1. Business Plan Preparation Introduction
Frank Moyes Leeds School of Business University of Colorado Boulder, Colorado
Business Plan Preparation: Choosing Good Opportunities

2. Tonight’s Agenda Choosing a good opportunity Discuss concepts
Mullins 2
Students introduce selves
Major
What have done that is entrepreneurial?
What want from course?
What is your wicked idea?
Frank Moyes
David Drake
Business Plan Preparation: Choosing Good Opportunities

3. Assignments for Next Week
Sept 5 resume: post on eCollege
Sept 8 – post your concept on eCollege
Sept 11 – instructor to the selected concepts & formation of teams
Business Plan Preparation: Choosing Good Opportunities

4. Next Week Framework for writing a business plan
Read Writing a Successful Business Plan from my website
Market research – Gene Hayworth, Leeds School Librarian
Importance of validation
Interviews and Call Reports
Business Plan Preparation: Choosing Good Opportunities

5. When Is an Idea an Opportunity?
Open window
Entry is feasible
Management team
Competitive advantage
Economics
Rewarding
Forgiving
Growth
Attractive
Durable
Timely
Adds value
What does this mean?
Timmons, New Venture Creation
Business Plan Preparation: Choosing Good Opportunities

6. Good Opportunity Market is strong & accessible Compelling need
Good Opportunity
Market is strong & accessible
Compelling need
Sustainable competitive advantage
Unique/different
High margins
Management
Business Plan Preparation: Choosing Good Opportunities

7. Market Demand Is Strong
Market Demand Is Strong
Favorable trends
Growing market
Size is big enough to be worth the effort
Market share attainable
Favorable window of opportunity
Venture Capital Perspective
30%+ per year
$100 million to $1 billion potential
Minimum 20%
Business Plan Preparation: Choosing Good Opportunities

8. Market Is Accessible Market Structure
Fragmented
No dominant player
SOT’s (slow, old or traditional)
Response of competitors to new entrants is indifferent
No proprietary barriers to entry
Access to channels is possible
Forgiving of mistakes
Fragmented market strategy
Ownership of resources
Low cost producer
Consolidation
If dominant player(s) are: old, traditional, slow
Response of competitors:
Airlines, but Southwest
Personal computers, but Dell
Organized crime
PC software, no buts
Access to channels
Air Florida
Toothpaste, but Tom’s of Maine
Will make lots of mistakes. Why need
Hi margins
Growth
Resources
Experience
Business Plan Preparation: Choosing Good Opportunities

9. Compelling Need Solves a problem Unfulfilled niche
Compelling Need
Solves a problem
Unfulfilled niche
Dissatisfaction with current products/services
Poor quality or service
Needs
Physical Physiological
Emotional Social
Financial Intellectual
Manage information: Google
Physical: food, warmth, shelter, sleep, etc.
Physiological: health, cleanliness, comfort, fitness, safety, etc.
Emotional: euphoria, love, prestige, stress, etc
Social: ethical, honesty, power, competitiveness, integrity, friendship, etc.
Intellectual: achievement, better decisions, artistry, etc.
Economic: revenues, productivity, cost savings, maintenance, etc.
Financial: ROI, DCF, payback, burn rate, etc.
Business Plan Preparation: Choosing Good Opportunities

10. Competitive Advantage
Competitive Advantage
Understand the market
Understand the competition
Sustainable
Innovation
Differentiation
Resources & capabilities
Really understand the market & competition
Major competitor is inertia
Business Plan Preparation: Choosing Good Opportunities

11. Strong Competitive Advantages
Intellectual property
Agreements with customers or suppliers
Long term contracts
Business Plan Preparation: Choosing Good Opportunities

12. Competitive Advantages That Are Often Questionable
First to market
Highest quality
Best service
Lowest cost or overhead
Patent protection
Business Plan Preparation: Choosing Good Opportunities

13. Unique/Different
You must differentiate your business – it’s already being done by someone
More than unique product/service design
Marketing – positioning
Operations – process or value chain
Channels – create a new channel
Benefits
Business Plan Preparation: Choosing Good Opportunities

14. High Margins Mind-set of high & low margin thinking
Advantages of high gross profit margins
Funding
Cash flow
Development & marketing
Can solve the screw-up problem
Slippery slope of low margin thinking
Example of 40% vs 60% gross profit margin business
Business Plan Preparation: Choosing Good Opportunities

15. Management Meets your personal interests & objectives
Takes advantage of your experience
Would your potential customers buy from you?
You can put a management team together
You are passionate and commit
Business Plan Preparation: Choosing Good Opportunities

16. Concept Description Brief description
Why is there an opportunity/need?
What is the product/service? How will it be produced or delivered?
Who is the target market?
What are the unique benefits?
Who is the competition? What advantages do you have over the competition?
Profitability
Revenue model
Contribution margins
Business Plan Preparation: Choosing Good Opportunities