This document summarizes the key points from a seminar on developing a successful business plan and pitch for investors. The presenter outlines the criteria investors use to evaluate opportunities, including potential returns, required investment, and strength of management team. Advice is provided on how to evaluate market opportunities, develop financial forecasts, and package the business plan and pitch to appeal to investors. The importance of thoroughly thinking through all aspects of the business is emphasized.

1. TED
ROGERS
SCHOOL OF RYERSON
MANAGEMENT UNIVERSITY
Business Plan Seminar
Dr. Dave Valliere
Entrepreneurship & Strategy

2. Investor’s Screening Criteria
• How much money can be made?
• How quickly can it be made?
• How will it be made?
• How much investment is required?
• How liquid is the investment?
• How involved do I have to get?
• Who else is involved?
Valliere

3. What Investors Like
• Large and rapidly expanding market
• Complete team of “stars”, with proven
track records
• “10X” improvement
• Compelling strategy, competitive
advantage, and business model
• Sustainability
Valliere

4. What Scares Them Off
• High risk, relative to the expected returns
• Seeking too much capital, or too little
– High tides hide the rocks
• Quibbling over deal terms
• Lack of commitment, integrity, realism
• Weak managers
– Poorly thought out Bizplans
– Lack of Investor’s Perspective
Valliere

5. Your Business Opportunities
• An opportunity is not just an idea
– “it can be done” is insufficient
– “is it worth doing?”
• Think big, high-potential
– Not “what can I do with what I have?”
– Instead, “what will it take to do the right
thing, and how can I get it?”
– People like to back winners
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6. Opportunity Evaluation
• What product or service will be sold?
• Who will it be sold to?
• How much will it cost to produce? Average selling?
• How big is the target market?
• What percentage of that market must be penetrated to
reach $50 million in sales?
• Who is the direct and indirect competition?
• What is the sustainable competitive advantage?
• Who is on the team?
• Is the product complete? If not, when?
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7. DEVELOPING THE PLAN
• It doesn’t matter how flashy the document
or the presentation, if the ideas are lame
or half-baked
• You should want to wirebrush it more than
anyone else
– Not the case? Then you are wasting your time
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8. The Business Plan
• Audience: people with resources to invest
– Financial, talent, relationships
• Help these investors understand the business
– Why they should invest their resources
• Typically “poor” and not well-received
– Not thought through
– Ignores the key questions for investors
Valliere

9. Bizplan Answers
• Why does the market care?
– the only problem money can’t solve
• What is your competitive advantage?
– how you can sustain it
• Can you handle your Unforeseen Killer
Variables?
– by definition, you won’t know your UKVs
• Can you make money at it?
Valliere

10. Bizplan Contents
• Executive Summary
• Customer Need & Market Opportunity
• Business Strategy & Key Milestones
• Marketing Plan
• Operations Plan
• Management & Key Personnel
• Financial Projections & Requirements
• Appendices
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11. Some Questions You Need to
Think Through
• Market • Regulatory Issues
• Competitors • Location
• Pricing • Risks
• Customers • Physical Assets
• Suppliers • People Assets
• Service • Financial
Which ones are most important in YOUR business?
Valliere

12. Financial Forecasting
• Project your expected sales
• Associated COS
• Infrastructure ramp-up, staff, and G&A
• Working capital policy implications
• Fixed asset requirements
• Adjust for
timings, depreciation, interest, taxes
• Cashflow with negative balance
• Impact of various financing scenarios
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13. Sensitivity Analysis
• What assumptions in your business are
reasonable to vary?
– Pricing trends
– Duration of sale cycle
– Magnitude and timing of revenues
– Launch expenses
– Cost of key supplies
– Lead time to hire staff
– Working capital days
– Cost and lead time for financing…
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14. Scenarios
• Monthly for first 1 or 2 years
• Yearly for 5 years
• Most likely case
– Credibility test: how realistic are you?
• Best case
– Credibility test: how good can it get without
dreaming in Technicolor?
• Worst case
– Credibility test: can you face up squarely?
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15. General Tips
• Model the dependencies
– COS= f(sales), G&A = f(staff), Pricing = f(time)
• Avoid specious precision
– Use $000s
– Follow GAAP
• Summarize into charts
– Sales hockey stick
– Cashflow and profit J-curves
– Key ratios (which ones do you think?)
• Investors love/hate hockey sticks
– Watch for synchronization
Valliere

16. PACKAGING THE PLAN
• The most important sales document you
will ever produce
• Understand the how/why of the reader
• What does the artifact signal about you?
Valliere

17. How to Read a Bizplan
• Executive summary
– 2 pages max
– Are they out to lunch?
• Team bios at the end
– Any credibility?
• Market description
– Real need?
• Everything else
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18. Appearances Matter
• How many pages?
• Binding?
• Colour?
• Multimedia?
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19. Details Matter
• Spelling, grammar
• Page numbers, TOC
• Organization, headings
• Consistency between figures and text
• What belongs in an appendix?
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20. LIFE’S A PITCH
• What are you really selling?
• What does your ability to pitch say about other
important things?
– Communicate
– Connect with people
– Persuade and convince
– Understand the audience
– Anticipate objections
– Handle unforeseen problems
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21. Understand the Investor
Perspective
• Understand the judges as your customer – your product
is your company
– Judges are sophisticated, BS-proof sounding boards
• The judges want to help you to
– See the truth, for better or worse
– Iron out the bugs in your plan/pitch
– Avoid going after the wrong opportunity
– Survive after the $25k runs out
– Raise even more money from professional sources
– Become rich and famous (remember those who helped you :)
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22. The Basic Idea…
• You are a group of people who
– Have identified something that solves a
problem for somebody willing to pay
– Have a plan to
• Create the company
• Build and market the solution
• Use an initial investment wisely
• Protect yourselves from competitors
– Can adapt to changing situations
– Are smart and get things done
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23. Be Prepared
• Complete, concise business plan with good
executive summary
• Be prepared to market your company to the
judges
• Be “Up” and show the “Fire in the Belly”
• Be realistic in terms of your requirements
• Anticipate additional information which may be
required – and be ready!
• Don’t BS judges, or yourself…
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24. Be Realistic
Have a realistic idea of:
• Your strengths and weaknesses
• The amount of money you will need to achieve
your objectives
– Seeking too little is worse than seeking too much!
• The amount of time required to fill the gaps in
your plan
– Raising more money, hiring good people, landing
reference customers
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25. Judges Ask Themselves
• Screening Criteria
– Is it worth it?
• Use of proceeds
– VA or overhead?
• Spending enough to ensure success
– Thinking big but realistically?
• Depth of market knowledge
– How do people buy?
Valliere

26. Judges Evaluate You
• How good is the selected Opportunity?
– Should we encourage this student to go for it,
or think of something even better?
• How good is the Plan?
– Has this student really thought it through?
• How likely is this business to survive?
– What happens when the prize is spent?
Valliere

27. Go for the Close
• Recap your main messages
• Ask for what you want!
– There’s more available than just the $25k
• Mine the valuable feedback
– Pay attention to what questions get asked
– Hot leads and referrals
Valliere