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Andrews Corporation

Andrews Corporation. Business Plan. Why Prepare a Business Plan?. Three Purposes of a Business Plan Development Determine where the company needs to go Forewarn of possible roadblocks along the way Formulate responses to contingencies Management Keep the business focused on success

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Andrews Corporation

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  1. Andrews Corporation Business Plan

  2. Why Prepare a Business Plan? • Three Purposes of a Business Plan • Development • Determine where the company needs to go • Forewarn of possible roadblocks along the way • Formulate responses to contingencies • Management • Keep the business focused on success • Track and monitor progress • Communication • Attract investors and strategic business partners • Attract high-quality employees

  3. What is a Business Plan A detailed document that outlines a company’s goals and strategies

  4. What is a Business Plan • The business plan should answer: • What is the growth potential of this company or project? • What does the company do? • How does the company operate? • What are the projected revenue and profit margins? • How is the capital going to be used? • What type of exit strategy is foreseen?

  5. SWOT Analysis • Strengths: attributes of the organization that are helpful to achieving the objective. • Weaknesses: attributes of the organization that are harmful to achieving the objective. • Opportunities: external conditions that are helpful to achieving the objective. • Threats: external conditions which could do damage to the business's performance.

  6. Internal Analysis Factors should be evaluated across the organization in areas such as: • Company culture • Operational capacity • Company image • Brand awareness • Organizational structure • Market share • Key staff • Financial resources • Access to natural resources • Exclusive contracts • Position on the experience curve • Patents and trade secrets • Operational efficiency • Strengths: • What advantages does your company have? • What do you do better than anyone else? • What unique or lowest-cost resources do you have access to? • What do people in your market see as your strengths? • What factors mean that you "get the sale"? • Weaknesses: • What could you improve? • What should you avoid? • What are people in your market likely to see as weaknesses? • What factors lose you sales?

  7. External Analysis Changes in the external environment may be related to: • Customers • Social changes • Competitors • New technology • Market trends • Economic environment • Suppliers • Political and regulatory environment • Opportunities: • Where are the good opportunities? • What are the interesting trends? • Changes in technology and markets on both a broad and narrow scale • Changes in government • Changes in social patterns, population profiles, lifestyle changes, etc. • Local events • Threats: • What obstacles do you face? • What is your competition doing that you should be worried about? • Are the required specifications for your job, products or services changing? • Is technology threatening your position? • Do you have bad debt or cash-flow problems? • Could any of your weaknesses seriously threaten your business?

  8. Executive Summary • Write this section last. • Summarize the fundamentals of your business: • Who are your customers? • What will your product strategy be? • What is your marketing plan? • What is your production plan? • How will you finance your growth and success? • What is your overall Corporate Strategy? • Outline your company’s competitive advantage. • Make it enthusiastic, professional, clear and concise

  9. SWOT Analysis Strengths • Customer Relationship • Innovation • Loyalty to Shareholders • Forecasting • Low Market Share with High-Tech products Weaknesses Opportunities • Market Share • Dividends • Increase Production Threats • Product Introductions • Increased Competition

  10. Executive Summary Essential for readers who don’t have the time, interest or need to read the entire document • Most important part of document • Last piece of document created • VERY short • Introduction/body/conclusion • Enough detail to reflect content • Concise and complete enough (even if full document never is read)

  11. Executive Summary • No new information • Use transitional words/phrases • Follow organization of document • Do not refer to document’s … • Tables • Figures • Appendices • References • Other explanatory materials

  12. Vision Statement • Clearly state your company’s philosophy. • Try to use words that are easily understood by employees and customers. Mission Statement • Clearly state your company’s long-term mission. • Try to use words that will help direct the growth of your company, but be as concise as possible.

  13. Company Description • What is important to you in business? • To whom will you market your products? • What factors will make the company succeed? • Describe your most important company strengths and core competencies. • What are your major competitive strengths?

  14. Products and Services • Current Product descriptions • Summarize your plans for new product introduction and product repositioning. • Will you introduce new products? • How often? • In what market(s)? • Where and how aggressively will you position your products? • How will you manage the age of your products? • Technology • What impact does MBTF have on cost? • Will you ever phase out a product?

  15. Market Analysis • Describe your industry. • Is it a growth industry? • What changes do you foresee in the industry, short term and long term? • How will your company be poised to take advantage of them? • Market Segmentation • What is the total size of your market? • Current demand in target market. • Summarize your market in the past, present, and future. • Trends in target market—growth trends, trends in consumer preferences, and trends in product development. • What percent share of the market will you have?

  16. Strategy & Implementation • Pricing Strategy: • Detail your plans for pricing, promotion, and selling tactics. • Will you price above, at, or below industry averages? • If you are going to price high, how will you justify those prices? • If low, how will you keep margins large enough to turn a profit? • Will pricing strategies be different for each market segment? • Promotion Strategy: • How much will you spend on promotion and sales? • What % customer awareness will suit your needs? • Sales Forecast using Excel

  17. Sales Forecast

  18. Production • Describe your plan for investing in your factories. • Automation • Capacity • How aggressive / conservative will you be vs. your Marketing Sales Forecast? • What level of automation is appropriate for your products? • Low tech • High tech • What is your corporate philosophy regarding capacity increases vs. overtime charges? • Do you plan to liquidate and factories?

  19. Financial Plan • Outline a high-level financial plan that defines your financial model and pricing assumptions. • How will you raise capital? • short-term debt • long-term debt • stock issues • factory liquidation • combination of these

  20. Key Financial Measurements • Identify the Key Financial Measurements that were selected by your company. • Why were these chosen? • What does your company need to accomplish to maximize these Measurements? • How do they support your business plan and corporate strategy?

  21. Projected Profit & Loss

  22. Resources • http://sba.gov • http://www.bplan.com/samples/sba.cfm • Business Plans for a Startup Business • Essential Elements for a Good Business Plan

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