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What should be included in The Business Plan?
The Coverage Page
The Executive
Summary
The Strategy of the Company
The Management Team
The Market Analysis
Marketing Issues
Financial Forecasts
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The content of the executive summary
The problem:
It is an opportunity to
be filled;
It is a problem to be solved;
It is basically a gap between supply and demand.
Examples:
People cannot practice due to weather conditions.
The meteo conditions are not sufficient in Poland.
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The content of the executive summary
The mission:
We will write what
do we intend to do. We may structure in in three points or on a timeframe basis. You may write 2-3 sentences or you can write your goals/objectives on a ST, MT, and LT timeframe.
Examples:
On a ST perspective I plan to be available in WAW. On a MT, I will open in the mountains. On a LT, I would like to open a branch in a close foreign country.
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Part 1: the Cover Page
Name of the company
Name of the brand
address
phone
number, fax, e-mail
chief executive’s name
Start your document with a Non Disclosure Agreement (NDA)
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Part 2: Executive Summary
Stands alone as a business plan within
a business plan.
Logical, clear, interesting and exciting.
Requires less than 4-5 minutes to read.
No more than 2 pages. Not an abstract, introduction, preface, random collection of convincing highlights
It’s the BP in miniature
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The Bad Executive Summary
Says little about company strategy
Barely touches on marketing
issues
Emphasizes company’s financial needs
Internally directed vs. externally
Little explanation of competition and where the company will go in marketplace
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The Better Executive Summary
Explains why the timing is right for the
company to be formed;
Establishes its strategy;
Explains how it will compete effectively, concise, to the point;
Emphasizes marketing aspects;
Positive in nature, says what a prospective investor wants to hear;
Synthesizes talents of team.
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The content of the executive summary
Based on: https://www.hbs.edu/newventurecompetition/Documents/SE-TrackAppSuccess_BusPlan.pdf
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The Content of the Executive Summary
The Issue
The Concept
The Management Team
The Market
Analysis
The Strategy
Financial Projections
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1. The Issue
The problem (or the challenge) is the issue to
be settled. It’s an opportunity.
Example:
There is in Warsaw, a growing population of foreigners and Poles, who are looking for a mixed-languages education for their children.
The number of facilities welcoming such children is limited in Warsaw.
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2. The Mission
The concept will be the solution to the problem
that you discussed in the first part of your ES.
Example:
I plan to open a bilingual (russian-polish) prep school, which will work with Russian Native Speakers.
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3. The Management Team
In a few lines, you will describe, those
who will work in your company.
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4. The Market Analysis
In the point 4, you will provide the
size of the market + one line related to any growth forecasts.
How to determine the size of a market? You do have to multiply the quantity sold for one year * unit price.
Example:
Children who may to prep’ school with a foreign language.
In this case we need to find the % of children going to private foreign languages prep schools and mutiply it by the annual tuition to be paid. Here, the annual tuition fee is around PLN 22,In prep’ school in Warsaw you do have 000. [110;220] PLN mln.
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5. The strategy
Your vision may be structurized in several periods of
time:
ST Approach
MT Approach
LT Approach
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6. Financial Projections
The growth of the market is determined by the
increase of sales.
The growth is marked by a percentage
Example:
The growth of the market of prep school in Warsaw is about X%
In the academic year 2018/2019, we had 48 626 children going to preps chool. In the academic year 2019/2020, we had 49 374 children going to prep’school. The increase was about 1.5%. We should have a broader perspective including some previous years. The potential growth is about 2%.
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Part 3: The Company Strategy
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Part 3: The Company Strategy
The strategy initially was related to military
affairs.
The strategy is a way of reaching your goal using your available resources.
As a way of presenting your strategy, you may split it three parts. On a ST perspective, on a MT perspective, and on a LT perspective.
The fundamental point is how to prepare your strategy?
As a starting point, you shall observe the strategy of similar ventures (if they do exist).
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Case Study
Similar Ventures
You do plan to open a restaurant .
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The Mission Statement
Represents a more generalized and idealistic vision of the
company’s purpose in life
often, these visions are a little too lofty
many times it is more than adequate just to improve people’s lives
mission statements also establish achievable goals
often focus on three issues: product, economic and social objectives
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Four Principle Strategy Issues
overall company strategy: overall approach to producing and
selling products and services, goals for maximizing success, what is your guiding principle?
mission statement: a statement that encapsulates your company’s values and overall purpose in life
technology/information assessment: ability to use technology and manage information
management team: who determines and implements strategy (must have credibility)
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Overall Strategy: past, present and future issues
Discuss your company’s history, when
it was started, by whom, has strategy changed from that of the past, if so, why?
Include fundamentals: sales, profits, number of employees, locations
What is status of company today (snapshot)?
Strengths and Weaknesses: mention these, you will appear more honest, open-minded
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Overall Strategy: future prospects
Also known as the “objectives” section
easy to project
good growth, harder to make it believable
if you had a history of growth, then it is more believable
can sometimes use external trends (e.g., growth in another area) to justify new direction
start-up companies can more easily speak to growth because they have bad experiences to dispel optimism
people starting the business can lend credibility to the plan if they, themselves, are credible
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Technology/Information Assessment
Greater or higher technology allows small companies to compete on
an even playing field with larger ones
used to achieve competitive advantages
with proper technology, customers can be serviced more quickly and efficiently than competitors
technology must be integrated into the company’s most important operations
examples?
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Case Study:
https://www.youtube.com/watch?v=dJQn4DqzMVQ
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Part 4: The management team
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The Management Team
This is the critical link in making the strategy
section believable
quality of the management team should speak for itself because people are the key to determining success
two most common problems: one-man-band syndrome, everyone from same background
hard to expand if you have a dictator
successful management teams require diversity of training and expertise
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The Management Team
This is where you provide details about the education,
qualifications and experience that you and your management team bring to your small business.
The management team section should help those third parties recognize what sets your business apart from others.
It should give meaning to that oft-repeated business maxim: “I don't invest in ideas; I invest in people.”
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The Management Team: structure
Education credentials, including college and major, and any
relevant certifications.
Employment highlights. Pick the last or last two titles and company affiliations unless there is something truly stellar in someone's past worth mentioning.
Skills or specialties, meaning those things that someone truly excels at or is known for.
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The Management Team: structure
Notable accomplishments, which can serve as a subliminal
message that they can be repeated at your small business.
Personal insights, which may include anything from community involvement to someone's rationale for joining your company. You have a lot of latitude here, so try to think in terms of what conveys the mark of a can-do, energetic person. If you're impressed by it, chances are someone reading your business plan will be too.
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The management Team: example
A mass communication graduate of Illinois State University,
Tom brings to us nearly 20 years of marketing experience and a proven ability to integrate best practices into emerging businesses. Websites, smartphones and digital marketing all came of age as the proud redbird worked as a district marketing manager for ABC Media and then marketing manager for XYZ Newspaper Group, both in Chicago. Tom helped these companies navigate sea changes in the newspaper industry and return to profitability by developing imaginative and synergistic marketing campaigns. We expect him to replicate these efforts at Write-On Marketing, at least when he's not busy critiquing the latest creations at his family's award-winning Illinois winery.
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Management Team Suggestions
emphasize real-life business accomplishments
academic accomplishments only hold value for
technology businesses
identify evidence of special knowledge and creativity
make the most of your human resources: describe all team members in positions of authority
describe your board of directors
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Case Study
https://www.youtube.com/watch?v=f60dheI4ARg
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Part 5: The Market ANalysis
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The Microenvironment
- Customers
- Employees
- Suppliers
- Shareholders
- Media
- Competitors
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The competitors
No businesses are carried out in a vacuum
if there is
no apparent competition, do not take that as a good sign
maybe the market isn’t receptive
maybe you need to look deeper
your competitor may not be another business, but another way of doing it
list your competitors and their weaknesses + strengths
how will you stay ahead of competition?
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The Macroenvironment
- The economic factors
- Legal issues
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KEY ISSUES
Much information for market research is public domain
many marketing surveys
begin using on-line data bases
doing it yourself is generally better than hiring someone else
it’s cheaper and you’ll learn more.
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pRODUCT
Define clearly your product
Define your goals and objectives related to your
products
Define its advantages
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Emphasize the Best Benefits
“best benefits” are those that make people feel
better or fill their wallets
benefit 1: convenience
products and services that save people time can often charge more
benefit 2: added value
important, no matter how simple
if product is boring, you must figure out ways to add value
benefit 3: saving both time and money
example: purchasing over the internet
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CASE STUDY
E-Commerce Marketing Strategy
https://www.youtube.com/watch?v=GkOM7q9BYGQ
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Part 7: FINANCIAL FORECASTS