Business Plan Preparation Introduction Frank Moyes Leeds School of Business University of Colorado Boulder, Colorado 1

Tonight’s Agenda Introductions Course organization & syllabus Writing a business plan Discuss your ideas 2

Communications Frank Moyes Office Hours: Koelbel 440 Monday 4:00 to 6:00pm Wednesday 3:00 to 5:30pm And by appointment Website faculty.colorado.edu/Moyeshttp://leeds- faculty.colorado.edu/Moyes 3

Materials Lawrence and Moyes, “Writing a Successful Business Plan”, 2007 (download from Resource section of Instructor’s website) Moyes and Lawrence, “Financial Spreadsheets for the Business Plan” (download from Resource section of Instructor’s website) 4

Objectives of the Course Understand what is a business plan & when to write one Learn to write a viable business plan Experience the process “Everything is vague to a degree you do not realize till you have tried to make it precise.” Bertrand Russell 5

Course Structure Weeks 1 & 2: Evaluate opportunities Week 3: Select concept & team Weeks 4 & 5: Market & Industry Analysis Week 6 to 13: Instructor to describe a section of the business plan (slides posted on course website) Weeks 5 to 12: In the Fire sessions Week 14: Present business plan & hand in Week 15: Competition 6

Grading Individual Concept & resume Participation Peer evaluation Team Assignments In the Fire sessions Written assignments & Presentations Final Business Plan & Presentation 7

Business Plan Sections Executive Summary Company Overview Product/Service Description Market & Industry Analysis Marketing Plan Operations Plan Development Plan Management Competitive Advantage Financial Plan Funding 8

Why Write a Business Plan? Road Map Establish goals to make sure that are on track and heading in the right direction Action Plan Small steps lead to large results Sales Tool to attract investors, vendors, customers, partners, employees “If we don’t have a plan for ourselves, we will be part of someone else’s.” Joan Lunden 9

A Good Business Plan Explains how you are going to do it Provides evidence that customers want to buy Tells a story - creates excitement Addresses the critical elements Should be painful to write 10

Critical Elements of a Business Plan (& You Must Address) Strong market Attractive industry Compelling Need Clear value proposition Sustainable competitive advantage Understanding of profitability & cash flow Management 11

Why Not Write a Business Plan? Lack experience Information Time & cost to get causes too great a delay Can’t get Situation changes too quickly Founder has great experience, successful track record & has a “gut feel” for the business 12

“Writing a business plan is a life changing event.” is a life changing event.” 13

Discuss Ideas 14

Concept & Team Selection Process Identify Concept Conduct Idea Exercise (download from website) Jan 23 discuss your concept in class Use Business Concept Description as a framework for explaining your concept 15

Concept & Team Selection Process (continued) Jan 25 (Friday) 1:00pm Business Concept Description as a Word attachment to instructor Must have your name & concept name in file name and on the attachment Jan 28 (Monday) Instructor to all students which concepts with the greatest potential that have been selected Jan 30 (Wednesday) Students whose idea are selected will form a teams of four in class 16

Approach to Generating Business Concepts “From Student to Entrepreneur” Doing what you love What bugs you Use your experience Recycle business concept Steps, pain points & solutions Developed by Neal Lurie, MBA

Concept Description Brief description Why is there an opportunity/need? What is the product/service? Who is the target market? What are the benefits to the target market? Who is the competition? Your competitive advantage. Profitability 18

Concept Description Brief description Why is there an opportunity/need? Problem you are solving Size & Trends What is the product/service? What is unique How will it be produced or delivered? 19

Unique/Different You must differentiate your business – it’s already being done by someone More than unique product/service design Marketing – positioning Operations – process or value chain Channels – create a new channel 20

Concept Description (continued) Who is the target market? Demographics & psychographics Industry, company size What are the benefits to the target market? Features are not benefits Who is the competition? Your competitive advantage Profitability Revenue model Contribution margins 21

Benefits Emotional: ambition, power, independence, achievement, ambition, pride of ownership, comfort, love, friendship, security, style, self improvement, etc. Social: status, image, popularity with friends or family members, reputation of brand, personal relationships, style, fashionable, etc. Health: stress, fitness, mental capacity, strength, sex life, quality of life, muse, etc. Financial: revenue, costs, savings, productivity, pricing, profitability, market share, save time, productivity, etc. 22

Concept Description Brief description Why is there an opportunity/need? What is the product/service? Who is the target market? What are the benefits to the target market? Who is the competition? Your competitive advantage. Profitability 23

Assignments for Next Week Review ESBM 3700 materials on Opportunity Recognition resume “From Idea to Entrepreneur” exercise Identify an opportunity to discuss in class 24