BUSINESS PLAN ACHARA CHANDRACHAI
OCTOBER 31 , 2000
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* ภ9<ภ8 ภภ, -$ â&#x20AC;&#x201C; Market Demand â&#x20AC;&#x201C; Customer Profile â&#x20AC;&#x201C; Customer Motivation 10.
* ก 9<ก8 • Secondary data • Primary Data – Market Survey – Test Market 11.
2. ก
NEW ENTRANTS Threat of New Entrants
INDUSTRY COMPETITORS SUPPLIERS Bargaining Power of Suppliers
BUYERS Intensity of Rivalry
SUBSTITUTES
Bargaining Power of Buyers
Threat of Substitutes 12.
2. ก Entry Barriers • Entry barriers • Economies of scale • Propriety product differences • Brand identity • Switching costs • Capital requirements • Access to distribution
13.
2. ก Entry Barriers • Absolute cost advantages • Government policy • Expected retaliation • Rivalry determinants • Industry growth • Fixed (or storage) costs / value added • Intermittent overcapacity
14.
2. ก Rivalry Determinants • Industry growth • Fixed (or storage) costs / value added • Intermittent overcapacity • Product differences • Switching costs 15.
2. ก Rivalry Determinants • Information of complexity • Concentration and balance • Diversity of competitors • Corporate stakes • Exit barriers 16.
2. ก Determinant of Buyer Power Bargaining Leverage •
Buyer concentration versus firm concentration
•
Buyer volume
•
Buyer switching costs relative to firm switching costs
•
Buyer information
•
Ability to backward integrate
•
Substitute products 17.
2. ก Determinant of Buyer Power Bargaining Leverage •
Price sensitivity
•
Price / total purchases
•
Product differences
•
Brand identity
•
Impact on quality / performance
•
Buyer profits
•
Decision makers’ incentives 18.
2. ก Determinant of Substitution Threat • Relative price performance of substitute • Switching costs • Buyer propensity to substitute 19.
2. ก Determinant of Supplier Power • Differentiation of inputs • Switching costs of suppliers and firms in the industry • Presence of substitute inputs • Supplier concentration
20.
2. ก Determinant of Supplier Power • Importance of volume to supplier • Cost relative to total purchases in the industry • Impact of inputs on cost or differentiation • Threat of forward integration relative to threat of backward integration by firms in the industry 21.
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24.
6 Cs 1. Creativity 2. Customer focus 3. Competence 4. Confidence 5. Commitment 6. Concern 25.
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29.
Technical Feasibility Analysis 1.Crucial Technical specifications • Design • Durability • Reliability • Product safety
• Standardization 30.
Technical Feasibility Analysis 2.Engineering requirements • Machines • Tools • Instruments • Work flow 31.
Technical Feasibility Analysis 3.Product development •Blue prints •Models •Prototypes 32.
Technical Feasibility Analysis 4. Product testing â&#x20AC;˘ Lab testing , field testing 5. Plant location issues â&#x20AC;˘ Desirable characteristics of plant site (proximity to suppliers, environmental regulations) 6. Plant layout studies 33.
The Product Development and Testing 1. Operating Specifications (customers requirements) 2. Thinking and visualization Engineers think about the design requirements, possible approaches, and visualize or imagine what the final product will look like 3. Accumulation of Information 4. Development of Alternative Conceptual Designs 34.
The Product Development and Testing 5. Engineering Exploration (feasibility studies ) Often results in modification of initial operating specifications 6. Reference Design 7. Analytical Investigations 8. Development, testing, construction, and tests of materials, components, breadboards and mock-ups 35.
The Product Development and Testing 9. Drawings and Initial Engineering Specifications construction of Development Model 10. Construction of Development Model 11. Tests 12. Drawings and specifications of prototypes and ultimately of the field test model 13. Construction of Prototype 36.
The Product Development and Testing 14. Tests 15. Construction of Field Test Models 16. Field Tests 17. Final Production Design, Drawings and Specifications 18. Production Problems arising from pilot production, regular production and use of the product lead to redesign and improvement 37.
Market Feasibility Analysis 1. Market Potential • Identification of potential customers and their dominant characteristics (eg. Age, income level, buying habits) • Potential market share (as affected by competitive situation) • Potential sales volume • Sales price projections 38.
Market Feasibility Analysis 2. Market testing • Selection of test markets • Actual market test • Analysis of market test results 39.
Market Feasibility Analysis 3. Marketing planning issues â&#x20AC;˘ Preferred channels of distribution, impact of promotional efforts, required distribution points (warehouses), packaging considerations price differentiation 40.
Financial Feasibility Analysis 1. Required financial resources for: • Fixed assets • Current assets • Necessary working capital 41.
Financial Feasibility Analysis 2. Available financial resources required borrowing • Potential sources of funds • Cost of borrowing • Repayment conditions 42.
Financial Feasibility Analysis 3. Operating cost analysis
â&#x20AC;˘Fixed costs â&#x20AC;˘Variable costs 4. Projected cash flow 5. Projected profitability 43.
Analysis of Organizational Capabilities 1. Personnel requirements
â&#x20AC;˘Required skills levels and other personal characteristics of potential employees
44.
Analysis of Organizational Capabilities 2. Managerial requirements 3. Determination of individual responsibilities 4. Determination of required organizational relationships 5. Potential organization development 6. Competitive Analysis
45.
Competitive Analysis
1. Existing competitors
â&#x20AC;˘ Size, financial resources, market entrenchment 46.
Competitive Analysis 2. Potential reaction of competitors to newcomer
â&#x20AC;˘ Price cutting, aggressive advertising, introduction of new products, etc. 3. Potential new competitors 47.
Interrelationship between Market and Technical Analysis 1. Preliminary investigation of new product idea
Market Data Consumer needs, demand potential
Product Data Engineering feasibility
2. Decision to develop specifications
48.
Interrelationship between Market and Technical Analysis
Technical Study Technical requirements for production, tooling. Quality control
Market Research Study Total market size, potential market share, price, channels 3. Decision to go ahead with product development
49.
Interrelationship between Market and Technical Analysis
Preliminary Market Plan Development sales and distribution strategies
Product Development and Testing
4. Decision to produce for field testing
50.
Interrelationship between Market and Technical Analysis
Analysis of Technical Performance Testing of product reliability
Determination of Customer Reactions Analysis of consumer satisfaction, sales volume potential 5. Decision to produce and market (commercialization)
51.
Interrelationship between Market and Technical Analysis
Detailed Marketing Planning Including distribution strategy, pricing, advertising, packaging
Production Planning and Manufacturing
6. Operating decisions
52.
BUSINESS PLAN The progressive steps in writing a business plan
53.
BUSINESS PLAN 1. Identify product / service / concept opportunity (the Big Idea). 2. Determine market feasibility / potential. 3. Determine market size (in units &dollars). 4. Complete competitive analysis. 5. Go/ No Go decision (proceed or look for another opportunity). 6. Develop marketing strategy. 7. Identify marketing mix components (product, place, price, promotion). 54.
BUSINESS PLAN 8. Determine beginning inventory and project your seasonal inventory for the next three years. 9. Determine location, size, type, and layout of necessary physical facilities. 10. Establish administrative organization and personnel requirements. 11. Estimate the initial capital requirements for the business. 12. Choose legal form of your organization. 55.
BUSINESS PLAN 13. Identify critical risks and assumptions to develop alternate plans. 14. List possible sources of startup capital and the amount you expect from each. 15. Prepare an opening balance sheet for the business, based on figures from steps 11&14 16. Prepare pro forma profit and loss statements for the first three years of operation 56.
BUSINESS PLAN 17. Estimate monthly (or seasonal)cash flows for each of the first three years of operation. 18. Prepare pro forma balance sheets for the first three years of operation. 19. Compute financial ratios for each year projected in the financial statements ; compare ratios to industry averages. 20. Prepare executive summary of plan. 21. Present plan to lenders or investors.
57.
ภBusiness Plan BUSINESS DESCRIPTION Company ________
Simply explained and feasible
Industry
________
Growing in market niches that are presently unsatisfied.
Products
________
Proprietary position (quality exceeds customerâ&#x20AC;&#x2122;s expectations.
Services
________
Described clearly. Service level exceeds customer expectations.
Previous success
________
Business has past record of success.
Competitive adventage
________
Identified and sustainable
58.
ภBusiness Plan BUSINESS DESCRIPTION Risks turned into ________ Opportunities Orientation of business
________
MARKETING Target market(s)
________
Size of target market (s)
Risk identified and shown how minimized
Market oriented , not product oriented.
Clearly identified.
________ Large enough to support viable business.
User benefits identified
________ Benefit to customers clearly shown.
59.
ภBusiness Plan MANAGEMENT TEAM Experience of team
________
Successful previous experience in similar business
Key mangers identified
________
Managers with complementary skills on team.
FINANCIAL PLAN Projections
________
Realistic and supported.
Rate of return
________
Exceptionally high. Loans can be paid back in less than one year.
Participation by owners
________
Participation by others
________
Owners(s) has significant personal investment. Others investors already involved.
60.
ก Business Plan PLAN PACKAGING Appearance
________
Professional. Laser printed, bound, no spelling or grammatical errors.
Executive summary
________
Concise description of business that prompts reader to say “Wow !”
Body of plan
________
Appendices
________
Plan standardized or custom
________
Sections of plan appropriate and complete. Appropriate supporting documentation. Plan custom written for specific business. Not “canned.”
61.
Financial Requirement Statement Period 1 Period 2 Period 3
Start â&#x20AC;&#x201C; up expenses Product (business) development expenses (expenditures associated with the conceptual development of the venture idea) Legal expenses (expenditures for all legal matters including patent search and registration procedures) Product testing expenses (expenditures associated with the development and testing of models and prototypes) Expenditures for market opportunity analyses
62.
Financial Requirement Statement Period 1 Period 2 Period 3
Start â&#x20AC;&#x201C; up expenses Expenditures (such as expenditures for materials, test equipment, and salaries and wages during the start-up phase Miscellaneous business development and start-up expenditures (suchas expenditures for materials, test equipment, and salaries and wages during the start-up phase
Required fixed investments Buildings Equipment and machinery Office equipment Expenditures for the installation of equipment and machinery
63.
Financial Requirement Statement Period 1 Period 2 Period 3
Operating expenses Material and other supplies Wage, salaries Marketing and promotion expenditures General administrative expenditures Rent Interest payments Repayments on loans Insurance Expenditures for utilities Taxes
Contingency funds Funds to cover expenditures caused by unforeseen developments or by changes in the venture implementation strategy
64. 1.
Profit and Loss Projection SALES: Product/ service line 1 Product/ service line 1 Product/ service line 1 Product/ service line 1 TOTAL SALES REVENUE Cost of Goods Sold : Product/ service line 1 Product/ service line 1 Product/ service line 1 Product/ service line 1 TOTAL COST OF GOOD SOLD GROSS PROFIT EXPENSES : Variable : Payroll Sales commission Freight and delivery Travel and entertainment Semivariable : Advertising / promotion Payroll tax Supplies Telephone Fixed : Rent Utilities Property taxes Dues and subscriptions TOTAL EXPENSES Profit before depreciation Depreciation NET PROFIT
Low _______________ ________________ ________________ ________________ _______________
Most likely _______________ ________________ ________________ ________________ _______________
High _______________ ________________ ________________ ________________ _______________
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________________ ________________ ________________ ________________ ________________ ________________ ________________ _______________
65.
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66.
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