LEAN START UP VS. TRADITIONAL BUSINESS PLAN MANAGEMENT AND ENTREPRENEURSHIP MARCH 14 TH, 2016

TRADITIONAL BUSINESS PLAN… WHAT’S IT MADE OF? GOALS FOR THE BUSINESS STRATEGIES TO MEET THE GOALS POTENTIAL PROBLEMS THE BUSINESS MAY ENCOUNTER WAYS TO SOLVE THE PROBLEMS BUSINESS STRUCTURE (INCLUDES TITLES AND RESPONSINILITIES) AMOUNT OF CAPITAL NEEDED TO START AND KEEP IT GOING UNTIL IT BREAKS EVEN

USES OF A BUSINESS PLAN… CONVEY VISION TO POTENTIAL INVESTORS TO ATTRACT NEW OR KEY EMPLOYEES PROSPECT FOR NEW BUSINESS OR CUSTOMERS SHOW SUPPLIERS YOU ARE ABLE TO PAY YOUR BILLS UNDERSTAND HOW TO MANAGE THE COMPANY BETTER

PRIMARY PARTS TO A BUSINESS PLAN… BUSINESS CONCEPT WHERE YOU DISCUSS HOW TO MAKE YOUR BUSINESS A SUCCESS. WHAT IS THE INDUSTRY? WHAT IS YOUR BUSINESS STRUCTURE? WHAT IS THE PRODUCT OR SERVICE?

PRIMARY PARTS TO A BUSINESS PLAN… MARKETPLACE SECTION : DESCRIBE AND ANALYZE POTENTIAL CUSTOMERS. WHO ARE THEY? WHAT MAKES THEM BUY? WHO IS THE COMPETITION?

PRIMARY PARTS TO A BUSINESS PLAN… FINANCIAL SECTION INCOME CASH FLOW BALANCE SHEET

SEVEN KEY COMPONENTS… EXECUTIVE SUMMARY BUSINESS DESCRIPTION MARKET STRATEGIES COMPETITIVE ANALYSIS DESIGN AND DEVELOPMENT PLAN OPERATIONS AND MANAGEMENT PLAN FINANCIAL FACTORS

HEY, HOW LONG SHOULD MY PLAN BE? TYPICALLY BUSINESS PLANS ARE PAGES IN LENGTH DEPENDS ON THE TYPE OF BUSINESS IF IT CAN BE LONGER OR SHORTER DO YOU WANT MILLIONS OF DOLLARS (LONGER) DO YOU WANT TO MANAGE YOUR EXISTING BUSINESS (SHORTER)

DO I NEED A BUSINESS PLAN? STARTUPS NEED A PLAN ESTABLISHED COMPANIES SEEKING HELP TO EXPAND ONLY PERSON WHO DOESN’T IS THE ONE NOT GOING INTO BUSINESS!

WHEN TO UPDATE A BUSINESS PLAN… YOU NEED FINANCING TO EXPAND MARKET HAS CHANGED YOUR COMPANY IS ABOUT TO DEVELOP A NEW PRODUCT NEW MANAGEMENT NEEDS FRESH INFORMATION IF YOU FEEL YOUR PLAN IS NOT WORKING OR SEEMS IRRELEVANT

WHAT IS A WORKING PLAN? A TOOL USED TO OPERATE YOUR BUSINESS DETAILED NOT FORMAL FOR INTERNAL USE, NOT A PRESENTATION PLAN…

WHAT IS PRESENTATION PLAN? STYLE, STYLE, STYLE THAT PUTS YOUR BEST FOOT FORWARD HIGH QUALITY VERSION IN A BINDER ELECTRONIC VERSION MUST BE PROOF READ AND ERROR-FREE

DOWNSIDE TO A TRADITIONAL PLAN… HAS FIVE YEAR FORECAST, WHO KNOWS WHAT IT WILL LOOK LIKE THEN? WRITTEN BEFORE A SINGLE PRODUCT IS MADE OR SOLD NO CUSTOMER INPUT BANKS WILL LOAN YOU MONEY BASED ON FORECASTING COMPLETE UNKNOWNS? 75% OF TRADITIONAL STARTUPS FAIL

MIKE TYSON SAYS… “EVERYBODY HAS A PLAN UNTIL THEY GET PUNCHED IN THE MOUTH”

ENTER THE LEAN START UP… WHAT’S IT MADE OF? FAVORS EXPERIMENTATION OVER EXTENSIVE PLANNING FAVORS CUSTOMER FEEDBACK OVER INTUITION AND GUESSING FAVORS ITERATIVE DESIGN OVER UP FRONT DEVELOPMENT FAIL FAST AND LEARN ON!

THE LEAN METHOD… 3 KEY PRINCIPLES PLUS A FOURTH. ON DAY ONE ALL YOU HAVE IS A BUNCH OF UNTESTED HYPOTHESES (GOOD GUESS) GET OUT OF THE BUILDING, TALK TO POTENTIAL CUSTOMERS, PURCHASERS AND PARTNERS USE CUSTOMER INPUT TO REVISE HYPOTHESES AND MAKE ADJUSTMENTS “AGILE DEVELOPMENT” REPEAT UNTIL IT WORKS, THEN KEEP REPEATING!

QUICK RESPONSIVE DEVELOPMENT… BUILD PRODUCTS IN SHORT, REPEATED CYCLES (AGILE DEVELOPMENT) PRODUCE ONLY THE MINIMUM VIABLE PRODUCT, NOTHING MORE GATHER FEEDBACK ON FEATURES AND MAKE A REVISED MINIMUM VIABLE PRODUCT FOR SALE TRANSITION FROM START UP MODE WITH CUSTOMER DEVELOPMENT TEAM SEARCHING FOR MORE ANSWERS

WHAT LEAN STARTUPS DO DIFFERENTLY

WHAT IS STEALTH MODE??? COMPANIES KEEP PRODUCT DEVELOPMENT SECRET BECAUSE OF POTENTIAL COMPETITION EXPOSE PRODUCTS DURING SECRET “BETA” TESTS HOPEFULLY GET FEEDBACK AND GO PRODUCE DECLINING IN POPULARITY WHY IS THIS NOT POPULAR ANYMORE?

CREATING INNOVATION BASED ECONOMY… LEAN METHODS RESULT IN FEWER FAILURES TRADITIONAL INDUSTRIES ARE LOSING JOBS THAT WILL NOT RETURN EMPLOYMENT GROWTH HAS TO COME FROM NEW INDUSTRIES INNOVATION ECONOMY NEEDS PROGRAMS AND INCENTIVES TO GROW AND HIRE

LARGE COMPANIES CAN PLAY TOO… ENCOURAGES INNOVATION TO STAY AHEAD OF COMPETITION MUST CREATE NEW BUSINESS MODELS APPLY LEAN STARTUP PRINCIPLES TO INNOVATE AND ADAPT PRODUCTS CUSTOMER FOCUSED VS GUESSING