This document summarizes the agenda and objectives for Session 1 of a business planning course offered by the Wharton Small Business Development Center. The session will cover drafting a mission statement, refining product/service descriptions and developing a value proposition, and examining the management team's strengths. Homework involves interviewing customers and suppliers to validate assumptions about the value proposition.

1. Welcome! Session 1 – July 6, 2004 Instructor - Kevin Hawley [email_address]

2. The Wharton SBDC is part of Wharton Entrepreneurial Programs and the Sol C. Snider Entrepreneurial Research Center. The Wharton Small Business Development Center is in part financed by a grant from the Commonwealth of Pennsylvania, Department of Community and Economic Development. The Wharton SBDC is funded under Cooperative Agreement No. 4-603001-2-0040-24 by the U.S. Small Business Administration. The support given by the U.S. Small Business Administration through such funding does not an expressed or implied endorsement of any of the co-sponsors’ or participants’ opinions, findings, conclusions, recommendations, products, or services. All SBDC programs are non-discriminatory and open to the public. Reasonable arrangements for persons with disabilities will be made if requested at least two (2) weeks in advance. Please contact Dr. M. Therese Flaherty, Director, Wharton Small Business Development Center, University of Pennsylvania, 433 Vance Hall, Philadelphia, PA 19104, (215) 898-8635.

3. Agenda – Session 1 Course Objectives Introductions The Mission Statement Product and Service Descriptions Writing and Testing Your Value Proposition Management Team Overview Preparation for Next Session and Homework

4. Course Objectives Draft Your Business Plan Systematic approach Areas for improvement identified Key assumptions identified and tested Refine Your Business Model Consistency, feasibility, profitability Sustainable competitive advantage Understand How Your Team Can Drive the Plan Individual and group strengths matched to challenges

5. Your Responsibilities Support and Learn From Other Entrepreneurs Complete Assignments Before Class Participate in Group Exercises and Discussions Respect Each Other’s Intellectual Property Rights Take Responsibility for Acting on Feedback Continually Work on Refining Your Business Plan What Are Your Expectations?

6. Introductions Please give your name and where you’re from Let’s hear your “Elevator Pitch” A thirty to sixty second description of your business idea, about as much time as you’d have to explain it to a potential investor during a ride on an elevator! What do you hope to accomplish in this course? One sentence about “why you’re here tonight”

7. The Business Plan Executive Summary Business Overview Financial Data Supporting Documents

8. The Business Plan Executive Summary Your Statement of Purpose – Session 1 Your Mission Statement – Session 1 The opportunity and the strategy – Session 4 Economics, profitability, and exit potential – Session 3 The offering to prospective investors – Session 3 Business Overview Financial Data Supporting Documents

9. The Business Plan Executive Summary Business Overview Product/service descriptions – Session 1 Target markets and customer profiles – Session 2 Location of business and competitive analysis – Session 2 Marketing, sales, and operations plans – Session 2, 3, and 4 Management team and personnel – Session 1 Investment requirements and expected use of funds – Session 3 Summary – Session 4 Financial Data Supporting Documents

10. The Business Plan Executive Summary Business Overview Financial Data – Session 3 Balance sheet Break-even analysis Income projections (Profit and Loss Statements) Cash flow projections Sensitivity (deviation) analysis Historical financial reports for existing business Supporting Documents

11. The Business Plan Executive Summary Business Overview Financial Data Supporting Documents – Session 4 Executive team resumes and personal balance sheets Supplier, customer, and/or partnership letters of intent Job descriptions Leases, contracts, and legal documents

12. The Executive Summary Statement of Purpose Why are you writing a business plan? How much money is needed? How will the funds be used? Mission Statement What do you intend to achieve? Are your goals measurable? Are your goals meaningful? Will this statement keep your efforts focused? The opportunity and the strategy Economics, profitability, and exit Offering to prospective investors

13. Class Exercise: Mission Statement No standard format for a mission statement, but... Brief – it should be easy to understand and remember Flexible – it should be able to accommodate change Distinctive – it should make the business stand out

14. Class Exercise: Mission Statement Answers three basic questions: What is our most significant market? What is our contribution to the market? How do we distinguish ourselves from the competition while making that contribution?

15. Class Exercise: Mission Statement EXAMPLE - Courtyard by Marriott: Market: To provide economy and quality minded travelers Contribution: with a premier, moderate priced lodging facility Distinction: which is consistently perceived as clean, comfortable, well maintained and attractive, staffed by friendly, attentive and attractive people.

16. Class Exercise: Mission Statement OTHER EXAMPLES AVIS - To ensure a stress-free rental experience by providing safe, dependable vehicles and special services designed to win customer loyalty. FORD MOTOR COMPANY - We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world. We anticipate consumer need and deliver outstanding products and services that improve people's lives.

17. Class Exercise: 3-5 Business Goals Market: To provide economy and quality minded travelers Contribution: with a premier, moderate priced lodging facility Distinction: which is consistently perceived as clean, comfortable, well maintained and attractive, staffed by friendly, attentive and attractive people. Develop three to five measurable goals for your business – they can relate to success in specific markets, achieving specific contributions, or maintaining a unique and sustainable distinction for your business.

18. Class Exercise: 3-5 Business Goals Develop three to five measurable goals for your business – they can relate to success in specific markets, achieving specific contributions, or maintaining a unique and sustainable distinction for your business. S – Short Term (1-5 years) M – Measurable A – Attainable R – Realistically achievable, given your resources T – Time specific

19. - 10 Minute Break -

20. Product/Service Descriptions Executive Summary Business Overview Product/service descriptions Target markets and customer profiles Location of business and competitive analysis Risks, opportunities, and milestones Management team and personnel Investment requirements and expected use of funds Summary Financial Data Supporting Documents

21. Product/Service Descriptions What are you selling? Who are your intended customers? What do you know about them? Are they “reachable” and interested? What are the benefits of what you’re selling? Benefits are what customers want to accomplish! Convenience Savings Pride of ownership What are the features of what you’re selling? Features are what make benefits possible! Location Low price Quality

22. Class Exercise: Refining Your Product/Service Descriptions What are you selling: Describe your products/services? Benefits? What does the customer want when purchasing such products/services? Features? How do your products/services provide what the customer wants? Refine your product/service descriptions to provide a clear connection between what you’re selling, the benefits customers expect, and the specific features of your product/service that respond to those wants.

23. Class Exercise: Value Proposition The Value Proposition is a statement of how your business satisfies a specific set of customer needs in a way that shows strong, sustainable competitive potential: What are you selling? To whom are you selling? Why do you customers purchase from you? What do they perceive as your “value add” to the purchase? How is your value differentiated or unique when compared to other providers or substitute products/services? How long will you be able to maintain that distinction? Why?

24. Class Exercise: Value Proposition Without testing your assumptions about the questions below, you may be basing your business plan on false or incomplete data – it’s critical to test all of your assumptions at this stage! Why do you customers purchase from you? What do they perceive as your “value add” to the purchase? How is your value differentiated or unique when compared to other providers or substitute products/services? How long will you be able to maintain that distinction? Why?

25. Homework: Value Proposition Create five questions you can use to interview your customers (or prospective customers) to validate your assumptions about the following: Why do your customers purchase from you? What do they perceive as your “value add” to the purchase? How is your value differentiated or unique when compared to other providers or substitute products/services? How long will you be able to maintain that distinction? Why? Customers (and/or prospects) are the best place to start when validating assumptions about a new venture’s potential!

26. Homework: Value Proposition Create ten questions you can use to interview your suppliers (or prospective suppliers) to validate your assumptions about the following: Why will customers purchase from you? What will they perceive as your “value add” to the purchase? How will your value be differentiated or unique when compared to other providers or substitute products/services? How long will you be able to maintain that distinction? Why? Suppliers are an excellent source of information about how customers behave and how well you’re prepared for success!

27. Management Team Overview What are your team’s strengths? Do NOT list weaknesses! Relevant experience Relevant education Assigned roles in the venture Matched to specific prior experience In what areas will your business need to add talent? Availability of competent advisors during start-up phase? Expected timing of hires, linked to business milestones

28. Homework Overview Revise and refine your Mission Statement Finish drafting your Product/Service descriptions Finish writing your questions to test your Value Proposition Interviews - test your assumptions with customers and suppliers Draft your Management Team Overview Questions about the assignments?