Business Planing for startups


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Business Planing for startups

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Business Planing for startups

  1. 1. Business Planning for StratupsGoa Startup LaunchpadVivek 526 7129
  2. 2. About Me• Over 10 years experience in manufacturing industriesinvolved in producing consumer products, constructionhardware, auto parts.• Have worked in various positions from supervisor toVice President• Currently working as consultant and coach for businessowners and startups• Passionate about learning the art and science ofstartups
  3. 3. About Goa Startup Launchpad• Mission to Empower Entrepreneurs in Goa tostart and grow their businesses• Promote entrepreneurship of all types fromgrassroots level to high tech• Work with incubators to help acceleratebusinesses• Connect with entrepreneurs, visionaries andgame changers of Goa
  4. 4. Join the MissionGoa Startup Launchpadhttp://goastartuplaunchpad.in
  5. 5. What is a Business Plan?
  6. 6. Business plan is a narrative of various Customer,Product, financial and operational hypotheses ofthe business
  7. 7. Many names ….• Presented to a banker, it may be called a "loanproposal." A venture capital group might call itthe "venture plan" or "investmentprospectus."
  8. 8. Why do we write a Business Plan?
  9. 9. • Communicating the idea• Becomes guide for future decisions• Helps to identify potential risks• Getting fundingMostly this is the only reason youwrite a business plan
  10. 10. You cannot use business Plan for…running yourStartupMore about this later….
  12. 12. Every Business Plan must have• Executive Summary• Company Description• Market Analysis• Organization and Management Structure• Products or services• Sales and Marketing• Financial Projection
  13. 13. Other Things that can be Included• Funding Request• Personal Financial Statements of the founders• Startup expenses and Capitalization• Exit plan for VC, Investors• Operational plan
  14. 14. 20 to 40 pages of….Blah… blah…blah…
  15. 15. First thing last…
  16. 16. Executive Summary• Is the most important part of the plan• May be the only part that is read in detail bythe investors• Should be able to precisely explain the majoraspects of the venture in about 30 seconds• It is always written last
  17. 17. Company Description• What business will you be in? What will youdo?• Company Goals and Objectives• To whom will you market your products?• Describe your industry• Describe your most important companystrengths and core competencies• Legal form of ownership
  18. 18. Market Analysis• Industry Description and Outlook• Information About Your Target Market• Demographics and critical needs of your potentialcustomers• Size of the Target market• How much market share can you gain?• Pricing gross margin targets• Competitive analysis• Regulatory restrictions
  19. 19. Organization and ManagementStructure• Organizational Structure• Ownership Information• Board of Directors Qualifications• Key advisors, consultants, mentors
  20. 20. Products or services• A Description of Your Product / Service• Details of lifecycle of products or service• R&D activities• Intellectual property
  21. 21. Sales and Marketing• market penetration strategy• growth strategy• Channels of distribution strategy• Sales Force• Sales process
  22. 22. Financial Projection• 12-Month Profit and Loss Projection• Projected Cash Flow• Opening Day Balance Sheet• Break-Even Analysis
  23. 23. Other items may be included asneeded
  24. 24. A Good Plan will Have• Good and unique business concept• Good understanding of the market• Market that is growing or is stable• Capable Management Team• Sound financial understanding• Business Focus
  25. 25. EXERCISE
  26. 26. Spend two minutes to Answer each setof questions
  27. 27. 1. Company Description2. Market Analysis3. Organization and Management Structure4. Products or services5. Sales and Marketing6. Financial Projection
  28. 28. This is just the start…you have to spend lot of time doingresearch and fine tune yourcalculations to complete the plan
  29. 29. “A good plan violently executed now is better thana perfect plan executed next week.”- George S. Patton
  30. 30. Even with all the research it is justa hypothesis
  31. 31. Imagine updating this 20 to 40 pagedocument every time your startuplearns more about your market,customer and the offering
  32. 32. It is very tedious process…and not suitable for startups
  33. 33. Can we avoid it?
  34. 34. Not entirely…because the banks or yourinvestors use it as document tojudge your business worthiness
  35. 35. Startups are constantly learning…and has to spend their time andenergy to use this knowledge to find astable, scalable business model
  36. 36. Startup is different…Startup Business
  37. 37. They cannot waste their timeupdating the long business plan…Yet they need something to keeptrack of their learning
  38. 38. The solution….
  39. 39. Business Model Canvas
  40. 40. What Is a Business Model?• Diagram of flows between company andcustomers• Scorecard of hypotheses testing• Rapid change with each iteration and pivot• Founder-driven* Alex Osterwalder
  41. 41. 9 building blocks of a businessmodel:Reference: Lean Launchpad Class – Steve Blank
  42. 42. 9 GuessesGuess GuessGuessGuessGuessGuessGuessGuessGuess
  43. 43. Process of testing the guesses tofind facts isCustomer Development
  44. 44. Business starts with an idea….Once we find a scalable businessmodel we can start building thecompany…
  45. 45. Scalable Startup ( Focus on Search)IdeaSize of theOpportunityBusinessModel(s)CustomerDiscoveryCustomerValidationLarge Company (Focus on Execution)-Total Available Market > $500m- Company can grow to $100m/year- Business model found- Focused on execution and processReference: Lean Launchpad Class – Steve BlankCompanyBuildingWriteBusiness PlanFunding
  46. 46. “If you plan on being anything less than you arecapable of being, you will probably be unhappyall the days of your life.”- Abraham Maslow
  47. 47. Think Big!
  48. 48. Plan for big things! 526 7129