planning for your business - workshop for fleximoms - may 2012 - mdi
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Planning for your business
Prajakt Raut President – Angel Investors Consor2um Execu2ve Director – The Hatch Visit the Virtual Learning Center for startups at www.thehatch.in www.facebook.com/TheHatchforStartups
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An idea is not a business
A business has to be constructed around an idea
• What do you do • How do you do it • How do you make money
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A business plan is useless product.
But it is a priceless process.
Provides a structured and logical framework for planning your business
Plans means nothing. Planning is everything.
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Should address the following ques>ons
o What problem or opportunity are we addressing?
o How are we addressing it?
o How are we planning to do it?
o Why are we doing it?
The market/Target Audience
Product / service
Organiza>on & Opera>ons planning
Business case : measure against YOUR goal
Create wealth
Serve the poor/reduce unemployment/make people happy
Do what I enjoy
Etc., etc.
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A business plan has internal as well as external uses
Internal uses • Understanding business case
• Planning your business
• Provides parameters to evaluate and made adjustments
• Monitoring progress
• Ensures team alignment
• Help recruit senior personnel
External uses • Funding
• Alliances
• Board members / advisors
• Partnerships
• Mergers and acquisitions
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What’s the process of working on a business plan?
o Start with a ‘story’ -‐ ‘See the film in your mind’
o Work out rough milestones and goals
o Think deeply of how you will implement it
o Work out the ‘structure’ of an excel sheet – with costs and revenues
o Start working in the excel sheet – assump>ons are cri>cal
o Work on mul2ple ‘scenarios’
o Finally, ar2culate it into the ‘presenta2ons’
It’s a liNle bit like planning a journey
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Idea
Implementa>on
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Can solve a problem
Improve quality of life
Improve something
Fulfill a need
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Cheaper
Faster
BeNer
Fuller
Nicer
Nearer
Examples of cheaper:
Lower price 0r accessible to more people e.g .EMI?
Improve something
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Product
Service
Value
Business model
New users
New uses
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Having a good idea is not the same as having a business plan.
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SeVng up a chain of coffee shops is more than just making great coffee
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Building a coffee chain requires the following competencies • Real estate procurement
• Facili2es management
• Brand iden2ty
• Marke2ng
• Sales
• Food handling
• Supply chain / procurement
• Processes
• Standardiza2on
• HR – hiring, training, reten2on
• Service management • Legal, finance, audit
• Vendor management
• MIS
Etc. etc., etc….
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Dynamics of an e-‐commerce business
Brand Strategy
Value proposi2on & posi2oning
Target Audience
Pricing
Brand Personality
Product
Procurement
Produc2on/Packaging
Supply chain
Vendor management
Capacity u2liza2on
Portal
Technology PlaYorm
Look & Feel – user experience
Ordering mechanisms – including ‘order on phone’
Payment gateways & methods
Logis>cs
Delivery & fulfillment mechanisms
Warehousing
Logis2cs partners
Order Management
Marke>ng
Marke2ng strategy as well as tac2cal idea, sales strategy
Media Plan & Budgets
CRM Strategies & Ideas including loyalty programs, referrals, etc.
Team Roles & Responsibili2es iden2fica2on
HR policies
Team hiring & reten2on plan
E-‐commerce
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How many vendors are involved?
Technology & portal development partners
1. E-‐commerce capable
Technology partners
2. Hos2ng partner 3. User Interface partner 4. Payment Gateway
5. Tes2ng & bug fixing experts
Opera>ons partners
1. Packaging & prin2ng partners 2. Logis2cs partners 3. Recruitment consultants
4. CRM partners/CRM plaYorm
vendors
5. Database vendors 6. Process Training Consultants 7. Sod Skill Training Consultants 8. Outsourced Call Centre
Marke>ng & Brand Communica>on partners
1. Brand iden2ty specialists 2. Photographer 3. Direct Marke2ng agency
4. Social Media Agency
5. Adver2sing Agency 6. Media Buying agency
19 Partners / Vendors involved in the implementa>on process
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To make a business case around a good idea.
Objec>ve of today’s session
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Fall in love with a PROBLEM. Don’t get infatuated with a solu>on. [Allows you to try new solu2ons if one does not work]
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To have one great idea, have many of them. Thomas Edison
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Exercise 1
Iden>fy the problem or need that you want to own
Present it as:
1. The situa>on/environment [e.g. accommoda2on choices in Gurgaon are either too expensive or too basic & dirty]
2. The problem you want to address [e.g. “We want to address the problem of finding smart, cheerful accommoda2on at reasonable prices]
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Exercise 2
State the ideas that address the problem that you chose
Present all the ideas you considered and explain why you discarded some.
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Implementa>on planning
The most cri>cal component of the plan
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Implementa>on planning – things to consider
• Customer segments and value proposi2on • B2B, B2C, B2B2C
• Channels to reach them • Marke2ng strategy • Sales strategy • Revenue streams • Key ac2vi2es • Key partnerships • Key resources • Cost structures
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Crea>ng an overview of your business
• What is the pain point you are addressing or what is the opportunity you are targe2ng? i.e. the need/value proposi>on
• What is your service/product/concept? i.e. what do you do? i.e. Concept
• Whom is this service targeted at? i.e. your customers/consumers? i.e. The Target audience
• What is the business model? I.e. Who will pay how much and to whom
• What is the scale of aspira2on? i.e. how large do you see yourself as in a 3-‐5 year >me period?
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Example of a business model Types of business models
• Free for users – adver2sers pay • SAAS – pay only for service / rental • Pay per use • Pay up front • Annual / periodic payments • Pay in installments • B2B2C
Example of a business model “We have a B2B2C model. We will charge parents Rs.250 per child per month. This will be collected by the school from parents who subscribe to our service and will be paid to us at the beginning of every quarter.
Students will be pre-‐registered but subscrip2on is not compulsory and parents can choose to opt out. School will keep 20% of total revenues, which we will give them at the end of the year on achieving a pre-‐agreed minimum revenue commitment.”
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Your goals
• In the next 3 – 6 months
• In the next 12 – 18 months or 24 months
• In the next 5 years
• Indicate when you become profitable
Current achievements / status:
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Competitive landscape
• Who will you compete with? [current or in future]
• Why would someone choose you over them?
• Why do you have a chance to be a dominant player?
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Planning for your business
Prajakt Raut President – Angel Investors Consor2um Execu2ve Director – The Hatch Visit the Virtual Learning Center for startups at www.thehatch.in www.facebook.com/TheHatchforStartups