Entrepreneurship

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Entrepreneurship

• The Importance of Business Planning for a Venture

ELIB 203
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The Importance of Business Planning for a Venture

• A goal without a plan is just a wish

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The Importance of Business Planning for a Venture

• When you decide on a brilliant business idea, the
  challenge is to provide a clear plan to get the
  idea executed.

• It requires more than one person and people with
  different skills to plan well.

• You can start writing your business plan (or
  drafts of it) while planning.

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The Importance of Business Planning for a Venture

• From each ten new startups, only one survives
  within the first two years (the rest fail to
  continue or go bankrupt)..

• If you start your business with no clear plan,
  you do not know the future of your business.

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The Importance of Business Planning for a Venture

• You can set yourself aside from competition and
  gain a competitive advantage by planning well.

• The business plan documents the plan your team is
  achieving.

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How to Set a Good Plan for My Business?

• Creating a business plan may seem boring, but you
  should not neglect it.

• This is the plan that will guide your company and
  attract investors!

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How to Start Planning?

• Gather and provide documentation about your
  business

• Every member in the organization should
  contribute to, read, and understand these
  documents

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The Documentation you need
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What is SWOT analysis

• S.W.O.T. is an acronym that stands for Strengths,
  Weaknesses, Opportunities, and Threats.

• A SWOT analysis is an organized list of your
  businesss greatest strengths, weaknesses,
  opportunities, and threats.

• (See End of Class activity about SWOT analysis)

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What is SWOT analysis

• Strengths and weaknesses are internal to the
  company (such as reputation, patents, employees
  experience, location). You can change them over
  time

• Opportunities and threats are external
  (suppliers, competitors, current prices of raw
  materials) they are out there in the market and
  you cannot change them

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SWOT Analysis
Internal External
Positive
Negative
S
W
Weaknesses Internal limitations that may
interfere with a companys ability to achieve its
objectives
Strengths Internal capabilities that may help a
company reach its objectives
O
T
Threats Current and emerging external factors
that may challenge the companys performance
Opportunities External factors that the company
may be able to exploit to its advantage
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Example of SWOT Analysis
Internal Factors Strengths Weaknesses
Internal Factors
External Factors Opportunities Threats
External Factors

• Technological skills
• Leading brands
• Distribution channels
• Customer loyalty/relationship
• Production quality
• Scale
• Management

• Absence of important skills
• Week brands
• Poor access to distribution
• Low customer retention
• Unreliable product/service
• Sub-scale
• Management

• Changing customer base
• Closing of geographic markets
• Technological advances
• Changes in government politics
• Tax increases
• Change in population age
• New distribution channels

• Changing customer tastes
• Technological advances
• Changes in government politics
• Lower personal taxes
• Change in population age
• New distribution channels

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Example of SWOT Analysis
Internal Strengths Weaknesses
Internal
External Opportunities Threats
External

• Your specialist marketing expertise.
• A new, innovative product or service.
• Location of your business.
• Quality processes and procedures.
• Any other aspect of your business that adds value
  to your product or service.

• Lack of marketing expertise.
• Undifferentiated products or services (i.e. in
  relation to your competitors).
• Location of your business.
• Poor quality goods or services.
• Damaged reputation.

• A developing market such as the internet.
• Mergers, joint ventures or strategic alliances.
• Moving into new market segments that offer
  improved profits.
• A new international market.
• A market vacated by an ineffective competitor.

• A new competitor in your home market.
• Price wars with competitors.
• A competitor has a new, innovative product or
  service.
• Competitors have superior access to channels of
  distribution.
• Taxation is introduced on your product or service.

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Example of SWOT Analysis
Internal Strengths Weaknesses
Internal
External Opportunities Threats
External
Experience our execs have decades of experiences
with plastics, engineering, and successful
startups. Relationships The company has
excellent relationships with firms that collect
and distribute PET bottles. Location There are
no other PET recycler than continue to export to
China.
High startup costs The very high costs of
opining a PET plant will require both investments
and loans. Construction time The recycling and
extrusion facility must be built before we can
begin processing plastic.
Environmental protection standards Whenever the
government regulations are updated, we need to
develop technically and economically feasible
recycling solutions that meet the
standards. Material scarcity Our business model
is PET-dependent. If use of PET bottles declines
or becomes obsolete, we will lose our supply.
Major facility expansion The initial PET
recycling facility will have a capacity of 46
million pounds, but the current annual stock of
recyclable bottle material in California, Oregon
and Washington is more than200 million pounds. R
D Potential for other uses of PET-recycling
by-product.
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What Should Be Included in a Business Plan?
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How to Draft a Business Plan

• Activity Refer to the Writing a Business Plan
  The Basics document in the handouts on pages 2
  to 4.

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Group Activity

• In a team, select an industry and a company
  within this industry then provide a SWOT analysis

• Refer and use the sheet of SWOT analysis in the
  (Business Modelling Workbook) document in the
  handouts.

• Two teams will be asked to explain their analysis
  to the class at the end of session