Establishing an eBusiness CITM360

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Establishing an eBusinessCITM360 Week 12

• Steven A. Gedeon, PhD, MBA, PEng
• sg_at_intelliaction.com

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This Weeks Agenda

• Case Study Presentations
• Did Everyone Present?
• Business Plan Guidelines
• Presentation Guidelines
• Example Business Plan and Presentation

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Business Plan Overview

• Executive Summary
• Mission, Goals Objectives
• The Business Opportunity (Big Picture)
• Market Analysis
• Key Success Factors (Strategy)
• Marketing Plan
• Processes and Technology Plan
• Organizational Matters
• Financial Plan
• Concluding Comments
• Appendices

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The Business Planning Process

• Identify the Opportunity (Start with an Idea)
• Marshal Scarce Resources (Skunkworks, Prototype)
• Market Analysis (Gather Info, Meet with
  Customers)
• Determine Key Success Factors
• Articulate the Business Opportunity
• Create Plans (Market, Technology, Org, Financial)
• Articulate the Goals and Objectives
• Create and Disseminate the Business Plan
• Implement the Plan
• Monitor and Revise the Plan

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Executive Summary

• Must be a Stand Alone Document
• Normally the First Thing you Send Out
• Many People will Only Read This even if Attached
  to the Full Business Plan
• Must Contain All the Essential Elements to
  Understand the Business and Stimulate Action
  (Accept a Followup Meeting or Ask for the Full
  Plan)
• Normally Written Last

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Mission, Goals Objectives

• This Should Motivate the Reader or Dont Bother
• No Motherhood/Apple Pie Statements
• Give an Overview of the Size of the Opportunity
• Is this Business Capable of Hitting 100M/yr in
  Rev?
• Are there Non-Financial Goals of the Business?
• Financial Goals
• E.g. break even in 6 mo? 2M within 2 years?
• Exit Strategy
• E.g. position ourselves to be acquired by
  Microsoft

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The Business Opportunity (Big Picture)

• This is Also a Motivational Opportunity
• Need to Provide Crystal Clear Understanding of
  the Business before Delving into Potentially
  Confusing Market Information and Plans
• All Info in the Plan must be Integrated with This
  Section
• You may Need to Rewrite this Section Most Often
  as You Discover Info and Refine your
  Understanding of the Business

• The Better we can Define the Opportunity and
  Value
• Proposition, the More Likely we are to Capitalize
  on it

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Market Analysis

• Focus on the Facts
• Provide References and Recent Info May want to
  put a lot of this in the appendix!
• Focus on Detailed Understanding, not Just Broad
  Overviews
• Nobody Ever Hits 1 of the Gazillion Dollar
  Market!
• Businesses are Built One Segment at a Time Pick
  Good Ones and Understand them in Detail
• Key aspects are the detail with which you define
  your customers and your realistic evaluation of
  your competitors

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Key Success Factors (Strategy)

• Synthesis of the Data and Strategy
• Strategy Map showing Key Differentiators
• What are the Few Key Things we Must Do to
  Succeed?
• What are the Few Key Things that Drive the Rest
  of the Plan?
• What are the Biggest Hurdles that we must Address?

This May be the Most Important Section
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Marketing Plan

• Product
• Core, Actual and Augmented
• Detailed Description of how it addresses the
  Customer Need
• Price
• Revenue Model, Pricing Strategy (Penetration,
  Skimming)
• Place (Distribution Channels)
• Promotion
• Can you justify the target revenues through your
  promotional campaigns (e.g. ROI?)

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Processes and Technology Plan

• This is Often in the Appendix (or a Separate
  Document)
• May be more Important if the Company Depends on
  Patents and/or Intellectual Property
• May want to provide Overview in Plan with Details
  in Appendix
• Remember this is an ITM Class and so I plan to
  take this section seriously!

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Organizational Matters

• Whether or not you need this Section may Depend
  on the Purpose of the Plan
• This is Often in the Appendix (or a Separate
  Document)
• May want to provide Overview in Plan with Details
  in Appendix
• Many Plans Only Provide a Good Overview of
  Management Team and Board of Directors

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Financial Plan

• Most Investors (and All Bankers, VCs) WILL READ
  this in detail and feel that this is the true
  Heart of a Plan
• Most plans Fail on this section
• Provide Proforma Financials in the Appendix
• Clearly State Key Drivers and Assumptions
• This section should demonstrate that you
  understand the Key Issues and Costs of doing
  business
• CPM Understanding if Revenues based on Traffic
• Understanding of the True Cost of Sales and Sales
  Cycle
• Demonstration of how to Manage Cash (Cash is King)

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Concluding Comments

• Last Chance to Motivate the Reader
• This is not a Summary Its a Conclusion
• Highlight the Key Things you want them to Remember

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Appendices

• Make sure you maintain a logical flow to the
  Business Plan. Anything that breaks the flow, but
  needs to be included, should be put in the
  appendix
• Resumes, Technical Details, Reports, Financial
  Statements all belong in the appendix
• Nice way to show youve really done your homework
  by including lots of backup information

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Final Business Plan Comments

• Edit, Edit, Edit! Mistakes and obvious spelling
  and grammar errors are deadly!
• Put Contact Information on Front Page and at end.
  You never know where your plan will end up and
  who may want to call.
• Format should be appropriate to your stage (dont
  make it too slick for a startup).
• Add some color, figures, logos

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Deliverables Biz Plan

• Hardcopy and Electronic versions of
• final presentation slides (PowerPoint file)
• Business Plan (Word file)
• Financial Plan (Excel file)
• Word File must be submitted to turnitin by
  midnight April 14 if youre late, there will be
  a penalty

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Business Plan Format

• Single spaced
• About 25 pages in main report, plus appendices
• Make use of colour, graphs, tables, white space

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Overall Organization of Plan

• Logical consistency, overall integration,
  cross-referencing
• What you have to say about your companys
  mission, and its business strategies, should be
  consistent
• Your Key Success Factors should drive the Market,
  Technology and Finance Plans

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What Reviewers Look For?

• Strengths of business management team (People,
  People People)
• Market share information, based on industry
  analysis understanding of competition
• Realistic projections based on available
  evidence
• "credible, not aggressive numbers"
• "even Microsoft only generates 40 margins"

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A Business Roadmap

• Does your plan include
• Strategies that appear rational and achievable?
• Sound profitability and growth projections,
  formatted as bankers usually see them?
• Sound competitive analysis?
• Sound marketing plan, based on thorough research?

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Self-Evaluation

• See worksheet 9.1 (BPTW)
• Use this to help identify weaknesses in your
  business plan

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Things that take you from an adequate plan to
a good plan
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Target Market

• Good definition of customers
• Segment, Segment, Segment
• Age, Income. Location, Quantity

• Reasons for interest in your product/service
• Clear differentiation between customers and
  users, if different
• Qualitative and Quantitative description of
  demand
• Now and in the future

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Target Market (2)

• Clear identification and discussion of
  competitors
• Why are you different??
• Appropriate Strategic Map showing Differentiation

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Business Model

• Demonstration of a good business model
• Coherent demonstration of how the targeted
  customers fit the business model
• Recognition of geographic limitations
• Scalability/roll-out model

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Business Model (2)

• Solid set of business processes, with good
  numbers
• Transaction volumes and resourcing needs
• Likely volumes
• Optimistic. Pessimistic, Most Likely
• Identification of likely challenges/problems

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Resources Needed

• Principals strengths weaknesses
• Additional resources needed are identified
• Management, other workers, partners, alliances
• Capital assets contributed/created/needed
• Creative acquisition of the resources

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Numbers Dollars

• A rational flow of numbers from section to
  section
• Realistic funding requirements
• Timing/staging

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Numbers Dollars (2)

• Links between key transaction numbers and revenue
• How customers turn into revenue
• What it will cost to generate that revenue
• A recognition of the various time lags
• Marketing to attracting customers
• Customers to orders
• Orders to payments

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Finally, for academic assessment

• Clear statement of any assumptions
• Recognition of sources (not necessarily as formal
  bibliography)
• Identification of any holes in your plan that
  you could not answer (better to admit you know it
  is missing than have reader discover it)
• Edit for readability
• Edit for proper spelling and grammar

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What is Readability?

• Understand your audience
• Talk to your reader (we and you)
• Dont say it the hard way (use short words,
  sentences and paragraphs)
• Analyze complexity and work to simplify
• Dont save paper, use white space
• Use meaningful headings

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Meaningful Headings

• Headings should be informative
• Headings should be short
• Text should make sense independent of its
  headings
• Dont overdo it

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Tables/Graphs

• use graphics to explain your points, e.g.
• sales forecast graph, could overlay with
  breakeven analysis
• summarize info in tables or bulleted lists

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Time, Editing Input

• Get others to review the document (perhaps even
  in sections)
• Edit down length -- look for balance across the
  report
• Use Appendices effectively

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Bloopers to avoid

• Not referencing Exhibits or Appendices in the
  main report
• Spell-checking but not proof reading
• Weak conclusions without rationale or
  recommendation

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Bloopers with numbers

• Spurious accuracy
• In our survey 66.376 stated. (66 or even
  2/3rds)
• Insufficient research/analysis
• Sales will definitely pick up by the 3d quarter

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Effective Presentation Tips

• The best analysis is pointless if it is not
  effectively presented to the client
• A good presentation or report stands on its own
  -- it should make sense to an outside reviewer
  who was not part of the study
• You often have only limited time to present a
  complex piece of material
• Errors in spelling, grammar and format raise
  basic questions about your competence

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Effective Presentation Tips

• slide design

check your colours on the background
make sure colours are visible

• dont try to present entire report, focus on key
  aspects of business plan

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Final Presentation - Logistics

• Presentations - 25 minutes by each team
• Questions lt5 minutes
• Written critique using forms to be handed out.
  You will need to critique each presentation
  (other than your own)

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Evaluation Criteria for Final Presentation

• Content - covered key issues in Business Plan
• Clear and concise
• Well thought out
• Makes sense and logical
• Evidence of research
• Presentation Style
• Articulate
• Quality of slides
• Confident - If you have a good plan, it exudes
  enthusiasm BPTW Page 47
• Good response to any questions