Writing and Pitching the Business Plan

1. Writing and Pitching the Business Plan

2. What is a Business Plan A business plan is a document that describes the opportunity, product, context, strategy, team, required resources, financial return, and harvest of a business venture. Entrepreneurs can learn and master a process for building a new venture. They communicate their intentions by writing a business plan.

3. Creating a Good Impression • How the business plan should look • How it should be organised • How it should be assembled

4. Introduction • Business plan is one of the most important document for any business • Written for a variety of reasons • help owners crystallise their ideas • focus efforts against established objectives • medium for attracting finance for start-ups or expansion • Quality document • Challenges should be addressed upfront

5. Some Quotes Winston Churchill “Plans are of little importance, but planning is essential Dwight D. Eisenhower “Plans are nothing; planning is everything Christian Bovee (1820 - 1904) “The method of the enterprising is to plan with audacity, and execute with vigor; to sketch out the map of possibilities; and then to treat them as probabilities.” No battle plan survives contact with the enemy.

6. The Elements of a Business Plan 1/2 • Executive Summary • Opportunity: quality, growth potential • Vision: mission, objective, core concept • Product of service: value proposition, business model • Context: industry, timelines, regulations, market analysis • Organization: structure, culture, talent

7. The Elements of a Business Plan 2/2 • Entrepreneurial team: capabilities, commitment • Financial plan: assumptions, cash flow, profit • Required resources: financial, physical, human • Uncertainties and risks • Financial return: return on investment • Harvest: return of cash to investors and entrepreneurs.

8. Contents/Structure • Summary • Current position • Objectives • Marketing plan • Operations plan • Management and staff • Financial plan • Information and control • Risk factors and rewards

9. Executive Summary This is a 2/3 page summary of the 30-40 page business plan • Company’s current status • Products/services it will sell and to whom • The benefits in economic and non economic terms, the products/service will confer on the customer • Financial forecasts • Overall objectives 3-7 years out and how they will be achieved • How much cash needed to reach objectives • How and when investor will benefit from their investment

10. CURRENT POSITION • What is the corporate structure? • Who owns the company? • Who are the senior managers? • What is the management structure? • How many employees are there? • What is the location? • What is the trading history? • What are the key financial ratios? • What are the strengths of the business? • What are the weaknesses? • Which areas could be improved?

11. MARKETING PLAN 1/2 • Absolute size of your domestic market • Absolute size of your export market • Trends and developments expected in the market in the future • Your market share • The factors influencing the market • The risks associated with new markets

12. MARKETING PLAN 1/2 You should have investigated both the competition and your customers and be able to state: • Who they are • What are the strengths and weaknesses of your competitors • What the response of the competition will be • How your product is superior • The relative importance of each customer and competitor.

13. OPERATIONS PLAN • Products or Services • Highlight unique qualities • Identify plans for diversification • Facilities • Manufacturing processes • Plant and machinery used in processing;

14. MANAGEMENT AND STAFF 1/2 • Evidence of the track record of key individuals • Their experience in the industry • Future executive requirements • Curricula vitae for senior managers (usually included in appendices) • Identification of the key function areas e.g. marketing, finance etc. ensuring each has appropriate experience

15. MANAGEMENT AND STAFF 1/2 • The financial rewards to the senior executives • The likely share ownership structure • The ages of the senior executives. If they are likely to retire soon, what provisions have been made for succession • Identification of the team leader

16. FINANCIAL PLAN 1/2 • Funding requirement • Summary of the projections • Summary of key financial statistics • Detailed assumptions behind the forecasts • Sensitivity summary for forecasts and key assumptions

17. FINANCIAL PLAN 1/2 The following must be appended: • Detailed projections for up to 3 years including profit and loss accounts, cash flow statements, and balance sheets • Most recent financial statements • Details of any sensitivity analysis

18. INFORMATION AND CONTROL • Details of the regular management reports • Demonstration that the business has staff with adequate financial skills • Details of how the business will be managed on a day to day basis • Outline transaction recording systems

19. Pitching for Investments Funds • Clearly define your Business Model • Who has your money in their pocket? • How are you going to get it into your pocket • BE SPECIFIC • KEEP It SIMPLE • COPY SOMEBODY( if necessary)

20. Explain Yourself in the First minute • Make it short and sweet : • We sell software • We sell Hardware • Exercise • Set a timer to one minute. Give your current pitch until the timer goes off. Ask the audience to write down one sentence that explains what your organisation does. Collect the answers and compare them to what you think you said.

21. OBSERVE THE 10/20/30 RULE • Ten slides • Twenty minutes • Thirty-point-font text

22. Mission Statement V Mantra 1/2

23. Mission Statement V Mantra 2/2

24. Milestones Timeline to : • Prove your concept • Complete design specifications. • Finish a prototype • Raise a capital • Ship a testable version to customers • Chip final version to customers • Achieve breakeven

25. Assumptions Create a comprehensive list of the major assumptions that you are making about business such as: • Product or service performance merits • Market size • Gross margin • Sales calls per salesperson • Conversion rate of prospects to customers • Length of sales cycle • Return of investment for the customer • Technical support calls per unit chipped • Payment cycle for receivables and payables • Compensation requirements

26. Tasks Tasks included in business plan (examples) • Filing patent • Filing legal documents • Completing Renting office space • Finding key vendors • Setting up accounting and payroll systems • Purchasing insurance policies

27. Big V Small Company 1/2

28. Big V Small Company 2/2

29. Make it Personal

30. ANSWER THE LITTLE MAN

33. Ten Common Mistakes or Gaps in Business Plans • Solutions or technologies looking for problem • Unclear or incomplete business model and value proposition • Incomplete competitor analysis and marketing plan • Inadequate description of the uncertainties and risks • Gaps in capabilities required of the team • Inadequate description of revenue and profit drivers • Limited or no description of the metrics of the business • Lack of focus and a sound mission • Too many top-down assumptions such as ”we will get 1 present market share.” • Limited confirmation of customer demand or pain. Chapter 7: Table 7.3

34. Thank you