1. Business Plans
Simonyi Center

2. Purpose of Business Planning
Provide a roadmap for success of the company
Force the entrepreneur to formalize their vision and do the research to answer hard questions about the company, its industry and the competitive landscape
Set goals, strategies, policies and procedures for the firm
A tool for raising capital

3. Business Plans Must Tell:
What Problem you are solving and how serious it is.
Who has this Problem and Why it is Important to them.
How Large is the Market and How Fast is it Growing.
How Large your Company will be in 3 to 5 Years.

4. Business Plans Must, cont.
Who are You and Why are You Qualified to Solve this Problem.
How much Money you need to Make this Happen.
What are your Key Milestones.
How much the Investors will Make on Their Investment in 3 to 5 Years.

5. What’s What messages . . . to reach What market(s) . . . with
What pain that need
What product(s) distributed through
What channel(s) against
What competition with
What pricing and packaging to deliver
What value in
What time frame?

6. What is the Customer’s Pain?
Must Have or Nice to Have?
Who Are Your Customers?
What Are They Buying?
Why Are They Buying?
Who Are Your Competitors?
What is your Business Model?

7. Business Plan Components
Executive Summary
Customer Need and Business Opportunity
Business Strategy and Key Milestones
Marketing Plan
Operations Plan
Management and Key Personnel
Financial Projections

8. Business Plan Details Executive Summary
The Purpose of the plan including how much money is required, what it will be used for and how much investors will make at exit
What is going to give you an unfair advantage!
Business opportunity, business model, market, product/service description, technology and management team
Summary of five-year income statement, profit, head count and capital requirements

9. BP Details, continued Customer Need and Business Opportunity
Product/service idea and technology description
Strategic Value Triangle for end users and customers
Business Strategy and Key Milestones
Plan to out-maneuver the competition
Show each milestone with the cumulative cash needed and head count

10. BP Details, continued Marketing Plan Basic need and company solution
Ideal customer and value proposition
Market segmentation and size of markets
Channels of Distribution
Strategic Partners

11. The Marketing Plan Current Marketing Situation
Basic need and company solution
Ideal customer and value proposition
Objectives
Marketing Strategy
Market segmentation and size of markets
Channels of Distribution
Strategic Partners

12. Marketing Plan, cont. Business model and branding plan
Sales strategy and plans
Customer support
Action programs
Five-year sales forecast
Competition, positioning and unfair advantage
Controls

13. BP Details, cont. Marketing Plan, cont.
Business model and branding plan
Sales strategy and plans
Customer support
Five-year sales forecast
Competition, positioning and unfair advantage

14. How Do Businesses Compete?
They Fill Needs That Are Not Being Met
They Find Customers and Suppliers Who Are Weaker Than They Are
They Get More Out of Less
They Use Other People’s Money (OPM)
The Try to Stay Out of the Way of Larger & Meaner Competitors (Nibble at the Edges)

15. Who Are Your Competitors? They Know All About You
What Type of People Are in Charge?
Why Do They Want Your Customers?
Do They Know Who Your Most Profitable Customers Are?
Can You Win A Price War With Them?
Do They Have A Glass Jaw or Do They Bite Ears?
Whose Market Share Will You Take?

16. BP Details, continued Operations Plan Management and Key Personnel
Engineering plan
Web site plan
Manufacturing or outsourcing plan (Make/Buy)
Facilities and administration plan
Management and Key Personnel
Organization Chart
Staffing plan (timing) and head count projections

17. BP Details, continued Financial Projections
Detailed resumes of founders and key employees
Incentive compensation plan and stock option pool
Company culture plan
Financial Projections
Overview and key assumptions
Five-year forecasts – Balance sheet, Income statement and Cash Flow Stmt by month for one year, by quarter for two years and annually for remainder of years.

18. BP Details, continued Income Statement Balance Sheet
Cash Flow Statement
Best, Worst and Expected Case Versions
Valuation Analysis
Exit Options
Return on Investment for each option

19. Appendix
The remaining slides are summary of business plan requirements from local venture capital firms.

20. Every Business Plan Must Answer These Questions
PEOPLE
Who are the people involved?
What have they done in the past that suggests they will be successful in the future?
Who is missing from the team and what will they do to get them to join?

21. Key Questions, continued
OPPORTUNITY
What is the nature of the opportunity?
How will the company make money?
How is the opportunity likely to evolve?
Can entry barriers be built and maintained?
CONTEXT
Macro economy
Tax
Regulatory
Socio-political
Cultural

22. OPPORTUNITY
Is the Total Market for the product or service large and/or rapidly growing?
Is the industry one that is now or can become structurally attractive?
Who is the customer and how do they make decisions?
Is this a compelling purchase for the customer?

23. OPPORTUNITY, continued
How will the product or service be priced?
How will you reach the target customer?
How much does it cost to acquire a customer in time and $?
How much does it cost to produce and deliver the product or service?
How much does it cost to support a customer?
How easy (expensive) is it to retain a customer?

24. OPPORTUNITY, continued
Buy Low, Sell High, Collect Early & Pay Late
When do you have to buy and pay for resources?
How long does it take to acquire a customer?
How long before the customer sends you a check?
How much capital equipment is required to support a dollar of sales?
Accounts Receivable vs. Accounts Payable

25. COMPETITION Who are the current competitors?
What resources do they control and what are their strengths and weaknesses?
How will they respond to our decision to enter the business and what can we do?
Who else might notice and enter our market?
Can we co-op competitors by forming alliances?

26. New Product Development Process
Marketing
Strategy
Development
Business
Analysis
Product
Development
Concept
Development
and Testing
Market
Testing
Commercialization
Idea
Screening
Idea
Generation

27. Market Development Strategy Checklist
Target Customer
Compelling Reason To Buy
Whole Product
Partners and Allies
Distribution
Pricing
Competition
Positioning
Next Target Customer