The document provides an overview of key elements to include when writing a business plan. It discusses identifying a promising business idea by demonstrating clear customer value, sufficient innovation, and feasibility/profitability. It then outlines the typical sections of a business plan, including an executive summary, product/service concept, marketing strategy, business model, business case/risks, and implementation plan. The document emphasizes that a good business plan should be clear, convincing, understandable, consistent in style, and act as a business card for the venture.

1. Writing a Business Plan
Tim C. McAloone
tmca@dtu.dk
With major contributions from: Internet sources, McKinsey & Venture Cup
Unless otherwise stated, this material is under a Creative
Commons 3.0 Attribution–Share-Alike licence and can be
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same licence and if including the following statement:
“Original material by Tim C. McAloone for course 42629 – Innovation and Product Development
Department of Mechanical Engineering, The Technical University of Denmark”

2. 2 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

3. Business plans – prior experience
• How many of you have or have had your own business?
• How many of you plan to have your own business in the next year?
• How many of you plan to have your own business in the next two years?
• How many of you plan to have your own business in the next five years?
3 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

4. Key objectives of this lecture
• What are the elements of a promising business idea
• How to make your business idea irresistible
• What to keep in mind when presenting your business in a
plan
• How to analyse your market and the competition
• How to choose your target market
• How to determine your market strategy
• What a business system is, and what to look out for when
designing one
• What to include in your financial planning
• How to consider and represent risks
Main focus on new startups, but most of principles are
valid for established business
4 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

5. Today’s agenda
• How to identify a business idea – concept and presentation
• Developing the business plan
1. Executive summary
2. Product/service concept
3. Marketing strategy
4. Business model/system
5. Business case and risks
6. Implementation plan & Checklists
• Video case exercise
5 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

6. Today’s agenda
• How to identify a business idea – concept and presentation
• Developing the business plan
1. Executive summary
2. Product/service concept
3. Marketing strategy
4. Business model/system
5. Business case and risks
6. Implementation plan & Checklists
• Video case exercise
6 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

7. Elements of a promising idea
7 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

8. Clear Customer Value
• The key to success in the marketplace is satisfied
customers, not great products
• The product developer’s view:
• Our device can perform 200 operations per minute
• Our new device has 25% fewer parts
• The innovator’s view:
• Our new device will save the customer a quarter of
the time and therefore 20% of the costs
• Our new solution can boost productivity up to 25%
• The product is merely a means of delivering value to
the customer
• The customer value expresses what is novel or
better about the idea, compared to competing offers
8 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

9. [Apple marketing material]
9 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

10. Sufficient degree of innovation
• Business ideas can be classified along the two
dimensions products/services and business system
• In each of these categories, you can develop something
new or capitalise on something that already exists
[McKinsey]
10 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

11. Sufficient degree of innovation
• Business ideas can be classified along the two
dimensions products/services and business system
• In each of these categories, you can develop something
new or capitalise on something that already exists
[McKinsey]
11 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

12. Sufficient degree of innovation
• Business ideas can be classified along the two
dimensions products/services and business system
• In each of these categories, you can develop something
new or capitalise on something that already exists
[McKinsey]
12 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

13. Sufficient degree of innovation
• Business ideas can be classified along the two
dimensions products/services and business system
• In each of these categories, you can develop something
new or capitalise on something that already exists
[McKinsey]
13 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

14. Feasibility and profitability
• “Back of the envelope” financial and resource
assessment
• Traditionally, profit calculations for a business are
made as follows:
• A company buys material or services, thereby
incurring costs
• It also sells products or services to customers,
thereby earning revenues
• Many new businesses do not, however, function
according to this model, e.g.:
• McDonalds, 7-Eleven
•
•
•
14 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

15. Elements of a promising idea
15 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

16. Key questions – Business idea
BUZZ GROUPS
• Discuss for 5 minutes with the person next to
you, what key questions you should have the answers
for, if you are to successfully present and promote a
new business idea.
16 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

17. Today’s agenda
• How to identify a business idea – concept and presentation
• Developing the business plan
1. Executive summary
2. Product/service concept
3. Marketing strategy
4. Business model/system
5. Business case and risks
6. Implementation plan & Checklists
• Video case exercise
17 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

18. The good business plan
Five core qualities:
• A good business plan impresses
with its clarity
• Concise, answers all questions
• A good business plan convinces with its objectivity
• Marketing jargon alone will irritate more than appeal
• Don’t be too critical of own project though
• A good business plan can be understood by the technical layman
• Practice on your granny!
• Use sketches, photos, mock-ups
• A good business plan is written in one consistent style
• Especially important if you are more than one person writing
• A good business plan is your business card
• Pay attention to detail
18 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

19. Today’s agenda
• How to identify a business idea – concept and presentation
• Developing the business plan
1. Executive summary
2. Product/service concept
3. Marketing strategy
4. Business model/system
5. Business case and risks
6. Implementation plan & Checklists
• Video case exercise
19 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

20. Executive summary
• Aim: To pique the interest of decision-makers and
investors
– Brief overview of the important aspects
– Highlight the product/service, customer
value, relevant markets, management
expertise, financing requirements, ROI
• Clear objective and concise description of business
idea
– Remember to describe your key audience
• The executive summary should be a standalone
document
– It’s not just the intro or the abstract
20 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

21. Today’s agenda
• How to identify a business idea – concept and presentation
• Developing the business plan
1. Executive summary
2. Product/service concept
3. Marketing strategy
4. Business model/system
5. Business case and risks
6. Implementation plan & Checklists
• Video case exercise
21 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark

22. Product/Service concept
• Describe the concept
– This is the core of the business plan – describe it
simply and crisply
• Customer value
– Must be better than current market offerings
– The function of the product/service and the value
transferred to the customer must be in focus
– Define the business area in detail – and if your
innovation is a range of products/services, define
their uniqueness wrt. each other
• Development status of your product/service
– Include photos or sketches
– A prototype would be even better
– Describe patents and protection of your concept
22 Original material by Tim C. McAloone for course 42629 – Innovation and Product Development 2012
Department of Mechanical Engineering, The Technical University of Denmark