Business Planning Brian Okane

© 2004 Oak Tree Press — South East Enterprise Platform Programme Slide 1

Business Planning

BRIAN O'KANE


THE HARSH REALITY

• 50% of start-ups fail

• Poor business planning

• “Write a business plan”

• Emphasis on writing, not on thinking

• THINK, THINK, THINK !


PROCESS vs OUTPUT

• PROCESS separate from OUTPUT

• PROCESS = Thinking, researching, testing, planning

• OUTPUT = Business plan document


BUSINESS PLANNING PROCESS

Think Plan Do


STRATEGY


MISCONCEPTIONS

• Strategy is for big companies only

• You need an MBA to do Strategy

• There's no point planning, since things change


Unsuccessful strategy 1

• All fogged up



• Sunday driver



• Rose-tinted spectacles



• If we make it, they'll buy it!



• Blind leap of faith



• Juggling too many things at once


STRATEGY

• Imagining

• Planning

• Deciding

• Taking control


STRATEGY

• Where do you want to go?• Where are you now?• How do you get there?

• Focus usually on HOW? – More important questions: WHAT? WHY?

• Strategic box

• Business plan – THINK, not WRITE


STRATEGIC BOX

• Values• Passion• Vision• Mission• Positioning• Resourcing


OTP STRATEGY

• Passion– Our passion is enterprise. Thinking about it.

Writing about it. Talking about it. Doing it. Helping with it. Making it happen.

• Vision– OTP will be known worldwide as the best in

developing successful methodologies and resources for entrepreneurs, MSMEs and enterprise support organisations.

• Mission– Helping entrepreneurs to achieve their

potential.


Vision

• WHAT ?

• WHY ?


Vision 2

• I want to own and run a uniquely personalised career advice service, which really understands people’s difficulties in choosing a career and works with them to find their best fit in the job market. I want this service to have a 99% first-time success rate in matching people to the right careers (not just the next job), as measured by the people themselves. I want this service to be available not just locally but, in time, nationally and even globally, at a price that everyone can afford.


Vision 3

• Challenges:– Personalised service. – Really understanding people.– Finding the best fit in the job market.– 99% first-time success rate.– Matching people to the right career, not just

jobs.– Success rate measured by customers.– National – even global – distribution.– Affordable price.


Vision

• Must:– Link to Values & Passion– Link with future trends– Set a challenge– Motivate– Take the long view


Mission

• Vision: Where you want to be

• Mission: How you bring people there with you


Positioning


• Positioning: Where market thinks you are

– VW Phaeton– Stg£43k – £68k– €65k - €103k


Branding

• Something that makes people pay more for your product, even though it's the same as a competitor's

– VW Sharan– €38,820

– SEAT Alhambra– €33,600


Targets


• Targets: Goals that are closer to home– What do you want to achieve next year? – Next month? – In the next three or five years? – Where will you be on your road to achieving

your Vision at a particular point in time?

• Your targets are the milestones that make clear and communicate your Vision.


FORMALITIES


Formalities

• Legal structure

• Bank account(s)

• Exposure to liabilities & loss

• Licences

• Intellectual property rights


MARKETING


MARKETING

• Satisfying needs .. profitably

• Elements:• Customers• Competition• Image• 4 Ps (product) / 3 Ps (service)• Marketing plan• Sales forecast


MARKET RESEARCH

• Keep it practical

• Sources of information

• What do you want to know?

• Do it yourself

• Core of your business (plan)


MARKETING

• 4 Ps (PRODUCT)- Product- Place- Price- Promotion

• 3Ps (SERVICE)– Physical presence– Perception– People

• All linked


SALES FORECASTS

• Evidence– Get forward orders!

• Be realistic

• Ultimate purpose of marketing is SALES

• Link sales forecasts to your promotion activities


MARKETING

SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES


MARKETING

Understand your customers' needs

Set targets

Combine all elements of the marketing mix

Link to finances / cashflow

Get hard evidence where possible


PROCESS &PEOPLE


BUSINESS PROCESS

• 4 elements:– Buy– Make– Sell– Manage / Infrastructure

• Visualise your process

• Resource implications– Space– Equipment– Staff


PEOPLE

• Analysis of skill levels– Now– Future need

• Key staff– Retention

• Part of resourcing of strategy

• Management capabilities


PEOPLE

• Human capital more important than financial

• Knowledge base• Organisational structure• Passion / unity / commitment• Entepreneur as manager• Which areas are critical?• Job descriptions• Cost• Formalities• Outsourcing


MANAGEMENT

• Delegation• Communication• Formalities• Ongoing development• Retention• Reward• Develop policy/systems• Review skills levels


BUSINESS PLANS


BUSINESS PLAN BENEFITS

• The road map or guide to the future– Not written in stone, but a plan nonetheless

• Establish objectives, prioritize, specify steps

• Cash flow is not profits and is not intuitive– It is, however, critical to success

• Communicate– Banks, investors, partners, family


CRITICAL QUESTIONS

– Who are you?– What is your product?– Who will buy your product? – Why do they buy your product?– What price will your customers pay?– How many will they buy at this price?– How many can you make?– How much does each unit of product cost you

to make?– How much investment do you need to get

started?– Have you a viable business?


PROCESS & OUTPUT

Exec Sum

Intro Project Outline

Ownership

Mkt'g Production

Finance & Funding

App'x

My product

I am

Start-up investment

Viable business ?

My customers:

Are / Will buy / Will pay

I can make

It costs to make

In summary


WRITING A BUSINESS PLAN

• Assemble information from your research

• Use template / software

• Start in the middle

• Reflect your plans in the financials

• Write for the audience


INTRO / EXEC. SUMMARY

• Brief / concise / relevant• Tailored to audience• Key messages – emphasise achievements• What do you want from the reader?• Ooomph!

• Last part to be written• CRITICAL


TAILORING BUSINESS PLANS

• Different plans for different audiences– Level of detail– Level of confidentiality– Nature of relationship with reader

• Why do YOU want the person to read the BP?

• Why do THEY want to read the BP (if at all)?


BUSINESS PLAN ISSUES

• Raise your sights!

• Marketing – where will the sales come from?

• Financials – realism/sensitivity?

• Text / Evidence / Numbers

• SHOW ME THE MONEY !!


• Questions / queries:

[email protected]

www.startingabusinessinireland.com

Business Planning Brian Okane

Business

marketing sales

sales link sales forecasts

sales forecasts evidence

unsuccessful strategy

business process

process people

mission vision

targets vision