Building YOUR DREAM: A Canadian Guide to Starting Your Own Business

Building YOUR DREAM: A Canadian Guide to Starting Your Own Business

Overview

• Eleventh Edition

• Focus on Stage 5: Business Plans by Good Mayhew Yap Ford.

Learning Objectives

• LO1: Evaluate three different types of business plan models.

• LO2: Discover the importance of developing a business plan.

• LO3: Identify the components that should be included in a traditional business plan.

• LO4: Identify the elements of alternative business plan models, specifically the Business Model Canvas and the Lean Canvas.

Types of Business Plans

1. Traditional Business Plans

2. Business Model Canvas

3. Lean Business Model Canvas

What is a Business Plan?

• A business plan is a written document that describes all aspects of your business venture, serving as a blueprint for success.

  • Importance of the ‘Big Picture’:

  • Helps business owners be prepared for challenges.

  • Allows for adjustments to be made in response to changing conditions.

Business Planning Components

• Develop a Vision Statement:

  • Focuses on the 'why' of your business.

  • Should be clear, concise, inspirational, and memorable.

  • Recommended length: 1-2 sentences.

• Formulate a Mission Statement:

  • Focuses on the 'how' of your business.

  • Defines the purpose and reason for being, ideally a paragraph long.

  • Key Components:

  • What your business does (market focus and niche).

  • Planned location and geographic market served.

  • Plans for growth.

  • Elements of sustainable uniqueness.

• Define Specific and Measurable Objectives:

  • Provide means to directly measure performance.

  • Objectives should be measurable and refer to specific outcomes with deadlines.

• Develop a Realistic Business Plan:

  • Must be clear, focused, realistic, and complete.

  • Serves as a selling document to potential investors and stakeholders.

Importance of Developing a Business Plan

• Internal Use:

  • Provides a checklist to ensure all important aspects of the business are covered.

  • Serves as a timetable for accomplishing stated objectives.

• External Use:

  • Crucial for attracting resources and obtaining support.

Structuring the Business Plan

• Length Considerations:

  • Varied page count, with main points needing to be addressed swiftly.

  • Use of graphs and infographics is valuable.

  • Most Important Sections Include:

  • Executive Summary

  • Market opportunity and competitive advantage

  • Goals and business strategy

  • Detailed financials

• Types of Business Plans:

  • Summary Business Plan: Approximately 10 pages, suitable for early stages and securing loans.

  • Full Business Plan: Evolves into an operations plan, states objectives for a one-year period, typically includes a budget, useful for Board approval.

  • Operational Business Plan: More than 40 pages, used infrequently, should be avoided to maintain focus and discipline.

Who Should Write Your Business Plan?

• It is recommended that you write your own business plan to ensure authenticity and personal investment in the project.

• Seek assistance for specific areas like legal considerations, permits, and licenses.

• Writing your plan can take from weeks to several months.

Components of the Business Plan

• Letter of Transmittal: Introduction to the reader, outlining major features.

• Title Page: Includes identifying information and key contacts.

• Table of Contents: Lists major headings and subheadings.

• Executive Summary: 1-2 pages summarizing key points and facts about the venture.

• Body of the Plan:

  • Company and Industry: History, current situation, goals, and industry trends.

  • Product/Service Offering: Detailed description, stage of development, and proprietary position.

  • Market Analysis: Profile of target customers, market size, trends, competition assessment, and sales estimates.

  • Marketing Plan: Marketing strategy details, sales strategies, advertising, pricing, and distribution channels.

  • Development Plan: Status of product development and regulatory requirements.

  • Production/Operations Plan: Description of operations including location, manufacturing plans, costs, and environmental considerations.

  • Management Team: Key management personnel, responsibilities, and qualifications.

  • Implementation Schedule: Schedule for launching the business and addressing potential risks.

  • Financial Plan: Needed financing, investment terms, current financial structure, realistic projections, cash flow forecasts, pro forma statements, and break-even analysis.

  • Appendices: Supplemental material that supports the body content.

Alternative Business Plan Models

Business Model Canvas (BMC)

• A tool for visualizing, challenging, and reinventing business models.

• Used primarily by strategic managers; simplifies structure without traditional complexity.

• Nine Key Elements:

  1. Customer Segments

  2. Value Propositions

  3. Channels

  4. Customer Relationships

  5. Revenue Streams

  6. Key Activities

  7. Key Resources

  8. Key Partnerships

  9. Cost Structure

Lean Canvas

• An entrepreneur-focused and actionable business plan framework.

• Emphasizes problems, solutions, key metrics, and competitive advantages.

• Similar structure to BMC, but tailored towards specific business needs.

Summary of Learning Objectives

• LO1: Evaluation of business plan models, including the traditional plan, BMC, and Lean Canvas, incorporates essential elements like product/service, customers, marketing, value propositions, financing, resources, and implementation plans.

• LO2: Importance of a business plan is highlighted as a guide for operations, securing financing, and regular tracking of goals.

• LO3: Components of a business plan outlined, including executive summary, market analysis, marketing plans, management team, etc.

• LO4: Key elements of BMC and Lean Canvas defined, focusing on customer understanding and unique value propositions.