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Create a Business Plan
A business plan is not required for incorporation in Hong Kong. But you need a business plan - although you will have an idea of how you are going to run your business, a well written business plan is required for fund raising or other purposes. The following is a general outline of a general business plan:
- Research
- List the type of information needed for your business concept - buying patterns of your target market; how big is your market; industry trends/standards affecting your business; competitive environment of your industry; how healthy is your industry growing
- Determine where to get the information - library; business or trade publications; interviewing knowledgeable people in your industry; researching Hong Kong government resources and publications; internet
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- Evaluating Your Business Concept
- Determine if your product/service is viable - timeframe to develop your product/service; costs of development; interest in the market for your product/service
- Determine if your market is clearly identifiable
- List your competitors.
- Describe the economic health of your industry.
- Explain any financial problems you anticipate.
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- Components of Your Business Plan
- Executive Summary - although it is the first section of your business plan, it is suggested to write the summary until you are done with the whole plan. Be positive, upbeat and confident. Limit your summary to about one or two page. Your summary must show that you have:
- A sound business concept;
- A carefully planned business venture;
- Capable management;
- A readily identifiable market;
- Significant competitive advantages;
- Realistic financial projections;
- A excellent chance for investors to get their money back.
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- Company Description
- Your company's mission statement and objectives;
- Indicate whether your firm is sole proprietor, partnerships or company;
- Provide the name of chairman, president or chief executive officer;
- List other key management personnel;
- Indicate how many people serve on your board of directors or advisory committee;
- State when your company was or will be founded;
- Describe your immediate development goals;
- Indicate which phase of development your company is in;
- Describe the financial status of your company.
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- Industry Analysis
- List the industries in which your company operates;
- Determine the size and growth rate of your industry;
- Research the effects of economic conditions and cycles on your industry and business;
- Describe how seasonal factors affect your industry;
- Describe how technological changes have affected your industry in the past five years.
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- Target Market
- Analyze and define your potential target market;
- Examine the buying patterns of your potential customers;
- Determine the buying sensitivities of your market;
- Assess the size and trends of your target market.
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- Competitive Analysis
- Your major competitors;
- How you compare to your competition;
- Potential future competitors;
- Barriers to entry for new competitors;
- Examine your competitive position in terms of customer preference and internal operational strengths.
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- Marketing Plan
- Define the message you want to send to your customers;
- Describe the ways you can get that message to your target market;
- Identify the sales force and procedures you will use;
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- Operations
- Describe and evaluate the facilities in which your business will operate;
- Evaluate and assess your production plan;
- Examine how you organize your workforce;
- Explain how you utilize new technology;
- Determine how you will fill orders.
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- Management and Organization
- Evaluate your management team - key employees, board of directors, advisory committee, consultants, specialists, and key personnel to be added;
- Determine what compensation and incentives ou will offer your key employees - salary only, bonuses, profit sharing, equity, stock options, etc;
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- Long Term Development and Exit Plan
- Determine your business' ultimate destination;
- Describe what you want your business to look like in three or five years;
- Decide on a strategy that will take your business towards your long term goals - create a list of priorities and assess the risks your business will face;
- Develop and clearly define your exit plan.
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- Financials
- Indicate which type of accounting system is appropriate - cash basis or accrual basis;
- Provide financial projections for three to five years in the future;
- Prepare the following in your plan - income statement, cash flow analysis, sources and uses of funds, and assumption sheet;
- Present your financial projections honestly and conservatively;
- Use standard formats and financial terms;
- Follow the financial practices used in your industry.
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- Appendix
- Decide if you will need an appendix;
- Keep the appendix short;
- Include the following items as appropriate - letters of intent or key contracts, endorsements, photos of your product, and technical information.
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- Preparing for Distribution
- Create a cover sheet;
- Number the pages by section;
- Provide a table of contents;
- Include the nondisclosure agreement;
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