Business Plan Preparation Frank Moyes Leeds College of Business University of Colorado Boulder, Colorado Product & Service, Elevator Speech

Tonight’s Agenda Topics Read BP pp 6-7 Practice Elevator Speech Features & Benefits Margins Elevator Speech Investor Presentations Read BP pp 6-7 Practice Elevator Speech In the Fire – team meetings, last hour Preliminary Market & Industry Analysis Results Preliminary Interview Results Product & Service, Elevator Speech

Next Week Marketing Plan Revenue Model Customer Surveys Read BP pp 14-18 In the Fire Prelim Industry Analysis Model company description Hand in 10 Call Reports Preliminary Competitive Matrix Model company Product & Service, Elevator Speech

In the Fire Grading

Business Plan Elements Executive Summary Company Overview Market & Industry Analysis Product/Service Description Marketing Plan Operations Plan Development Plan Management Competitive Advantage Financial Plan Funding Product & Service, Elevator Speech

Product/Service Sections Features Benefits Proprietary Rights Stage of Development Product & Service, Elevator Speech

Features Detailed description What is unique? Attributes Environment What is unique? What is evidence that customers want these features? How produce & deliver – systems approach Don’t assume people know or understand your product/service Description Specifications Drawings Photographs Rendering Other Product Issues Customer support Warranty Repair service Training Technical Support Product & Service, Elevator Speech

Attributes Performance: durability, quality of materials, defect levels, tolerances, construction, dependability, functional performance (acceleration, nutrition, taste), efficiency, safety, styling, packaging, etc. Cost: purchase price, quantity discounts, operating costs, repair costs, cost of extras or options, cost of installation, trade in allowance, likely resale value, etc. Availability: carried by local stores, credit terms, quality of service available from local dealer, delivery time, credit card, on-line transactions, etc. Service: hours, warrant, guarantee, return/replacement policy, upgrades, maintenance, training, installation, repair service, spare parts, customer support, tech support, training, product design, make to order, level of inventory, quotation response time, lead time, quality certification, employee capabilities, etc. Environment: location, atmosphere, layout, fixtures, aesthetics, style, sound, lighting, color, etc. Bad Slide Product & Service, Elevator Speech

Benefits Describe major benefits - be specific What is the evidence that benefits are understood by the market? Product & Service, Elevator Speech

Benefits Emotional: ambition, power, independence, achievement, ambition, pride of ownership, comfort, love, friendship, security, style, self Improvement, etc. Social: status, image, popularity with friends or family members, reputation of brand, personal relationships, style, fashionable, etc. Health: stress, fitness, mental capacity, strength, sex life, quality of life, muse, etc. Financial: revenue, costs, savings, productivity, pricing, profitability, market share, save time, productivity, etc. Convenience? Objective is distinguish between benefits and features, not put into categories Product & Service, Elevator Speech

Feature vs. Benefits Product & Service, Elevator Speech

Net Dog Product & Service, Elevator Speech

NetDog Feature Benefit Adaptable to new network threats Protection without a reduction in user productivity Modular rules based system Adaptable to new business requirement and new threats Guaranteed zero packet loss Eliminates the risk of false negatives Intelligent network adaptation Protection is provided regardless of the network topology Ships with a standard rule set Provides out of the box protection from common attacks Scripting language and API Customers can develop their own powerful rules Web based reporting system Improves forensics and visibility into the security of the network Web based interface Makes administration of the system easy

Features DUO Benefits Ergonomic design Eliminates back and shoulder pain so parents feel more comfortable while carrying their baby. Cocoons Allow parents to more easily attach and detach baby from harness, eliminating fear of straining arms, dropping or tightly squeezing baby. Multiple Cocoons Parents maintain a look that can be seasonally updated to provide the feeling that they are on the leading edge of fashion. Babies are happier and more comfortable in Cocoons specifically designed to fit their current developmental stage. Unexpected Attributes Convenient features allow parents to keep important items, like keys, easily accessible. This saves time and energy spent preparing to get out the door.

Product & Service Conclusions Make it real Photo, rendering, specs Prototype Evocative description Make it exciting Sell your concept Product & Service, Elevator Speech

Product/Service Competitive Matrix Product/Service offering – breadth and depth Quality (define the type quality) Detailed analysis of the key features Obtain samples of the competitor’s products, specifications & drawings Retail go to competitor’s locations, observe the environment and how customers interact with the business. Internet businesses evaluate the websites. Strengths and weaknesses Location Product & Service, Elevator Speech

Product/Service Competitive Matrix Attribute 1 Attribute 2 Attribute 3 Price Style Availability Crocs $29 One style, multiple colors Everywhere! Tevas $45+ Multiples styles, colors Athletic/comfort shoe stores Reef $20 Thongs, multiple colors Skate shops, dept stores Hoz Sandals ? Product & Service, Elevator Speech

Quality Dimensions I Performance - the primary operating characteristics of the product or service Features - the characteristics that supplement the basic functioning of the product or service Reliability - probability of the product or service failing within a specified period of time Conformance - the degree to which a product or service meets acknowledged standards Product & Service, Elevator Speech

Quality Dimensions II Durability - a measure of product life (both technical and economic) Serviceability - the speed, courtesy, competence, and ease of repair or recovery Aesthetics - how a product or service looks, feels, sounds, tastes, or smells Perceived Quality - various tangible and intangible aspects of the product from which quality is inferred Product & Service, Elevator Speech

Service Quality Dimensions Reliability - ability to perform service dependably & accurately Responsiveness - willingness to help customers & provide prompt service Assurance - knowledge & courtesy of employees and ability to convey trust and confidence Empathy - provision of caring, individualized attention to customer Tangibles - appearance of physical facilities, equipment personnel and communication material Product & Service, Elevator Speech

Financial Dynamics Every entrepreneur must know – part of your DNA All your decisions have a financial impact Not accounting Language of business Product & Service, Elevator Speech

Financial Dynamics 4 Key Elements Revenue Margins Assets Cash Flow Product & Service, Elevator Speech

Margins % Gross Profit Margin % Contribution Margin Revenue – COG’s Revenue % Gross Profit Margin % Contribution Margin % Net Profit Margin % Operating Expenses Revenue – Variable Costs Revenue Net Earnings Revenue Sales, General & Admin Revenue Product & Service, Elevator Speech

Margins %

The Elevator Pitch Based on material developed by: 9:50 Before we get started, let me give some background on the examples that we will be using in the following segment: These examples are taken from various companies that have been funded over the past year, including ones that obtained funding using the models and best practices from this workshop. To preserve confidentiality, the name Acme was used for all companies. We would like to acknowledge the support of Strategic Design Group in SF for assistance in assembling the slide examples for this presentation. Cameron Kane and his team are experts in graphic design and presentation development for groups including investor audiences. (RECOGNIZE CAMERON, IF IN THE AUDIENCE or REFER TO ONE PAGER INCLUDED IN THE COLLATERAL MATERIALS). Strategic Design Group will provide copies of the one pager to National. Contact Dina Oki with the number of copies you would like for your workshop. As we go through the materials, we will show you slides from these presentations to translate theory into specifics.   Any questions??? Product & Service, Elevator Speech

Elevator Pitch What is the objective? Elevator Pitch What is the objective? Who are you talking to? What motivates them? Must be exciting and compelling This is a conversation, not a speech Product & Service, Elevator Speech

The Elevator Pitch Goal: Buy-in Critical Attribute: Focus Investors Employees Customers and partners Critical Attribute: Focus What do you want remembered? Result: Motivate Listener wants to hear more Product & Service, Elevator Speech

The Elevator Pitch What market are you in? What urgent problem are you solving? What is the size of the opportunity? Value proposition Why will you win? Where is the validation (customers, investors, etc.)? The order is flexible Product & Service, Elevator Speech

Elevator Pitch Communication Imperatives Show passion, energy, and enthusiasm Use appropriate eye contact when face-to-face Slow down and speak clearly Be brief (target 30 seconds) Be confident Use understandable vocabulary Product & Service, Elevator Speech

Elevator Pitch – Example P1 Diamond develops proprietary thin film diamond products and equipment that dramatically improve heat dissipation on microprocessors, solving one of the highest priority pain points in the industry. We address growing markets that will exceed $1.5B by 2006 and will become the dominant supplier with the best team having the most comprehensive patent position in the industry. Intel is our largest current investor, and we are actively engaged with other top target customers and partners who provide very strong references. Product & Service, Elevator Speech

How Do You Get Immediate Attention? Reduce to one sentence or question what is unusual, interesting, exciting or dramatic. Product & Service, Elevator Speech

Elevator Pitch http://www.youtube.com/watch?v=Tq0tan49rmc Product & Service, Elevator Speech

Elevator Pitch Exercise Your name and the name of your firm Your pitch Evaluation by class on a scale of 1 to 10 Urgent pain Large growing market Unique, defensible position Validation Communication skills Desire to hear more ESTIMATED TIME – START FROM 9:05 – 9:35 Describe exercise: Each person compose in writing elevator pitch elements (5 minutes) Form small groups (2-3 people) Each person presents and others provide written (see other materials for template) or verbal feedback and rank against criteria. (Ranking 1 to 10 with 1= Poor and 10 = Excellent). Instruct against using a rating of 5 as its middle of the road. (5 minutes per person including elevator pitch and feedback – total 15 minutes). Reconvene Discuss / list best practices as a group (10 minutes) Product & Service, Elevator Speech

Be Prepared to Answer Questions About Product and technology Marketing strategy Market research Revenue and profitability Funds required Valuation Product & Service, Elevator Speech