Business plan workshop

Business Plan Development
Workshop

rik@e2bconsulting.com

e2B Consulting Sdn Bhd

Workshop Agenda
• Part 1
General Introduction to what is a Business
Plan

• Part 2
How to prepare a Business Plan. Practical
aspects of preparing a Business Plan

Copyright e2B Consulting Sdn
Bhd

Importance of a Business
Plan
Success for businesses of all sizes are positively correlated to
having a Business Plan.

Vast majority of INC. magazine 500 fastest growing companies
had business plans from the start – Timmons (1999)

Firms that spent time planning and developing a business plan
are those that experience rapid growth – Woo (1989)

93% of fast growth firms of the total studied had written
Business Plan – Kinsella (1993)

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What is a Business Plan
A Business Plan is a written statement that
describes and analyzes your business and
gives detailed projections about its future.

• Helps get the money
• Helps decide to proceed or stop
• Helps improve business concept
• Helps improve odd of success
• Helps keep on track
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Business Plan - ownership
• The business plan should be owned and accepted
by the management team. Venture Capitals will
want to learn what you plan to do, not see how
well others can write for you!

• Professional advisers can provide a vital role in
helping to give the plan the appropriate focus.

• It is you who must come up with the plan and
defend it.

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The Planning Process
The Business Plan is just like a road-map.
Planning it is like planning a trip. It is a
3 stage process:

1. Understanding WHERE YOU ARE
2. Deciding WHERE YOU WANT TO GO
3. Planning HOW TO GET THERE

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Understanding where you
are
• Understanding your product/service – your
competitive advantage (Unique Selling Point)
• Understanding your customers – who, why and
how are they going to buy from you
• Understanding your strengths and weaknesses
(Internal)
• Understanding the opportunities and threats
(External)

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Deciding where you want to go
• Decide the general aims of your business – in
some organization the aims are also referred
to as the ‘mission statement’ of the
organization

• Set specific objectives for the business. The
Objectives should be:
• Quantifiable
• Bounded in time
• Realistically achievable

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Planning how to get there
• Need to develop strategies to enable the
business to achieve the targeted
objectives
• Need to develop a Marketing Plan
• Need to develop Resource Plan
• Need to draw-up financial budgets
• Projected Profit & Loss
• Cash-flow forecast

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The business planning process
Personal aims
Mission Statement
Internal Appraisal
• Strengths
Business • Weaknesses
objectives

Customer analysis
Market segmentation External Appraisal
• Opportunities
•Threats
Marketing
Plan

Operating Plans
• Financial plans
• Resource plans
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Writing
The
Business Plan

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Business details
• Name and address of business
• Personal/Applicants information and
address
• Business type: sole
proprietor/Partnership/Sdn Bhd/Bhd
• Business activity
• Business information: Paid-up capital,
company secretary, auditors, Directors,
Shareholdings etc
• Licenses (if any)
• References
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1. Executive Summary
• All Business Plan starts with an Executive
Summary
• Fill this up LAST

• Executive Summary (Maximum 500 words) –
This is only the extraction/summary from
what you have written.

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2. Value Proposition
• What does this mean?
– This DEFINES the value of your proposed
product or service
– Value proposition is
• a description of the customer problem,
• the solution that addresses the problem,
and
• the value of this solution from the
customer's perspective.
– Should answer the questions:
• "Why should I buy this product or
service?" as well as "Why should I do
anything at all".
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2. Value Proposition … cont.

• Why do I need to define my value
proposition?
– If you only have 5 minutes to explain
your ideas to a potential investor - then
explain your value proposition.
– A good value proposition
• makes investors sit up and listen!
• shows that you have put a LOT of
research and thought into your idea

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2. Value Proposition… cont.
• How do I explain and write my value
proposition?
– The following is a template for creating
a value proposition, which may be
referred to as a positioning statement.
– Note the first portion of the value
proposition asserts the value of the
offering and the second sentence
asserts the positioning of that value.

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2. Value Proposition… cont.
– First Sentence:
• For (target customer)
• Who (statement of the need or
opportunity),
• The (product/service name) is a
(product/service category)
• That (statement of benefit).
– Second Sentence
• Unlike (primary competitive alternative)
• our product (statement of primary
differentiation).
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3. Business Model & Market
Potential
• What is a Business Model?
– A business model (also called a business design)
is the mechanism by which a business intends
to generate revenue and profits.
– It is a summary of how a company plans to
serve its customers. It involves both strategy
and implementation.

• What is Market Potential?
– Normally it means market size
– It should be supported by some credible
research - not something you pick off the air
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3. Market Potential &
Business Model
• How do I write this out?

a) Identify target market(s),
industries/sectors/sub-sectors/geography and
describe business model including revenue
stream (maximum 250 words)

b) Describe market size and growth opportunity
for identified market supported by Market
research.

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Business Model Template

INFRASTRUCTURE YOUR OFFER CUSTOMER
CUSTOMER
PARTNERS
RELATIONSHIP
CORE VALUE TARGET
CAPABILITIES PROPOSITION CUSTOMER
VALUE DISTRIBUTION
CONFIGURATION CHANNELS

COST REVENUE
STRUCTURE FINANCE STREAMS

Fill up the “dark yellow boxes” and you can pretty much
explain your business model
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Discussion/Q&A

• Time check
• Q&A

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4. Competitive Analysis

• What is Competitive Analysis?
– Describes the “strength” of your
product or idea. No
products/ideas/services is perfect - but
by identifying the strengths,
weaknesses, opportunities and threats
within the business industry - it will help
the entrepreneur to “attack the
market”.

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4. Competitive Analysis …cont.

• Direct and Indirect Competitors?
– Do research
• Identify Direct competitors
• Indirect competitors
• Old school competitors
– Differentiating factors?
• How are you/your product unique?

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4b. Competitive Analysis
• Conduct a SWOT analysis
– Strengths
• Attributes of your business that helps in achieving
your business success
• What makes your ideas better than others
• What capabilities you have that makes the business
viable

– Weaknesses
• Attributes of your business that are harmful
towards achieving your business success
• Your Weaknesses - and be honest about it!
• Define by perhaps cost, resources, product weakness
etc

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4b. Competitive Analysis …cont.
• Conduct a SWOT analysis
– Opportunities
• Opportunities that you see in the market
• Your competitors’ weaknesses - is YOUR
opportunity

– Threats
• Your competitors strengths - are THREATS
to your business
• Don’t forget your indirect competitors too!

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SWOT - Strengths
• Advantages of proposition? Innovative aspects?
• Capabilities? Location and geographical?
• Competitive advantages? Price, value, quality?
• USP's (unique selling points)? Accreditations,
qualifications, certifications?
• Resources, Assets, People?
Processes, systems, IT,
• Experience, knowledge, data? communications?
• Financial reserves, likely Cultural, attitudinal,
returns? behavioural?
• Marketing - reach, Management cover,
distribution, awareness? succession?

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SWOT - Weakness
• Disadvantages of Cashflow, start-up cash-drain?
proposition? Continuity, supply chain
robustness?
• Gaps in capabilities?
Effects on core activities,
• Lack of competitive distraction?
strength? Reliability of data, plan
• Reputation, presence and predictability?
reach? Morale, commitment, leadership?
• Financials? Accreditations, etc?
• Own known vulnerabilities? Processes and systems, etc?
Management cover, succession?
• Timescales, deadlines and
pressures?

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SWOT - Opportunities
• Market developments? Geographical, export, import?
• Competitors' New USP's?
vulnerabilities? Tactics - surprise, major contracts,
• Industry or lifestyle etc?
trends? Business and product
development?
• Technology development
Information and research?
and innovation?
Partnerships, agencies,
• Global influences? distribution?
• New markets, vertical, Volumes, production, economies?
horizontal? Seasonal, weather, fashion
• Niche target markets? influences?

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SWOT - Threats
• Political effects?
• Legislative effects? Vital contracts and partners?
Sustaining internal capabilities?
• Environmental effects?
Obstacles faced?
• IT developments? Insurmountable weaknesses?
• Competitor intentions - Loss of key staff?
various? Sustainable financial backing?
• Market demand? Economy - home, abroad?
• New technologies, Seasonality, weather effects?
services, ideas?

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Mingle … Network …
Promote Your Ideas …
Expand Your Business Relationships

5. Marketing Plan
• What is a Marketing Plan?

– A Marketing Plan is a written document that
details the actions necessary to achieve
marketing objectives.
– It can be for a product or service, a brand, or
a product line.
– It can cover one year (referred to as an annual
marketing plan), or cover up to 5 years.
– Solid marketing strategy is the foundation of a
well-written marketing plan.
• While a marketing plan contains a list of actions, a
marketing plan without a sound strategic foundation
is of little use. Copyright e2B Consulting Sdn
Bhd

5. Marketing Plan … CONT.

– MARKETING STRATEGY, which
covers:
• Market share objectives
• Product Mix
• Pricing Strategy
• Promotion Strategy
• Distribution Strategy

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5a. Go to market & sales
strategy
• Below is a list of items that you may want to
consider while developing your marketing plan
• Market share objectives
– State the market share by customer segment or geographical
markets
• Product Mix
– Do you have plans to bundle the product with other products
or service
• Pricing Strategy
– Define the pricing objective, method, strategy
– Figure out your break-even point
• Promotion Strategy
– Define promotional goals, advertising mix, sales force/sales
channels requirements, publicity
• Distribution Strategy
– Define by geography, market segments, distribution channels,
• Product development schedule
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6. Technology Plan
• What is a Technology Plan?
• It should cover:
– Product Development Strategy
• How do you plan to develop the product: personal, in-house,
outsource, with a partner?
• How long will it take and how much?
• What are the key milestones?
– Design
• Technical Architecture (briefly explained)
– Functional Specs
• List of Product Functions
– Technology Platform
– How your technology is different from competitors
– Prototyping Plan
• Explain what functions will be developed
• How long will it take to develop?
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7. Financial Plan
• Projections for 3 years or 5 years
• What is a Financial Plan?
– This is basically the strategy of funding
your business proposal
– Sales and Cost of Sales
– To plan out what your next plan of
action is crucial so that you do not
waste time when you move to the next
stage or when your prototype is done

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7a. Profit &Loss
• The P&L gives you a feel of the business
potential & the bottom line
• It will also help you in visualizing how much
money you actually need to kick off your
business
• An good analysis of the P&L will help you in
your financial planning & strategy
• Filling up the Pre-seed form is quite
straight-forward. Please refer to the
Form

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7b. Sample P/L Year 1 Year 2
RM RM

SALES

less: COST OF SALES

GROSS PROFIT 0 0
less:
General & Administrative Expenses
Professional fees
Directors' remuneration
Insurance
Medical fee
Rental of premises
Salaries, allowances & bonus
Utilities
Upkeep of office
R&D expenses
Others:-
Others:-
Others:-

Total G&A 0 0

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7b. Sample P/L cont
S a le s & M a rk e tin g E x p e n s e s
A d ve rtise m e n t
E n te rta in m e n t
P rin tin g a n d s ta tio n a ry
S a la rie s a n d
c om m is s io n s
T e n d e r fe e
T ra ve llin g e x p e n s e s
U p k e e p o f m o to r ve h ic le
O th e rs :-
O th e rs :-
O th e rs :-

T o ta l S & M 0 0

O th e r In c o m e 0 0
P B D IT 0 0
le ss : A m o rtis a tio n
D e p re c ia tio n

P B IT 0 0
le ss : F in a n c ia l C h a rg e s

P R O F IT /(L O S S ) B E F O R E T A X AT IO N 0 0
L E S S : T AX AT IO N
P R O F IT /(L O S S ) A F T E R T A X A T IO N 0 0

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8. Resource Plan
• What is a Resource Plan?
– Provides an indication of resources and types
of resources required for the
commercialization of the business
– list the types of resources you require for the
number of years of projection
– Listing this out will help you develop the
financial projections later.
– Refer to Pre-seed Form

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8b. Sample Resource Plan
No Description/Job title Year 1 Year 2 Year 3

Management Staff
1 Chief Executive Officer
2 Chief Operating Officer
3 Chief Financial Officer
Technical Staff
1 Senior Engineer
2 Operations Executive
3 Programmer
Administration Staff
1 Receptionist
2 Support Executive
3 Accounts Assistant
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Appendix
Supporting documentation
•Curriculum Vitae
•Project Activities, Deliverables,
•Capital Expenditure checklist
•Company documentation & licenses

e2B Consulting Sdn Bhd

Q&A!
Ask NOW or forever hold your peace!

Thank you

Business plan workshop

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