Transcript bplans_1_the_idea

INLS 210-97
Information Entrepreneurship
Module 1:
Business Planning
Readings
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Venturecoach.com
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From Idea to Business
http://www.venturecoach.com/resources/howbiz.h
tm
Anatomy of a Business Model
http://www.venturecoach.com/resources/bizmodel
.htm
Entrepreneur.com: An Introduction to
Business Plans
http://www.entrepreneur.com/Your_Business/
YB_PrintArticle/0,2361,287323----1-,00.html
Readings
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Planware.org: Business Ideas
http://www.planware.org/ideas.htm
Center for Entrepreneurial Excellence:
Elements of a Business Plan
http://www.ceebic.org/elp.htm
BusinessTown.com: Creating Your Business
Plan
http://www.businesstown.com/planning/creat
ing-plan.asp
Readings
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BusinessTown.com: Why Plan Your
Business?
http://www.businesstown.com/planning
/creating-why2.asp
The Business Planning Institute: Fatal
Mistakes to Avoid When Writing a
Business Plan
http://www.bpiplans.com/Articles.htm
Sample Business Plans
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MOOT Court Competition
http://www.businessplans.org/mootcorp
.html
Bplans.com: Sample Business Plans
http://www.bplans.com/sp/?a=bc
The Idea
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Develop an idea that maximizes your
strengths and minimizes your weaknesses
Look for strengths by examining your
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Educational background (special expertise or
skills)
Personality (commitment, resolve, independence)
Personal experience in a business or hobby
Source: Business Ideas
Idea Components
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The idea has four components
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Product/Service
A Business Model
A Team
Money
Source: The Venturecoach.com
The Idea: Components
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When thinking about your product or
service
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Remember the better technology rarely
wins. But the better idea usually does.
What real customer need are you meeting?
How do you market in a way that
customers are willing to buy your product
or service?
Who are the competitors?
Source: The Venturecoach.com
The Idea: Components
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A Business Model
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Describes how your business makes
money.
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What are you selling?
How do you get paid?
Who pays you?
How much do you get paid?
How often do you get paid?
Source: The Venturecoach.com
The Idea: Components
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Business Model Fundamentals - What to
look for
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markets with a lack of competition
Recurring revenues
Low fixed costs
Low asset requirements
Compelling reason for customers to stay
Know why customers stay
Source: The Venturecoach.com
The Idea: Components
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A Team
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Identify business needs – find the best people to
fill those needs
Skill set
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Financial
Project Management
Marketing
Production/Manufacturing/Logistics
Technological
Beware choosing friends
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Establish clear roles and accountability
Source: The Venturecoach.com
The Idea: Components
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Money
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A solid plan brings money
Investors are partners and can offer guidance
Sources
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Banks
Credit
Angels
Target groups
Venture capital
Source: The Venturecoach.com
The Idea: Elevator Speech
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To be able to talk about your business plan
with clarity and passion develop a Two Minute
Summary
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Conveys who the market is, what is the problem
to be solved, and how it will be done.
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FOR target customers
WHO ARE DISSATISFIED WITH market alternatives
OUR PRODUCT IS A new product or service
THAT PROVIDES key problem-solving capabilities
UNLIKE product alternative
WE HAVE ASSEMBLED key product/service features
Source: The Venturecoach.com
Refining the Idea:
Logic Flow Planning
Adapted by Tom Miller, NCSU and
Scott Brown, UNC-CH with
permission from Jerry Hart, CMC
High level, abstract view
Vision
Mission
Objectives / Goals
Strategy
Tactics / Action Plan
Low level, concrete view
Vision Statement
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A statement of what the world will be
like if the business venture is
successful.
Source: Kotler Strategic Marketing
for Non-Profit Organizations
Mission Statement
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The basic purpose of an organization.
What the organization is trying to
accomplish.
A clear statement of your company’s
long-term mission.
Try to use words that will help direct
the growth of your company, but be as
concise as possible.
Source: Kotler Strategic Marketing
for Non-Profit Organizations
Logic Flow Planning Terms
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Objectives/Goals
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Strategy
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The major variable that the organization
will emphasize
A plan of action to accomplish a goal
Tactics
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Specific steps to be taken to implement
strategy
Source: Kotler Strategic Marketing
for Non-Profit Organizations
Plan Outline
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Executive Summary
Table of Contents
Situation Analysis
Business Objectives
Management
Capabilities
Market Analysis
Business Development
Strategy
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Financial Review
Appendices
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Company
background
Technological Needs
Literature Citations
Resumes
Administrative issues
Source: SmartPlanet.com Guide to
Writing a Business Plan
Executive Summary
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Executive Summary
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2 pages maximum
Summary of the plan
Do not cut and paste from the plan
This may be your only chance to sell your
idea
Compelling and persuasive wording
Source: SmartPlanet.com Guide to
Writing a Business Plan
Situation Analysis
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What is the organization is trying to accomplish?
What distinguishes the company from the
competition?
How does the company add value to its customer’s
lives?
What factors will account for the company’s success?
What are the key technologies/concepts upon which
the company is based?
Why is the time right for your product/service?
Source: SmartPlanet.com Guide to
Writing a Business Plan
Business Objectives
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The major variable that the organization will
emphasize
Describe the where, when, why, how, and who of the
company’s first year of business.
How they will be short-term goals (12 to 18 months)
and long-term (18+ months) be achieved?
 State specific measurable objectives
 State market share objectives
 State revenue/profitability objectives
What are the plans for alternative outcomes?
Source: SmartPlanet.com Guide to
Writing a Business Plan
Management
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List CEO and key management by name
Describe roles in company
Include previous accomplishments to
show these are people with a record of
success
Summarize number of years of
experience in this field
Outline advisory boards or panels
Source: SmartPlanet.com Guide to
Writing a Business Plan
Management
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Describe strategies for attracting and
keeping key personnel.
Schedule for adding new personnel
Sample organizational structure
Source: SmartPlanet.com Guide to
Writing a Business Plan
Market Analysis
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Industry Analysis
Competitive Analysis
Marketing Activities
Technology
Business Operations
Source: SmartPlanet.com Guide to
Writing a Business Plan
Market Analysis:
SWOT Analysis
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Informs marketing analysis and
planning
Internal Analysis
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Strengths, Weaknesses,
External Analysis
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Opportunities
Threats
Source: David Bangs Jr. The
Market Planning Guide
Internal SW Analysis
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Areas to examine within the company
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Profitability
Sales and marketing
Quality
Customer service
Productivity
Financial resources
Financial management
Operations
Source: David Bangs Jr. The
Market Planning Guide
External OT Analysis
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Areas to examine
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Technology
Government and Regulation
Legal
Economic environment
Opportunities
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Think in terms of consumer problems.
Define nature of product/service opportunities
created by those problems.
Source: David Bangs Jr. The
Market Planning Guide
Marketing Analysis:
Industry Analysis
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Industry size
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Target Markets
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Who is most likely to buy from you?
What wants, needs, and habits do your best customers and
prospects share? How many best customers are there?
Regulatory requirements
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$1 billion or $10 billion
Think about local, state, and federal laws and regulation
affecting your business
Projected changes over the next three to five years
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In industry
In company’s product/service
Source: SmartPlanet.com Guide to
Writing a Business Plan
Marketing Analysis:
Competitive Analysis
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Who are the competitors?
What is their market share?
How do you compare, in the eyes of the
consumers, to existing companies?
Outline your company’s competitive
advantage
Source: SmartPlanet.com Guide to
Writing a Business Plan
Marketing Analysis:
Marketing Activities
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Who are the competitors?
What is their market share?
How do you compare, in the eyes of the
consumers, to existing companies?
Review those changes in market share,
leadership, players, market shifts, costs,
pricing, or competition that provide the
opportunity for the company’s success.
Source: SmartPlanet.com Guide to
Writing a Business Plan
Business Development Strategy
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When will the business open?
What resources are available?
How will the customer base be built and
maintained?
Source: SmartPlanet.com Guide to
Writing a Business Plan
Business Development Strategy
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Growth Strategy & Tactics
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Market penetration – capture market share
from competitors
Create new markets
Source: Kotler Strategic Marketing
for Non-Profit Organizations
Financial Review
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Detailed financial plan (be conservative)
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Best guess at financial results
States what assumptions have been made
and why
Outlines funds required and their use
Reviews yearly expected sales and profits
for the next three years
Discussion of how growth will be managed
Source: SmartPlanet.com Guide to
Writing a Business Plan
Things to Think About
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Resource Requirements
Risks and Rewards
Near-term/Long-term Decisions
Resource Requirements
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Technology requirements
Personnel requirements
Resource requirements
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Financial, distribution, promotion, etc.
External requirements
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Products/services/technology required to
be purchased outside company
Risks & Rewards
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Risks
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Summarize risks of proposed project
Addressing risk
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Summarize how risks will be addressed
Rewards
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Estimate expected pay-off, particularly if
seeking funding
Decisions
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Near term
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Isolate key decisions and issues that need
immediate or near-term resolution
Long term
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Isolate issues needing long-term resolution
State consequences of decision
postponement