Why undertake ?, "There is no event that occurs without a reason that justifies it", "If you want to be rich, happy and successful, you should only dedicate yourself to what you are passionate about"
"Small opportunities are the beginning of big companies" (Demóstenes)
elaboration-plans-business-presentationTo be or not to be an entrepreneur
If you are undecided about this decision, I invite you to answer these 5 questions:
1. Are you clear about your abilities, dreams, ideals, passions?
2. Are you willing to give your all to fulfill your most desired dreams?
3. Even if everyone around you thinks that what you want to do could be wrong, would you do it?
4. If you fail in what you undertake, would you try again as many times as necessary?
5. Do you like to launch into new adventures willing to learn from the multiple experiences (positive or negative) that you live?
If you answered affirmatively to all the questions, or to most of them, don't think twice, your destiny is to undertake.
You have 2 options: undertake and dedicate yourself completely to achieving your goals or let yourself be guided by your fears and end up living a life you did not want…
decision is yours.
Skill is what you are capable of. Motivation determines what you will do. Attitude determines how well you will do »(Lou Holz)
" Anyone who is not making mistakes is not trying hard enough "(Wess Roberts)
Your time is limited, don't waste it living someone else's dream. Steve Jobs
In the USA the Beatles were ignored for their haircut.
"80% of success is based simply on insisting" W. Allen
"Fear does not exist anywhere except in the mind" (Dale Carnegie)
Didn't success come to you? Go to him. (Marva Collins)
It must be a clear, concrete and precise document capable of convincing a potential investor of the opportunity that investing in the business represents. It must also be a guide for the start-up of the company.
Source: Karen Weinberger Villarán, Business Plan.
Importance of the Business Plan
• Convince yourself of the idea before making a significant financial and personal commitment.
• Get a loan from the bank.
• Attract potential investors.
• Convince other companies with which you want to form alliances.
• Explain how the company would work to the companies with which it intends to establish medium and long-term contracts.
• Attract employees.
• Assist managers to set goals and plan for the long term.
• It works as a great motivator by giving a more realistic framework to the idea.
• Helps to organize and refine the entrepreneur's ideas.
• Verify the profitability of the business.
• It is an important sales tool.
How is a business plan written?
It is important for you to know that to write a business plan:
- It is not necessary to have completed the analysis of one of the stages of the business plan to continue with the next stage.
- There is no sequence on the preparation of the business plan and its index is only a reference.
- Each participant involved in the development of the business plan must launch their creativity, flexibility, knowledge and initiative.
- It should be developed with a spiral approach, that is, every time a decision is made in some part of the business plan, it is necessary to review whether said decision requires adjusting other parts of the plan.
"One should not think that there are unattainable things" (Euripides)
Comparison of objectives and scope
Objective Tool Scope Approach planning
Business plan Identify the business opportunity and the technical, economic, social and environmental viability of the business. · Surrounding analysis
· Internal analysis
· Business model
· Strategic plan
· Action plans by areas
· Demonstrate viability of the business idea. In the analysis of opportunities and economic, technical and market viability.
Strategic plan
Feasibility study
Project evaluation Establish the long-term plan of the company, based on an analysis of the environment and the internal environment of the organization. · Surrounding analysis
· Vision, mission, strategic objectives, generic strategy, philosophy and institutional values. In the projection of the company.
Know the feasibility of implementing an investment project while defining the main elements of the project. · Market research
· Technical aspects · Administrative aspects · Financial aspects. In evaluating the viability of the project in fundamentally technical or operational terms.
Know the economic and financial profitability of an investment project. Compare flows of income and expenses. · Based on the cash flow, the NPV and the IRR are determined. In evaluating the project in terms of liquidity and profitability.
"The businessman who uses yesterday's formulas for success for today's world may not have a business tomorrow" (John Mason)
If your business idea is not risky, then you are not undertaking
"The excellence of a leader is measured by the ability to transform problems into opportunities" (Peter Drucker)
Structure of a Business Plan
Business Plan for a new company
Executive Summary
-Formulation of the business idea -Analysis of the
opportunity
-Presentation of the business model
Analysis of the environment
-Analysis of the industry, the market and
-Estimate of the demand
Strategic planning
SWOT - analysis
-Vision
-Mission
-Objectives strategic
-Strategy generic
-Fonts competitive advantages
Strategic Marketing Plan -Partnerships
Operations plan
-Design of the structure and human resources plan
Projection of financial statements
Financial evaluation
Conclusions and recommendations
Annexes
"The only real mistake is the one from which we learn nothing" (John Powell)
The executive summary presents the profile of the company, the product or service that is to be offered, the target market that is to be satisfied, the strategies that will be used to achieve the objectives, the expected economic results and the financial indicators of the plan of business.
▪ It is a brief description of the most relevant aspects of the business plan.
▪ It is the most important section.
▪ It must be able to arouse the investor's curiosity. ▪Its maximum length is about 3 pages.
"The supreme wisdom is to have dreams big enough not to lose sight of them while pursuing them" (William Faulkner)
"Talent wins games, but teamwork and intelligence win championships" (Michael Jordán)
«Put your heart, your mind, your intellect and your soul even in your smallest acts.
Herein lies the secret of success »(Swami Sivananda)
- How the idea was born
- Since when it exists
- What reason it was created and
- The most important events that have taken place during its development and evolution
"Ask yourself if what you are doing today brings you closer to where you want to be tomorrow" (James Brown)
"Opportunity lies at the heart of difficulties" (Bruce Lee)
"Only the world triumphs who stands up and looks for circumstances and creates them if he does not find them" (George B. Shaw)
Surrounding analysis
Economic factors
The entrepreneur must know:
The behavior and trend of the exchange rate, inflation and interest rates, the growth of national production by sector. The average family income and the saving capacity of the population. Employment and unemployment levels, as well as employability indices, among others.
Socioeconomic factors.
The socioeconomic factors with the greatest impact on companies are:
The size of the population and the distribution of people in the socioeconomic levels of the countries where your target market is located.
The age structure of the population and its geographical distribution. The quality of the available workforce and the technical and professional capacity of the workers.
The level of education and culture of the population and the percentage of the poor and illiterate.
• The willingness of the target audience to purchase and consumption habits.
Surrounding analysis
Political and legal factors
An exporting company must take into consideration:
• The direct and indirect taxes that you must pay.
• Antitrust laws.
• Tariff preferences.
• Investment promotion policies in certain areas of the country.
• Changes in the political structures of the countries to which it exports.
• National and international provisions on what can and cannot be done in each country.
• Local regulations and deregulations.
• Local and international bureaucracy and levels of corruption.
Technological factors
Technology can substantially increase the competitiveness of a company.
Technology is essential to analyze the threats or opportunities that may arise in an industry.
Environmental factors
Impacts that world development has generated:
• Global warming.
• Water scarcity.
• The change from food-oriented crops to crops oriented to energy generation.
• The water contamination.
• The climatic changes that have been generating great natural disasters.
• Space pollution.
• The transformation of large forest areas into agricultural areas.
• The transformation of agricultural areas into urban areas.
Market survey
Entrepreneurs often have many questions, the answers to which are not always available from secondary sources on the market.
The entrepreneurial team must carry out the market survey or commission the study from a consultant or a company specialized in market research.
a) Regarding customers
What is the profile of the potential client?
What is the behavior of my potential clients?
What would be the level of acceptance of the product or service?
"Success is not achieved only with special qualities. It is above all a work of perseverance, method and organization »(Víctor Hugo)
b) Regarding competitors
It is essential that the entrepreneur be very clear with whom he is competing and with whom he is not.
When analyzing competition, the following questions should be answered:
Who are the competitors?
What are substitute goods or services?
What products and services do they sell?
How much do they sell in the year?
What are the prices of the competition and how do they compare to ours?
How do our products compare to those of the competition?
Who is the market leader and what is the attribute that identifies you as such?
"If you find your passion… then it is no longer a job!" (LA Reid)
c) Regarding suppliers
Choosing suppliers well is as important and strategic as determining the target market to which the company's marketing strategies will be directed.
In this case it is important to know:
What links or relationships do you have with input providers?
What relationships do you have with providers of financial resources?
What are your payment terms?
Do they provide short or medium term credit?
We are what we do, day by day. So excellence is not an act, but a habit "(Aristotle)
Industry analysis
The analysis of an industry implies the study of those forces that could directly affect the development and performance of a company.
It should not be a description of variables, but an in-depth analysis that allows the following five questions to be answered:
1.- What are the barriers to entry to a particular industry?
The most common entry barriers to an industry are:
• High economies of scale
• Difficult differentiation of existing products or services
• High capital requirements
• Difficult access to distribution channels • Government, regional or municipal regulations
“Man discovers himself, when faced with the obstacle” (Antoine from Saint-Exupery)
2.- What is the bargaining power of the company's suppliers?
The bargaining power of suppliers is generally high when:
• The supplier market is dominated by few, but large suppliers.
• It is not easy for the new company to find substitute goods in the supplier market.
• The new company is an unimportant customer to the supplier and therefore has little interest in providing it.
• The new company is forced to buy from a certain supplier because the quality of that input is critical to the success of the company.
• The cost of changing suppliers is high, because the processes between both companies have already been standardized.
"Do what you can, with what you have, wherever you are" (Theodore Roosevelt)
3.- What is the bargaining power of my clients or buyers?
In general, the bargaining power of buyers or clients is high when:
• They buy a large part of the total production of the industry
• The product that is bought in an industry represents an important part of the supplier's sales
• When you can change suppliers at a very low cost
«Conquering fear is the beginning of wealth »Bertrand Russell
4.- Who are the competitors and what is the level of rivalry between them?
• An analysis of strategic groups should be carried out, in order to identify which companies have similar characteristics and
• Which approach their clients with similar strategies.
• All companies with similar characteristics and strategies will be considered direct competitors.
This analysis is essential, since the marketing plan and the operations plan will be considered based on it.
"You do not get ahead celebrating successes but overcoming failures" (Orison S. Marden)
5.- What are the industry exit barriers?
• The investment amount is usually the biggest exit barrier, so they cannot withdraw from the industry without having fulfilled their obligations
• The obligations that have been generated with the workers
• The contracts signed with the clients
«Stop thinking in terms of limitations and start thinking in terms of possibilities »(Ferry Josephson)
View
The vision is realized by formulating an ideal image of the project and putting it in writing, in order to create the dream (shared by all those who take part in the initiative) of what the company should be in the future.
Advantages of establishing a vision
• It fosters enthusiasm and commitment from all the parts that make up the organization.
• Incentives that from the CEO to the last worker who has joined the company, take actions according to what the vision indicates.
Remembering that the top managers have to lead by example.
• An adequate vision avoids modifications, otherwise any essential change would leave the components of the company without reliable guidance, promoting general insecurity.
"The man who has made a mistake and does not correct it, makes another major mistake" (Confucius)
Mission
It is the reason for being of the company, the reason why it exists.
The importance of the mission
It is essential that the company's mission is properly stated because it allows:
• Define a clear and determined corporate identity, which helps to establish the personality and character of the organization.
• It gives the opportunity for the company to know who its potential customers are.
• It provides stability and coherence in the operations carried out.
• Define the opportunities that arise in the event of a possible diversification of the company.
"There is no leader without mission and there is no mission without passion" (Sergio Pascual)
Business strategy
Strategies refer to how organizations achieve their goals.
Cost leadership strategy
It is generally applied when the entrepreneur wants to capture a large portion of the market and it does not value differentiation.
The cost leadership strategy is usually effective when:
• The market is made up of many price-sensitive buyers.
• There is little chance of achieving product differences.
• Buyers do not value differences between one brand and the other.
• When there are a large number of buyers with considerable bargaining power.
"Success seems to be a matter of persevering when others have already quit" (William Feather)
Differentiation Strategy
• They are in a constant struggle to maintain the characteristics or attributes that show their difference.
• They must have a good marketing budget, to make known to customers the characteristics that make their product or service unique.
• Your product must be valued by the client and therefore be willing to pay a price higher than the market average.
Focus strategy
• The company “focuses” only on a clearly defined market share or segment.
• This may be because the entrepreneur is NOT interested in covering a large proportion of the market.
• His resources, capacities and core skills do not allow him to reach an important part of the market.
"Success is achieved by turning each step into a goal and each goal into a step" (CC Cortez)
Sources generating competitive advantages
Competitive advantage is that which a company possesses and which serves to generate value for its clients, rare and difficult to imitate on the part of current or potential competitors.
• Brands, patents, intellectual property registries
• A privileged location, a talented and committed workforce
• A leading and visionary entrepreneur
• A management information system that allows you to anticipate changes in the environment and make quick and good decisions
"Those who say that something cannot be done are often interrupted by others who are doing it" (Joel A. Barker)
Marketing plan
The segmentation variables can be many and very varied, but the important thing is to select the one or those that are relevant to differentiate consumer groups.
Marketing objectives
Every plan must contain objectives and the first objective of the marketing plan is to:
• Sales
• It should be established based on the estimated demand in the market survey
• To the expectations of the entrepreneur and to the production capacity and indebtedness of the company
• This objective should be set in monetary and unit terms
All the men I know are superior to me in some way. In this sense I learn from them (Ralph W. Emerson)
"The future belongs to those who believe in the beauty of their dreams" (Eleanor Roosvelt)
The Marketing Mix
Description of the product or service
When describing a product, reference is made to:
"Man discovers himself, when facing the obstacle" (Antoine de Saint-Exupery)
Price strategy
The price list will be set according to the cost structure of the company, the prices of the competition, the perception of customers and the economic results expected by the entrepreneur.
Table of possible combinations between quality and price
"Anything that can do or dream, begin it. Audacity contains in itself genius, power and magic »(Goethe)
Distribution strategy or place
It refers to the way how the final customer or consumer will be reached. At this point, it is necessary to analyze which are the distribution channels that the industry has, that is:
• Is it sold directly to customers?
• Are sales representatives, distributors or agents used?
• What are the advantages and disadvantages of using third parties to sell?
• How do you access “valuable” clients?
• How many distributors are there and how are they geographically distributed?
• Do the distributors have any bargaining power?
• Are the distributors associated?
"Man never knows what he is capable of until he tries" (Charles Dickens)
Promotion strategy
The fundamental objective of the promotion strategy is to communicate and make known to the target market the benefits of the product or service offered.
Promotion strategies are related to:
• Advertising activities.
• Direct marketing.
• personal sale.
• Sales promotions.
• Coupons.
• Giveaways.
• Joint promotions.
• Loyalty programs.
• Public relations.
"Failure defeats losers and inspires winners." Robert T. Kiyosaki.
Positioning strategy
In order to occupy a place in the mind of the consumer or client, the entrepreneur will seek to differentiate himself in order to be remembered for some particular attribute.
• These differences must be significant so that they can be easily perceived and remembered by the target audience.
• There must be a sufficiently large demand that values the additional benefit and is capable of recognizing a substantial improvement with respect to the products or services offered by the competition.
In times of crisis, only imagination is more important than knowledge. (Albert Einstein)
Operations plan
If the entrepreneur does not have the appropriate infrastructure, in a convenient location and if he does not have an efficient production and distribution system, it is difficult for the business to be sustainable, despite the benefits of the product or service.
The operations plan aims to establish:
1. The "production objectives" based on the marketing plan.
2. The "production processes" based on the attributes of the product or service.
3. The “production standards” that will make production efficient, satisfy customer demands and the profitability expected by shareholders.4. The "investment budget" for the transformation of inputs into final products or services.
"An entrepreneur sees opportunities where others only see problems."
Michael Gerber.
Human resources plan
People are the key element of business success and therefore a quality human resource could be an advantage for the company.
The human resources plan must consider:
• The main functions that are required in the business.
• The skills and knowledge that each role requires.
• The charges that will be permanent in the company.
• The tasks, which because they are temporary or require a high degree of specialization, could be carried out by people or companies outside the company.
• The key positions and the own staff that will do the tasks that allow the company to differentiate itself from the rest.
• The organization chart that represents the general structure of the company.
• Policies and strategies that will help manage human resources.
• The company's payroll, that is, the remuneration budget.
Financial plan
It will allow the investor to know what the economic remuneration will be in exchange for the money invested, that is, if the plan will be economically and financially viable.
The financial plan is extremely important because it allows:
• Determine the economic resources necessary to carry out the business plan.
• Determine the total costs of the business, that is, the costs of production, sales and administration.
• Determine the amount of initial investment necessary to start the business.
• Determine financing needs.
• Determine the sources of financing, as well as the advantages and disadvantages of each alternative.
• Project the financial statements, which will serve to guide the activities of the company when it is running.
• Evaluate the economic and financial profitability of the business plan.
Cost analysis
The production cost is made up of:
a) Direct materials
b) Direct labor
c) Indirect manufacturing
costs d) Administration costs
e) Marketing costs
f) Variable costs
g) Fixed costs
"Only he who gives up is lost." Hans- Ulrich Rudel
Initial investment
The initial investment budget will include all:
• Fixed, tangible and intangible assets that are needed to start business operations.
• Some fixed assets may be land, transportation units, machinery, furniture, tools, computers.
• Some intangible assets may be computer licenses, patents, technology transfers, among others.
"You do not get ahead celebrating successes but overcoming failures" (Orison S. Marden)
Working capital
• Working capital is used to finance the company's first production before receiving its first sales income.
• It will serve to finance raw materials, pay direct labor, grant credits in the first sales and have certain expenses that the business implies.
Example to calculate working capital
In this example, the maximum accumulated deficit is 200, so that would be the amount of working capital required to finance the operations of the company during the first five months.
Cash flow projection
Cash flow is the basic tool for financial planning and project evaluation.
It serves to:
• Plan, order and company for a certain period.
• See if it can be purchased on the scheduled dates.
• Evaluate the possibility of managing additional financing.
• Evaluate the need to change the term conditions in the collection from clients and the payment from suppliers.
• Determine the economic utility of the project and estimate its profitability.
"There are no secrets to success. This is achieved by preparing, working hard and learning from failure. Colin Powel.
