Le business plan

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General Introduction ..................................................................................................................................... 3
1. PESCA NORTE S.L. ...................................................................................................................................... 4
What is the principle activity of the business?............................................................................................ 4
Who are the promoters of the project? ...................................................................................................... 4
2. General Description .................................................................................................................................. 6
Introduction................................................................................................................................................. 6
Contents....................................................................................................................................................... 6
Business description..................................................................................................................................... 6
Market study ................................................................................................................................................ 6
Summary ...................................................................................................................................................... 7
Executive Summary...................................................................................................................................... 7
3. Organizational aspects............................................................................................................................. 9
Commercial description............................................................................................................................... 9
Technical description................................................................................................................................... 10
Purchasing Plan ........................................................................................................................................... 11
Organisation and Human Resources ........................................................................................................... 11
Legal structure ............................................................................................................................................. 12
4. Viability....................................................................................................................................................... 13
Economic-financial study ............................................................................................................................. 13
Evaluation of the risk ................................................................................................................................... 14
Annexes............................................................................................................................................................ 15
General Introduction
The Business Plan: what it is and what it serves for
A Business Plan is a document that identifies describes and analyses a business opportunity, examines its technical,
economic and financial viability and develops all the procedures and strategies necessary to convert the business
diversification plan, an internationalisation project, the acquisition of a business or a unit of an external business or
even in the launching of a new product or service. In short, both in the development and launching of a start-up
and for the analysis of new corporate investments, the Business Plan has become an indispensable tool.
The elaboration of a Business Plan covers two specific objectives:
gives him the information for carrying out the correct positioning of his project and for determining the viability
of his project with reasonable certainty.
the presentation card of the entrepreneurs and their project to third parties when asking for any type of
collaboration, help or financial support.
Formal aspects when writing a Business Plan
Making a Business Plan involves the following of a series of rules and standards:
it is important to use language that is intelligible to more than one group: investors, bankers, suppliers,
technologists etc.
scheme that we will develop later in a more detailed way.
1. PESCA NORTE S.L.
PESCA NORTE S.L. is a family business resulting from the more than 30 years experience in the salted cod sector of
its founder and present General Manager Mr Ramon Sánchez. Its headquarters is in the Industrial Polygon La
Pesquera in Laredo (Cantabria) where the new plant was inaugurates in 1998 with some of he best installations in
the sector.
What is the principle activity of the business?
The principle activity of the business and that which forms its business objective is the import, elaboration and
wholesale of salted cod. The average number of employees is 30, most of whom are operatives for the
manipulation of the product, from the reception of the raw material from the North Sea (Norway and Iceland
preferably) until the shipment of the finished product for its later distribution. The commercialised products are
centred on salted cod and its presentations: backs, pieces, barbels, fillets etc.
Who are the promoters of the project?
The project has been made by the following team:
MBA from the Instituto de Empresas de Madrid, with experience as management assistant in PESCA NORTE and
knowledgeable of the cod sector.
Samuel Larralde: Degree in Business Studies from the Universidad de Navarra and MBA from the
Instituto de Empresa de Madrid.
who knows the product and the desalting processes, will be appointed to take charge of the plant. He will come
from the principal business unit of traditional salted cod. The director of the project and Product Manager will be
directly responsible to the General Manager of PESCA NORTE.
2. General Description
Introduction
In this section should appear the name and address of the projected or already established business, a summary of
employees, products or services commercialised, etc. Similarly, there should appear in this section, the names and
professional records of the business promoters and all those professionals who collaborate in the writing of the
Business Plan and in the consequent start-off of the activity.
See annex 1
Contents
The structure of a Business Plan should be outlined in a table of contents which contains the different sections and
the pages where they can be found.
See annex 2
Business description
Reference should be made to the product or service proposed in the Business Plan, the needs it covers, its difference
protection of and rights over the product or service to be commercialised (patents, brands, anagrams, authorisation
formulas, etc) and in the case of a new product, the steps taken to obtain patents or other protection formula
whose groundwork has begun or been completed.
Market study
The carrying out of a complete market study is a fundamental part of a good Business Plan. The information
obtained through this study allows us to make a judgement on the technical, economic and financial viability of our
business project.
The first phase of the market study should be the fixing of objectives and how to reach them. Carrying out a
complete study allows us to know the following points:
Potential clients should be identified and classified in relatively homogeneous groups with common and
identifiable characteristics.
or services, their prices, their quality, the efficiency of their distribution, the service offered, the timing of the
product, their market quota or estimated sales volume, their commercial policy, their profitability, and in general
all that information that helps our product or service to position itself as well as possible in the market or reference
segment.
To cover the points mentioned above, we need to collect an enormous amount of information which is not always
readily available. For this reason it is fundamental to plan intelligently the field-work that must be done to collect
the necessary information.
The information that we are going to collect by carrying out the market study will have a great influence on the
drawing up of the different parts of the Business Plan and in many cases, as it is the determining element when
analysing the viability of a business project, it may lead to a change of strategy or even to the abandoning of the
business idea.
Summary
This is the last section of our Business Plan. In this, we should state in summary form, the main strengths of the
project, its weaknesses its advantages and opportunities and its threats and risks.
It is the opportunity to reinforce our arguments for the still not convinced investor of the worth of the project for
which reason we must spare no effort when reflecting the true profitability of this project.
Finally, in the summary and conclusions, as a final conclusion, the denial of the viability of the project might
happen, an undoubted benefit when concentrating our investments on potentially more viable projects.
Executive Summary
The executive summary, although it is in second position in the Business Plan scheme described in this technical
note, is in reality the last document that has to be made and is a summary of all the activity proposed in the
especially when negotiating with potential investors in our business project or equally it can be a communication
tool for people responsible in the corporation, financial entities etc.
A good executive summary should include at least:
value chain and to leave clear our income model.
knowledge of the sector, his management capacity, his record of business and corporate achievements, and his
degree of commitment to the project.
the later success of the project: production, marketing Human Resources etc.
calendar.
See annex 3
3. Organizational aspects
Commercial description
The Marketing Plan has as objective the fixing of the strategies that allow us to reach the turnover figure in the
economic-financial analysis. The Marketing Plan therefore must detail our global marketing strategy that serves to
exploit our business opportunity and the advantages inherent in it.
commercial section stimulates our business project. In this sense, here we should include a study of the primary
motivation of the client for the acquisition of our product or service, how we identify and contact our potential
clients, what characteristics of our product or service (price, quality, distribution, delivery service, guarantee, etc.)
we will emphasise to generate sales etc.
We will indicate if the product or service will be introduced at regional, national or international level in the first
phase, the reasons for this and future expansion plans.
comparing them with those of the competition. We will go on to quantify the gross margin and calculate if such
a margin can support the activity of the business, investments and derived costs. It is interesting, if we have the
data, to compare our commercial margins with those of the competition. In the case where there are great
differences between our price policy and that of our competitors, we must be capable of explaining these
differences and in the case where they are favourable to our competitors explain our higher price in terms of
novelty, quality, guarantees, features, service, saving in derived costs etc. In the opposite case, that is, where our
prices are lower than those of the competition, we must be capable of explaining how we can position ourselves
in the market with lower prices and maintain the profitability of our product or service, through greater
production efficiency, lower labour costs, lower material costs etc. Finally we must make a sensitivity analysis to
study different price policies, for example, to study if a higher price, in spite of reducing volume, increases
profitability.
way of contracting and the qualifications of the sales team (the companies own force or representatives) both in
the immediate future and in the medium and long term. Later the Marketing Plan should describe the
commercial margins policy and promotion measures offered to distributors, representatives and retailers and the
comparison with what our competitors do. Moreover, the estimated sales of each representative or member of
the sales team should be presented as well as the incentives designed for different volumes and the total cost of
payment periods and other considerations such as the discount policy, advances, abseilings etc.
to use to attract the attention of potential clients to our product or service. It is important to draw up a Means
Plan, which collects the publicity and promotional means which we are thinking of using, with an economic
evaluation of the means and the impact cost of our activity. Similar procedures can be followed in the case of
using other promotional means such as mailings, appearance at fairs, telemarketing websites etc.
in the case that our product or service is capable of offering either or both.
to use, the discount and margin policy for our channels and the importance of distribution costs with regard to
commercialisation price and the possibilities of exporting our products using the system of international
distribution, transport, insurance, payment by international clients, etc
Technical description
The technical description section should include, in the case that our activity is based on the development,
production and commercialisation of a product, the first two phases already mentioned: development and
production. If we are dealing with a service, as there is no production process as such, we will talk about technical
description and limit ourselves to giving a detailed description of the procedures and technical needs which we will
meet when giving the service.
In the case of a product we must begin by considering the duration of the research and development work which
leads us to form the product in its totality and the needs for investment in the human team and the laboratory,
samples, prototypes, etc. that lead us to develop our final product as well as examining whether we are capacitated
in technological and know-how terms for such a development or whether we should opt for subcontracting.
Then, we have to describe the production process, for which we should give attention to the following aspects:
necessary to cover the production forecasts and the need for personnel, their qualification and cost.
of the existence of qualified manpower, the cost of the manpower, labour conflictivity in the zone, incentives for
the placing of manufacturing installations, the environmental normatives, proximity to the sources of raw
material, accessibility of the installations, etc.
acquisition regime, maintenance expenses, structure and design and the construction of the plant and estimated
cost of the installations.
formulas, production capacity, estimated cost and timing of the acquisitions and finally the duration of the
production equipment and annual depreciation.
subcontractors, who they are, qualification and cost, description of the Production Plan in terms of volume, cost,
manpower, raw material, subcontracted components, stock management, etc. Description of the quality control
processes, control of inventories and inspection procedures, which guarantee minimum costs and avoid
problems of dissatisfaction among our clients.
Finally, we will be able to evaluate, from a strategic point of view, the option of subcontracting the production if
our added value is not found here.
Purchasing Plan
The Purchasing Plan should cover the relationship of the raw materials and materials necessary for producing and
commercialising our product or service. It is necessary to carry out an estimation of cost, of the needs of existing
stocks in storage and their rotation, and a list of suppliers and other sources of provisioning and their location.
To conclude this section we must refer to our need for space to store raw materials and finished products and to the
cost of this storage and assuming it is relevant, to mention the seasonal nature of the storage of raw materials as a
consequence of production.
Organisation and Human Resources
This section of the Business Plan includes a description of management functions and line positions, a detailed
description of key management posts, with the profiles required or a description of the persons if they have already
been determined, with a list of their responsibilities.
For each person who occupies a position of responsibility, it is necessary to describe in detail his professional
experience, his specialisation in a determined functional area or in a determined sector and a list of his
achievements during his professional career. This type of list increases the confidence of possible investors in the
management team and at the same time indicates possible weaknesses or strengths of the directing team.
Later, it is important to describe in detail the responsibilities and specific tasks that each member of the
organisation will perform in the Business Plan project and the remuneration which corresponds to the position,
detailing the specific remunerative concepts, fidelity policy, stock options if applicable, etc.
Regarding line personnel, it is necessary to accept the labour categories that exist in the business, the tasks that are
carried out in each of these categories, the labour agreement which the workers accepted with their specialities if
there were any, the contract formula and the number of workers per category and position, establishing work shifts
that guarantee the correct functioning of the business and finally the remuneration corresponding to each group of
workers and the total cost of the payroll. The need for qualified personnel in a certain area and at an appropriate
cost can mean in some sectors and at precise moments a true entry barrier that makes the viability of the project
extremely difficult.
To finalise, the section referring to organisation and human resources must make reference to the global policy of
the business in the area of human resources, especially if the size of the business advises the creation of a specific
personnel division and likewise it is necessary to formulate an organisation chart of the business by areas and with
the specific persons, if they exist, in the positions of managerial responsibility.
Legal structure
We should explain here the legal form that the business has and the reason for its choice instead of other legal
formulas given in our legislation, the fiscal regime of the business, choice of partners, and the filiation of the
founding partners of the business. If the business were already constituted, to the previously mentioned, would be
added all those circumstances that have modified the legal nature of the business. Copies of the constitution deeds
and business statutes should be attached.
The legal structure should also contain the names and legal status of other partners or investors, with their
corresponding share percentage and their different categories, with their obligations and restrictions. Moreover,
this section should contain everything related to exterior advising services with specification of the legal status of
the advisors, their speciality and the estimated cost of their services.
All the administrative and legal proceedings for constituting a business, for example, the constitution of the
company, registry, fiscal licence, licences for activity or works etc. should be detailed step by step, with an
indication of the time required for carrying them out and their cost.
4. Viability
Economic-financial study
The Financial Plan is another of the basic elements included in the Business Plan. Its purpose is to evaluate the
economic potential of a business project and to present viable alternatives for financing it. Obviously, before
done previously, which indicate the possible economic and financial viability of the business. When preparing our
Business Plan, it is necessary to think about our business project creatively and to consider alternative ways to
finance or launch the project.
When beginning to make out Financial Plan, we have to refer to the hypotheses which are going to support our plan,
hypotheses that which are contained generally in the different sections of what we have been covering when making
our Business Plan. Now, we have to describe the capital structure and the contributions of the promoters to it.
As a central part of our Financial Plan we have to provide a series of financial state forecasts that are listed below:
not reached.
profitable for the project.
years previous.
Once the financial states described have been made, it is interesting to make a comment on the principal
conclusions that they reflect, data such as the maximum amount of capital required and when it will be required,
the amount of debt required, when it must be repaid etc.
Regarding profitability, the internal rate of the profitability of the expected investment must be determined and
explained fully, the periods for the recuperation of the investment, as well as the more appropriate financial ratios
of the specific Financial Plan.
Before completing the section on the Financial Plan, it is worth referring again to the double function that this plan
leading potential financiers into error and they have enough knowledge to detect these anomalies and bury our
credibility.
Evaluation of the risk
The starting of a business project or the launching of a new product is an activity that undoubtedly carries multiple
risks, and the Business Plan should contain implicit references to them.
The Business Plan must include a description of the risks and of the possible consequences of adverse circumstances
which affect the industry, our company, our human team, the acceptance of our product or service by the market,
or delays in launching the product or service or obtaining the necessary financial resources.
In the same way, the risk evaluation must make references to external factors such as recession, new technologies,
competitor reaction, changes in demand, premature obsolescence, etc., and their influence on the development of
our project and on the possible correcting measures on the risk factors that we may apply.
The identification and discussion of the risk factor in our business project and the contingency plans proposed show
Annexes
PESCA NORTE S.L. is a family business resulting from the more than 30 years experience in the salted cod sector of
Industrial La Pesquera in Laredo (Cantabria), where in 1998 a new production plant with some of the best
installations in the sector was inaugurated.
The principal activity of the business and its main objective is the import, preparation and wholesale of salted
cod. The average number of employees is 30, most of whom are operatives working in the preparation of the
product from the reception of the raw material from the North Sea (preferably Norway and Iceland) to the
shipment of the finished product prior to distribution. The commercialised products are salted cod and its different
Given the level of maturity reached in the salted cod market and our experience in it, we have opted for a
strategy of related diversification. Our project is based on the creation of a new line of frozen salted cod, a
product recently introduced on the market, with great potential due to the fact that it has not been introduced
massively. The product has a great advantage over traditional salted cod because it avoids the tedious work of
desalting for the user.
There is a growing tendency among consumers for rapidly prepared food and with our new product we are trying
to adapt traditional cod to the new needs of the consumer.
In the present study PESCA NORTE proposes the creation of a new production line to produce desalted, deep-
frozen cod ready for cooking and situated in its central processing plant in Laredo (Cantabria). The objective is to
enter in new market segments so that PESCA NORTE will be adapting to new tendencies and will depend less on its
traditional business, salted cod. The turnover expected of this new UEN would be 2,650,453 in the first year,
which would mean 15% of the total combined sales of PESCA NORTE in this period.
The distinguishing advantage of our product lies in the quality of the raw material, which is much superior to the
products found on the market at present.
Promoters
This project has been developed by the following team:
MBA from the Instituto de Empresa de Madrid with experience as management assistant in PESCA
NORTE and expert in the cod sector.
Samuel Larralde: Degree in Business Studies from the Universidad de Navarra and MBA from the
Instituto de Empresa de Madrid.
who knows the product and the desalting processes will be incorporated from the main business unit of traditional
salted cod. The project director and the Product Manager will be directly answerable to the managing director of
PESCA NORTE.
GENERAL TABLE OF CONTENTS OF A BUSINESS PLAN
INTRODUCTION ........................................................................ 1
EXECUTIVE SUMMARY ............................................................... 2
BUSINESS ANALYSIS................................................................... 4
ANALYSIS OF THE INDUSTRY ..................................................... 10
ANALYSIS OF THE CLIENTS ........................................................ 15
DESCRIPTION OF THE MARKET AND THE COMPETITORS .......... 22
MARKETING PLAN ....................................................................... 25
DESCRIPTION OF THE WORK TEAM........................................... 30
ECONOMIC AND FINANCIAL STUDY......................................... 33
GROWTH EXPECTATIONS .......................................................... 35
ANNEXES ................................................................................... 38
EXECUTIVE SUMMARY
Description of the business
PESCA NORTE is a business dedicated to the preservation and wholesale of salted imported cod. The aim of the
(especially super-stores). The principal advantage of the product is that presents traditional cod of the highest
quality, ready for cooking.
Technical description
The production process will be carried out in a special section within the installations of PESCA NORTE, who is our
supplier of raw material (salted cod, already cut up). From this point, we will carry out all the phases of production,
only subcontracting transport.
Potential clients
Within the portfolio of potential clients, there are two very different groups. On the one hand, there are the super-
stores and on the other the wholesale distributors, who in turn are divided into two groups: distributors of frozen
food and present distributors of PESCA NORTE
Competition
Frozen salted cod is a product that is still not well established in the market and at present there is no business that
produces frozen salted cod of quality and with the capacity to supply it regularly on a large scale.
Investment needed
The process will take place in PESCA NORTE´s own installations in Laredo, for which reason no investment is
needed for premises, as there is more than enough space since the industrial premises are of recent construction.
Even so, the halls we will use have to be prepared so that they are in the state necessary for carrying out the
desalting and freezing processes. These investments, which include both machinery and preparation of the halls
(moving earth, refrigerating, electric, and sanitary installations, etc.) come to 21,633,883·18 euros.
To the investment only has to be added something for furniture, a computer, suitable working clothes, for a little
more than 6,000 euros and the investment in the manoeuvring fund which is 500,000 euros for the first year.
Sales forecasts
The sales forecasts considered start from contacts made both with present clients of PESCA NORTE and with
possible new clients. The start off figure is 300,000 kilos, of which 40% will be for Portugal and 60% for Spain.
Regarding the distribution channels in the first year we think 20% of sales will be in super-stores rising to 40% in
the fifth year.
Economic analysis
The real net value discounting cashflow in the first five years and the residual value (considering infinite cashflows
with growth of 2%) is a little more than 6,600,000 euros, which is very profitable. Even discounting only the
cashflows in the 5 years analysed, the VAN is also positive. (1,057,781 euros).
In the different sensitivity analyses done (price, discount rate, first year sales, sales growth, and growth of infinite
cashflow) we have determined that the project would not be profitable only if sales were 50,000 kilos or less.
Taking into account that in the market study the forecast was 300,000 kilos, it does not seem very probable such a
thing would happen.