MBA Lite Grow Your Business Series Phil Bessler Associate Professor Business Clinic Director SIFE Sam Walton Fellow Past President, Entrepreneurship Education Consortium Baldwin-Wallace College Berea, OH Copyright, The Bessler Consulting Group, LLC

Grow Your Business Series  Innovation  Organizing  Marketing  Funding Copyright, The Bessler Consulting Group, LLC 2

Who is Phil Bessler?  10th Year at Baldwin-Wallace  Founded the Business Planning Clinic  Responsible for Teaching the Entrepreneurship at the graduate and undergraduate levels.  32 years in business, Start-ups, small businesses, Fortune 500 divisions  BS Engineering, MBA  For and Not-For Profit Boards Copyright, The Bessler Consulting Group, LLC 3

Contact Information  Who you going to call? Phil Bessler Director, The Business Clinic Baldwin-Wallace College (even on the east side) Copyright, The Bessler Consulting Group, LLC 4

Organizing the Business  Legally  Planning  Functionally  Leadership and Management  Processes  Executing  Measuring Copyright, The Bessler Consulting Group, LLC 5

Pick the Right Legal Structure  Issues to think about: Ownership Funding Personal Liability Taxes Future Plans Inc. Magazine Articles Inc. Magazine Articles HG.ORG Legal Structures HG.ORG Legal Structures Copyright, The Bessler Consulting Group, LLC 6

Planning  How do you test if an idea is a good opportunity  Once good, what do you do next? Copyright, The Bessler Consulting Group, LLC 7

Types of Plans  1. The Feasibility Study*  2. The Strategic Plan  3. The Business Plan* Copyright, The Bessler Consulting Group, LLC 8

The Feasibility Study  Go/No Go Decision  Three Questions Is there a market? Do the financials make sense? What are the resources necessary? Copyright, The Bessler Consulting Group, LLC 9

Detailed Questions to Answer  CONCEPT  INDUSTRY AND MARKET/CUSTOMER  FOUNDING TEAM  FINANCIAL NEEDS ASSESSMENT Copyright, The Bessler Consulting Group, LLC 10

CONCEPT  Who is the customer?  What is the value proposition?  What is the product/service being offered?  What does your value chain look like?  Which distribution channel alternatives are available, and which customers will be served by them?  Are there ways to innovate in the distribution channel? Copyright, The Bessler Consulting Group, LLC 11

INDUSTRY AND MARKET/CUSTOMER  What are the demographics, trends, patterns of change, and life cycle stage of the industry?  Are there any barriers to entry? If so, what are they?  What is the status of technology and R&D expenditures?  What are typical profit margins in the industry?  What are distributors, competitors, retailers, and others saying about the industry?  What are the demographics of the target market?  What is the customer profile? Who is the customer?  Have you talked with customers?  Who are your competitors, and how are you differentiated from them? Copyright, The Bessler Consulting Group, LLC 12

FOUNDING TEAM  What experience and expertise does the team have?  What are the gaps and how will you fill them? Copyright, The Bessler Consulting Group, LLC 13

FINANCIAL NEEDS ASSESSMENT  What are your start-up capital requirements?  What are your working capital requirements?  What are your fixed cost requirements?  How long will it take to achieve a positive cash flow?  What is the break-even point for the business? Copyright, The Bessler Consulting Group, LLC 14

Feasibility Study Decision  Go  No-Go But Rework  Shelve  Give Up  If Go, advance to the hard work: A Detailed Business Plan Copyright, The Bessler Consulting Group, LLC 15

The Business Plan  A Road Map  Play Book  Living Document Copyright, The Bessler Consulting Group, LLC 16

Uses of the Business Plan  Equity Investors  Bankers (especially SBA Loans)  Key Employees  Suppliers  Customers  Most Important YOU! Copyright, The Bessler Consulting Group, LLC 17

Eight Elements of a Business Plan 2. Company Direction 3. Company Overview 4. Product/ Service Strategy 5. Business Operations 6. Market Analysis 7. Marketing Plan 8. Financial Summary 1. Executive Summary Copyright, The Bessler Consulting Group, LLC 18

Executive Summary  The most important part of your plan  People read this section first – and then go to the Financials  You may be asked to send just the Summary and Financials to some investors  Write it last when you’ve done the work Copyright, The Bessler Consulting Group, LLC 19

Two Types of Executive Summaries  Synopsis: sums up what’s in rest of plan good for all types of businesses  Narrative: tells a “story” good for businesses with one or two dominant elements Copyright, The Bessler Consulting Group, LLC 20

2. Company Direction 2.1 Present Situation 2.2 Vision Statement 2.3 Mission Statement 2.4 Goals and Action Steps Copyright, The Bessler Consulting Group, LLC 21

3. Company Overview 3.1 Company name 3.2 Legal business description 3.3 Current stage of development and financial status 3.4 Management team 3.5 Advisory Board/Board of Directors 3.6 Staffing 3.7 Strategic alliances Copyright, The Bessler Consulting Group, LLC 22

4. Product/Service Strategy 4.1 Physical or logical description descriptions 4.2 Features and benefits of products/services 4.3 Market needs 4.4 Product life cycles 4.5 Research and Development 4.6 Production, Delivery and Service Copyright, The Bessler Consulting Group, LLC 23

5. Business Operations 5.1 Environmental sustainability 5.2 Taking an order 5.3 Filling an order 5.4 Shipping 5.5 Invoicing 5.6 Collection 5.7 Inventory Control 5.8 Purchasing 5.9 Support 5.10 Systems Copyright, The Bessler Consulting Group, LLC 24

6. Market Analysis 6.1 Industry 6.2 Competition 6.3 Market 6.4 Customer 6.5 SWOT Analysis Copyright, The Bessler Consulting Group, LLC 25

7. Marketing Plan 7.1 Overall Marketing Strategy 7.2 Sales Strategy 7.3 Distribution Strategy 7.4 Advertising and Promotion 7.5 Public Relations Copyright, The Bessler Consulting Group, LLC 26

8. Financial Plan 8.1 Purpose 8.2 Business Assumptions 8.3 Summary/ Analysis of Financial Statements (Income/Cash Flow/Balance Sheet ) 8.4 Sources and Uses of Funds 8.5 Payback Method/Exit Strategies Copyright, The Bessler Consulting Group, LLC 27

1. Executive Summary 1.1 The Conclusion 1.2 Company Direction 1.3 Company Overview 1.4 Product/Service Strategy 1.5 Business Operations 1.6 Market Analysis 1.7 Marketing Plan 1.8 Financial Plan Copyright, The Bessler Consulting Group, LLC 28

Community Resources  The Hudson Library  The Business Clinic at Baldwin- Wallace College  SBA  SBDC  Jumpstart  University of Akron Law Clinic Copyright, The Bessler Consulting Group, LLC 29

Typical Library Resources:  Industries:  NAICS - North American Industry Classification System 2007 (Ready Ref HF 1042.N )  Online at:  SIC codes - Standard Industrial Classification Manual 1987 (Ready Ref HF S )  Online at:  Business & Company Resource Center — database  Standard and Poor 's NetAdvantage (Industry Surveys & Sub-Industry Reviews) — database  Value Line Investment Survey — database  2010 U S. Industry & Market Outlook (Ready Ref HC 101.U ) Copyright, The Bessler Consulting Group, LLC 30

Library Resources:  Financial analysis  RMA Annual Statement Studies (Ready Ref 5681.B2 R6)  D&B Industry Norms and Key Business Ratios (Ready Ref HF 5681.R )  Markets  Business & Company Resource Center  Business Source Complete  Lexis-Nexis Academic — Company Dossier  Demographics  Small Business Development Center National Information Clearinghouse (SBDCNET)  URL:  U. S. Census  URL: Copyright, The Bessler Consulting Group, LLC 31

 Competitive Research  Datamonitor Reports (in Business Source Complete)  Company Dossier (in Lexis-Nexis Academic)  Additional Resources:  Business Plans Handbook.. a Compilation of Actual Business Plans Developed by Small  Businesses Throughout North America (Ref HD 62.7.B865)  (Latest editions online through OhioLINK Electronic Book Center) Copyright, The Bessler Consulting Group, LLC 32

Organizing the Business Help  Who you going to call? Phil Bessler Director, The Business Clinic Baldwin-Wallace College (even on the east side) Copyright, The Bessler Consulting Group, LLC 33

Any Questions? Copyright, The Bessler Consulting Group, LLC 34