Business Plan Development

1. Business Plan Development Creating Your Road Map IMBA Lecture Series (c) 2009 Debra Askanase

2. Agenda • Purpose of a Business Plan • Parts of the Plan • Criteria by Section • Tips (c) 2009 Debra Askanase

3. Tools • Sample Business Plan • Questionnaires (to get you started) • Detailed Section Outline (c) 2009 Debra Askanase

4. WHY do we do this? (c) 2009 Debra Askanase

5. Yes, but WHY ELSE? • Know the Industry • Find your Competitive Advantage • Analyze Risks • Develop Your Idea Methodically • Acquire Investors • Find Support • Secure Financing ….SHOULD I START THIS VENTURE??

6. Business Plan Sections

7. Business Plan Sections • Narrative Section • Business Description • Products and/or Services • Industry Analysis • Operations • Clientele/Target Markets • Competition • Marketing Plan • Personnel/Management • Long-term Goals • Risks and Contingencies (c) 2009 Debra Askanase

8. Business Plan Sections • Financial Projections • Financial Narrative • Start-up Expenses and Worksheet • Revenue Assumptions • Financial Assumptions • 3-5 Year Financial Projections • Statement of Cash Flows • Income Statement • Balance Sheet • Relevant ratios (c) 2009 Debra Askanase

9. Business Plan Sections • Supporting Documents • Resume/CV • Relevant documents/contracts • Past 3 years of tax returns (if seeking conventional financing) • Academic research • Marketing research results • Other (c) 2009 Debra Askanase

10. US vs. Israeli Style • All presentations, section questionnaires in US format • Sample outline in combined style • Lecture series suggests: • create in US format, then convert to any other style (c) 2009 Debra Askanase

11. Products and Services • Clear, concise descriptions • Divide into separate sections • Products • Services • Further subdivide into categories • Value proposition • Price menu • Pricing approach/structure (c) 2009 Debra Askanase

12. Industry Analysis • Your Goal: • Give a comprehensive understanding of the industry • Defend your business relevance! • How? • Describe current situation • Relevant trends • Intervening factors • Size of industry/market potential (total # businesses, annual revenues, etc.) • Growth potential (c) 2009 Debra Askanase

13. Industry Analysis • Where? • Academic sources (trade journals, academic journals, Google scholar) • Economic census (USA) http://www.census.gov/econ/census/ or http://factfinder.census.gov • Trade Associations • Online databases/sources: • Emarketer.com, bizstats.com,hoovers.com/free • GALE database • Articles, studies, etc. (c) 2009 Debra Askanase

14. Operations • Straightforward • (If retail) “paint a picture” of the space (as you walk in you will see/experience etc.) • Procedures and controls • Distribution channels • Payment procedures (in/out) • Business-specific details (c) 2009 Debra Askanase

15. Clientele/Target Markets • Primary Clientele (>= 50%) • Secondary Clientele (>= 20%) • Tertiary Clientele • Detailed descriptions • Demographics • Psychographics • Spending • Total market size per market segment • Use for Revenue Projections (c) 2009 Debra Askanase

16. Clientele/Target Markets • Consumer • B2B • Tourist • Religious • Example: Witch Tee’s (Salem, MA) (c) 2009 Debra Askanase

17. Competition • Match Apples to Apples: Segment your competition • Your Value Proposition • Your Competitive Advantage • 2 Types of competitors: • Direct • Indirect • Discuss each significant competitor in depth, can group others • Identify potential threats and talk about them directly (c) 2009 Debra Askanase

18. Step Back from the Project! • SWOT Analysis/PEST Analysis (next lecture) • Do you have a real Value Proposition? USP? • Do you want to start this business? • Begin financial projections (c) 2009 Debra Askanase

19. Marketing Plan • Your Goal: you understand your market, industry, competitive and competitive advantage • Within the narrative, consider and describe • Marketing channels • Personnel • Geographic reach and richness • Tools • 4 (or 5) Ps • Pricing strategy related to marketing (c) 2009 Debra Askanase

20. Marketing Plan • Quantifiable Goals/Objectives = specific deadline dates, and numerical goals • Specific, detailed activities • Complete budget • Metrics • Several plans: • Start-up/awareness • First year • First three years • Marketing calendars are useful tools (c) 2009 Debra Askanase

21. Personnel and Management • Organizational Chart • Responsibilities • Salaries • Professional Advisors • Advisory Board (c) 2009 Debra Askanase

22. Long-Term Goals (c) 2009 Debra Askanase

23. Risks and Contingencies • Shows you understand your business • Deals with investor concerns up front • Make them real • Addressat least two real risks (c) 2009 Debra Askanase

24. Financial Narrative (c) 2009 Debra Askanase

25. Recommended Reading Good to Great & Built to Last Jim Collins Blue Ocean Strategy W. Chan Kim Getting to Yes: Negotiating Agreement Without Giving In Roger Fisher, William Ury and Bruce Patton The E-Myth Revisited Michael E. Gerber The Tipping Point Malcolm Gladwell The Little Red Book of Selling Jeffrey Gitomar Groundswell Forrester Research The Wisdom of Crowds James Surowiecki (c) 2009 Debra Askanase