Wharton Business Plan Competition

Transcription

1 Wharton Business Plan Competition Business Planning Workshop February 8, 2005 May not be reproduced, in whole or in part, without expressed, written permission. Jeffrey Babin, Managing Director, Antiphony Partners, LLC Project Faculty, Wharton Global Consulting Practicum Oversight Committee, VIP The Wharton School Lecturer Engineering Entrepreneurship School of Engineering and Applied Science Associate Director NUS College in Bio Valley February 8, 2005; Slide 2 February 8,

2 Workshop Agenda Bite, Plan & Pitch Plan Outline & Discussion Resources Business Plan Do s and Don t s Q&A February 8, 2005; Slide 3 Presenting the Idea Bite, Plan, and Pitch May not be reproduced, in whole or in part, without expressed, written permission. February 8,

3 Tell a Simple Story These people have this problem that costs them this much. I have these things that solve the problem in this way. I make them in this way. If I get this, then here s what I m going to do to make this happen. February 8, 2005; Slide 5 Answer Seven Deadly Questions February 8, 2005; Slide 6 February 8,

4 Assume that your audience knows February 8, 2005; Slide 7 The Bite is a (name) (noun with adjective) that (verb) (object) to/for. (noun) (name) (phrase of differentiation) (descriptive clause) (descriptive clause) (descriptive clause) February 8, 2005; Slide 8 February 8,

5 Who reads it? The Plan Forces us to think through our business concept systematically. February 8, 2005; Slide 9 Uses For a Business Plan External Raising capital Focus on requirements and implementation Position the venture in a positive and appropriate light Demonstrate balance, compensation, and contingency Internal Planning Focus on need, product/service Evaluate critical assumptions key factors economic drivers potential return market position February 8, 2005; Slide 10 February 8,

6 Business Plan Competitions What they are PR & networking Pocket money Process and source of feedback Distraction from venture What they are not Launching pads for ventures Funding sources Validation of business Best use of resources I hear and I forget, I see and I remember, I do and I understand. Confucius February 8, 2005; Slide 11 Wharton BPC Phase III Outline Executive summary Company description Product/service identification Market, competition and competitive advantage Management team and organization Operations Financial structure and projections February 8, 2005; Slide 12 February 8,

7 Judges Focus Revenue Model and Financial Projections (33 1 / 3 %) Execution Plan (33 1 / 3 %) Proposed Product/Service and Market Opportunity (33 1 / 3 %) February 8, 2005; Slide 13 One Business Plan Outline Executive Summary Company Description Product/Service Industry & Market Analysis Marketing Strategy Operations Plan Development Plan Management Financials [Offering& Exit] Appendices February 8, 2005; Slide 14 February 8,

8 1. Executive Summary Clear, compelling and effective as a standalone overview of the plan. February 8, 2005; Slide Company Overview Business purpose, history, origination of the idea, current status, overall strategy and objectives: Mission statement History and current status Markets and products Objectives February 8, 2005; Slide 16 February 8,

9 3. Product/Service Description, [features], BENEFITS Pricing Differentiation from existing products, proprietary elements Current stage of development February 8, 2005; Slide Industry & Market Analysis Analysis of the industry and marketplace in which the company will compete: Industry analysis Marketplace analysis Customer analysis Competitor analysis February 8, 2005; Slide 18 February 8,

10 5. Marketing Strategy Strategy for addressing the needs of the marketplace and creating a want for the product: Target market strategy Product/service strategy Pricing strategy Distribution strategy Advertising and promotion strategy Sales strategy Sales forecasts Marketing expense estimates February 8, 2005; Slide Operations Plan for production and delivery of the product, product cost, margins, complexity, resources required: Operations strategy Scope of operations Operating expense estimates February 8, 2005; Slide 20 February 8,

11 7. Development Steps needed to ramp-up the business and get it up and running from its current status: Development strategy Development timeline Development expense estimates. February 8, 2005; Slide Management 3 Most Important Elements of Business Management, Management, Management Background of key individuals Personnel needs, timing of hires, organizational structure Ability to execute strategy February 8, 2005; Slide 22 February 8,

12 9. Summary of Financials Summary of financial reports (see appendix) showing consistency with the plan and anticipated financial performance: Financial assumptions Financial forecasts Capital requirements Risks Exit strategies February 8, 2005; Slide [Offering] Amount of investment desired, valuation, anticipated payback and ROI, deal structure, possible exit strategies. February 8, 2005; Slide 24 February 8,

13 Appendices Pro-Forma Financial Reports: Assumptions, trends, comparatives, etc. Cash flow statement Income statement Balance sheet Sources & uses of funds (Cap Table for subsequent rounds) Resumes/Bios Testimonies, references, research, etc. February 8, 2005; Slide 25 The Pitch Tell em what you re gonna tell em Tell em Tell em what you told em 90% of your listeners remember only the first and last things said. February 8, 2005; Slide 26 February 8,

14 Venture Fairs/Competitions Venture concept * VC emphasis * Market opportunity Is it big enough? * Product/Service Offering Does it meet a need? * Competitive differentiation IP, distinctive advantage? Production and Operations [We can hire execution] Marketing, sales, distribution Experience, common goals, * Management communication? Source: Terry Collison, Blue Rock Capital Funding February 8, 2005; Slide 27 Business Plan References The Ernst & Young Business Plan Guide E.S. Siegel, et al. (2nd Edition), Wiley 1993 How to Really Create a Successful Business Plan D.E. Gumpert (3rd Edition), Inc. Publishing, 1996 Business Plans that Win $$$ - Lessons from the MIT Enterprise Forum Rich & Gumpert, Harper & Row, 1985 The Total Business Plan P.D. O Hara, Wiley, 1994 New Venture Creation Entrepreneurship for the 21st Century J.A. Timmons, McGraw-Hill, February 8, 2005; Slide 28 February 8,

15 Effective Communications Tell a simple story Answer the Seven Deadly Questions Who? What? Why? When? Where? How? How much? Assume nothing (KISS), except that your audience can read February 8, 2005; Slide 29 Business Plan Do s & Don t s May not be reproduced, in whole or in part, without expressed, written permission. February 8,

16 Get Some Perspective How the world should work How the world does work It may be VERY different than you imagine. February 8, 2005; Slide 31 Look at the Fish! February 8, 2005; Slide 32 February 8,

17 Hazards of Hockey Sticks Damned if you do Appropriately-sized opportunity Rationale explanation February 8, 2005; Slide MBA Buy Low Sell High Collect Early Pay Late February 8, 2005; Slide 34 February 8,

18 Economic Feasibility Revenue (sales; ramp over time) COGS (direct inputs into offerings sold) Gross Margin ($ left for overhead) SGA (expenses for phone, roof, lights, selling) R&D (pay for the techies) Taxes (Uncle Sam s share) Net Income (should be +) February 8, 2005; Slide 35 Business Model Units of revenue Major costs (where s the money going) Variable Fixed Stepwise Recording of sales versus collection of sales Timing (inflows/outflows) February 8, 2005; Slide 36 February 8,

19 Control the Business Model Increase sales Reduce expenses Invest to increase sales:expenses ratio Advance revenue collection Delay expense payment Conserve cash February 8, 2005; Slide 37 Consumer Process Where are they when you reach them? What are you doing to Increase prospects at each stage? Drive prospects to next stage? Awareness Interest Evaluation Trial Purchase Use February 8, 2005; Slide 38 February 8,

20 Competitive Advantage Compelling value proposition with measurable return to customers Easier: Profit, Pain More Difficult: Function, Fashion, Social, Educational Ideal: Need and Want NOT First Mover with higher quality and lower price February 8, 2005; Slide 39 Time s Yours Jeffrey Babin jbabin@antiphony.com May not be reproduced, in whole or in part, without expressed, written permission. February 8,