MG 298
Entrepreneurship
August 19
Shivram Venkatasubramaniam
MG 298 Entrepreneurship
Shivram V.
Today
• Recap-Business Models & Class
Discussion
• Business Planning Basics
• Class discussion
• Readings for next class
MG 298 Entrepreneurship
Shivram V.
Business Plan
• What is it?
• Do you really need one?
• How long is it useful i.e. how quickly does
it become obsolete?
• Who should prepare it?
• Which parts of it matter the most?
MG 298 Entrepreneurship
Shivram V.
Business Plan Contents
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Executive Summary
Industry, Company and its Products
Market Research & Analysis
Economics of the business
Marketing Plan
Design and Development Plans
Manufacturing and Operations Plan
Management Team
Overall Schedule
Critical Risks, Problems and Assumptions
The Financial Plan
Proposed Company Offering
Appendices
MG 298 Entrepreneurship
Shivram V.
1. Executive Summary
• Description of Business Concept and the
Business
• Target Market and Projections
• Competitive Advantages
• Costs
• Economics, Profitability, and Harvest Potential
• The Team
• The Offering
MG 298 Entrepreneurship
Shivram V.
2. Industry, Company, Products or
Services
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The Industry
Company and Concept
Products and/or Services
Entry and Growth Strategy
MG 298 Entrepreneurship
Shivram V.
3. Market Reseach and Analysis
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Customers
Market Size and Trends
Competition and Competitive Edges
Estimated Market Share and Sales
Ongoing Market Evaluation
MG 298 Entrepreneurship
Shivram V.
4. Economics of the Business
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Gross and Operating Margins
Profit potential and Durability
Fixed, Variable and Semi-variable Costs
Months to breakeven
Months to reach positive cash flow
MG 298 Entrepreneurship
Shivram V.
5. Marketing Plan
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Overall Marketing Strategy
Pricing
Sales Tactics
Service and Warranty Policies
Advertising and Promotion
Distribution
MG 298 Entrepreneurship
Shivram V.
6. Design & Development Plans
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Development Status and Tasks
Difficulties and Risks
Product Improvement and New Products
Costs
Proprietary Issues
MG 298 Entrepreneurship
Shivram V.
7. Manufacturing & Operations
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Operating Cycle
Geographical Location
Facilities and Improvements
Strategy and Plan
Regulatory and Legal Issues
MG 298 Entrepreneurship
Shivram V.
8. Management Team
• Organization
• Key Management Personnel
• Management compensation and
Ownership
MG 298 Entrepreneurship
Shivram V.
9. Overall Schedule
• Typical Project Plan with customary
artifacts
– Timeline
– Milestones
– Responsibilities
MG 298 Entrepreneurship
Shivram V.
10. Critical Risks, Problems,
Assumptions
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Minor and major risk
Known problems and issues
Possible impact on plan
Implicit and explicit assumptions about any
aspect of the venture
• Dominant theme ---- Try to identity every
conceivable source of unexpected and
unpleasant surprises and change
MG 298 Entrepreneurship
Shivram V.
11. Financial Plan
• Actual Income statements and Balance
Sheets (Historical as well)
• Pro-forma Income statements and
Balance Sheets
• Pro-forma Cash Flow Analysis
• Breakeven Chart and Calculation
• Cost Control
• Highlights
MG 298 Entrepreneurship
Shivram V.
12. Proposed Company Offering
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Desired Financing
Offering
Capitalization
Use of Funds
Investor’s Return
MG 298 Entrepreneurship
Shivram V.
13. Appendices
• Typically a lot of the supporting information
and data tends to be presented in
Appendices
– Detailed Financial Information
– Resumes
– Market Data
– Press Releases and Interviews
– News Clippings
MG 298 Entrepreneurship
Shivram V.
Do Not…
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Have unnamed people in the plan
Make unsubstantiated statements
Use too much technical jargon
Spend resources on aesthetics/packaging
Swap execution time for writing time (an
ounce of visible implementation is worth
several pounds of theoretical planning)
• Bank on deal until money is in the bank
MG 298 Entrepreneurship
Shivram V.
Internet Sources
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www.bplans.com
www.us.deloitte.com/growth
web.mit.edu/entforum/
www.businessplans.org
www.sba.gov/starting/indexbusplans.html
www2.inc.com/writing-a-business-plan/
MG 298 Entrepreneurship
Shivram V.