• THE ECONOMICS OF THE BUSINESS-Ryan- Environmental and Economic. Arturo-Social Sustainability
This section should address the social, economic, and environmental sustainability of your business model. Because customers (and investors) are increasingly interested in supporting companies that are proactive with regard to these issues, building a sustainable, socially responsible venture from the start can have competitive as well as economic advantages. Outline any environmental issues related to your business with regard to resources, waste generation, and legislative compliance. Discuss the nature of any opportunities for green impact, such as carbon reduction, recycling, and any green technologies or production capabilities that could enhance sustainability. Describe the nature of subcontractors and suppliers you plan to do business with. Describe any sustainability advantages you have or can develop, and how these might relate to building customer loyalty and community support for your product(s) or service(s). Summarize the employment opportunities that your business is likely to create, and describe any plans for outsourcing or using offshore labor and how that might impact the communityand your labor pool. Examine the potential environmental impact of your business as it grows.
• OVERALL SCHEDULE-Tamara
A schedule that shows the timing and inter-relationship of the major events necessary to launch the venture and realize its objectives is an essential part of a business plan. The underlying cash conversion and operating cycle of the business will provide key inputs for the schedule. In addition to being a planning aid, by showing deadlines critical to a venture's success, a well-presented schedule can be extremely valuable in convincing potential investors that the management team is able to plan for venture growth in a way that recognizes obstacles and minimizes investor risk. Because the time to do things tends to be underestimated in most business plans, it is important to demonstrate that you have correctly estimated these amounts in determining the schedule.
Create your schedule as follows:
1. Lay out (use a bar chart) the cash conversion cycle of the business for each product or service expected, the lead and elapsed times from an order to the purchase of raw materials, or inventory to shipping and collection.
2. Prepare a month-by-month schedule that shows the timing of product development, market planning, sales programs, production, and operations, and that includes sufficient detail to show the timing of the primary tasks required to accomplish an activity.
3. Show on the schedule the deadlines or milestones critical to the venture's success, such as these: Incorporation of the venture. Completion of design and development. Completion of prototypes. Obtaining sales representatives. Obtaining product display at trade shows. Signing distributors and dealers. Ordering materials in production quantities. Starting production or operation. Receipt of first orders. Delivery on first sale. Receiving the first payment on accounts receivable.
4. Show on the schedule the "ramp-up" of the number of management personnel, the number of production and operations personnel, and plant or equipment and their relation to the development of the business.
5. Discuss in a general way the activities most likely to cause a schedule slippage, what steps will betaken to correct such slippages, and the impactof schedule slippages on the venture's operation, especially its potential viability and capital needs.
• CRITICAL RISKS, PROBLEMS, AND ASSUMPTIONS-Ade
The development of a business has risks and problems, and the business plan invariably contains some implicit assumptions about them. You need to include a description of the risks and the consequences of adverse outcomes relating to your industry, your company and its personnel, your product's market appeal, and the timing and financing of your startup. Be sure to discuss assumptions concerning sales projections, customer orders, and so forth. If the venture has anything that could be considered a fatal flaw, discuss why it is not.
The discovery of any unstated negative factors by potential investors can undermine the credibility of the venture and endanger its financing. Be aware that most investors will read the section describing the management team first and then this section. Do not omit this section.
If you do, the reader will most likely come to one or more of the following conclusions:
1. You think he or she is incredibly naive or stupid, or both.
2. You hope to pull the wool over his or her eyes.
3. You do not have enough objectivity to recognize and deal with assumptions and problems. Identifying and discussing the risks in your venture demonstrate your skills as a manager and increase the credibility of you and your venture with a venture capital investor or a private investor. Taking the initiative on the identification and discussion of risks helps you to demonstrate to the investor that you have thought about them and can handle them. Risks then tend not to loom as large black clouds in the investor's thinking about your venture.
1. Discuss the assumptions and risks implicit in your plan.
2. Identify and discuss any major problems and other risks, such as these: Running out of cash before orders are secured. Potential price cutting by competitors. Any potentially unfavorable industry trends. Design or manufacturing costs in excess of estimates. Sales projections not achieved. An unmet product development schedule. Difficulties or long lead times encountered in the procurement of parts or raw materials. Difficulties encountered in obtaining needed bank credit.Larger-than-expected innovation and development costs. Running out of cash after orders pour in.
3. Indicate what assumptions or potential problems and risks are most critical to the success of the venture, and describe your plans for minimizing the impact of unfavorable developments in each case.
Formating and Rough Draft- Richard
Attendance- Arturo, Ryan, Tamara, Richard, Ade