Rizal Philippines | January 24, 2014
I am just about to complete checking the Business Plan submitted by the MM and Spentrep class last semester, some 50 calendar days ago. They were supposed to submit this last January 10, 2014 which was 45 calendar days after the semester ended.
I know that we need to develop this skills among our MBAs especially those are taking Entrep as elective subject. A BP is a guide on how to start and run your start up well. (Although the trend now with other quarters are to: 1. come out with the business model as your guide/dashboard 2. and for lean start up to come up with MVP - minimum viable product at once and test it - at once. Rapid prototyping, having a product is very important if you are to race to the market place and be the market leader, and rake in the profits.
Some salient points:
1. The Business Plan is 25 points of the total grade. It is the final exam, the convergence of all the learning for the semester.. This is where we apply the lectures, the cases, the special reports, and the slideshare presentation on BP, the group creative activities on Micromarket, the PDQ.
2. The BP format as prescribed has to be followed and not less than 40 pages as specified in the syllabus. Before, if the paper does not follow the format or is less than 40 pages, it gets a 1. This quarter is more forgiving.
3. Be sure: there is a table of contents and executive summary. The organization the offerings are not mentioned at the bottom but are important nevertheless
4. At the concept, as part of the learning on lean start up, you must have 3 word
tag for your business. It should be catchy and denote your business that is
MAGIC, UNIQUE, DIFFERENTIATED, MESMERIZING, SEDUCTIVE, MAGNET, ENCHANTING, A WOW BUSINESS.
4. The salient points to be graded are:
1.
Business concept and model 10%
Concept - 50 words or less that describes the business: the product, benefits, the PTM, and the location, and even positioning. We did a lot of exercises on this on group creative activities and impromptu exercises in the class
Business Model - the BM canvass has to be used, and briefly described. Focus on the MVP. This is the dashboard of the business. The BM answers a basic question - how does the business make money. Therefore the cents and pesos have to be specified in the cost and revenue portion of the BM. It should not escape the eye of the student, if any of the elements of the BM can be innovated.
2.
Business objectives 10% VMO KRAPI
Hand outs have been given at the start of the semester and they must be followed. After going through the FS, the student goes back to the SMART objectives and the KRAPI
Most students forget the job generation part; we have to remember the Ateneo Nation Building motto. How do you contribute to nation building
3.
The Product 10%
1. What are the customer wants and needs being satisfied;
2. What are the demographics and psychographics of the PTM
3. What are the features? What are the benefits?
4. Competitive analysis ( on many fronts, the product, the company, distribution, ads, promo, special deals, SWOT if you may)
5. Alpha and beta testing
For the lean start ups:
1. You need the prototype, the Minimum Viable Product
2. The 3 word tag to capture the imagination of the prospects
Surprisingly, many miss this out.
4.
Market estimate: 20%
The outcome of this portion is to make an intelligent guess estimate of the the sales. Where do you base your sales..
The case for this is Pranav, The group creative activity is micromarket
The macro and micro analysis (which includes the traffic count and analysis of sales of similar establishments in the same service or catchment area) Unfortunately, many stop at the micromarket and fail to make a jump to the sales estimate
This is the proving portion, after having studied your product, the customer, and the competition, you can sell this much. This ME portion supports the Financial. Will you have enough volume to break even?
Is the risk worth taking because you have enough buyers.
Will you do a pilot or market test? Did you do an FGD?
5.
EDS 20%
Enterprise Delivery System; this portion was taken in MICO. This is SPATRES mentioned in the handout by Morato on Strategtic Planning.
This is is SPATRES: Strategy, Program (Projects) Activities, Tasks, and Resources
This is ITO: INput Throughputs, and Outputs, Matching and Outcomes
Inputs: 4M: materials, money, materials machinery
Throughputs: activities, projects, programs, Job Descriptions, business process and improvements:; job descriptions, controls, manuals
Outputs: Products and services
Matching: 4ps of marketing. The products and services must match the Customer Wants and Needs.
Outcomes: The business objectives mentioned in the first part of the BP.
HOW DO THE OBJECTIVES CONNECT WITH THE KEY ACTIVITES AND RESOURCES (This is the strategy portion.)
You must be able to discuss this in great detail; and it could not be less than 40 pages. Please do not submit that contains a one page infographic.
6.
Financials: 20%
It must contain at least 3 elements:
1. Cash flow
2. Profit and Loss
3. Balance Sheet
This office tries to furnish the student with spreadsheet template (Excel on how to do this easily) Most have built in ratio. You must know how the thing works, not necessarily how to do the Excel. The student must understand how this connects with the objective, key resources and activities.
7.
Compliance with the regulators: 5%
You must conform to the local national, and even international regulations. And may include ISO accreditation. Discuss how you are going to comply. Will you be a good citizen? Will you pay the correct the taxes? How will you deal with difficulties with regulators: with corruption and facilitation?
8.
Exit strategy: 5%
This refers to two business situations:
When things get bad: how to bail out? How do you liquidate, what are your contingencies to lessen your loss? What are the red flags? What are the thresholds for bailing out?
When business is good and is profitable:
Plans for succession, IPO, selling for profit? How do you add, multiply, subtract, or divide?
Unfortunately many students neglect this and get nothing as a grade for this. Please pay attention on this section
Please follow this format. Please see my slides on BP at slideshare on BP preparation
N.B.
1. The BP should be 40 pages or more. When you do your EDS well and thoroughly, it could be more than 40 pages, just for EDS
2. Have a table of contents. (You do that for strama)
3. Have an executive summary, although you write this last
For the last term, 3 students got a grade of 1 for the following reasons: their BP were less than 40 pages as specified; they did not contain the above mentioned parts, did not have enough data and details to prove that the business is viable, and can be operated; and were badly written. Some were cut and paste afffair, which is a bad practice for somebody who will soon be called a Master of BA
