Business Plan: Inception to Fruition Bala Mulloth, Ph.D. Office of Innovation Development and Entreprenuership, NYU-Poly

A Word from….. Entourage

Four-Legged Stool  Find Opportunity—Idea—Passion  Study It — Student of Industry  Execute — Time & Talent  Money—Fuel To Your Engine No Magic Wand...

What Does THE PLAN Reveal? Create or add significant value to a customer or end user Create or add significant value to a customer or end user Solve a significant problem, or meet a significant want or need for which someone will pay a premium Solve a significant problem, or meet a significant want or need for which someone will pay a premium Have robust market, margin, and moneymaking characteristics Have robust market, margin, and moneymaking characteristics Fit well with the founder(s) and management team at the time, in the marketplace, and with the risk- reward balance Fit well with the founder(s) and management team at the time, in the marketplace, and with the risk- reward balance

Writing a Business Plan Steps outlining the process by which a business plan is written Steps outlining the process by which a business plan is written Segmenting information Segmenting information Creating an overall schedule Creating an overall schedule Creating an action calendar Creating an action calendar Doing the work and writing the plan Doing the work and writing the plan

6 The Well-Written Business Plan Orderly Orderly Succinct Succinct Persuasive Persuasive Draws readers in, keeps their interest, and convinces them of the potential for this opportunity Draws readers in, keeps their interest, and convinces them of the potential for this opportunity Based on reasonable assumptions Based on reasonable assumptions Answers the important questions – Articulates how your team will address the 3-5 key drivers of your business Answers the important questions – Articulates how your team will address the 3-5 key drivers of your business

7 Additional Tips Prioritize the points you are making into three categories: Prioritize the points you are making into three categories: Need to know – without this the plan makes no sense Need to know – without this the plan makes no sense Good to know – directly supports and gives context to your essential points Good to know – directly supports and gives context to your essential points Nice to know – to Appendix? Nice to know – to Appendix?

8 Executive Summary Arguably the most important section of the business plan Arguably the most important section of the business plan Highlights from each section of the BP Highlights from each section of the BP Do not cut and paste! Do not cut and paste! Should be written and re-written during the planning process Should be written and re-written during the planning process

9 New Venture Idea What existing need or want does the concept fill? What is the problem you solve? What existing need or want does the concept fill? What is the problem you solve? Describe the service/product. How will it change the way people live or work? Describe the service/product. How will it change the way people live or work? Who is your customer? What are your market segments? Who is your customer? What are your market segments? What is the unique selling benefit? (e.g. why will they buy?) What is the unique selling benefit? (e.g. why will they buy?)

10 Business/Financial Model Sources of revenue and funding—required investment Sources of revenue and funding—required investment Financial returns Financial returns What are your cash needs for operations? Cash flow statement—start-up and growth What are your cash needs for operations? Cash flow statement—start-up and growth Financial projections—3 year income statement with revenue, cost of goods sold, expenses and projected margins. Financial projections—3 year income statement with revenue, cost of goods sold, expenses and projected margins. How do you plan to scale the business? How do you plan to scale the business?

Business Model of Sorts…

12 Market Analysis Size of potential market Size of potential market Target segments Target segments Current competition and possible new entrants Current competition and possible new entrants What are the critical success factors/risks and how will you manage them? What are the critical success factors/risks and how will you manage them? What is your competitive advantage? What is your competitive advantage? How will you “go to market?” What is the marketing plan—branding & 4Ps How will you “go to market?” What is the marketing plan—branding & 4Ps

13 Operations Plan How does the business work? How does the business work? Product development Product development Logistics Logistics Human resources Human resources Physical facilities Physical facilities Operating and sales cycle Operating and sales cycle Articulate milestones for new venture. What is your current status? Articulate milestones for new venture. What is your current status?

Management What are the team’s qualifications for executing the plan successfully? What are the team’s qualifications for executing the plan successfully? Who are the necessary key hires? Who are the necessary key hires? startups/?utm_source=feedburner&utm_medium=feed&utm_camp aign=Feed%3A+Techcrunch+%28TechCrunch%29 startups/?utm_source=feedburner&utm_medium=feed&utm_camp aign=Feed%3A+Techcrunch+%28TechCrunch%29

A Sample Pitch… Angels to VCs

16 Ten Questions 1) Is the business an opportunity with real potential or just an idea? 2) Does the product or service add significant value to the customer? 3) Is the industry in which the product or service will compete growing, stable, or declining? 4) Does the firm have a well-defined target market? 5) Does the firm have an exciting and sensible business model? Will the firm be able to defend its position?

17 Ten Questions 6) How will the firm’s competitors react to its entrance into its markets? 7) Is the management team experienced, skilled, and up to the task of launching the new firm? 8) Is the firm organized in an appropriate manner? 9) Are the financial projections realistic. Do they project a bright future for the firm? What rate of return can investors expect? 10) What are the critical risks surrounding the business, and does the management team have contingency plans in place if risks become actual problems?

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