Business Planning – Development and Analysis Programme

Business Plan Components

• Commence with objectives, scope, statement of the problem or remit
• Executive Summary
• Report Body
• Conclusions
• Recommendations
• Supporting papers
• What order is best for the above

Business Plan Contents

• Does it focus properly on the recipient
• What is the style, experience, purpose and expectation
• What is the report’s objective – is it clear
• What are the readers’ expected knowledge, intentions, seniority
• What is the report meant to achieve
• Are there any sensitivities
• What is expected of you as the reader

Analysing The External Environment of the Firm

• Does the Business Plan cover this in detail
• What are external issues
• Economic
• Financial
• Institutional
• Regulatory
• Reputational
• Competition
• Barriers to entry
• Existing players
• New entrants
• What is the USP
• On-demand or Committed
• Raising Debt
• Raising Equity
• Equipment Funding – various possibilities
• Infrastructure funding
• Property funding
• Project finance
• Trade finance
• Syndications

Financial Analysis of The Plan and Its Creator

• Funding requirements
• Financial Projections – at least three years and subjected to a full conventional analysis
• Full set of previous accounts and balance sheets
• How recent are the figures
• Management or audited
• What are the assumptions made
• Is there a margin of safety
• Do the figures make sense, appear realistic and seem convincing
• Cash flow projections
• EBITDA and other key ratios
• Leverage and gearing
• Any mezzanine element
• How much and for how long
• Debt or equity or a hybrid
• How much “skin in the game” has the client invested
• The macro-environment
• Existing capital structure
• Proposed “new” capital structure
• Rights of various parties
• Inter-creditor and where applicable tripartite agreements

Analysing the Corporate and Business Strategy Set Out in the Plan

• What is the “mission statement”
• Are the objectives clear
• What is the corporate strategy of the business
• What time scale; short medium or long term
• How will success be benchmarked
• Who will drive the vision and who will implement it
• What is the business strategy
• How will business goals be achieved
• Are they realistic
• Who will accomplish this
• How will success or failure be measured
• Does it make sense
• Do you have confidence that both objectives can be achieved
• What does progress so far and the track record to date tell you

Industry Analysis – What does The Plan Cover

• The current state of the industry
• The target market
• Reference materials
• Spreadsheets
• pie charts
• bar graphs
• Other relevant data.
• Historical data about the nature of the industry
• Growth potential based on economic factors and conditions.
• A list of the major competitors in the industry
• A brief summary of their operations and similar products or services.
• A summary of the nature of the industry
• Specific information and statistics about growth patterns, fluctuations related to the economy and income projections made about the industry.
• A forecast for the industry.
• Data and industry predictions for the next five, 10 and 20 years.
• Government regulations that affect the industry.
• Is there a Competitive Analysis and Unique Selling Proposition as well as data for the direct and indirect competition
• Is there a realistic list potential stumbling blocks.

An Analysis of Management

• The board and the non–executives
• The Chairman and the CEO
• Senior Management
• For both the above
• Track record
• Reputation
• Skillsets
• Age and Experience
• Qualifications
• Previous roles
• The risk/reward proposition
• Can they make it happen in your view
• Is there a disconnect
• Does all management buy-in to the Plan
• Were key players consulted
• What is your experience of dealing with the team
• What do your existing respected clients say about them
• What is the industry view
• Is the chain of command optimal
• Flat or top-down or bottom-up style
• What is your view of them
• If there are any meaningful doubts, walk away

Target Market in the Plan

• What is the target market
• Is there a group of customers that have a similar need for the product or service
• Will those potential clients buy the product
• Is the business satisfying an existing need or creating a new product
• Demographics analysis
• Geographic analysis
• Psychographic analysis – Why do they buy?
• Behaviouristic: What makes the target clients decide to do business with you
• Can this be achieved
• What is the evidence to date
• What have competitors done

Competition Analysis

• Who are the most important competitors?
• What are their main strengths and weaknesses?
• How can this business be different?
• How can the product or service be more competitive?
• What are competitors’ pricing policies?
• How do these affect the projected sales strategies?
• Are main competitors and their estimated market shares listed and understood?

Human Resources & Operations in the Plan

• What is the existing Management Structure
• What management tools are used
• Who actually runs the business
• How many people are employed and will be employed (Full Time / Part-Time)
• What types of skills and/or experience are already in place.
• What is needed
• What training will the workforce require to be able to meet the future plans?
• What measures will be adopted to ensure employee loyalty?
• Incentives & compensation systems – will they help drive value creation
• How soon will it be necessary to expand the workforce?

Implementing the Plan

• What Balanced scorecard will be used
• Is it tried and tested and fit for purpose
• Change management capabilities
• Key drivers
• Key responsibilities
• KRI’s & KPI’s
• How will success be measured
• What will the early warning signs be
• Who will have strategic control and oversight responsibility
• What MI or data will be made available to enable stakeholders to review progress