Vousaveztous les produits de votreentreprise (chiffresd’affairesmaisaussiproduits financiers, produitsd’exploitation, etc.)Vousavezensuitetoutes les charges. On peutdistinguerplusieursgrandsgroupes: coûtd’achat de cequevousproduisezouvendez, les fraisgénéraux, les frais de personnel, les amortissements, les frais financiers. Reste le bénéfice.
Friends Family and Fools
Now, you have to convince yourself, your partners and business angels to invest in your project
One of the tools is the business plan
To write a business plan is a long job and requires a huge investment in time.The first recipient of a business plan is not an external investor but YOU ! After all, you are your first investor !
The process of putting a business plan together forces the person preparing the plan to look at the business in an objective and critical manner. It helps to focus ideas and serves as a feasibility study of the business's chances for success and growth. It is a strong communication tool for your business. It defines your purpose, your competition, your management and personnel. The process of constructing a business plan can be a strong reality check. The finished business plan provides the basis for your financing proposal.The finished report serves as an operational tool to define the company's present status and future possibilities. It can help you manage the business and prepare you for success.
How you present your business idea to an investor will put all your previous effortsto the test. It is critical to attract attention and pique interest through content andprofessional appearance. Good venture capitalists are presented with up to 40business ideas per week, and their time is limited.
Executive summary is a summary of the highlights of your business plan.Even is the summary appears first in the document, it’s better to leave the writing until the end
Your mission statement is about you, your company, and your ideals. Read other companies’ mission statements, but write a statement that is about you and not some other company. Make sure you actually believe in what you’re writing; your investors, customers and your employees will soon spot a lie.
A good business plan starts with a clearly defined problem—something that’s really troubling or compelling—supported by evidence from marketing research, testimonials, letters of intent, or whatever, that the pain is real.If you can convince your readers that this problem is real, they’ll be hooked, at least for a while, as they read on to see whether you’ve found a solution that can resolve the pain. If the pain isn’t real, stop writing. There’s no need for a solution.
You have to explain your technology. But investors know that the better technology does not always win. Do you remember Betamax ? So, technology is just a tool to solve a problem. It’s not the purpose of your business !
This section of the plan is extremely important, because if there is no need or desire for your product or service there won't be any customers. If a business has no customers, there is no business.Investors look for management teams with a knowledge of their target market. If you are launching a new product, include your marketing research data. If you have existing customers, provide an analysis of who your customers are, their purchasing habits, their buying cycle. 7
Understanding your competition's strengths and weaknesses is critical.If your competitors are highly successful, identify why. You need also to explain why there is room for another player in the market.
Once you have identified who your market is, you'll need to explain your strategy for reaching the market and distributing your product or service. Potential investors will look at this section carefully to make sure there is a viable method to reach the target market identified at a price point that makes sense.
The operationsshould be explained to investors so that they fully understand how the business will acquire its products and how it will make them ready for resale. Explaining this process should also make the readers aware that you or your teamhave the required expertise.The more complex the business operations, the more the investors will have to be convinced that you or your teamcan handle the required tasks.
For most investors the experience and quality of the management team is the most important aspect they evaluate when investing in a company. Investors must feel confident that the management team knows its market, product and has the ability to implement the plan. Your plan must communicate management's capabilities in obtaining the objectives outlined in the plan. If this area is lacking, your chances for obtaining financing are bleak.
This very important part will be developed by Stéphanie from the ABE.
After completing your financial plan, you have to develop your forecasted sensitivity analysis.It’s a ‘What if’ tool.What if my sales are 10 % lower ?What if my assumptions are wrong ?
You need to create a business timeline that details your projection for how your company will grow over the next five years. This projection will be used to show investors that your company will be able to survive and be able to create value.However, the business timeline that you create has to be based on more than just your guess; it needs to be supported with facts, figures and dataWhere are you now?What are next steps?What are critical milestones?What will your benchmarks be?
How much money are you asking for ?How many shares in exchange of the investment are you ready to give ?
Mic boostcamp finance presentation
Boost Camp By MIC9/11/2011 Xavier CORMAN 1
Finance • Writing a Business Plan • Starting a P&L • How to finance your start-up • Public helps for starters • Business Angels9/11/2011 Xavier CORMAN 2
Notions • Balance Sheet - Bilan • P&L – Compte de résultat • Cash-flow – Trésorerie • Business Plan – Plan d’affaires • Financial Plan – Plan financier9/11/2011 Xavier CORMAN 3
Balance Sheet ACTIVE PASSIVE Equity (Capital) Non Current Assets (Actifs Immobilisés) LT Debts Current Assets (Actifs circulants) ST Debts9/11/2011 Xavier CORMAN 4
Profit & Loss (P&L) COGS (Cost of Sales) General Expenditures Gross margin Personnel Costs Revenues (Sales…) Depreciation EBITDA Financial cost Profit9/11/2011 Xavier CORMAN 5
How to finance your start-up ? Suppliers FFF Banks BAShareholders VC Equity LT Debts ST Debts Public Banks Shareholders 9/11/2011 Xavier CORMAN 7
What is dilution ? 100% 15% 20% 90% 25% 80% 12% 70% 15% VC 2 60% 9% VC 1 50% 85% BA 40% 68% Founder(s) 30% 51% 20% 10% 0% Start Serie A Serie B9/11/2011 Xavier CORMAN 8
What is the purpose of a business plan ?9/11/2011 Xavier CORMAN 9
"Writing a business plan forces you into disciplined thinking, if you do an intellectually honest job. An idea may sound great, but when you put down all the details and numbers, it may fall apart.“ Eugene Kleiner, Venture Capitalist9/11/2011 Xavier CORMAN 10
Why to write a business plan ? 1. To look at the idea in an objective way. 2. To study the feasibility of the idea 3. To check the business model 4. To understand the financial needs 5. To have an operational tool to start the business 6. To help the management A business plan is much more than a financial plan !9/11/2011 Xavier CORMAN 11
The business plan – content There is no prescribed format, the following sections are usually included. 1. Executive summary 2. Mission 3. Problem 4. Solution 5. Technology 6. Market and industry analysis 7. Marketing and sales 8. Manufacturing and operations plan 9. Team: why you? 10. Financial plan 11. Sensitivity analysis 12. Status and timeline 13. Proposed investment9/11/2011 Xavier CORMAN 12
Presenting to investors Investors are not familiar with the technology of your product or the industry jargon. Describing your concept clearly and incisively is your goal. You must be able to convey the basic mechanics of your business idea to an investor with credibility. There will be plenty of time at a later point for detailed descriptions and exhaustive financial calculations.9/11/2011 Xavier CORMAN 13
1. Executive summary Mimics your pitch Should be very compelling and inviting to read the rest “Summary” -> try one page9/11/2011 Xavier CORMAN 14
2. Mission statement Define your business at the most basic level In less than 30 seconds, explain: Who your company is ? What you do ? What you stand for ? Why you do it ? Explain what business you are in, purpose, strategic goals and business values. SHORT ! 3-4 sentences9/11/2011 Xavier CORMAN 15
3&4. From problem to solution SOLVE A PROBLEM! Show the problem and for whom this is a problem Why are incumbents (if they exist) not able to address this problem? SOLUTION? What is it? Show it (sample, picture, demo, …) Why is it attractive? Is it durable? Is it timely ? Does it do something better? Does it create VALUE?9/11/2011 Xavier CORMAN 16
5. Technology How does it work? Does it work? Has it been successful elsewhere? Why has nobody else come up with it? Is it patented / licensed? Who owns the rights?9/11/2011 Xavier CORMAN 17
6a. Market and industry analysis This section of the plan should include: A general description of your market The niche you plan on capitalizing on and why The size of the niche market. Include supporting documentation A statement and supporting documentation as to why you believe there is a need for your product or offering by this market What percentage of the market do you project you can capture? What is the growth potential of the market? Include supporting documentation Will your share of the market increase or decrease as the market grows? How will you satisfy the growth of the market? How will you price your goods or services in the growing competitive market?9/11/2011 Xavier CORMAN 18
6b. Competition Identify your closest competitors. Where are they located? What are their revenues? How long have they been in business? Define their target market. What percentage of the market do they currently have? How do your operations differ from your competition? What do they do well? Where is there room for improvement? In what ways is your business superior to the competition? How is their business doing? Is it growing? Is it scaling back? How are their operations similar to yours and how do they differ? Are there certain areas of the business where the competition surpasses you? If so, what are those areas and how do you plan on compensating?9/11/2011 Xavier CORMAN 19
7. Marketing and sales How will you make money? Who is your target customer? Mix (4 Ps): Product and production - can you provide what the customer wants. Pricing policy - right price and quality (do you have prove of willingness to pay?!!!!) Promotion - how do you communicate to your potential customers. Place – where will you be selling.9/11/2011 Xavier CORMAN 20
8. Operations and production How are you going to produce the product or provide the service at a profit? Manufacture or sub contract out. What resources are required? Infrastructure, staff, equipment Now/future? How do you ensure the right quality?9/11/2011 Xavier CORMAN 21
9. Team Often read the first! Why you? What is your history? What do you know? What are your skills? Whom do you know and who knows you? What is your reputation? How does the team profile fit with the opportunity, the context and the deal struck? How committed are the people to the venture? Lacking or critical team members?9/11/2011 Xavier CORMAN 22
10. Financial plan Gross margins and operating margins Projection of the cash inflows and outflows of the business. Actual and expected revenues Actual variable and fixed costs Use benchmarks if possible Prepared monthly in year one (could be quarterly in years 2 to 5). Takes into account the timing of receipts and payments. Includes both capital and revenue income and expenditure. Shows the cash requirements of the business. Pro-forma P&L and balance sheets Pro-forma break-even chart9/11/2011 Xavier CORMAN 23
11. Sensitivity analysis Know your critical assumptions “Delhaize will love our green product because they focus a lot on their environmentally friendly image” “Consumers will love our this new IT platform, because it is cheaper” … Best case / worst case scenarios Identify risks in your business model What happens if the market changes, you run out of cash before your first order, you don’t reach your targets… What will you do when that happens?9/11/2011 Xavier CORMAN 24
12. Status and timeline Step #1 - Set Up the Outline for Your Timeline Highlights of your business projected growth and development Step #2 - Research Your Points Back up your predictions with viable research Step #3 - Use Your Data to Refine Your Timeline Step #4 - Add References to Your Business Timeline How did you generated your data and predictions ? Step #5 - Clean Up Your Business Timeline Formatting the graphic so that it looks professional and easy to read9/11/2011 Xavier CORMAN 25
13. Proposed investment Nature of the deal What are you asking and offering?9/11/2011 Xavier CORMAN 26
The 12 deadly sins in business plans (Gordon Baty / Zero stage capital) 1. Too Long 2. Poor Writing: grammar, redundant, unpersuasive 3. Poor Layout: illogical, illegible, poor illustration 4. No Executive Summary 5. Unclear Product Features: jargon, proprietary features, current development status 6. No Backup on Team 7. Unsupported Market Estimates / No Primary Research 8. Superficial Competitive Analysis 9. Creative Accounting Formats 10. Unfocused User Benefits: no Unique Selling Proposition 11. No Demonstrated Customer Knowledge 12. Lack of Compelling Reason to Invest Now9/11/2011 Xavier CORMAN 27
Conclusion A business plan is a living story that demonstrates how an opportunity can become a new venture, not just the writer’s dreams and wishes Always use a pitch / business plan presentation as an opportunity to learn. There is no better critic than an investor.9/11/2011 Xavier CORMAN 28
Why a Financial Plan ?• To understand where and how you make money• To convince investors (including yourself) that you will be profitable• To build quickly different scenario9/11/2011 Xavier CORMAN 29
Short Financial PlanQuick estimation of – Projected sales – Cost of goods sold – Workforce – General Expenditures (Marketing Costs) – Investments If first estimations are positive9/11/2011 Xavier CORMAN 30
Extensive Financial Plan• Spreadsheet is THE tool (XLS, Open Office, etc.)• Use an existing template (ABE, other) OR• Build your own spreadsheet9/11/2011 Xavier CORMAN 31
Structure of the spreadsheet • Assumptions • Sales • Profit & Loss • Cash-Flow • Balance Sheet9/11/2011 Xavier CORMAN 32
Some tips• Use an existing spreadsheet’s template• Monthly or Quarterly• 3 to 5 years• Avoid a fixed starting date• Put editable fields in a different colour9/11/2011 Xavier CORMAN 33
Example of Financial plan Hypothèses du plan financier 1. Début des activités Date prévue pour la constitution et le lancement des activités 1/01/2012 Le premier exercice comprend donc une période de: 12 mois Le plan financier couvrira dès lors la Année 1 Année 2 Année 3 Année 4 période suivante: 2012 2013 2014 2015 12 mois 12 mois 12 mois 12 mois 2. Chiffre daffaires 2012 2.013 2014 Taux de TVA Année 1 trim1 Annéee 1 trim 2 Année 1 trim3 Année 1 trim4 Anneé 2 trim 1 Année 2 trim 2 Année 2 trim3 Année 2 trim 4 Année 3 trim 1 1. Quantités prévisionnelles Produit 1 21% 0 3 60 323 533 551 611 911 1.411 Produit 2 21% 1 5 100 538 888 918 1.018 1.518 2.351 Produit 3 21% 0 2 40 215 355 367 407 607 940 Produit 4 21% 3 27 540 2.903 4.795 4.955 5.495 8.195 12.695 Produit 5 21% 5 45 900 4.838 7.991 8.258 9.158 13.658 21.158 Produit 6 21% 2 18 360 1.935 3.197 3.303 3.663 5.463 8.463 Total subscriptions 10 100 2.000 10.750 17.758 18.350 20.350 30.350 47.017 2. Prix unitaire de vente pour chaque produit (hors TVA) Produit 1 29,07 29,07 29,07 29,07 29,07 29,07 29,07 29,07 29,07 Produit 2 35,43 35,43 35,43 35,43 35,43 35,43 35,43 35,43 35,43 Produit 3 47,83 47,83 47,83 47,83 47,83 47,83 47,83 47,83 47,83 Produit 4 29,07 29,07 29,07 29,07 29,07 29,07 29,07 29,07 29,07 Produit 5 33,56 33,56 33,56 33,56 33,56 33,56 33,56 33,56 33,56 Produit 6 42,56 42,56 42,56 42,56 42,56 42,56 42,56 42,56 42,56 3. Chiffre daffaires par produit (hors TVA) Produit 1 9 87 1.744 9.375 15.487 16.003 17.747 26.468 41.003 Produit 2 18 177 3.543 19.043 31.459 32.507 36.050 53.765 83.289 Produit 3 10 96 1.913 10.283 16.986 17.552 19.465 29.031 44.973 Produit 4 78 785 15.698 84.376 139.383 144.027 159.725 238.214 369.029 Produit 5 151 1.510 30.202 162.336 268.169 277.104 307.306 458.316 710.000 Produit 6 77 766 15.321 82.349 136.036 140.569 155.889 232.494 360.167 342 3.421 68.421 367.762 607.521 627.762 696.183 1.038.288 1.608.462 3. Coûts des ventes Taux de TVA Année 1 Annéee 2 Année 3 Année4 1. % des Achats de marchandises par rapport aux ventes Produit 1 43,0% 43,0% 43,0% 43,0% Produit 2 66,2% 66,2% 66,2% 66,2% Produit 3 49,1% 49,1% 49,1% 49,1% Produit 4 43,0% 43,0% 43,0% 43,0%9/11/2011 Xavier CORMAN 34
Questions & Answers Download this presentation and an example of Business Plan from Mc Kinsey: http://www.slideshare.net/xaviercorman9/11/2011 Xavier CORMAN 35