1. Writing a Winning Business Plan
Lari E. Mobley, MBA, Ph.D.
Jeff McHugh, MBA, CMA
Explain name
Welcome them and tell them why we’re here
Portions adapted from Katan Associates, UCI, 2015

2. Agenda What is a business plan? Guidelines and judging criteria
Sections
Tips and suggestions
Q & A

3. Dilbert on Business Plans

4. A brief explanation https://youtu.be/PDWvcsTloJo
We are intended to use our God-given resources most effectively
Everything belongs to the Lord, and we are just stewards
Ask: How would you define an entrepreneur? What does an entrepreneur do? What is he or she like?

5. What is a business plan?
A business plan is a written description of your business’s future
Statement of goals
Reasons they are attainable
Plans for reaching them
People who will make it happen
Plans don’t sell new business ideas to investors. People do.
Risk taker? Manager? Celebrity? Inventor?

6. Guidelines for Biola Start-up
Business plans must not be over fifteen pages, excluding the cover page and table of contents.
Cover page should include company name, team member names, school affiliations, undergraduate, graduate, alumni status.
Margins must be one inch on all sides.
Body text should be 12 pt. font.

7. Guidelines for Biola Start-up
Document text should be single-spaced.
Submit documents only as a single file in Adobe Acrobat format (.pdf format).
Due Date:
Must post Written Business Plan to: BiolaStartup2016.istart.org by March 14, 2016, 11:59PM.

8. Judging criteria Quality of business plan = 30%
Executive summary & company overview
Products or services
Market need
Market potential
Competitive advantage
Management
Financial forecasts

9. Judging criteria Faith-based component = 20%
Are Biblical values and principles represented?
Does the business serve the common good and impact the world for Christ?
Impact of presentation = 30%
Evidence of a market, ability to execute, and return on investment
Judges’ assessment of idea= 20%
Would they invest their own money?

10. Glossary of business plan terms
What they say
What they mean
Customers are clamoring for our product
We have not yet asked them to pay for it, and all of our current customers are relatives
We are looking for a passive, dumb-as-rocks investor
We seek a value-added investor
We did not modify any of the assumptions in the business plan template we downloaded from the Internet
We project a 10% margin

11. Executive summary
The executive summary is clear and effective as a stand-alone document
What problem are you solving?
How will your business solving the problem?
Who are your customers?
Who are your competitors?
How viable is your business?
How do you make money?
Innovations of the past:
Installment buying (gave farmers purchasing power to buy equipment)
Containers for shipping (minimized time in port)
Systematic training of teachers (made universal schooling possible)
Textbooks
Hospitals
Management (rendering productive people of different skills and knowledge working together in an organization)

12. Products or services What is the product or service?
What are its attributes?
What are the advantages and potential drawbacks?
Ask: Is entrepreneurship an art or a science?

13. Products or services
Why/how is your product/service more compelling than existing ones or the competition? What is the stage of development?
Do you have a proprietary position or intellectual property protection planned or in place?
Ask: Is entrepreneurship an art or a science?

14. Market need
It can be learned

15. Market need
What specific conditions in the market have created the problem you are solving?
How will your product/service take advantage of the opportunity?
It can be learned

16. Market need Who are your customers and what are their attributes?
Clearly define your potential customers and why they will pay for your product or service
It can be learned

17. Marketing by Guy Kawasaki
It can be learned

18. Market potential
What are the characteristics of the market for your product or service?
How will you reach the market?
Hint: “word of mouth” is not a strategy. It means “we have no clue.”
How big is the market opportunity: number of potential customers & annual sales?
How do you know this?
How believable are your numbers?
Relate this to the parable of the talents, remind them that the resources are God’s, not ours

19. Market potential Can you narrow the market to a manageable segment?
Demographic, psychographics, geography, behavior
No, “everyone” is NOT your customer
How will you dominate the market?
e.g. through pricing, quality, geography
Is there a market niche where you will have competitive advantage?
Can you sustain this advantage? How?
Relate this to the parable of the talents, remind them that the resources are God’s, not ours

20. Build a bottom-up model
NOT this:
There are 1.3 billion people
1 percent want Internet access
We’ll get 10% of that potential audience
Each account will yield $240 per year
1.3 billion people x 1% addressable market x 10% success rate x $240/customer = $312 million!
And—added bonus—look at how conservative these principles are!
Source: The Art of the Start, by Guy Kawasaki
Relate this to the parable of the talents, remind them that the resources are God’s, not ours

21. Build a bottom-up model
BUT this:
Each salesperson can make phone calls per day that get through to a prospect
There are 240 working days per year
5% of sales calls will convert within 6 months
Each successful sale will bring in $240 worth of business
We can bring on board 5 salespeople
10 calls/day x 240 days/year x 5% success rate x 5 salespeople = $144,000 in sales the first year
Source: The Art of the Start, by Guy Kawasaki
Relate this to the parable of the talents, remind them that the resources are God’s, not ours

22. Competitive advantage
Competitive Matrix:
Who are your competitors?
Their strengths & weaknesses?
Your strengths & weaknesses?
How will you close the gap?
How easily can competition close gap?
So, is this inherently risky? How risky?

23. Competitive advantage
Yes, you have competitors
The “old way of doing things” can be a competitor
Doing nothing can be a competitor
Saying you have no competition is a nonstarter
It’s your job to show how you are superior to the competition, not that it does not exist
So, is this inherently risky? How risky?

24. Competitors by Guy Kawasaki
So, is this inherently risky? How risky?

25. Competitors: what NOT to do
It’s the best use of our God-given resources. Convince us through your concept paper that it would be risky NOT to start your business
Source: The Art of the Start, by Guy Kawasaki

26. Competitors: what to do
Source: The Art of the Start, by Guy Kawasaki

27. Management Who are key team members and their respective roles?
What are their relevant experiences and accomplishments?
What other areas of expertise are you lacking?
When will you need additional team members?
Market = customers
Solution = your business model

28. Financial forecasts Income statement Balance sheet
Funds required & uses
Key assumptions
Financial model

29. Tips and suggestions Don’t forget key expenses
Salaries and payroll taxes
Unless you are independently wealthy
Licenses, permits, patents, and trademarks
Insurance
Business, workman’s comp, vehicles, other
Websites are not free
Social media is not free
A man buys a Cadillac because he wants prestige, not a car
A woman buys cosmetics because she wants hope
You buy a drill because you need to make a hole, not because you need a drill

30. Tips and suggestions Explain your “go to market strategy”
How will you get your first customers?
How exactly will they hear about you and decide to buy your product or service?
Are they both willing and able to pay?
A man buys a Cadillac because he wants prestige, not a car
A woman buys cosmetics because she wants hope
You buy a drill because you need to make a hole, not because you need a drill

31. Tips and suggestions Do your research Be realistic
Read sample business plans
Have others read your plan
Check your numbers for accuracy and believability
Be realistic
A man buys a Cadillac because he wants prestige, not a car
A woman buys cosmetics because she wants hope
You buy a drill because you need to make a hole, not because you need a drill

32. Final thoughts Our success comes from the Lord
“He did this all so you would never say to yourself ‘I have achieved this wealth with my own strength and energy.’ Remember the Lord your God. He is the one who gives you power to be successful…”
- Deuteronomy 8: (NLT)

33. Questions
Any questions?