Creating a Simple Business Plan Jon Kolko Professor, Austin Center for Design

Business Plan A business plan is an organizing document that describes your company’s value in a short, concise manner. A business plan acts as a grounding summary of your work: It describes what your company is and what it does It articulates the value of your products or services It defines the potential market for your ideas It grounds your ideas in reality 2

What is it? A business plan is an organizing document that creates an overview of your product or service, and the value you provide. It’s often a single document or a single presentation It follows a somewhat predictable format The goal of the document is alignment and evangelization It evolves as your company evolves – it is a living document 3

What is it for? A business plan has two primary audiences, and serves several purposes: Your team Help you consider your idea from a variety of perspectives Align your team members around a set of goals and assumptions Provide clarity around direction Investors or Partners Convince them that there is a reason to invest Explain the value of your idea in a simple and concise way Help them understand the context of your idea 4

What’s in it? Top-line value proposition How it works What pain do people have that this addresses Key features Evidence of market demand Basic financials Marketing plan Team 5

For example… 6

Austin Center for Design teaches autonomy through making. 7

How it works 1 2 3 Students take classes in design strategy, social entrepreneurship and innovation from leading practitioners Students gain confidence in creativity in order to represent complex ideas and solve complex problems Students learn that they can design their own career course, rather than settling for existing jobs 8

2/ Lack of real-world applicability Pain points addressed 1/ High cost of tuition 2/ Lack of real-world applicability 3/ Outdated curriculum 4/ High student to faculty ratio 5/ No personalized career advice 6/ Disconnected alumni 9

Creative Studio Environment 10

Supportive Alumni Network 11

$15,000 Low Cost 12

Small Class Size 13

Market Demand 24M students $42.5M funding Intent to monetize content, mentoring, recruiting $119.3M funding Massive growth; guaranteed job placement 14

Revenue and Growth $15,000 tuition fee 10 student class sizes $140,000 approximate profit per class, after class 1 $15,000 tuition fee 10 student class sizes $80,000 fixed expenses $10,000 incremental instructor cost per class 15

Specialty audience = Specialty approach Marketing Specialty audience = Specialty approach Thought Leadership Alumni Network Faculty Network 16

Team 17

In detail… 18

Austin Center for Design teaches autonomy through making. Simple and concise Makes an implicit (or explicit) promise (“If you buy our product, we promise we will teach autonomy through making”) Acts as a mission statement Acts as a prompt for further discussion Austin Center for Design teaches autonomy through making. 19

How it works Supports the top-line value promise Step by step Still framed as value promise (implied “We promise that you will…”) Active (“take, gain, learn”) How it works 1 2 3 Students take classes in design strategy, social entrepreneurship and innovation from leading practitioners Students gain confidence in creativity in order to represent complex ideas and solve complex problems Students learn that they can design their own career course, rather than settling for existing jobs 20

2/ Lack of real-world applicability Describes the problems with the current leading products and services Sets up the problems, so they can’t be resolved by the Key Features (subsequent slides) Pain points addressed 1/ High cost of tuition 2/ Lack of real-world applicability 3/ Outdated curriculum 4/ High student to faculty ratio 5/ No personalized career advice 6/ Disconnected alumni 21

Key Features Describes the key capabilities of your offering Visual, when possible Select items that differentiate your product or service Be concise, but be prepared to talk at length about each feature Key Features 22

Shows that there is critical mass of interest around the particular topic It’s rare that you will ever be the only person in the space; shows that you are aware of the competitive landscape Market Demand 24M students $42.5M funding Intent to monetize content, mentoring, recruiting $119.3M funding Massive growth; guaranteed job placement 23

Basic financials that illustrate how you will make money You are not a finance person; don’t try to be. Stick to the basics: expenses, revenue upside, and growth Be realistic: there’s no way you are going to make a billion dollar company in 5 years, so don’t paint that picture. Revenue and Growth $140,000 approximate profit per class, after class 1 $15,000 tuition fee 10 student class sizes $80,000 fixed expenses $10,000 incremental instructor cost per class 24

Specialty audience = Specialty approach Describe how you will get your message out Be realistic in your reach Avoid things like “We will use google ads and facebook” Marketing Specialty audience = Specialty approach Thought Leadership Alumni Network Faculty Network 25

Who are you, and why are you qualified to run this company and sell this product? Team 26

Business Plan A business plan is an organizing document that describes your company’s value in a short, concise manner. A business plan acts as a grounding summary of your work: It describes what your company is and what it does It articulates the value of your products or services It defines the potential market for your ideas It grounds your ideas in reality A business plan contains: A top-line value proposition How it works Paint points Key features Evidence of a market for your product Basic financials Marketing Team 27