Budget2011-12 Guidelines ist draft

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Strategic Business UnitBUDGET GUIDLINES



EXECUTIVE SUMMARY

1.Business Description2.Products3.The Market4.Competition5.The operations6.Management Team7.Risks/ Opportunities8.Financial Summary9.Capital Requirement



1.Business Description:Industry overview-Should begin with the current position of the Industry andfuture of the industry including positive and negative effect of new product and development will have on your particular

business.Company Description:State whether the business is a new business, expandingbusiness ,diversification or a takeover of an existing business .Next ,explain the actual business you are in , this will include

describing the manufacturing of the product at own factory withlocation orjobwork , extension and /or sales office of themanufacturing unit and /or Subsidiary of the parent company.



3M ission Statement:

Your mission statement is a short inspirational statementof the vision and goals you have for your company/group.

Your mission statement should address , but is not

limited to the following elements:y Nature and philosophy of the companyy Quality , price ,service customer relationships,management style ,employee relationship.y Corporate culture ,imagey Social and community imagey Growth and profitability goals



4 .History and Current Status: Summarize the current status of your company .Discuss significant past issues/ problems and how you survived them5.Goals and Objective: Express your Company ̀ objective by answering the following

questions:y What are your plans for the future of the business?y What are your ambitions for the Company?y Are you developing growth strategy? If so , how fast do you think you willgrow?y Explain your short term and long term plansy What are your time frame for reaching different goals?6.Critical Success Factors :Question to address are :

What factors will make this business a success?What are your major strengths?

Last Year Achievement vs budgets and variance analysis.



2.Product: Answer Following questions:

What exactly is your product?What market placeWho will purchaseWhat proprietary rightsPricing strategyProfit margin for each product line



3The Market:To properly write this section of the business plan , conducting and gathering market research is veryimportant .Primary / Secondary research Internet , Govt. Dept etc . And address the followingquestions:

Industry Analysis: Current trends and important development, largest and important industry players,national and international events influencing this industry , growth forecast, estimated industry sales ,5years / 10 years outlook. Size, growth rate , trends and drivers of the industry.

Sensitivity to economic cycles and seasonalityPolitical and economic factorsMarketing Strategies and Sales: Marketing and sales section of your plan will make or break the prospect

. A great idea is meaningless if you don t get customer .Begin with the fundamentals of your marketing

plan. State target market segments you wish to penetrate , how you plan to achieve this and the periodfor capturing a specific percentage of the market share . Answer the following:y Market Segmentation Strategyy Targeting Strategyy Positioning Strategyy Corporate Messagey Product Strategyy Pricing Strategyy Distribution Channely Promotion and Advertising Startegyy Promotional Budgety Sales Startegyy Sales Forecast

o Best Caseo Expected Caseo Worst Case



4 Competition:Its important to know your competitors ,what they have accomplished and thechallenge you have before you. Your competitor have preceded you in the market , interms of position, distribution, market exposure and a customer base .The success of

your business depends on your ability to take market share away from theindentified competitors or to address a segment of the market that is not beingcurrently captured. If you are anticipating taking market share , you need to explainhow you are going to do it. Answer following issues:

Identify Competitors , their strength , strategy and factors that give power (Marketing Strategy , superior product, established company , strongfinancial backing , expertise , relationship and R & D)

Analyze own weakness, be honest in analyzing own weakness and can be a real eyeopener.



FACTOR COMPANY Strength weakness CompetitorA Comp-B Comp-C Importance toCustomer

Product

Price

Quality

Appearance

Sales Method

Credit Policy

Advertising

Do Some Analysis as per following table and estimate how importanteach factor is to a customer . 1=critical , 5 = not very important

After doing above analysis matrix above , write a short note stating competitiveadvantage and disadvantage for both you and your competitors.



5. Operations:How you will run your business and deliver value to customers. Operation is defined to as the processesused to produce the product and deliver them to the market place .and can include procurement , storage,manufacturing , transportation, logistics , travel , after sale service and so on . So most important is makeproper alignment of operations with marketing plan. Suppose if high quality will be one of your comparativeadvantages in the market place / marketing plan , then design your operations to deliver high quality , notlow cost. So one have to trade off with operations . Its impossible to have lowest cost and high quality , oftenhigh quality means high cost. So one has to trade offs , so the product is as per marketing plan.So answer the followings carefully:Operations Strategy: Alignment with marketing plan, where to stress more and lessScope of operations : Make vs buy , what type of vendors , partners , associates and people you need.Location: Built around your customerPersonnel : Right mix and tight person on right jobOperation Ex pensesCost ControlsLegal environment ²C ompliances , licenses etcInventory M anagementSu ppliers Terms Credit policyAcco u nts Receivables M anagementAcco u nts Payable M anagementEHS AND QUALITY P OLICY



6.Organization Chart:The chart will state who will runyour business, stating who are keymanagers : their duties and

responsibilities, unique skill theybring to the business andcompensation.Insert your org Chart -------



7R isk/ Opportunity :R isks are part of any business, especially new one. Illustratethe risk like : market , pricing , product , regulatory , andmanagement risk etc.Describe and quantify the opportunity . Explain why you arein business along with the reasons why you will be able totake advantage of this opportunity . Be sure to answer thefollowing questions :

Have you considered all potential risksDoes your business have a contingency plan in place for allthe risks known and /or highlighted by you.What makes this opportunity unique?What are the financial risks associated with yourbusiness?How these will be minimized?What is the worse case scenario? How your business willhandle this?



Financial Summary: Prepare financial summary , theformats already given and should haveadditional information as under:

Financial History and RatioProjectionsBEPBalance SheetCash Flow StatementMarket research data

Product literatureAssumptions, trends and comparisonsBest Case, Most likely and worse case



9 .Capital Requirement:Clearly state the capital /funds neededto start or expand your business.Summarize , how much invested tilldate and how it is being used. Describewhy you need the funds and thebenefits from the opportunities. And

also explain how and when businesswill repay the investment.



Thank You

Documents

Budget2011-12 Guidelines ist draft