1

2

Is Doing a Business Plan Worth the Time for a Startup?

3

Agenda

• Preparation

• Gathering information

• What to cover and how to organize

• Success factors

• Something extra

• Preparation

• Gathering information

• What to cover and how to organize

• Success factors

• Something extra

4

Preparing

5

Why Undertake Writing a Business Plan

• Provides a road map Provides a road map for where you are goingfor where you are going

• Provides a framework Provides a framework for making decisionsfor making decisions

• Develops and tests Develops and tests assumptions and assumptions and alternatives before alternatives before committing resourcescommitting resources

• Helps determine the number Helps determine the number and amount and amount of resources (both money of resources (both money and people) neededand people) needed

• Provides a road map Provides a road map for where you are goingfor where you are going

• Provides a framework Provides a framework for making decisionsfor making decisions

• Develops and tests Develops and tests assumptions and assumptions and alternatives before alternatives before committing resourcescommitting resources

• Helps determine the number Helps determine the number and amount and amount of resources (both money of resources (both money and people) neededand people) needed

• Challenges and refines Challenges and refines strategiesstrategies

• Clarifies company focus and Clarifies company focus and aligns resourcesaligns resources

• Sales tool for investors and Sales tool for investors and partnerspartners

• Gets buy in from the teamGets buy in from the team• Tool for getting feedbackTool for getting feedback• Builds in mechanism Builds in mechanism

for staying on track and for staying on track and evaluate successevaluate success

• Challenges and refines Challenges and refines strategiesstrategies

• Clarifies company focus and Clarifies company focus and aligns resourcesaligns resources

• Sales tool for investors and Sales tool for investors and partnerspartners

• Gets buy in from the teamGets buy in from the team• Tool for getting feedbackTool for getting feedback• Builds in mechanism Builds in mechanism

for staying on track and for staying on track and evaluate successevaluate success

6

How In Depth Does It Need to Be: That Depends

The longer the plan:The longer the plan:

• The more sophisticated the lenderThe more sophisticated the lender

• The more money you’re raisingThe more money you’re raising

• The bigger the company at the startThe bigger the company at the start

• The faster the growth trajectoryThe faster the growth trajectory

• The more spread out the staffThe more spread out the staff

• The more frequently the staff turns overThe more frequently the staff turns over

• The more outsiders and the more important their role The more outsiders and the more important their role (funders, vendors, partners, strategic alliances(funders, vendors, partners, strategic alliances)

The longer the plan:The longer the plan:

• The more sophisticated the lenderThe more sophisticated the lender

• The more money you’re raisingThe more money you’re raising

• The bigger the company at the startThe bigger the company at the start

• The faster the growth trajectoryThe faster the growth trajectory

• The more spread out the staffThe more spread out the staff

• The more frequently the staff turns overThe more frequently the staff turns over

• The more outsiders and the more important their role The more outsiders and the more important their role (funders, vendors, partners, strategic alliances(funders, vendors, partners, strategic alliances)

7

Time Span

3 years3 yearssometimes 5sometimes 5depending on needdepending on need

3 years3 yearssometimes 5sometimes 5depending on needdepending on need

8

Name/Title Responsibility Task Timing Comments

Jane Doe, President •Oversight •Overall task master

•Legal issues

•Management /staff plan

•Strategic Partnerships

Jim Johnson, VP

Product Development

•Information gathering •Marketplace analysis

•Product description

•Operations

Maria Garcia,

VP Marketing

•Marketing

•Note taking

•Market definition

•Positioning

•Marketing tactics

John Smith,

Accountant

•Financials •Budget, startup funds

separated

•P&L

•Balance Sheet

•Cash Flow

•Breakeven Analysis

•Assumption write up

Who Will Be Involved and How

9

Questions

10

Gathering Information

11

Why Research the Feasibility of Your Business

• Determine your idea’s potential Determine your idea’s potential

• Define customerDefine customer

• Size up the competitionSize up the competition

• Test product and positioningTest product and positioning

• Determine your idea’s potential Determine your idea’s potential

• Define customerDefine customer

• Size up the competitionSize up the competition

• Test product and positioningTest product and positioning

12

Where to Look for Information

• Internet search engines Internet search engines by competitors’ names by competitors’ names or key words or key words

• Trade associations and Trade associations and publications publications

• Business and general press Business and general press as well as press releases as well as press releases

• Government agenciesGovernment agencies• Corporate annual reports Corporate annual reports

• Internet search engines Internet search engines by competitors’ names by competitors’ names or key words or key words

• Trade associations and Trade associations and publications publications

• Business and general press Business and general press as well as press releases as well as press releases

• Government agenciesGovernment agencies• Corporate annual reports Corporate annual reports

• Investment firm researchInvestment firm research• Private research firms such as Private research firms such as

IDC, Forrester, JupiterIDC, Forrester, Jupiter• Online computer databases, Online computer databases,

Nexis, FactivaNexis, Factiva• Shop the competitionShop the competition• Conduct your own researchConduct your own research

• Investment firm researchInvestment firm research• Private research firms such as Private research firms such as

IDC, Forrester, JupiterIDC, Forrester, Jupiter• Online computer databases, Online computer databases,

Nexis, FactivaNexis, Factiva• Shop the competitionShop the competition• Conduct your own researchConduct your own research

13

What to Look for

• Market sizeMarket size

• Market needs and characteristicsMarket needs and characteristics

• Market segments and underserved nichesMarket segments and underserved niches

• Market trends Market trends

• CompetitionCompetition

• Data to help make budget assumptions/Data to help make budget assumptions/financial projectionsfinancial projections

• Market sizeMarket size

• Market needs and characteristicsMarket needs and characteristics

• Market segments and underserved nichesMarket segments and underserved niches

• Market trends Market trends

• CompetitionCompetition

• Data to help make budget assumptions/Data to help make budget assumptions/financial projectionsfinancial projections

IndustryIndustry Regulatory Regulatory

TechnologyTechnology PoliticalPolitical

SociologicalSociological EconomicEconomic

14

Compare Yourself to the Competition

• Been around Been around a long timea long time

• QualityQuality• ExclusivityExclusivity• PricingPricing• Extent Extent

of featuresof features• ServiceService• ReliabilityReliability• DeliveryDelivery• LocationLocation

• Been around Been around a long timea long time

• QualityQuality• ExclusivityExclusivity• PricingPricing• Extent Extent

of featuresof features• ServiceService• ReliabilityReliability• DeliveryDelivery• LocationLocation

• InformationInformation• AvailabilityAvailability• Credit cardCredit card• Credit lineCredit line• WarrantyWarranty• AccessoriesAccessories• PositioningPositioning• Amount and Amount and

location of location of advertisingadvertising

• InformationInformation• AvailabilityAvailability• Credit cardCredit card• Credit lineCredit line• WarrantyWarranty• AccessoriesAccessories• PositioningPositioning• Amount and Amount and

location of location of advertisingadvertising

15

Questions

16

Structure of the Business Plan

17

Business Plan Sections

• Executive summary (written Executive summary (written last)last)

• Company summary / Company summary / Description of businessDescription of business

• Contributions and Contributions and milestones*milestones*

• Market opportunityMarket opportunity

• Competition* Competition*

• Executive summary (written Executive summary (written last)last)

• Company summary / Company summary / Description of businessDescription of business

• Contributions and Contributions and milestones*milestones*

• Market opportunityMarket opportunity

• Competition* Competition*

• Marketing strategyMarketing strategy

• OperationsOperations

• Organizational planOrganizational plan

• Financial information Financial information

• Risk factorsRisk factors

• Marketing strategyMarketing strategy

• OperationsOperations

• Organizational planOrganizational plan

• Financial information Financial information

• Risk factorsRisk factors

18

Company/Business Description Section

• Description of product/service Description of product/service emphasizing uniquenessemphasizing uniqueness

• LocationLocation• Legal IssuesLegal Issues

– – Legal formLegal form– – OwnershipOwnership– – IPIP– – Loans, leases, obligationsLoans, leases, obligations– – Contracts, AgreementsContracts, Agreements

• Description of product/service Description of product/service emphasizing uniquenessemphasizing uniqueness

• LocationLocation• Legal IssuesLegal Issues

– – Legal formLegal form– – OwnershipOwnership– – IPIP– – Loans, leases, obligationsLoans, leases, obligations– – Contracts, AgreementsContracts, Agreements

• Mission and visionMission and vision• Business Model: Business Model: describes describes

what you are selling, how what you are selling, how you will make money and you will make money and why you will be successfulwhy you will be successful

• Development stageDevelopment stage• Financial statusFinancial status• Contributions & milestonesContributions & milestones

• Mission and visionMission and vision• Business Model: Business Model: describes describes

what you are selling, how what you are selling, how you will make money and you will make money and why you will be successfulwhy you will be successful

• Development stageDevelopment stage• Financial statusFinancial status• Contributions & milestonesContributions & milestones

19

Vision/Mission

Together they provide direction and focus Together they provide direction and focus on where your heading long term and on where your heading long term and where you need to be today.where you need to be today. If you get If you get into a bind, check your vision and mission into a bind, check your vision and mission for direction. for direction.

Together they provide direction and focus Together they provide direction and focus on where your heading long term and on where your heading long term and where you need to be today.where you need to be today. If you get If you get into a bind, check your vision and mission into a bind, check your vision and mission for direction. for direction.

20

Vision

• The dreamThe dream• This is about what could be This is about what could be • It’s squishy, subjectiveIt’s squishy, subjective• It’s your rallying cryIt’s your rallying cry• Use powerful, simple yet memorable Use powerful, simple yet memorable

phrases that capture the essence of phrases that capture the essence of your visionyour vision

• The dreamThe dream• This is about what could be This is about what could be • It’s squishy, subjectiveIt’s squishy, subjective• It’s your rallying cryIt’s your rallying cry• Use powerful, simple yet memorable Use powerful, simple yet memorable

phrases that capture the essence of phrases that capture the essence of your visionyour vision

21

Examples of Great Vision Statements

• John Kennedy: John Kennedy: land a man on the moon and safely return him land a man on the moon and safely return him to earth by the end of this decadeto earth by the end of this decade

• Coca Cola: Coca Cola: benefits and refreshes everyone it touchesbenefits and refreshes everyone it touches• Avon:Avon: to be the company that best understands and satisfies the to be the company that best understands and satisfies the

product, service and self-fulfillment needs of women – globally.product, service and self-fulfillment needs of women – globally.• Microsoft:Microsoft: a personal computer in every desk top running Microsoft a personal computer in every desk top running Microsoft

softwaresoftware• Dell: Dell: listens to customers and delivers innovative technology listens to customers and delivers innovative technology

and services they trust and valueand services they trust and value• Amazon: Amazon: to be earth's most customer centric company; to build to be earth's most customer centric company; to build

a place where people can come to find and discover anything a place where people can come to find and discover anything they might want to buy online they might want to buy online

• Google: Google: we provide access to the worlds’ information in one clickwe provide access to the worlds’ information in one click

• John Kennedy: John Kennedy: land a man on the moon and safely return him land a man on the moon and safely return him to earth by the end of this decadeto earth by the end of this decade

• Coca Cola: Coca Cola: benefits and refreshes everyone it touchesbenefits and refreshes everyone it touches• Avon:Avon: to be the company that best understands and satisfies the to be the company that best understands and satisfies the

product, service and self-fulfillment needs of women – globally.product, service and self-fulfillment needs of women – globally.• Microsoft:Microsoft: a personal computer in every desk top running Microsoft a personal computer in every desk top running Microsoft

softwaresoftware• Dell: Dell: listens to customers and delivers innovative technology listens to customers and delivers innovative technology

and services they trust and valueand services they trust and value• Amazon: Amazon: to be earth's most customer centric company; to build to be earth's most customer centric company; to build

a place where people can come to find and discover anything a place where people can come to find and discover anything they might want to buy online they might want to buy online

• Google: Google: we provide access to the worlds’ information in one clickwe provide access to the worlds’ information in one click

22

Mission

AnswersAnswersAnswersAnswers

23

Example of Great Mission Statements

• American Red Cross: American Red Cross: to improve the quality of human life; to enhance to improve the quality of human life; to enhance self-reliance and concern for others; and to help people avoid, prepare self-reliance and concern for others; and to help people avoid, prepare for, and cope with emergenciesfor, and cope with emergencies

• Avis: Avis: We will ensure a stress-free car rental experience by providing We will ensure a stress-free car rental experience by providing superior services that cater to our customers’ individual needs…superior services that cater to our customers’ individual needs…always conveying the ‘We Try Harderalways conveying the ‘We Try Harder®®’ spirit with knowledge, caring ’ spirit with knowledge, caring and a passion for excellenceand a passion for excellence

• Long John Silver: Long John Silver: to be America’s best quick service restaurant chain. to be America’s best quick service restaurant chain. We will provide each guest great tasting, healthful, reasonably priced We will provide each guest great tasting, healthful, reasonably priced fish, seafood, and chicken in a fast, friendly manner on every visit.fish, seafood, and chicken in a fast, friendly manner on every visit.

• Blockbuster: Blockbuster: mission to become the complete source for movies mission to become the complete source for movies and games – rental and retail and games – rental and retail

• Patagonia: Patagonia: Build the best product, cause no unnecessary harm, use Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental business to inspire and implement solutions to the environmental crisiscrisis

• American Red Cross: American Red Cross: to improve the quality of human life; to enhance to improve the quality of human life; to enhance self-reliance and concern for others; and to help people avoid, prepare self-reliance and concern for others; and to help people avoid, prepare for, and cope with emergenciesfor, and cope with emergencies

• Avis: Avis: We will ensure a stress-free car rental experience by providing We will ensure a stress-free car rental experience by providing superior services that cater to our customers’ individual needs…superior services that cater to our customers’ individual needs…always conveying the ‘We Try Harderalways conveying the ‘We Try Harder®®’ spirit with knowledge, caring ’ spirit with knowledge, caring and a passion for excellenceand a passion for excellence

• Long John Silver: Long John Silver: to be America’s best quick service restaurant chain. to be America’s best quick service restaurant chain. We will provide each guest great tasting, healthful, reasonably priced We will provide each guest great tasting, healthful, reasonably priced fish, seafood, and chicken in a fast, friendly manner on every visit.fish, seafood, and chicken in a fast, friendly manner on every visit.

• Blockbuster: Blockbuster: mission to become the complete source for movies mission to become the complete source for movies and games – rental and retail and games – rental and retail

• Patagonia: Patagonia: Build the best product, cause no unnecessary harm, use Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental business to inspire and implement solutions to the environmental crisiscrisis

24

Developing Your Mission and Vision

• Create an overall picture Create an overall picture of your company.of your company.

• Describe the purpose Describe the purpose of the company.of the company.

• Who are your company’s Who are your company’s customers and how do customers and how do you segment the market?you segment the market?

• What differentiates your What differentiates your company from its company from its competitors?competitors?

• Create an overall picture Create an overall picture of your company.of your company.

• Describe the purpose Describe the purpose of the company.of the company.

• Who are your company’s Who are your company’s customers and how do customers and how do you segment the market?you segment the market?

• What differentiates your What differentiates your company from its company from its competitors?competitors?

• What’s the legacy you want to What’s the legacy you want to create?create?

• What are the strengths What are the strengths and opportunities revealed in and opportunities revealed in the SWOT analysis the SWOT analysis to be conveyed?to be conveyed?

• What are the subjective words What are the subjective words and terms that describe your and terms that describe your company?company?

• What’s the legacy you want to What’s the legacy you want to create?create?

• What are the strengths What are the strengths and opportunities revealed in and opportunities revealed in the SWOT analysis the SWOT analysis to be conveyed?to be conveyed?

• What are the subjective words What are the subjective words and terms that describe your and terms that describe your company?company?

25

Marketplace Analysis

Demonstrates both need and demand and shows Demonstrates both need and demand and shows your understanding of the market’s demographics your understanding of the market’s demographics and factors that will influence customers to buyand factors that will influence customers to buy•External environmentExternal environment

• Market description: size, Market description: size, growth and demandgrowth and demand

• Customers: segments, Customers: segments, purchasing purchasing power and buyingpower and buying

IndustryIndustry RegulatoryRegulatory TechnologyTechnology PoliticalPolitical SociologicalSociological EconomicEconomic

26

Marketplace Analysis

Competition: Competition: • Who else offers your product/service? Where? Who else offers your product/service? Where? • Who buys from your competitors? Who buys from your competitors?

What are their plans for growth?What are their plans for growth?• How important are your target customers to the competition? How important are your target customers to the competition?

What share of market do you have vs. What share of market do you have vs. the competition per customer segment?the competition per customer segment?

• Compare strengths and weaknesses to you:Compare strengths and weaknesses to you: Product performanceProduct performance production/service deliveryproduction/service delivery Experienced personnelExperienced personnel LocationLocation Brand awarenessBrand awareness Etc.Etc.

Competition: Competition: • Who else offers your product/service? Where? Who else offers your product/service? Where? • Who buys from your competitors? Who buys from your competitors?

What are their plans for growth?What are their plans for growth?• How important are your target customers to the competition? How important are your target customers to the competition?

What share of market do you have vs. What share of market do you have vs. the competition per customer segment?the competition per customer segment?

• Compare strengths and weaknesses to you:Compare strengths and weaknesses to you: Product performanceProduct performance production/service deliveryproduction/service delivery Experienced personnelExperienced personnel LocationLocation Brand awarenessBrand awareness Etc.Etc.

27

Marketing Strategy

• Define MarketDefine Market

• Product descriptionProduct description

• Marketing objectiveMarketing objective

• Positioning: What’s your value proposition?Positioning: What’s your value proposition?

• PricingPricing

• Distribution channelsDistribution channels

• Communications tactics: direct mail, Communications tactics: direct mail, advertising, promotion, trade shows, advertising, promotion, trade shows, word-of-mouth, etc.word-of-mouth, etc.

• Public relationsPublic relations

• Strategic alliances that help Strategic alliances that help penetrate the market faster penetrate the market faster

• Define MarketDefine Market

• Product descriptionProduct description

• Marketing objectiveMarketing objective

• Positioning: What’s your value proposition?Positioning: What’s your value proposition?

• PricingPricing

• Distribution channelsDistribution channels

• Communications tactics: direct mail, Communications tactics: direct mail, advertising, promotion, trade shows, advertising, promotion, trade shows, word-of-mouth, etc.word-of-mouth, etc.

• Public relationsPublic relations

• Strategic alliances that help Strategic alliances that help penetrate the market faster penetrate the market faster

DemographicDemographic PsychographicPsychographic GeographyGeography Purchasing habitsPurchasing habits Life / business styleLife / business style Buying sensitivesBuying sensitives

28

Operations

What are the key factors involved in creating your What are the key factors involved in creating your product/service? How does the business work (production product/service? How does the business work (production process, supply chain, facility, equipment, management process, supply chain, facility, equipment, management information systems)? Differs by type of business:information systems)? Differs by type of business:

What are the key factors involved in creating your What are the key factors involved in creating your product/service? How does the business work (production product/service? How does the business work (production process, supply chain, facility, equipment, management process, supply chain, facility, equipment, management information systems)? Differs by type of business:information systems)? Differs by type of business:

Manufacturing:Manufacturing: How do you turn How do you turn raw materials raw materials into finished into finished products? products? Capacity Capacity challenges? challenges? Quality control?Quality control?

Manufacturing:Manufacturing: How do you turn How do you turn raw materials raw materials into finished into finished products? products? Capacity Capacity challenges? challenges? Quality control?Quality control?

Retail:Retail: What are your hours What are your hours of operation, of operation, systems, customer systems, customer service practices and service practices and store layout?store layout?

Retail:Retail: What are your hours What are your hours of operation, of operation, systems, customer systems, customer service practices and service practices and store layout?store layout?

Service:Service: Describe type Describe type of people and of people and processes involved in processes involved in delivering the service. delivering the service. How will you control How will you control for quality? How for quality? How will you handle will you handle capacity issues?capacity issues?

Service:Service: Describe type Describe type of people and of people and processes involved in processes involved in delivering the service. delivering the service. How will you control How will you control for quality? How for quality? How will you handle will you handle capacity issues?capacity issues?

29

Organization Plan

The strength of the management team is absolutely critical The strength of the management team is absolutely critical to the success and to the ability to raise investment capital to the success and to the ability to raise investment capital and form strategic partnerships. and form strategic partnerships.

• Highlight management’s Highlight management’s experience, industry knowledge experience, industry knowledge and functional skillsand functional skills

• Include an organizational Include an organizational structurestructure

• Board of directorsBoard of directors• Advisory boardAdvisory board• Key consultantsKey consultants

The strength of the management team is absolutely critical The strength of the management team is absolutely critical to the success and to the ability to raise investment capital to the success and to the ability to raise investment capital and form strategic partnerships. and form strategic partnerships.

• Highlight management’s Highlight management’s experience, industry knowledge experience, industry knowledge and functional skillsand functional skills

• Include an organizational Include an organizational structurestructure

• Board of directorsBoard of directors• Advisory boardAdvisory board• Key consultantsKey consultants

30

Values and Social Responsibility

– – EmployeesEmployees– – SuppliersSuppliers– – CustomersCustomers– – CommunityCommunity– – Environment Environment

– – EmployeesEmployees– – SuppliersSuppliers– – CustomersCustomers– – CommunityCommunity– – Environment Environment

– – Obey the lawObey the law– – Act ethicallyAct ethically– – Honesty and fairness Honesty and fairness in dealings in dealings– – Double or triple bottom lineDouble or triple bottom line

– – Obey the lawObey the law– – Act ethicallyAct ethically– – Honesty and fairness Honesty and fairness in dealings in dealings– – Double or triple bottom lineDouble or triple bottom line

Values Social Responsibility

31

Exit Strategy

• Go public Go public • Acquisition/mergerAcquisition/merger• SaleSale• Buy-outBuy-out• FranchiseFranchise• Hand downHand down• CloseClose

• Go public Go public • Acquisition/mergerAcquisition/merger• SaleSale• Buy-outBuy-out• FranchiseFranchise• Hand downHand down• CloseClose

32

Financials

• Income statementIncome statement• Cash flow statementCash flow statement• Balance sheet Balance sheet • OtherOther

Source and use of fundingSource and use of funding Startup costsStartup costs Breakeven analysisBreakeven analysis AssumptionsAssumptions

• Income statementIncome statement• Cash flow statementCash flow statement• Balance sheet Balance sheet • OtherOther

Source and use of fundingSource and use of funding Startup costsStartup costs Breakeven analysisBreakeven analysis AssumptionsAssumptions

33

Financials

• Develop realistic assumptionsDevelop realistic assumptions– Forecast revenues based on industry standards Forecast revenues based on industry standards

for price, sales volume and growth ratefor price, sales volume and growth rate

– Cost of goods: source vendors and suppliers Cost of goods: source vendors and suppliers for their feesfor their fees

– Operations: project staffing needs with salaries and start Operations: project staffing needs with salaries and start dates, fixed costs and marketing dollarsdates, fixed costs and marketing dollars

• Include your assumptionsInclude your assumptions• Project realistic numbersProject realistic numbers• Provide monthly data for 1Provide monthly data for 1stst year, annual year, annual

for 2for 2ndnd and 3 and 3rdrd year year• Consider 2 or 3 scenarios: best, worst, likelyConsider 2 or 3 scenarios: best, worst, likely• Include what’s important summarize the restInclude what’s important summarize the rest

• Develop realistic assumptionsDevelop realistic assumptions– Forecast revenues based on industry standards Forecast revenues based on industry standards

for price, sales volume and growth ratefor price, sales volume and growth rate

– Cost of goods: source vendors and suppliers Cost of goods: source vendors and suppliers for their feesfor their fees

– Operations: project staffing needs with salaries and start Operations: project staffing needs with salaries and start dates, fixed costs and marketing dollarsdates, fixed costs and marketing dollars

• Include your assumptionsInclude your assumptions• Project realistic numbersProject realistic numbers• Provide monthly data for 1Provide monthly data for 1stst year, annual year, annual

for 2for 2ndnd and 3 and 3rdrd year year• Consider 2 or 3 scenarios: best, worst, likelyConsider 2 or 3 scenarios: best, worst, likely• Include what’s important summarize the restInclude what’s important summarize the rest

34

Risk & Contingency

• Identify risk factors and Identify risk factors and a plan for mitigating them. a plan for mitigating them. – MarketMarket

– CompetitionCompetition

– TechnologyTechnology

– ProductionProduction

– ExecutionExecution

– CapitalizationCapitalization

– EconomicEconomic

• Identify risk factors and Identify risk factors and a plan for mitigating them. a plan for mitigating them. – MarketMarket

– CompetitionCompetition

– TechnologyTechnology

– ProductionProduction

– ExecutionExecution

– CapitalizationCapitalization

– EconomicEconomic

35

Appendix

• Letters of intent/key contractsLetters of intent/key contracts• EndorsementsEndorsements• PhotosPhotos• Location listLocation list• Market research resultsMarket research results• Managers resumesManagers resumes• Technical/operational informationTechnical/operational information• Marketing materialMarketing material

• Letters of intent/key contractsLetters of intent/key contracts• EndorsementsEndorsements• PhotosPhotos• Location listLocation list• Market research resultsMarket research results• Managers resumesManagers resumes• Technical/operational informationTechnical/operational information• Marketing materialMarketing material

36

Executive Summary

• Solve a problemSolve a problem

• • Turn the problem into an opportunityTurn the problem into an opportunity

• • Define the market and its potentialDefine the market and its potential

• • Analyze the competition and Analyze the competition and state your advantagestate your advantage

• • Describe the company’s productsDescribe the company’s products

• • Strategize on the best way Strategize on the best way to market your productto market your product

• • Portray solid management expertisePortray solid management expertise

• • Summarize financials and spell out Summarize financials and spell out how much you need and for what how much you need and for what

• Solve a problemSolve a problem

• • Turn the problem into an opportunityTurn the problem into an opportunity

• • Define the market and its potentialDefine the market and its potential

• • Analyze the competition and Analyze the competition and state your advantagestate your advantage

• • Describe the company’s productsDescribe the company’s products

• • Strategize on the best way Strategize on the best way to market your productto market your product

• • Portray solid management expertisePortray solid management expertise

• • Summarize financials and spell out Summarize financials and spell out how much you need and for what how much you need and for what

37

Questions

38

Success Factors

39

Questions to Ask Yourself

• Does your idea solve a significant Does your idea solve a significant problem, meets a significant problem, meets a significant unmet needunmet need

• Offers a profit potential (reward) Offers a profit potential (reward) that it outweighs the riskthat it outweighs the risk

• Good fit for your expertiseGood fit for your expertise• Opportunity for profits will exist Opportunity for profits will exist

for a reasonable length of time – for a reasonable length of time – forget fadsforget fads

• People will want to finance ideaPeople will want to finance idea

• Does your idea solve a significant Does your idea solve a significant problem, meets a significant problem, meets a significant unmet needunmet need

• Offers a profit potential (reward) Offers a profit potential (reward) that it outweighs the riskthat it outweighs the risk

• Good fit for your expertiseGood fit for your expertise• Opportunity for profits will exist Opportunity for profits will exist

for a reasonable length of time – for a reasonable length of time – forget fadsforget fads

• People will want to finance ideaPeople will want to finance idea

40

Questions Others Will Ask

Is the idea solid?Is the idea solid?

Is the market large enough?Is the market large enough?

Do they understand the market?Do they understand the market?

Is the industry healthy?Is the industry healthy?

Are the financial projections realistic and positive?Are the financial projections realistic and positive?

Is management experienced and capable?Is management experienced and capable?

Are they strategic and flexible? Are they strategic and flexible?

Do they have good control of their finances?Do they have good control of their finances?

Are they passionate and motivated?Are they passionate and motivated?Does the team have values and integrity?Does the team have values and integrity?

How will I get my money back?How will I get my money back?

41

Dotting the “i” and Crossing the “t”

• Clear and compellingClear and compelling• Accurate dataAccurate data• Credible sourcesCredible sources• Jargon-freeJargon-free• Clear typeface 11 or 12 Clear typeface 11 or 12

point typepoint type• Include graphics Include graphics

and chartsand charts• Use color for emphasisUse color for emphasis• Correct typos Correct typos

and grammatical and grammatical mistakesmistakes

• Clear and compellingClear and compelling• Accurate dataAccurate data• Credible sourcesCredible sources• Jargon-freeJargon-free• Clear typeface 11 or 12 Clear typeface 11 or 12

point typepoint type• Include graphics Include graphics

and chartsand charts• Use color for emphasisUse color for emphasis• Correct typos Correct typos

and grammatical and grammatical mistakesmistakes

42

Questions

43

Something Extra

44

Nondisclosure Agreement (NDA)

• Increases chance of information Increases chance of information remaining confidentialremaining confidential

• Prohibits recipient from disclosing Prohibits recipient from disclosing information in your Business Planinformation in your Business Plan

• Nothing guarantees confidentialityNothing guarantees confidentiality

• Venture capitalists and Venture capitalists and professional investors professional investors will NOT sign NDAswill NOT sign NDAs

• Increases chance of information Increases chance of information remaining confidentialremaining confidential

• Prohibits recipient from disclosing Prohibits recipient from disclosing information in your Business Planinformation in your Business Plan

• Nothing guarantees confidentialityNothing guarantees confidentiality

• Venture capitalists and Venture capitalists and professional investors professional investors will NOT sign NDAswill NOT sign NDAs

45

5 Ways to Name

• Take the names of Take the names of people, animals, places or symbols: people, animals, places or symbols: Johnson & Johnson, Procter & Gamble, Scientific Atlanta, Ford, Heinz, Johnson & Johnson, Procter & Gamble, Scientific Atlanta, Ford, Heinz, Alamo, Eli Lilly, Disneyland, Stengel SolutionsAlamo, Eli Lilly, Disneyland, Stengel Solutions

• Literally Literally describe the business, product or service:describe the business, product or service:American Airlines, General Motors, Metropolitan Life, General Electric, American Airlines, General Motors, Metropolitan Life, General Electric, Universal StudiosUniversal Studios

• Use contractions, acronyms and initials: Use contractions, acronyms and initials: IBM, FedEx, Nabisco, ESPNIBM, FedEx, Nabisco, ESPN

• Make up a Make up a nonsense name, or pick an unrelated or coined name, nonsense name, or pick an unrelated or coined name, or or use a use a foreign phrase that sounds good:foreign phrase that sounds good:Google, Yahoo, Zocor, Exxon, Dos Equis, TiVo, XeroxGoogle, Yahoo, Zocor, Exxon, Dos Equis, TiVo, Xerox

• *Come up with a *Come up with a benefit-related name: benefit-related name: Spic and Span (household cleaner), Edge (shaving lather), Spic and Span (household cleaner), Edge (shaving lather), Head & Shoulders (shampoo), Nice ’n Easy (hair coloring), Head & Shoulders (shampoo), Nice ’n Easy (hair coloring), I Can’t Believe It’s Not Butter! (margarine)I Can’t Believe It’s Not Butter! (margarine)

• Take the names of Take the names of people, animals, places or symbols: people, animals, places or symbols: Johnson & Johnson, Procter & Gamble, Scientific Atlanta, Ford, Heinz, Johnson & Johnson, Procter & Gamble, Scientific Atlanta, Ford, Heinz, Alamo, Eli Lilly, Disneyland, Stengel SolutionsAlamo, Eli Lilly, Disneyland, Stengel Solutions

• Literally Literally describe the business, product or service:describe the business, product or service:American Airlines, General Motors, Metropolitan Life, General Electric, American Airlines, General Motors, Metropolitan Life, General Electric, Universal StudiosUniversal Studios

• Use contractions, acronyms and initials: Use contractions, acronyms and initials: IBM, FedEx, Nabisco, ESPNIBM, FedEx, Nabisco, ESPN

• Make up a Make up a nonsense name, or pick an unrelated or coined name, nonsense name, or pick an unrelated or coined name, or or use a use a foreign phrase that sounds good:foreign phrase that sounds good:Google, Yahoo, Zocor, Exxon, Dos Equis, TiVo, XeroxGoogle, Yahoo, Zocor, Exxon, Dos Equis, TiVo, Xerox

• *Come up with a *Come up with a benefit-related name: benefit-related name: Spic and Span (household cleaner), Edge (shaving lather), Spic and Span (household cleaner), Edge (shaving lather), Head & Shoulders (shampoo), Nice ’n Easy (hair coloring), Head & Shoulders (shampoo), Nice ’n Easy (hair coloring), I Can’t Believe It’s Not Butter! (margarine)I Can’t Believe It’s Not Butter! (margarine)

46

Identify Your Reasons For Starting a Business

• This is personal journey

• There are no right or wrong answers

47

Determine the Additional Support You’ll Need

• Take classes• Join industry groups• Join networking groups• Network• Join peer-to-peer

mastermind or CEO Roundtables

• Read books and magazines on entrepreneurs and entrepreneurial techniques

• Find a mentor or advisor• Use a coach

48

Set Your Own Direction

49

Suggested Reading

• Harvard Business Essentials Entrepreneur’s Toolkit: Tools and Techniques to Launch and Grow Your New Business

• Values-driven Business: How to Change the World, Make Money and Have Fun by Ben Cohen and Mal Warwick• stengelsolutons.com

– Ten Tips for Developing a Meaningful Market Analysis– Ten Tips to Getting Valuable Feedback Online

• Stengel Solutions Handouts (to be emailed)– Hungry for Feedback That Will Really Grow Your Company? Create the Perfect Survey– Redefine (Define) the Company Vision/Mission– Sample business plan

• Entrepreneur.com– How to Research Your Business Idea

http://www.entrepreneur.com/startingabusiness/businessideas/evaluatingyouridea/article70518.html– How to Name Your Business

http://www.entrepreneur.com/startingabusiness/startupbasics/namingyourbusiness/article21774.html– Full Dream Ahead http://www.entrepreneur.com/magazine/entrepreneursstartupsmagazine/2004/february/

68924.html• MyOwnBusiness.com

http://www.myownbusiness.org/s2/index.html• Business Week

http://allbusiness.businessweek.com/business-planning-structures/business-plans/437-1.html

50

Questions