Business Plan: Road Map - Ch 3 & 4

• It is important to understand and memorize the English terms, not just the Arabic translations as the exam will be in English.

Chapter 3 vs. 4

• Chapter 3 discussed the first four steps of creating a project.
• Chapter 4 covers the last three steps, is shorter, and easier to understand. Topics covered in outline:
• Business plan
• Essential function the plan
• The elements and realities that must be in the final business plan

Business Plan (The Road Map)

• Provides a planning tool that builds on the idea assessment, feasibility analysis, and business model

• Delivers a more comprehensive and detailed analysis than the first three steps in the new business planning process

• Describes in detail how to turn your business model into a successful business

• Acts as a road map or guide for the entrepreneur

The Benefits of Creating a Business Plan

• A written summary of the entrepreneur's proposed business venture
• Includes the operational and financial details, marketing opportunities and strategy
• States the manager's skills and abilities

Essential Function of a Business Plan

• Guides the company by charting its future course and defining the strategy for following it.
• This guidance provides mission statements, goals, objectives, budgets, financial forecasts, target markets, and entry strategies.
• Helps the entrepreneur to attract lenders and investors who will provide capital so that a venture can repay loans and produce a good rate of return.

A Plan Must Pass Three Tests

• Required to get external financing and dealing with potential lenders and investors

The Reality Test

• Provides that a market exists for your product or service, or that the entrepreneur can actually build/provide the offering for the cost estimates in the plan.
• Reality testing has external and internal components

External Component for The Reality Test

• Proves a market for the product or service, industry attractiveness and niche, potential customers, market size and degree of competition

Internal Component for The Reality Test

• Focuses on difference from competitors already selling something of what has value for the company

Competitive Test

• Evaluates a company's position relative to its competitors, and management's ability to create a company that will gain an edge over its rivals
• Has external and internal components

External Component for The Competitive Test

• Evaluates the company's relative position to its key competitors
• Checks the effect on its strengths and weaknesses of the competition
• If it threatens the new company's success and survival

Internal Component for The Competitive Test

• Focuses on management's ability to create a company that will gain an edge over existing rivals.
• Has external and internal components

The Value Test

• Proving that a venture offers investors or lenders a high probability of repayment or an attractive rate of return.

Key Elements of a Business Plan

• Title page and table of contents
• Mission and vision statement
• Description of a firm's product or service
• Business and industry profile
• Competitor analysis
• Marketing strategy
• Plan of operation
• Pro forma (projected) financial statements
• The loan or investment proposal
• Executive summary
• Entrepreneurs' and managers' resumes

Title Page and Table of Contents Detail

• A business plan should contain a title page with the company's name, logo, and address as well as the names and contact information of the company founders.
• The date on which the plan was issued can be included on the title page
• Readers appreciate a table of contents that includes page numbers so that they can locate particular sections of the plan.

Mission and Vision Statement Detail

• A mission statement expresses an entrepreneur's vision for what his or her company is and what it is to become, and should be limited to no more than 25 words

Product or Service Description

• Describe the benefits customers get from the product or service.
• Clearly state the product/service sold, target market, and the basic scope.
• Features are descriptive facts about a product or service (ergonomically designed, more comfortable handle).
• Benefits are what the customer gains from the product or service feature (lower energy bills, faster access to the internet)

Business and Industry Profile

• Provides readers with an overview of the industry or market segment in which the new venture with industry data, such as trends, market size and its growth or decline will operate
• Business should inform investors in what company competes.

Competitor Analysis

• States who the main competitors are and their strengths and weaknesses as well as what distinguishes the entrepreneur's product or service from other offerings, which provides a relative edge
• Uses first hand research on competitors.

Marketing Strategy

• Providing if a profitable market involves two steps: Show the target desires product and show support from facts.

Plan of Operation

• Chart the organization, position and peoples that occupy them
• Space/inventory requirements, staffing plans and account.

Pro Forma (Projected) Financial Statement

• A proposed statement/venture and to prepare for the near year if possible with operation from published research .

The Loan or Investment Proposal

• Is a statement on purpose to finance and have the means to the people in the company that need them
• Including: sources, repayment, and timetable and an assessment to the issues facing
• All found in the works and investment needed for future growth.

Entrepreneurs' and Managers' Resumes

• To summarize the presentation to each potential financial institution or investors, the entrepreneur should write an executive summary.

Executive summary is a written version of "the elevator pitch"

• Imagine talking to a lender and you can convince them fast of the product you got.

A good elevator pitch provides:

• The context, benefit costumers receive, and the point of how the business different from the companies.

What Lenders and Investors Look for in a Business Plan

• Capital (a stable base where they can grant to you), Capacity (Ability to pay/take care of you bank loans), Collateral (Is a security payment), Character (is to very the people that work).

To Present the Plan

• Plan is the most needed to be rehearse to show that it is working out.

Need in plans

• State company’s goals, solve problems, state model, have advantages, etc.

Making The Presenting Pitch For Investors

• Practice and be ready to commit to a plan of investment
• Follow plan: offer proof, review highlights be ready to answer some question.
• Show them where they been fitting for the offer and follow up with all people as well.

Rule 10/20/30 For Ppt

• Rule follows: there are 10 slides/20 minute and 30 points each to make an impact on customers and give you investment.