Business Planning

Summary

Summary Start-up Process

 

This is a description of the process to start an enterprise, a Business plan. You need to commit your ideas to paper, so you can tell stakeholders about it:

  • Investors are sure to want to see a plan to see how good the idea is and how likely it is to succeed: How much return will there be on their investment. Later if someone has invested, they will want to see how well you are performing against the plan
  • Lenders want their money to be safe, and know that you’ll be able to pay them back.
  • You may want communicate with your team to so they understand the plan and buy into it.
  • Later, the team will need to execute the plan. The Business Plan will become the set of instructions for them to do that.

 

This isn’t the only way to run a project. If you think there is better way, please let me know. This is a simple version and only a start. Each of the steps I mention probably has a process or best practice.

enterprise process

 

Start up Process

 

Business Plan

 

The business plan is the main deliverable here. It needs to contain the essence of everything that will follow, a complete set of executable instructions

 

Typical information in the business plan is

  • Introduction
  • The Problem – What problem is the business going to solve? This will be defined in the business case for each offering, so, if there is a theme in the suite of products this will describe the theme. The detail will be in the business cases.
  • The Solution – The Business will solve the problem or problems described. Again the detail will be product specific and be in the Business Cases
  • The Market – It is important to understand the market. Is it growing? Does the enterprise have particular knowledge of the market or do the product address a particular need in it?
  • The Team – an proven and effective team increases the chances the endeavor will succeed.
  • Success factors – What is good about the business and the products. What will make the enterprise successful. Ultimately why should someone believe in the business enough to invest their money in it.
  • The Business Model – How will the products make money from the opportunity? How much?
  • The Company structure – How is the company structured? Is it even set up yet?
  • Marketing Plan – This is the plan of how you will communicate the features, advantages and benefits of you product to your customers.
  • Description of Operations – This describes how the company will operate. It needs to include every aspect of day-to-day activities: accounting, legal, sales, marketing
  • Progress – What is the status of everything? Which products have products been developed or launched. Are there alliances, awards, contracts? Is there any money coming in?
  • Financial annexes – What financial progress has there been? What is forecast? What return is expected?
  • How funds would be deployed – if money is being raised how will it be spent?
  • Exit the investors typically cannot see their return until their interest is bought out. Exit might be through selling the whole enterprise to another company (a trade sale), or their investment is sold to another investor perhaps by an Initial Public Offering.

The Business Plan is different from a business case. A business case is done per product. The sum and summary of business cases are carried over to the business plan. For instance, each product will have a problem, a solution, costs and revenues. The products probably have something in common, so some of Marketing, Sales, Market, supply and operations will have something in common, so effort and costs can be shared.

 

 

Business Plan

Business Case

Cash Flow

Sum of all products

Yes

Sales forecast

Only in monetary terms

Yes

Valuation

For whole company

Of product-line, based on cash-flow of project

Funding

Yes

Maybe

Exit

Yes

No

 

 

 

Implementation of the Start-up plan

The Objective of this stage is move from wherever you are to an operational state. The watchwords are effectiveness and efficiency. Most things that need doing will be outlined in the Plan and this is a big help, but the plan is not exhaustive. There will still be decisions to make and details to fill in.

Anything in the plan is effectively approved by the Investors. Most decisions will be delegated to the management team by the shareholder agreement. Things that aren’t covered, will need Shareholder agreement, typically using a special resolution or a resolution at a shareholder meeting. Either way it is important to have strong legal basis for how the company is set up.

In general, implementing the Start-up Plan is a step in project management. There are plenty of methodologies, such as PMP or PRINCEII, and plenty of practitioners.

 

Operation

Operation is the steady state of the enterprise going business. This may happen in parallel with other steps. For instance, the company may do business, delivering products and services and invoicing for it, while it is developing other parts of the business and new products.

 

Please read on:

Business Plan.

Product Management Process.

Idea.

Solutions Marketing.

Funding Enterprises.