Electronic Commerce COMP3210

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Electronic Commerce COMP3210

• Dr. Paul Walcott

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Contents

• Elements of a Business Plan
• Executive Summary
• Business Description
• Define Your Market
• Identify and Analyse Your competition
• Design and Development Plan
• Operations and Management Plan
• Financial Statements

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Introduction

• What is a business plan?
• A business plan is a document which highlights
  (for the given year)
• The plan as to how the company will be run
• The goals of the company
• The money required to meet those goals
• The strategy employed to meet those goals
  (including marketing)

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Introduction (I)

• Why should I create a business plan?
• A business plan forces a business to assess the
  market place
• It forces a business to identify a clear
  marketing strategy
• It also serves as a benchmark which the companies
  performance can be measured against.

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Introduction (II)

• There are seven essential sections of a business
  plan. These are the
• Executive Summary
• Business Description
• Define Your Market
• Identify and Analyse Your competition
• Design and Development Plan
• Operations and Management Plan
• Financial Statements

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Executive Summary

• The executive summary follows the title page of
  the business plan
• The purpose of the executive summary is to
  explain to the reader what the business wants
• The summary should be short and concise (maybe
  half a page, typically no longer than a page)
• People do not have time to waste reading long
  documents

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Key Elements of an Executive Summary

• 1. The business concept
• What is the business you are proposing, its
  products and the advantages over the competition
• 2. The financial features
• Highlight the forecasted sales, profits, cash
  flows and return on investment
• 3. The financial requirements
• What are the start-up costs and the cost of
  expansion. How will this money be used?

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Key Elements of an Executive Summary (I)

• 4. Current business position
• This includes any relevant information about the
  company, its formation date, its owners and key
  personnel
• 5. Major achievement
• Are there any developments which are essential to
  the success of the business? These may include
  prototypes, patents or crucial contracts

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Business Description

• This section often begins with a short
  description of the industry, its present outlook
  and future possibilities
• Include any products or developments that might
  affect your business
• State whether the business is new or already in
  existence and the type of operation, e.g. is it
  retail, food service, manufacturing or
  service-oriented?
• State who your customers will be and how your
  product will be distributed and advertised

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Business Description (I)

• Describe the product or service you intend to
  market
• Show how your business will gain the competitive
  edge
• Explain how the business will be profitable

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Define Your Market

• Define the entire market for your industry
• in terms of size, structure, growth prospects,
  trends and sales potential
• Define the specific market that you will be
  targeting (market segmentation)
• Define your niche in this market

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Define Your Market (I)

• After defining your market you must
• Estimate your market share for the period of time
  the business plan covers
• Position your business
• Price your product
• Determine the distribution strategy
• Create a promotion plan
• Estimate your sales potential

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Identify and Analyse Your competition

• Determine who your competitors are
• What strategies are they using to sell their
  products or service
• What are they strengths and weaknesses

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Design and Development Plan

• The design and development plan allows investors
  to understand
• The design of your product
• How it is produced
• How it will be marketing
• The development budget required to allow the
  company to meet its goals

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Design and Development Plan (I)

• The sections included in the development plan
  include
• Product development
• Market development
• Organisational development
• Each of these sections should be described from a
  funding point of view
• Finally, identify measurable goals for the
  overall design and development plan

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Operations and Management Plan

• Describes how the business functions
• It explains business logistics
• The responsibilities of the management team
• The task assigned to each company division
• Capital and expense requirements related to the
  operation of the business
• And the financial tables
• The operating expense table
• The capital requirements table
• The cost of goods table

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Financial Statements

• The three common financial statements are
• The balance sheet
• A statement of your assets, liabilities and
  equity
• The Income statement
• Reflects when sales are made and expenses are
  incurred
• The statement of cash flows shows
• The amount of cash required to meet obligations,
  when it is required and from where it will come