1. Creating a Winning Business Plan

2. Objectives
 Why is a Business Plan important?
 What are the Key Business Plan Components?
y p
 Gain the tools you need to Write a Winning Business
Plan!

3. Three core sections
1. Technology (Operations)
2. Marketing/Sales
3. Finance

4. Why You Need a Business Plan
A Business Plan is a Roadmap
How Will You Start and/or Grow
Where Will You Obtain Funding
Marketing/Sales Strategy Clarified
Financial Planning

5. Who Will Read The Plan
– Plan Organized to Convince Funding Sources
– Resource Providers (Funders) Expect
• Consistent, Structured Format
• Professional Presentation
– Address your Audience’s Questions
• How/When Will They Benefit?
• Do They Believe You Can Make It Happen?
• What Are the Costs/Risks For Them?

6. Before You Start Writing
e o e ou S a W g
 What Do You Want to Convey
 Follow a Logical Progression
 Refrain from Industry Jargon
 Present Clear Conclusions
 Emotional & Human Side Tell the Story

7. Table of Contents
• Company Summary
– Company Ownership
– Start-up Summary
• Products and Services
– Product D
P d t Description
i ti
– Service Description
– Competitive Comparison
– Technology
T h l
• Market Analysis Summary
– Market Segmentation
– Target Market Segment Strategy
– Trends

8. Table of Contents
• Strategy and Implementation Summary
– Competitive Edge
– Marketing Strategy
– Sales Strategy
gy
– Milestones
• Operations
– Eq ipment
Equipment
– Employees
– Processes
• Management Summary
– Key Personnel Plan

9. Table of Contents
• Financial Plan
– Important Assumptions
– Break-Even Analysis
– Projected Profit and Loss
– Projected Cash Flow
– Projected Balance Sheet
• Appendix
pp
– Assumptions
– Licenses
– Lease Info
– Contracts
– Testimonials

10. Executive Summary
y
A Stand Alone Document
Objectives/ Mission/ Keys to Success
Make Sure Your Summary is:
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– Concise - 2 Pages Maximum
– Cohesive – Briefly Tells the Full Story
– Compelling – Get Them to Read the Details
– Clear- How Much Money Are You Asking For?

11. Business Description (Overview)
 Your Company - Include Vision, History, Structure
 Your Vision/Mission – Clear, Assertive
 Overview of the Industry - Important Fact-based Trends
 Your Value Proposition - What Makes Your Product or Service
Unique AND Valuable
 Estimated Revenues and Profit/Cash Flow (3 Years)

12. Management
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Leadership
The Team
Back up plan
Include Outside Advisors (L
I l d O t id Ad i (Lawyer, A Accountant,
t t
Consultants, Insurance, Banker, Etc.)
Ownership (% of Each Partner, Owner)

13. Ope a o s a
Operations Plan – How w you run the Business
ow will u e us ess
Can Be Complex and Require Special Expertise
– P d t - M t i l H dli L i ti P k i
Product Materials Handling, Logistics, Packaging,
Purchasing, Etc.
– Service - Abstract Processes
Seasonality and Other Demand Peaks
Make vs. Buy (Outsourcing)
Don’t Overlook the Details
Transportation Considerations and Costs
Labor C id
L b Considerations
i
Non-production Processes and Admin Process Flows

14. What Differentiates Your Product or Service?
What is your secret sauce?

15. How To Develop Technology /Ops Skills?
p gy / p
Family Business – Helped or Ran
Education
Training
– Hands-on Work, Classes, Courses
– On-the-Job Training (Volunteer)
Relevant Work Experience

16. Can You Create A Difference?
 Low Cost
 Targeted Need
 Service or Convenience
 Innovation
 Offer a Product/Service Solution to a Customer
Problem

17. Marketing
Market Research – Provides Information About the
Buyer/Customer, Competition, and Product/Service.
Market Planning Product/Service Introduction, Startup,
M k t Pl i – P d t/S i I t d ti St t
Product Life Cycle
Advertising and Sales Promotion -- Define Audience & $$
Prior to Committing to Print, Radio, TV, InterNet

18. Who is Your Customer?
Who Buys Your Products and Services
Wh Do They Think About You/ Your
What h h k Ab /
Competitors?
Costs Far Less to Maintain an Existing Customer
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Than to Generate a New One

19. Ma e
Market Information
o a o
What Is the TOTAL Market for the Product/Service
Define YOUR Market for Products And/or Services
Geographic (Primary/ Tertiary) – by ZIP Code/
Countyy
Demographic – What Are Average Incomes, Ages,
etc.
Growth Trends and Changes – Who’s Going In/out
 /
of Business? And why?
Potential Downside – Who What Can Replace the
Who,
Service? Cost/ Quality/ Service Aspects?

20. Ma e g d Sa es a
Marketing And Sales Plan
Who Is (and Isn’t) Your Target Customer?
Need to Locate, Communicate, and Educate Prospects
How Will You Get Them to Change Their Behavior?
Wh t Will Y E h i ?
What You Emphasize?
How Will You Overcome Perceptions of Risk (Inertia and
Performance)?)
Tools (Mail, Direct Sales, Etc.), and Why It Makes Sense?

21. Sales Plan
How Do You Sell in Your Market?
How Will You Ask for the Order?
Provide for Lead Times
Sales Structure and Compensation?
S l St t dC ti ?

22. Selling Your Products/Services
 Develop A Sales Strategy – Who to Sell to, When, How, What
Products/Services
 Develop a Sales Team – Start Small, Grow
 Set Specific Objectives – by Month, Quarter, Year, 3 Year
 Analyze Sales Results Periodically
 Teach Sales Techniques - Training Is Essential for Product
and/or Service Knowledge

23. Product / Services Analysis
 What Needs Does Your Product/Service Meet?
/
 What Support Services Are Required?
 How Can You Reduce Customer Costs? Increase Customer
Revenues?
 How Does Your Product/Service Compare With Competition?
 Wh t A th Possible S b tit t N A li ti ?
What Are the P ibl Substitutes, New Applications?

24. Competitive Analysis
Who Are Your Competitors?
What Are Their Strengths and Weaknesses?
Wh Is Their Market A
What h M k Approach (C h (Customer
Segmentation, Sales Focus)?
How Are They Financed?
What Is Their Reputation?
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How Are You Better?

25. Pricing
Know Break Even Point -- May Have to Walk Away
Break-Even
Pricing Strategy Vs. Competition – Ask Customers
Vs
Pricing – Cost Competition Product Uniqueness
Cost, Competition,
C id All C t – Di t Indirect
Consider Costs Direct, I di t

26. Advertising and Sales Promotion
 Target Advertising
g g
 Use the Most Effective Medium for Your Audience
 Must Be Cost Effective
 Consider A Promotion Professional
 Use Free Media

27. Distribution
Distributors
Mail Order
Telemarketing
Compare With Competition

28. Ma e g og a Su a y
Marketing Program Summary
Select Market Strategies
Prepare Marketing Plan
Prepare S
 Supporting Sales Plan
S l l
Focus on Differentiation
Communicate Internally and Externally
Measure Performance and Adjust Plans to Meet
Market Conditions

29. Sell Yourself & Your Plan
Funding Sources Are Skeptical
– Bankers Are Risk Averse – Get to Know Them Early
in the Cycle
y
– Equity Sources Are Tough to Impress, Want Proof of
Conceptp
You Are the Message – Present Yourself, Your Case,
Evidence, Backup Assertions

30. Funding
Show How You Will Create Value
Show h
Sh That You C C
Can Control Risks
l k
Why Should Someone Believe You Are
Better Equipped to Take Advantage of the
q pp g
Opportunity

31. Banks Look at 5 Cs
 Character – Credit History (Have You Paid Your Bills on Time); Are
You Personally Involved and Responsible for Success?
 Collateral – Do You Have a House to Put up Against a Loan? The
Greater the Bank’s Risk, the Higher Your Interest Rate
 Cash Flow – Will the Business Cover Your Living and Business Expenses
for 6 Months to One Year?
 Capitalization – What Does It Cost in Asset Investment to Get Started?
(Low C t St t B i
(L Cost Startup Business: Cleaning Wi d
Cl i Windows, N d S Need Squeegee and d
Soap; High Startup Cost Businesses: Restaurants, Retail Stores)
 Conditions – Working Capital, Ongoing Costs, Competition, Industry
Trends, Regulations (Local, State, and National, OSHA, Handicapped)

32. What Equity Investors Look for in a Startup
q y p
Timing- Short Term, 3-5 Years?
Timing 35
Is Your Business Model Proven?
How Long Have You Been in This Type of Business?
Are You Going to Actively Work in the Business?
How Much Do You Have Invested in the Business?
What Are Your Risks?

33. Financial Plan
 Well-Documented Assumptions Are Crucial
– Acknowledge Risks
– Pricing d Product Costs
P i i and P d t C t
– Sales Forecasts and Market Share
– Lead Times – Receivables, Payables, Working Capital
– Interest Costs – Loans, Family & Friends
 Test for Reasonableness (You Cannot Double Sales Every Month Without
es o easo ab e ess ( ou Ca o oub e Sa es ve y Mo W ou
Serious Working Capital Problems)
 Get Help If You Need It – Accountants TA
Accountants,

34. What Eats Up Cash
Accounts Receivables (A/R)
Difference Between Pay by Credit Card and Bill
Monthly
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 Bill Monthly – Receive Payment Net 30 Days
or ++ More
 Wait Time Affects Working Capital
Accounts Payable (A/P) – What You Owe, Loans,
etc.

35. Your Financial Plan
1. Personal Assets (What You Own to Pay for Startup)
2. Personal Li bili i (Wh Y N d to Li O )
2 P l Liabilities (What You Need Live On)
3. Business Services (Needed Before Startup)
4. Business Expenses (Ongoing)
5. Balance Sheet (Where Do You Stand?)
6. Cash Flow Statement (How Are You Doing?)
7.
7 Revenue/Expense (P&L) on a Cash Basis

36. Traps to Avoid
Confusing Description of the Business/ Vision
Unsupported Assumptions
Asking f
A k for Too Much Or Too Little M
M hO l Money
 Use of Jargon and Acronyms
Hype, Overused Phrases
 No Competition ; No Brainer
“No Competition”; “No Brainer”
Numbers that Do Not Look Realistic

37. Don’t forget…..
Your plan is a living
breathing document to be
modified significant
changes occur!

38. Resources
• http://www.sba.gov/smallbusinessplanner/plan/writea
// / / /
businessplan/index.html
• http://www.myownbusiness.org/s2/
• http://www soros org/openaccess/oajguides/oaj suppl
http://www.soros.org/openaccess/oajguides/oaj_suppl
ement_0703.pdf
• http://en.wikipedia.org/wiki/Content_of_a_business_pl
an
• http://money.howstuffworks.com/business-plans16.htm
• http://www.businessballs.com/freebusinessplansandmar
ketingtemplates.htm
• www.wsi.miniplan.com

39. Resources