1. Business Planning Process
Entrepreneurs Pocket Guide FS 2017

3. Why you need a business plan.
It is a small investment in time and cost when compared to the time and cost of starting a business.
It forces the entrepreneur to think critically about all aspects of the business venture.
Think anticipatory.
It can later be used as a benchmark to monitor the progress of the business.
To get feedback from others.
***new slide***
Copyright © 2014 John Wiley & Sons, Inc.
Copyright © 2014 John Wiley & Sons, Inc.

4. Business planning is a continuous process.
Start business planning when starting to think about a new venture
Organize information into topic areas
Focus on critical aspects of the business model and follow basic/common plan formats
Copyright © 2014 John Wiley & Sons, Inc.

5. The plan should be for You.
Investors and Outsiders second.

6. Types of Plans: 5+ page (glorified) Executive Summary Use: Audience:
Organizing you own thoughts.
Inviting potential stakeholders (investors, partners, etc.)
Audience:
Internal & External
25+ page Formal Plan
Due diligence by investors or lenders
Mostly external.
li: in/jodyburgess

7. 10-20 Minute Investor Pitch Deck
25+ Page Biz Plan
10 Minute Concept Pitch
5 Page Exec Summary
10-20 Minute Investor Pitch Deck
li: in/jodyburgess

8. 10-20 Minute Investor Pitch Deck
Audience
FFF
Early Pitch Events
Crowd funding
Must haves
Clear
Simple
Compelling
Tangible
Enthusiasm
Marketing
Audience
Angels
Later Pitch Events
Must haves
Clear Value Prop
“Whole Business”
Proof/validation
Traction
Financial plan (ROI)
Audience
Angels at Due Diligence Stage
VC’s, Banks
Must haves
Clear execution plan
Extensive financials
Milestones, roadmap, $$ required
25 Page Biz Plan
5 Page Exec Summary
10 Minute Concept Pitch
10-20 Minute Investor Pitch Deck
li: in/jodyburgess

9. Summarize your business plan with an executive summary
Write Executive Summary last.
Hook the reader.
Provide compelling information on:
Description of Opportunity
Business Concept
Industry Overview
Target Market
Competitive Advantage
Economics / Revenue Model
Team
Offering (if applicable)
Copyright © 2014 John Wiley & Sons, Inc.

10. Example:

11. Example:

12. The goal with your plan is to Tell a story

13. “General Format” Cover Table of Contents Executive Summary
Company and Product Description
Industry / Customer Analysis
Competitor Analysis
Go to Market Strategy
Team / Management
Critical Risks
Offering / Ask (if appropriate)
Financial Plan (projections)
Appendices
Entrepreneurship - Bygrave

14. Company and Product Description
What is the problem / opportunity?
Specificity is important. Necessary to convince the reader (and yourself.)
How are you planning to solve it?
Give a clear and concise description on how you plan to solve your customer’s pain.

15. Industry / Customer Analysis
Provide evidence that the market you are entering is growing and valuable.
Is there a trend working in your favor?
Customer
Size of market
Number of potential customers.
Be specific!!!
How much money is being spent in the industry.
Be cautious of top-down vs. bottom-up forecasting with your financials later.
(See concentric circle model – next slide.)
Customer Profile
Provide an overview of the ideal customer.

16. Tertiary Market
– Occasional customer.
Secondary Market
- Not your most likely buyer but worth marketing toward.
Primary Market
Your ideal customer.

17. Competitive Analysis
It is good to be transparent and acknowledge what options exist.
You always have competition –even if the answer is status quo.
Focus on their feature sets and product offerings.
Better to highlight why your idea will better address a subset of the market that isn’t using the current offerings, then to say that you’ll steal users away (this is a harder sell to consumers.)
Might find use in developing a competitive matrix. (next slide)

18. Competitive Matrix (Example Feature List) Competitor 1 Competitor 2
Price
Convenience
Web enabled
Flashing lights
USB port
(Example Feature List)

19. Go To Market Strategy
How do you plan to acquire customers and get your product / service to them?
Create a series of milestones that highlight you plan for the near future to get your product launched and gaining traction.
Marketing Plan (How will you secure your customers?)
Think small & be specific.
How do you acquire the first 100 customers? 1000? Etc.
Show a clear understanding of the sales process.
Operations / Development Plan (How will you build your product?)
Product development
Branding / IP
Support
Metrics…etc.

20. Team Highlight the key members of your founding / leadership team.
Specifically showcase:
Industry expertise
Skill sets and talents
Relevant experiences
Spend time on this as many investors bet on the team over the idea.
But you have to be truthfull.

21. Critical Risks Transparency above all else.
What are the obstacles that completely derail the business?
What external events could derail the business?
What other “stakeholders” could be an issue in development?
FYI -Your investors likely know all about these risks so you acknowledging them shows that you are thinking ahead and developing relevant strategy.

22. Offering / Ask Outline of investment opportunity.
How much capital is needed?
What is being offered? (stock)
Timing?
Exit strategy?
Note: Think carefully about adding this to your plan.
Most investments start as a discussion around the business not a cold ask.
It isn’t like Shark Tank.

23. Proforma Financial Statements
It is about the assumptions not the numbers!!!
Considerations:
Develop a revenue model & pricing strategy.
Establish COGS
Startup /Fixed expenses vs. Operating expenses
Its alright if you show a loss.
It is better to be conservative then to seem like you aren’t being truthful.
Year 1 - should show month to month
Years 2 & 3 – can be annual only

24. FINANCIAL CONSTRUCTION CHECKLIST
Step 1: Build-Up Method
1. Identify all your sources of revenues
2. Determine your revenues for a “typical day”
3. Understand your revenue drivers
a. How many customers you will serve
b. How much product they will buy
c. How much they will pay for each product
d. How often they will buy
4. Validate driver assumptions
a. Primary research (talk to customers, attend trade shows, etc.)
b. Secondary research (industry reports, company reports, etc.)
5. Recombine. Multiply the typical day by the number of days in a year
6. Determine Cost of Goods Sold (COGS) for a typical day
7. Recombine. Multiply COGS by number of days in a year
8. Determine operating expenses by most appropriate time frame
9. Refine operating costs
10. Create preliminary income statement
Step 2: Comparable Method
11. Compare revenue projections to industry metrics
12. Run scenario analysis
13. Compare common-sized cost percentages to industry averages
Step 3: Building Integrated Financial Statements
14. Derive monthly income statements for first two years, yearly statements for year 3–5
15. Create balance sheet (yearly for year 1–5)
16. Create cash-flow statement (monthly for years 1 and 2, yearly for years 3–5)
Step 4: Final Steps
17. Write a two- to three-page description of financial statements
Copyright © 2014 John Wiley & Sons, Inc.

25. Closing: Don’t get paralyzed in planning.
Look for great examples online.
Ask for lots of people to review and edit.
You will get mixed feedback.
Consider templates / software.
LivePlan

26. Contact: Ken Szymusiak - Managing Director, Burgess Institute for Entrepreneurship & Innovation Office: N456 - Business College Complex