Business Plans Built by Stambaugh/2009 Jeff Stambaugh Dillard College of Business/Rm 257A

Motivation Built by Stambaugh/2009 ■ Are business plans a waste of time? Business plans are outdated shortly after they are printed!

Internal Audiences Built by Stambaugh/2009 ■ What’s the plan ■ Roadmaps / milestones ■ What’s my role ■ How we doin’?

External Audiences Built by Stambaugh/2009 ■ Banks: can they repay, what collateral do they have ■ Investors: who are they, what’s the return ■ Suppliers / Partners: what do they add, can they make it ■ Prospective employees: growth, stability

Building the Plan Built by Stambaugh/2009 ■ Vision / Mantra (10 words or less) ■ Mission: include strategy ■ Elevator Pitch: 60 second (+/-) speech that: ■ Hooks fast (new product / competitive angle) ■ Specific request / status

5-M Plan for BP Strategizing Built by Stambaugh/2009  Mantra  Mission  Measures  Methods  Mechanics

BP Faux Pas Built by Stambaugh/2009  “Creative” Format  Sloppiness  Too ornate  Unrealistic / undefined market  Lack of external support (when available)  Overly / “underly” aggressive financials  No skin in game (if seeking money)

“Standard Format” Built by Stambaugh/2009  Cover Letter  Title Page  TOC  Exec Summary  The Company  The Market  The Organization  The Financials  Appendices

Cover Page Built by Stambaugh/2009  Good stationary with logo  Personalized  Follow the template: p. 213

Exec Summary Built by Stambaugh/2009  Product (don’t forget hook)  Market  Competitive Advantage  Management (experience)  Business (status/stage)  Finances (details of offer)

The Company Built by Stambaugh/2009 ■ Description of status ■ Product / Service and Industry Analysis

Market Built by Stambaugh/2009 ■ Market and target customer ■ Competition / competitive advantage ■ Marketing strategy

The Organization Built by Stambaugh/2009 ■ Legal / org structures ■ Key personnel ■ Location

Financials Built by Stambaugh/2009 ■ Critical assumptions ■ The deal for investors ■ Income statements ■ Cash flow statements ■ Balance sheet statements ■ Milestones

Tailor the plan Built by Stambaugh/2009 ■ For audience ■ For your business

Recognize the risks Built by Stambaugh/2009 ■ Numbers too optimistic ■ Sales don’t materialize ■ Competitors ■ Lack of experience ■ Inadequate cushion ■ Inadequate payback

Why Presentations? Link Link Built by Stambaugh/2009 ■ Passion? ■ Expertise? ■ Professionalism / Personality ■ Recruiting a team link link ■ Finding Soul mates link link

Class Takeaways Built by Stambaugh/2009 ■ Solid business plan is a key pathway to success ■ This is a legit opportunity ■ Product adds significant value to customer ■ Exciting business model with ability to defend its position ■ Well-defined target market in an attractive industry ■ They can handle competitors’ reactions ■ Management team is “ready” ■ Firm organized in appropriate, legal, ethical manner ■ Financials realistic with appropriate ROI ■ Risks are addressed