1. Entrepreneur’s Toolkit Tool 4: Financial objectives

2. Business Plan and Financial Objectives  Financial objectives help encompassing the financial scope of your project.  They provide credibility to the project by quantifying the strategic posture, i.e. the competitive strategic positioning + organizational structure, of the new venture  The entrepreneurial approach of financial objectives is specific and deserves a dedicated methodology. => SKEMA Business School, has designed and experienced on a variety of projects a unique tool supporting the entrepreneurial finance methodology : DEFI

3. The financial objectives of the BP helps quantifying …  Strategic posture  Revenue streams  Cost structure Business Plan and Financial Objectives

4.  Transaction revenues from one-shot customer payment  Recurring revenues from ongoing payments to deliver the VP or provide post purchase customer support Revenue streams: The cash the firm generates from each customer segments under 2 types of streams

5. Business Plan and Financial Objectives Cost structure: Describes all costs incurred to operate the BM  Cost-driven structure: focused on cost control efficiency  Lower-price Value Proposition  Maximum automation  Extensive outsourcing  Value-driven structure: focused on value creation towards loyalty  Premium Value Proposition  Customization of services and relationships

6. BP and Financial Objectives – The DEFI tool

7. A tool designed to match the entrepreneurial mindset Sales objectives on the targeted segments likely to value the firm’s proposition objectives of investments needed to develop & deploy the Value Proposition Internal competences needed to generate and maintain the Value proposition Clear financial statements to evaluate the financial validity of the entrepreneurial project Ability to leverage debt to finance growth + commitments towards shareholders Strategic financial indicators to monitor the economic and financial performance

8. BP and Financial Objectives – The DEFI tool Sales objectives on the targeted segments likely to value the firm’s proposition objectives of investments needed to develop & deploy the VP

9. BP and Financial Objectives – The DEFI tool Financing choices are influenced by your ability to leverage debt to finance growth + commitments towards shareholders Company tax

10. BP and Financial Objectives – The DEFI tool Staff objectives: Internal competences needed Financial statement objectives

11. BP and Financial Objectives – The DEFI tool Financial objectives: a key part of the Light BP !

12. Questions Q1: What is the correct assumption a)Financial objectives in a business plan need to be presented in order to translate the characteristics of the project into a financial perspective b)It is impossible to represent the content of the new venture’s strategy in the financial objectives c)In the pitched business plan, it is mandatory to introduced in detail the balance sheet and the income statement layout. Q2: In a pitched business plan, financial objectives a)Provide information on your ability to raise funds b)Provide reliability of your strategic positioning c)Provide a financial picture of the resources and revenues needed to implement the business model of the project Q3: Which of the following assumptions is not correct a)The revenue streams quantified in a business plan are either transaction revenues or recurring revenues or both b)Revenues described in a pitched business plan encompass all streams of business c)A cost-driven cost structure characterizes a lower quality value proposition as opposed to a value-driven cost structure