Business plan basics by M. Hariharan (Savior Faire)

Slide 1:

M Hariharan Director Savoir faire Management Services Pvt Ltd Starting Up – Creating a Business Plan June 19, 2010

Slide 2:

Stability Rigidity Flexibility Confusion

Road Map:

Road Map Understand the “Customer” of the Business Plan Egg or Hen – starting point for the business plan Where do I start? – Market or Capabilities Assumptions Tie-up the loose ends

Customer of the Business Plan:

Customer of the Business Plan Long Term Investor Lender Venture Capitalist/ Private Equity Customer Yourself Long Term Profit Earning Potential Scalability; Exit Will my money be safe? Intention of showing the Business Plan to the Customer?! Convincing yourself

Road Map:

Road Map Understand the “Customer” of the Business Plan Egg or Hen – starting point for the business plan Where do I start? – Market or Capabilities Assumptions Tie-up the loose ends

Balance Sheet Basics:

Balance Sheet Basics Money Required Fixed Assets Working Capital Money Funded Share Capital + Reserves Loaned Funds Net Worth Source of Funds Application of Funds Financing Investing

Egg or Hen?:

Egg or Hen? This is what I require…. ஃ this is the funding required ……. OR This is the funding available … ஃ this is what I’ll do with that fund

Sourcing options:

Sourcing options Venture Capital Seed Capital Angel Investor Private Equity Lender Boot Strap Long Term Managerial and Tech expertise High risk, High return Long term influence in the venture Friends and relatives Pre-revenue stage To attract the attention of the Venture Capital To get the business off the ground “At risk” investment of promoters More favourable terms than other type of investors For the person than the project Focus on helping the business succeed than huge profit for the future Not quoted on exchanges Revival, multiple investors Buy, Strip and Flip Building company from own finances

Road Map:

Road Map Understand the “Customer” of the Business Plan Egg or Hen – starting point for the business plan Where do I start? – Market or Capabilities Assumptions Tie-up the loose ends

Market or Capabilities:

Market or Capabilities Key factor/ Limiting Factor/ Constraint I know the size of the market I am going to address I know the amount I require to run my business to start with

Road Map:

Road Map Understand the “Customer” of the Business Plan Egg or Hen – starting point for the business plan Where do I start? – Market or Capabilities Assumptions Tie-up the loose ends

Assumptions:

Assumptions Ockham’s razor ( Pluralis non est ponenda sine neccesitate ) Explicit vs implicit assumptions Understand the domains of control and influence Info.Sources Growth Timing Controls Valid Assumption

Domains of Influence and control:

Beyond Influence & Control Within Sphere of Influence Domains of Influence and control Within Span of Control

Assumptions:

Assumptions Assumptions proving incorrect Mistrust the obvious Ockham’s razor ( Pluralis non est ponenda sine neccesitate ) Explicit vs implicit assumptions Understand the domains of control and influence Info.Sources Growth Timing Controls Valid Assumption

Road Map:

Road Map Understand the “Customer” of the Business Plan Egg or Hen – starting point for the business plan Where do I start? – Market or Capabilities Assumptions Tie-up the loose ends

Slide 16:

Purpose Process People Prosper

Slide 17:

Sales Plan Production Plan Cost Plan Projected Profit and Loss Account Investment Plan Debt/ Equity Plan Projected Balance Sheet Cash Flow Statement Milestone reporting Assumptions Charts/ Graphs and Pictures Critical Annexures

What makes a good plan?:

What makes a good plan? Simple Is it easy to understand and to act on? Does it communicate its contents easily and practically? Specific Are its objectives concrete and measurable? Does it include specific actions and activities, each with specific dates of completion, specific persons responsible and specific budgets? Simple Specific Realistic Complete Follow up Actions Results Plan Realistic Are the sales goals, expense budgets, and milestone dates realistic? Is the plan complete? Complete Does it include all the necessary elements?

Have a satisfied customer to have satisfied investor:

Have a satisfied customer to have satisfied investor Thank you hari@sfccostmanagment.com www.sfccostmanagement.com +919821160114

Slide 20:

Enterprising India 2011 Enterprising India – MUMBAI February 2011