MOE - Obtaining the Right Financing Part 2/2
Summary
TLDRThis video script focuses on the importance of a business plan for entrepreneurs seeking funding. It outlines the components of a business plan, including executive summary, company description, market analysis, operations plan, and financial projections. The script emphasizes the plan's role in attracting investors, aligning management, and guiding business strategies. It also covers the advantages of having a business plan and how it can help startups and established companies secure funding and operate effectively.
Takeaways
- 📝 A business plan is a crucial document that outlines the objectives and strategies of a business.
- 💡 Writing a business plan is beneficial for both startups and established companies as it helps guide business decisions and attract funding.
- 👥 External audiences like business partners, venture capitalists, and financial institutions often require a business plan to consider investment or loans.
- 🤝 Internally, a business plan aligns the management team on strategies and goals.
- 📈 A comprehensive business plan includes sections like executive summary, company description, market analysis, operations plan, and financial projections.
- 🏢 The executive summary is a concise overview of the entire business plan and should be limited to one or two pages.
- 🛒 The market analysis section involves industry, customer, and competitor analysis to understand the business landscape.
- 🚀 Operations plan details how the business will run, including production processes, logistics, and customer service.
- 💼 Business strategies should focus on customer attraction and retention, sales, channel, pricing, and branding strategies.
- 💰 The source of funds section outlines where the business will get its money from, including personal savings, bank loans, and investors.
- 💹 Financial projections provide forecasts of the business's financial health, including balance sheets, income statements, and cash flow statements.
Q & A
What is the primary purpose of a business plan?
-A business plan serves as a tool to support business owners and entrepreneurs in securing financial support and guiding the business towards achieving its objectives.
What are the two main learning objectives for the topic of business plans?
-The two main learning objectives are to understand the value of writing a business plan and to be able to describe or explain the details of a business plan.
Who are the external audiences for a business plan?
-External audiences for a business plan include business partners, venture capitalists, financial institutions such as government banks and commercial banks.
What is the role of a business plan for internal audiences?
-For internal audiences, such as business partners or the management team, a business plan serves to keep everyone aligned on business strategies and objectives.
What should be included in the executive summary of a business plan?
-The executive summary should succinctly summarize the business idea, information, and data of the business plan and should not exceed one or two pages.
What does the company description section of a business plan typically cover?
-The company description section covers the history of the company, background, recent admission statements, profiles of the management team, business organization, ownership, legal status, and key success factors.
How should the products or services section of a business plan be approached?
-This section should start by identifying the problems of the target customers and then explain how the products or services can solve these problems, including details on functions, features, and differentiations from competitors.
What are the three main components of market analysis in a business plan?
-The three main components of market analysis are industry analysis, customer analysis, and competitor analysis.
Why is the operations process important in a business plan?
-The operations process describes how the business will run and how products or services will be produced, including considerations for raw materials, production methods, logistics, and customer service.
What are the key elements of a business strategy section in a business plan?
-The business strategy section should explain how the company will attract and retain customers, including selling strategies, channel strategies, pricing strategies, and branding strategies.
How should the source of funds section be detailed in a business plan?
-The source of funds section should specify how the business will raise money, including self-funding, bank loans, business angels, venture capital, government agencies, and crowdfunding, and should detail the proportion from each source.
What does the business budget section of a business plan entail?
-The business budget section outlines the spending plan for the business based on income and expenses, including fixed costs, variable costs, revenues, and projections for the business's financial performance.
What are the two types of financial statements included in a business plan?
-The two types of financial statements are historical financial statements, which reflect past performance, and proforma financial statements, which project future performance.
Outlines
📈 Introduction to Business Plans
This paragraph introduces the concept of a business plan as a crucial tool for entrepreneurs seeking financial support. It emphasizes the importance of understanding the value of writing a business plan and being able to describe its details. The business plan is portrayed as a guide for business owners to achieve objectives and as a document that appeals to both internal and external audiences, such as business partners, venture capitalists, and financial institutions. The paragraph outlines the advantages of having a business plan and sets the stage for a detailed discussion of its components.
📝 Components of a Business Plan
Paragraph 2 delves into the components of a business plan, starting with the executive summary, which is a concise overview of the entire plan. It should be brief, typically not exceeding one or two pages, and placed at the beginning of the document. Following the executive summary is the company description, which provides an overview of the business, including its history, background, management team profiles, and legal status. The paragraph also discusses the necessity of explaining the business's products or services, addressing customer needs, and detailing how these offerings solve customer problems. Market analysis, including industry, customer, and competitor analysis, is highlighted as a critical part of understanding the business environment.
🛠️ Operations and Strategy
Paragraph 3 focuses on the operational aspects of a business plan, detailing how a business will run and its production processes. It covers the operations plan, which includes considerations for raw materials, production methods, delivery logistics, and customer service. The paragraph also addresses business strategies, such as sales, channel, pricing, and branding strategies, emphasizing the importance of understanding the target market and differentiating the business from competitors. Financial considerations are also introduced, including the sources of funds for a business startup.
💼 Business Budgeting
This paragraph discusses the financial planning aspect of a business plan, specifically the budget. It explains that a business budget is a spending plan based on projected income and expenses, and it helps in estimating available capital and predicting revenue. The budget is composed of fixed costs, which do not change with production or sales volume, and variable costs, which are directly associated with production levels and can fluctuate. The paragraph provides examples of both types of costs and advises on creating realistic financial estimates to avoid overestimation.
💹 Financial Projections
Paragraph 5 concludes the financial section of the business plan discussion by focusing on financial projections. It outlines the importance of forecasting the financial status of a business through financial statements, which include the balance sheet, income statement, and cash flow statement. The paragraph differentiates between historical financial statements, which reflect past performance, and proforma financial statements, which project future performance. It provides a detailed look at the components of each financial statement and how they contribute to the overall financial planning of a business.
🏁 Recap and Learning Objectives
The final paragraph serves as a recap, summarizing the key points discussed in the video script about business plans. It reiterates the importance of understanding what a business plan is, its advantages, and its components. The paragraph also reminds viewers of the learning objectives, encouraging them to ensure they have met all the goals set out in the video, such as comprehending the value of a business plan and being able to articulate its details.
Mindmap
Keywords
💡Business Plan
💡Executive Summary
💡Company Description
💡Products or Services
💡Market Analysis
💡Operations Plan
💡Business Strategy
💡Sources of Funds
💡Business Budget
💡Financial Projections
💡Target Customers
Highlights
A business plan is a crucial tool for entrepreneurs seeking financial support.
The first objective is to understand the value of writing a business plan.
The second objective is to explain the details of a business plan.
Business plans are essential for both startups and established companies.
A business plan is used to attract funds from various sources like business partners and financial institutions.
It serves as a guide for the entrepreneur on how to achieve business objectives.
The business plan keeps the management team aligned with business strategies.
A good business plan includes an executive summary, company description, market analysis, and financial projections.
The executive summary should be concise, not exceeding one or two pages.
Company description should include history, background, and key success factors.
Products or services should be explained starting from the customer's problem.
Market analysis consists of industry, customer, and competitor analysis.
Operations plan details how the business will run and products will be produced.
Business strategies should include selling, channel, pricing, and branding strategies.
Sources of funds can be self-funding, bank loans, business angels, or crowdfunding.
A business budget outlines how money will be spent and helps predict revenue.
Fixed costs are expenses that do not change with production or sales volume.
Variable costs change based on the level of production or sales.
Financial projections include balance sheets, income statements, and cash flow statements.
Historical financial statements reflect past performance, while proforma statements project future performance.
Transcripts
[Music]
well good morning everyone today we will
discuss on the topic of a business plan
the business plan is one part of the
topics of source of fundings as I
mentioned in the previous topic of
social funding that business plan is the
kind of tool these two will support the
business owner the entrepreneur like you
guys for financial support we will
discuss the advantages of writing a
business plan here
well before our discussions I would like
you know the objective of these topics
after you completed these topics please
please please make sure that you need
all object tips of these topics the
first objective of this topic is that I
expect you guys understand the value of
writings a business plan
and the second learning objective of
this topic is that I expect you can
describe or I can explain the detail of
a business plan
here you are business plan well first of
all I would like to know what is your
business plan
you can notice here that from the slide
A business plan is the document that
explains the guy what and how
what is what are the objective of your
business
as well a business plan tell the
business owner how
how is right how you guide the
entrepreneur right as the business owner
can achieve or meet the objective of
your business
I suggest that both startups business
owner like you guy and a straw
company should have business plans
what are the advantages for writings
business plans
why the business owner right you guy
should write a business plan right A
business plan is an important document
that is used for board external and
internal audiences of the company who
are the external audience right the
external audience are
I can like give you four example
business partners right business and
those like a venture capitalist right
another external audience is like
financial institutions such as
Government Bank such as commercial Banks
the business plan is used to attract
funds or money from business partners
business angels Venture capitalists you
need to propose your business plan in
order to attract your partners the
business plan is the most important
supporting document when you apply for
loan from any banks
it means that bank will ask the guy as
the business owner submit your business
plan when you ask for Roan from the
banks
as the benefits to the internal
audiences who probably are your business
partner or the management team for
example
a business plan can serve to keep the
management team on the same page about
business strategies all the same targets
or object tips of the business at this
point you have the idea what is the
business plan and the advantages of the
business plan right we will discuss all
the combinations of a good business plan
after this here you are from this page a
good business plans should include the
basics business plan outline right
an executive summary
company descriptions products or service
or Business Solutions
might get analysis that complies of
Industry analysis customer analysis and
competitor analysis we continue the
business plan with business strategies
you can see here from this page
operations process such a funds business
budget and financial projections well we
will start with an executive summary
what is an executive summary
correct the executive summary is a kind
of report that ribs or summarized all
informations or data or business idea of
your business plan
rent of the executive summary should not
more than one or two patents right the
executive summary should be the first
sections of the business plan
inchon I repeat again that executive
summary is a summary of your business
plan right the executive summary should
be the first part of first sections of
your business plan right and the rent of
the executive summary should not more
than one or two pages
I give you here an example of the
executives summary of a business
the company descriptions should be
followed the executive summary what you
should mention or explain in these
sections I mean in the sections of
company descriptions a company
descriptions you know is an overview or
summary of a business
it is an important part of a business
plan that describes or explain the
history of the company the company
background recent admission statements
profiles of the management team and
business organizations
business ownership and legal status like
a business ownership for example are you
like those popular ship or are you like
a Partners or are you like a
corporations
as well you should explain the key
success factors right of your business
in the company description part
the next part of the business plan
should be the explanations of your yes
or drugs service or business platforms
you'll probably aligned or explain your
products or service or your business
platform here
from this part you should start this
part from the problem of your customer
as you can notice from this page right
you should start this part from the
problem of your customer
why the Target customer need to buy your
products need to use your service only
to apply for your business platform
you need to give the explanations that
how your products also based on your
business platform can solve the problems
of your Target customer you then
describe the detail of your products
also with or business platform such as
functions or features
you don't need to explain the
differentiations of your products or
your service or your business platform
compare with
your competitors at this point you are
crystal clear right what are your
products or service or business platform
right at this stage you need to consider
or analyze the market that include you
can see from this page industry analysis
followed by customer analysis then
competitive analysis
again I say again in the part of market
analysis you need to analyze three main
things that are industry analysis
customer analysis and competitor
analysis here industry analysis should
be the first part of the sessions market
analysis what informations should be in
the industry analysis
well you need to analyze and provide
informations of the total size of the
industry you expect to involve it you
need to analyze the segment of this
industry the growth layer of this
industry
and especially you need to specific
target market such as mass Market or
niche market
in part of the customer analysis
entrepreneur or the business owner like
you guy you need to Define who are your
Target customers
as the entrepreneur you need to Define
needs of your Target customer
you need to identify the preferences of
your Target customer
relative your products and services
again right I repeat again that the
business owner should analyze one one
you should analyze who are your Target
customer right two what are the needs
open point of your Target customer and
three what are the preferences of the
Target customers
finally we need to analyze the
competitor board dialects and indirect
competitor
you should do some research about the
products or service or business platform
of the competitors in terms of functions
features and price
here we will continue the operations
process or operations plan here
the operations plan here on this page
describe you how your business will be
run and how your products or service
will be produced
you can notice from the diagram on this
page that
the business owner showed concern about
the raw materials right that should be
used for Productions
how to produce the products
how you deliver the finished good to
your customer as the logistic process
for example via Curry Express Fresh
Express
Etc
and how you provide service to your
customer
like after sales services
and you probably like need to use the
information technology that we call it
for each process as you can notice from
this page
I gave you on this page that the idea
what is the Productions process
you need to think about the inputs right
that may be money any raw materials
label your knowledge or experience
right you transform the inputs as I
mentioned you transform the inputs with
some Chi of matching or technology right
you didn't get what you then get the
outputs as your finished goods here in
terms of the business strategies
business strategy should be the most
important part of the business plan
right this sections explain write these
sections describe how the company will
attracts and keep the customer and how
you intend to list your customer
in terms of selling strategy right you
can see here the first items selling
strategies
saying your business is their pet shop
the primary juicer is not the primary
buyer right for example you have a dog
the dog is the dude sir right but you
are the buyer
the selling strategy should focus on
what should focus on the buyer right not
the user right at this point you get my
idea
then in terms of the channel strategies
you need to describe the channel
strategy as well in the business plan
if this is a directional to customer or
through intermediaries for example the
buyer will buy your products from the
supermarkets or from the pet shop right
you need to think you need to consider
what is the channel strategies for your
business
right you need to consider where you
should sell your products right it
should be in the supermarket or should
be in the pet shop
in terms of the pricing strategy right
the pricing strategy that you need to do
some kind of the research on your
competitors
and the positionings of your products
and services
that your products or service can be
called like a premiums products or
discount products or parity products
comparing with products or service of
your competitors
well in terms of the breading strategies
building a brand is a very important for
any news business startup you know you
need to describe the company name
the name of your products also is dry
you need to specify functions of your
products or service line and social
benefit to your Target customer as well
well for the next part is the source of
funds since like you guys we have done
the detail of the source of funds from
the previous chapter right ideally fresh
the guide the main idea of the sources
of funds that come from here
self-funding or personal saving as you
can see from this page right bank loan
that may come from government Banks or
commercial Banks
also like you know that business angels
went to Capital list government agencies
and Cloud funding should be your source
of funds as well all mentions should be
sort of fun right for the new business
startup right the guy
you need to specify how you can raise
money for your business such as like I'm
saying that you less a hundred percent
of this money from your personal saving
or you list like a 50 percent of this
investment of the money from your saving
and another 50 percent from bank loan
at this point right you guys you have
the idea how you can rest money right
so what is the next correct you guide
next to the business budget the budgets
will tell you how you spend the money on
your business right this section should
include Revenue course related to the
business the course are like a fixed
cost and verbal cost well we start the
business budget with what is the
business budget things
correct the business budget is the
spending plan for your business based on
your income and expenses the business
plan identify your available capital or
money right the business plan estimate
your spending and the business plan also
help you guide predict Revenue actually
so you can see here on this page the
business budget should comprise of one
revenues
to thick cause and free the variable
cost
they will discuss the detail of each
component here on this page what are the
revenue revenues are the money that you
expect your business to make from the
sales of good and service right if your
business is new you can check the
revenue of similar business and use
those figure
to create some estimated Revenue numbers
but if your business is more than one
year old right you are experienced will
guide you in estimating these components
I mean in terms of Revenue
but whether your business is New or Old
right you know it is important it is
very important to like stay Lyricist to
avoid overestimate things here you are
in terms of the cost on this page what
are the fixed costs
the fixed costs differ to a course that
does not change with an increase or
decrease in the number of goods or
service produced or sold
I said that the fee cost will not change
with an increase or decrease in the cell
volume right for example Internet
payment right building rent it doesn't
matter how many items you produce you
need to pay for the internet every month
right
it doesn't matter you produce your
products or not you need to pay for the
internet right therefore internet is for
example your fake calls the other
figures include building rent employees
slowly Accounting Service mod cash
payment or insurance premiums here you
are the verbal course on this page
variable costs are cost directly
associated with Productions and
therefore change depending on business
output what does this mean this cost I
mean variable cost can increase or
decrease with less pack to Productions
level or sales I say that the variable
cost can increase or decrease right the
increasing or decreasing things of
variable costs are based on what based
on the volume of the Productions the
other variable cost includes for example
raw materials marketing expenses
commissions credit card fee
Etc
finally finally finished the last
sections of the business plan that is
financials projections
can projects or you can forecast the
financial status of your business from
financial statement on this page you can
see here the basics financial statement
are comprised of one balancing two
income statement three cash flow
statement right
okay in terms of the financial statement
right there are two types of financial
statement here on this page the
historical financial statement and
proforma financial statement okay well
what is the historical financial
statement the historical financial
statement reflects past performance and
usually prepare on a quarterly or annual
basics
you can notice that what I am saying the
historical Finance statements tell you
the past performance right on the
opposite side pro forma proforma
Furniture statement ah protections right
projections for future period based on
forecast and completed for more than two
or three years in the filters
you'll notice what I am saying the
performer the proforma I mean proforma
balanchi pro forma income statement and
proforma cash flow statement tell you
the future period 4 might be next three
or five years after this
guy on this page you can notice that the
main item of balance sheet should be
assets
that and equity
the total assets always equal debt and
equities what is the proforma balance
sheet you can notice here on this page
new projects or forecast assets you can
see here from your left hand side and
the debt and equity
on your right hand side for the next
three years
well on this pitch in terms of the
proforma income statement the income
statements start from what you can
notice here on this path the income
statement start from sales right
you can notice the sales forecast for
next three years from this pitch you
then subtract or deduct of rest that
sell which all kind of expenses for
example operating expense interest
expense tax expense right
finally at the bottom line you can see
here on this pad as the bottom line you
get the net income right for next three
year as proforma income statement well
on the large page you can forecast the
proforma cash flow statement for three
to five years as well
in terms of the cash flow statement
right you start from one you can notice
here that from your left hand side you
start from the as flow from operations
then we move to your right hand side
right you notice that
cash flow from investings and cash flow
from financings
we already completed the detail of
business plan
we already completed that what is the
business plan right the advantages of
business plan right and the component of
business plan
at this stage
you need to get back to the learning
objective of these topics and make sure
that you meet all objectives
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