Creating a Winning Business Plan
Objectives Why is a Business Plan important? What are the Key Business Plan Components?                 y               ...
Three core sections1. Technology (Operations)2. Marketing/Sales3. Finance
Why You Need a Business PlanA Business Plan is a RoadmapHow Will You Start and/or GrowWhere Will You Obtain FundingMar...
Who Will Read The Plan– Plan Organized to Convince Funding Sources– Resource Providers (Funders) Expect   • Consistent, St...
Before You Start Writing                 e o e ou S a W g What Do You Want to Convey Follow a Logical Progression Refra...
Table of Contents• Company Summary   – Company Ownership   – Start-up Summary• Products and Services   –   Product D      ...
Table of Contents• Strategy and Implementation Summary  –   Competitive Edge  –   Marketing Strategy  –   Sales Strategy  ...
Table of Contents• Financial Plan   –   Important Assumptions   –   Break-Even Analysis   –   Projected Profit and Loss   ...
Executive Summary                             yA Stand Alone DocumentObjectives/ Mission/ Keys to SuccessMake Sure Your...
Business Description (Overview) Your Company - Include Vision, History, Structure Your Vision/Mission – Clear, Assertive...
Management                        gLeadershipThe TeamBack up planInclude Outside Advisors (LI l d O t id Ad i        ...
Ope a o s a Operations Plan – How w you run the Business                    ow will   u e us essCan Be Complex and Requir...
What Differentiates Your Product or Service?   What is your secret sauce?
How To Develop Technology /Ops Skills?                     p         gy / pFamily Business – Helped or RanEducationTrai...
Can You Create A Difference? Low Cost Targeted Need Service or Convenience Innovation Offer a Product/Service Solutio...
MarketingMarket Research – Provides Information About the Buyer/Customer, Competition, and Product/Service.Market Planni...
Who is Your Customer?Who Buys Your Products and ServicesWh Do They Think About You/ YourWhat      h  h k Ab       / Com...
Ma e               Market Information                         o a oWhat Is the TOTAL Market for the Product/ServiceDefin...
Ma e g d Sa es a           Marketing And Sales PlanWho Is (and Isn’t) Your Target Customer?Need to Locate, Communicate, ...
Sales PlanHow Do You Sell in Your Market?How Will You Ask for the Order?Provide for Lead TimesSales Structure and Comp...
Selling Your Products/Services Develop A Sales Strategy – Who to Sell to, When, How, What  Products/Services Develop a S...
Product / Services Analysis What Needs Does Your Product/Service Meet?                               / What Support Serv...
Competitive AnalysisWho Are Your Competitors?What Are Their Strengths and Weaknesses?Wh Is Their Market AWhat     h M ...
PricingKnow Break Even Point -- May Have to Walk Away      Break-EvenPricing Strategy Vs. Competition – Ask Customers   ...
Advertising and Sales Promotion Target Advertising     g             g Use the Most Effective Medium for Your Audience ...
DistributionDistributorsMail OrderTelemarketingCompare With Competition
Ma e g og a Su a y         Marketing Program SummarySelect Market StrategiesPrepare Marketing PlanPrepare S         Su...
Sell Yourself & Your PlanFunding Sources Are Skeptical  – Bankers Are Risk Averse – Get to Know Them Early    in the Cycl...
FundingShow How You Will Create ValueShow hSh That You C C             Can Control Risks                       l kWhy ...
Banks Look at 5 Cs Character – Credit History (Have You Paid Your Bills on Time); Are  You Personally Involved and Respon...
What Equity Investors Look for in a Startup         q y                                 pTiming- Short Term, 3-5 Years?T...
Financial Plan Well-Documented Assumptions Are Crucial    –   Acknowledge Risks    –   Pricing d Product Costs        P i...
What Eats Up CashAccounts Receivables (A/R)Difference Between Pay by Credit Card and BillMonthly      y    Bill Monthly...
Your Financial Plan1. Personal Assets (What You Own to Pay for Startup)2. Personal Li bili i (Wh Y N d to Li O )2 P       ...
Traps to AvoidConfusing Description of the Business/ VisionUnsupported AssumptionsAsking fA k for Too Much Or Too Litt...
Don’t forget…..   Your plan is a livingbreathing document to be   modified significant     changes occur!
Resources• http://www.sba.gov/smallbusinessplanner/plan/writea       //             /                   /     /  businessp...
Resources
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Lwl write a successful business plan [compatibility mode]

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Lwl write a successful business plan [compatibility mode]

  1. 1. Creating a Winning Business Plan
  2. 2. Objectives Why is a Business Plan important? What are the Key Business Plan Components? y p Gain the tools you need to Write a Winning Business Plan!
  3. 3. Three core sections1. Technology (Operations)2. Marketing/Sales3. Finance
  4. 4. Why You Need a Business PlanA Business Plan is a RoadmapHow Will You Start and/or GrowWhere Will You Obtain FundingMarketing/Sales Strategy ClarifiedFinancial Planning
  5. 5. Who Will Read The Plan– Plan Organized to Convince Funding Sources– Resource Providers (Funders) Expect • Consistent, Structured Format • Professional Presentation– Address your Audience’s Questions • How/When Will They Benefit? • Do They Believe You Can Make It Happen? • What Are the Costs/Risks For Them?
  6. 6. Before You Start Writing e o e ou S a W g What Do You Want to Convey Follow a Logical Progression Refrain from Industry Jargon Present Clear Conclusions Emotional & Human Side Tell the Story
  7. 7. Table of Contents• Company Summary – Company Ownership – Start-up Summary• Products and Services – Product D P d t Description i ti – Service Description – Competitive Comparison – Technology T h l• Market Analysis Summary – Market Segmentation – Target Market Segment Strategy – Trends
  8. 8. Table of Contents• Strategy and Implementation Summary – Competitive Edge – Marketing Strategy – Sales Strategy gy – Milestones• Operations – Eq ipment Equipment – Employees – Processes• Management Summary – Key Personnel Plan
  9. 9. Table of Contents• Financial Plan – Important Assumptions – Break-Even Analysis – Projected Profit and Loss – Projected Cash Flow – Projected Balance Sheet• Appendix pp – Assumptions – Licenses – Lease Info – Contracts – Testimonials
  10. 10. Executive Summary yA Stand Alone DocumentObjectives/ Mission/ Keys to SuccessMake Sure Your Summary is: y – Concise - 2 Pages Maximum – Cohesive – Briefly Tells the Full Story – Compelling – Get Them to Read the Details – Clear- How Much Money Are You Asking For?
  11. 11. Business Description (Overview) Your Company - Include Vision, History, Structure Your Vision/Mission – Clear, Assertive Overview of the Industry - Important Fact-based Trends Your Value Proposition - What Makes Your Product or Service Unique AND Valuable Estimated Revenues and Profit/Cash Flow (3 Years)
  12. 12. Management gLeadershipThe TeamBack up planInclude Outside Advisors (LI l d O t id Ad i (Lawyer, A Accountant, t t Consultants, Insurance, Banker, Etc.)Ownership (% of Each Partner, Owner)
  13. 13. Ope a o s a Operations Plan – How w you run the Business ow will u e us essCan Be Complex and Require Special Expertise – P d t - M t i l H dli L i ti P k i Product Materials Handling, Logistics, Packaging, Purchasing, Etc. – Service - Abstract ProcessesSeasonality and Other Demand PeaksMake vs. Buy (Outsourcing)Don’t Overlook the DetailsTransportation Considerations and CostsLabor C idL b Considerations iNon-production Processes and Admin Process Flows
  14. 14. What Differentiates Your Product or Service? What is your secret sauce?
  15. 15. How To Develop Technology /Ops Skills? p gy / pFamily Business – Helped or RanEducationTraining – Hands-on Work, Classes, Courses – On-the-Job Training (Volunteer)Relevant Work Experience
  16. 16. Can You Create A Difference? Low Cost Targeted Need Service or Convenience Innovation Offer a Product/Service Solution to a Customer Problem
  17. 17. MarketingMarket Research – Provides Information About the Buyer/Customer, Competition, and Product/Service.Market Planning Product/Service Introduction, Startup,M k t Pl i – P d t/S i I t d ti St t Product Life CycleAdvertising and Sales Promotion -- Define Audience & $$ Prior to Committing to Print, Radio, TV, InterNet
  18. 18. Who is Your Customer?Who Buys Your Products and ServicesWh Do They Think About You/ YourWhat h h k Ab / Competitors?Costs Far Less to Maintain an Existing Customer g Than to Generate a New One
  19. 19. Ma e Market Information o a oWhat Is the TOTAL Market for the Product/ServiceDefine YOUR Market for Products And/or ServicesGeographic (Primary/ Tertiary) – by ZIP Code/ CountyyDemographic – What Are Average Incomes, Ages, etc.Growth Trends and Changes – Who’s Going In/out / of Business? And why?Potential Downside – Who What Can Replace the Who, Service? Cost/ Quality/ Service Aspects?
  20. 20. Ma e g d Sa es a Marketing And Sales PlanWho Is (and Isn’t) Your Target Customer?Need to Locate, Communicate, and Educate ProspectsHow Will You Get Them to Change Their Behavior?Wh t Will Y E h i ?What You Emphasize?How Will You Overcome Perceptions of Risk (Inertia and Performance)?)Tools (Mail, Direct Sales, Etc.), and Why It Makes Sense?
  21. 21. Sales PlanHow Do You Sell in Your Market?How Will You Ask for the Order?Provide for Lead TimesSales Structure and Compensation?S l St t dC ti ?
  22. 22. Selling Your Products/Services Develop A Sales Strategy – Who to Sell to, When, How, What Products/Services Develop a Sales Team – Start Small, Grow Set Specific Objectives – by Month, Quarter, Year, 3 Year Analyze Sales Results Periodically Teach Sales Techniques - Training Is Essential for Product and/or Service Knowledge
  23. 23. Product / Services Analysis What Needs Does Your Product/Service Meet? / What Support Services Are Required? How Can You Reduce Customer Costs? Increase Customer Revenues? How Does Your Product/Service Compare With Competition? Wh t A th Possible S b tit t N A li ti ? What Are the P ibl Substitutes, New Applications?
  24. 24. Competitive AnalysisWho Are Your Competitors?What Are Their Strengths and Weaknesses?Wh Is Their Market AWhat h M k Approach (C h (Customer Segmentation, Sales Focus)?How Are They Financed?What Is Their Reputation? pHow Are You Better?
  25. 25. PricingKnow Break Even Point -- May Have to Walk Away Break-EvenPricing Strategy Vs. Competition – Ask Customers VsPricing – Cost Competition Product Uniqueness Cost, Competition,C id All C t – Di t IndirectConsider Costs Direct, I di t
  26. 26. Advertising and Sales Promotion Target Advertising g g Use the Most Effective Medium for Your Audience Must Be Cost Effective Consider A Promotion Professional Use Free Media
  27. 27. DistributionDistributorsMail OrderTelemarketingCompare With Competition
  28. 28. Ma e g og a Su a y Marketing Program SummarySelect Market StrategiesPrepare Marketing PlanPrepare S Supporting Sales Plan S l lFocus on DifferentiationCommunicate Internally and ExternallyMeasure Performance and Adjust Plans to Meet Market Conditions
  29. 29. Sell Yourself & Your PlanFunding Sources Are Skeptical – Bankers Are Risk Averse – Get to Know Them Early in the Cycle y – Equity Sources Are Tough to Impress, Want Proof of ConceptpYou Are the Message – Present Yourself, Your Case, Evidence, Backup Assertions
  30. 30. FundingShow How You Will Create ValueShow hSh That You C C Can Control Risks l kWhy Should Someone Believe You Are Better Equipped to Take Advantage of the q pp g Opportunity
  31. 31. Banks Look at 5 Cs Character – Credit History (Have You Paid Your Bills on Time); Are You Personally Involved and Responsible for Success? Collateral – Do You Have a House to Put up Against a Loan? The Greater the Bank’s Risk, the Higher Your Interest Rate Cash Flow – Will the Business Cover Your Living and Business Expenses for 6 Months to One Year? Capitalization – What Does It Cost in Asset Investment to Get Started? (Low C t St t B i (L Cost Startup Business: Cleaning Wi d Cl i Windows, N d S Need Squeegee and d Soap; High Startup Cost Businesses: Restaurants, Retail Stores) Conditions – Working Capital, Ongoing Costs, Competition, Industry Trends, Regulations (Local, State, and National, OSHA, Handicapped)
  32. 32. What Equity Investors Look for in a Startup q y pTiming- Short Term, 3-5 Years?Timing 35Is Your Business Model Proven?How Long Have You Been in This Type of Business?Are You Going to Actively Work in the Business?How Much Do You Have Invested in the Business?What Are Your Risks?
  33. 33. Financial Plan Well-Documented Assumptions Are Crucial – Acknowledge Risks – Pricing d Product Costs P i i and P d t C t – Sales Forecasts and Market Share – Lead Times – Receivables, Payables, Working Capital – Interest Costs – Loans, Family & Friends Test for Reasonableness (You Cannot Double Sales Every Month Without es o easo ab e ess ( ou Ca o oub e Sa es ve y Mo W ou Serious Working Capital Problems) Get Help If You Need It – Accountants TA Accountants,
  34. 34. What Eats Up CashAccounts Receivables (A/R)Difference Between Pay by Credit Card and BillMonthly y  Bill Monthly – Receive Payment Net 30 Days or ++ More  Wait Time Affects Working CapitalAccounts Payable (A/P) – What You Owe, Loans,etc.
  35. 35. Your Financial Plan1. Personal Assets (What You Own to Pay for Startup)2. Personal Li bili i (Wh Y N d to Li O )2 P l Liabilities (What You Need Live On)3. Business Services (Needed Before Startup)4. Business Expenses (Ongoing)5. Balance Sheet (Where Do You Stand?)6. Cash Flow Statement (How Are You Doing?)7.7 Revenue/Expense (P&L) on a Cash Basis
  36. 36. Traps to AvoidConfusing Description of the Business/ VisionUnsupported AssumptionsAsking fA k for Too Much Or Too Little M M hO l Money Use of Jargon and AcronymsHype, Overused Phrases No Competition ; No Brainer“No Competition”; “No Brainer”Numbers that Do Not Look Realistic
  37. 37. Don’t forget….. Your plan is a livingbreathing document to be modified significant changes occur!
  38. 38. Resources• http://www.sba.gov/smallbusinessplanner/plan/writea // / / / businessplan/index.html• http://www.myownbusiness.org/s2/• http://www soros org/openaccess/oajguides/oaj suppl http://www.soros.org/openaccess/oajguides/oaj_suppl ement_0703.pdf• http://en.wikipedia.org/wiki/Content_of_a_business_pl an• http://money.howstuffworks.com/business-plans16.htm• http://www.businessballs.com/freebusinessplansandmar ketingtemplates.htm• www.wsi.miniplan.com
  39. 39. Resources

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