Crafting a Business Plan and Building a Solid Strategic Plan
Benefits of Creating a Business Plan
The marketing opportunities and strategy
The managers' skills and abilities
The operational and financial details
A business plan is the best insurance against launching a business destined to fail or mismanaging a potentially successful company
An entrepreneur's proposed business venture
Key Elements of a Business Plan
Competitor Analysis
Marketing Strategy
Business and Industry Profile
Entrepreneurs' and Managers' Resumes
Description of a Firm's Product or Service
Plan of Operation
Mission and Vision Statement
Pro Forma (Projected) Financial Statements
Executive Summary
The Loan or Investment Proposal
Title Page and Table of Contents
First impressions count! Use an attractive cover
Use spreadsheets for realistic financial forecasts
Checks for errors
Include cash flow projections
Make it visually appealing
Keep the plan "crisp"
Include a table of contents with page numbers
Tell the truth
Make it interesting!
Show that it will make money
What Lenders and Investors Look for in a Business Plan
Collateral
Character
Capacity
Capital
Conditions
Tips for Making the Pitch
Avoid the use of technical terms that will be above most of the audience
Remember to tell lenders and investors how they will benefit
Keep the presentation "crisp"
Be prepared for questions
Hit the highlights
Anticipate questions and prepare for them in advance
Offer proof
Focus your answers on what's important to lenders and investors
Explain how your company's products or services solve some problems and emphasize the factors that make your company unique
Follow up with every lender and investor to whom you make a presentation
Follow the 10/20/30 rule for PowerPoint presentations.
Use visual aids
Hook investors quickly with an up-front explanation of the new venture, its opportunities, and the anticipated benefits to them
Focus on communicating the dynamic opportunity your idea offers and how you plan to capitalize on it
Demonstrate enthusiasm about the business but don't be overly emotional
Practice your delivery and then practice some more
Prepare
Building a Strategic Plan
Strategic planning is a tool that can help: it involves developing a game plan to guide the company as it works to accomplish its vision, mission, goals, and objective and to keep it from straying off course.
Entrepreneurs must be able to adapt to changes in the marketplace
Structural Capital
Customer Capital
Human Capital
Shift the world economy from a base of financial to intellectual capital
Building a Competitive Advantage
The aggregation of factors that sets a company apart from its competitors and gives it a unique position in the market that is superior to its competition
Emphasize human capital
The company subjects all job applicants to a thorough screening process
Example: Whole Foods - Retailer of natural and organic food
Demonstrate a love of food and dedication to a customer service
Competitive Advantage
The key to success over time is building a sustainable competitive advantage
A company gains a sustainable competitive advantage through its ability to develop a set of core competencies
Building a competitive advantage alone is not enough
Strategic Management Process
Analyze competion
Create goals & objectives
Identify key success factors
Formulate strategies
Scan environment for opportunities and threats
Translate plans into actions
Assess strengths and weaknesses
Establish accurate controls
Develop a vision and translate it into a mission statement
Balance Scorecards
Internal Business: At what must we excel?
Innovation and Learning: Can we continue to improve and create value?
Customer: How do customers see us?
Financial: How do we look to shareholders?
Give managers a quick, yet comprehensive, picture of a company's overall performance
Corporate Citizenship: Do we meet our responsibility to society as a whole, the environment, the community, and other external stakeholders?
A set of measurements unique to a company that includes both financial and operational measures