Franchising

Module 5 Writing a Business Plan

Jesus Reigns Christian College

Professor Dr. Federico A. Figueroa, Jr.

15-1
4-2
What is a Business Plan?
• A Business Plan is a written narrative,
typically 25 to 35 pages long
– Describes all the critical internal and
external elements (factors) and
strategies for guiding the direction of
an organization.
– Communicates how an organization
create sustainable value.
– Identifies risks and uncertainties and
communicates how an organization
manage them
– Describes an organization’s structure,
objectives and future plans. 4-3
Business Plan
• VMOKRAPISPATRES

4-4
Uses of a Business Plan (Internal)
• Refining your product • Motivating and focusing
strategy. employees.
• Identifying key customers. • Analyzing capital
• Identifying milestones and budgeting decisions.
timelines. • Facilitating new product
• Helping set objectives & development.
performance metrics. • Integrating new
• Managing risk and acquisitions.
uncertainty. • Facilitating restarts,
restructuring and
turnarounds. 4-5
Uses of a Business Plan (External)

• Attracting key employees.

• Educating potential investors.
• Arranging strategic alliances.
• Obtaining large contracts with strategic customers.
• Facilitating mergers and acquisitions.

4-6
Guidelines for Writing a Business Plan 1 of 5

• Structure of the Business Plan

– To make the best impression a business plan should
follow a conventional structure - an outline of the
Business Plan.
• Typically, investors are busy people and want a plan
where they can easily find critical information.
Guidelines for Writing a Business Plan 2 of 5

• Structure of the Business Plan (continued)

– Software Packages
• There are many software packages available that employ an
interactive, menu-driven approach to assist in the writing of a
business plan.
• Some of these programs are very helpful. However, entrepreneurs
should avoid a boilerplate plan that looks as though it came from a
“canned” source.
– Sense of Excitement
• Along with facts and figures, a business plan needs to project a
sense of anticipation and excitement about the possibilities that
surround a new venture.
Guidelines for Writing a Business Plan 3 of 5
• Content of the Business Plan
– The business plan should give clear and concise information
on all the important aspects of the proposed venture.
– It must be long enough to provide sufficient information yet
short enough to maintain reader interest.
– For most plans, 25 to 35 pages is sufficient.
• Types of Business Plans
– There are three types of business plans, which are shown on
the next slide.
Guidelines for Writing a Business Plan 4 of 5
Types of Business Plans
Guidelines for Writing a Business Plan
5 of 5

• Recognizing the Elements of the Plan may Change

– It’s important to recognize that the plan will usually change while
written.
– New insights invariably emerge when an entrepreneur or a team of
entrepreneurs immerse themselves in writing the plan and start
getting feedback from others.
Outline of Business Plan

• Outline of Business Plan

– A suggested outline of a business plan is shown on the next several
slides.
– Most business plans do not include all the elements introduced in the
sample plan; we include them here for the purpose of completeness.
– Each entrepreneur must decided which elements to include in the
plan.
Outline of Business Plan
• Section 1: Executive Summary
• Section 2: Company Description
• Section 3: Industry Analysis
• Section 4: Market Analysis
• Section 5: Marketing Plan
• Section 6: Management Team and Company Structure
• Section 7: Operations Plan
• Section 8: Product Design and Development Plan
• Section 9: Financial Projections
Section 1: Executive Summary 1 of 2

• Executive Summary
– The executive summary is a short overview of the entire business
plan.
– It provides a busy reader with everything that needs to be known
about the new venture’s distinctive nature.
– An executive summary shouldn’t exceed two single-space pages.
Section 1: Executive Summary 2 of 2

Key Insights
Executive • In many instances an investor will ask for a copy of
Summary a firm’s executive summary and will ask for a copy
of the entire plan only if the executive summary is
sufficiently convincing.
• The executive summary, then, is arguably the most
important section of a business plan.
Section 2: Company Description 1 of 2

• Company Description
- Company History
- Mission Statement
- Products
- Current status
- Legal status and ownership
- Key partnerships (if any)
Section 2: Company Description 2 of 2

Key Insights

Company Description • While at first glance this

section may seem less
important than the others, it is
extremely important.
• It demonstrates to your reader
that you know how to translate
an idea into a business.
Section 3: Industry Analysis 1 of 2
• Industry Analysis
– Industry size, growth rate, and
sales projections.
– Industry structure.
– Nature of participants.
– Key success factors.
– Industry trends.
– Long-term prospects.

http://www.business-to-you.com/porters-five
-forces/
Section 3: Industry Analysis 2 of 2

Key Insights
Industry Analysis •Before a business selects a target
market it should have a good grasp of
its industry—including where its
promising areas are and where its
points of vulnerability are.
• The industry that a company
participates largely defines the playing
field that a firm will participate in.
Section 4: Market Analysis 1 of 2

• Market Analysis
– The market analysis breaks the industry Market segmentation is the
into segments and zero in on the specific process of dividing the market
segment (or target market) to which the into subsets of customers who
firm will try to appeal. share common characteristics.
The four pillars of segmentation
– Items to include in this section: marketers use to define their
• Market segmentation and target market ideal customer profile (ICP) are
selection. demographic, psychographic,
• Buyer behavior. geographic and behavioral.
• Competitor analysis.

Source: https://www.tutor2u.net/business/reference/market-segmentation
Section 4: Market Analysis 2 of 2

Key Insights
• Most startups do not service their entire
Market Analysis industry. Instead, they focus on servicing a
specific (target) market within the industry.
• It’s important to include a section in the
market analysis that deals with the behavior
of the consumers in the market. The more a
startup knows about the consumers in its
target market, the more it can tailor its
products or service appropriately.
Section 5: Marketing Plan 1 of 2

• Marketing Plan
– The marketing plan focuses on how the business will market
and sell its product or service.
– Items to include in this section:
• Overall marketing strategy.
• Product, price, promotions, and distribution.
Section 5: Marketing Plan 2 of 2
Key Insights
•The best way to describe a
startup’s marketing plan is to start
Marketing Plan by articulating its marketing
strategy, positioning, and points of
differentiation, and then talk about
how these overall aspects of the
plan will be supported by price,
promotional mix, and distribution
strategy.
Section 6: Management Team and Company Structure
1 of 2
• Management Team and Company Structure
– The management team of a new venture typically consists of
the founder(s) and a handful of key management personnel.
– Items to include in this section:
• Management Team.
• Board of Directors.
• Board of Advisers.
• Company Structure.
Section 6: Management Team and Company Structure
2 of 2
Key Insights
•This is a critical section of a business
Management Team and plan.
Company Structure • Many investors and others who read
the business plan look first at the
executive summary and then go
directly to the management team
section to assess the strength of the
people starting the firm.
Section 7: Operations Plan 1 of 2
• Operations Plan
– Outlines how your business will be run and how your
product or service will be produced.
– A useful way to illustrate how your business will be run is to
describe it in terms of “backstage/ back of the house”
(unseen to the customer) and “front stage/ front of the
house” (seen by the customer) activities.
– Items to include in this section:
• General approach to operations.
• Business location.
• Facilities and equipment.
Section 7: Operations Plan 2 of 2

Key Insights
• Your have to strike a careful balance
Operations Plan between adequately describing this
topic and providing too much detail.
• As a result, it is best to keep this
section short and crisp.
Section 8: Product Design and Development Plan
1 of 2

• Product Design and Development Plan

– If you’re developing a completely new product or service,
you need to include a section that focuses on the status of
your development efforts.
– Items to include in this section:
• Development status and tasks.
• Challenges and risks.
• Intellectual property.
Section 8: Product Design and Development Plan 2 of 2

Key Insights
Product Design and •Many seemingly promising startups
Development Plan never get off the ground because of
their product development efforts that
stall or turn out to be more difficult
than expected.
• It is important to convince the reader
of your plan that this won’t happen
to you.
Section 9: Financial Projections
1 of 2
• Financial Projections
– The final section of a business plan presents a firm’s pro
forma (or projected) financial projections.
– Items to include in this section:
• Sources and uses of funds statement.
• Assumptions sheet.
• Pro forma income statements.
• Pro forma balance sheets.
• Pro forma cash flows.
• Ratio analysis.
Section 9: Financial Projections
2 of 2

Key Insights
Financial Projections • Having completed the earlier
sections of the plan, it is easy to see
why the financial projections come
last.
• They take the plans you’ve
developed and express them in
financial terms.
Presenting the Business Plan to Investors
1 of 2

• The Oral Presentation

– The first rule in making an oral presentation is to follow directions. If you’re told
you have 15 minutes, don’t talk for more than the allotted time.
– The presentation should be smooth and well-rehearsed.
– The slides should be sharp and not cluttered.
• Questions and Feedback to Expect from Investors
– The smart entrepreneur has a good idea of the questions that will be asked, and
will be prepared for those queries.
Presenting the Business Plan to Investors
2 of 2
Twelve PowerPoint Slides to Include in an Investor Presentation
1. Title Slide 7. Marketing and sales
2. Problem 8. Management team
3. Solution 9. Financial projections
4. Opportunity and target market 10.Current status
5. Technology 11.Financing sought
6. Competition 12.Summary
34