MANA 3325 – Thurburn Lecture #4 Slides Product or Service Feasibility Primary Research – Most Valuable & Expensive: Customer Surveys Focus Groups Prototypes In-Home Trials Secondary Research – Less Pertinent & Less Expensive: Trade Associations Direct Mail Lists Demographic Data Census Data Market Research by Others Articles Local Data Internet

MANA 3325 – Thurburn Lecture #4 Slides Financial Feasibility Capital Requirements Do we have enough cash to do it? If not… can we raise the cash needed? Estimated Earnings Does it generate enough cash to sustain itself? Return on Investment Can we get a better return doing something else for a lower risk?

MANA 3325 – Thurburn Lecture #4 Slides Should We? Can We? How Do We? Did We? Would We?

MANA 3325 – Thurburn Lecture #4 Slides Should We? Does it fit our Vision and Mission? Can We? Do we have adequate resources? Perform a Feasibility Analysis How Do We? Develop a Business Plan Specify Objectives Did We Achieve our Goals? Implement the Business Plan Measure Results Would We Do It Again? Do we pull the plug? If so… When?

MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Why Make a Business Plan?

MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Good Planning Improves Results Increase Probability of Successful Financing Helps Prevent Mistakes… I wish we hadn’t !

MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Who is the Plan for? Yourself… essentials may be enough. Partners… more extensive Investors… most extensive The More $$$ the More EXTENSIVE

MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Company Strategy Marketing Implementation Projections Financing

MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Company Title Page Table of Contents Exec Summary Vision & Missions History Industry Profile Products & Services

MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Strategy Goals Objectives Business Strategy

MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Marketing Marketing Strategy Marketing Research Customer Research Competitors Analysis

MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Implementation Management Team Plan of Operations

MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Projections Assumptions Projections Summary & Cash Flow Income Sources COG Expenses Payroll Detail

MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Financing Loan Details if applicable Investor Details if applicable

MANA 3325 – Thurburn Lecture #4 Slides The Business Plan The 5 Cs of Capital and Financing Capital Capacity Collateral Character Conditions

MANA 3325 – Thurburn Lecture #4 Slides The Business Plan The 5 Cs of Capital and Financing Capital – Enough? and Balance of Debt vs Equity Capacity – Cash Flow Collateral – Liquid or Fixed Assets Character – Creditor History Conditions – Terms of Loan

The Business Plan Who is the Plan for? Yourself… essentials may be enough. Marketing Strategy Competitor Analysis Financial Projections MANA 3325 – Thurburn Lecture Slides

The Business Plan Who is the Plan for? “Partners”… more extensive … add the Vision & Mission Business & Industry Profile Plan of Operations Partner Buy In T&C MANA 3325 – Thurburn Lecture Slides

The Business Plan Who is the Plan for? Investors… most extensive… add the… …. Full Business Plan…. The More $$$ the More EXTENSIVE MANA 3325 – Thurburn Lecture Slides

The Business Plan MANA 3325 – Thurburn Lecture Slides A Plan Must Pass Three Tests 1.The Reality Test: 2.The Competitive Test: 3.The Value Test: Define Reality Test…?

The Business Plan MANA 3325 – Thurburn Lecture Slides The Reality Test – proving that: A market really does exist for your product or service. You can actually build or provide it for the cost estimates in the plan. Next… Define the Competitive Test

The Business Plan MANA 3325 – Thurburn Lecture Slides The Competitive Test – evaluates: 1. A company’s position relative to its competitors. 2. Management’s ability to create a company that will gain an edge over its rivals. Next define the Value Test

The Business Plan MANA 3325 – Thurburn Lecture Slides The Value Test – proving that: A venture offers investors or lenders an attractive rate of return or a high probability of repayment.

The Business Plan MANA 3325 – Thurburn Lecture Slides

The Business Plan Company Strategy Marketing Implementation Projections Financing MANA 3325 – Thurburn Lecture Slides What are the sub-parts of the Company Section of a Business Plan?

The Business Plan Company Title Page Table of Contents Exec Summary Vision & Missions History Industry Profile Products & Services MANA 3325 – Thurburn Lecture Slides What is the difference between Features & Benefits?

The Business Plan MANA 3325 – Thurburn Lecture Slides Features vs. Benefits Feature – a descriptive fact about a product or service: “an ergonomically designed, more comfortable handle” Benefit – what a customer gains from the product or service feature: “fewer problems with carpal tunnel syndrome and increased productivity” What are the sub-sections of the Strategy Section?

The Business Plan Strategy Goals Objectives Business Strategy MANA 3325 – Thurburn Lecture Slides What are the sub-sections of the Marketing Section?

The Business Plan Marketing Marketing Strategy Marketing Research Customer Research Competitors Analysis MANA 3325 – Thurburn Lecture Slides What are the sub-sections of the Implementation Section?

The Business Plan Implementation Management Team Plan of Operations MANA 3325 – Thurburn Lecture Slides What are the sub-sections of the Projections Section?

The Business Plan Projections Assumptions Projections Summary & Cash Flow Income Sources COG Expenses Payroll Detail MANA 3325 – Thurburn Lecture Slides

The Business Plan Proposed Financing Loan Details if applicable Investor Details if applicable MANA 3325 – Thurburn Lecture Slides

The Business Plan Capital – Enough? and Balance of Debt vs Equity Capacity – Cash Flow Collateral – Liquid or Fixed Assets Character – Creditor History Conditions – Terms of Loan MANA 3325 – Thurburn Lecture Slides

The Business Plan MANA 3325 – Thurburn Lecture Slides Tips on Preparing a Business Plan 1.Make sure your plan has an attractive cover. (First impressions are crucial.) 2.Rid your plan of all spelling and grammatical errors. 3.Make your plan visually appealing. 4.Include a table of contents to allow readers to navigate your plan easily. 5.Make it interesting.

The Business Plan MANA 3325 – Thurburn Lecture Slides Investors Family: The first place you go… need to get some buy in. Friends: The second place… should be interested. Network: Hopefully it is full of people with money. Suppliers: If an extension of an existing business this is a great source of financing. Money People: Angels, Mezzanine, Growth Stage, M&A