THE BUSINESS PLAN CHAPTER 8 Week 5 Dr. Thomas Webb BA 346

The Top 10 Lies by Entrepreneurs At least what Guy Kawasaki thinks they are! 1.Our projections are conservative. 2.[Big Name research firm] says our market will be $50 billion in [Big Name firm] is going to sign our purchase order next week. 4.Key employees are set to join us as soon as we get funded. 5.No one is doing what we are doing. 6.No one can do what we are doing. 7.Hurry because several other venture capital firms are interested. 8.Oracle is too big/dumb/slow to be a threat. 9.We have a proven management team. 10.Patents make our product defensible. 11.All we have to do is get 1% share of the market.

The Top 10 Tips for Starting Anything At least what Guy Kawasaki thinks they are! 1.Make Meaning, not money 2.Make Mantra, not mush 3.Jump to the next curve, push to the next level don’t marginalize 4.Get going, stop talking and analyzing 5.Niche thyself, high value, high uniqueness 6.Let a hundred flowers blossom, you just may not know who is going to buy your stuff. 7.Follow the 10/20/30 rule, 10 slides, 20 minutes, 30pt font 8.Hire infected people, passion is key 9.Lower barriers to adoption, make it easy to buy 10.Don’t let the bozos grind you down, rich doesn’t equal smart

So Why a Business Plan? 1.To help you think better This is your very own strategic plan to success. Don’t leave things out, what do I really want, where could it go wrong. 2.To help you get money –You just won’t get any money without a plan that tells a story they can understand. –It must fit the audience. A bank is not an angel. Totally different criteria. Target it! Have as many versions as you need to tell the story to that target market !

The Elements of the Plan Each part has it’s purpose! The Vision Statement [10 works] The Mission Statement [50 words] The Elevator Pitch [ words] The Executive Summary [1-2 pages] The Plan Core The Financials The Appendices

Up Front Parts – The Vision [10 words] Vision, Mission, Pitch, Opening Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion." Jack Welsh –“I have a dream” –"To serve the most vulnerable" –“By the end of the decade, we will put a man on the moon.” –When we think, empires fall. –McDonald aims to be the UK’s best fast service restaurant experience.

Up Front Parts – The Mission [50 words] Vision, Mission, Pitch, Opening Why you do what you do, the organization's reason for being, its purpose. Says what, in the end, you want to be remembered for. “Our guiding mission is to deliver superior quality products and services for your customers and communities through leadership, innovation and partnerships.” This is Wendy’s!! The best burger for the price around the world or Healthy Fast Food

Up Front Parts – The Mission [50 words] Vision, Mission, Pitch, Opening Dell Computer's mission statement is "Dell's mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet customer expectations of: Highest quality Leading technology Competitive pricing Individual and company accountability Best-in-class service and support Flexible customization capability Superior corporate citizenship Financial stability"

Up Front Parts – The Mission [50 words] Vision, Mission, Pitch, Opening McDonald's mission statement "McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness and value, so that we make every customer in every restaurant smile. To achieve our vision, we are focused on three worldwide strategies: Be the best employer for our people in each community around the world, Deliver operational excellence to our customers in each of our restaurants, and Achieve enduring profitable growth by expanding the brand and leveraging the strengths of the McDonald's system through innovation and technology. Quality, consistency, cleanliness, service

Up Front Parts – The Pitch [ words] Vision, Mission, Pitch, Opening The hook, the passion, the substance, the request What is it? An "elevator pitch" is a quick and concise way to communicate who you are, what you're trying to do, and why you do it better Why is it important? It's much more than a mission statement — it's understanding your business in a way that gets people excited and thinking.

Up Front Parts – The Pitch [ words] Six Questions it must answer! The hook, the passion, the substance, the request What is your product or service? Who is your market? What is your revenue model? Who is behind the company? Who is your competition? What is your competitive advantage?

Up Front Parts – The Pitch [ words] 10 keys to a great pitch! 1.Be concise 2.Solve a problem 3.Describe the product and benefits 4.Tailor the pitch to the audience 5.Speak in plain English 6.Grab the listener’s attention 7.Show your passion 8.Tell a consistent story 9.Conclude with a call for action 10.You get one you can fill in!!! Finance, customers, potential employees, channel members, key suppliers

Up Front Parts – The Executive Summary Vision, Mission, Pitch, Opening This is everything EXCEPT a summary. It must focus on the decisions that are required and enough information to set a direction. If someone only reads this, what will be their decision?

Assumptions, Assumptions, Assumptions How do you know? Where did that come from? No way? As a group I have been disappointed with the lack of rigor to document sources of information and lack of knowledge on how to do it. It is a SERIOUS weakness you have. It is absolutely essential that you document the assumptions in your plan. Go through it line by line and say where did this come from, how did I know that. Lots of footnotes and explanations are CRITICAL! Note: if you don’t put them all in, have them in a notebook so when someone asks, you can answer!

State The Risks Explicitly Don’t be afraid to tell the truth? Search for it in fact! The Truth is VERY Important. There is a tendency to make this marketing document not reflect the truth. RESIST! The Core Questions –Overstated numbers –Uncertain sales –Overlooked competition –Experience deficits –Inadequate cushion –Inadequate payback. My Additions –Risk of weak assumptions –Market risks – reality and your assessment –Consumer Change risk –Inadequate resources risk –Optimistic timing risk.

The Business Plan Just know where to find the information! – – – – – –

The Five Biggest Mistakes in the Plan This is true of all the steps from Mission to Final Plan No target market defined. Unrealistic financial projections. Too much hype. Poor research. No focus on competition.

The Great Evaluation Why go through all this! What did you get out of this strange and cumbersome exercise? They cover the key elements – management, product, objectives, information, supply, finances, assumptions, action plan, money, presentation quality. How do you critically read a plan and evaluate it. What does this list do well, not so well? Really saw what parts there are to a business plan. Understood that it ain’t that easy, there are lots of pieces to fill in and things you have to learn. There is lots of information out there.

So What Should You Get Out Of All This! Just a sense of what one can be! What should I expect? What should you expect? You really need to do one There is a huge amount of information out there for every piece of the plan. There are some very important parts that you need to spend time on. You get a feel for what they are like and what has to be in them.

So What Should You Get Out Of All This! What is this all about? I don’t care about the elevator pitch, I care about your ability to find one and what is needed 5 years from now. I don’t care if you understand all the parts of a plan but that you know there are a few parts that you really have to do well. I care that you can go in and evaluate a plan and know where to get the information so you can blow away the others in your group. I care that you can figure out that you must have a good elevator pitch for your job, your next job, your career. You know you need one and how to build one. I care that you understand what a mission statement is and where to go to get information when you boss says “we need to redo our mission statement, what do you think Gary or Lisa.“ I don’t give examples, you go out and find them – that is your job!

SO! Remember “The map is not the territory!”

Strategic SWOT Combination A super way to know where you stand! Threats FIGHTFLEE Opportunities FLAUNTFIX StrengthsWeaknesses Inside the Firm Outside the Firm

A SWOT for the Business Minor Program StrengthsWeaknesses OpportunitiesThreats

Where to look? EXISTING PRODUCTSNEW PRODUCTS EXISTING MARKETS Market PenetrationProduct Development NEW MARKETS Market DevelopmentDiversification