan Define your objectives for producing the plan. Who is going to read the plan and what do you want them to do? The objectives can help you decide how much emphasis to put on various sections. Outline the key points you want to make in each section before you start writing. Review your outline to ensure that your sections are consistent with each other, that there is little duplication, and that all the key issues have been addressed. Do the Executive Summary last. The executive summary can be the most important section of your plan because people will read it first, and it may be the only section they read. A good executive summary should be short (two- three pages at most), highlight what is important in your plan and get the reader excited about your business.
Failing to plan is planning to fail
Information on Writing an Effective Business Plan Queensland Government Smart Skills Website (Online Assistance) www.sdi.qld.gov.au/virtual/index.cfm Writing a Business Plan and Business Plan Templates www.bplans.com/dp Business Plan Guide (Small Business Counseling Service Inc) www.sbcs.org.au/tips.htm
Business Plan Template -Review- & Getting the most from your business planning