Preparing a business plan
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Preparing a Business Plan. Allen Bolton & Stephanie Meadows February 27, 2007. Why create a business plan. Communicates strategic direction Communicates objectives Provides for common agreement and buy-in Benchmark to measure performance Shares budget requirements.

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Preparing a Business Plan

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Preparing a business plan

Preparing a Business Plan

Allen Bolton & Stephanie Meadows

February 27, 2007


Why create a business plan

Why create a business plan

  • Communicates strategic direction

  • Communicates objectives

  • Provides for common agreement and buy-in

  • Benchmark to measure performance

  • Shares budget requirements


Why create a business plan in academia

Why create a business plan in academia

  • Considering a new department, division or center (will need BOT approval too)

  • Considering a new clinical service line or research shared facility

  • Considering a spin-off company

  • High-dollar faculty recruits

  • New facilities

  • Developing a new research or training program


Before you begin writing

Before you begin writing

  • Define target audience

  • Determine content and level of detail

  • Map out the plan’s structure

  • Identify main issues to be addressed


Key elements to a business plan

Key elements to a business plan

  • Executive Summary (write this section last)

  • Vision/Mission statement

  • Goals and objectives

  • Description of products and or services

  • Market analysis

  • Operational plan (organizational structure)

  • Financial plan

  • Business Risk


Executive summary write this last

Executive Summary (write this last)

  • Clear definition of the “business”

  • Assessment of markets

  • State competitive advantages

  • Introduce leadership team and roles

  • Financial strengths and use of funds

  • Make it enthusiastic, professional, complete, and concise


Mission statement

Mission Statement

  • Clearly state your long-term mission

    • Try to use words that will help direct growth but be as concise as possible.

    • Explain your reason for being and your guiding principles.


Goals and objectives

Goals and Objectives

  • Goals are destinations – where you want to be

  • Objectives are progress markers on the way to goal achievement

  • List 3-5 year goals

  • State specific, measurable objectives for achieving your goals

    • List market-share objectives

    • List revenue/profitability objectives


Products and or services

Products and or Services

  • Describe in depth your products or services (technical specifications, drawings, photos, brochures, and other bulky items belong in Appendices)

  • State factors that will give you competitive advantages or disadvantages

    • Examples include level of quality or unique or proprietary features.


Marketing analysis

Marketing Analysis

  • Do your market research

  • Summarize your primary target market

    • Include geographic location, demographics, target market needs and how these needs are currently being meet.

  • Highlight trends

    • Emphasize growth trends, trends in consumer preferences, and trends in product development.


Marketing analysis1

Marketing Analysis

  • Growth potential and opportunities

  • Barriers to entry and how you will overcome any barriers

    • Examples include high capital cost, high production cost, high marketing cost

  • Marketing strategies and sales plans

    • The 4P’s – product, price, place and promotion


Operational plan

Operational Plan

  • List key management by name

    • Use a simple organizational chart to illustrate the structure.

  • Include previous accomplishments to show that these are people with a record of success.

  • Summarize number of years of experience in this field.


Financial plan

Financial Plan

  • Outline a high-level financial plan that defines your financial model and key assumptions.

    • The plan should include expected annual revenues and profits for the next three years.

    • All detailed schedules such as P&L projections, cash flow projections, balance sheet and ratio analysis should be included appendix.

    • Comment on expected direct and indirect return on investment.


Common omissions in budget preparation

Common omissions in budget preparation

  • Including salaries but omitting fringe benefit cost

  • Excluding a factor for annual merit increase or a CPI increase for expense

  • Failure to factor in contra revenues examples are taxes on revenue, refunds, bad debt or contract adjustments

  • Underestimating travel expense

  • Related marketing or promotional items for conferences or events (examples t-shirts, bags, coffee mugs)

  • Current pricing for services needed (pharmacy, labs, testing)


Resource requirements

Resource Requirements

  • List requirements for the following resources:

    • Personnel

    • Technology

    • Finances

    • Promotion

    • Products

    • Services

    • Facilities


Risks and rewards

Risks and Rewards

  • Summarize the risks of the proposed project and how they will be addressed.

  • Estimate expected rewards, particularly if you are seeking funding.


Key issues

Key Issues

  • Near term

    • Identify key decisions and issues that need immediate or near-term resolution.

    • State consequences of decision postponement.

  • Long term

    • Identify issues needing long-term resolution.

    • State consequences of decision postponement.

  • If you are seeking funding, be specific about any issues that require financial resources for resolution.


Final tips

Final Tips

  • Avoid unnecessary jargon

  • Economize on words

  • Use short crisp sentences and bullet points

  • Concentrate on relevant and significant issues

  • Relegate detail to appendices

  • Write executive summary last

  • When in doubt, write a business plan… it will usually distinguish your program/project in academia


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