Ideas to Market Mark Levi 1. Peace and Prosperity Through Science and Collaboration Outline of the...

Ideas to MarketMark Levi

1

Peace and Prosperity Through Science and Collaboration www.crdf.org

Outline of the Process

1. Do you have a Marketable Product or Service?

a. Describing the Product or Service in a succinct way.

b. Estimating/Measuring its Market Value.

c. When do you kill an idea?

2. Thinking through all of the details and putting them on paper.

a. Building a Business Plan and Market Strategy

b. Market Research

c. Defining Customers, Competition, Channels of Distribution

3. Building awareness, interest, preference and loyalty. (Branding)

4. Taking the product or service to market

2


What is the Business?

• Clearly describe the business and the customer need that

the business fulfills

• All Investors look for and value a succinct description of a

business

• Elevator Speech

• Layered Descriptions

• You may not have time for a long description

3


Estimating Market Value

Successful businesses find a market need and fill it.

• What gives a product value?

• Features, Advantages, Benefits

• Sum of Benefits, Advantages over Competition

• Is the product value something a customer will pay?

• How do you find out value? MARKET RESEARCH

4


When do you kill an Idea?

• 50% of all products introduced are failures

• Early critical thinking can save much money and time

• Must make a people environment OK to kill projects

• This discussion should take place at every phase.

5


•Uses structured set of questions to finding out how customer values product

•Requires both knowledge of the process and development of appropriate skill

•In the ideal situation, the discovery process leads to a discussion of

• What is/ is not important,

• Opportunities to understand why which items are key(valuable) through the supply chain

• Allows tradeoff discussions

• Competitive threats and directions

Discovering Customer Value

6


Background

• Customers do not buy on product specs alone, ever!

• Customers buy from vendors who, they believe, understand their

needs and their business and will attempt to meet those needs….

• Vendors who listen to them.

• Customers select products and vendors who help solve their

problems; technical, social, and business.

7


Discovering

• The continuous process of interacting with customer decision

makers to find out their changing needs, wants, values, timing,

expected price, etc.

• Techniques needed to do it professionally.

• Must be preceded by relating.

• Listening is more critical than ‘Advocating’.

• Is the basis for continuous dialog.

• Properly done gives competitive advantages.

8


Customer Expectations Performance Gap

Customer Expectations

Metrics/ Specs

Importance Cust view our perf

Gap Cause

Low latency Software Drivers High Integration Hi Perf/ Price ratio

Meets Stds Ease of Use

9


The Gated Phase Review Process

• Companies with the most successful product introductions use a gated phase review system

• Breaks Product Development process into logical steps and requires passing a gate to move to next step.

• Each product/ service requires own gates but typical are:– Idea confirmation (with customers), feasibility (Dev & Mfg)

– Agreement to Develop (with Business Plan, Strategy, etc.

– Development Phase

– Sample Phase

– Release to Sales

– Release to Production

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Gated Phase Review Process

• If process makes sense,

– Choose gates,

– Choose milestones to pass gates and

– People (team) that needs to agree that milestones are met

– Note: Works best when all critical vested parties have a say

• Each gate generally has a checklist to ensure are actions are taken

• Each Gate also provides opportunity to Kill Product or service

11


Project Risks and Mitigation

Identify the market, development , customer, personnel, and any other business risks that might impair project success and what can be done to prevent them happening.

I Prob = Probability of Occurrence. Low, Medium, Highii Sev = Severity – impact to project contract –volume, revenue, price, cost, schedule, performance. Low, Medium, Highiii What can we do in advance to prevent or minimize this risk.

12


The Business Plan

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What is a Business Plan

• It describes the business objectives

• It describes the market to be served

• It describes the competitive strategy

• It describes measurable planned results

• It describes how results will be achieved

• It has a matching Financial Plan

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Why write a Business Plan?

• It is a planning and operating tool

• It forces you to think through what you are doing

• It is a tool to share your thoughts with others

• It is a benchmark for tracking business

• Lenders and others require it

• It is the tool used to measure progress against a plan

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Key Elements of a Good Plan

• Clearly describes the business and the customer need that

the business fulfills

• Demonstrates market demand exists

• Shows a competitive strategy

• Has a clear and focused marketing plan

• Realistic management plan

• Realistic Financial plan

16


Business Planning Process

• Gather data to to fill in questions in Business Plan

• Use primary and secondary research

• Use a good outline to document plan details

• Free business plan outlines are available

• Have your plan reviewed by (critical) others

17


Business Plan Sections

Executive Summary

Description of Business

Service or Product

Market Strategy

Location

Competition

Management

Personnel

Financial Plan

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Executive Summary

• It is a brief but very concise overview of the entire plan

• It is best written last

• It is often the only part of the plan read by a lender

• It must highlight the key points of the plan and why the business

will be successful

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White Knight Carpet CleanersExecutive Summary

• A carpet and upholstery cleaning business

• Operated by husband and wife

• Sole proprietorship

• Target market – Silicon Valley upscale homeowners

• High end pricing strategy

• One percent market share will make business profitable

• Operating from home

• Owners are experienced

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White Knight Carpet CleanersExecutive Summary (cont.)

• Seeking a $30,000 short term loan

• Investing $20,000 of their own money

• Expect profitability within six months

• Anticipate net profit after taxes of $90,000 per year

• Will repay loan after three years

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Description of Business

• Type of business

• Status of business

• Ownership type

• Vision

• Why this business will be successful?

• Why this business will be profitable?

• Your experience in this business area

22


What is business?

What is status?

Ownership form?

Why will it succeed?

Carpet & upholstery cleaning business

Start up business

Sole Proprietorship

Only need small market share

Low overhead

Much experience

White Knight Case StudyDescription of Business

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White Knight Carpet CleanersDescription of the Business

• Do work at customer’s location

• Only a small home office is required

• Only one equipped van is required

• Operate six days per week

• 40% of capacity will make business profitable

• Sam Taylor has 9 years experience

• Susan Taylor has 5 years related experience

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Services Offered

• Description of services to be offered

• Benefit and value to the customer

• How will this service compare to that of the competition?

• Why will the customer come to you instead of the

competition?

• What, if anything, is included with the product or service, in

your price

25


Products Offered

• Description of products

• Benefit and value to the customer

• How does this product compare to that of competing ones?

• Product lifetime and future product plan

• Why will the customer leave his current supplier and buy your

product?

26


White Knight Case StudyThe Service or Product

What is specific service?

What specific market is satisfied?

What are benefits to customer?

How does service differ from

competition?

Carpet & upholstery cleaning

Upper income homeowners

Quality, trustworthy & dependable

service

Emphasis on quality rather than

speed

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Market Strategy

• The specific market and market status

• Target market segment and customers

• Values to be provided to customers

• Marketing plan

• Promotional plan

• Plans for sales and distribution

• Pricing strategy

• Major financial milestones planned

28


White Knight Case StudyThe Market Strategy

Target Market is Upscale South Bay Communities

Customers may want both carpet and upholstery cleaning

There are 50,000 single family homes in our market

Why Customers Will Come = Customer Satisfaction– Owners do the cleaning –not hired help– Better cleaning job with superior equipment– Advice on carpet & upholstery replacement issues

Services priced at upper end of the range

Promote using local advertising and directly thru friends and acquaintances

Attract & Keep Customers through Customer Satisfaction

29


Business location

• Where will business be located?

• Does it satisfy all business objectives?

• Form of occupancy

• Risks and risk mitigation plans

• What are the rules and regulations for this business?

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The Competition

• The key competitors in this business segment

• Their strength and weakness

• Competitors’ business strategy

• How will your strategy succeed

31


Management

What are the key job functions

Who will fill these positions

What are their qualifications

Plans for use of expert help from outside (if needed)

32


Personnel

Personnel plan

Strategy issues: experienced, or inexperienced and trained

on the job

Strategy issues: employee, or contractor

Retention and incentive plan

33


Market Research

• Market Research is an organized way of finding out the answers

to the critical questions you need to answer to complete a

business plan

• It involves primary and secondary research

• It focuses on the market for your product or service,

competition, potential customers and differentiation

34


Market Research

Primary Research Techniques

• Phone/ Live Interviews – customers, distributors, sales teams of

your competitors

• Trade shows – conferences

• Focus Groups – customers, distributors

35


Market Research

Secondary Research Techniques• Web searches; competitor websites, (public company financials, annual

reports)

• Professional Research Reports

• Competitor’s catalogs and product literature

• Library searches– Magazines, reports– Sales and Marketing Management Magazines

• US Government Pubs

• Trade, Professional and Industry Associations

Always read the publications your target customers read, Always read the publications your target customers read,

including the adsincluding the ads

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Not Rocket Science or Brain Surgery

Market Research

It is a straight forward process with 3 steps:

– Find people (primary) and data sources (secondary) who know

something about your potential business,

– ask them prepared questions and

– record the information in an organized fashion

Incorporate information learned into Business Plan

37


Prepared Questions?

Make a list of the things that you need to know to complete your

Business Plan

For each thing you need to know, make a list of questions, the answers

to which, will give you the information for which you’re looking.

– Make some fact questions, some feeling questions, some open

ended, some closed.

– Use the same list of questions repeatedly so you can compare

answers.

– Modify question list as needed.

38


Marketing Research Questions

• WHOWHO will be your customers

• WHEREWHERE are they located

• WHENWHEN do they decide to buy your product or service?

• WHYWHY do they “need” your product or service?

• HOWHOW will you find them or they find you?

• WHATWHAT is your product or service worth?

• HOW MUCHHOW MUCH can they afford to pay?

39


Market Research

What are you trying to learn?• Is the market clearly identifiable? What exactly is it? What

COULD it be?• How large is the currently served market?• How fast is it growing? Or not?• Who are you competitors? How large, growing, etc.?• How will you be different from the competitors?• Current trends in the industry• Regulations to operate in this business• Why are competitors’ customer loyal? (Are they?)• What are competitors sales, profits and growth trends?

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The Financial Plan

• Be consistent with descriptive part

• Show reaching profitability

• Realistically show all expenses

• Show adequate capital for surviving the start up cycle

• Show how any loan will be paid back

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Financial Statements

Projections for at least two years

– Use of Loan Statement

– Monthly/Quarterly Cash Flow Projections

– By year two, Profit & Loss Statement and Balance Sheet

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Cash Flow Projection

• Time phased tables of projected

– Cash receipts & cash disbursements

– Net cash flow

– Ending & beginning cash balances

– Shows status of working capital

– Tool for estimating startup expenses

• Tool for planning & managing cash flow

• Updated easily in spread sheet format

• Most important financial statement

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WWW.SCORE.ORGCall 1-800/634-0245

www.svscore.org408 288 8479

White Knight Cleaners Cash Flow Projections

First Year Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Cash receipts Full carpet cleaning 2,700 2,700 3,600 4,500 6,300 6,300 5,400 5,400 7,200 8,100 9,000 8,100 Upholstery cleaning 540 540 720 900 1,260 1,260 1,080 1,080 1,440 1,620 1,800 1,620 Contract cleaning 0 0 0 0 0 0 0 900 900 1,800 1,800 1,800Total Cash receipts 3,240 3,240 4,320 5,400 7,560 7,560 6,480 7,380 9,540 11,520 12,600 11,520

Cash disbursements Supplies 200 200 200 200 200 300 300 300 300 300 300 300 Van & Office equipment 28,000 5,000 0 0 0 0 0 500 0 500 0 0 Equip maintenance 0 0 200 200 200 200 200 200 200 200 200 Van fuel & maintenance 200 200 200 600 200 200 600 200 200 800 200 200 Rent for van storage 300 300 300 300 300 300 300 300 300 300 Insurance 200 200 200 200 200 200 200 200 200 200 200 200 Business telephone 80 80 80 80 80 80 80 80 80 80 80 80 Taxes (estimated) 0 0 0 Office supplies 200 500 200 200 0 0 200 0 0 200 0 0 Licenses & Prof. Dues 300 0 0 100 0 0 100 0 0 100 0 0 Advertising 500 500 500 300 500 500 0 0 1,000 1,000 200 0 Accounting & Legal 1,500 1,000 0 0 0 0 0 0 100 600 0 0 Loan repayment 0 0 900 900 900 900 900 900 900 900 900 900 Salaries 4,000 4,000 4,000 4,000 4,000 4,000 5,000 5,000 5,000 5,000 5,000 5,000Total Cash disbursements 35,180 11,680 6,580 7,080 6,580 6,680 7,880 7,680 8,280 10,180 7,380 7,180

Net Cash flow -31,940 -8,440 -2,260 -1,680 980 880 -1,400 -300 1,260 1,340 5,220 4,340

Cumulative Cash flow -31,940 -40,380 -42,640 -44,320 -43,340 -42,460 -43,860 -44,160 -42,900 -41,560 -36,340 -32,000

Cash on Hand Opening balance 50,000 18,060 9,620 7,360 5,680 6,660 7,540 6,140 5,840 7,100 8,440 13,660 Cash receipts 3,240 3,240 4,320 5,400 7,560 7,560 6,480 7,380 9,540 11,520 12,600 11,520 Cash disbursements -35,180 -11,680 -6,580 -7,080 -6,580 -6,680 -7,880 -7,680 -8,280 -10,180 -7,380 -7,180

Ending Cash Balance 18,060 9,620 7,360 5,680 6,660 7,540 6,140 5,840 7,100 8,440 13,660 18,000

44


Profit and Loss Statement

It shows the results for a period of time e.g. month, quarter or year

It must be looked at along with the Balance Sheet and Cash Flow

Statement

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Peace and Prosperity Through Science and Collaboration www.crdf.org 46



Balance Sheet

• Table that shows assets and liabilities

• It is a snapshot of a single point in time, often the end

of a financial period or year

• Prepared for an individual, or business

– Assets - liabilities = net worth

• Often required by lenders

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Summary

• A business plan is really necessary if you are serious about your

business

• Don’t expect it to be perfect or static; it is a repetitive, iterative

process

• Your research and planning are the most important elements

• They give you the knowledge and confidence to positively sell the

advantages of your business to a funder or customer

50


Marketing Strategy

Targeted Customers:

• Identify target lead partners and their applications

• At what price? (ball park)

• We have met with Key Customers and they say…...

• Identify their competitors for the application

• What market share will they capture and what is the

likelihood of doing so?

• What are the important point in the supply chain?

51


Marketing Strategy

Product Strategy

• How do you plan to build market awareness for this

product?

• After alpha and beta sites, how will this product be taken

to market?

• Will this product obsolete any current products?

• How will this product be positioned vs. competitive

products?

52


Marketing Strategy

Channel Strategy

Will you promote the product in all regions? How?

What is the customary channel strategy for this product?

Does this product fit into company’s selling strategy?

What are your plans for Distributors

Will you use Reps?

53


Marketing Strategy

Promotional Strategy

• How will you build awareness interest, preference and loyalty?

• Do you have a Brand strategy?

• How are you going to launch this product or service

Ads

Collateral

Road shows

Eval Kit/Board/ etc.

54


Pricing: How much do I charge?

• How much value does the customer perceive?

• Why do you need a price schedule?

• What about payment terms? Up front charge?

• Guarantees, policies on returns

• Discounts, sales, introductory offers?

• Lowering your price is always easier than raising it!

• Warning: Price may define value in customers’ mind

55


•Direct Sales Force

•Distributors,

•Retail outlets

•Catalogs alliances,

•Mailers,

•Brochures,

•Business cards,

•Web site

•Advertisements,

•Telephone Book

•Public Relations (Press

Releases)

How will you reach your customers?

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A Useful Communications Model

Attention Interest Preference Loyalty

Advertising

Billboards

Handbills

Samples

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Finally

• The act of doing a thorough Business Plan gives you the knowledge

and confidence to speak with authority about your business

• A successful business needs many parts working well together:

– Product Development

– Manufacturing

– Marketing

– Sales

• That needs a well integrated, inter-dependent team

• And good leadership to orchestrate the total process

Remember that you need to fill a market need58


Interesting Web Sites

– www.smallbusiness.yahoo.com (Yahoo Small Business)

– www.bizstats.com (Small Business Profitability)

– www.sba.gov (free statistics, business plans)

– www.smallbizbooks.com (guide book by business type)

– www.entreworld.org. (quick facts, resources)

– www.entrepreneur.com (Entrepreneur Ideas)

– www.calgold.ca.gov (Permits & Licenses in California)

– www.business.gov (U.S. Business Advisor)

– www.toolkit.cch.com (Business Owner’s Tool Kit)

–

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– www.score.org (small business information)

– www.uspto.com (US Patent & Trademark Office)

– www.businessplans.org (Center for Business Planning)

– www.nolo.com (Self Help Law Center)

– www.vfinance.com (venture capital resource library)

– www.bizmove.com (small business knowledge base)

– www.oraclesmallbusiness.com (Oracle Small Business Site)

– www.startupjournal.com (Wall Street Journal Small Business Site)

– www.thomasregister.com (Products Mfg in North America)

Interesting Web Sites

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www.firstgov.com (Access to Govt Sites)

–www.gsa.gov (Selling to the Govt)

–www.foreignborn.com (Guide for Foreign Born)

–www.smalltownmarketing.com (Marketing Plans)

–www.myexports.com (Export Regulations)

–www.fita.org/webindex (International Trade)

–www.aafd.org (Franchises)

Interesting Web Sites (cont.)

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Facts & Information Sources

• Trade Associations (Google)

• International Association of Consultants

• Entrepreneur Magazine

• Various Chambers of Commerce

• Dun & Bradstreet (Financial Condition)

• Better Business Bureau

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A Partial list of Products derived from the Space Program

360 Degree Camera

Advanced Hydrogen Sensors

Advanced Welding Torch

Aerodynamic Bicycle Wheels

Air Catalysts for Carbon Monoxide Poisoning

Aircraft Collision Avoidance

Aircraft Design Analysis

Airline Wheelchairs

Airliner TV Transmission Via Satellite

Anthrax Smoke Detector

Arteriosclerosis Detection

Artificial Heart

Audiometric System for Hearing Assessment

Automated Urinalysis

Automatic Insulin Pump

Automotive Design

BAFCO Linear Actuators

Balance Evaluation System

Biomass Production System for Education

Bioreactor Demonstration System

Bioreactor Human Tissue Growth

Bone Analyzer

Breast Biopsy

Breast Cancer Screening

Bridge Safety Improvements

Cabin Pressure Altitude Monitor and Warning

System

Camera on a Chip

Cardiac Pacemaker

Cataract Surgery Tools

Chemical Warfare Hood

Chromosome Analysis

Clean Room Apparel

Clean Water for Homes

Coastal Zone Color Scanner

Compact Blood Diagnostic Equipment

Compact Fire and Rescue Extraction Devices

Composite Forceps

Composite Materials Development - Golf Clubs

Computer Joysticks

Bioreactor Human Tissue Growth

Bone Analyzer

Breast Biopsy

Breast Cancer Screening

Bridge Safety Improvements

Cabin Pressure Altitude Monitor and Warning

System

Camera on a Chip

Cardiac Pacemaker

Cataract Surgery Tools

Chemical Warfare Hood

Chromosome Analysis

Clean Room Apparel

Clean Water for Homes

Coastal Zone Color Scanner

Compact Blood Diagnostic Equipment

Compact Fire and Rescue Extraction Devices

Composite Forceps

Composite Materials Development - Golf Clubs

Computer Joysticks

Computer-Aided Tomography (CAT Scanner)

Convection Oven

Cool Vest Therapeutic Suits

Cordless Power Tools and Appliances

Corporate Jet Wing Designs

Corrosion Protection Coating

Crop Dusting Improvements

Crop Growing Improvements

DeBakey Heart Pump

Dental Arch Wire

Digital Mammography

Diving Optical Profiler

DMI Remote Sensing Fish-Finding Service

Doppler Radar

Ear Thermometer

Edible Toothpaste

Electric Car

Emission Testing

Emulsified Zero-Valent Iron Remediation

Energy Storage Systems

Engine Coatings

Engine Design

Engine Lubricant

Failsafe Flashlight

Fetal Heart Monitor

Fire Detection Systems

Firefighter Breathing System

Firefighter Radios

Firefighting Equipment

Fireman’s Air Tanks

Fitness Equipment

Flame Detector

Foam-In-Place Seating Technology

Freeze Drying Technologies

Gas Detector

Gasoline Vapor Recovery

Geosynchronous Orbiting

Golf Ball Aerodynamics

GPS Navigation

Helmet Padding

High Temperature Soldering Blocks

High-Pressure Waterstripping

Historical Document Condition Analysis

Home Insulation

Human Tissue Stimulator

Implantable Heart Aid

Improved Aircraft Engines

Inertial Motion-Tracking for Virtual Reality

Infrared Camera

Infrared Thermometer

Insulation

Insulin Pumps

Interactive Computer Training

InTime Agricultural Remote Sensing

Invisible Braces

Kidney Dialysis

http://www.spacecoalition.com/article_display.cfm?

aid=14

63

Thank You for your kind attention

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