Virtual Enterprise:

Developing a Business Plan

Marcus Catsouphes and Nicholas Giglia

October 17, 2008
Agenda

Business Planning Overview

Defining the Business

Market Analysis

SWOT Analysis

Marketing Plan

Operating Procedures

Financial Analysis

Copyright © 2008 Deloitte Development LLC. All rights reserved. 1

Who Prepares a Business Plan?

• It is NOT necessarily a new business.

• Business plans can be prepared by:
– Inventors/Entrepreneurs
– Companies seeking start-up capital
– Established companies with new initiatives.
– Borrowers from a bank
– Companies going public
– A division within a larger business
– Any business owner or manager

Copyright © 2008 Deloitte Development LLC. All rights reserved. 2

Why Prepare a Business Plan?
• Understand Business Environment

• Reach Consensus

• Guide Decision-Making

• Facilitate Control

• Evaluate Performance

A good business plan connects the facts of the present

with a vision of the future.
Copyright © 2008 Deloitte Development LLC. All rights reserved. 3
Business Plan Recipe

The Problem Team

• Industry Overview • Team makeup
• Solution • Qualifications

Value Proposition Marketing

• Why will people • Attracting and
buy from you? retaining
• Unique Selling customers
Point
Financials
Business Model
• Financial
• Operating projections
procedures
• Include funding
• Company set-up requests here
• SWOT
Copyright © 2008 Deloitte Development LLC. All rights reserved. 4
Finding Information

Research in a business plan is crucial – but where can

you find the information?

Government
Company Data
Reports

Previous
Public Filings
Plans

Financial Trade
Statements Publications

Competitor
Online Sources
Business Plans

Copyright © 2008 Deloitte Development LLC. All rights reserved. 5

Elements of a Business Plan
8%
INTRODUCTORY
Statement of Purpose Objective
Company Description Personnel
15% 8%
MARKET DISCUSSION OF
ANALYSIS RISKS
8%
8%
SWOT ANALYSIS FEASIBILITY

15% 8%
MARKETING PLAN PRESENTATION
8%
OPERATING
WRITING SKILLS
PROCEDURES
23%
SUPPORTING
FINANCIAL DATA DOCUMENTS

Note: Percentages are rounded

Copyright © 2008 Deloitte Development LLC. All rights reserved. 6
Structure of a Business Plan

Company Description
(Products and Services)
Strategic Objectives

MARKET SWOT
ANALYSIS ANALYSIS

MARKETING OPERATING
PLAN PROCEDURES

FINANCIAL
ANALYSIS

Statement
Of Purpose

DISCUSSION
OF RISKS

Copyright © 2008 Deloitte Development LLC. All rights reserved. 7

Intro – Defining the Business

MISSION VISION STRATEGY

Why are we in What do we want How do we make
business? the business to profits and beat
look like 5 years the competition?
from now?

SHARED VALUES
What type of organization do we seek to be?

Vision: An idealized view of an organization’s future state. Where or what an organization

would like to be in the future.
Mission: An enduring statement of purpose. An organizations reason for being. Describes
what an organization does, who it does it for, and how it does it.
Strategy: An expression of the manner in which the organization will achieve the goals
necessary to accomplish its mission and fulfill its vision.
Values: A set of commonly held fundamental beliefs that describe the type of behavior it will
take to realize the organization’s vision.

Copyright © 2008 Deloitte Development LLC. All rights reserved. 8

Intro – Company Description

• Management Background
• Company History
• Stage of the Business
– Pioneer, Growth, Mature
• Current-Year Initiatives
– Internal Projects
– Investments
– Alliances or Joint Ventures

Copyright © 2008 Deloitte Development LLC. All rights reserved. 9

Market Analysis

• Industry Overview INDUSTRY OVERVIEW

• Market Segmentation MARKET

• Customer Profiles (vs. ANALYSIS

Company Offering) MARKET

SEGMENT

• Market Size CUSTOMER

PROFILES
• Remember the Budget…
MARKET
– Sales Potential SIZE
& SHARE
– Pricing & Margin
MARKETING
PROGRAM

Analysis of market segments and customers will drive

the marketing program … as well as the financial plan.
Copyright © 2008 Deloitte Development LLC. All rights reserved. 10
Elements of SWOT Analysis

POSITIVE NEGATIVE

INTERNAL /
Strengths Weaknesses
FACTUAL

EXTERNAL /
Opportunities Threats
POTENTIAL

Copyright © 2008 Deloitte Development LLC. All rights reserved. 11

SWOT Analysis

• More Relevant for Existing Companies

• May Reflect Strategic Choices
• Generally Forward-Looking
• Provides Insight for Business Plan

SWOT Analysis brings a strategic element to the

planning process: how well can this company compete?
Copyright © 2008 Deloitte Development LLC. All rights reserved. 12
Company’s Response

• Primary Benefit of SWOT is Company’s Response

• Address Results of Each Quadrant
– Actions to Exploit or Remedy
– Explanation of Other Items
• Intended Future Action
• Explanation of Mitigating Factors
– Time Horizon for Significant Items
• How does our SWOT compare with competitors?
• How will we manage risk?

Copyright © 2008 Deloitte Development LLC. All rights reserved. 13

Marketing Plan

• Advertising
• Brand Image
• Promotional Initiatives
• Sales Support
• Demand Management
• Remember the Budget…
– Sales Impact (Indirect)
– Cost Impact (Direct)

The detailed customer understanding gained from

market analysis helps to select the right marketing tools.
Copyright © 2008 Deloitte Development LLC. All rights reserved. 14
Marketing Plan (cont.)

• Marketing P’s: Product, Price, Placement, Promotion,

Positioning
– Product – Covered in Business Definition
– Price – Explored in Segment Analysis

• Placement, Promotion & Positioning

– Related to Distribution Channels
– Seasonal or Continuous
– Provides Customer with:
• Purchase Incentive
• Information

Copyright © 2008 Deloitte Development LLC. All rights reserved. 15

Operating Procedures

• Sourcing
– Raw Materials, Finished Goods, Other Supplies (Maintenance,
Administration)
• Production / Preparation
– How? When? How Much?
• Sales and Marketing Process
• Distribution / Delivery
– How? Where? How Fast? How Often? Channels?
• Customer Service and Quality Control
• Remember the Budget… What Will It Cost?

Copyright © 2008 Deloitte Development LLC. All rights reserved. 16

Financial Analysis
• Break-Even Analysis
– Breakeven Point =
Fixed Costs/(Unit Selling Price – Variable Costs)
– Tells a business how many units it needs to sell to make a
profit. It is not an indicator of demand

• Operating Budget
– The projected cost of running your business
– Tells a business the things on which it spends money, and
the ways it makes money

• Cash Flow
– Shows how and from where money flows into and out of a
company
– Shows how changes in the Balance Sheet and Income
Statement affect cash
– Shows how easily a company can pay its bills
Copyright © 2008 Deloitte Development LLC. All rights reserved. 17
Funding & Capital Structure
• Debt – amount of money • Capital Structure is how a
borrowed by the firm firm finances its overall
(debtor) from a creditor, to operations and growth by
be re-paid at a later date using different sources of
with interest (loans) funds (debt, equity)
• Equity – the amount of funds • Composition of a firm’s
contributed by the owners liabilities
(stockholders) of the
business, or trading a
percentage of the business
for a specific amount of
money

Why It Matters: Tells you how much more $$$ you need
to obtain to run your business!
Copyright © 2008 Deloitte Development LLC. All rights reserved. 18
Results of Financial Analysis
• Based on the financial analysis management may:
– Decide whether to continue or discontinue certain aspects of
their business
– Make or purchase certain items for the manufacture of
company products or delivering of services
– Assist in negotiating with obtaining additional funding
– Provide information that will assist management in making
decisions for conducting their business

Why It Matters: Ensures that you know what is going on

with your business!

Copyright © 2008 Deloitte Development LLC. All rights reserved. 19

 About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate
and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its
member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

Copyright © 2008 Deloitte Development LLC. All rights reserved. 21