TOPIC 7: EXECUTION AND BUSINESS PLAN

INTECH 4100: TECHNOPRENEURSHIP Each milestone should include the budget required
for it to be reached, the target date, as well as any
resources you need, including people. If you do
WHAT IS AN EXECUTION PLAN? need to raise capital, you will want to share these
 When it comes to planning a new business milestones with potential investors.
or launching a new endeavor, an execution
plan is where the pedal hits the metal.
While a business plan outlines your entire BUSINESS EXECUTION PLAN TASKS
business and a financial plan shows where Tasks are the important details that are required to
the money will come from and go, the ensure your execution reaches each milestone.
execution plan outlines what specifically While it may be tempting to leave tasks out that
needs to be done and when. seem obvious, documenting each important task
will ensure that nothing is left to chance, which
can easily happen when you soon find yourself
THE THREE ESSENTIAL COMPONENTS working 12 to 18 hours each day to get your
OF AN EXECUTION PLAN business launched. Just like the milestones, each
1. Milestones are your key business goals. task should include the resources needed to
These are the goals that, should you miss complete it.
one, your business endeavor will fail

2. Tasks are the specific things you need to BUSINESS EXECUTION PLAN
do to reach each milestone. MILESTONES In addition to many other tasks,
most businesses would require to be done in order
to get up and running:
3. The third component, your budget, details 1. Incorporate your company.
how much your plan will cost. 2. Lease office space.
3. Contact three key vendors.
4. Set up an accounting system.
BUSINESS EXECUTION PLAN 5. Hire a lawyer.
MILESTONES 6. File legal and tax documents.
Milestones will vary, depending on the 7. Buy liability insurance.
nature of your business and the market you are 8. Design a logo.
entering. In "The Art of the Start," GuyKawasaki 9. Create a website.
offers a list of milestones any business in the
industry should consider using, but these can be
adopted by any company developing a new Some tasks may need to be broken down into
product: additional tasks. If you’re starting a landscaping
company, having a website maybe a single tasks,
1. Prove your concept works, both but if you have a website is central to your
technically and as a business. business, like an e-commerce website, it may
2. Finish your design specifications. require more attention to detail:
3. Create a working prototype.
4. Raise capital. 1. Choose and register a domain name.
5. Ship a testable version of your product to 2. Select a web host.
your first customers. 3. Select a payment plugin or service.
6. Ship the final version of your product to 4. Hire a graphic designer.
customers. 5. Finish the homepage.
7. Reach a break-even point in sales. 6. Create the first sales landing page.
7. Set up analytics.
 start with a sales forecast, cash flow
statement, income statement (also called
WHAT IS BUSINESS PLAN?
profit and loss) and your balance shit.
Writing a Business Plan
6. Appendix – If you need more space for a
Writing a business plan shouldn’t be complicated. product images or additional information,
This guide will show you how to get your plan use the appendix for those details.
done step-by-step without any of the complexity
or frustration.
STEP IN BUDGET PREPARATION
1. Create a list of your expected income
The Six Components of a Business Plan and expenses using previous financial
Building a business plan to raise money and grow documents and after meeting with your
your business or just need to figure out if your key managers.
idea will work, every business plan needs to cover Use bank statements, tax returns, payroll
6 essential topics. Here’s a quick overview of each reports and other documents that help you
topic. There are a lot more details and instructions project what you might spend this year
for each step later in this guide. after discussions with your managers
regarding your potential sales and any
1. Executive summary - is an overview of increases in your costs to do business.
your business and your plans. It comes
first in your plan and is ideally only one to 2. List your expenses by month, entering
two pages. Most people write it last, the amounts in the months when you
though. will accrue them, rather than when you
will pay them.
2. Opportunity – This section answer these
questions: What are you actually selling Average recurring monthly variable
and how are you solving a problem ( or expenses, such as utilities and phone bills,
“need”) for your market? Who is your and recurring quarterly or bimonthly
target market and competition? expenses, such as insurance premiums,
entering an average monthly expense for
3. Execution – In the execution section of those in your document. Include interest
your business plan, you’ll answer the you will accrue on credit cards and other
question: how are you going to take your forms of credit. List your income by
opportunity and turn into a business plan? month, entering the amounts in the months
This section will cover your marketing and when you will earn the income, rather than
sales plan, operations, and your milestones when you will receive payment. Include
and metrics for success. interest you will earn from investments
and on late receivables.
4. Company and management summary –
investors look for a great team in addition 3. Subtract your expenses from your
to great ideas. Use the company and income to determine how you will
management chapter to describe your perform each month and at the end of
current team and who you need to hire. the year.
You will also provide a quick overview of
your legal structure, location, and history if Review your expenses to determine
you’re already up and running. if you need to cut any to make an annual
point.
5. Financial Plan – your business plan isn’t
complete without a financial forecast.
4. Create a cash flow budget using the
We’ll tell you what to include in your
budget document you just created.
financial plan, but you’ll definitely want to
 Enter your expenses in the months you learn if they foresee any changes to their
will need to make payment. Enter the exact original projections.
amounts of quarterly or bimonthly
expenses in the months they are due, rather
than using monthly averages. Enter your Sales and Marketing Plan
income in the months you will receive
payment. Before starting your business, it's important to
outline all the details in a business plan. Creating
the plan not only forces you take a good look at all
aspects of your business, from financial, to target
5. Subtract your expenses from your
market, and more, but also, it becomes the
income in your cash flow budget to
roadmap for your success.
determine if you will have any months
when you have more bills due than One of the most important sections of a business
income received. plan is Marketing and Sales Strategies, which
outlines your plan for reaching and selling to your
Review your expected cash on hand those
target market. While you want to have a
months to determine if you can pay your
wonderful product or provide stellar service, it’s
bills. Review your expenses to determine
all for nothing if you don’t have customers and
if you need to take actions such as cutting
clients.
expenses during months with a net
expense, shifting spending in areas such as
marketing or negotiating different terms
with your vendors. WHY YOU NEED A BUSINESS AND
MARKETING PLAN?
 Determine where you are now in relation
6. Create a budget that divides your to where you want to go in your business.
expenses into overhead and production,  Identify needed resources to start and run
allowing you to see what your your business.
administrative, office sales and other  Develop clarity and focus on what needs to
non-manufacturing costs are, and what be done
your expenses to make your product  Gain insights to and understanding of your
are. industry market, and more.
Divide your overhead and production costs
by number of units you make to determine
your costs for each. Use this information to WHAT EXACTLY IS HUMAN
guide your analysis of spending. RESOURCES?
 Human resources (HR) is the umbrella
term used to describe the management and
7. Manage your budget by entering your development of employees in an
income expenses into your main budget organization.
as they accrue, and entering your
income and expenses into your cash flow BASIC FUNCTIONS OF HR INCLUDE:
budgets as you receive and pay them.  Recruitment
Compare your real-time performance  Onboarding
to your projections to determine if you  Managing payroll
need to adjust your budget. Hold monthly  Employee benefits
budget meetings with your management  Holiday management
team to discuss your performance task, ask  Training and development
for suggestions for improvement and to  Employment law compliance
 Safety compliance
FIVE LEAN PRINCIPLES OF 4) Adopting a pull system
MANAGEMENT
However, the fifth step of pursuing perfection
Basic five lean principles management is the most important among them all. It makes
functions of HR include: lean thinking and continuous process
improvement a part of the organizational
1. Define Value - to better understand the
culture.
first principle of defining customer value,
it is important to understand what value is.
Value is what the customer is willing to
pay for. It is paramount to discover the
actual or latent needs of the customer.

2. Map the Value Stream – the second lean

principle is identifying and mapping the
value stream. In this step, the goal is to use
the customer’s value as a reference point
and identify all the activities that
contribute to these values. Activities that
do not add value to the end customer are
considered waste.

3. Create Flow - after removing the wastes

from the value stream, the following action
is to ensure that the flow of the remaining
steps runs smoothly without interruptions
or delays. Some strategies for ensuring that
value-adding activities flow smoothly
include: breaking down steps,
reconfiguring the production steps,
leveling out the workload, creating cross-
functional departments, and training
employees to be multi-skilled and
adaptive.

4. Establish Pull – inventory is considered

one of the biggest wastes in any
production system. The goal of a pull-
based system is to limit inventory and
work in process (WIP) items while
ensuring that the requisite materials and
information are available for a smooth
flow of work.

5. Pursue Perfection – wastes are prevented

through the achievement of the first four
steps:

1) Identifying value
2) Mapping value stream
3) Creating flow, and