Business Plans Made Simple

Transcription

1 Business Plans Made Simple Center for Entrepreneurship and Innovation School of Management Alumni Relations Career Services Presented by: Gerard F. Zappia, Dean School of Management November 15, 2014

2 Goals for Today Have fun! Demystify the business plan (complexity vs. value) Learn the basics - business plans (concept stage) Develop a rough draft Identify strengths and areas for development

3 ess to docs

4 What is a Business Plan?

5 What is a Business Plan? A business plan is a road map that provides directions so a business can plan its future and avoid bumps in the road. Author Unknown

6 What is a Business Plan? A business plan is a written description of your business's future. That's all there is to it- - a document that describes what you plan to do and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your business strategy, you've written a plan, or at least the germ of a plan. Entrepreneur.com

7 Users (Audience) of the Business Plan?

8 Audience Business Plan Investors o Individual o Institutional o Strategic/Partner Bankers (growth/maturity stage) Management Team Yourself - Most Important!

9 A lot of entrepreneurs think they only need to develop a formal business plan if they re seeking investment. This is a costly folly. Writing a business plan gives you a chance to thoroughly evaluate your idea inside and out, uncover its upsides and potential pitfalls, and, most crucially, think up ways to avoid them before they happen. It s your chance to stare long and hard at your ideas weaknesses and decide whether or not you can overcome them. Forbes.com

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11 Summary - Business Plan Concept Business roadmap (story) Living document (????????) Process driven Forces you to think holistically Must make sense

12 Contents of a Business Plan?

13 Table of Contents 1. Executive Summary 2. Market Opportunity 3. Product/Service/Technology 4. Competition 5. Sales/Marketing Strategy 6. Financials 7. Company/Management Overview 8. Summary

14 Let s Start Writing Version 1.0 (Expect to Revise Many Times) (You may not be able to answer every question today)

15 Writing and Thinking Once the idea is out of your head. It has the chance to evolve and be refined. It can be shared with others to get the idea validated and enhanced (or mocked). It means the idea has a chance of becoming more than just an idea. Aden Davies

16 Writing and Thinking Good writing is clear thinking made visible. Bill Wheeler

17 Friendly Advice This is not rocket science! Use clear, concise language with no techno jargon. Your mother/ father must understand it! Avoid using hype words. Must be a story (that makes sense) Think of everything in context. The only thing you have is your credibility. Don t risk it with false claims. Sophistication of the plan varies with stage of development

18 Financing Sources Assumption - You are here Venture Stages Concept Pre-Seed Seed Idea Prototype Customer Validation Early Stage Revenues Growth Market Extension Maturity Profitability Grants Grants SBIR, NSF, NIH, NYSERDA, etc. 3Fs Equity Angels - VCs A/B Series VCs Debt Boot Strapping Econ. Dev. / Factoring Senior/Bank Debt

19 Executive Summary One short paragraph for each of the business plan sections Include a summary of the financials Include funding requirements to complete development and to begin sales. Prepare after completing the other sections.

20 Market Opportunity What problem are you solving? Who has it? o Do not confuse with the solution How are they solving it today? What is the market size? What user feedback do you have? What is your initial target market and why? What are the macro- trends?

21 Product/Service/Technology What is your solution? How does it solve market need? What IP do you own or plan on pursuing? What approvals do you need? What is the status of your solution? This should not be a technical treatise (write for a general audience).

22 Competition Who is your competition? What do you know about them? How is your solution better? How much better? What prevents your competition from copying your solution?

23 Sales/Marketing Strategy How will you bring your solution to market? What is the average sales cycle? (if applicable) What is the average cost of customer acquisition? What sales channel will you use? Who are your potential partners? How do you plan to generate demand?

24 Manufacturing/Operations Where will your product/service be manufactured/created? Explain your methods of: Production techniques and costs Supply chain Quality Control

25 Financials What does your financial picture look like for the next five years? Revenue Cost of Goods Gross Income Expenses Net Income Provide a cash flow analysis

26 Year 1 Year 2 Year 3 Year 4 Year 5 a. Unit Volume b. Average Revenue/Unit Revenue (= a x b) c. Average cost/unit Cost of Goods (= a x c) Gross Profit Expenses Engineering/R&D Sales and MarkePng Gen and Admin Net Income

27 Cash Flow Statements Total Cash Receipts Total Cash Paid Out Cash Position

28 Management Overview Brief overview of company Brief overview of team (expertise that relates to company/product Qualifications must add value Board of Advisors Do not say world class Funding needs

29 Summary Why should we invest? List a few compelling bullet points Why is your business important? What happens if your business does not exist?

30 Exhibits and Appendices Be focused Include content that supports the plan Don t include what you don t refer to Reasonable contents Summary Financials Management team resumes Customer letters of intent Existing marketing materials Max: 10 to 15 pages

31 Important Guidelines Proof, proof, and proof again Grammar, punctuation, sentence structure, etc. Mistakes and sloppiness are a death knell A good picture (or graph) is worth a thousand words Omit images, tables, charts don t instantly convey meaning. Label graphics and significance Balance use of text and graphicc Lots of white space

32 Assess How well developed is your business idea? Which areas need additional development?

33 Thank You