1. Business PlanBusiness Plan
DevelopmentDevelopment
Prof. Purvish ShahProf. Purvish Shah
BE , PGDBM (Mech)BE , PGDBM (Mech)

2. Think before you start…Think before you start…
 Know the IndustryKnow the Industry
 Find your Competitive AdvantageFind your Competitive Advantage
 Analyze RisksAnalyze Risks
 Develop Your Idea MethodicallyDevelop Your Idea Methodically
 Acquire InvestorsAcquire Investors
 Find SupportFind Support
 Secure FinancingSecure Financing
…….SHOULD I START THIS VENTURE??.SHOULD I START THIS VENTURE??

3. Business Plan SectionsBusiness Plan Sections

4. Business Plan SectionsBusiness Plan Sections
 Narrative SectionNarrative Section
– Business DescriptionBusiness Description
– Products and/or ServicesProducts and/or Services
– Industry AnalysisIndustry Analysis
– OperationsOperations
– Clientele/Target MarketsClientele/Target Markets
– CompetitionCompetition
– Marketing PlanMarketing Plan
– Personnel/ManagementPersonnel/Management
– Long-term GoalsLong-term Goals
– Risks and ContingenciesRisks and Contingencies

5. Business Plan SectionsBusiness Plan Sections
 Financial ProjectionsFinancial Projections
– Financial NarrativeFinancial Narrative
– Start-up Expenses and WorksheetStart-up Expenses and Worksheet
– Revenue AssumptionsRevenue Assumptions
– Financial AssumptionsFinancial Assumptions
– 3-5 Year Financial Projections3-5 Year Financial Projections
 Statement of Cash FlowsStatement of Cash Flows
 Income StatementIncome Statement
 Balance SheetBalance Sheet
 Relevant ratiosRelevant ratios

6. Business Plan SectionsBusiness Plan Sections
 Supporting DocumentsSupporting Documents
– Resume/CVResume/CV
– Relevant documents/contractsRelevant documents/contracts
– Past 3 years of tax returns (if seekingPast 3 years of tax returns (if seeking
conventional financing)conventional financing)
– Academic researchAcademic research
– Marketing research resultsMarketing research results
– OtherOther

7. Products and ServicesProducts and Services
 Clear, concise descriptionsClear, concise descriptions
 Divide into separate sectionsDivide into separate sections
– ProductsProducts
– ServicesServices
– Further subdivide into categoriesFurther subdivide into categories
 Value propositionValue proposition
 Price menuPrice menu
 Pricing approach/structurePricing approach/structure

8. Industry AnalysisIndustry Analysis
 Your Goal:Your Goal:
– Give a comprehensive understanding ofGive a comprehensive understanding of
the industrythe industry
– Defend your business relevance!Defend your business relevance!
 How?How?
– Describe current situationDescribe current situation
– Relevant trendsRelevant trends
– Intervening factorsIntervening factors
– Size of industry/market potential (total #Size of industry/market potential (total #
businesses, annual revenues, etc.)businesses, annual revenues, etc.)
– Growth potentialGrowth potential

9. OperationsOperations
 StraightforwardStraightforward
 (If retail) “paint a picture” of the space(If retail) “paint a picture” of the space
(as you walk in you will see/experience etc.)(as you walk in you will see/experience etc.)
 Procedures and controlsProcedures and controls
 Distribution channelsDistribution channels
 Payment procedures (in/out)Payment procedures (in/out)
 Business-specific detailsBusiness-specific details

10. Clientele/Target MarketsClientele/Target Markets
 Primary Clientele (>= 50%)Primary Clientele (>= 50%)
 Secondary Clientele (>= 20%)Secondary Clientele (>= 20%)
 Tertiary ClienteleTertiary Clientele
 Detailed descriptionsDetailed descriptions
– DemographicsDemographics
– PsychographicsPsychographics
– SpendingSpending
– Total market size per market segmentTotal market size per market segment
 Use for Revenue ProjectionsUse for Revenue Projections

11. CompetitionCompetition
 Match Apples to Apples: Segment yourMatch Apples to Apples: Segment your
competitioncompetition
 Your Value PropositionYour Value Proposition
 Your Competitive AdvantageYour Competitive Advantage
 2 Types of competitors:2 Types of competitors:
– DirectDirect
– IndirectIndirect
 Discuss each significant competitor inDiscuss each significant competitor in
depth, can group othersdepth, can group others
 Identify potential threats and talk aboutIdentify potential threats and talk about
them directlythem directly

12. (c) 2009 Debra Askanase(c) 2009 Debra Askanase
Step Back from theStep Back from the
Project!Project!
1)1) SWOT Analysis/PEST AnalysisSWOT Analysis/PEST Analysis
(next lecture)(next lecture)
2)2) Do you have aDo you have a realreal ValueValue
Proposition? USP?Proposition? USP?
3)3) Do you want to start this business?Do you want to start this business?
4)4) Begin financial projectionsBegin financial projections

13. Marketing PlanMarketing Plan
 Your GoalYour Goal: you understand your: you understand your
market, industry, competitive andmarket, industry, competitive and
competitive advantagecompetitive advantage
 Within the narrative, consider andWithin the narrative, consider and
describedescribe
– Marketing channelsMarketing channels
– PersonnelPersonnel
– Geographic reach and richnessGeographic reach and richness
– ToolsTools
– 4 (or 5) Ps4 (or 5) Ps
– Pricing strategy related to marketingPricing strategy related to marketing

14. Marketing PlanMarketing Plan
 Quantifiable Goals/Objectives =Quantifiable Goals/Objectives =
specific deadline dates, andspecific deadline dates, and
numerical goalsnumerical goals
 Specific, detailed activitiesSpecific, detailed activities
 Complete budgetComplete budget
 MetricsMetrics
 Several plans:Several plans:
– Start-up/awarenessStart-up/awareness
– First yearFirst year
– First three yearsFirst three years
– Marketing calendars are useful toolsMarketing calendars are useful tools

15. HRMHRM
 Organizational ChartOrganizational Chart
 ResponsibilitiesResponsibilities
 SalariesSalaries
 Professional AdvisorsProfessional Advisors
 Advisory BoardAdvisory Board

16. Risks and ContingenciesRisks and Contingencies
 Shows you understand yourShows you understand your
businessbusiness
 Deals with investor concerns up frontDeals with investor concerns up front
 Make them realMake them real
 AddressAddress at leastat least two real riskstwo real risks