BUSINESS PLAN: FIRST STEPS

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BUSINESS PLAN FIRST STEPS

• Julia Rastopchina Oksana Kikhtenko
• Eurasia Regional Advising Conference
• Moscow, 2004

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WHAT IS A BUSINESS PLAN?

• A document developed to justify a request for
  funding
• An action plan to develop business ideas
• As a strategic planning tool describes business
  strategy, market position, identifies goals,
  defines budget

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KEY QUESTIONS OF A BUSINESS PLAN

• What is our business and its mission?
• Who are our clients and how well do we know them?
• What are the customers needs, what do they want?
• What do we supply and how does our product create
  value for our customers?

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KEY QUESTIONS OF A BUSINESS PLAN

• How is our business developing?
• How it can/ should develop?
• How can we prevent others from entering our
  market?
• How do we compete with other players on the
  market?

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BUSINESS PLAN GOAL

• To guarantee that our efforts are aimed at
  maintaining and enhancing our competitiveness

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BUSINESS PLANNING PROCESS

• Business planning includes
• Analysis of the current situation and trends
  including competition
• SWOT analysis (strengths, weaknesses,
  opportunities and threats)
• Defining/refining our business mission checking
  for validity/ applicability
• Key success factors and strategic decision-making
  main directions
• Goal-setting (SMART specific, measurable,
  agreed upon, realistic, time-bound)

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SITUATION ANALYSIS

• Micro environment (immediate surrounding)
• Macro environment (global/national/regional level)

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Analysis of micro environment (immediate
surrounding)

• Customers/ clients
• Suppliers
• Labor force
• Competition

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Analysis of macro environment

• Economic environment
• Legal aspects
• Political environment
• Technological factors
• Social factors
• Global economic conditions

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MACRO ENVIRONMENTof your business
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MICRO ENVIRONMENT(IMMEDIATE SURROUNDINGS)of
your business
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Opportunities and threats for company development

• Opportunities

• Threats

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SWOT - analysis
STRENGTHS Key internal advantages a manager can
use
WEAKNESSES Internal obstacles a manager should
be aware of
OPPORTUNITIES Key external advantages a manager
should use
THREATS Key external events or future changes
that may negatively affect the companys business
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SWOT-ANALYSIS STRATEGIC MEANING
S STRENGTHS
W WEAKNESSES
Company
Loss of time
??!
NO WAY!
Solve problems first!
O OPPORTUNITIES
T THREATS
Market
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SWOT analysis purpose and applications

• Summarizes
• results of macro and micro environments
• opportunities and threats (based on macro
  environment analysis)
• strengths and weaknesses (based on micro
  environment analysis)
• Helps to develop
• strategic action plan based on SWOT-matrix
• company strategy

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STRENGTHS

• Competent leadership
• Available financial resources
• Qualified personnel
• Good reputation with the customers
• Market leadership
• Protection against competition
• Technological supremacy
• Cost advantages
• Competitive advantages
• Innovation capability and ability to implement
  innovation
• Seasoned management
• Better production facilities
• Potential for external investment

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WEAKNESSES

• No clear strategy
• declining competitive position
• obsolete equipment
• low profits
• lack of managerial experience and insight
• low competence
• weak or no follow-up on strategy implementation
• internal problems
• vulnerability under pressure from competition
• weak RD
• low capacity
• insufficient market knowledge/awareness
• bad marketing
• lack of finance to implement strategy
• undeveloped distribution/ sales
• high costs (higher than competition)
• narrow product range

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OPPORTUNITIES

• new markets/ market segments
• expanding production / services
• expanding product range
• supplementary products or services
• weakening of competitors
• market growth or expansion
• lower trade barriers on new geographic markets
• vertical integration (up or down)
• new technologies
• availability of external funding

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THREATS

• new competitors
• growing sales of substitute products or services
• slowing market growth
• unfavorable government policy
• growing pressure from competition
• growing negotiating power of suppliers and
  customers
• changes in customer needs and preferences
• unfavorable demographic situation
• unfavorable currency fluctuations
• high dependence on demand levels and life cycle
  of business

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KEY QUESTIONS OF A BUSINESS PLAN

• What is our business and its mission?
• Who are our clients and how well do we know them?
• What are the customers needs, what do they want?
• What do we supply and how does our product create
  value for our customers?
• How is our business developing?
• How it can/ should develop?
• How can we prevent others from entering our
  market?
• How do we compete with other players on the
  market?

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THANK YOU!