MHR 423 Creating the Business Plan Spring 2005 Dr. Stan Abraham MHR Dept.

Principal Course Objectives To understand what goes into, and write, a business plan for a new business or a young business needing financing To make a five-minute convincing “pitch” of that business plan Two Prerequisites MHR 320 or EBZ 306 MHR 321

Required Text Kathleen R. Allen, Launching New Ventures: An Entrepreneurial Approach, third edition, Houghton Mifflin, 2003 Dr. Allen teaches at USC –She is also involved in commercializing intellectual property created at the university

Value of the Course Most entrepreneurs have no formal education in entrepreneurship Some even have no formal education! Many have never written a business plan Many are engineers, scientists, artists, or other professional that have no business experience or acumen whatever Epitomizes Cal Poly Pomona’s philosophy of “learning by doing” You will actually write a business plan and do a five-minute pitch for the business at the end of the quarter before invited guests (investors or other knowledgeable people)

My Expectations of You Take more responsibility for your own learning You won’t learn as much if you don’t Commit to having a very good group experience Your workload and stress level will increase exponentially if you don’t, and your grade will suffer proportionately Plan carefully and organize well There is a lot to get done in the quarter Pay attention to all deadlines Get started early

My Role as Professor To create a friendly and fun environment for learning To act as a resource, coach, expert, and sounding board for you as you develop your business plan To provide useful feedback at all times –Especially when grading your assignments To give mini-lectures on each topic based on my experience Will supplement the text nicely

The Business Plan Done in groups Based on a business idea you come up with –But I have two companies that need business plans Written in stages Improved through feedback from grading Experience putting the whole plan together Culminates in a 5-min. dazzling presentation before guests External Analysis Financial Projections and Investment Deal Marketing Plan Final Business Plan

Company 1 An online toy directory—three years old Helps thousands of “small” toy manufacturers reach distributors and retail buyers –Revenues come from listings and ads –Profits are surging Does about $450K in revenues Headquartered in Santa Monica, CA –Run by a relatively young but savvy entrepreneur Needs investment capital to expand

Company 2 A _____________ (description) Started and run by a recent Cal Poly Pomona graduate Needs a business plan to finance expansion Revenues of about $___ Headquartered in San Dimas, CA

Participation Grade (10 pts) Nothing happens until I know all your names (week 3 or 4) Attendance gets four points Remaining six points for asking questions and contributing to discussion during video discussions and final presentations More than one unexcused absence loses two points for each such absence More than four unexcused absences gets an automatic ‘F’

Written Work First drafts must never be handed in Always edit them once or twice Groups should assign someone this critical task Business writing is concise and clear If you find writing difficult, you must go to the University Writing Center for help Take pride in your work—a quality business deserves a quality business plan Final reports poorly written will lose points Ask questions about anything you are not sure of

Videos and Discussion A new feature of the course On each of three video sessions, I will show a video of two startup companies making a pitch to a panel for funding –Please read the business plan for each company, available online, before class at which their video is shown –After each company founder has appeared before the panel, the class will discuss which of them deserves the funding more –Then a final clip will be shown with the decision of the panel as to which one it considered better The experience puts you in the role of investor The class discussion part will earn you participation points, but is otherwise not graded

Changes made since Fall 2003 New, more helpful course text –One comprehensive book, not three No software you have to buy and use Class gets off to a faster start –Must settle on your project within two weeks No interim group presentations Videos and class discussion to make you think like an investor –You can view the companies’ business plans before viewing the video More class time to work on your business plan

Learn what others said… Course evaluations from Summer 2002 and Fall 2003 are available for you to see on my website under MHR 423 –You will see that I take the feedback seriously and improve the course as a result Feedback I gave to groups in those classes on their Marketing Plan is also available for you to read on my website –Names have been removed to protect the innocent –The feedback may induce you not to make the same mistakes –You will note my feedback is constructively critical and more severe than the grades I gave

Any Questions?