How to Build A Successful Business Plan for a Small Business

1. How to Build A Successful Business Plan for a Small Business Speaker: Omar Shawky

2. Why write a Business Plan 1. Because I have to… • Needed for financing • Strategic partnering • Attract key people/investors • Organize my thoughts

3. Why write a Business Plan 2. Because I Need to Understand My Business • The Plan is the result of a planning process • People Don’tPlan to Fail; They Fail to Plan • Who are my customers? • Why will they buy my product or service? • What will they pay? • How will I make and deliver/sell the service/product? • What resources (people, money, technology) do I need? • Can I make money / create value? • Do I have the right team on board?

4. TheRight Ingredients • A TEAM with Relevant Experience • Market Size • Idea • Technology • Competitive Advantage • Reasonable Projections • Exit Strategy

5. Company Structure Idea Financials Market Operations & Production Competitive Edge Team Marketing Strategy Business Plan

6. Business Planning Steps • Idea generation, Vision, Mission, Objectives, Strategies • Market research and Analysis • Marketing strategy • Production planning • Management and Organization • Financial plan • Company formulation

7. Business Planning Steps • Idea generation, Vision, Mission, Objectives, Strategies • Market research and Analysis • Marketing strategy • Production planning • Management and Organization • Financial plan • Company formulation

8. 1. The Idea • Innovative product or service • Visualize a market gap – you can add value • Imported idea

9. Vision Vision Where do you want to go at the end? Objectives 4th Objective What is the road map and major mile stones? Strategy How will you reach your objectives? 3rd Objective SMART Specific Measurable Achievable Relevant Time-Bound 2nd Objective 1st Objective

10. Who are your stakeholders and what is your mission to each one of them? Religion Family Mission: Stakeholders Work Community Friends Country

11. Who are your stakeholders and what is your mission to each one of them? Suppliers Shareholders Mission: Stakeholders Employees Community Customers Country

12. Business Planning Steps • Idea generation, Vision, Mission, Objectives, Strategies • Market research and Analysis • Marketing strategy • Production planning • Management and Organization • Financial plan • Company formulation

13. 2. Market Analysis • Market size • How big is it NOW? • Trends – how fast is it or will it grow? • Market Players – Competitors • Competitive Advantage • Estimated market shares • Existing/planned products in the marketplace • Is this the RIGHT TIME for my product? • Is there a GAP that I can fill?

14. SWOT Analysis Strengths How maximize them Internal Weaknesses How minimize their effects Opportunities How you capitalize on them External Threats How you avoid them

15. Business Planning Steps • Idea generation, Vision, Mission, Objectives, Strategies • Market research and Analysis • Marketing strategy • Production planning • Management and Organization • Financial plan • Company formulation

16. 3. Marketing Strategy • Who are my TARGET customers? • Why would they buy my product? • How much would they pay? • What are the special features in my product? • What is my competitive advantage It is all about your EDGE

17. Marketing Plan Process Defining Target Market Needs, Wants, Demand Marketing Mix 4 Ps Marketing Research Product Variety Quality Design Features Brand Packaging Size Services Warranty Return Place Channels Coverage Location Inventory Transport Push / Pull Price Price List Discounts Allowances Payments Credit Promotion Promotions Advertising Sales Force Public relation Direct marketing Targeting Positioning Segmenting

18. Business Planning Steps • Idea generation , Vision, Mission, Objectives, Strategies • Market research and Analysis • Marketing strategy • Production planning • Management and Organization • Financial plan • Company formulation

19. 4. Production plan • Technology • Equipment • Raw Material Sourcing • Operation Plan and Capacity

20. Business Planning Steps • Idea generation , Vision, Mission, Objectives, Strategies • Market research and Analysis • Marketing strategy • Production planning • Management and Organization • Financial plan • Company formulation

21. 5. Management Plans • Getting the RIGHT Team on board • Training • Delegation • Empowerment

22. Business Planning Steps • Idea generation , Vision, Mission, Objectives, Strategies • Market research and Analysis • Marketing strategy • Production planning • Management and Organization • Financial plan • Company formulation

23. Financial Section What Investors is looking for in Financial Section: • Total Investments • Breakdown of Investments (Land, Building, Equipment, People, Working Capital, …etc.) • Income Statement Projections • Cash Flow Statement Projections • Initial Balance Sheet • Net Present Value (NPV) • Internal Rate of Return (IRR) • Breakeven Analysis • Payback Period

24. Financial Plans • Income Statement Projections • Revenues Assumptions • Costs/Expenses Assumptions • Depreciation Assumptions • Interest Expenses Assumptions • Taxes • Cash Flow Projections • Initial investment • Working Capital (Payables vs Receivables) • Capital Expenditure (Capex) • Debt Assumptions

25. Income Statement Income Statement Objective: provides information about the firm’s operating activities over a specific period of time. Revenue:100 100% - Cost of Goods Sold (COGS): 60 60% Gross Profit (Profit Margin)40 40% Operating Expenses: General & Administration 8 8% Sales & Marketing 12 12% - Total Operating Expenses 20 20% Earning Before Interest, Tax, Depreciation & Amortization (EBITDA)20 20% - Depreciation & Amortization 5 5% Earning Before Interest and Tax (EBIT) 15 15% - Interest Expenses 5 5% Net Income Before Tax 10 10% -Taxes 2 2% Net Income8 8%

26. Cash Flow Statement Objective:provides information about the firm’s cash position and sources of cash in and cash-out 1- Cash Provided from Operations: + Net Income 8 +Depreciation & Amortization 5 -Increase in Receivables (1) +Increase in Payables 4 Total Cash from Operations 16 2- Cash Provided from Investing: -Capital Expenditure (2) +Sale of equipment, land..etc 1 Total Cash from Investing (1) 3- Cash from Financing: -Repayment of debt (1) +Sale of common stock 1 -Cash Dividends(5) Total Cash from Financing (5) Total Cash Flow 10

27. Assets Current Assets: Cash and securities 15 Account Receivables 10 Inventories 25 Total Current Assets 50 Plant 30 Land 15 Furniture 5 Total Assets 100 Liabilities Current Liabilities: Accounts Payables 10 Short-term borrowing 15 Total Current Liabilities 25 Long Term Debt 25 Total Liabilities 50 Shareholders’ Equity Common Stocks 20 Retained earnings 30 Total S.E. 50 Total Liab. + S.E. 100 Balance Sheet Objective: provides summary of what the business owns and what it owes to both lenders and investors. (Assets = Liability + Shareholder's Equity)

28. Measuring Performance • Net Present Value (NPV) • Internal Rate of Return (IRR) • Breakeven Analysis • Payback Period *See the excel file for calculations

29. Business Planning Steps • Idea generation • Market research and Analysis • Marketing strategy • Production planning • Management and Organization • Financial plan • Company formulation

30. Name – logo - slogan Legal structure Location Mission – Values - Objectives 7. The Company

31. Elements of the Business Plan • Executive Summary • The opportunity, company, product/service, vision, mission & objectives • Market research/analysis / SWOT Analysis • Marketing plan • Manufacturing and operations plan • Management team • Financial plan (Capital Required, Projections, Returns) • Legal Structure • Action Plan

32. Finally: No Risk … No Gain ”ومن لا يتعلم صعود الجباليعش أبد الدهر بين الحفر“ “If we all did the things we are really capable of doing, we would literally astound ourselves” Thomas Edison

33. Thank You &May God Bless Omar Shawky Email: oshawky@gmail.com