MHR 423 Creating the Business Plan

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MHR 423Creating the Business Plan

• Spring 2005

Dr. Stan Abraham MHR Dept.
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Principal Course Objectives

• To understand what goes into, and write, a
  business plan for a new business or a young
  business needing financing
• To make a five-minute convincing pitch of that
  business plan
• Two Prerequisites
• MHR 320 or EBZ 306
• MHR 321

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Required Text

• Kathleen R. Allen, Launching New Ventures An
  Entrepreneurial Approach, third edition, Houghton
  Mifflin, 2003
• Dr. Allen teaches at USC
• She is also involved in commercializing
  intellectual property created at the university

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Value of the Course

• Most entrepreneurs have no formal education in
  entrepreneurship
• Some even have no formal education!
• Many have never written a business plan
• Many are engineers, scientists, artists, or other
  professional that have no business experience or
  acumen whatever
• Epitomizes Cal Poly Pomonas philosophy of
  learning by doing
• You will actually write a business plan and do a
  five-minute pitch for the business at the end of
  the quarter before invited guests (investors or
  other knowledgeable people)

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My Expectations of You

• Take more responsibility for your own learning
• You wont learn as much if you dont
• Commit to having a very good group experience
• Your workload and stress level will increase
  exponentially if you dont, and your grade will
  suffer proportionately
• Plan carefully and organize well
• There is a lot to get done in the quarter
• Pay attention to all deadlines
• Get started early

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My Role as Professor

• To create a friendly and fun environment for
  learning
• To act as a resource, coach, expert, and sounding
  board for you as you develop your business plan
• To provide useful feedback at all times
• Especially when grading your assignments
• To give mini-lectures on each topic based on my
  experience
• Will supplement the text nicely

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The Business Plan

• Done in groups
• Based on a business idea you come up with
• But I have two companies that need business plans
• Written in stages
• Improved through feedback from grading
• Experience putting the whole plan together
• Culminates in a 5-min. dazzling presentation
  before guests

External Analysis
Marketing Plan
Financial Projectionsand Investment Deal
Final Business Plan
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Company 1

• An online toy directorythree years old
• Helps thousands of small toy manufacturers
  reach distributors and retail buyers
• Revenues come from listings and ads
• Profits are surging
• Does about 450K in revenues
• Headquartered in Santa Monica, CA
• Run by a relatively young but savvy entrepreneur
• Needs investment capital to expand

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Company 2

• A _____________
• (description)
• Started and run by a recent Cal Poly Pomona
  graduate
• Needs a business plan to finance expansion
• Revenues of about ___
• Headquartered in San Dimas, CA

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Participation Grade (10 pts)

• Nothing happens until I know all your names (week
  3 or 4)
• Attendance gets four points
• Remaining six points for asking questions and
  contributing to discussion during video
  discussions and final presentations
• More than one unexcused absence loses two points
  for each such absence
• More than four unexcused absences gets an
  automatic F

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Written Work

• First drafts must never be handed in
• Always edit them once or twice
• Groups should assign someone this critical task
• Business writing is concise and clear
• If you find writing difficult, you must go to the
  University Writing Center for help
• Take pride in your worka quality business
  deserves a quality business plan
• Final reports poorly written will lose points
• Ask questions about anything you are not sure of

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Videos and Discussion

• A new feature of the course
• On each of three video sessions, I will show a
  video of two startup companies making a pitch to
  a panel for funding
• Please read the business plan for each company,
  available online, before class at which their
  video is shown
• After each company founder has appeared before
  the panel, the class will discuss which of them
  deserves the funding more
• Then a final clip will be shown with the decision
  of the panel as to which one it considered better
• The experience puts you in the role of investor
• The class discussion part will earn you
  participation points, but is otherwise not graded

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Changes made since Fall 2003

• New, more helpful course text
• One comprehensive book, not three
• No software you have to buy and use
• Class gets off to a faster start
• Must settle on your project within two weeks
• No interim group presentations
• Videos and class discussion to make you think
  like an investor
• You can view the companies business plans before
  viewing the video
• More class time to work on your business plan

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Learn what others said

• Course evaluations from Summer 2002 and Fall 2003
  are available for you to see on my website under
  MHR 423
• You will see that I take the feedback seriously
  and improve the course as a result
• Feedback I gave to groups in those classes on
  their Marketing Plan is also available for you to
  read on my website
• Names have been removed to protect the innocent
• The feedback may induce you not to make the same
  mistakes
• You will note my feedback is constructively
  critical and more severe than the grades I gave

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• Any Questions?