1、Business plan reportHOW TO WRITEA BUSINESSPLANBusiness plan report2Table of ContentsPreface .41. THE ROUTE FROM CONCEPT TO COMPANY .41.1 Success factors.41.2 Stages of development .52. THE BUSINESS IDEA.82.1 Development of a business idea .82.2 Elements of a promising business idea.92.3 Protecting y
2、our business idea.132.4 Presenting to investors .143. THE BUSINESS PLAN.163.1 Advantages of a business plan.163.2 Characteristics of a successful business plan.163.3 The investors point of view.183.4 Tips on preparing a professional business plan .214. STRUCTURE AND KEY ELEMENTS OF A BUSINESS PLAN .
3、234.1 Executive summary.234.2 Product or service.244.3 Management team .264.4 Market and competition.284.5 Marketing and sales.324.6 Business system and organization .374.7 Implementation schedule.414.8 Opportunities and risks.424.9 Financial planning and financing.425. CASE STUDY: CITYSCAPE .485.1
4、CityScape: Idea and business concept.485.2 CityScape: Business plan.495.2.1.- EXECUTIVE SUMMARY .505.2.2. - SERVICE IDEA.525.2.3. - MANAGEMENT TEAM.535.2.4. - MARKET AND COMPETITION.545.2.5. - COMPETITOR ANALYSIS.555.2.6. CITY SCOPES COMPETITIVE ADVANTAGES .565.2.6. - MARKETING AND SALES.575.2.7. -
5、BUSINESS SYSTEM AND ORGANIZATION.585.2.8. - IMPLEMENTATION SCHEDULE.605.2.9. - OPPORTUNITIES AND RISKS.615.2.10. - FINANCIAL PLANNING AND FINANCING .625.3.- Critique of elements of CityScape business plan.68Business plan report3PrefaceThis Guide to writing a business plan is designed to help you in
6、developing yourbusiness idea, from concept to company. It details the contents, scope, andstructure of a business plan and the expectations venture capitalists have whenreading one, and provides valuable pointers on starting up a company.The Guide is not intended as a business studies resource nor i
7、s it a theoreticaltreatise on the nature of business plans per se. Rather, it offers practical tips to helpyou get started setting up your company. Naturally, there is no guarantee that allaspects of this Guide will be relevant to your particular company or that all topicsrelevant to your company wi
8、ll be covered. The Key questions about the mainelements of a business plan make no claim to completeness; those questions notrelevant to your specific business plan need not be answered.If you are reading this Guide because you have a business idea you want totransform into a successful company, we
9、offer you a word of encouragement: Makethe most of this opportunity!McKinsey & Company, Inc.Business plan report41. The Route from Concept to CompanyNew, innovative companies generally try to grow from a startup into an establishedcompany within five years. But they can seldom finance their activiti
10、es alone alongthe way. Rather, they are dependent on professional investors with considerablefinancial clout. For entrepreneurs, financing is an existential question the businessplan must thus be viewed from the point of view of potential investors right fromthe outset.1.1 Success factorsSuccessful
11、companies arise from a combination of five elements (exhibit 1).1. No business concept, no business. Having an idea is just the beginning of thecreative process. Many entrepreneurs are initially infatuated with their inspiration,losing sight of the fact that their idea is the point of departure for
12、a long process ofdevelopment which must face and withstand tough challenges before it can enjoyfinancing and market success as a mature business concept.2. Money matters. Without finding somebody who invests money into growing theidea into a viable business, this business will never become a reality
13、. Therefore, fromearly on a lot of attention has to be put on convincing investors to provide thenecessary funding.3. No entrepreneurs, no enterprise. Growing new firms is not a one-person job. Itcan only succeed with a team of, usually, three to five entrepreneurs whose talentsBusiness plan report5
14、are complementary. Putting together well-functioning teams is known to be adifficult process, taking time, energy and an understanding of human nature. Do notlose any time in putting your team together, and work on perfecting it throughoutthe entire startup process. The characteristics of a high-per
15、formance managementteam are discussed in more detail in section 5.3 of this Guide.4. Traditional service providers will help you clear the first hurdles. You will oftenneed the advice of professional service providers such as patent lawyers, taxadvisors, and market researchers, especially at the beg
16、inning. Getting the rightinformation early, e.g., for registering a patent, can have consequences for latersuccess or failure.5. Strong networks are a shot in the arm for every new company. Professionalguidance of potential entrepreneurs by means of a network of non-materialsponsors, entrepreneurs,
17、venture capitalists, and service providers is decisive inmaking viable ideas into real companies. Prime examples for such regional networkscan be found in Silicon Valley and the Boston area.1.2 Stages of developmentThe typical progression of the startup and development of growing companies intoestab
18、lished firms can be subdivided into three stages. The end of each stage serves asa milestone for venture capitalists by which to gauge the status of their investment.Being familiar with each stage and the challenges it poses may spare you wastedenergy and disappointment. Please note, however, that t
19、he three stages in thedevelopment of a functioning startup do not match the three phases in thedevelopment of a business plan within the framework of this competition (seeexhibit 2).If you intend to be successful, this startup process should influence both youractivities as the initiator of a busine
20、ss concept and your path toward forming yourown company. To a large extent, it is the demands of investors that will determinehow you must approach the individual stages of the startup.Stage 1: Business idea generation. In the beginning is the inspiration your solutionto a problem. It must be evalua
21、ted to determine if it delivers an actual customervalue, whether the market is big enough, and just how big it will be. The idea itselfhas no intrinsic economic value. It acquires economic value only after it has beensuccessfully transformed into a concept with a plan and implemented.You will need t
22、o start putting together your team as soon as possible, and findingpartners who can develop your product or service until it is ready for market (or atleast until shortly before). In the case of products, this usually involves a functioningprototype. You will most likely have to do without venture c
23、apital during this stage.You will still be financing your plan with your own money, help from friends,Business plan report6perhaps state research subsidies, contributions from foundations or other grants.Investors refer to this as seed money, as your idea is still a seedling, not yetexposed to the h
24、arsh climate of competition.Your objective at this stage is to present your business concept and market whichforms the foundation of your new company so clearly and concisely as to pique theinterest of potential investors in helping you cultivate your idea further.Stage 2: Business plan preparation.
25、 At this stage, it is most important to focus onthe big picture: dont lose sight of the forest for the trees! The business plan itself willhelp you do this as you must consider and weigh the risks involved, prepare for anycontingency, learn to anticipate a variety of possible situations or scenarios
26、. Youwill need to lay down plans and create a budget for the key activities of the business for development, production, marketing, distribution and finance. Naturally, youwill need to make many decisions, such as which customers or segments will youtarget? What price will you ask for your product o
27、r service? What is the best locationfor your business? Will you handle production yourself or outsource it to thirdparties? And so on.In preparing the business plan you will come in contact with many people outsideyour startup team. In addition to investors, you will talk to many specialists:attorne
28、ys, tax advisors, experienced entrepreneurs, ad experts. The business plancompetition organizers will help you get in touch with just the right people. You willalso have to begin reaching out to your potential customers, i.e., by means ofconsumer surveys, to make initial assessments of your market.
29、Always keep in mindthat customer acceptance is an essential prerequisite to the success of your company!Seek out about possible suppliers and perhaps close your first agreements. You willalso want to become aware of who your competitors are.This whole process will not come cheap. The team must earn
30、a living, you must runa rudimentary operation, and perfect a prototype. Yet at this stage, you should alsobe able to estimate your expenses. Financing will generally still be provided from thesame sources you relied on during stage one, although some investors may bewilling to make the occasional ad
31、vance.Business plan report7This stage concludes successfully for you as a new entrepreneur when an investorexpresses a willingness to finance your undertaking.Stage 3: Startup and growth. Now that the conceptual work is largely complete, it istime to start implementing your business plan.Your role n
32、ow changes from that of architect to that of builder. Business successmust now be sought and achieved on the market. The day of reckoning has comewhen you will learn whether your business concept was a good and ultimatelyprofitable one.Investor exit en route to becoming an established company. The p
33、ull-out of yourinitial investors is a completely normal step in the development of a startup, for ifeverything has gone well, your risky venture will have gradually become a stableenterprise (see exhibit 3). In the course of its short life, you have created a number ofjobs, and wooed many customers
34、with your innovative solution to their problem.Your commitment is paying off as the value of your business increases.A profitable exit has been the objective for the venture capitalist from the outset.Capital recovery can happen in very different ways. Normally, the business is soldto a competitor,
35、supplier, or customer, for instance, or it is listed on the stockexchange (the initial public offering or IPO). It is also possible for investors whowant out to be paid off by the other partners.Business plan report82. The Business IdeaThere is nothing in the world as powerful as anidea whose time h
36、as come.Victor HugoThe above statement undoubtedly applies to ideas for starting a new business. Buthow do you come up with such an idea? And how can you know if the idea for thebusiness will have a promising future?Studies show that the lions share of original and successful business ideas weregene
37、rated by people who had already had several years of relevant experience.Gordon Moore and Robert Noyce, for example, had a number of years behind themat Fairchild Semiconductors before teaming up with Andy Grove to form Intel. Butthere are also examples of revolutionary ideas brought to life by mere
38、 novices, asSteve Jobs and Steve Wozniak demonstrated when they dropped out of university tostart Apple.2.1 Development of a business ideaIn economic terms, a spark of genius is worthless, no matter how brilliant it may be.For an idea to grow into a mature business concept, it must be developed andr
39、efined, usually by many different people.The initial idea must first pass a quick plausibility check. Before you follow up on anidea, you should evaluate it in light of its (1) customer value and (2) market chancesand its (3) degree of innovation, as well as considering whether it will be both (4)fe
40、asible and profitable.Talk your idea over with friends, professors, experts, and potential customers.The broader the support you find for your idea, the better you will be able todescribe its benefits and market opportunities. You will then be well preparedwhen it comes time to discuss your project
41、with professional investors.Is your idea really novel? Has someone else already developed it or even appliedto patent it?Will it be possible to develop your idea in a reasonable period of time and with ajustifiable level resources?It takes at least four weeks to develop a business idea. In light of
42、the multiplestages of development, it is improbable and fairly unrealistic that you will spendfewer than four weeks developing your concept. Generally, a business idea is notworthy of being financed until it is so concrete that it can be launched on the marketBusiness plan report9in the foreseeable
43、future at reasonable risk. Investors talk of the seed phase of abusiness concept, which usually has to be financed with soft money, i.e., fromsources that as yet place no hard and fast demands on the success of the idea.The seed phase can take longer, in particular if the idea is ahead of its time.A
44、lthough the perfect product has been found, it cannot yet be marketed because thedevelopment of complementary technologies or systems is still in the works. Oneexample is the Internet. The ideas for marketing products and services came early,but a lack of security in the available payment systems ha
45、mpered and delayed itscommercial exploitation for some time.2.2 Elements of a promising business ideaA business idea can be considered promising if it has the following four elements(exhibit 4):1. Clear customer valueThe key to success in the marketplace is satisfied customers, not great products.Cu
46、stomers spend their hard-earned money to meet a need or solve a problem. Thefirst principle for developing a successful business idea is thus that it clearly showswhich need it will fulfill and how it will do so.Initially, many entrepreneurs have the product and the technical details of designand ma
47、nufacture in mind when they speak of their solution. Not so the investor the investor first looks at the idea from the perspective of the market. For investors,customer value takes top priority, and everything else is secondary. Whats thedifference? If innovators say, Our new device can perform 200
48、operations perminute, or Our new device has 25% fewer parts, they are focusing on the product.Business plan report10By contrast, saying, Our new device will save the customer a quarter of the timeand therefore 20% of the costs, or Our new solution can boost productivity by upto 25%, adopts the custo
49、mers point of view. The product is merely a means ofdelivering value to customers.The customer value of a product or service expresses what is novel or better aboutthe item when compared to competitive offers or alternative solutions. As such, itplays a key role in setting your product apart from ot
50、hers a core issue inmarketing, as we will learn and is essential to the market success of your businessconcept. Try, whenever possible, to also express the customer value in figures if youcan.Marketing theory states that the customer value must be formulated into a uniqueselling proposition or USP.
