Developing a Business Plan

Madhukar Shukla

Agenda

Understanding Entrepreneurship What does an entrepreneur do? How do entrepreneurs plan/ think? On Developing a Business Plan Why do you need a business plan? Key tenets of developing a plan Structure of a business plan

Madhukar Shukla

What does an entrepreneur do?

shifts economic resources out of an area of lower yield/productivity into an area of higher productivity and greater yield.
identifies an under-served market and designs & implements a scalable strategy to meet the needs of the segment.

Madhukar Shukla

How do Entrepreneurs Plan/ Think

Two ways of Reasoning Causal Reasoning Effectual Reasoning

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How managers think causal reasoning

Rationally: select/ align the means/resources to achieve the predetermined goal

Goal

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How entrepreneurs think effectual reasoning

Imagining/ crafting possible futures through given means/ resources

Who I am What I know Who I know

R1 R2 R3 R4 R5
Madhukar Shukla

Agenda

Understanding Entrepreneurship What does an entrepreneur do? How do entrepreneurs plan/ think? On Developing a Business Plan Why do you need a business plan? Key tenets of developing a plan Structure of a business plan

Madhukar Shukla

Why do you need a business plan?

A business plan is for oneself not for others If you dont believe it, no one else will The process of developing a plan is more important than the plan It is not a concept paper do the field-level work If it doesnt challenge you, you are missing something You will never be able to follow the plan perfectly but you will know how much you have deviated you will know your strengths and weaknesses A plan is your resume

Madhukar Shukla

Key tenets of a Business Plan

Business Plan is not just about what you want to do but also about how and when you will do it Make the plan bottom up not top down Start by writing the Executive Summary first What do you want to do? How will you do it? How will you make it sustainable? Plan for your start-up costs Salaries, infrastructure, registration, etc. Cashflow requirements Pilot, etc.. Till first sales or funding
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Life-cycle of growth and investment/ funding

Philanthropic Angel Capital

Venture Founded Grant/Seed Investment

Growth Capital
Initial Investment Venture Capital/ Private Equity/ Project Funding

Time/ years
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NKC Study findings source of funding

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NKC Study findings self-financing

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Structure of a Business Plan

What is your Value Proposal? What need are you trying to fulfill? What makes you unique? Who are your customers? What is the Market Size? What is your market segment? What is the size of the market? What is the scope for market penetration? What are your challenges to scale?

Madhukar Shukla

Structure of a Business Plan

What is your Business and Financial Model How is it scalable? What are your dependencies? What are the key risks? What is your revenue model? What is your Competitive Landscape? Who are the major players in the industry/ segment? How do you compare with them? What is the existing demand for the products/ services you aim to offer?

Madhukar Shukla

Lastly

Quality of the entrepreneur / team is often more important than the plan!!, e.g., Knowledge, skillset and passion of the entrepreneur/ team Ability to build an organisation and run a business Depth of knowledge about the customer/ market and the sector

Thanks!

Madhukar Shukla