Business Plan Writing and Presenting Professor Brandon Walcutt March 31, 2016

Presentation Contents Presenter/Student Introduction Writing Business Plans Presenting Business Plans Making an Elevator Pitch Q & A

Presenter Bio Education:  MBA: Administration (US) Experience  Intl. Business experience  Russia/Mexico/Korea  Business Consulting (US)  Boeing, First Union Nat. Bank, Airborne Express  Entrepreneur  Managing Partner – Sapient Press  Partner – Terrene Communications  Former CEO - Hanmi Designs  Professor  Hankuk University of Foreign Studies,  Kyunghee University  Nottingham-Trent Univ. MBA Prog. / University of Derby MBA Prog.

Student Introduction Name Country of Origin Do you have an existing company? Business area of interest

Writing Business Plans

Overview of Business Plans What is it? Purpose Audience Types: Components Tips and Guidelines

4-7 What Is a Business Plan? Business Plan  Written narrative, typically 25 to 35 pages long, that describes what a new (or existing) business plans to accomplish. Purpose  A business plan is a dual-purpose document Inside the firm: Helps the company develop a “road map” to follow in executing its strategies and plans. Outside the firm: Introduces potential investors and other stakeholders to the business opportunity the firm is pursuing and how it plans to pursue it.

4-8 Business Plan Audience There are two primary audiences for a firm’s business plan AudienceWhat They are Looking For A Firm’s Employees Investors and Other External Stakeholders The plan articulates the vision and future plans of the firm, helps the employees of a firm operate in sync and move forward in a consistent and purposeful manner. Makes the case that the firm is a good use of an investor’s funds or the attention of other external stakeholders. Includes facts generated through a properly conducted feasibility analysis.

4-9 Business Plan: Types

4-10 Business Plan Components Potential Components Other Potential Components: - Value Proposition - Business Model - Business Operations Plan - Market Entry - Transition to Revenue Service - Competitive Assessment - Partnership Strategy - Executive Summary - Business/Product/Service Premise - Management Team and Advisors - Company Structure, Ownership, Intellectual Property - Industry Analysis - Marketing Plan - Operations Plan - Financial Plan - Critical Risk Factors - Appendix Use what is relevant!

4-11 The Executive Summary  Short overview of the entire business plan  Provides a busy reader with everything that needs to be known about the new venture’s distinctive nature  Keep it short…no more than 2 or 3 pages Business Plan Components The Business  Identified opportunity and how the business plans to address the issue.  Brief history, mission statement and objectives.  An explanation of the company’s competitive advantage  Brief description of the business model

4-12 Management Team  Key part of the plan from an investment point of view.  Brief summary of management team qualifications, relevant employment, professional experiences, significant accomplishments, and education Business Plan Components Company Structure, Ownership, and Intellectual Property  Operational structure and mgmt reporting relationships  Legal structure  Intellectual property the firm owns, including patents, trademarks, and copyrights.

4-13 Industry Analysis  Major characteristics and trends of the industry, includes size, attractiveness and profit potential.  How diminish or sidestep the forces that suppress its industry’s profitability.  Target market and how to compete in that market. Business Plan Components Marketing Plan  Firm’s approach to: Target market / Product strategy Pricing strategy / Channels of distribution Promotional strategy

4-14 Operations Plan  Describes: Day-to-day operations Overview of the manufacturing plan Network of suppliers, business partners, and service providers Any risks or regulations pertaining to the operations of the firm should be disclosed, such as nonroutine regulations Business Plan Components

4-15 Financial Plan  Demonstrates the financial viability of the business.  Explains funding that will be needed by the business during the next three to five years along and how the funds will be used.  Explain assumptions  Financial projections (3-5 years) Pro forma income statements Balance sheet Cash flow statement  Remember……you will be held accountable by investors so be confident about your numbers! Business Plan Components

4-16 Critical Risk Factors  What factor is most likely to cause failure? Appendix  Include any material that doesn’t fit in elsewhere Business Plan Components

4-17 Tips and Guidelines The 10 Most Important Questions a Business Plan Should Answer Is the business just an idea, or is it an opportunity with real potential? Does the firm have an exciting and sensible business model? Will other firms be able to easily copy it? Is the product or service viable? Does it add significant value to the customer? Was a feasibility analysis completed? Is the industry in which the product or service will be competing growing, stable, or declining? Does the firm have a well-defined target market?

4-18 The 10 Most Important Questions a Business Plan Should Answer Is the management team experienced, skilled, and up to the task of launching the new firm? Is the firm organized in an appropriate manner? Are its strategy and business practices legal and ethical? Are the financial projections realistic, and do they project a bright future for the firm? What rate of return can investors expect? How will the firm’s competitors react to its entrance into their markets? What are the critical risks surrounding the business, and does the management team have contingency plans in place if risks become actual problems? Tips and Guidelines

4-19 Tips and Guidelines Should be:  Clear and concise  Long enough to provide sufficient information yet short enough to maintain reader interest  Market-oriented in meeting customer needs  Possess a conventional structure yet communicate a sense of excitement – careful not to get too creative!  Software packages – using them has pros and cons

4-20 After the Biz Plan……What’s Next? Example VC Schedule

4-21 Recent Korea VC Trends

4-22 Recent Korea VC Trends

Presenting Business Plans

4-24 Presenting Business Plans If you are seeking capital and meeting investors, it is likely that you will need to present your business plan. Guy Kawasaki’s 10 / 20 / 30 Rule

4-25 Presenting Business Plans Ten PowerPoint Slides to Include in an Investor Presentation: 1.Title slide 2.Executive Summary 3.Business Description 4.Industry Analysis 5.Management Team 6. Marketing Plan 7. Financial Plan 8. Implementation Plan 9. Current status, amount of money requested, and projected use of funds

4-26 Presenting Business Plans Additional Tips  Don’t use industry jargon  Breathe!  Do Not Only Focus on the Product or Technology  Avoid too much material on the slides  Don’t attempt to do too much! Interest them and then let them read the full plan.  PRACTICE…PRACTICE…PRACTICE!

Making an Elevator Pitch

What is an Elevator Pitch? A short, simple description of your business idea that anyone could understand by the time you ride up three floors in a typical elevator. An elevator pitch is not a sales pitch You want to pitch how your business solves a real problem or addresses a burning need that exists today

Elements of the Pitch The following points are included in effective elevator pitches 1. The Hook: pitch opening that grabs listener attention 2. Brief description of product/service 3. Brief target market description 4. Brief description of how the business is different from the competition 5. Brief description of how you will make money 6. Brief description of the resources you need from investors 7. Brief description of the returns/payback the investor can expect 8. Memorable tagline/pitch closing

Elevator Pitch Tips Guidelines to keep in mind when developing the product pitch:  Passion  KISS – Keep It Simple, Stupid  Limit technical terms/details  Highlight customer benefits, not technical benefits

Top 3 Elevator Pitch Mistakes Focus on selling a cool product/idea instead of on the viability of the business Take too long to get to the pain/problem that you are solving Don’t engage the recipient via questions that request them to engage with you

Hook: Have you ever had your cell phone fail inside a building? Product: We provide a wireless communications network that enables any cell phone to work anywhere inside all types buildings, while ensuring your communications are secure. Market: The FCC has determined that over 60% of the 5 million commercial buildings in the U.S. inhibit wireless or cell phone communications from within. The percentage is even higher in international markets, suggesting a huge need for better wireless communications networks. Competition and Differentiators: There are many vendors that provide internal wireless networks like Linksys and Cisco. However, we are the only vendor that enables communications to penetrate steel and other high density construction materials, which significantly reduces the cost of installation Revenue Model: We will install the wireless network in a building at no charge, and then charge a usage fee for all calls that we carry on our networks Investment Required and Payback Estimate: We are seeking a $1,500,000 investment to fund manufacturing, marketing, and initial product distribution. Within five years, we seek to achieve an IPO, at which time investors can expect a payback at about a 20% ROI. Closing: In conclusion, we make wireless communication simple and effective. Elevator Pitch: An Example

Homework for 11/26! Your homework is simple….. - Prepare an elevator pitch or your company or concept - 2 – 4 minutes / no visuals - Basics are fine as no NDAs will be signed! - We will “fund” the best plan presented

Question and Answer Period