Business Plan Training Session 1: Defining the Business

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Describes how to define your business and/or products/services when building a business plan

Describes how to define your business and/or products/services when building a business plan

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  • 1. Business Plan Training Series
    Section1: Product/Business
    Chuck Behn
    7 July, 2011
  • 2. People Over 35 Launched 80% Of Startups in 2009 …. Global Entrepreneurship Monitor
    People over 55 are nearly twice as likely to launch startups in "high-growth" industries -- including aerospace, defense, health care, and computer and electronics … Kaufmann Foundation
    “… companies started by older workers don't get much recognition because they don't generally produce hot Web apps or other easily understood products. Instead, they tend to involve more complex technologies like biotech, energy, or IT hardware. They also tend to sell products and services to other businesses, which consumers rarely see but which do most of the heavy lifting in powering innovation and economic growth."
    Entrepreneur Headlines
  • 3. “Good service keeps this customer happy”Fort Worth Star-Telegrampg 19A, 7/4/11E.B. Holschuh III
    Restaurant
    Dentist
    Mechanic
  • 4. Executive Summary
    Product/Business
    Market opportunity definition
    Competition
    Marketing & Sales
    Management
    Finance/Risks
    Appendices
    Components of a Business Plan
  • 5. Do I Have a Product or Business Idea?
    Product
    Business
    Provides a solution to a question/problem
    Can become a profitable business unto itself if market is large enough
    If successful, is differentiated and efficient in delivering its solution
    Sustainable
    Scalable
    Creates competitive advantage
    A grouping of products and/or services
    A successful transition of product to business: Vitamin Water differentiated itself from all other water products using flavor and ingredients – sold for $4.2B
  • 6. Business and/or Product
    Business
    Product/Services
    What does your business do?
    What are your long term goals/objectives?
    How is your business different from competition?
    What will make people want to buy from you?
    Description of products & services
    Positioning
    Competitive evaluation
    Product/Service rollout plan
  • 7. Who is your customer?
    What customer problem(s) do you solve?
    What value do you provide?
    How do you make money?
    What are your costs?
    How profitable will you be?
    What Does Your Business Do?
  • 8. Music Publisher – rights exploitation business
    Search Engines – web portals
    Financial Advisor – selling time
    Cake/cookies Bakery – gift shop
    Concise Business Descriptions
    What is yours?
  • 9. Goal 1: Build business to $x Revenue and SELL!
    Objective 1: Achieve in Y years
    Objective 2: % Profit
    Goal 2: Excel in xxxx
    Systems
    Personnel
    Training
    Differentiate
    Method 1
    Method 2
    Become innovation leader in zzzzzzz
    Method 1
    Method 2
    What are your goals/objectives?
  • 10.
  • 11. Compared to:
    Competition
    Parallel businesses in other industries
    Your industry
    Substitute products and services
    How is your business different?
  • 12. Differentiation Examples
    In a crowded personal computer marketplace, Dell sold direct to order, and stood out.
    When other fast food chains were getting “healthy,” Hardee’s reinvented itself with the Thickburgers. (Unapologetically, the Monster Thickburger contains 1,420 calories!)
    Ignored airports and focused on suburban locations and the “insurance replacement” market
    Barbie is an all-American children’s doll, while Bratz is a hip, modern doll with attitude.
    When Crest and Colgate fought over market share for cavity and tartar control, Tom’s advertised all-natural ingredients (and Colgate bought them out for a cool $100 million). 
  • 13. Unique products/services
    Customer niche
    Inventory
    Unique distribution
    Price
    Service
    Guarantee
    Reputation
    Why would someone buy from YOU?
  • 14. Walmart vs. Nordstrom’s
    Ford vs. Chevrolet
    McDonalds vs. Jack-in-the-Box
    Dell vs. Apple
    TXU vs. Reliant Energy
    Tom Thumb vs. Kroger
    Geico vs. Allstate
    Centex vs. David Weekley
    Why would someone buy from the following companies?
  • 15. Physical description
    Pictures, drawings, diagrams are also helpful
    Uses/benefits
    What problem(s) are you solving?
    What extra benefits are provided?
    Stages of development
    Concept development
    Beta testing
    Technical implementation
    Commercialization
    Product/ServiceDescription
  • 16. Product/ServiceDevelopment Tools/Methodologies
    DFSS – Design for Six Sigma
    QFD – Quality Function Deployment
    Stage Gate Process
    Target Costing
    Integrated Product Teams
  • 17. Direct competitors
    Potential competitors
    Buyers
    Suppliers
    Substitute products
    Strengths/Weaknesses/Opportunities/Threats (SWOT) analysis on company and product(s)
    Product/ServiceCompetitive Evaluation
  • 18.
  • 19. Product/ServicePositioning – Separation from competitors
    Potential Positioning Strategies
    Does your Positioning:
    Against/Away from competitors (Avis, we’re #2)
    Emphasis on benefits (Volvo, safety)
    Product Attribute (Motel 6, economy)
    How used (Jeep, off road)
    Users (_____ for Dummies books)
    Have one clear message?
    Connect with/pertinent to the target audience?
    Contrast your strengths against the competition?
    Resonate with customers into the future?
    Is it believable and can you substantiate all claims?
  • 20.
  • 21. What product is coming out when and with what features
    Planned future releases by product
    Product life cycle
    Allocated resources
    Planned results (financial, market share, etc.)
    Product/ServiceRollout Plan
  • 22. BlackberryRollout Plan
  • 23. Business Concept Example
    Morning Star Espresso Company is a new espresso business that is scheduled to begin operations on January 1, 2003. The reservation based, Indian owned enterprise will be managed and operated by Kim Smart, sole proprietor.
  • 24. Service Description Example
    JavaNet will provide its customers with full access to the Internet and common computer software and hardware. Some of the Internet and computing services available to JavaNet customers are listed below:
    Access to external POP3 email accounts.
    Customers can sign up for a JavaNet email account. This account will be managed by JavaNet servers and accessible from computer systems outside the JavaNet network.
    FTP, Telnet, Gopher, and other popular Internet utilities will be available.
    Access to Netscape or Internet Explorer browser.
    Access to laser and color printing.
    Access to popular software applications like Adobe PhotoShop and Microsoft Word.
    JavaNet will also provide its customers with access to introductory Internet and email classes. These classes will be held in the afternoon and late in the evening. By providing these classes, JavaNet will build a client base familiar with its services. The computers, Internet access, and classes wouldn't mean half as much if taken out of the environment JavaNet will provide. Good coffee, specialty drinks, bakery goods, and a comfortable environment will provide JavaNet customers with a home away from home. A place to enjoy the benefits of computing in a comfortable and well-kept environment.