The document outlines essential components and considerations for writing a business plan, emphasizing the importance of understanding market needs, target customers, and financial projections. It includes tips on positioning, product differentiation, operational strategies, and team dynamics, as well as resources for additional guidance. Key questions are presented to ensure readiness and thorough preparation before drafting the business plan.

1. Business Plans:
Don’t be a gnome!

2. VIDEO
http://www.youtube.com/watch?v=TBiSI6OdqvA&feature=player_detailpage

3. The “how” matters...
GNOME
VIDEO They won‟t always
come if you build it...

4. Contents
1. Purpose of a business plan
2. The “thinking behind”
3. What to include
4. „How to‟ tips and resources

5. Purpose of a business plan
• Internal
• Develop / validate an idea
• Track progress
• External
One doc but may need
o Investors tweaking for different
audiences
o Debt providers
o Co-founders
o Customers

6. The “thinking behind” (1/2)
Before writing the
glossy book think
Q1 Is there an unsatisfied need? Do you have a way of
effectively addressing this need?
through the basics
o OR is there a need you can satisfy better than
alternatives?
Q2 What is your target market prepared to pay you to
satisfy the need? What will it take to get them to switch
from using an alternative?
o OR is there another way to monitise? (e.g. advertising)
Q3 Do economics work once the business is “up and
running”?

7. The “thinking behind” (2/2)
Q4 How long much ££ and time does it take to reach “up and
running”? What are the risks?
Q5 Do overall economics work on a reasonably short timeframe
(2-3 years)?
Q6 Do you have what it takes (people, expertise, experience, ££)
to get from point A to point B? Can you get what you lack
elsewhere?
Q7 Are you committed enough (be honest with yourself)?
If you answered YES to all of the above – you are now ready
to write a business plan!

8. Elevator pitch This will be refined
after doing proper
research but
important to have
• By now you should have something along the lines of...
basics early
• For [target customers]
• Who have [compelling reason to buy]
• Our product is a [new product category / challenger]
• That provides [key benefit (which solves problem)]
• Unlike [competitor / substitutes]
• We have [key point of differentiation]
30-60 seconds to generate interest
Source: Crossing the Chasm

9. Key components
• Market positioning -- NEED
• Product / services -- SOLUTION
• Market strategy -- UNFAIR ADVANTAGE
• Operations -- BUSINESS MODEL (rest of)
• Team -- ENGINE ROOM
• Financials -- BOTTOM LINE
Show you have done your research (market, costing,
customer needs/demads/price sensitivities)

10. Market positioning • Solve a significant problem?
• Robust market, margin, and
• Size + growth of addressable market moneymaking characteristics?
($50m+, 20%+ growth, 40%+
• Porter‟s 5 – market attractiveness margins)
(margins, trends)
• Target market defined & described -
– how will you reach them?
• Competition / substitutes – never
say “no competition”!
• Market dynamics / likely response
to entry from incumbents
• Broader picture – economy,
regulations geopolitics, culture

11. Product / service
• Product / service
• Pricing
• What makes it different?
• Is it ready? What is still required to develop?
• Need to have defensible barriers
o Technology (patents, etc)
o Domain knowledge
o Network effect
o Partnerships
o Culture / loyalty

12. Market strategy
• Describe how plan to reach target customer ahead /
better than of competition
o WOM / direct marketing / SEO
• What is your unfair advantage?
o First mover
o New category
o Price leader (efficiency? volume?)
o Quality leader (domain expertise? premium?)
o Niche (knowledge of niche)

13. Operations
• How different is business model from competition?
o Direct vs. indirect
o In-house vs. outsource vs. crowd-source
o Franchise vs. owned
o Auction
• Other components
o Location
o Offices
o Logistics
o Manufacturing

14. Team
• Demonstrate to boost investor confidence
o Expertise (sector, knowledge of customer base, technical)
o Experience (startup, BD)
o Passion
o Personality (ability to attract talent / lead)
o “team” experience (overcome obstacles)
• Address any gaps in skills / resources
o Make sure have “core” in-house (e.g. technology expertise)
o Be clear on what is missing

15. Financials It’s easy to underestimate costs / overestimate revenues /
get timing wrong here – get reader comfortable by showing
you have done research (comparable businesses, quotes
from suppliers, survey of customers)
• Projections
o Income statements – accounting profit, EBITDA, how long takes to
get to break even, show until “exit” (e.g. 5 years)
o Cash flow – “king”, timing matters, monthly typically for Yr1 and Yr2,
show seasonality, working capital requirements, capex
• Funding
o Be clear on how large is the gap / how plan to plug it AND repay
o Exit
o When / how (IPO, trade, PE)
o How much (exit multiple, resulting IRR, cash flow x)

16. Tips and resources
• The Great British Business Show – Nov 17/18 (free)
• Business Link – www.businesslink.gov.uk
• Smarta – www.smarta.com
• Business plan software – www.paloalto.com
• Business model inspiration – www.businessmodelinspiration.com
• Business plan templates – www.bplans.com
• For random questions – kovaleva.anastasia@gmail.com