Marketing plan Industry profile Competition profile Customer profile Marketing plan: –Target market –Pricing policies –Gross margin on products –Break-even analysis –Distribution channels –Sales and advertising strategy

Competition grid CompetitorsTarget marketMarketing strategy (e.g. price, quality, location) AdvantagesDisadvantages Direct Indirect Future

The market (customers and marketing) CustomersProduct/servicePriceDistributionPromotion Primary Secondary Walkins

Market study Marketing mix: –Product –PRICE –Distribution –Promotion

Who/what Sets Price? Costs? Competition? Distribution chain (Suppliers, buyers)? Customer value? 19.3 © 2004 Ewing Marion Kauffman Foundation

Margin and break even point Gross margin = sales – direct (var.) cost –The margin includes what you take home as profit + what you have to pay on bills. –Percentage = (price – var. cost) / sales Break-even point Fixed costs BE = Sales price per unit – variable cost per unit

Pricing Break-Even Point 19.1 © 2004 Ewing Marion Kauffman Foundation

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Excellency in a business plan Business concept Management team Financing Keys to success Understanding of challenges

Management and organization plan Ownership –Legal form: Proprietorship, partnerships, corporation (Nov. 9) Contracts (Nov. 9) Board of directors (Oct. 19) Organizational blueprint –Management team –Compensation + employee ownership –Organizational chart + delegating Infrastructure Insurance,

Legal Ownership options IssuesSole proprietorshipPartnershipsCorporationLimited Liability Company Number of owners One2 or moreLimited to 75 in case of S Corporation 2 or more LiabilityOwner liableGeneral partners liable. Limited partners only liable to amount of investment Shareholders liable to amount invested. Officers maybe personally liable Members only liable to amount of investment Transfer of property Free to sell. Assets transferred to estate upon death with valid will General partners require consent from others. Limited partners can transfer but subject to partnership agreement Free to sell. Slightly limited by S corporation status. Permission of majority of members needed to transfer interest Continuity of life of business Dissolution on death of owner Dissolution on death or separation of one general partner unless otherwise specified Continuity of lifeMost states allow perpetual existence. Unless otherwise stated in agreement. Start- up costsFiling fees for DBA and business license Filing fees for Attorney’s fees for agreement Attorney fees for incorporation, documentation and filing. TaxationPass-through (38 percent rate) Double-taxation (35 percent or 38 if S) Pass-through (38 percent rate) Ability to raise capital limitedmoderateHighhigh Distribution of profits Go to ownerShared as established in agreementPaid as dividends according to agreement and shareholder status. Shared based on agreement or articles of organization

Dimensions of organizational blueprints Criterion for selectionSkills Exceptional potential Fit with the team Basis for attachmentCompensation (“money”) Qualities of the work (“work”) Work group as community (“love”) Coordination and control Direct monitoring (content) Peer and/or cultural control (context) Professional standards (results) Formal processes or procedures (behavior) Source: Baron, J., and M.T. Hannan Organizational blueprints for success in high-tech start-ups: Lessons from the Standford Project on Emerging Companies. California Management Review, 44:3: 8-36.

Momenta Corp Identify or “imagine” Kamran Elahian preferred delegation style Most appropriate hiring policy? Is its current policy the most appropriate? Most appropriate way of motivating this profile of employees