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THINGS TO AVOID IN WRITING A BUSINESS PLAN: + TIPS FOR IMPROVEMENT PowerPoint Presentation
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THINGS TO AVOID IN WRITING A BUSINESS PLAN: + TIPS FOR IMPROVEMENT

THINGS TO AVOID IN WRITING A BUSINESS PLAN: + TIPS FOR IMPROVEMENT

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THINGS TO AVOID IN WRITING A BUSINESS PLAN: + TIPS FOR IMPROVEMENT

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  1. THINGS TO AVOID IN WRITING A BUSINESS PLAN:+TIPS FOR IMPROVEMENT Michael W. Piczak March 2004

  2. WHY IT IS IMPORTANT TO AVOID ERRORS CREDIBILITY

  3. SOURCES OF CREDIBILITY • REPORT ITSELF • RESEARCH • LANGUAGE USAGE • YOUR APPEARANCE • YOUR CONDUCT/PRESENCE • YOUR EXPERIENCE • THE IDEA ITSELF

  4. 3 CATEGORIES OF MISTAKES • CONTENT ISSUES • STYLISTIC CONCERNS AND • COMPUTER SKILLS DEFICIENCIES

  5. CONTENT ISSUES • REFERS TO THE SUBSTANTIVE ASPECTS OF THE REPORT • REPRESENTS THE HOMEWORK AND RESEARCH YOU HAVE DONE IN GATHERING YOUR THOUGHTS ABOUT THE BUSINESS

  6. STYLISTIC CONCERNS • INCLUDE APPEARANCE, ORDER, QUALITY OF PRESENTATION, ENGLISH USAGE, QUALITY OF EXHIBITS, POOR CHOICE OF LANGUAGE, GRAMMAR, ETC.

  7. COMPUTER SKILLS DEFICIENCIES • DETRACT FROM PERCEIVED QUALITY OF WORK • CAN BE USED AS DEMONSTRATION OF COMPETENCE AND ABILITY TO LEARN • CAN BE USED TO SAVE CONSIDERABLE SUMS OF MONEY IN GRAPHICS WORK

  8. CONTENT MISTAKES • NO POSITIONING STATEMENT • VALUES, VISION, MISSION STATEMENTS INCORRECT • NO SWOT RESEARCH/CITATIONS • “MY MARKET IS ANYONE THAT EATS” • NO TARGET MARKET NUMBERS • DIFFERENT 4Ps FOR EACH TARGET MARKET • INCLUSION OF IMPRESSIONISTIC, UNSUBSTANTIATED AND GRATUITOUS STATEMENTS • OPINING CONCLUSIONS WITHOUT EVIDENCE (“the market is big; how big? Really big!” or “and I believe…”) • FINANCIALS MAKE LITTLE SENSE (e.g. sales of $100M in year 3; budgets in narrative must match financial statements; variable costs in breakeven show $.96 while all input costs are >$10/) • FINANCIAL NARRATIVE REQUIRED WITH GRAPHS • SECTIONS NEED PREFACING OR INTRODUCTION • PAYING YOURSELF $0 OR $175,000 PER YEAR • COMPETITION ANALYSIS IS DESCRIPTION ONLY • NETWORKING AND PROMOTION BUDGETS MUST HAVE GOALS AND OBJECTIVES • HAVE SHORT TERM AND LONG TERM GOALS • PROPOSING TO “WIN” ON BASIS OF CUSTOMER SERVICE WITH WEAK CUSTOMER SERVICE PLAN • CLAIMING TO BE “NEW, UNIQUE, DIFFERENT, GREAT” WITH NO EVIDENCE • NO PROVISION FOR INSURANCE OR NUMBERS LOOK OUT OF WHACK • DON’T FORGET LICENSING ISSUES; SIGNAGE; LEASEHOLD IMPROVEMENTS • PROPOSING TO WORK 100 HOURS A WEEK • GETTING BASIC NUMBERS WRONG (POPULATION OF STONEY CREEK IS 500,000)

  9. IF THERE IS A PROBLEM, HAVE A PLAN • “During periods of low and negative cashflow, we will build inventory in preparation for the upcoming Xmas season…” • “Because a goodly number of my employees are part time, I am prepared to lay them off for particular periods…” • “We can do maintenance during quieter periods in the summer…” • “I will be promoting a number of breakeven activities for that low summer period to get us through…” • “The operation will simply close at the end of the fall…” • “We are developing complimentary products and services to keep us going when we’re in the business cycle trough…” • “All staff will learn the new POS system when our rush period comes to an end…”

  10. NEVER DECLARE • “I DON’T LIKE CUSTOMERS…” • “I NEED $5000 PER MONTH TO LIVE…”

  11. GETTING FINANCIAL ESTIMATES RIGHT • ESTIMATING STARTUP AND ONGOING COSTS IS LIKE VACATION – BUDGET FOR ONE LEVEL AND SPEND ANOTHER • OFTEN GET STICKER SHOCK AT HOW MUCH CAPITAL ASSETS COST • DON’T ALWAYS BUY NEW • LOOK FOR LIQUIDATIONS, GOVERNMENT SURPLUS SALES, BUY USED, AUCTIONS TO KEEP COSTS DOWN • DO YOUR HOMEWORK AND SHOP AROUND • NEGOTIATE HARD

  12. WHAT GETS UNDERSTATED • LICENSING/PERMITS (FIRE, CITY, VENDING) • SIGNAGE • CAPITAL EQUIPMENT • LEASEHOLD IMPROVEMENTS • TRUE LEASING COSTS • COST OF EMPLOYEES BY 30%

  13. WHAT IS TRULY NEW, UNIQUE, DIFFERENT • RAINFOREST CAFÉ • PIXAR ANIMATION STUDIOS • DISNEY’S IMAGINEERING • JUNCTION TAVERN IN HAMILTON • CIRQUE DE SOLEIL • CONCORDE JET • POST IT NOTES • DISSOLVING STITCHES • SO AND SO “EXPERIENCE”

  14. COMPETITION ANALYSIS • MUST GO BEYOND DESCRIPTION TO CAREFULLY ASSESS WHAT YOU DO COMPARED TO THE COMPETITION • LOOKING FOR: • KEY SUCCESS FACTORS (KSFs) • SOURCES OF COMPETITIVE ADVANTAGE (CAs) • FINDING ANY DISTINCTIVE COMPETENCIES (DCs)

  15. STYLISTIC MISTAKES • LABEL/REFERENCE APPENDICES • USE LOGO IN HEADER/FOOTER • NAME OF COMPANY WRONG • NAME OF OWNER WRONG • WRITE IN 3RD PERSON • NO “IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII” • REPORT OUT OF ORDER (FEASIBILITY TOO EARLY; 4 Ps BEFORE TARGET MARKET DEFINITION; OPS ISSUES IN MARKETING PLAN) • SPELLCHECK • GRAMMAR POOR • APPENDICES NOT PARTITIONED AND NOT REFERENCED IN NARRATIVE • 1 FONT SIZE AND TYPE • DOUBLE SPACE • USE PARAGRAPHS TO SEPARATE IDEAS • POOR CHOICE OF WORDS • CHOOSE PAPER TO BE CONSISTENT WITH PERSONALITY OF BUSINESS • BIND PROPERLY AND PROFESSIONALLY • FONTS, LOGOs, COMPANY NAME CONSISTENT THROUGHOUT

  16. SPEAKING TO FEASIBILITY FEASIBILITY: The preceding report and analysis has demonstrated that: • Start up costs are low • Breakeven is low • The owner has considerable experience • The owner is pledging a substantial proportion of the startup costs • There are few periods of negative cashflow • The market is very large and untapped • Industry trends are in the desirable position • Government grants are available and applied for • Management team possesses considerable strengths (experience, ecducation, contacts, energy, creativity, financial resources) • Competitors “don’t get it” • Market gap exists • Proposed company enjoys competitive advantages and a distinctive competence • Lease options obtained provide ideal location (e.g. Yorkdale Mall) • Balance sheet and income statements strong after years 2 and 3 while conservatively presented “And therefore, I believe, a strong case has been made that ABC Company is a feasible operation.”

  17. GREAT FANTASTIC AMAZING WOO GIG CHEAP DECENT MUG SHOTS NO HASSLE UNIQUE SUPERIOR EXCEPTIONAL PARTNER WITH OR CATER TO EVENT VALUE PRICED WELL CONSTRUCTED PASSPORT PHOTO WORRY FREE POOR CHOICE OF WORDS IN A REPORT AVOID THESE TRY THESE

  18. LEARN • IT’S/ITS/THEIR • THAN/THEN • THERE/THEIR/THEY’RE • NO CONTRACTIONS WHEN WRITING • TO FORGET SLANG (“SMOKES”, “BOOZE”, “MUG SHOT”, “HASSLE”) • WRITING IN THIRD PERSON • TO PROOFREAD

  19. COMPUTER SKILLS DEFICIENCIES • NO STYLE TAGS • NO COMPTER GENERATED T of C • PAGE NUMBERING INCORRECT • SEPARATORS FOR HEADERS/FOOTERS • TABLES PLAIN (SHADE, SHADOW, OUTLINE, BOLD, HEADER ROW REPEAT) • CORPORATE IMAGE PACKAGE INCOMPLETE (CIP) • GAPS BETWEEN SECTIONS

  20. LETTERHEAD FAX COVER SHEET BROCHURE FLYER GRAND OPENING MENU TAKE OUT MENU ENVELOPE INVOICE QUOTE SHEET BUSINESS CARDS WEB SITE CORPORATE PIECES (CUPS, SHIRTS, CAPS, PENS, KEY CHAINS, CALENDARS) ELEMENTS OF CIP

  21. REMEMBER, IT’S ALL ABOUT CREDIBILITY THE END