Business Plan Writing for Young Entrepreneurs

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Presentation to YBHK on Dec 16 2009 regarding business plan writing and entrepreneurship

Presentation to YBHK on Dec 16 2009 regarding business plan writing and entrepreneurship

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  • If there are multiple team members participating in the pitch, put names on the next slide instead. Key objective: Everyone in the room should know the basic value proposition of the company, including the target market, before the next slide is shown. All the words should not be on this slide, but reinforce and extend the tagline orally so that that everyone has a foundation for what is to come.
  • The three or four key players in the company. For some reason, everyone puts the team slide at the end, but investors want to know this at the beginning, and it is common courtesy to make sure everyone is introduced. But make this short, crisp and relevant. This is not the time to share everyone’s life story, or detail the resumes of all six members of the advisory board. Focus on a significant, relevant accomplishment for each person that identifies that person as a winner. In ten to fifteen seconds, you should be able to say three or four sentences about your CTO that says everything the investors want to know about him or her at that moment. Key objective: Investors should be confident that there is a good credible core group of talent that believe in the company and can execute the next set of milestones. One of those milestones may be filling out the team, and so it is important to convey that the initial team knows how to attract great talent, as well as having great domain skills. If there is a gap in the team, address it explicitly, before investors have to ask about it.
  • The best way to give an overview of your company is to state concisely your core value proposition: What unique benefit will you provide to what set of customers to address what particular need? Then you can add three or four additional dot points to clarify your target markets, your unique technology/solution, and your status (launch date, current customers, revenue rate, pipeline, funding needed). Key objective: Flesh out the foundation you established at the beginning. At this point, no one should have any question about what it is that your company does, or plans to do. The only questions that should remain are the details of how you are going to do it. Another key objective you should have achieved by this point in your presentation is to make sure that if there are some compelling brand names associated with your company (customers, partners, investors, advisors), your audience knows about them. Feel free to drop names early and often—starting with your first email introduction to the investor. Brand name relationships build your credibility, but do not overstate them if they are tenuous.
  • You need to make it clear that there is a big, important problem (current or emerging) that you are going to solve, or opportunity you are going to exploit, and that you understand the market dynamics surrounding the opportunity—why does this situation exist and persist, and why is it only now that it can be addressed? Show that you really understand the very particular market segment you are targeting, and frame your market analysis according to the specific problem and solution you are laying out. In some cases, however, the problem you are attacking is so obvious and clear that you can drop this slide altogether. You do not have to tell investors that there are a lot of cell phones out there or that teenagers like to socialize. Save yourself, and them, the pain of the obvious. Even if your market opportunity is not obvious, you can assert the size of your opportunity on slide 2. Sometimes you may need a slide to clarify the factors that define the size and scope of the opportunity, particularly if you are going after multiple market segments. There may be a unique market dynamic or emerging trend that requires explanation. Do not use this slide to quote the Gartner Group or Frost & Sullivan ; show that you really understand where your prospective customers are from the ground up.
  • What specifically are you offering to whom? Software, hardware, services, a combination? Use common terms to state concretely what you have, or what you do, that solves the problem you’ve identified. Avoid acronyms and don’t try to use these precious few words to create and trademark a bunch of terms that won’t mean anything to most people, and don’t use this as an opportunity to showcase your insider status and facility with the idiomatic lingo of the industry. If you can demonstrate your solution (briefly) in a meeting, this is the place to do it. You might need an extra slide to show how your solution fits in the value chain or ecosystem of your target market. Do you complement commonly used technologies, or do you displace them? Do you change the way certain business processes get executed, or do you just do them the same way, but faster, better and cheaper? Do you disrupt the current value chain, or do you fit into established channels? Who exactly is the buyer, and is that person different than the user?
  • State clearly and quantify to the extent possible the three or four key benefits you provide, and who specifically realizes these benefits. Do some constituents benefit more than others, or earlier than others? These dynamics should inform your go-to-market strategy, and your product/service roadmap, which you will discuss later.
  • Depending on your solution, you might need a separate slide to convince investors that no one else can easily duplicate or surpass your solution (assuming that’s actually true.) If you are in a business sector in which intellectual property is important, this is where you drill down into your secret sauce and proprietary technology. Again, boil this down to simple elements and terms, devoid of jargon. Do not walk the audience through a guided tour of your detailed product architecture. Instead, highlight the elements of your technology that give you unique potential for leverage and scale as you grow. If you do slides 4 and 5 well, it will be easy to make the case for your...
  • So how are you better than everyone else, including the status quo? Most entrepreneurs misunderstand the critical objective of this slide, which is not to enumerate all the deficiencies of the competition (as much fun as that may be.) Just because you have really cool technology, secret sauce, and intellectual property does not mean you will win. Other factors like domain expertise, high-level connections, and special relationships with customers, vendors, and other companies also play a part. Your key objective is to convince the investor that lots of folks will buy your product or service, even though they have several alternatives (one of which may be to do nothing), for very good reasons. The best way to convince an investor is to have referenceable customers or prospects who will articulate in their own words why they bought or will buy your offering over the alternatives. Use this slide to summarize the three or four key reasons why customers prefer your solution to other solutions and to the status quo. Many entrepreneurs have been coached to use a four-square matrix that shows that they are in the upper right-hand quadrant, but this has become a joke in the venture community. Check-boxes are better, if they are not abused. Make sure your check-box criteria reflect the market’s requirements, not just your product’s features. Depending on how important the analysis of competitive players is in your market segment, you may need a matrix to provide a detailed list of competitors by category. Preferably, you develop this as a “pocket slide” to be used for Q & A, if necessary. It is important, however, that you do your homework on the competition, and that you don’t misrepresent their strengths or their weaknesses.
  • The single most compelling slide in any pitch is a pipeline of customers and strategic partners that have already expressed some interest in your solution—if they haven’t already joined your beta program. Too often this slide is, instead, a bland laundry list of standard sales and marketing tactics. You should focus on articulating the non-obvious, potentially disruptive elements of your strategy, or you can frame your comments in terms of the critical hurdles you need to get over, and how you are going to jump them. If you don’t have a pipeline, and there is nothing unique or innovative about your strategy, then drop this slide and make the elements of your sales model clear in the discussion of your business model
  • How do you make money? Usually by selling something for a certain price to certain customers. But there are lots of variations on the standard theme. Explain your pricing, your costs, and why you are going to be especially profitable. Make sure you understand the key assumptions underlying your planned success and be prepared to defend them. What if you can’t sustain the price? What if it takes twice as long to make each sale? What if your costs don’t decline over time? Some investors will want to test the depth of your understanding of your business model. Be ready to articulate the sensitivity of your business to variations in your assumptions.
  • The two previous slides above should come together neatly in your five-year financial projections. [Bill and I disagree here. I think a five-year projection is impossible.] You should show the two or three key metrics that drive revenues, expenses and growth (such as customers, unit sales, new products, expansion sales, new markets), as well as the revenue, expense, profit, cash balance, and headcount lines. The most important thing to convey on this slide is that you really understand the economics and evolution of a growing, dynamic company, and that your vision is grounded in an understanding of practical reality. Your financials should tell your story in numbers as clearly as you are telling your story in words. Investors are not focused on the precision of your numbers; they’re focused on the coherence and integrity of your business plan.
  • It should be clear from your financials what your capital requirements will be. On this slide you should outline how you plan to take in funding—how big each round will be, and the timing of each—and map the funding against your key near-term and medium-term milestones. You should also include your key achievements to date. These milestones should tie to the key metrics in your financial projections, and they should provide a clear, crisp picture of your product introduction and market expansion roadmap. In essence, this is your operating plan for the funds you are raising. Do not spend time presenting a “use of funds” table. Investors want to see measures of accomplishment, not measures of activity. And they want to know that you are asking for the right amount of money to get the company to a meaningful milestone.
  • This slide is almost always wasted. Most entrepreneurs just put up three or four dot points about how wonderful their investment opportunity is. Generally the words are the same words that investors hear from scores of other entrepreneurs, such as, “We have a huge opportunity, and we will be the winners!” Your key objective on this slide is to solidify the core value proposition of your company in words that are memorable and unique to your company. If the venture investor in the room has to give a short description of your company to his partners, these are the words you want used. This is a good place to reinforce your tagline, or mantra—the short phrase that captures the essence of your message to investors. The best solution to creating your summary slide is to imagine that this is the only slide you will ever be able to present. If you had to do your whole pitch in one slide (with 30 point font), this is that slide.

Transcript

  • 1. 2009 年 12 月 16 日 年青人 如何 成功 創業
  • 2.
    • This document has been prepared by Tsoi Ming To (“Mingles”) solely for use in the visual presentation to a private group of audience. It is not intended for general distribution to the public and may not be reproduced or redistributed.
    • The information contained in this document has not been independently verified. No representation or warranty express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or veracity of the information or opinions contained herein.
    Disclaimer & Notice E-mail: mingles@entrepreneur.hk
    • This document has been prepared solely for the purpose of presenting some ideas and guidelines of the subject theme for the seminar, workshop or training session, by assisting the audience in understanding the subject in a general knowledge level.
    • This document is furnished in confidence for your reference only and for no other purposes. The content of this document cannot be released to the third party unless it is given a written consent by Mingles.
  • 3.  
  • 4. 王允祈 Winki
    • 萬寧電視廣告
    • 12-Nov-2009 播出
    • YouTube > 150,000
    • Winki 也可能
    • 將廣告拍攝
    • 變成事業
  • 5. 打工仔 與 老闆 在風暴來臨的一天出發
  • 6. Employee Praying for higher signals
  • 7. Entrepreneur Praying for all signals cancelled
  • 8. more less Entrepreneur Self-employer Employee
  • 9. Different Mindsets
    • Entrepreneur
      • Just do it
      • Face the failure
      • 24/7 online
      • Passionate
      • Long term
      • Multi-disciplines
      • Capital growth
      • No regret
      • Achievement > $
    • Employee
      • Don’t make mistakes
      • Avoid risks
      • Stop and rest
      • Hide away
      • Daily worker
      • Specialized
      • Stable salary
      • Only for money
  • 10. Employee or Entrepreneur?
    • Most people wish to start their business but finding many excuses not to start:
      • No money
      • Family burden
      • No personal network
      • Not smart enough
      • No time
      • No supporting partners
      • Too risky
      • Too old
  • 11. Cashflow Quadrant
    • Being Employed
    • It’s a job
    the Cashflow Quadrant is the trade mark of Robert T. Kiyosaki as extracted from the book, Rich Dad’s Guide to Financial Freedom E B S I
    • Self employed
    • It’s your own job
    • Start your business
    • Someone work for your
    • Invest your money
    • Money works for you
    TM Safety Freedom
  • 12. Can you be an entrepreneur?
    • Two sets of basic skills
    • 1. Are you willing to start and take the risks?
      • Entrepreneurship, French word “to undertake” ; “to do things with your own hands”
      • A startup must have a lot of risks.
      • It’s not for someone who want safe and stable payroll
    • 2. Can you sell?
      • No resources but your idea and presentation devices
      • Be able to organize your idea, then sell it to your family, friends and anyone else
    Created by Kevin Au of the CUHK Center for Entrepreneurship
  • 13. What is Entrepreneurship?
    • To pursue opportunity without regard to resources currently in hand
    • opportunity
      • a market, preferably large and fast growing
    • resources currently in hand
      • entrepreneurs find resources as they pursue the opportunity vs. managers look at the amount of resources at hand and decide what opportunity to pursue
    Created by Kevin Au of the CUHK Center for Entrepreneurship
  • 14. In-born Entrepreneur
    • A desire to achieve
    • Hard work
    • Nurturing quality
    • Acceptance of responsibility
    • Reward orientation
    • Optimism
    • Orientation to excellence
    • Organization
    • Profit orientation
    extracted from Business Horizons, Sep-Oct 1986 edition, by John G. Burch
  • 15. Acquired Entrepreneur Timing extracted from Business Horizons, Sep-Oct 1986 edition, by John G. Burch Opportunities People Information Access to capital Competition
  • 16. Life style Entrepreneurs
    • 1 to 2 times of growth in 10 years
    • The entrepreneur spotted a “pain point”, an under-served market, and developed an independent business based on personal skills and knowledge
    • The entrepreneur runs the firm in a way that suits his life style and interest, earns good money, and shows little interest to grow the firm
    Created by Kevin Au of the CUHK Center for Entrepreneurship
  • 17. Life style Entrepreneur
  • 18. Life style Entrepreneur
  • 19. Life style Entrepreneur? No
  • 20. Foundation Entrepreneurs
    • Thomas Neir, Founder of Pacific Coffee
      • He was transferred to HK as a regional financial manager. Coffee at that time was from fast-food shops and instant coffee package. People had a hard time finding quality coffee.
      • He opened his first store at the Bank of America Tower, Central, in 1993
      • Tom is not a life style entrepreneur because he opened 3 more shops in 1994, and grew Pacific Coffee to be sold at $200M+ in 2005
    Created by Kevin Au of the CUHK Center for Entrepreneurship
  • 21.
    • 5 times in 5 years; 10-30 times in 10 years (see diagram)
    • The founder are able to scale up their business to reap a much larger benefit
    • This kind of entrepreneurship contributes more to the society in creating jobs and other economic impact
    • All college graduates should go beyond life style entrepreneurship
    Foundation Entrepreneurs Created by Kevin Au of the CUHK Center for Entrepreneurship
  • 22. Hi-growth Entrepreneurs
    • 10 times in 5 years; 100-300 times in 10 years
    • The founder usually opens up a new market or industry
      • YouTube, Yahoo!, Blackberry, Tencent (QQ)
    • Many people ask how they can predict the future. They ask the wrong question because
    • The only way to predict the future is
    • to create one yourself!
    Created by Kevin Au of the CUHK Center for Entrepreneurship
  • 23. Entrepreneurs from Occupation
    • Athlete
      • 李寧
      • 李寧有限公司 (Li Ning Co. Ltd.)
      • lining.com
    • Doctor
      • 曹貴子
      • 康健醫務中心 (Town Health Centre)
      • townhealth.com
    Sports Medical
  • 24. 香港本地個案分析 倚天香港有限公司 衡睿有限公司
  • 25. 個案一
    • 倚天香港
    紀念品設計生產
  • 26.
    • Eva 以往是從事會計的工作,而 Andrew 是在加拿大唸電腦工程的,兩人原本跟紀念品市場沒有關係的。
    於是兩人就 產品設計 、 定價 、 目標客戶群 、 供應商 等方面進行更全面的資料搜集,因而建立了以雨傘為 機構宣傳紀念品 的獨特經營模式。 在一次偶然的機會,一位由日本回來的朋友,返香港順道帶來一些 很好質料的雨傘 ,令兩位年青人著迷。 經過一番資料搜集、市場分析後,發現 以雨傘為紀念品 的市場,暫時仍未有很多競爭,而且以較傳統的模式經營,缺乏設計心思,訂單額亦要求較大,售後服務欠缺。
  • 27.
    • 雨傘,其實是流動的宣傳工具,比較起日曆、筆座等文具有更佳的曝光率。
    • 而且張開的雨傘,面積較大,容易吸引注意,亦擁有更大的設計空間。
    • 質量好的雨傘較耐用,宣傳的訊息更長久,亦是品牌的優質象徵。
  • 28. 「香港青年創業計劃」最後批出 HK$90,000 貸款給倚天香港, Eva 及 Andrew 亦自行籌組 HK$90,000 資金。 經營一年後,已吸引一些跨國公司垂青,如銀行、化妝品、汽車公司等的訂單。 由於雨傘是季節性的用品,所以「倚天」亦開展其他類別的紀念品市場,如頸繩、水晶、購物袋及筆等。 「倚天」的目標,是希望能成為類似利豐集團的模式,以創意設計及高效率的營運,成為專門化的紀念品設計生產公司。
  • 29. 個案二
    • 衡睿
    回收及環保顧問
  • 30. 一位在香港大學唸環境工程,另一位在科技大學唸環境科學, 兩位都是本地大學的碩士畢業生,原本是安穩地在機構任職工程師,但覺得身為年青人,應創一番事業。 滿腦子都是創業的點子,但始終不是很熟悉其他市場,唯獨是環保工業,是兩人的專業知識。 於是兩位年青人專心鑽研環保市業在香港的發展空間,發現垃圾其實都是很值錢的東西。雖然有了目標方向,但欠缺啟動資金。
  • 31. 有一天, Felix 在家吃飯時,看見墊底的報紙刊載了 「香港青年創業計劃」的 資料,之後與 Alex 商討, 在截止申請前兩星期才報名參加,並開始撰寫計劃書。
  • 32.
    • 回收垃圾是一門資本投入較多的生意,一些設備動輒也是十多萬元。
    • 雖然「香港青年創業計劃」最終只能批出 HK$80,000 貸款給衡睿,但是因為得到這項鼓勵,令 Alex 及 Felix 更有決心自行籌組資金。
    • 重大的設備投資,包括壓縮垃圾機、貨車等重型機械。
    • 「衡睿」的目標,是希望把環保的知識普及,加強環保措施的效益,為改善環境污染盡力。
    • 公司名稱的解讀 Eco = ecology = 生態 Sage = wisdom = 智慧
  • 33. 開創事業 的 準備 清單
  • 34. 開展業務前
    • 檢視自己的優勢、強項及弱點
      • 以十個D來評估自己的人格特質
    source from William D. Bygrave, director of Babson College’s Center for Entrepreneurial Studies Destiny ( 使命 ) Doers ( 實幹 ) Distribute ( 分享 ) Dedication ( 奉獻 ) Dollar ( 金錢觀 ) Determination ( 決心 ) Details ( 周詳 ) Decisiveness ( 果斷 ) Devotion ( 熱愛 ) Dream ( 理想 )
  • 35.
    • 評估自己對創辦事業的必要條件
      • 專業技能
      • 對產品/服務的市場認知
      • 經營及管理能力
      • 財務能力
      • 毅力及魄力
    • 營業模式及策略
      • 銷售對象、場所、市場調查
    • 風險評估
    • 草擬業務計劃
    • 起動資金預算
    開展業務前
  • 36.
    • 按有關法例成立公司及領取營業執照
    • 銀行帳戶開立
    • 聘用人員及遵循相關法規
    • 合適的保險計劃
    • 覓識法律、會計及財務的專業人士
    • 具體化執行業務計劃
    • 信貸與集資的途徑
    開展業務前
  • 37.
    • 發掘開發更好的供應商
    • 發掘開拓客戶的渠道
    • 成本控制
    • 技術改良
    開展業務前
  • 38. Process of Business Planning and Pitching Ideas Writing Business model Presentation
  • 39. Visualization of Ideas The Back of the Napkin by Dan roam www.thebackofthenapkin.com
  • 40.
    • The Back of the Napkin, by Dan Roam
    The Visual Thinking Toolkit
  • 41. The S.Q.V.I.D.
    • A practical tool of applied imagination
    • The Back of the Napkin, by Dan Roam
  • 42. Business Model Design Nine Blocks of Business Model by Alex Osterwalder www.businessmodeldesign.com
  • 43. Mapping Story & Model VALUE PROPOSITION KEY ACTIVITIES COST STRUCTURE KEY RESOURCES PARTNER NETWORK DISTRIBUTION CHANNEL CUSTOMER RELATIONSHIP CUSTOMER SEGMENT REVENUE STREAMS infrastructure customer finance offer Company's POV Customer's POV Product's POV
  • 44. Nine Building Blocks VALUE PROPOSITION KEY ACTIVITIES COST STRUCTURE KEY RESOURCES PARTNER NETWORK DISTRIBUTION CHANNEL CUSTOMER RELATIONSHIP CUSTOMER SEGMENT REVENUE STREAMS infrastructure customer finance offer Outlining the capabilities required to run a company's business model Portrays the network of business partners Describes the arrangement of activities & resources Gives an overall view of a company’s bundle of products and services Relationship established with customers Channels to reach customers Customers targeted by the company to offer value to Sums up the monetary consequences to run a business model Describes the revenue streams through which money is earned
  • 45.
    • Value proposition : The bundles of products and services that satisfy our customer segments’ needs
    • Customer segments : Our groups of customers with distinct characteristics.
    • Distribution channels : The channels through which we communicate with our customers and through which we offer our value propositions.
    • Customer relationships : The types of relationships we entertain with each customer segment.
    • Key resources : The key resources on which our business model is built.
    • Key activities : The most important activities performed to implement our business model.
    • Partner network : The partners and suppliers we work with.
    • Revenue streams : The streams through which we earn our revenues from our customers for value creating and customer facing activities.
    • Cost structure : The costs we incur to run our business model.
    Definition of the Nine Building Blocks
  • 46. Drawing of Business Model
  • 47. Writing Business Plan Key Topics & Planning Process
  • 48. Key Topics of Business Plan (1)
    • Business overview
    • 1 to 3 pages
    • Management Team
    • Bios, resume, personal profile with achievement
    • Market
    • Economics and industrial analysis, logical but simple to understand
  • 49. Key Topics of Business Plan (2)
    • Product
    • Feature and specification addressing “What” & “Why”
    • Business Model
    • The Nine Blocks
    • Strategic Relationships
    • Uniqueness and secret between you and the suppliers and customers
  • 50. Key Topics of Business Plan (3)
    • Competition
    • Identify direct and indirect competitors
    • Barriers to Entry
    • Any strengths to support you are better than others
    • Financial Overview
    • Cash flow vs Profit & Loss, and Balance Sheet
    • Major figures are sufficient
  • 51. Key Topics of Business Plan (4)
    • Use of Proceeds
    • How and when you spend money
    • Capital & Valuation
    • Requiring forecast with substance
    • Discounted Cash Flow (DCF) approach
    • Company Logo & Stylesheet
    • Match your style with arts
  • 52. Effective Presentation Pitching to VCs by Davod S Rose www.ted.com search “ david rose ”
  • 53. Elements of Selling
    • Integrity
    • Passion
    • Experience
    • Knowledge
    • Skill
    • Leadership
    • Commitment
    • Vision
    • Realism
    • Coachability
    Logical progression Things easily be known or understood Validity and Viability
  • 54. Elements of Selling
    • Good
    • Short, short bullet points
    • Better
    • Just the headline
    • Best
    • Only images (diagram, charts, photos)
  • 55. Ten Slides Approach
    • Problem
    • Your solution
    • Business model
    • Underlying magic/technology
    • Marketing and sales
    • Competition
    • Team
    • Projections and milestones
    • Status and timeline
    • Summary and call to action
  • 56. 10-20-30 Rule of PowerPoint
    • A PowerPoint presentation should have
      • ten slides,
      • last no more than twenty minutes, and
      • contain no font smaller than thirty points.
  • 57. Cover Slide
    • Company name, location, tagline, presenter’s name and title.
  • 58. Intro Slide
    • Team
  • 59. Slide 1
    • Company Overview
  • 60. Slide 2
    • Problem/Opportunity
    • Problem/Opportunity Size
  • 61. Slide 3
    • Solution
    • Delivering the Solution
  • 62. Slide 4
    • Benefits/Value
  • 63. Slide 5
    • Secret Sauce / Intellectual Property
  • 64. Slide 6
    • Competitive Advantage
    • Competitive Advantage Matrix
  • 65. Slide 7
    • Go to Market Strategy
  • 66. Slide 8
    • Business Model
  • 67. Slide 9
    • Financial Projections
  • 68. Slide 10
    • Financial Requirements/Milestones
  • 69. Slide 11
    • Summary Slide
  • 70. Thank You
    • Mingles Tsoi
    • www.entrepreneur.hk