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Entrepreneurship
Lecture 5
Mr. Ibrahim Mohamed Ali
BBA,MBA (HRM)
Human Resource Director
Hormuud University
Mogadishu-Somalia. 1
Section 5
Crafting a Business Plan and Building a
Crafting a Business Plan and Building a Solid
Strategic Plan.
Solid Strategic Plan
id Strategic Plan
INRORDUCTION
A business plan is a planning tool that
builds on the foundation of the idea
assessment, feasibility analysis, and
business model discussed in Chapter 4. A
business plan provides a more full and
detailed analysis than the first three
steps in the new business planning
process.
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A Business Plan
A written summary of an entrepreneur’s
planned business project, its operational
and financial details, its marketing
opportunities and strategy, and its
managers’ skills and abilities.
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New Business Planning Process
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Before launching your business, now
are six steps to ensure a successful start
1: Go the business plan. ...
2: Test your idea. ...
3: Know the market. ...
4: Understand your future customer. ...
5: Start cash resources. ...
6: Choose the right business structure.
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Functions
of a Business Plan
1. Guiding the company by recording its
future development and defining its
strategy for following it.
2. Attracting lenders and investors who will
provide needed capital.
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A Plan Must Pass Three Tests
1. The Reality Test: proving that:
A market really does exist for your product or service.
You can actually build or provide it for the cost estimates in the plan.
2. The Competitive Test: evaluates:
A company’s position relative to its competitors.
Management’s ability to create a company that will gain an
advantage over its competitors.
3. The Value Test: proving that:
A project offers investors or lenders an attractive rate of return or a
high probability of repayment.
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Elements of a Business Plan
Title Page and Contents
Executive Summary
Vision and Mission Statement
Company History
Business and Industry Profile
Business Strategy
Report of the Firm’s Product or Service
Marketing Strategy
Competitor Analysis
Description of Management Team
Plan of Operation
Formal Financial Statements
The Loan or Investment Proposal
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What Owners and Investors Look for in
a Business Plan
The “5 Cs” of Credit
Capital
Capacity
Collateral( or guarantees,)
Character
Conditions
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Building a Strategic Plan
Entrepreneurs must be able to adapt to changes
in the marketplace.
Strategic planning is a tool that can help it involves
developing a game plan to guide the company as
it works to accomplish its vision, mission, goals,
and objectives.
It’s crucial to building a successful business.
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To make
their strategic plans workable, entrepreneurs should divide them into
projects, carefully defining
each one by the following:
Purpose. What is the project considered to accomplish?
Scope. Which areas of the company will be involved in the
project?
Contribution. How does the project relate to other projects
and to the overall strategic plan?
Resource requirements. What human, Natural and
financial resources are needed to complete the project
successfully?
Timing. Which schedules and deadlines will ensure project
completion?
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A Major Change . . .
The biggest change facing entrepreneurs
today is the shift from financial capital to
intellectual capital
Human
Structural
Customer
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Building a Competitive
Advantage
Developing a strategic plan is
critical to creating a sustainable
competitive advantage: the
collection of factors that sets a
company to one side from its
competitors and gives you a unique
position in the market that is
superior to its competition.
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Define Competitive Advantage:
Consider five aspects of a small company:
1. Products they sell
2. Service they provide
3. Pricing they offer
4. Way they sell
5. Values to which they are committed
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What is Strategic Management
Strategic management: involves setting
objectives, analyzing the competitive
environment, analyzing the internal
organization, evaluating strategies and ensuring
that management rolls out the strategies across
the organization.
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Key Terms in Strategic
Management
Vision statement
answers the question “What do we want to become?”
often considered the first step in strategic planning.
Mission statements
identifies the scope of a firm’s operations in product
and market positions.
addresses the basic question that faces all strategists:
“What is our business?”
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Strategic Management Process
Step 1 Develop a vision and translate it into a mission
statement
Step 2 Evaluate strengths and weaknesses
Step 3 Scan environment for opportunities and threats
Step 4 Identify key success factors
Step 5 Analyze competition
Step 6 Create goals & objectives
Step 7 Formulate strategies
Step 8 Translate plans into actions
Step 9 Establish accurate controls
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Analyze of SWOT
Strengths: positive internal factors that a company can use
to accomplish its mission, goals, and objectives.
Weaknesses: negative internal factors that inhibit the
accomplishment of a company’s mission, goals, and
objectives.
Opportunities: positive external options that a company
can exploit to accomplish is mission, goals, and objectives.
Threats negative external forces that inhibit a company’s
ability to achieve its mission, goals, and objectives.
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Business Strategy
How to gain competitive advantage?
How to achieve the goals and objectives?
Methods to satisfy (Key Success Factors)
KSFs of the industry.
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Marketing Strategy
Defining the target market
Who is my target customer ?
Where?
How many?
Why?
Proving that a profitable market exists
Showing customer interest
Documenting market claims 21
Marketing Strategy
Advertising
Market Size and movement
Location
Pricing
Delivery
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Thank You For
Attending
This Section
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