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Essential Business Planning Insights: Avoiding Start-Up Pitfalls

This guide emphasizes the critical importance of effective business planning for start-ups. With 50% of new ventures failing primarily due to poor business strategies, it highlights the need for entrepreneurs to focus on the planning process rather than just producing a business plan document. Key insights include strategic thinking, understanding the difference between process and output, and addressing common misconceptions about planning and strategy. By engaging in thorough research and thoughtful decision-making, entrepreneurs can enhance their chances of success and achieve their vision.

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Essential Business Planning Insights: Avoiding Start-Up Pitfalls

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  1. Business Planning BRIAN O'KANE © 2004 Oak Tree Press — South East Enterprise Platform Programme

  2. THE HARSH REALITY • 50% of start-ups fail • Poor business planning • “Write a business plan” • Emphasis on writing, not on thinking • THINK, THINK, THINK ! © 2004 Oak Tree Press — South East Enterprise Platform Programme

  3. PROCESS vs OUTPUT • PROCESS separate from OUTPUT • PROCESS = Thinking, researching, testing, planning • OUTPUT = Business plan document © 2004 Oak Tree Press — South East Enterprise Platform Programme

  4. BUSINESS PLANNING PROCESS        Think Plan Do © 2004 Oak Tree Press — South East Enterprise Platform Programme

  5. STRATEGY © 2004 Oak Tree Press — South East Enterprise Platform Programme

  6. MISCONCEPTIONS • Strategy is for big companies only • You need an MBA to do Strategy • There's no point planning, since things change © 2004 Oak Tree Press — South East Enterprise Platform Programme

  7. Unsuccessful strategy 1 • All fogged up © 2004 Oak Tree Press — South East Enterprise Platform Programme

  8. Unsuccessful strategy 2 • Sunday driver © 2004 Oak Tree Press — South East Enterprise Platform Programme

  9. Unsuccessful strategy 3 • Rose-tinted spectacles © 2004 Oak Tree Press — South East Enterprise Platform Programme

  10. Unsuccessful strategy 4 • If we make it, they'll buy it! © 2004 Oak Tree Press — South East Enterprise Platform Programme

  11. Unsuccessful strategy 5 • Blind leap of faith © 2004 Oak Tree Press — South East Enterprise Platform Programme

  12. Unsuccessful strategy 6 • Juggling too many things at once © 2004 Oak Tree Press — South East Enterprise Platform Programme

  13. STRATEGY • Imagining • Planning • Deciding • Taking control © 2004 Oak Tree Press — South East Enterprise Platform Programme

  14. STRATEGY • Where do you want to go? • Where are you now? • How do you get there? • Focus usually on HOW? • More important questions: WHAT? WHY? • Strategic box • Business plan – THINK, not WRITE © 2004 Oak Tree Press — South East Enterprise Platform Programme

  15. STRATEGIC BOX • Values • Passion • Vision • Mission • Positioning • Resourcing © 2004 Oak Tree Press — South East Enterprise Platform Programme

  16. OTP STRATEGY • Passion • Our passion is enterprise. Thinking about it. Writing about it. Talking about it. Doing it. Helping with it. Making it happen. • Vision • OTP will be known worldwide as the best in developing successful methodologies and resources for entrepreneurs, MSMEs and enterprise support organisations. • Mission • Helping entrepreneurs to achieve their potential. © 2004 Oak Tree Press — South East Enterprise Platform Programme

  17. Vision • WHAT ? • WHY ? © 2004 Oak Tree Press — South East Enterprise Platform Programme

  18. Vision 2 • I want to own and run a uniquely personalised career advice service, which really understands people’s difficulties in choosing a career and works with them to find their best fit in the job market. I want this service to have a 99% first-time success rate in matching people to the right careers (not just the next job), as measured by the people themselves. I want this service to be available not just locally but, in time, nationally and even globally, at a price that everyone can afford. © 2004 Oak Tree Press — South East Enterprise Platform Programme

  19. Vision 3 • Challenges: • Personalised service. • Really understanding people. • Finding the best fit in the job market. • 99% first-time success rate. • Matching people to the right career, not just jobs. • Success rate measured by customers. • National – even global – distribution. • Affordable price. © 2004 Oak Tree Press — South East Enterprise Platform Programme

  20. Vision • Must: • Link to Values & Passion • Link with future trends • Set a challenge • Motivate • Take the long view © 2004 Oak Tree Press — South East Enterprise Platform Programme

  21. Mission • Vision: Where you want to be • Mission: How you bring people there with you © 2004 Oak Tree Press — South East Enterprise Platform Programme

  22. Positioning • Vision: Where you want to be • Positioning: Where market thinks you are • VW Phaeton • Stg£43k – £68k • €65k - €103k © 2004 Oak Tree Press — South East Enterprise Platform Programme

  23. Branding • Something that makes people pay more for your product, even though it's the same as a competitor's • VW Sharan • €38,820 • SEAT Alhambra • €33,600 © 2004 Oak Tree Press — South East Enterprise Platform Programme

  24. Targets • Vision: Where you want to be • Targets: Goals that are closer to home • What do you want to achieve next year? • Next month? • In the next three or five years? • Where will you be on your road to achieving your Vision at a particular point in time? • Your targets are the milestones that make clear and communicate your Vision. © 2004 Oak Tree Press — South East Enterprise Platform Programme

  25. FORMALITIES © 2004 Oak Tree Press — South East Enterprise Platform Programme

  26. Formalities • Legal structure • Bank account(s) • Exposure to liabilities & loss • Licences • Intellectual property rights © 2004 Oak Tree Press — South East Enterprise Platform Programme

  27. MARKETING © 2004 Oak Tree Press — South East Enterprise Platform Programme

  28. MARKETING • Satisfying needs .. profitably • Elements: • Customers • Competition • Image • 4 Ps (product) / 3 Ps (service) • Marketing plan • Sales forecast © 2004 Oak Tree Press — South East Enterprise Platform Programme

  29. MARKET RESEARCH • Keep it practical • Sources of information • What do you want to know? • Do it yourself • Core of your business (plan) © 2004 Oak Tree Press — South East Enterprise Platform Programme

  30. MARKETING • 4 Ps (PRODUCT) • Product • Place • Price • Promotion • 3Ps (SERVICE) • Physical presence • Perception • People • All linked © 2004 Oak Tree Press — South East Enterprise Platform Programme

  31. SALES FORECASTS • Evidence • Get forward orders! • Be realistic • Ultimate purpose of marketing is SALES • Link sales forecasts to your promotion activities © 2004 Oak Tree Press — South East Enterprise Platform Programme

  32. MARKETING SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES, SALES © 2004 Oak Tree Press — South East Enterprise Platform Programme

  33. MARKETING • Understand your customers' needs • Set targets • Combine all elements of the marketing mix • Link to finances / cashflow • Get hard evidence where possible © 2004 Oak Tree Press — South East Enterprise Platform Programme

  34. PROCESS & PEOPLE © 2004 Oak Tree Press — South East Enterprise Platform Programme

  35. BUSINESS PROCESS • 4 elements: • Buy • Make • Sell • Manage / Infrastructure • Visualise your process • Resource implications • Space • Equipment • Staff © 2004 Oak Tree Press — South East Enterprise Platform Programme

  36. PEOPLE • Analysis of skill levels • Now • Future need • Key staff • Retention • Part of resourcing of strategy • Management capabilities © 2004 Oak Tree Press — South East Enterprise Platform Programme

  37. PEOPLE • Human capital more important than financial • Knowledge base • Organisational structure • Passion / unity / commitment • Entepreneur as manager • Which areas are critical? • Job descriptions • Cost • Formalities • Outsourcing © 2004 Oak Tree Press — South East Enterprise Platform Programme

  38. MANAGEMENT • Delegation • Communication • Formalities • Ongoing development • Retention • Reward • Develop policy/systems • Review skills levels © 2004 Oak Tree Press — South East Enterprise Platform Programme

  39. BUSINESS PLANS © 2004 Oak Tree Press — South East Enterprise Platform Programme

  40. BUSINESS PLAN BENEFITS • The road map or guide to the future • Not written in stone, but a plan nonetheless • Establish objectives, prioritize, specify steps • Cash flow is not profits and is not intuitive • It is, however, critical to success • Communicate • Banks, investors, partners, family © 2004 Oak Tree Press — South East Enterprise Platform Programme

  41. CRITICAL QUESTIONS • Who are you? • What is your product? • Who will buy your product? • Why do they buy your product? • What price will your customers pay? • How many will they buy at this price? • How many can you make? • How much does each unit of product cost you to make? • How much investment do you need to get started? • Have you a viable business? © 2004 Oak Tree Press — South East Enterprise Platform Programme

  42. PROCESS & OUTPUT My product I am I can make It costs to make Finance & Funding Project Outline Production App'x Exec Sum Intro Ownership Mkt'g In summary My customers: Are / Will buy / Will pay Start-up investment Viable business ? © 2004 Oak Tree Press — South East Enterprise Platform Programme

  43. WRITING A BUSINESS PLAN • Assemble information from your research • Use template / software • Start in the middle • Reflect your plans in the financials • Write for the audience © 2004 Oak Tree Press — South East Enterprise Platform Programme

  44. INTRO / EXEC. SUMMARY • Brief / concise / relevant • Tailored to audience • Key messages – emphasise achievements • What do you want from the reader? • Ooomph! • Last part to be written • CRITICAL © 2004 Oak Tree Press — South East Enterprise Platform Programme

  45. TAILORING BUSINESS PLANS • Different plans for different audiences • Level of detail • Level of confidentiality • Nature of relationship with reader • Why do YOU want the person to read the BP? • Why do THEY want to read the BP (if at all)? © 2004 Oak Tree Press — South East Enterprise Platform Programme

  46. BUSINESS PLAN ISSUES • Raise your sights! • Marketing – where will the sales come from? • Financials – realism/sensitivity? • Text / Evidence / Numbers • SHOW ME THE MONEY !! © 2004 Oak Tree Press — South East Enterprise Platform Programme

  47. Questions / queries: brian.okane@oaktreepress.com www.startingabusinessinireland.com © 2004 Oak Tree Press — South East Enterprise Platform Programme

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