1. Introduction of Entrepreneurship - Business Plan
Consumer Behavior_Introduction_
2008/2/19
Introduction of Entrepreneurship
- Business Plan
Chin-jung J. Luan
Mar
by C-J Luan at NDHU-IB 1

2. The Business Plan Objectives
Carefully articulate the merits, requirements, risks, and potential rewards of the opportunity and how it will be seized
Demonstrate how the four anchors reveal themselves to the founders and investors by converting all the research, careful thought, and creative problem solving from the Venture Opportunity Screening Exercises into a thorough business plan

3. What Does It Reveal?
A business plan for a high potential venture reveals the business’ ability to:
Create or add significant value to a customer or end user
Solve a significant problem, or meet a significant want or need for which someone will pay a premium

4. What Does It Reveal?
A business plan for a high potential venture reveals the business’ ability to:
Have robust market, margin, and moneymaking characteristics
Fit well with the founder(s) and management team at the time, in the marketplace, and with the risk-reward balance

5. What to Be Obsolete?
The plan is obsolete the instant it emerges from the printer
The pace of tech and info-age change, and the dynamism of the global marketplace shortened the already brief life expectancy of any business plan
It’s impossible to find a year-old venture today that is identical in strategy, market focus, and so forth as the BP described

6. Work in Progress The BP should be thought of as a work in progress
Never finish it even the funds, team, directors are raised
It’s actually a contingent plan ahead
One has to be prepared to continually adjust course to min risk and ensure successful completion of the journey

7. The Plan Is Not the Business
Without a BP, it is exceedingly difficult to raise capital from informal or formal investors
Some of the most impressive BPs never become great businesses; some the weakest plans lead to extraordinary businesses
Case- Lotus Development Corp.

8. The Plan Is Not the Business
What Mitch Kapor proposed originally?
a brief letter of some description of nearly 10 separate products
a one-year monthly startup budget
a five-year goal of $30M
capital required- $200K-300K

9. The Plan Is Not the Business
What VC thought of the plan?
basically discarded it
the opportunity is much bigger
a five-year revenue up to several hundred million
capital required- $1M
vital- first-mover advantage
Result: $500M in revenue in the
first 5 years

10. Some Tips of the Preparation
Refer to Exhibit 6.1
Tom Huseby’s experience sharing
sell-sell-sell myopia
Entrepreneurs not only succeed at developing a great business concept but attract the right investors
2 powerful forces are unleashed in the process- discern and message (signals)

11. Who Develops the Plan?
Reasons not (Con-) to hire an outside professional to prepare the business plan
Consequences of different strategies and tactics can be considered
Human and financial requirements for launching and building the venture can be examined
Pro- the MGMT team can use its time to obtain financing and start the business

12. Writing a Business Plan
Steps outlining the process by which a business plan is written
Segmenting information
Creating an overall schedule
Creating an action calendar
Doing the work and writing the plan

13. Business Plan I. EXECUTIVE SUMMARY
Description of the business concept and the business opportunity and strategy
Target market and projections
Competitive advantages
Costs
Economics, profitability, and harvest potential
The team
The offering

14. Business Plan
II. THE INDUSTRY AND THE COMPANY AND ITS PRODUCT(S) OR SERVICE(S)
The industry
The company and the concept
The product(s) or service(s)
Entry and growth strategy

15. Business Plan III. MARKET RESEARCH AND ANALYSIS Customers
Market size and trends
Competition and competitive edge
Estimated market share and sales
Ongoing market evaluation

16. Business Plan IV. THE ECONOMICS OF THE BUSINESS
Gross and operating margins
Profit potential and durability
Fixed, variable, and semivariable costs
Months to breakeven
Months to reach positive cash flow

17. Business Plan V. MARKETING PLAN Overall marketing strategy Pricing
Sales tactics
Service and warranty policies
Advertising and promotion
Distribution

18. Business Plan VI. DESIGN AND DEVELOPMENT PLAN
Development status and tasks
Difficulties and risks
Product improvement and new products
Costs
Proprietary issues

19. Business Plan VII. MANUFACTURING AND OPERATIONS PLAN Operating cycle
Geographical location
Facilities and improvements
Strategy and plans
Regulatory and legal issues

20. Business Plan VIII. MANAGEMENT TEAM
Organization and Key management personnel
Management compensation and ownership
Other investors
Employment and other agreements and stock option and bonus plans
Board of directors
Other shareholders, rights, and restrictions
Supporting professional
advisors and services

21. Business Plan IX. OVERALL SCHEDULE
X. CRITICAL RISKS, PROBLEMS, AND ASSUMPTIONS
XI. THE FINANCIAL PLAN
Actual income statements and balance sheets
Pro forma income statements / forma balance sheets
Pro forma cash flow analysis
Breakeven chart and calculations
Cost control
Highlights

22. Business Plan XII. PROPOSED COMPANY OFFERING XIII. APPENDICES
Desired financing
Offering
Capitalization
Use of funds
Investor’s return
XIII. APPENDICES