UoM Commercial

Business Planning (v. brief)

Richard DayUoM Commercial

2012

2UoM Commercial

Key Messages you must convey

We have a compelling product which meets a need in the market

We understand the competition and the market

We can execute in the market window open to us

We can make you a LOT of money

3UoM Commercial

Typical Contents of a Business Plan

Exec Summary (including objectives)

Background

Problem (what is the market need?)

Solution (what is the product / service that will met this need?)

Value Proposition / Why this solution (IP, performance, etc)?

Market details including Competition

Pricing / Marketing / Sales / Distribution

Business Model (how money will be made from the solution)

Team (Management and Board)

Financials (projections), including use of funds/capital

Investment Proposition

Next Steps (including Timeframes

4UoM Commercial

Use a framework to help to write your plan....

5UoM Commercial

Framework : Benefit ModelThe External situation drives Internal focus

Problem/Need/Desire

Benefit

Feature

$Internal focus

External situation

A simple way to consider a business is to view is as an entity

that responds to (and seeks to exploit) situations in the

marketplace.

The external situation drives the internal focus of the business (its direction, structure and activities)

6UoM Commercial

Framework : Benefit ModelBenefits arise when a need is matched by a feature

Problem/Need/Desire

Benefit

Feature

$

Market

Consumers are willing to pay money for a valued ‘benefit’

A ‘benefit’ arises when a feature of a

product/service matches a need in the marketplace

Product (has features)

7UoM Commercial

Framework : Benefit Model Step 1: Answer questions prompted by the External Situation

Problem/Need

Internal focusBenefit

Features

External situation

What is the need in the marketplace?

Exactly what should we sell?

What are the benefits that arise for the customer?

What form do the benefits take?

Are these benefits sustainable?

Who are we selling to?

How should we price it?

How many can we sell?

How often can we sell?

How long is the sale cycle?

Is the market attractive?

What barriers will we face?

How do we position the product/service?

What marketing will we need?

How should we access the market?

When do we need to launch?

Market

Examine the external factors to answer questions such as…

8UoM Commercial

External Factors to consider…Nature & Extent of Demand

Who – Define the customer?

What – is the product or service?

Where – Wholesale/retail? Purchase decision made? In value chain?

When – Seasonal patterns, lead times?

Why – why purchase?

How – how purchase: tender? point-of-sale? cash? internet?

Market size and shares?

Customer Segments and needs?

Competitors?

Trends?

Gaps in Services?

Substitute products / services?

9UoM Commercial

Framework : Benefit ModelStep 2: Use the External Situation to drive the Internal Focus

Problem/Need

Internal focusBenefit

Features

$External situation

When will incur these all of costs (at what stage of the development cycle)?

When do we need money, and how much?

How much will it cost us to produce our product / deliver our service?

What pricing model should we use?

What distribution model should we use?

How much will it cost us to access the market?

How will we raise awareness of our product with our target market?

Given your understanding of the external situation, determine how the you will structure your business and design it’s functions/parameters so that it can meet the markets needs

What is our strategy?

What company structure do we need?

What resources do we need ?

How many staff do we need at what point?

How much will admin expenses be?

How much will product development be?

How much will marketing expenses be?

Product

10UoM Commercial

Random Thoughts

The Business Plan is only a representation of The Plan

You must be able to verbalise The Plan in 20-60 seconds

– What is your business selling?

– To whom?

– Why they will buy it?

– How the business will make money?

– What is the Exit Strategy?

Understand your audience’s drivers and decision criteria

State your assumptions – be able to defend them!

Investors back people, NOT ideas or plans

11UoM Commercial

Appendix – Summary of q’s to answer

What am I selling?

Who am I aiming to selling it to? How much will I charge? How many will I sell?

What is the nature of the market am I operating in? (the demand, existing competitors, trends)

Why will the market purchase my product / what is the opportunity?

How am I getting it to them? (Marketing & Distribution, Channels, Alliances)

What is my timeframe?

What resources to I need to do this?