Business Plans
Simonyi Center
Purpose of Business Planning
Provide a roadmap for success of the
company
Force the entrepreneur to formalize their
vision and do the research to answer hard
questions about the company, its industry
and the competitive landscape
Set goals, strategies, policies and procedures
for the firm
A tool for raising capital
Business Plans Must Tell:
What Problem you are solving and how
serious it is.
Who has this Problem and Why it is
Important to them.
How Large is the Market and How Fast
is it Growing.
How Large your Company will be in 3 to
5 Years.
Business Plans Must, cont.
Who are You and Why are You Qualified
to Solve this Problem.
How much Money you need to Make
this Happen.
What are your Key Milestones.
How much the Investors will Make on
Their Investment in 3 to 5 Years.
What’s
What
What
What
What
What
What
What
What
What
messages . . . to reach
market(s) . . . with
pain . . . that need
product(s) . . . distributed through
channel(s) . . . against
competition . . . with
pricing and packaging . . . to deliver
value . . . in
time frame?
What is the Customer’s Pain?
Must Have or Nice to Have?
Who Are Your Customers?
What Are They Buying?
Why Are They Buying?
Who Are Your Competitors?
What is your Business Model?
Business Plan Components
Executive Summary
Customer Need and Business
Opportunity
Business Strategy and Key Milestones
Marketing Plan
Operations Plan
Management and Key Personnel
Financial Projections
Business Plan Details
Executive Summary
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The Purpose of the plan including how much
money is required, what it will be used for and
how much investors will make at exit
What is going to give you an unfair advantage!
Business opportunity, business model, market,
product/service description, technology and
management team
Summary of five-year income statement, profit,
head count and capital requirements
BP Details, continued
Customer Need and Business Opportunity
 Product/service idea and technology
description
 Strategic Value Triangle for end users and
customers
Business Strategy and Key Milestones
 Plan to out-maneuver the competition
 Show each milestone with the cumulative
cash needed and head count
BP Details, continued
Marketing Plan
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Basic need and company solution
Ideal customer and value proposition
Market segmentation and size of markets
Channels of Distribution
Strategic Partners
The Marketing Plan
Current Marketing Situation
Basic need and company solution
Ideal customer and value proposition
Objectives
Marketing Strategy
Market segmentation and size of markets
Channels of Distribution
Strategic Partners
Marketing Plan, cont.
Business model and branding plan
Sales strategy and plans
Customer support
Action programs
Five-year sales forecast
Competition, positioning and unfair
advantage
Controls
BP Details, cont.
Marketing Plan, cont.
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Business model and branding plan
Sales strategy and plans
Customer support
Five-year sales forecast
Competition, positioning and unfair
advantage
How Do Businesses Compete?
They Fill Needs That Are Not Being Met
They Find Customers and Suppliers
Who Are Weaker Than They Are
They Get More Out of Less
They Use Other People’s Money (OPM)
The Try to Stay Out of the Way of
Larger & Meaner Competitors (Nibble
at the Edges)
Who Are Your Competitors?
They Know All About You
What Type of People Are in Charge?
Why Do They Want Your Customers?
Do They Know Who Your Most
Profitable Customers Are?
Can You Win A Price War With Them?
Do They Have A Glass Jaw or Do They
Bite Ears?
Whose Market Share Will You Take?
BP Details, continued
Operations Plan
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Engineering plan
Web site plan
Manufacturing or outsourcing plan (Make/Buy)
Facilities and administration plan
Management and Key Personnel
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Organization Chart
Staffing plan (timing) and head count projections
BP Details, continued
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Detailed resumes of founders and key employees
Incentive compensation plan and stock option pool
Company culture plan
Financial Projections
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Overview and key assumptions
Five-year forecasts – Balance sheet, Income
statement and Cash Flow Stmt by month for one
year, by quarter for two years and annually for
remainder of years.
BP Details, continued
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Income Statement
Balance Sheet
Cash Flow Statement
Best, Worst and Expected Case Versions
Valuation Analysis
Exit Options
Return on Investment for each option
Appendix
The remaining slides are summary of
business plan requirements from local
venture capital firms.
Every Business Plan Must Answer
These Questions
PEOPLE
Who are the people involved?
 What have they done in the past that
suggests they will be successful in the
future?
 Who is missing from the team and
what will they do to get them to join?
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Key Questions, continued
OPPORTUNITY
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What is the nature of the opportunity?
How will the company make money?
How is the opportunity likely to evolve?
Can entry barriers be built and maintained?
CONTEXT
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Macro economy
Tax
Regulatory
Socio-political
Cultural
OPPORTUNITY
Is the Total Market for the product or
service large and/or rapidly growing?
Is the industry one that is now or can
become structurally attractive?
Who is the customer and how do they
make decisions?
Is this a compelling purchase for the
customer?
OPPORTUNITY, continued
How will the product or service be priced?
How will you reach the target customer?
How much does it cost to acquire a customer
in time and $?
How much does it cost to produce and deliver
the product or service?
How much does it cost to support a
customer?
How easy (expensive) is it to retain a
customer?
OPPORTUNITY, continued
Buy Low, Sell High, Collect Early & Pay Late
 When do you have to buy and pay for resources?
 How long does it take to acquire a customer?
 How long before the customer sends you a check?
 How much capital equipment is required to
support a dollar of sales?
 Accounts Receivable vs. Accounts Payable
COMPETITION
Who are the current competitors?
What resources do they control and what are
their strengths and weaknesses?
How will they respond to our decision to
enter the business and what can we do?
Who else might notice and enter our market?
Can we co-op competitors by forming
alliances?
New Product Development Process
Marketing
Strategy
Development
Concept
Development
and Testing
Idea
Screening
Idea
Generation
Business
Analysis
Product
Development
Market
Testing
Commercialization
Market Development Strategy Checklist
Target Customer
Compelling Reason To Buy
Whole Product
Partners and Allies
Distribution
Pricing
Competition
Positioning
Next Target Customer