Presented by the
UH Pacific Business Center
(PBCP)
David M. Gillespie
PBCP is a partner with the Shidler in providing economic technical assistance throughout the Pacific Region. The PBCP also operates the Honolulu Minority Business Enterprise
Center. We have extensive experience and expertise in business plan development.
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Document/Submission Requirements

Prefer PDF format
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Less than 1mb single file
 Single Spaced (min.), 12 Point Font
(min.), 1” Margins all around (min.) &
8.5” X 11” paper size
Emailed as attachment to: pace@hawaii.edu
by 5pm on 4/4/08, AND
Five hardcopies to PACE office
 If Mailed - postmarked by 4/4/08
 If Hand Delivered – At PACE by 5pm on
4/4/08
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Document Specification Requirements

1 page

2 pages

pages
Maximum
Maximum 10
 Attachments or Appendices
Maximum 10 pages, open format
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1) Overall Appeal -10%
2) Attractiveness of Market Opportunity-15%
3)
4)
5)
6)
7)
Value Created by the Product/Service-15%
Competitive Advantage of Venture-15%
Operational & Technological Viability-
15%
Management Team Capability-15%
Capital Requirements & Financial Forecast
-15%
4

Suggested Organization
1. Cover Sheet
2. Exec. Summary -
Overall
Appeal (10%)
3. Overview of the Firm
4.
Market Analysis –
Market
Opportunity (15%)
5. Products/Services
Offered –
Value
Created (15%)
6.
Marketing Plan/Strategy
– Competitive Advantage (15%)
7. Operations Plan –
Operational & Technical
Viability (15%)
8. Management Team –
Team
Capability (15%)
9. Financial Plan –
Capital
Requirements & Projections
(15%)
10. Appendices &
Attachments
5

Data Requirements:
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Team Name
Business Name
Names of All Team Members
Other:
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Logo Development
Balanced Sheet with Lots of White
Use of Color
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Judging Criteria 1 - Overall Appeal of the Plan
(10%): Compelling “vision”; enthusiasm; greater than the sum of its parts.
The business plan judge will probably obtain most of his/her ‘appeal’ in reading your Executive Summary.
Write the Final Executive Summary Last

Things will change as you write the plan
 The Executive Summary you already turned in can be adjusted/changed.
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‘Elevator Pitch’ – The reader must ‘get it’ in the
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Executive Summary.
Who – Manoa Tansgenics, Inc., a start up life science company
What – Provide genetically modified mice, a novel gene insertional methodology and gene therapy research development.
How – Use a proprietary gene insertion technology invented by the two business founders
Why – Transgenic mice market at $180 million; once technology validated potential for gene therapy market projected at $5.7 billion in 2011
How Much & Return – Need $2.5 million for research; offer 15% equity in the firm. Once reach
20% market penetration, firm sold/merged/IPO.
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Other Key Items to Address:
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Mission and Objectives
Product, Process, or New Business
Model
The ‘Pain’ the Above will relieve
Target Market – Customers, Value
Added, Competitors, Competitive
Advantage
Business Model – Who pays, how much, and how often. Model margins
The Executive Summary MUST stand on its own; don’t copy sections word for word from the business plan narrative—a common mistake.
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Include/Expand By the Level of
Importance to Your Business Plan

Technology & Intellectual Property
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Management Team
Milestones/Goals
Revenue/Cash Projection
Funding Needs & Use of Proceeds
Investor Potential Return & How and
When Returned
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– A way

 of introducing the firm
Value, Vision & Mission
History
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
Distinctive Competence
Technology
Competitive Advantage
Strategy and Objectives of Firm
Major Milestones Achieved to Date
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Judging Criteria 2 - Attractiveness of
Market Opportunity (15%)
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12

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Market Profile
- Show you know the market you are entering
 Demographic/Geographic/Psychographic or
Business Profile
 Maturity of Industry
–
Which Phase: Start-Up,
Growth, Maturity, Decline
 Size of Market – Units and Dollars
 Growth Potential – Tie it to research and in units and dollars over time
Market ‘Pain’
 Needs – What is the ‘pain’ of this market
 Set it up so that your product relieves ‘pain’
13

 Market/Industry ‘Business Model’
 What is the current set-up (business model) for businesses in this market.
 What is the margin and net profit profile of this market/industry – financial research
 Is there a niche unsatisfied, or a better business model— set it up so your product/service, and, or business model is the answer.
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 Competition
– Who else provides the service or product and what else do they provide their customers
 Competitive Position of Leaders

Market Share Distribution - % of the market pie by leader, market share growth
 Barriers to Entry – How difficult is it to enter the market you’re interested in.
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Judging Criteria 3 Value Created by the
Product/Service (15%)
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
How will you relieve the ‘pain’- what is the unique value of product/service
Importance of Product/Service to
Customer
Product/Service Description or
Prototype

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Features and Benefits of
Product/Service
Market Reaction to Product/Service
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 Product/Service Description – Clear, concise and complete. Detail in
Appendix
 Product Benefits & Features – The things that will relieve the ‘pain’ you identified in Market Analysis.
 Product/Service Customer Reaction –
Sampling, interviews, testimonials
 Product SWOT – If appropriate
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 Cleary Describe Product Need
 Need may not be fully recognized by the market at this time
 Describe how you see the ‘need’ developing
 Product Development Plan
 Current level of product development
 Phasing plan of product development
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Judging Criteria 4 - Competitive Advantage of the
Venture (15%)

How Will the Product Gain Market
Share Against Competitors

Market Share and Growth Profile
Potential
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How Long to Get Product/Service to
Market
What Business Model/Distribution
Method Will Position the Firm Best
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Business Model Proposed
 Be as specific as possible. Clear, concise explanation (B2B, B2C, etc.)
Product Market Development Plan
 Phases of development: drawing, prototype, pilot manufacturing
Overcoming Competition – How?
 Pricing, Business Model, Quality,
Market Tactics
20

 Focused Target Market(s) Profile
 Size and Trends of Markets
 Demographic, Geographic,
Psychographic or Business Profile
 Buying Sensitivity
 Vulnerability to Economic Factors
 Purchasing Patterns
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Pricing Strategy –
Image Awareness, Cost
Recovery
 How will you fit within the market? - Above
Market, Match Competition, Below Market ?
Promotional Strategy

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Media – Web-based, Print, TV: what does the competition do?
Message – What will be your key message; Is it focused on your core business?
Promotional Budget – Sales growth requires a matching promotional budget.
22

– How will sales be developed and processed
 Sales Generation in the Business
Model
 Sales Force Management
 Order Processing
 Compensation Plan
23



First Year – by quarter; then yearly

By Product/Service Line

By Units and Dollars
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Service and Support Capability

Strategic Alliances
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Judging Criteria 5 - Operational &
Technological Viability (15%)

Product/Service Production

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
Product/Service Distribution
Production obstacles and how you will overcome them
Any essential technology property and how will it be protected
Develop a plan timeframe
25

Plan – Where produced or developed – materials required & sources, outsourcing

Technical requirements of producing the product/service and how met.
 Patent protection or other means of protection
– How will you get your product/service to the customer

Retail, Wholesale, Distributor, Internet,
Licensing, Franchising – tie into the business model
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Manufacturing Requirements – by order of importance to the plan
 Facilities – plan for growth
 Equipment
 Outsourcing
 Third-Party Agreements
 Contracts
 Licensing
27

Make/Break Activities
 Schedule of key activities to be accomplished – GANTT Chart
 Specific/Crucial Objectives:
 Timeframe
 Responsibility of who?
 Results expected
28

Judging Criteria 6 -Management Team Capability
(15%)

Venture management/expertise needs

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Education, experience, skills of team
Acknowledge skill gaps and show how you will overcome them – hire, contract, etc.
Role of each team member in the development of the venture – dual roles
29

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30

Show that Your Organization is Set to Meet the
Growth You Planned For
 Principal Players – Do you have the right people in the right places? Will the firm’s expertise requirements change as the firm grows?
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Consultants and Specialist – Are industry changes severe enough to bring on experts?
Organizational Structure – What is your organizational structure and will it be appropriate for your firm’s growth?
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Judging Criteria 7 - Capital Requirements &
Financial Forecast (15%)

Capital

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Needs – Capital asset purchases, start-up expenses, working capital
Sources – Venture Capitalist, lenders, FFF?
Phasing – Start-up, 1 st , 2 nd , other rounds
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Entity Ownership structure
Investment Exit Strategy
Project Evaluators – ROI, NPV, IRR
Cash Flow - when turn positive
32

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 P & L Summary
 Cash Flow Summary

When does firm turn to positive cash flow

Dividends,
Capital Returns, NPV, IRR
33

 Seed – Develop proto-type
 Early Stage – Launch product
 Growth Stage – Expand marketing
 Mezzanine – Add resources, acquire other firms
Develop a structure/mix of funding
34

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Income Projections – Revenues,
COGS and major expense categories. $ and %.
Cash Flow Forecasts –Too little cash
(common problem) for working capital.
Cash Flow Break-Even Analysis –
Do you need to generate more or less sales to cover operating costs than what you originally planned for?
35

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Income Statement Format
Major Revenue Categories – Ascending
Order
 By product/service type

Show Key % - Gross & Operating Margins
Major Expense Categories – Ascending
Order
 COGS, Personnel, Rent
Level of Detail
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By Quarter for the first 12 months
By Year after first 12 months
Three years minimum, five years maximum
36

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Revenues, Direct Materials and Labor,
General & Admin. Expenses
Asset
Purchases
Dividends,
Return on Investment
37

Be sure you have a financial macro & micro understanding of your venture and that micro and macro are in sync.

– The financial big picture: Review, understand and analyze the financial statements you generate.

– The financial details:
Pricing strategy, margins, mark-up of the product or service you are offering.
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Examples of what you can put in the Appendix
 Start-up Cost Schedule
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Funding Sources Detail
Detailed Income Projections
Balance Sheet Projections
Detailed Cash Flow Projections
Cash Break-Even Analysis
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 Interest Rates: Long & short-term
 Sales on Credit
 Inventory Turnover
 Personnel Overhead
 Licensing Agreement
 Other
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Product/Service

Detailed Description, Drawings,
Production Processes
Management Team
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Resumes
 Consultants/Experts Qualifications
Other
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Market Research Data
Relevant News Articles
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
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6 C’s Of A Winning Business Plan
Complete
– No missing sections, cover all the judging points.
Clear
– Concept of your product/service, its market, and business model are explained completely during the first read of the plan.
Credible
– The plan makes ‘sense’. No crazy revenue projections, outrageous market share claims, belief in a lack of any competition, etc.
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6 C’s Of A Winning Business Plan
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Compelling – Draws the reader into the business concept they way a good novel draws in a reader. The reader buys into your idea because your plan is convincing and your narrative is persuasive.
Customer Focused
– Show you understand your customer and how you will relieve their pain.
Concern for Investor/Lender
– Show how, and when, debt/equity is returned and ROI is developed.
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‘Form’ of the Plan

Use of Charts and Graphs
 Simple, Clean, Easy to Read


Font
Type and
Size
Changes
 Limited Changes - subtle
Color

 Make sure it prints ‘ok’ in black and white
 Shading and texture for graphs/charts
Number the pages
45

Plan Development

Many contributors—one writing voice
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
Proofread by non-team member
Support assumptions when ever possible
Business Plan Team Skill Needs

Marketing – Research, Market Size, Sales Est.

Financial – Projections & Statement
Development
Plan Wording

Positive word choices; not “might”, “maybe”,
“probably”; but don’t overstate or exaggerate.
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Business Plan Judges Are Hawaii
Business Professionals

Bankers, Business Owners, Gov’t and Non-Gov’t Organization
Employees

Business Service Providers –
Accountants, Lawyers, Consultants

Investors, Venture Capitalist

Entrepreneurs
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 Business Plan Pro – palo-alto.com
 Business Plan Builder – jianusa.com
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Business Plan Writer Deluxe
Bplans.com
Businessplans.org – sample plans
Microsoft Business Planner – Office
Pro
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