ND - Business Plan (E)

1. ND - Business Plan (E) Lim SeiKee @ cK

3. Plan to make your Business Plan  Allocate the time you need to do certain parts of the Business Plan • Use calendar / Planner / Diary / Journal • Create a deadline for specific tasks  If you are doing in a group, allocate specific tasks for a specified person

4. Writing tips • Clear • Concise • Organized • Well laid out • Natural • Positive • Well interpreted facts • Do not jump to conclusions • Show sources • Proofread • Make it perfect

5. Presentation Tips • 15 – 20 slides • 15 – 20 minutes • Keep it simple • Make it to the point • Tell a story • Dress professionally • Practice • In front of mirror • In front of someone

6. Tell a story • Introduction (breaking the ice) • Existing problem/pain/situation • Solution (Product/service) you are providing • Market research and strategy • Who are involved • How you can succeed

7. Quick tips • Its not just an idea, but a work in progress • You have the numbers to back you up • You have qualified people involved • Be passionate in your presentation

8. Introduction Financial planning means to prepare the financial plan. [@ capital plan] A financial plan is an estimate of the total capital requirements of the business. It selects the most economical sources of finance. Financial plan gives a total picture of the future financial activities of the business.

9. Financial Plan • Taking a commercial business as the most common organizational structure, the key objectives of producing a financial plan would be to: • • Create wealth for the business • • Generate cash, and • • Provide an adequate return on investment

11. The working capital cycle • Cash sales to customers • Receipts from customers who were allowed to buy on credit (trade debtors) • Interest on bank and other balances • Investment by shareholders • Purchasing finished goods for re-sale • Purchasing raw materials and other components needed for the manufacturing of the final product • Paying salaries and wages and other operating expenses • Paying taxes Inflows Outflows

12. Cash flow can be described as a cycle: • The business uses cash to acquire resources (assets such as stocks) • The resources are put to work and goods and services produced. These are then sold to customers • Some customers pay in cash, but others ask for time to pay. Eventually they pay and these funds are used to settle any liabilities of the business. • And so the cycle repeats

13. The cash needed to make the cycle above work effectively is known as working capital. • Working capital is the cash needed to pay for the day to day operations of the business.

14. In other words, working capital is needed by the business to: • Pay suppliers and other creditors • Pay employees • Pay for stocks • Allow for customers who are allowed to buy now, but pay later (so-called “trade debtors”)

15. What is crucially important, therefore, is that a business actively manages working capital. • It is the timing of cash flows which can be vital to the success, or otherwise, of the business. • Just because a business is making a profit does not necessarily mean that there is cash coming into and out of the business.

16. Advantages of managing its cash flow • It knows where its cash is tied up, spotting potential bottlenecks and acting to reduce their impact • It can plan ahead with more confidence. Management are in better control of the business and can make informed decisions for future development and expansion • It can identify surpluses which can be invested to earn interest