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Lecture notes Introduction To Entrepreneurship & Corporate Strategy
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Week 7 the business plan: an entrepreneurial toolThe entrepreneurial plan:
A good business plan serves four, interconnected
purposes:
As an instigator of analysis
As a facilitator of synthesis
As a call to action
As a tool for communication
Analysis: A business plan dictates that certain information
be included. Preparing a business plan ensures that a full understanding of markets, customers and
competitors is in place.
Synthesis: A business plan encourages the integration of information in new, and potentially valuable
ways. New opportunities and innovations may be spotted as a consequence of creating the plan.
Action: A business plan defines the key projects involved in progressing the venture. It can be used to
define a series of integrated objectives and specify resource requirements.
It acts as a call to action.
Communication: The business plan can be used as the basis for communication the venture, what it
is and what it offers to key stakeholder groups.
Communication (continued):
For example:
What should a business plan include?
There is no simple answer to this question. As a piece of communication, it should be tailored to
the needs of the particular audience and the action the entrepreneur wishes to elicit.
What should a business plan include (continued)?
Many entrepreneurs create a ‘master’ business plan that is wide in scope and detailed.
From this master plan, specific plans (written or presented) can be created quickly.
This master plan is dynamic. It is added to as new information and insights become available.
Formats for a business plan:
Mission
Overview of objectives
Description of market environment (and how are you positioning yourself in it?)
Strategy
, Financial forecasts
Project and activities
People
Plaatje zit niet meer in slides!!!!
A mission should answer the question “What is your business about?”
depends what for business you are; a public business, profit business, non-profit business, etc
Overview of key objectives:
Financial objectives
in terms of income, expenditure and profits
Strategic objectives
In terms of market position and presence
Growth objectives
in terms of financial and market measures
Good objectives should be:
clear and unambiguous
quantified
feasible (given market conditions)
achievable (given resources available)
benchmarked
– against competitor performance
– against historical performance
Markets may be defined in terms of:
Competitors present
Products delivered
Technology used
Buying groups
It may be useful to define several markets that may be overlapping or hierarchically ordered.
Different definitions will play different roles in terms of objective setting and strategy adopted.
Description of market background:
, Definition of market
Competitors present
Competitors described in terms of:
likely impact
size and market power
strategy
selling points / market position
strengths and weaknesses of products
Strategy:
strategy may be considered to be the answer to a series of questions:
what are we selling?
who are we selling to?
what reasons are we giving them to buy?
why can we deliver profitably?
why will we beat competitors?
Strategy (continued):
elements of strategy include:
1) product strategy (features/distinction from competitors)
2) Pricing strategy (margins/relative to competitors/promotional and discount pricing)
3) Distribution strategy (Distributors/selling/pricing/promotional support)
4) Promotional strategy (means/message)
5) Networking strategy (relationship building with other supporting organizations)
Financial forecasts:
Over a given period of time give information on:
Income (source)
Expenditure
- Marginal
- Capital
Profits
Cash flow
Projects and activity:
Specify key projects in terms of:
Aims and objectives
Outcomes
Mileposts
Expenditure
People:
Details on the key people behind the venture
Emphasis skills, experience and successes
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