Business Plans

The Truth about Business Plans

Chris Leong

Director of Strategy Soft Space

Engineer degree & MBA with Strathclyde University Thing I did Co-author of Like Me, Follow ME Microsoft MVP Client Development 2009 Technoprenuer Association of Malaysia Council Member 2011 Funding Lobby for the introduction of Angel Tax Incentive Founding member of Malaysian Business Angels Network (MBAN) Judge for various Business plan/Start-up Pitching competition

Use of a Business Plan

Define and fix objectives, and programs to achieve those objectives (Corporate) Create regular business review and course correction. Raise Funds (Investments, Loans & ETC) Set a value on a business for sale or legal purposes Evaluate a new product line, promotion, or expansion Communication with stakeholders Define a new business (this will be our use)

Business Plan for Start-up

Good business plans does not mean good business Business plans are not agile & nimble enough for start-ups Start-up environment are too unpredictable You dont know whether you have a customer to have a plan Most plans are too long term for a start-up

Small steps are better than comprehensive planning

Simple steps
1. First have a business model How are you going to make money 2. Get validation customer, experts & partners 3. Build minimum viable product 4. Try selling 5. Got potential customer? If yes: #6 If no: got back to #1 6. Start your business plan (Powerpoint/Word) 7. Execute

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Business model
Introducing the business model canvas
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Business model
How youre creating value
What problem does this solve and for whom? Is this a real problem?

and how youre making money from the value youre creating
Who pays? Do you sell it as a product? A service? Does one product in the portfolio subsidize another?

Business Model Canvas

Customer segments

Source: Business Model Generation

Value proposition

Channels

Customer relationships

Revenue streams

Key resources

Key activities

Key partners

Cost structure

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Business Plans
Remember to KISS
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Simplified Business Plan Outline

Executive Summary Company Summary Product Description Market Analysis Summary Strategy and Implementation Summary Management Summary Financial Plan

Four Elements Supporting Successful Plan Implementation

1. Is the plan simple, easy to understand and to act on? Does it communicate its contents easily and prac?cally? 2. Is the plan specic? Are its objec?ves concrete and measurable? Does it include specic ac?ons and dates of comple?on, specic persons responsible and specic budgets? 3. Is the plan realis?c? Are the sales goals, expense budgets, and milestone dates realis?c? Nothing s*es implementa*on like unrealis*c goals. 4. Is the plan complete? Requirements of a business plan vary, depending on the context. There is no guarantee, however, that the plan will work if it doesn't cover the main bases.

Time Frame
Opinions vary - A business plan should normally project sales by month for the next 12 months, and annual sales for the following two years. This doesn't mean businesses shouldn't plan for a longer term than just three years. It does mean, however, that the detail of monthly forecasts doesn't pay off beyond a year, except in special cases.

Business Plans Donts

Don't use a business plan to show how much you know about your business Nobody reads a long-winded business plan: not bankers, bosses, nor venture capitalists (50 pages max)

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Concept from.

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Chris Leong
Chris.leong@softspace.com.my

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