Writing The Winning Business Plan

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Writing The Winning Business Plan

• Jack DerbyDerby Management

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Why create a Business Plan?

• Most importantly, for you your team
• You need one for a startup
• You need one for a corporation
• The actual process of planning is the key.
• It consolidates management direction.
• It provides debate finally consensus.
• Its used as a guide when speed bumps happen.
• Its your company your personal scorecard.

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Why else?

• No Business PlanNo money.
• The Six Stages of Successful Sources
• FFA Friends, Family Acquaintances
• Private angels
• Venture capitalists
• Corporate investors
• Strategic partners
• Banks

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Writing a plan is tough work

• It requires disciplined balance
• Its visionary, but logical.
• Its financially perfect, but flexible.
• Its for today, but also for 3-5 years out
• Its a formal Plan, but its easy to read.
• Its creative, but it follows The Rules.

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How do you start?

• Pay attention to The Dos Donts.
• Above all else
• Be compelling
• Be brief, focused, deliberate
• Focus on customers how you will sell them.
• Provide market research hard data
• Be innovative describe barriers to others.
• Create an experienced management team

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The 25 Dos

• Be brief direct detailed.
• Get to the bottom line quickly.
• Identify what the business is immediately
• Identify the business model immediately.
• Focus on your customers.
• Define whats compelling.
• Define whats unique.

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The 25 Dos

• Be realistic with yourself.
• Remember, you're investing your career.
• Define long term objectives for 3 to 5 years.
• Describe the 3 to 4 primary strategies.
• Focus on your sales model channel strategies.
• Include your ecommerce strategies.
• Make realistic, but exciting, projections.

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The 25 Dos

• Support strategies with detailed tactics.
• Substantiate with accepted market research.
• Discuss very objectively your risks.
• Answer the question of why customers buy.
• Describe the barriers to entry for others
• Convince your reader about success.

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The 25 Dos

• State how much money you will need.
• Define exactly how the funds will be used.
• State clearly your exit strategy.
• Stick with proven and accepted plan formats.
• Don't try to be cute!

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The 15 Donts

• Write about history. Focus on the future.
• Focus only on you your technology.
• Use highly technical buzz descriptions.
• Forget about objective customer research.
• Make unsubstantiated statements or claims.
• Create revenues that you wont make.
• Include detailed budgets.

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The 15 Donts

• Forget what makes your plan different
• Experienced management
• Large and growing markets
• Proven sales models channels
• Experienced sales penetration tactics.
• Innovative technologies

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The 15 Donts

• Assume anything.
• Forget what your reader wants.
• Define valuations in the actual plan.
• Attempt to write the business plan alone.
• Extend the process more than two months.
• Include copies of resumes technical papers.
• Forget to proofread, proofread proofread.

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Dont just start writing

• PreparationThe Key to Success.
• Whats my Vision?
• Can I say it so that anyone understands it?
• What business are we in today?
• What about in 3 years?
• Are we really innovative?
• What about in 3 years?

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Dont just start writing

• PreparationThe Key to Success.
• What do we really know about
• Our future product roadmap
• What our service offerings could be.
• The market data, trends, forecasts.
• The new technologies in development
• The competition
• Who are our customers will be in 3 years?

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One more preparation task

• Think about your starting assumptions.
• Externally, what do I think will happen about
• Economic trends
• Markets that I am entering
• Technology changes
• Regulations

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One more preparation task

• Define your starting assumptions
• Internally, what do I want expect for
• Sales revenue growth rates
• Product costs and margins
• Sales expense percentages
• GA expense percentages
• Receivables, payables, financing, capital
  models.

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Now, you can finally start writing.

• What you need
• A quiet place and time.
• All of your data easily available.
• Start working by yourself.
• Get the content down quickly.
• Send a first rough draft to others quickly.
• Write draft after draft after draft after..

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You have two options today

• The Traditional Business Plan
• 7-8 sections
• 20-30 pages with financials
• More detail markets, products technologies
• Business Plan Lite
• 2 sections
• 8-10 pages with financials
• An extended Executive Summary

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The traditional plan

• Certainly preferred by us
• Provides an opportunity to provide clear details
• Brings out the richness of the business idea.
• Details the business and sales models
• What follows here is the traditional format
• 7-8 sections
• 20-30 pages

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Business Plan Lite

• A result of the times
• Today, time to read is the driver.
• Requires you to
• Be an excellent writer
• Provide great detail with very well chosen words
• Get your points across succinctly with clarity.
• Sections 1 2 7 create the BP Lite

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Whats included?
Vision Strategies Tactics Operations
Actions
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Whats included?

• 7-8 Sections
• Executive Summary
• Introduction to the business
• Definition of your products services
• Overview of your markets
• Overview of your sales marketing plans

These become the Business Plan Lite.
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Whats included?

• Overview of product development roadmap
• Summary of manufacturing operations
• Bios of your management team
• Four pages of financials
• Brief appendices if necessary

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Section 1 The Executive Summary

• 2-3 pages
• Make it compelling
• Your Idea
• Your Markets
• Your business and sales models
• Your competitive advantages
• Your management team
• Your use of the funds

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Section 2. Whats the Business?

• This section is focused on
• The Business Opportunity
• The Markets
• The Technology
• The Products

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Section 2. Whats the Business?

• This section must define
• a clear Vision
• clear strategies
• a well defined business model
• a dedicated, believable Mission
• a strong sense of management experience

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Section 2. Whats the Business?

• The products their value add services
• features benefits, innovation, technology
• The markets
• research data
• competition
• The customers
• who they are their needs

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Section 3 Sales Marketing

• The most important section
• 3.1 Whats the Market?
• Customer analysis their needs
• Worldwide market size trends
• Competitive strengths weaknesses
• Value creation for your products services

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Section 3 Sales Marketing

• 3.2 The Marketing Plan
• What are your marketing strategies?
• What are the data points to measure success?
• What is your price positioning why?
• What are your primary tactics in years 1 2?
• What are your primary events in year 1?

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Section 3 Sales Marketing

• 3.3 The Sales Plan
• Whats your Sales strategy?
• What standard channels will you use?
• Is there an innovative channel?
• What are your penetration tactics?
• Whats your sales model?
• Whats your hiring training plan?
• Whats your measurement reporting?

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Section 4 Engineering and RD

• What are your core technologies?
• Provide sufficient, but not numbing, detail.
• What is your development status?
• Describe your primary milestones.
• Be conservative.
• Assume development will be late.
• Detail the technical teams background.

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Section 4 Engineering and RD

• What is your strategy for future products?
• Define in text with graphics your roadmap
• Define common platforms and architectures.
• What your IP patent strategy?
• What is your IP strategy?
• If you have patents, provide a status table.
• If not, define why not in a positive manner.

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Section 5 Operations/Manufacturing

• Whats your Manufacturing strategy?
• Outsource or not?
• Why why not?
• What is core in Manufacturing?
• What are your unique capabilities
• What are your unique processes?

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Section 5 Operations/Manufacturing

• Focus on your customers in your
• Distribution strategy
• Quality strategy
• Value added services that you will employ

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Section 5 Operations/Manufacturing

• What is your Customer Support strategy?
• Customer order fulfillment tactics
• Primary objectives
• Delivery
• Response time
• Primary policies
• Outsource or not?
• Future services that you will provide?

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Section 6 Senior Management

• Management
• The 1 reason that investors do not invest.
• Experience counts first.
• Dedication counts second.
• Ability to rapidly learn is third
• Too strong an ego is a negative.

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Section 7 The Financials

• The Rule Everything Must Hang Together
• Your vision and strategies in text must tie in.
• Your market growth objectives must tie in.
• Your business and sales models must tie in.
• Your margin percentages must tie in.
• Your cost of goods must tie in.
• Your expenses must reflect standard percentages.
  

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Section 7 The Financials

• You need
• PLs
• 1st year by month
• 2nd year by quarter
• 3rd year by year
• Balance Sheets for each year
• Cash Flows for each year
• 3-4 pieces of paper only

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Section 7 The Financials

• You need to list your
• Primary assumptions
• Primary categories for the use of the funds
• What are the primary risks?
• Other than the normal of early stage companies
• If nothing specific, do not list any.
• Whats your exit strategy?

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Section 8 The appendices

• Provide only the compelling things
• Product data sheets for primary products
• Any critical publication.
• Do not provide resumes.
• Do not include patents.

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Where do I go for help?

• Good textbooks
• Rich, Gumpert
• Anything from HBS Press
• Anything from Inc.
• Inc Magazine inc.com
• Startup.wsj.com
• MIT Enterprise Forum workshops

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Where do I go for help?

• MIT Enterprise Forum TCN seminars
• The best local entrepreneurship schools
• MIT Sloan , Babson, HBS, Bentley
• Professional Mentors Coaches
• Venture capital investors
• The big CPA firms
• PWC, Deloitte, Ernst, Andersen.
• The big law firms
• Testa,
• INC, Fortune Small Business

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Derby Management

• Coaching
• One on One senior management
• One on Team senior management
• Strategic Planning
• Business Plan writing editing
• Fundraising
• Recruiting and replacing players

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How to find us

• Derby Management
• 20 Park Plaza
• Boston, MA 02116
• Office 617-266-9266
• Cell 617-504-4222
• jack_at_derbymanagement.com