Business Plans Made Simple

1. Business Plans Made Simple Center for Entrepreneurship and Innovation School of Management Alumni Relations Career Services Presented by: Gerard F. Zappia, Dean School of Management September 2, 2014

2. Goals for Today Have fun! Demystify the business plan (complexity vs. value) Learn the basics - business plans (concept stage) Develop a “rough” draft Identify strengths and areas for development

3. Access to docs

4. What is a Business Plan?

5. What is a Business Plan? “A business plan is a road map that provides directions so a business can plan its future and avoid bumps in the road.” Author Unknown

6. “A business plan is a written description of your business's future. That's all there is to it--a document that describes what you plan to do and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your business strategy, you've written a plan, or at least the germ of a plan.” Entrepreneur.com What is a Business Plan?

7. Users (Audience) of the Business Plan?

8. Audience – Business Plan Investors Individual Institutional Strategic/Partner Bankers (growth/maturity stage) Management Team Yourself - Most Important!

9. “A lot of entrepreneurs think they only need to develop a formal business plan if they’re seeking investment. This is a costly folly. Writing a business plan gives you a chance to thoroughly evaluate your idea inside and out, uncover its upsides and potential pitfalls, and, most crucially, think up ways to avoid them before they happen. It’s your chance to stare long and hard at your ideas’ weaknesses and decide whether or not you can overcome them.” Forbes.com

11. Summary - Business Plan Concept Business roadmap (story) Living document (meaning?) Process driven Forces you and to think holistically Must make sense

12. Contents of a Business Plan?

13. Table of Contents • Executive Summary • Market Opportunity • Product/Service/Technology • Competition • Sales/Marketing Strategy • Financials • Company/Management Overview • Summary

14. Let’s Start Writing – Version 1.0 (Expect to Revise – Many Times) (You may not be able to answer every question today)

15. Writing and Thinking Once the idea is out of your head. It has the chance to evolve and be refined. It can be shared with others to get the idea validated and enhanced (or mocked). It means the idea has a chance of becoming more than just an idea. Aden Davies

16. Friendly Advice This is not rocket science! Use clear, concise language with no techno jargon. Your mother/father must understand it! Avoid using hype words. Must be a story (that makes sense) – Think of everything in context. The only thing you have is your credibility. Don’t risk it with false claims. Sophistication of the plan – varies with stage of development

17. Financing Sources Assumption - You are here Concept Pre-Seed Seed Early Stage Growth Maturity Venture Stages Market Extension Idea Revenues Prototype Customer Validation Profitability Grants Grants – SBIR, NSF, NIH, NYSERDA, etc. Equity 3Fs Angels - VCs A/B Series– VCs Boot Strapping Debt Econ. Dev. / Factoring Senior/Bank Debt

18. Executive Summary • One short paragraph for each of the business plan sections • Include a summary of the financials • Include funding requirements to complete development and to begin sales. • Prepare after completing the other sections.

19. Market Opportunity • What problem are you solving? Who has it? • Do not confuse with the solution • How are they solving it today? • What is the market size? • What user feedback do you have? • What is your initial target market and why? • What are the macro-trends?

20. Product/Service/Technology • What is your solution? • How does it solve market need? • What IP do you own or plan on pursuing? • What approvals do you need? • What is the status of your solution? • This should not be a technical treatise (write for a general audience).

21. Competition • Who is your competition ? • What do you know about them? • How is your solution better? • How much better? • What prevents your competition from copying your solution?

22. Sales/Marketing Strategy • How will you bring your solution to market? • What is the average sales cycle? (if applicable) • What is the average cost of customer acquisition? • What sales channel will you use? • Who are your potential partners? • How do you plan to generate demand?

23. Manufacturing/Operations • Where will your product/service be manufactured/created? • Explain your methods of: • Production techniques and costs • Supply chain • Quality Control

24. Financials • What does your financial picture look like for the next five years? • Revenue • Cost of Goods • Gross Income • Expenses • Net Income • Provide a cash flow analysis

26. Cash Flow Statements Total Cash Receipts Total Cash Paid Out Cash Position

27. Management Overview • Brief overview of company • Brief overview of team (expertise that relates to company/product • Qualifications must add value • Board of Advisors • Do not say “world class” • Funding needs

28. Summary Why should we invest? List a few compelling bullet points Why is your business important? What happens if your business does not exist?

29. Exhibits and Appendices Be focused Include content that supports the plan Don’t include what you don’t refer to Reasonable contents Summary Financials Management team resumes Customer letters of intent Existing marketing materials Max: 10 to 15 pages

30. Important Guidelines Proof, proof, and proof again Grammar, punctuation, sentence structure, etc. Mistakes and sloppiness are a death knell A “good” picture (or graph) is worth a thousand words Omit images, tables, charts don’t instantly convey meaning. Label graphics and significance Balance use of text and graphicc Lots of white space

31. Assess How well developed is your business idea? Which areas need additional development?

32. Thank You