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MANA 3325 – ThurburnLecture #4 Slides Product or Service Feasibility
Primary Research – Most Valuable & Expensive:• Customer Surveys• Focus Groups• Prototypes• In-Home Trials
Secondary Research – Less Pertinent & Less Expensive:• Trade Associations• Direct Mail Lists• Demographic Data• Census Data• Market Research by Others• Articles• Local Data• Internet
MANA 3325 – ThurburnLecture #4 Slides
Financial Feasibility
• Capital Requirements Do we have enough cash to do it? If not… can we raise the cash needed?
• Estimated Earnings Does it generate enough cash to sustain itself?
• Return on Investment Can we get a better return doing something else for a lower risk?
MANA 3325 – ThurburnLecture #4 Slides
Should We?Does it fit our Vision and Mission?
Can We?Do we have adequate resources?
Perform a Feasibility Analysis
How Do We?Develop a Business Plan
Specify Objectives
Did We Achieve our Goals?Implement the Business Plan
Measure Results
Would We Do It Again?Do we pull the plug?
If so… When?
MANA 3325 – ThurburnLecture #4 Slides
The Business Plan
Good Planning Improves Results
Increase Probability of Successful Financing
Helps Prevent Mistakes… I wish we hadn’t !
MANA 3325 – ThurburnLecture #4 Slides
The Business Plan
Who is the Plan for?
• Yourself… essentials may be enough.
• Partners… more extensive
• Investors… most extensive
The More $$$ the More EXTENSIVE
MANA 3325 – ThurburnLecture #4 Slides
The Business Plan
• Company• Strategy• Marketing• Implementation• Projections• Financing
MANA 3325 – ThurburnLecture #4 Slides
The Business Plan
• Company• Title Page• Table of Contents• Exec Summary• Vision & Missions• History• Industry Profile• Products & Services
MANA 3325 – ThurburnLecture #4 Slides
The Business Plan
• Strategy• Goals• Objectives• Business Strategy
MANA 3325 – ThurburnLecture #4 Slides
The Business Plan
• Marketing• Marketing Strategy• Marketing Research• Customer Research• Competitors Analysis
MANA 3325 – ThurburnLecture #4 Slides
The Business Plan
•Implementation• Management Team• Plan of Operations
MANA 3325 – ThurburnLecture #4 Slides
The Business Plan
•Projections• Assumptions• Projections• Summary & Cash Flow• Income Sources• COG• Expenses• Payroll Detail
MANA 3325 – ThurburnLecture #4 Slides
The Business Plan
•Financing• Loan Details if applicable• Investor Details if applicable
MANA 3325 – ThurburnLecture #4 Slides
The Business Plan
The 5 Cs of Capital and Financing
Capital
Capacity
Collateral
Character
Conditions
MANA 3325 – ThurburnLecture #4 Slides
The Business Plan
The 5 Cs of Capital and Financing
Capital – Enough? and Balance of Debt vs Equity
Capacity – Cash Flow
Collateral – Liquid or Fixed Assets
Character – Creditor History
Conditions – Terms of Loan
The Business Plan
Who is the Plan for?
Yourself… essentials may be enough.
• Marketing Strategy• Competitor Analysis• Financial Projections
MANA 3325 – ThurburnLecture 09-10-13 Slides
The Business Plan
Who is the Plan for?
“Partners”… more extensive … add the
• Vision & Mission• Business & Industry Profile• Plan of Operations• Partner Buy In T&C
MANA 3325 – ThurburnLecture 09-10-13 Slides
The Business Plan
Who is the Plan for?
Investors… most extensive… add the…
…. Full Business Plan….
The More $$$ the More EXTENSIVE
MANA 3325 – ThurburnLecture 09-10-13 Slides
The Business Plan
MANA 3325 – ThurburnLecture 09-10-13 Slides
A Plan Must Pass Three Tests
1. The Reality Test:
2. The Competitive Test:
3. The Value Test:
Define Reality Test…?
The Business Plan
MANA 3325 – ThurburnLecture 09-10-13 Slides
The Reality Test – proving that:
• A market really does exist for your product or service.
• You can actually build or provide it for the cost estimates in the plan.
Next… Define the Competitive Test
The Business Plan
MANA 3325 – ThurburnLecture 09-10-13 Slides
The Competitive Test – evaluates:
1. A company’s position relative to its competitors.
2. Management’s ability to create a company that will gain an edge over its rivals.
Next define the Value Test
The Business Plan
MANA 3325 – ThurburnLecture 09-10-13 Slides
The Value Test – proving that:
• A venture offers investors or lenders an attractive rate of return or a high probability of repayment.
The Business Plan
• Company• Strategy• Marketing• Implementation• Projections• Financing
MANA 3325 – ThurburnLecture 09-10-13 Slides
What are the sub-parts of the Company Section of a Business Plan?
The Business Plan
• Company• Title Page• Table of Contents• Exec Summary• Vision & Missions• History• Industry Profile• Products & Services
MANA 3325 – ThurburnLecture 09-10-13 Slides
What is the difference between Features & Benefits?
The Business Plan
MANA 3325 – ThurburnLecture 09-10-13 Slides
Features vs. Benefits
Feature – a descriptive fact about a product or service:
“an ergonomically designed, more comfortable handle”
Benefit – what a customer gains from the product or service feature:
“fewer problems with carpal tunnel syndrome and increased productivity”
What are the sub-sections of the Strategy Section?
The Business Plan
• Strategy• Goals• Objectives• Business Strategy
MANA 3325 – ThurburnLecture 09-10-13 Slides
What are the sub-sections of the Marketing Section?
The Business Plan
• Marketing• Marketing Strategy• Marketing Research• Customer Research• Competitors Analysis
MANA 3325 – ThurburnLecture 09-10-13 Slides
What are the sub-sections of the Implementation Section?
The Business Plan
•Implementation• Management Team• Plan of Operations
MANA 3325 – ThurburnLecture 09-10-13 Slides
What are the sub-sections of the Projections Section?
The Business Plan
•Projections• Assumptions• Projections• Summary & Cash Flow• Income Sources• COG• Expenses• Payroll Detail
MANA 3325 – ThurburnLecture 09-10-13 Slides
The Business Plan
Proposed Financing
• Loan Details if applicable
• Investor Details if applicable
MANA 3325 – ThurburnLecture 09-10-13 Slides
The Business Plan
Capital – Enough? and Balance of Debt vs Equity
Capacity – Cash Flow
Collateral – Liquid or Fixed Assets
Character – Creditor History
Conditions – Terms of Loan
MANA 3325 – ThurburnLecture 09-10-13 Slides
The Business Plan
MANA 3325 – ThurburnLecture 09-10-13 Slides
Tips on Preparing a Business Plan
1. Make sure your plan has an attractive cover. (First impressions are crucial.)
2. Rid your plan of all spelling and grammatical errors.
3. Make your plan visually appealing.
4. Include a table of contents to allow readers to navigate your plan easily.
5. Make it interesting.
The Business Plan
MANA 3325 – ThurburnLecture 09-10-13 Slides
Investors
Family: The first place you go… need to get some buy in.
Friends: The second place… should be interested.
Network: Hopefully it is full of people with money.
Suppliers: If an extension of an existing business this is a great source of financing.
Money People: Angels, Mezzanine, Growth Stage, M&A