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  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 200-2008 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 200-2008 Tennant Consulting www.tennantconsulting.com
  • Copyright 200-2008 Tennant Consulting www.tennantconsulting.com
  • Copyright 200-2008 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 200-2008 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 200-2008 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 200-2008 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 200-2008 Tennant Consulting www.tennantconsulting.com
  • Copyright 200-2008 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com
  • Copyright 2005 Tennant Consulting www.tennantconsulting.com

Order Management System Example, no pictures Order Management System Example, no pictures Presentation Transcript

  • How to Write a Great Business Plan Steve Tennant Tennant Consulting www.tennantconsulting.com
  • About the Speaker Steve Tennant, Managing Director, Tennant Consulting
    • After PeopleSoft, Steve was VP Business Development at Ninth House Network, a broadband Internet e-learning company; then VP Marketing at Planitax, a startup software-as-a-service application financial software provider, a Tennant Consulting client which he helped to secure venture financing in 2003.
    • Past roles include advising over 20 high-tech firms at Technology Ventures Corporation and as a member of the Keiretsu Forum, an angel investor group.
    • Steve founded the 2,000-member PeopleSoft Alumni Network and co-chairs the East Bay Innovation Groups' Startups and Venture Capital SIG, a monthly networking and educational forum for high-tech entrepreneurs.
    • Mr. Tennant graduated with a BBA with high distinction from the University of Michigan Business School in Ann Arbor, Michigan and lives with his family in Orinda, California.
    • Steve publishes a free monthly newsletter with tips and tools for entrepreneurs. To subscribe, visit www.tennantconsulting.com
    • Steve Tennant is a marketing consultant to software and technology firms looking to attract more customers and venture capital.
    • Since 2001, Steve Tennant has been managing director of Tennant Consulting, helping software and Internet executives accelerate growth of their businesses through strategy, marketing, alliance, and product management consulting services.
    • Steve has over 20 years of software and technology industry experience. He is a former VP of Business Development and director of Product Strategy at PeopleSoft. Prior to that, he was a senior manager at Andersen Consulting (now Accenture).
  • How to Write a Great Business Plan Steve Tennant Tennant Consulting www.tennantconsulting.com
  • Representative Clients
    • Employer tax collection system – State of Michigan
    • Project management system
    • Professional service billing system
    • Government accounting system – Puerto Rico
    • Receiving, inventory, shipping system
    • Utility billing system
    • Member information system
    • Disaster recovery system
    • AI-based mortgage loan origination system
    • Retail banking system
    • Bank of the Future solution center
    • Portfolio accounting system
    • Investment management customer reporting
    First Nationwide Bank
  • Experience – As an employee
    • Global accounting enterprise packaged software
    • Activity-based accounting software
    • Knowledge management software
    • Broadband e-learning / management training
  • Representative Clients
    • Hosted corporate tax software
    • Accounting & audit software
    • Enterprise pricing software
    • RFID supply chain application software solution
    • Hosted medical billing software
    • Expandable USB hard drive
    • IT asset management software
    • Building energy analysis software
    • Networking skills e-learning
    • Data storage security
    • Wireless power products for consumer electronics
    • Corporate training materials printing software
    • Credit and collections software
    • Grid computing solutions
    • Hosted bio-computing software
    • Offshore product management services
    • Collaborative software solution
    • Global capital markets trading software
    Rolling Thunder
  • You Might Be Thinking…
    • How do I write a business plan?
    • What do I include?
    • How does this process work in the real world?
    • What separates “good” from “great”?
    • How do I get started?
    • Is there any more pepperoni?
  • An idea to make your plan great
  • The “Business Concept” Customers’ Really Big Problem Valuable, Differentiated Solution What are Their Needs and Wants? How Do They Solve It Today? How Do They Buy? What Do They Value/Pay? How “Really Big” Is The Problem? How Are We Different? How Do We Deliver Value? What Do We Build/Buy/Partner? How to Balance Speed & Quality? What’s Our Solution?
  • Your “Investor Toolkit”
    • Executive Summary (of the Business Plan)
      • 1-3 page standalone Word or PDF document
    • Investor Pitch
      • 10-16 Slide PowerPoint
    • Business Plan
      • 15-40 Page Word or PDF document
    • Financial Plan
      • 5-20 Page Spreadsheet
      • 2-3 pages in Business Plan
      • 1 Slide in Investor Pitch
  • How This Works Great, send me your business plan & financials I’d like to meet Sum You Advisors Sum Sum Sum Investors Sum Investor Pitch Investor Presentations PPT BP Fin Due Diligence BP Fin Terms Negotiations Funding $ Investor Pitch All Partners Meeting PPT
  • Now on to the nuts and bolts…
  • What’s in a business plan? No “right or wrong” – just “complete” and “incomplete” Adjust sequence to tell your story
    • Business Plan
    • Sample Table of Contents
    • Executive Summary
    • Problem/Market Opportunity
    • Business Concept & Vision
    • Solution
    • Competitive Landscape
    • Intellectual Property
    • Customer Value Proposition
    • Revenue Model
    • Sales, Marketing & Alliances
    • Manufacturing/Operations
    • Financials
    • Investment/Uses of Funds
    • Team
    • Team
    • Customers
    • Solution
    • IP
    Lead with your strength
  • Executive Summary
    • Used to get investor meetings
    • 1-3 pages
    • Industry, category, stage
    • May be required to complete an application
    • Include short answers to each of the other sections
    • No NDA: Keep jewels close
    • Lead with your strength
    • Show compelling vision
    • Make the story interesting
    • Tips
      • Draft first, finalize after long business plan is completed
      • Use to provide “routing information” for VC firms
      • Leave investors wanting to learn more
      • Used twice: stand-alone email doc and as intro in your longer business plan
      • Have other laypeople review & provide feedback
  • This section speaks volumes… about your thought process
  • Problem/Market Opportunity
    • What’s the REALLY BIG PROBLEM you’re solving?
    • What’s the market size? How much is spent ON THIS PROBLEM today?
    • How fast is the market growing? Compound Annual Growth Rate (CAGR)
    • Hubcaps vs. cars
    • What are the market trends?
    • Why invest now?
  • Market: Tips for Success
    • Think Big
      • $1-1.5B market size hurdle for many VC’s – or their economics don’t work
      • Include global, not just domestic markets
      • Have customer purchase knowledge before meeting investors
    • Bottoms Up
      • Start with the economics of one customer
      • Then build it up to a customer base: “Bottoms Up” analysis means this many customers, spending this much = market size
      • Do “bottoms-up” math:
        • (# of customers) x (% who buy each year) x (average amount spent annually) = market size
    • Top Down
      • Compare to “tops-down”
        • “ Gartner says this will be a $50B market by 2011 – we just need “__%”. This doesn’t work – but it can be used to reconcile your bottoms up analysis.
  • Terminology
    • “ Available Market”
      • Everyone who has this problem, that could someday buy your solution
    • “ Addressable Market”
      • Everyone you plan to address with this version of your solution
    • “ Demand side” vs. “Supply side”
      • Demand = measure of customer spending
      • Supply = measure of supplier revenues
      • Both are valid
  • Now the stage is set…
  • Business Concept
    • Introduce your company - what’s your idea?
    • What kind of company are you?
      • “ We sell software”, “We license IP to pharmaceuticals”
    • Who will you sell to?
      • Specific titles, demographics, examples
    • What are their biggest problems?
    • How being addressed today?
    • What are people willing to pay for your solution?
  • Examples
    • “ We replace redundant local accounting systems with a single global system…”
    • “ We use a specialized, customized, online survey tool to replace in-person tax interviews by expensive tax accountants…”
    • “ 75% of computer users have pictures, music, or other valuable data that is not backed up...”
    • “ Most data security has focused on the corporate perimeter, yet most breaches are internal. We stop internal users from accessing stored data they should not be accessing.”
  • Typically the longest section (and unnecessarily so)
  • Solution
    • What is your solution to the problem?
    • What is your technology?
    • Underlying technology?
      • Platform decisions?
      • Development tools?
    • How does it work?
    • How is it better?
    • Functions? Features?
    • What are you actually selling?
    • Answer, “So what?” Describe benefits .
  • Solution: Tips
    • Include 1-2 pictures, diagrams, graphs, flowcharts, screenshots.
    • What’s your vision? Roadmap?
    • What is your role in the value chain? What other components to the “Whole Product”?
    • Layperson language for angel investors and BP competition – assume VCs have experience
    • Save technical details and secret recipes for due diligence
    • Show some restraint!
  • Show Them The Money… If You Want Them to Show You The Money
  • Customer Use & Value Proposition
    • Include your protagonist, the customer, in the story.
      • How is their life better after using your solution?
    • How do economics work for one customer?
      • How does that customer justify purchase?
      • Include “Whole Product” cost
  • Just don’t ever, ever say, “We have none”
  • Competition
    • From the buyer’s perspective
      • Who else do buyers consider as substitutes?
    • From the investor’s perspective
      • If you prove there’s a profitable market, who else would enter? Then how will you beat them?
      • What’s your strategy to win long term?
  • Barriers to Entry/ Intellectual Property
    • Brief (1-2 sentence) patent description & number
    • Patent approval status
    • Status of key regulatory approvals (e.g., FDA approval, NSA certification, Gorilla vendor certification)
    • Also different business model, limited distributors or partners, few global players, financials required to be successful, etc.
  • “ So, how do you make money?”
  • Revenue Model / Business Model
    • Describe revenue streams & pricing, e.g.:
      • License fees, subscription revenues, service contracts, consulting fees, gain share, etc.
      • Distinguish 1-time vs. ongoing
      • Distinguish by product and market
    • What is pricing based on?
      • How does price compare to customer value?
      • What PROOF do you have that customers will actually pay this for your solution?
  • What happens when you actually go try to sell this?
  • Sales, Marketing & Alliances
    • A.K.A. “Go to Market” strategy
    • How will your reach your customers?
    • How much website traffic?
    • Type of sales model (direct, keywords, telesales, through partners, etc.)
    • What will it cost to sell the product?
    • What are the risks?
    • How long before the sales model is proven?
    • What will it take to prove the cost of sales?
  • Sales, Marketing, Alliances Tips
    • Your product is unlikely to “sell itself”
    • Examine sales models and financials from similar companies to see what works; estimate costs
    • Compare (total expenses spent selling to date) / (number of customers) = sales & marketing costs
    • Compare sales & marketing to product cost
    • Factor in:
      • Sales ramp up time
      • Customer education time
      • Customer budget cycles
      • Sales compensation requirements
      • Not all reps make quota
      • Typical # accounts/representative
      • # contacts per account
  • How will you build it?
  • Operations/Manufacturing
    • For product companies
    • How will product be built?
    • Who on the team is managing?
    • Are costs known? Contracted for?
    • Offshoring? Outsourcing? Your team’s experience with this?
  • Probably requires the most effort after “customers”
  • Financials
    • Quarterly for two years, 5 years total
      • Income
      • Expenses
      • Margin
      • Cash Requirements
    • Summarize financials in a table
    • Include hockey-stick graph
    • Include key assumptions
    • Reference your financial model (the spreadsheet in your investor kit)
  • The Ask
  • Financing/Uses of Funds
    • How much capital are you raising?
    • Debt/equity?
    • How will the money be used?
      • Complete prototype
      • Customer acquisition
      • Management team
      • Product development
      • Etc.
    • If this is such a good deal, who are the previous investors, and where are they now?
    • Be prepared for exit strategy w/ angels; exclude for meetings with VCs
    • Do not include a valuation
  • This Section Speaks Volumes About You As A Leader
  • Team
    • Describe the team members and advisors
      • Their role & responsibility relative to the plan, and
      • Their relevant experience achieving similar results
    • CEO
      • Prior relevant experience?
      • Who is accountable for the investment?
      • Avoid “Three musketeers”
  • Cover
    • Company name
    • Industry
    • Date
    • Contact information
      • Name of primary contact
      • Email
      • Office phone
      • Mobile phone
      • Company website
  • Tool: Business Concept Questionnaire Writer’s block? Make this your first stop – 12 page questionnaire
    • Steve, your business concept questionnaire is AWESOME. It really helped to expand how to describe our business and structure our investor presentation.
    • We had our first VC meeting today, and it went very well – the questionnaire helped us crystallize our business concept and anticipate the vast majority of their questions…. Thank you!
    • - Phil Cullen
    • President, Acqua Consulting
    “ “
  • Questions?
    • Why a business plan
    • What is your concept
    • What to include
    • How to get started
    • Q&A
  • How to Write a Great Business Plan Steve Tennant Tennant Consulting www.tennantconsulting.com