Techniques – business planning

Link to business planning materials

Workbook pages:

TABLE OF CONTENTS

  • Management team

  • Enterprise overview

  • Needs opportunity

  • Market and market segments

  • Products and/or services

  • Research and development

  • Competitive strategy

  • Business and revenue/profit models

  • Marketing strategy and action plans

  • Operations strategy and action plans

  • Human resource strategy and action plans

  • Finance strategy and action plans

  • Financial plan

  • Investment opportunity and exit strategy

  • Issues for consideration

MANAGEMENT TEAM

  • Team members (board members and officers)

  • Roles and responsibilities

  • Qualifications

  • Relevant background

  • Advisory board

ENTERPRISE OVERVIEW

  • Position within the industry

  • Values

  • Mission

  • Vision

  • Value proposition

  • Key success factors

  • Demographics

    • Location

      • Address

      • Voice number

      • Fax number

      • URL

      • email address for point of contact

    • Tag line

    • Logo

    • Entity and domicile

    • Professional advisors and relationships

      • Accountants

      • Attorneys

      • Bankers

      • Consultants

      • Insurance agents

  • Current status

    • Launch date

    • Financing to date

NEEDS OPPORTUNITY

  • Situation in the marketplace

  • Complication that makes the situation difficult

  • Problem to be addressed

    • Why there is a problem

    • What the problem is

    • What the market is and how big it is

    • Factors that define the size and scope of the opportunity

  • Solution offered by the enterprise

    • What solution specifically is being offered to whom

    • How the solution is delivered

      • Through an existing supply chain

      • By disrupting the marketplace

    • How does the solution compare to that of competitors

      • Benefits

        • What are the benefits

        • Who are the beneficiaries

        • When are they realized, and by whom

      • Cost

      • Features

    • Relationship between buyers and end-users

Markets and market segments

  • Industry segment

  • Market lifecycle (emerging, growth, mature, decline)

  • Size and growth potential by segment

    • Broad

    • Narrow

    • Niche

  • Evidence of readiness and awareness of prospective customers by segment

  • Position in the supply chain

PRODUCTS AND/OR SERVICES

  • Value and benefits

  • Features and functions

  • Differentiators

    • Distinctive features

    • Proprietary functions

RESEARCH AND DEVELOPMENT

  • Capability

  • Intellectual property

    • Duplication protection

    • Unique domain expertise

  • Proprietary protection

  • Feasibility study results

    • Proofs of concept

    • Prototypes

Competitive strategy

  • Advantage

    • In markets

      • Broad

      • Narrow

      • Niche

    • By product and/or service features

  • Competition

    • Existing competitors

    • Threat of new entrants

      • Competitors

      • Alternative products and/or services

  • Barriers to entry

BUSINESS and REVENUE/PROFIT MODELS

  • Business model

    • Infrastructure

      • Processes

        • Planning and policy development

        • Research and development

        • Sales and production

        • Performance measurement

      • Functions

        • Administrative

        • Operational

      • Facilities (locations – leased and owned)

        • Administrative

        • Sales

        • Production

        • Warehouses

      • Equipment

      • Inventory

        • Materials

        • Supplies

    • Delivery channels (market segment/product and/or service line matrix)

    • Constituencies

      • Primary

        • Employees

        • Customers

        • Suppliers

        • Investors

      • Secondary

        • Regulators

        • Competitors

      • Communities at large

BUSINESS and REVENUE/PROFIT MODELS…(CONT’D)

  • Revenue/profit models

    • Assumptions

    • Revenue

      • Product and/or service line pricing

        • Unit prices

        • Projected and forecasted volumes

      • Gross sales revenue

      • Sales revenue net of discounts, returns, and allowances

      • Other related revenue

    • Cost of revenue

      • Product and/or service costs at various price points

      • Other related costs

    • Operating expenses

      • Marketing and selling

      • Research and development

      • Administrative

      • General

    • Operating profit

    • Other income and expense

    • Income tax provision

    • EBITDA

    • Net profit

    • Sensitivity and sustainability of differing assumptions

      • Longer sales cycles

      • Longer procurement cycles

      • Employee pressures on compensation

      • Customer pressures on price, quality, and convenience

      • Supplier pressure on cost

      • Investor pressures on returns on investment

      • Regulatory pressures on freedom

      • Competitive pressure on price

      • Receivables aging

Marketing stRATEGY AND ACTION PLANS

  • Segments

  • Channels

    • Direct

      • Brick and mortar

      • Electronic

    • Alliances and partnerships

      • Collaborative

      • Cooperative

  • Advertising and promotion

    • Traditional

    • Electronic and social media

  • Selling methods

  • Service delivery

    • At point of sale

    • On going

Operations strategy and ACTION PLANS

  • Insourced activities

    • Procurement

    • Manufacturing (new and service orders)/(custom and mass-production)

      • Fabrication

      • Assembly

    • Distribution

  • Outsourced activities

    • Materials and supplies

    • Equipment

    • Supervision

  • Opportunities for reengineering processes

    • Cost

    • Structural

    • Strategic

HUMAN RESOURCE STRATEGY AND ACTION PLANS

  • Function model

    • Administrative functions

      • Legal

      • Finance and accounting

      • Human resources

      • Information technology

    • Operational functions

      • Research and development (cross-functional)

        • Research

          • Market

          • Product and/or service

          • Infrastructure

        • Development

          • Program management

          • Engineering

      • Business development

        • Marketing

        • Sales

        • Service delivery

      • Operations

        • Procurement

        • Manufacturing

        • Distribution

  • Acquisition, development, advancement, retention and attrition

    • Market supply

    • Knowledge and skills qualifications

    • Education and training

      • Professional

      • Vocational

FINANCE STRATEGY AND ACTION PLANS

  • Amount of financing and for what purpose

  • Schedule of total financing and investor rounds

    • Rounds, timetables, and milestones

    • Deliverables to date

    • Measures of accomplishments by deliverable

FINANCIAL PLAN

  • Assumptions

    • Transaction volumes (frequency, recency, and value)

    • Revenue

    • Cost of revenue

    • Operating expenses

    • Other income

    • Capital expenditures

    • Growth rates

    • Capacity

    • Policies for credit, sales, service, and collections

  • Projections and forecasts (3-5 years)

    • Cash flow

    • Income

    • Financial position (balance sheet)

  • Budget

    • Sales

    • Operating expenses

    • Capital

      • Financing

      • Operating

      • Investment

  • Milestones for key events and accomplishments

  • Constraints

    • Inventory lead times, turnover, waste, and shrinkage

    • Leases (capital and operating)

    • Regulations (licenses, permits, and zoning)

  • Risk factors (market, product and/or service, interest rates, and liquidity)

  • Contingencies

  • Break-even analysis and summary of fixed and variable costs

FINANCIAL PLAN…(CONT’D)

  • Key performance indicators

    • Financial

      • Margins

        • Gross

        • Operating

        • Net

      • Returns

        • Assets

        • Capital/equity

    • Non-financial

      • Market share and penetration

      • Product and/or service usage

      • Satisfaction (employees/customers/suppliers/investors)

      • Quality

      • Time-to-market

      • Cycle time

      • Productivity

      • Asset capacity and utilization

INVESTMENT OPPORTUNITY AND EXIT STRATEGY

  • Pro-forma term sheet

    • Amount of financing required

    • Description of ownership interest

    • Deal structure

    • Capital structure of the enterprise

    • Sources of funds

      • Amount of financing raised to date in prior rounds

      • Amount of financing anticipated in future rounds

    • Uses of funds

  • Potential exit strategy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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