1、Business Plan Tool Kit 1Contents What is a Business Plan Writing a Business Plan Business Plan sample(to be complemented later)2 Definition of a business plan The role of a business plan in new business development process The significance of a business idea Developing a business idea Elements of a
2、promising business idea Prioritizing a business idea Protecting your business idea What is a Business Plan 3 Definition of a business plan A business plan must have a detailed plan for the following eight factors;1)Product/Service 2)Market and Competition 3)Marketing 4)Business System 5)Organization
3、 and HR 6)Opportunities and Risks 7)Implementation Schedule 8)Financial Planning What is a business plan Developing a business idea(idea which can make money)into a detailed plan that can be implemented4 Role of a business plan in new business development processNew business promotion stageMethodolo
4、gyInternal support organizationOnline Idea DBIntangible WorkshopBenchmarking/Megatrend AnalysisBusiness Plan CompetitionStage 1Stage 2Stage 3Idea GenerationBusiness plan write-upImplementation and growthIdea Generation Management TeamBusiness Plan Development TeamInvestment CommitteeVenture Team(TFT
5、)What is a business planA business plan can be defined as the intermediary stage before a business idea can actually be implemented as a new business5 Significance of a business ideaThere are many different ways to generate a business idea.The following are recommendations to come up with well-organ
6、ized business ideas-best if implemented at the same time Intangible Workshop:Hold workshops to generate ideas to facilitate company intangibles,as the significance of intangibles continue to grow under the new economy Benchmarking/Megatrend Analysis:Study megatrends of other industries to generate i
7、deas or conduct benchmarking analysis Online Idea DB:Make an idea DB online to enable review/posting of ideas as a way to help develop business ideas Business Plan Competition:Hold business plan competitions to generate business ideas What is a business plan No business idea,no business plan No busi
8、ness plan,no businessA business idea is the start of a business establishment.You must have many creative ideas which can be transformed into a business in order to create valueDeveloping a business idea 6 Elements of a promising business idea The key to success in the marketplace is satisfied custo
9、mers,not great products.(ex)“Our new device can perform 200 operations per minute.”(X)“Our new device has 25%fewer parts.”(X)“Our new device will save the customer a quarter of the time.”(O)Make value propositions to the customer Present customers with unique values.Clear customer valueMarket of ade
10、quate sizeFeasibility and profitabilitySufficient degree of innovation What is a business plan Clear Customer Value Who will buy your product/service?Why should the customer buy the product?(What needs does your product fulfill that the competitor products cannot?)What is most unique about your busi
11、ness idea?Key Questions7 Does the market you plan to target with your products/services have adequate size (no precise analysis needed,statistics or estimates can be used)Know who your competitors are.Clear customer valueMarket of adequate sizeSufficient degree of innovation What is a business plan
12、Market of adequate sizeFeasibility and profitability What is the market size?Is the market growing?What is your target market and market share?Who are your competitors?What are your strengths/weaknesses compare to your competitors?Key Questions8 A business idea should have the following four element
13、s according to product/service type and business system-Must specify where innovation is taking placeNew product(Microsoft)New industry(Netscape)Existing industryNew business system(Dell)Business SystemConvention InnovationProduct/serviceConventionInnovationClear customer valueMarket of adequate siz
14、eSufficient degree of innovationFeasibility and profitability Sufficient degree of innovation What is a business plan How is your product/service innovative?How is your business system innovative?Key Questions9 Consider feasibility(legal constraints,time/resource limits,etc)Calculate overall profita
15、bility(simple cash flow,etc)Clear customer valueMarket of adequate sizeSufficient degree of innovationFeasibility and profitability Feasibility and Profitability What is a business plan What are the constraints in implementing your business idea?Why are other people not implementing this kind of bus
16、iness idea?What is the gross margin rate of your planned business?How much investment is necessary?How much is the variable cost?Does the profit increase?What is the overall cash flow?Key Questions10 Prioritization of a business idea-In search of a killer idea A process to prioritize generated ideas
17、 Positioning of ideas on the below chart based on the potential market and its feasibility Killer Idea:An idea capable of creating a new market (ex.walkman,mobile phone,Dialpad,45min.photograph printing,etc.)Seek solutions for obstacles in implementation Immediately launch business plan write-up Pos
18、tpone Seek ways to expand market size FeasibilityLowHighMarket size(allow growth)LowHigh What is a business plan 11Protecting a business idea Ways of protecting a business idea Patenting:Patenting a business idea to ensure legal protection Confidentiality agreement:Maintaining a confidentiality agre
19、ement with related parties working on the business idea Quick implementation:Implementing your business plan as soon as possible What is a business planInnovative ideas are the result of hard work and creative thinking.It is important to protect the idea sufficiently so that the idea is not exposed
20、to other industriesThe best protection is to implement your business idea as quickly as possible so as to build an entry barrier 12 The need to write a business plan Elements of a good business plan Business plan structure Writing a business plan Summary Product/Service Market and Competition Market
21、ing Business System Organization and HR Opportunities and Risks Implementation Schedule Financial Planning13 The need to write a business plan “Writing a business plan forces you into disciplined thinking,if you do an intellectually honest job.An idea may sound great,but when you put down all the de
22、tails and numbers it may fall apart.”Writing a business plan The business plan was first used in the USA by start-up and venture companies as means of acquiring funds from private investors and venture capitalists.Even major corporations rely on business plans to help them make internal investment d
23、ecisions.Can systematically examine feasibility of the new business from various angles-Can provide solutions to problems and heighten efficiency of the new business with clear analysis of the situation Provides an invaluable tool for management and evaluation of the projectBenefits of writing a bus
24、iness plan14 Elements of a good business plan Clarity:Must clearly lay out the key points(strengths)of the business plan Objectivity:Must be based on objective data Simplicity:Should be comprehensible by technical layman Consistency:Must have uniform visual layout and consistency in editing of the f
25、inal version Well-defined,quantifiable customer value:Lowering the cost of delivering an existing value or creating a new value if this can be achieved at reasonable cost Innovative product/service:The product/service and/or business system must possess a high degree of innovation The possibility to
26、 protect/sustain the innovation A growing and/or large market:The target market should grow at a fast pace or should be a large market A far-sighted analysis of the competition:Provide a complete and objective description of existing and potential future competitors A careful weighing of the risks a
27、nd opportunities:Provide a realistic description of the risks involved in the business and plans to overcome them.Explain ways to make use of potential opportunities General principlesMain Contents Writing a business plan 15Check to see if your readers can read and comprehend the summary in five to
28、ten minutes even if the person has no previous knowledge of your business concept or its technical or scientific basis Writing a business plan SummaryThe summary should be able to deliver the most important aspects of the business plan to the decision-makersFocus on these four elements when writing
29、your summary Clarity of the business idea Value the product/service provides to the customer Market size and growth Return on investmentDescribe your business idea as clearly,compellingly,and concisely as you can16 Product/serviceDevelopment status of the product/service Explain the stage of develop
30、ment your product/service has reached Identify technical/legal/consumer behavioral/partnership(need to partner with other industries)/social and cultural constraints in delivering product or service to customers and provide solution measures“If you dont know what the customer value is,the whole thin
31、g is a waste of time.”Writing a business plan Clearly indicate how your product/service differs from those that are now or will be on the marketCustomer Value The business plan doesnt make any sense if the product or service fails to provide better value to the customer compared to current market of
32、ferings Analyze the value the customer gains from your product/service Weigh the advantages and disadvantages of the new product/service from the customers perspective 17Check List (Product/service)Have you explained plans to retrieve the value delivered to the customer?(how will you get your money
33、back)Development status of the product/service Have you accurately explained the current stage of development of your product/service?Have you indicated what resources(time,personnel,funds)you require for each subsequent development?Customer Value Is there a clear definition of what customer value y
34、our product/service provides?Have you defined who you customers are and who are not?Have you identified why the customer buys your product/service?(Have you explained what added value the customer receives compared to other products/services)Have you weighed the strengths/weaknesses of your product/
35、service over comparable products/services from the customers perspective?Have you conducted pilot tests or surveys to see if the product/service fulfills customer needs?(or tried other means to find out)Have you explained the technical barriers and solution measures?Have you explained the institutio
36、nal/legal constraints and ways to overcome them?Have you explained the customary/consumer behavioral constraints and solutions?Have you explained the cultural/social constraints and ways to overcome them?YesNo Writing a business plan 18 Market and CompetitionMarket size and growth A rapid increase i
37、n the value of the company can be expected only if the market holds a great potential The market size should be presented in figures i.e.number of customers,of unit sales,total sales Your expectations for market growth are critical;show what factors will affect developments(e.g.technology,legislativ
38、e initiatives)Forecasting market size and growthDefine factors influencing market size and growthSet hypothesis on future developments Collect facts needed to verify hypothesis(past trends,expert opinions)Estimate market size and growth based on the proven hypothesis“If there is no competition,there
39、 is probably no market.”Writing a business plan19 Points to follow when making an estimate Build on solid foundation:Rely on easily verifiable figures even though there may be many unknowns Think logically:An estimate should be a logical conclusion and should not have any leaps in logic or depend on
40、 unspecified assumptions Compare your sources:Check your facts with other sources(interviews,statistics,expert opinions)to ensure objectiveness Be creative:Look for a substitute variable that relates to your need when a variable is unknown Check for plausibility:Check if each estimate makes sense Wr
41、iting a business plan 20Market Segmentation -Segment the market and explain your target market -There are many ways to segment the market but the following three elements need to be present 1)Determine the number of customer in each market segment and their buying power (Measurability)2)Identify cus
42、tomer behavioral pattern in each segment(Homogenous-within)3)Use the same marketing strategy for customers within each segment Customer segmentation criteria for consumer goods markets Customer segmentation criteria for industrial goods markets Location:country,urban/rural(population density),climat
43、e Demographics:age,sex,income,profession,religion,education level Behavior:Frequency of product purchase,product usage,brand loyalty,price sensitivity,purchasing variables Psychological factors:Lifestyle(behavior,interest,opinion)Demographics:company size,industry,location Operations:technology empl
44、oyed(e.g.,digital,analog)Buying habits:centralized or decentralized purchasing,purchasing criteria Situational factor:urgency of need,order size Writing a business plan 21 CompetitionCompare key customer value,target customers,sales revenue,market share,cost positioning,product lines,and distributio
45、n channels of your company with those of your competitorsCompare strengths/weaknesses of your product with that of the competitorsConsider ways to maintain your competitive edgeCompare your intangible assets with those of the competitorsAnalyze your positioning strategy in the market with that of th
46、e competitors*Positioning:transferring the customers market position of the product/service to a position that the company wants to take(ex.Low quality producthigh quality product,baby products adult products)Maps for designing positioning strategy(samples)QualityLowHighPriceLowHighProduct lineLowHi
47、ghDelivery time LowHighCredibilityLowHighConvenienceLowHigh Writing a business plan22 Have you explained factors crucial for success in your target market?Competition Have you identified your competitors with comparable products/services?Have you given an analysis of your potential competitors?Marke
48、t size and growth Have you explained the general trend of your target market?Is there a rationale for present market size?Is there a rationale for future market growth rate?Market segmentation Have you defined the criteria for market segmentation and its rationale?Have you compared the strengths and
49、 weaknesses of your major competitors with your own?Have you compared your strategies with those of your competitors?What is your competitive edge(especially intangible)over your competitors and have you explained if your competitive edge will be sustainable?Have you given a rationale for characteri
50、stics of each market segment(profitability,size,growth rate)and their future prospects?Is there a clear definition of the target customer and customer examples?Have you determined the target market share for each market segment?Writing a business plan Check List (Market and competition)YesNo23 Marke
