Business PlansBusiness PlansIntroduction

Why a Business Plan?Why a Business Plan?

Strategic Guide

Lenders

Investors

Strategic GuideStrategic Guide

Where Do You Want To Go? How Are You Going to Get There? What Market Niches? How Much is it Going to Cost? Greatest Profit Opportunity?

Lender ExpectationsLender Expectations

Good Business Track Record Ability to Repay Staying Power Collateral

Investor ExpectationsInvestor Expectations

Competitive Advantage Huge Market Strong Management Team Strong Marketing and Sales Plan Exit Strategy

Entrepreneurs Start Businesses:Entrepreneurs Start Businesses:

To Capitalize on an Invention To Be Their Own Boss To Get Rich

---All Need an Exit Strategy

Funding Sources:Funding Sources:

Savings Friends and Family Financial Institutions / Banks Angel Investors Venture Capital

Business PlanningBusiness Planning

A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals.

STRATEGIC PLANNNINGSTRATEGIC PLANNNING

Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. In order to determine the direction of the organization, it is necessary to understand its current position and the possible avenues through which it can pursue a particular course of action. Generally, strategic planning deals with at least one of three key questions:

"What do we do?" "For whom do we do it?" "How do we excel?"

Strategic PlanningStrategic Planning

Business planning VS Strategic Business planning VS Strategic PlanningPlanning

A strategic plan is primarily used for implementing and managing the strategic direction of an existing organization. A business plan is used to initially start a business, obtain funding, or direct operations.

A strategic plan is for established businesses, organizations and business owners that are serious about growing their organization. Whereas a business plan could be for new businesses and entrepreneurs who are startups.

A strategic plan is used to provide focus, direction and action in order to move the organization from where they are now to where they want to go.  Whereas a business plan is used to provide a structure for ideas in order to initially define the business.

Cont….Cont….A strategic plan is used to communicate the

direction of the organization to the staff and stakeholders.  However, a business plan is used to present the entrepreneur’s ideas to a bank.

A strategic plan is critical to prioritizing resources (time, money and people) to grow the revenue and increase the return on investment.  Whereas a business plan is critical if the business is seeking funding. s

Business planning VS Strategic Business planning VS Strategic PlanningPlanning

Business Plan ContentBusiness Plan Content

Executive Summary Company Description Product/Services Description Industry Overview Market Analysis Competitors

Business Plan ContentBusiness Plan Content

Customers Marketing and Sales Plans Development Operations Management

Business Plan ContentBusiness Plan Content

Personnel Financial Summary Financials Offering Appendices

Executive SummaryExecutive Summary

A mini-business plan in one or two pages Highlights the most important points of your

business plan It is NOT an introduction to the plan

Executive SummaryExecutive Summary

Identify the company, its background, structure and location

Describe what the company does, and the market it serves

Describe the market potential for the company’s products and services, market trends, etc.

Executive SummaryExecutive Summary

Outline the backgrounds and experience of the top management team

Describe the funding required, the purposes for which it will be used, the collateral available (if for a lender), and the expected outcomes

Company OverviewCompany Overview

Brief Company Introduction– Mission statement– Location, size, history– Market and products– Overview of company capabilities– Objectives

Products/ServicesProducts/Services

Products / Services– What does it do?– Uniqueness– Competitive Advantage

Technology– Brief description– Applications

Commercialization Status– Brief overview

Industry OverviewIndustry Overview

Set The Stage Industry Definition and Description

– Major players within the industry– Factors driving dynamics– New products and developments

Legislation and Policies Driving the Industry Historical and Future Trends

Market AnalysisMarket Analysis

Market Definition– Primary Market– Secondary Markets

Market Size and Trends– Current total revenues– Predicted annual growth rate

CompetitorsCompetitors Direct Competitors

– Who are they?– Size and product breadth– Revenues and profitability– Strengths and weaknesses– Market shares

Indirect Competitors

Indirect competitors in the business world are those businesses that don't necessarily sell the same products but offer different alternatives to satisfying the same customer need.

CustomersCustomers

Customer Characteristics– Who are they?– Why do they buy?– Need satisfied by the product/service– How is the need currently filled?– What are the alternatives?– Who makes the decision to buy?– How frequently do they purchase?

Marketing and Sales PlansMarketing and Sales Plans

Statement of Opportunity Marketing and Sales Objectives Existing Customers Potential Customers

– Prospects targeted– How prospects will be targeted and qualified

Marketing StrategiesMarketing Strategies

Product/Service Strategy Pricing Strategy Distribution Strategy Advertising and Promotion Strategy Sales Strategy Marketing and Sales Forecasts

Marketing and Sales PlansMarketing and Sales Plans

Marketing Programs– Direct Mail– Trade Shows– Advertising– Internet– Publicity/Public Relations– Marketing Budget

Pricing– Basis for targeted price point– Margins and profitability by volume levels

Marketing and Sales PlansMarketing and Sales Plans

Sales Plan– Sales force structure – (direct or reps)– Sales expectations/quotas– Margins given to intermediaries– Service and warranties– Sales Budget– Organizational chart indicating planned growth

DevelopmentDevelopment

R & D Plan– Objectives– Milestones and current status– Difficulties and risks– Staffing– R & D Budget and assumptions

OperationsOperations

Manufacturing/Production Plan– Objectives– Facilities– Staffing– Subcontractors– Quality Control– Budget / Operating Expenses

ManagementManagement

Company Organization Management Team Administrative Expenses

Management TeamManagement Team

President VP Finance VP Sales VP Marketing VP Manufacturing Board of Advisors

PersonnelPersonnel

Human Resource Plan– Staffing Objectives– Organizational Structure– 3-5 year growth plan– Budget

Summary of FinancialsSummary of Financials

Financial Objectives– Time to Cash Flow Positive– Time to profitability

Financial Assumptions Capital Requirements Exit Scenario

FinancialsFinancials

Pro-forma Cash Flow Projections Pro-forma Profit & Loss Statements Pro-forma Balance Sheet

OfferingOffering

Investment Requirements Pro-forma Valuation of Business Offer

AppendicesAppendices

Resumes of Key Management Patent Information Customer List Testimonials Supplemental Financial Spreadsheets References

Questions?Questions?