1. Writing the Winning Business Plan
Jack Derby Derby Management

2. Why create a Business Plan?
Most importantly, for you & your team
You need one for a startup
You need one for a corporation
The actual process of planning is the key.
It consolidates management direction.
It provides debate & finally consensus.
It’s used as a guide when speed bumps happen.
It’s your company & your personal scorecard.

3. No Business Plan…No money.
Why else?
No Business Plan…No money.
The Six Stages of Successful Sources:
FF&A: Friends, Family & Acquaintances
Private angels
Venture capitalists
Corporate investors
Strategic partners
Banks

4. Writing a plan is tough work
It requires disciplined balance
It’s visionary, but logical.
It’s financially perfect, but flexible.
It’s for today, but also for 3-5 years out
It’s a formal plan, but it’s easy to read.
It’s creative, but it follows The Rules.

5. Pay attention to The Do’s & Don’ts.
How do you start?
Pay attention to The Do’s & Don’ts.
Above all else…
Be compelling
Be brief, focused, & deliberate
Focus on customers & how you will sell them.
Provide market research & hard data
Be innovative & describe barriers to others.
Create an experienced management team

6. The 25 Do’s…
Be brief & direct & detailed.
Get to the bottom line quickly.
Identify what the business is immediately
Identify the business model immediately.
Focus on your customers.
Define what’s compelling.
Define what’s unique.

7. The 25 Do’s…
Be realistic with yourself.
Remember, you're investing your career.
Define long term objectives for 3 to 5 years.
Describe the 3 to 4 primary strategies.
Focus on your sales model & channel strategies.
Include your ecommerce strategies.
Make realistic, but exciting, projections.

8. The 25 Do’s…
Support strategies with detailed tactics.
Substantiate with accepted market research.
Discuss very objectively your risks.
Answer the question of why customers buy.
Describe the barriers to entry for others
Convince your reader about success.

9. The 25 Do’s…
State how much money you will need.
Define exactly how the funds will be used.
State clearly your exit strategy.
Stick with proven and accepted plan formats.
Don't try to be cute!

10. The 15 Don’ts…
Write about history. Focus on the future.
Focus only on you & your technology.
Use highly technical buzz & descriptions.
Forget about objective customer research.
Make unsubstantiated statements or claims.
Create revenues that you won’t make.
Include detailed budgets.

11. The 15 Don’ts…
Forget what makes your plan different…
Experienced management
Large and growing markets
Proven sales models & channels
Experienced sales penetration tactics.
Innovative technologies

12. The 15 Don’ts…
Assume anything.
Forget what your reader wants.
Define valuations in the actual plan.
Attempt to write the business plan alone.
Extend the process more than two months.
Include copies of resumes & technical papers.
Forget to proofread, proofread & proofread.

13. Don’t just start writing
Preparation…The Key to Success.
What’s my Vision?
Can I say it so that anyone understands it?
What business are we in today?
What about in 3 years?
Are we really innovative?

14. Don’t just start writing…
Preparation…The Key to Success.
What do we really know about…
Our future product roadmap
What our service offerings could be.
The market data, trends, & forecasts.
The new technologies in development
The competition
Who are our customers will be in 3 years?

15. One more preparation task…
Think about your starting assumptions.
Externally, what do I think will happen about…
Economic trends
Markets that I am entering
Technology changes
Regulations
Under Technology: Give the example of Moore’s Law

16. One more preparation task…
Define your starting assumptions
Internally, what do I want & expect for…
Sales revenue growth rates
Product costs and margins
Sales expense percentages
G&A expense percentages
Receivables, payables, financing, & capital models.

17. Now, you can finally start writing.
What you need…
A quiet place and time.
All of your data easily available.
Start working by yourself.
Get the content down quickly.
Send a first rough draft to others quickly.
Write draft after draft after draft after…..

18. You have two options today
The Traditional Business Plan
7-8 sections
20-30 pages with financials
More detail: markets, products & technologies
Business Plan Lite
2 sections:
8-10 pages with financials
An extended Executive Summary

19. Certainly preferred by us
The traditional plan
Certainly preferred by us
Provides an opportunity to provide clear details
Brings out the richness of the business idea.
Details the business and sales models
What follows here is the traditional format
7-8 sections
20-30 pages

20. Sections 1 & 2 & 7 create the BP Lite
Business Plan Lite
A result of the times
Today, time to read is the driver.
Requires you to…
Be an excellent writer
Provide great detail with very well chosen words
Get your points across succinctly & with clarity.
Sections 1 & 2 & 7 create the BP Lite

21. What’s included?
Vision
Strategies
Tactics
Operations
Actions

22. What’s included? 7-8 Sections… Executive Summary
Introduction to the business
Definition of your products & services
Overview of your markets
Overview of your sales & marketing plans
These become the Business Plan Lite.

23. What’s included? Overview of product development roadmap
Summary of manufacturing & operations
Bios of your management team
Four pages of financials
Brief appendices if necessary

24. Section 1: The Executive Summary
2-3 pages
Make it compelling…
Your Idea
Your Markets
Your business and sales models
Your competitive advantages
Your management team
Your use of the funds

25. Section 2. What’s the Business?
This section is focused on…
The Business Opportunity
The Markets
The Technology
The Products

26. Section 2. What’s the Business?
This section must define…
a clear Vision
clear strategies
a well defined business model
a dedicated, believable Mission
a strong sense of management experience

27. Section 2. What’s the Business?
The products & their value add services
features & benefits, innovation, technology
The markets
research data
competition
The customers
who they are & their needs

28. Section 3: Sales & Marketing
The most important section
3.1 What’s the Market?
Customer analysis & their needs
Worldwide market size & trends
Competitive strengths & weaknesses
Value creation for your products & services

29. Section 3: Sales & Marketing
3.2 The Marketing Plan
What are your marketing strategies?
What are the data points to measure success?
What is your price positioning & why?
What are your primary tactics in years 1 & 2?
What are your primary events in year 1?

30. Section 3: Sales & Marketing
3.3 The Sales Plan
What’s your Sales strategy?
What standard channels will you use?
Is there an innovative channel?
What are your penetration tactics?
What’s your sales model?
What’s your hiring & training plan?
What’s your measurement & reporting?

31. Section 4: Engineering and R&D
What are your core technologies?
Provide sufficient, but not numbing, detail.
What is your development status?
Describe your primary milestones.
Be conservative.
Assume development will be late.
Detail the technical team’s background.

32. Section 4: Engineering and R&D
What is your strategy for future products?
Define in text with graphics your roadmap
Define common platforms and architectures.
What your IP & patent strategy?
What is your IP strategy?
If you have patents, provide a status table.
If not, define why not in a positive manner.

33. Section 5: Operations/Manufacturing
What’s your manufacturing strategy?
Outsource or not?
Why & why not?
What is core in Manufacturing?
What are your unique capabilities
What are your unique processes?

34. Section 5: Operations/Manufacturing
Focus on your customers in your…
Distribution strategy
Quality strategy
Value added services that you will employ

35. Section 5: Operations/Manufacturing
What is your Customer Support strategy?
Customer order fulfillment tactics
Primary objectives
Delivery
Response time
Primary policies
Outsource or not?
Future services that you will provide?

36. Section 6: Senior Management
The #1 reason that investors do not invest.
Experience counts first.
Dedication counts second.
Ability to rapidly learn is third
Too strong an ego is a negative.

37. Section 7: The Financials
The Rule: Everything Must Hang Together
Your vision and strategies in text must tie in.
Your market growth objectives must tie in.
Your business and sales models must tie in.
Your margin percentages must tie in.
Your cost of goods must tie in.
Your expenses must reflect standard percentages.

38. Section 7: The Financials
You need…
P&L’s
1st year by month
2nd year by quarter
3rd year by year
Balance Sheets for each year
Cash Flows for each year
3-4 pieces of paper only

39. Section 7: The Financials
You need to list your…
Primary assumptions
Primary categories for the use of the funds
What are the primary risks?
Other than the normal of early stage companies
If nothing specific, do not list any.
What’s your exit strategy?

40. Section 8: The appendices
Provide only the compelling things…
Product data sheets for primary products
Any critical publication.
Do not provide resumes.
Do not include patents.