IP4INNO Module 4B: Business Planning with IP The 7Ps Assessment Tool Timing recommendation: 1.5 hours Name of speakerVenue & date

Agenda Introduction To The 7Ps Assessment Tool The 7Ps and Suggested Assessment Criteria Plan Product Profit Production Promotion Protection People 7Ps Case Study Exercise Summary

Introducing the 7P’s Assessment Tool – a model for evaluating businesses Products Profit Plan Promotion Production Protection People

7P’s (1) - Plan The business plan helps: to find funding - reduce the unknowns and reduce risk for investor to set up goals to foresee problems to see the company as a whole

7P’s (1) - Suggested Criteria: The Plan -The long term vision of the business is well communicated -The concept appears to be viable -The technology/product has a defined and sizable market -The plan alludes to the uniqueness of the business and discusses the competing technologies

7P’s (2) - Products Products Invention s What is the (USP)? Technologies The product development plan

7P’s (2) - Suggested Criteria: Product/s -The product/s has a clear unique selling point -The company demonstrates that it understands the benefits its products/services offer to customers, not just the technical features. -The company has a range of products -The company has a credible product development plan

7P’s (3) - Profit The Financial Plan: Break-even Analysis, Profit and Loss Statements, Cash Flow Statement and Balance Sheet.

7P’s (3) - Suggested Criteria: Profit The turnover growth appears to be realistic The assumptions used are explained The profitability estimates are in the range of achievable figures (say 0-25%) The figures reconcile (pick on some figures you understand)

7P’s (4) - Production A company should be able to show how it intends to produce its products e.g. in-house or outsourced production, and that it understands it’s value chain.

7P’s (4) - Suggested Criteria: Production The plan sets out how the company intends to produce its products The company appears to understand its value chain The company is aware of the risks of outsourcing The company’s costs of production are not prohibitive

7P’s (5) - Promotion Product Promotion –Endorsements –Physical Evidence –Trade Shows –Search Engines Route to Market –Distribution –Links to Market –Routes to Market –Initial Sales

7P’s (5) - Suggested Criteria: Promotion -The company has a some evidence of promotional material or is engaged in promotional activities -The company makes appropriate use of distributors in order to access remote markets and there are clear plans for how these products/service sales will be supported -The company has identified where initial sales will come from -The company has close links to their target market

7P’s (6) - Protection IPR: Patents, Trademarks, Design Rights, Copyrights, Plant breeders rights IPR Gives investors the confidence to invest since IPR holders can prevent other entering a market and provides an asset that can be traded through licensing Long term supply or client contracts

7P’s (6) - Suggested Criteria: Protection -The company has some form of protection in the form of supplier/customer contracts or IP rights -The company has a portfolio of IP -The plan describes the benefits of the IP to the end user -The plan covers competing IP

7P’s (7) - People Internal People Founders The management team Chief Executive Officer Chief Financial Officer Scientific Advisory Board Board of Directors External People Patent Attorney Certified Public Accountant Attorney at Law Technology Licensing Officer (Technology Manager) and “Good people can succeed with a bad idea. Bad people can't succeed with the best idea”

7P’s (7) - Suggested Criteria: People -The management team have grown businesses before including raising similar investment and recruiting/retaining staff -The key staff are incentivised to stay with the business for at least 3 years; or plans exist to capture their knowledge -The key functional responsibilities (production, marketing, sales, financial management) are being handled by team members with at least 3 years past experience -Businesses are a series of challenges: the team can count on the support of networks of experienced people

Case Study Exercise Develop one additional criteria for each P to evaluate the two cases Assess the case studies against the criteria For each case study, give each statement a score from 1-5 based on what you have read – 1 meaning that you strongly disagree with the statement and 5 meaning that you strongly agree with the statement. For example...

Compare the scores assigned for each case study Are all the categories of equal importance? Which company would you invest in? Case Study Exercise

Summary Evaluating companies is more than collecting numbers Hard numbers teach you about history – they do not tell you about the future Good companies display the behaviours of good companies Bad companies display the behaviours of bad companies People run businesses; people change business; people are the most important P

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