Writing A Winning Business Plan

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A presentation I gave at the University of California Irvine on the components to winning business plan.

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Writing A Winning Business Plan

  1. 1. Writing a Winning Business Plan<br />1<br />University of California-Irvine<br />February 1, 2011<br />
  2. 2. 2<br />Marshel Sheperd<br />One “A”<br />One “L”<br />Two “H”s<br />Three “E”s<br />
  3. 3. My Business Background<br />3<br />
  4. 4. 4<br />
  5. 5. 5<br />
  6. 6. 6<br />
  7. 7. 7<br />My Goal for Today<br />Exec Summary<br />BusinessPlan<br />“A overview to get you excited…”<br />“Details that will get you hooked.”<br />
  8. 8. Articulate Vision & Reasoning<br />How To Turn $ to $<br />Intro of Management Team<br />Outline Known Risks & Challenges<br />8<br />Purpose of Both<br />
  9. 9. 9<br />Goal of Overall Plan<br />Investment Consideration<br />Position Against Difficult & Critical Issues<br />Attract Talent<br />Create Credibility<br />Memorable Milestone Roadmap<br />
  10. 10. Pleading a Case<br />Anecdotes & Trends<br />Timeliness--Why Now?<br />How World Is Changed With You<br />Unlock Big Time Value<br />10<br />Tone of the Plan<br />
  11. 11. You Won’t Think of It All—But Try—Work In Progress<br />People, Markets, Competitors, Customers May Change<br />Revenue Model Might Change if Incentives Aren’t Right<br />End Game Mission Should Remain Sturdy<br />11<br />What You Should Know<br />Creativity +<br />Adaptation<br />
  12. 12. 12<br />An Example: Our Story<br />100,000,000 Known Cases Annually<br />1. Poor methods of diagnosis—Dissatisfaction <br />2. Growing Market—Importance<br />
  13. 13. Version 1.0<br />Direct to Consumers (No Eye Dr. Needed)<br />Too Risky & Complicated<br />Version 2.0<br />Direct to Optometrist & Ophthalmologists<br />Little Incentive to Switch<br />Version 3.0<br />Win Over Eye Drop Solution Companies<br />Partner For Better Solutions<br />Version 3.1<br />Preventative Care<br />Win Over Insurance Companies<br />13<br />
  14. 14. 14<br />Where Are We Today<br /><ul><li>Timing—Market Needs to Mature a Bit Before We Make Sense
  15. 15. Building Relationships & Credibility with Science World
  16. 16. Simplifying Our Market Entry Pathway
  17. 17. Many Challenges to a Product Business</li></li></ul><li>The Business Plan<br />15<br />
  18. 18. Exec Summary<br />Company Description<br />Market Evidence<br />Product or Service<br />How You Make $<br />Customer Analysis<br />Marketing Plan<br />Financial Plan<br />Management Team<br />Competition (Existing & Entrants)<br />Operating & Milestone Risks<br />Exit Strategy<br />16<br />Plan Components<br />
  19. 19. This is a 1-Pager (aka Tear Sheet)<br />What Is The BIG DEAL?<br />What Are You Solving? How Bad Is It…<br />Why Should Investors Care? How Big Is It… <br />Who Needs It Solved? How Many Are There…<br />Why Do They Care? How Important Is It…<br />Who Pays You? How/Who Pays, Can They…<br />What Stage Is This? How Far From Payback…<br />Goal Is To Get the Reader To the Plan<br />17<br />Executive Summary<br />
  20. 20. What Defines Your Market?<br />Segmented Attributes?<br />How Big Is The Market? <br />What Market Conditions Create The Problem You Solve?<br />Is there another way to solve it that dominates your solution?<br />Aspirin vs. Pain Killer<br />Goal is to Give Undeniable Evidence That Market Is There & Ready<br />18<br />Market Overview<br />
  21. 21. What Does It Do?<br />How Does It Do It?<br />Key Defining Attributes? From the Customer…<br />Are Differences WOW or Eh?<br />Do Customers Need to Switch…Will They? Why?<br />What Position Will It Take In The Market?<br />Is it Defensible? Is it Scalable? <br />Goal is to prove the solution is believable, warranted, and superior.<br />19<br />Product or Service<br />
  22. 22. 20<br />Product or Service<br />
  23. 23. What Key Assumptions Need To Be Proven?<br />Small & Large, Investors Want to See Them All<br />Don’t All Need to Be Large—Smaller Steps Shows Momentum<br />Goal is to Show Grasp of Knowledge to Get to Market<br />21<br />Product Milestones<br />
  24. 24. 22<br />Marketing<br /><ul><li> Demand—How Bad Do They Want It?
  25. 25. Distribution—How Will You Reach Your Market?
  26. 26. Purchase Consideration & Behaviors—Know Your Customers and What Makes Them Excited
  27. 27. Goal Is to Layout Your Market Domination Strategy—Pricing, Quality, Geography, Mobility</li></li></ul><li>Why Will They Give You Money?<br />Do They Have Money To Afford It At Your Cost Structure?<br />What Are Their Expectations of Quality?<br />23<br />Potential Customer Base<br />
  28. 28. Who Does What? Qualifications?<br />Who Else Do You Need?<br />How Will You Get Them?<br />Management Is Critical—Don’t Overlook This!<br />Goal Is to Show Why You Are The Right Team, If Not Complete—Who Do You Need<br />24<br />Management Team<br />
  29. 29. Who is Paying? Who is Using?<br />How Often Are They Buying?<br />How Valuable Is It To Them?<br />Razor / Razorblade?<br />Think Incentives& Natural Flow<br />25<br />Business Model<br />
  30. 30. Who Are Your Competitors<br />Answer better not be “None”<br />What Are Your & Their Advantages & Disadvantages<br />What Are The Gaps? Does Closing Them Matter?<br />Who Else Can Enter this Space if it Proves to Be Lucrative? How Will Slow Them?<br />26<br />Competition<br />
  31. 31. Great Businesses Will Attract Copy Cats…What Will Stop/Slow Them?<br />Intellectual Property<br />Economies of Scale<br />Critical Relationships<br />Capital Requirements<br />Goal Is to Show How Each of These Matter To Your Model<br />27<br />Barriers to Entry<br />
  32. 32. Income Statement (3 to 5 years)<br />Balance Sheet (3 to 5 years)<br />When Funds Are Required & Uses<br />Key Assumptions<br />Financial Model—What Are the Economic Drivers?<br />Goal is to Present a Cogent Plan that Aligns with the Rest—Does It Make Sense?<br />28<br />Financial Plans<br />
  33. 33. IPO<br />Operate & Grow It<br />Seek Corporate Buyout<br />Goal is to Show Investors (including you & your team) When They Will Get their Money Back + Rate of Return<br />FYI…A Business “Made to Operate” is What Corporate Acquirers Want to See<br />29<br />Exit Strategy<br />
  34. 34. Investors, Customers, Partners, Employees, and Success is ULTIMATELYthe Result of the People Involved<br />Advice: Fall In Love with You + Your Idea<br />Don’t Do It Alone…You Will Not Think of Everything<br />Build Trust In Each Other—It Will Be Rough & Rocky…<br />Know Exactly What You Want and When You Want It—Ask For The Money<br />30<br />Other Things to Consider<br />
  35. 35. How Much Money Would You Put On The Line?<br />Did You Put Money On the Line?<br />This is Not a Solid Argument for Investors<br />How Committed & Passionate Are You To the Idea?<br />Are Your Teammates Equally Committed & Passionate?<br />Remember…Goal of Plan Is To Get You To a Meeting<br />31<br />Other Things to Consider<br />
  36. 36. Don’t Need to Solve the World’s Biggest Problems from Day 1<br />Plan Needs to Be Believable & Achievable<br />Textbooks Won’t Have the Answer. <br />Critical & Creative ThinkingWill<br />Know Your Pain Tolerance<br />Minimum Living Expenses to Survive<br />32<br />Other Things to Consider<br />
  37. 37. Think Critically and On Your Feet<br />Be Creative<br />Have Fun<br />Take Criticism, But Don’t Let It Stop You<br />Nobody Loves Your Vision As Much As You Do!<br />Good Luck<br />33<br />Parting Words<br />
  38. 38. Thank You<br />34<br />
  39. 39. Questions?<br />35<br />Marshel Sheperd<br />marshelsheperd@gmail.com<br />(203) 979-6047<br />

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