Strategic Business Overview

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Strategic Business Overview

• A Guide to Creating a Professional and
  Comprehensive Overview for Your Venture

Revised 10/1/99
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About this Guide...

• This PowerPoint presentation or deck is a guide
  to structuring and organizing your own venture
  overview. Overviews generally take the form of
  Business Plans, Executive Summaries and Venture
  Presentations. Regardless of the application,
  the principals and guidelines are inherently the
  same.
• Included are suggested headings, content and
  subject order.
• Following the slides is a Notes section
  containing overall suggestions and strategies for
  organizing and structuring the overview.

Key Points This section at the bottom of each
slide lists the crucial questions that must be
answered by that particular slide. Above all
else, answer these questions.
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Formatting

• The slides were intentionally left simple and
  plain. Paper materials should be printed on plain
  paper while avoiding the overuse of color and
  glitz.
• When preparing presentations, select your own
  backgrounds, colors, layout and the use of text /
  graphics.
• Be as concise as possible summarize key points
  and leave plenty of white space.
• You may need two different versions a live
  version that you present in person and a paper
  version that will be unaccompanied by an oral
  narrative.
• Live presentations use dark backgrounds and
  light colored text / images. Live decks should be
  extremely concise.
• Paper presentations use light background,
  minimal shading (they might make copies) more
  detailed than live version.

Key Points Remember, your materials (paper and
presentation) are a direct reflection of you and
the business in review. Keep it clean, simple
and professional.
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Overview Outline

• Business Concept
• Background
• Technology and Products
• Market Analysis
• Competitive Advantages
• Marketing Plan
• Growth Strategy
• Management Team
• Financial Plan

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Business Concept

• This is a 2 minute summary of the venture,
  concept and business model. Make sure to grab
  the readers attention!
• Speak in broad or high-level terms that the
  audience can relate to, rely on graphics and
  diagrams to illustrate.
• Discuss the economics that drive the business and
  show how you make money.
• The purpose of this slide is to describe the
  overall nature, industry and type of business you
  will be presenting.
• If applicable, include your Mission Statement.

Key Points What is the overall concept of the
venture? Where does it fit into the business
universe or the grand scheme of things? What
will this Company do and How will it make money?
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Background

• How did you become involved in the venture?
• Who are the key participants?
• Briefly discuss steps taken in forming the
  Company.
• Again, quick overview, highlight the key events
  and developments only - no minutia.
• Generally how and why this venture came to be...

Key Points Where did this product/technology
come from? How and when did this all get
started? How did the key participants get
involved in the venture? What has been
accomplished to date?
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Technology and Products(or Service)

• Describe the technology in terms the audience
  will understand - avoid technical jargon.
• List the products (if several, list major ones)
  and discuss the features and benefits of each
  product. Use pictures, diagrams or actual models
  if available.
• Validate the technology and prove that it works.
• Typical questions What is it? How does it work?
  What does it do? What need does it fill? What
  problems does it solve? What is unique about it?
  And most importantly, Why will your customers buy
  it?

Key Points What exactly is the product or
service? What are its key features and benefits?
How is it unique and different? Is the product
/ technology proprietary? If so, is it protected
by patents? Why will potential customers want to
buy it?
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Market Analysis

• Provide credible statistics (referenced)
  Industry and market size, number of customers,
  price points and growth trends.
• Identify barriers to entry, customer buying
  power, supplier power, threat of substitutes,
  market dynamics and structure identify key
  participants (use graphics).
• Define and segment customer universe (who is most
  likely to buy and why?).
• Demonstrate user validation i.e. focus groups,
  alpha/beta site.
• Describe and support the need and demand for your
  product.
• Discuss level of competition within industry and
  describe your competitors (direct and indirect).
  List their strengths and weaknesses. Show where
  you fit in the big picture.

Key Points What does the overall market look
like and how big is it? How is the industry
structured? Where are your customers and, again,
why will they buy your product? Who are your
competitors? What are your competitors strong
points?
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Competitive Advantages

• Describe key, sustainable competitive advantages
  patented technology, trademarks, exclusive
  contracts, etc. If possible, list your unfair
  advantage (cannot be replicated).
• Highlight additional competitive strengths
  barriers to entry, strategic partnerships, RD
  capabilities, first mover advantage, fast
  time-to-market capabilities, solid financial
  backing or knowledgeable, experienced management
  team.
• Highlight the key differences between you and
  your competitors products (benefits, features,
  performance and price), positioning,
  capabilities, and strategy.
• How or why is your product an improvement over
  status quo?
• Do not ignore, belittle or underestimate your
  competition.

Key Points Where are your competitive
strengths/weaknesses? Which are real,
sustainable competitive advantages vs.
competitive strengths? How will you confront and
minimize competition? What can you do to keep
from being ambushed in the marketplace?
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Marketing Plan

• Describe your overall marketing strategy and
  describe your marketing and sales organization.
• Describe target market, why theyll buy and
  expected share Who makes buying decision? What
  do they value? What is required to make a sale?
  Support assertions with data.
• Discuss how and when you will reach your
  customer advertising, promotion, point-of-sales
  and distribution. (Can you utilize the Internet?)
• Discuss your brand and how it will be developed.
• Explain your pricing rationale and compare to
  market.

Key Points Who exactly are your customers? Why
will they buy from you? How do you intend to sell
your product? How do you know they will buy it
at your price? What are the key aspects of
branding, promoting and distributing your
product? Again, how can you assure reader that
you can reach your projected sales levels?
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Product Development Plan

• Describe the product development / manufacturing
  process.
• Identify key elements of process that will be
  internal or outsourced. If outsourced, identify
  supplier.
• Describe major capital items, critical skills and
  lead times.
• Describe managements experience and existing
  available resources to implement the development
  plan.
• Describe how much has been accomplished to date.
• What are the remaining critical steps in the
  initial phase of the development or production
  plan?
• Identify similar efforts to produce or develop
  product.

Key Points What are the critical steps, skills,
equipment., technology and other resources needed
to complete the development process. What are
the sources of supply or technology? What are the
potential missteps?
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Growth Strategy

• Taking into consideration operations,
  manufacturing, suppliers, personnel and
  management - what is needed for growth and what
  challenges will you face in order to reach the
  targeted revenue goal.
• In broad terms describe your strategy for
  sustaining high growth rates. This may include
  the following topics technology development,
  product line extension, aggressive marketing and
  branding, strategic partnerships, mergers and
  acquisitions and adequate financing.
• Identify the risk factors that may prevent you
  from reaching your goals (or worse case, cause
  the business to fail).

Key Points How quickly can you grow the
business? What is your strategy for reaching
that goal? What are the resources needed to
sustain a high growth rate? What are the key
stress points?
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Management Team

• Identify principals and management team.
• Describe the relevant background, experience and
  expertise of key individuals. Show strong track
  records.
• Discuss the qualifications (particularly of the
  founder or CEO) that add value to the
  organization and increase the chances for
  success.
• Has the CEO ever run a business?
• Identify weaknesses in management, positions that
  need to be filled and how / when you will secure
  the right people.
• Identify the team member with the accounting
  /financial expertise.
• List board of directors and their relevant
  experience.

Key Points Who will run this company? Are they
qualified? What holes need to be filled? What
are the strengths and weaknesses? Note this is
the MOST important consideration. Investors want
to see a track record of success.
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Financial Plan

• Summarize 5 year proformas (reasonable
  expectations)
• Show unit sales, revenue, gross margin, EBITDA,
  EBT.
• Provide detailed financial statements as
  attachment.
• Highlight Breakeven and profitability points.
• Describe current cash position cash on hand and
  cash flow.
• How has the venture been capitalized to date?
• Describe compensation for management (pre- and
  post funding)
• Identify amount and timing of capital needed to
  fund growth.
• Identify and discuss the Use of Proceeds
• Equipment, RD, Working Capital, Marketing Costs,
  Inventory, Startup Expenses, Acquisitions, Etc.
• Identify the options for an Exit (Sale/IPO/Recap).

Key Points What are the realistic revenue
projections? When will the company reach
profitability? How much capital is needed, when
will it be needed, what will it be used for?
What is the investors exit strategy?
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Notes On Strategic Overviews
Audience Take-Away's

• By the end of the Business Plan/presentation the
  audience must have a very clear understanding of
  the following
• The overall concept and business model
• The product/service, its benefits and how it will
  be sold
• The technology and proof that it works
• The market size, characteristics, participants
  and dynamics
• The need and demand in the marketplace for your
  product/service
• The customer base and why they will buy the
  product/service
• The plan for making customers aware of and able
  to buy product
• The competition and how you intend to stay ahead
  of them
• The management team and their qualifications for
  success
• The projected financial future of the Company
• The capital required and its intended uses
• The exit strategy (liquidity event) for investors

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Notes On Executive Summaries

• Executive Summaries should consist of no more
  than 3 pages. Make it concise, well written and
  compelling.
• The goal of the Executive Summary is to address
  the highlights of the venture (review the
  previous slide) what makes this business
  concept particularly unique and why should
  investors be excited about getting involved.
• Think in terms of an elevator pitch if you
  had only two minutes to sell your story, what
  would you say?
• Above all else, reinforce the following topics
  management team, market size, marketing plan,
  competitive advantages, growth strategy, revenue
  model and financial requirements.
• Focus on the investment opportunity not the
  product/technology.
• Remember, the Executive Summary may be your one
  and only opportunity to gain the attention of a
  prospective investor, so make it interesting and
  make it sell the rest of the Business Plan.

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Notes On Business Plans

• Business Plans should consist of no more than 20
  pages of text. Information in addition to the 20
  pages may include financials, product diagrams,
  marketing materials, market or competitor
  information, management resumes, patent abstracts
  or legal agreements, bibliography or any
  additional materials that an investor may find
  useful.
• Be concise and explain buzz words and acronyms
  (explain industry jargon if you are using it).
• Again, address all of the points on the Audience
  Take-Aways slide and remember, the easier you
  make it for a prospective investor to read your
  plan, understand the uniqueness and advantages of
  your concept and get excited about investing, the
  greater the probability of getting funded.
• Tell the story in an interesting and compelling
  fashion.
• The purpose of the business plan is to open the
  door for a face-to-face meeting and a
  presentation. Prospective investors will provide
  you with a very narrow window of attention use
  it wisely.

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Notes On Venture Presentations
Creating and Making Presentations

• Slides should contain a mixture of text and
  graphics (tables, charts, pictures, etc.). Make
  the slides interesting.
• Modify presentation based on your audience.
• Again, be concise and explain buzz words and
  acronyms (explain industry jargon if you are
  using it).
• Text should be large enough to be easily read.
  Leave plenty of white space (do not cram too much
  information on one page).
• Do not read from slides. Discuss the topics
  covered by it.
• When answering questions, listen carefully and
  answer the question politely, directly and
  succinctly.
• Support your answers with findings or data. If
  you dont know the answer, admit it - youll lose
  credibility if you try to fake it.
• Be confident maintain eye contact with your
  audience.
• Relax, speak clearly and project your voice.

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Notes On Strategic Overviews
The Goal

• The overriding goal of your Business Plan or
  presentation is to prove, beyond a reasonable
  doubt, that you can successfully produce and
  build a company around your product/service and,
  more importantly, that a large number of people
  will in fact buy it.
• The only real means of accomplishing this task
  is by adequately addressing all the topics listed
  on the previous slides and allaying the concerns
  raised by the questions found in the Key
  Points.
• Keep in mind, ventures are only as credible as
  the people involved. Firmly establish your
  credibility and believability, and build the
  audiences confidence in your team as a group of
  professionals. After all, its the management
  team that will drive a company to success or
  failure - all bets are on you.

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Notes On Strategic Overviews
Quotes to remember

• If you can prove that people will buy your
  product, you can raise money. If they dont
  invest, its because they dont believe in your
  product or they dont believe in you
• - Joe Lassiter, Harvard Business School
• I usually know if Im interested the moment the
  entrepreneur walks into the room
• - David Hull, Centennial Funds