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  1. 1. Business Plans <ul><li>For The Real World </li></ul><ul><li>Barry Williams </li></ul><ul><li>Delaware SBDC </li></ul>
  2. 2. Why a Business Plan? <ul><li>Strategic Guide </li></ul><ul><li>Lenders </li></ul><ul><li>Investors </li></ul>
  3. 3. Strategic Guide <ul><li>Where Do You Want To Go? </li></ul><ul><li>How Are You Going to Get There? </li></ul><ul><li>What Market Niches? </li></ul><ul><li>How Much is it Going to Cost? </li></ul><ul><li>Greatest Profit Opportunity? </li></ul>
  4. 4. Lender Expectations <ul><li>Good Business Track Record </li></ul><ul><li>Ability to Repay </li></ul><ul><li>Staying Power </li></ul><ul><li>Collateral </li></ul>
  5. 5. Investor Expectations <ul><li>Competitive Advantage </li></ul><ul><li>Huge Market </li></ul><ul><li>Strong Management Team </li></ul><ul><li>Strong Marketing and Sales Plan </li></ul><ul><li>Some Skin in the Game </li></ul><ul><li>Obscene Return </li></ul><ul><li>Exit Strategy </li></ul>
  6. 6. Entrepreneurs Start Businesses: <ul><li>To Capitalize on an Invention </li></ul><ul><li>To Pursue a Passion </li></ul><ul><li>To Be Their Own Boss </li></ul><ul><li>To Get Rich </li></ul><ul><li>---All Need an Exit Strategy </li></ul>
  7. 7. Exit Strategies <ul><li>Selling the Business </li></ul><ul><li>Transferring the Business to a Family Member </li></ul><ul><li>Taking the Company Public </li></ul><ul><li>Being Acquired by a Larger Company </li></ul>
  8. 8. Funding Sources: <ul><li>Savings </li></ul><ul><li>Friends and Family </li></ul><ul><li>Financial Institutions / Banks </li></ul><ul><li>Angel Investors </li></ul><ul><li>Venture Capital </li></ul>
  9. 9. Business Plan Content <ul><li>Executive Summary </li></ul><ul><li>Company Description </li></ul><ul><li>Product/Services Description </li></ul><ul><li>Industry Overview </li></ul><ul><li>Market Analysis </li></ul><ul><li>Competitors </li></ul>
  10. 10. Business Plan Content <ul><li>Customers </li></ul><ul><li>Marketing and Sales Plans </li></ul><ul><li>Development </li></ul><ul><li>Operations </li></ul><ul><li>Management </li></ul>
  11. 11. Business Plan Content <ul><li>Personnel </li></ul><ul><li>Financial Summary </li></ul><ul><li>Financials </li></ul><ul><li>Offering </li></ul><ul><li>Appendices </li></ul>
  12. 12. Executive Summary <ul><li>A mini-business plan in one or two pages </li></ul><ul><li>Highlights the most important points of your business plan </li></ul><ul><li>It is NOT an introduction to the plan </li></ul><ul><li>It must grab your reader, and entice him/her to read further </li></ul>
  13. 13. Executive Summary <ul><li>Identify the company, its background, structure and location </li></ul><ul><li>Describe what the company does, and the market it serves </li></ul><ul><li>Describe the market potential for the company’s products and services, market trends, etc. </li></ul>
  14. 14. Executive Summary <ul><li>Outline the backgrounds and experience of the top management team </li></ul><ul><li>Describe the funding required, the purposes for which it will be used, the collateral available (if for a lender), and the expected outcomes </li></ul>
  15. 15. Company Overview <ul><li>Brief Company Introduction </li></ul><ul><ul><li>Mission statement </li></ul></ul><ul><ul><li>Location, size, history </li></ul></ul><ul><ul><li>Market and products </li></ul></ul><ul><ul><li>Overview of company capabilities </li></ul></ul><ul><ul><li>Objectives </li></ul></ul>
  16. 16. Products/Services <ul><li>Products / Services </li></ul><ul><ul><li>What does it do? </li></ul></ul><ul><ul><li>Uniqueness </li></ul></ul><ul><ul><li>Competitive Advantage </li></ul></ul><ul><li>Technology </li></ul><ul><ul><li>Brief description </li></ul></ul><ul><ul><li>Applications </li></ul></ul><ul><li>Commercialization Status </li></ul><ul><ul><li>Brief overview </li></ul></ul>
  17. 17. Industry Overview <ul><li>Set The Stage </li></ul><ul><li>Industry Definition and Description </li></ul><ul><ul><li>Major players within the industry </li></ul></ul><ul><ul><li>Factors driving dynamics </li></ul></ul><ul><ul><li>New products and developments </li></ul></ul><ul><li>Legislation and Policies Driving the Industry </li></ul><ul><li>Historical and Future Trends </li></ul>
  18. 18. Market Analysis <ul><li>Market Definition </li></ul><ul><ul><li>Primary Market </li></ul></ul><ul><ul><li>Secondary Markets </li></ul></ul><ul><li>Market Size and Trends </li></ul><ul><ul><li>Current total revenues </li></ul></ul><ul><ul><li>Predicted annual growth rate </li></ul></ul>
  19. 19. Competitors <ul><li>Direct Competitors </li></ul><ul><ul><li>Who are they? </li></ul></ul><ul><ul><li>Size and product breadth </li></ul></ul><ul><ul><li>Revenues and profitability </li></ul></ul><ul><ul><li>Strengths and weaknesses </li></ul></ul><ul><ul><li>Market shares </li></ul></ul><ul><li>Indirect Competitors </li></ul>
  20. 20. Customers <ul><li>Customer Characteristics </li></ul><ul><ul><li>Who are they? </li></ul></ul><ul><ul><li>Why do they buy? </li></ul></ul><ul><ul><li>Need satisfied by the product/service </li></ul></ul><ul><ul><li>How is the need currently filled? </li></ul></ul><ul><ul><li>What are the alternatives? </li></ul></ul><ul><ul><li>Who makes the decision to buy? </li></ul></ul><ul><ul><li>How frequently do they purchase? </li></ul></ul>
  21. 21. Marketing and Sales Plans <ul><li>Statement of Opportunity </li></ul><ul><li>Marketing and Sales Objectives </li></ul><ul><li>Existing Customers </li></ul><ul><li>Potential Customers </li></ul><ul><ul><li>Prospects targeted </li></ul></ul><ul><ul><li>How prospects will be targeted and qualified </li></ul></ul>
  22. 22. Marketing Strategies <ul><li>Product/Service Strategy </li></ul><ul><li>Pricing Strategy </li></ul><ul><li>Distribution Strategy </li></ul><ul><li>Advertising and Promotion Strategy </li></ul><ul><li>Sales Strategy </li></ul><ul><li>Marketing and Sales Forecasts </li></ul>
  23. 23. Marketing and Sales Plans <ul><li>Marketing Programs </li></ul><ul><ul><li>Direct Mail </li></ul></ul><ul><ul><li>Trade Shows </li></ul></ul><ul><ul><li>Advertising </li></ul></ul><ul><ul><li>Internet </li></ul></ul><ul><ul><li>Publicity/Public Relations </li></ul></ul><ul><ul><li>Marketing Budget </li></ul></ul><ul><li>Pricing </li></ul><ul><ul><li>Basis for targeted price point </li></ul></ul><ul><ul><li>Margins and profitability by volume levels </li></ul></ul>
  24. 24. Marketing and Sales Plans <ul><li>Sales Plan </li></ul><ul><ul><li>Sales force structure – (direct or reps) </li></ul></ul><ul><ul><li>Sales expectations/quotas </li></ul></ul><ul><ul><li>Margins given to intermediaries </li></ul></ul><ul><ul><li>Service and warranties </li></ul></ul><ul><ul><li>Sales Budget </li></ul></ul><ul><ul><li>Organizational chart indicating planned growth </li></ul></ul>
  25. 25. Development <ul><li>R & D Plan </li></ul><ul><ul><li>Objectives </li></ul></ul><ul><ul><li>Milestones and current status </li></ul></ul><ul><ul><li>Difficulties and risks </li></ul></ul><ul><ul><li>Staffing </li></ul></ul><ul><ul><li>R & D Budget and assumptions </li></ul></ul>
  26. 26. Operations <ul><li>Manufacturing/Production Plan </li></ul><ul><ul><li>Objectives </li></ul></ul><ul><ul><li>Facilities </li></ul></ul><ul><ul><li>Staffing </li></ul></ul><ul><ul><li>Subcontractors </li></ul></ul><ul><ul><li>Quality Control </li></ul></ul><ul><ul><li>Budget / Operating Expenses </li></ul></ul>
  27. 27. Management <ul><li>Company Organization </li></ul><ul><li>Management Team </li></ul><ul><li>Administrative Expenses </li></ul>
  28. 28. Management Team <ul><li>President </li></ul><ul><li>VP Finance </li></ul><ul><li>VP Sales </li></ul><ul><li>VP Marketing </li></ul><ul><li>VP Manufacturing </li></ul><ul><li>Board of Advisors </li></ul>
  29. 29. Personnel <ul><li>Human Resource Plan </li></ul><ul><ul><li>Staffing Objectives </li></ul></ul><ul><ul><li>Organizational Structure </li></ul></ul><ul><ul><li>3-5 year growth plan </li></ul></ul><ul><ul><li>Budget </li></ul></ul>
  30. 30. Summary of Financials <ul><li>Financial Objectives </li></ul><ul><ul><li>Time to Cash Flow Positive </li></ul></ul><ul><ul><li>Time to profitability </li></ul></ul><ul><li>Financial Assumptions </li></ul><ul><li>Capital Requirements </li></ul><ul><li>Exit Scenario </li></ul>
  31. 31. Financials <ul><li>Pro-forma Cash Flow Projections </li></ul><ul><li>Pro-forma Profit & Loss Statements </li></ul><ul><li>Pro-forma Balance Sheet </li></ul>
  32. 32. Offering <ul><li>Investment Requirements </li></ul><ul><li>Pro-forma Valuation of Business </li></ul><ul><li>Offer </li></ul>
  33. 33. Appendices <ul><li>Resumes of Key Management </li></ul><ul><li>Patent Information </li></ul><ul><li>Customer List </li></ul><ul><li>Testimonials </li></ul><ul><li>Supplemental Financial Spreadsheets </li></ul><ul><li>References </li></ul>
  34. 34. Investment Climate
  35. 35. Questions?

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