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Whether for a whole business, a division of the business or a new product, the business plan is the
core from which all operational aspects take their lead. In formulating the business plan a wide
variety of possible approaches will have been tested and rejected to result in a single coherent
roadmap. In essence the plan takes the idea, subjects it to rigorous appraisal and builds it into
a full business framework.
The plan will be supported by detailed research, in particular a financial model, and it will inform
the many more detailed documents required to put the idea into practice. Because the business plan
provides the business with a concise understanding of the opportunity, risks and roadmap, it is also
a key vehicle for the attainment of investment funding, whether internal or external.
MorganDoyle have formulated business plans for whole companies, usually start-ups, and
divisions within multi-national companies, for both internal and external funding. We have also had
to work from badly conceived plans, and have direct experience of the problems this can cause and
how to put them right. Our approach is similar to that used by the ‘big-four’, with whom we have
collaborated on a number of projects, and are usually based on the following generic structure:
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The Executive Summary. A concise summary
focussed according to the target audience, but usually stressing the business opportunity,
financial highlights, the product/service USP's and the reasons why the product/service will
succeed.
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Aims and objectives. At a high level
what the plan aims to achieve. The aims and objectives are often derived from the value chain
positioning, and will relate to the overall company business targets if this plan is for a
division or a new product. This section will also include the scope of the plan within the
business - timeframe, divisions affected, geography, etc.
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Product/Service. An overview of the
product or service from the customers’ perspective, including functionality, pricing, USP’s,
and a TCO or ROI analysis.
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Markets. A review analysing the
competition in terms of functionality and pricing, the market size historically, currently and
into the future together with supporting evidence for projections, and the expected market share
with supporting logic. It will also consider market segmentation and, if necessary, different
channels for each segment.
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Operations. Analysis of the effect of
the new product or service on resourcing, organisational structure, support systems and processes.
Will there need to be modifications or additional resources, and how will this be achieved?
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Key Financials. A summary of the
projected costs and revenues, P&L, cash flow and balance sheet for the chosen baseline financial
model, together with presentation of the major sensitivities, cost options (e.g. lease/buy;
insource/outsource), model variations (low growth/low risk; high growth/high risk) and risks.
This section is supported by a detailed financial model that includes amongst other things the
costings figures from the product/service and operations analysis, and revenues from the markets
analysis. TCO or ROI analyses are also included where appropriate.
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Management Team/Structure. A brief review
of the key individuals who will drive the project showing that the required experience and
skills will be available.
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Risks and Rewards. An analysis of the
perceived risks ranked according to likelihood, with their potential effect tested against the
financial model and a description of appropriate strategies for mitigation.
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Execution Plan. A timeline showing the
significant milestones: technical, operational and financial. This section should be backed-up
by high level programme plan.
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Appendices. Much of the detailed research
work should be included as appendices, in particular a description of dependencies and
assumptions, the ROI/TCO model, the financial model, the programme plan, and an operations
high level architecture.
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For external investment funding some sections may be expanded or promoted, in particular the
Management Structure, Risks and Rewards and Exit Strategy.
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