Business Plan Preparation

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Business Plan Preparation

• Frank MoyesLeeds College of Business
• University of ColoradoBoulder, Colorado

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Tonights Agenda

• Publishing your plan
• Investor presentations
• Executive Summary
• Team meetings review financial projections
• Hand-in
• Management Plan
• Financial Plan (4 statements)
• Income Statement
• Balance Sheet
• Cash Flow
• Assumptions

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End of Semester Schedule I

• Practice Presentations Workshop
• 45 minutes
• April 19 800am to 1100
• Rooms 302 308
• Voluntary
• Sept 21 (Monday) 1200 noon email Exec Summary in
  Word.doc to Frank

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End of Semester Schedule II

• April 23 (Wednesday) Cut Round all teams for
  grade
• Hand in 2 copies of Plan
• 1 copy Financial model all worksheets
• 1 copy of slide presentation
• Presentations in Rooms room 302 308
• 15 minute presentation
• 15 minute Q A
• Select 4 teams for finals
• Grading Criteria are on the website
• Attendance required to do FCQs peer
  evaluations
• Business attire

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End of Semester Schedule III

• April 25 (Friday) four finalists submit 6 copies
  to Entrepreneurship Center before 1200 noon
• April 30 Undergraduate Business Plan Competition
• Reception at 600
• Competition in Room 125 at 630
• Invite friends and family

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Publish Your Plan I

• Length
• Plan 20 pages max
• Appendices 10 pages max
• 5 year IS, BS and CF in Appendix with detailed
  assumptions
• Customer survey summary results and how
  conducted
• Resumes
• Development Gantt timeline
• Drawings, specifications, layout
• Capital expenditure detail
• Other import information that investors would
  need to understand the plan

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Publish Your Plan II

• Font size 12 point
• Use tables and graphs (sources)
• Show sources of info in parentheses or footnotes
• Spiral binding, white paper
• Cover sheet with team member names

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Publish Your Plan III

• Financial info in Plan
• Financial Summary with key assumptions
• Offering Valuation
• Sources Uses
• 5 year IS, BS and CF in Appendix with detailed
  assumptions
• Financial projection from the model with all
  assumption worksheets in separate binding

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Publish Your Plan IV

• Less is better
• White space
• Make it interesting to read
• Make it real
• Use photos
• Use color if it is appropriate
• Proof read and spelling

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Business Plan Elements

• Executive Summary
• Company Overview
• Product or Service Description
• Market Industry Analysis
• Marketing Plan
• Operations Plan
• Development Plan
• Management Plan
• Competitive Advantage
• Financial Plan
• Funding

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One Page Executive Summary

• Opportunity
• Product/Service
• Marketing Strategy
• Competitive Advantage
• Management
• Financial
• Funding

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Executive Summary

• Opportunity
• Product/Service
• Marketing Strategy
• Competitive Advantage
• Management
• Financial
• Funding

• Compelling solves a problem
• Differentiation
• Key elements
• Sustainable
• Critical
• Revenue, profitability
• Cash required, offering

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Presenting Your Plan

• 15 minutes
• Make it real - tell a story
• Focus on 3 or 4 points you want judges to
  remember
• Introduce points
• Repeat in Summary
• Show prototypes, exhibits, short videos
• Test slides for clarity in your class room before
  presentation
• Practice transitions between presenters

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Presentation Slides

• 12 to 15 Slides
• Back-up slides to help in answering likely
  questions
• Each slide conveys one point
• Everything on the slide must support the point
• 3 bullets
• Use simple graphics to convey point

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Questions Answers

• 15 minutes
• Answer 30 seconds or less
• Decide beforehand who will answer what questions
• Unless team member is in trouble, only one answer
• If dont like your answer, they will ask again
• If you dont know the answer, say so

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Killer Slide Presentation

• Overview (3 key points)
• The Problem
• Opportunity
• The Solution
• Target Market
• Competition
• Sustainable Competitive Advantage

• Go To Market Strategies
• Management
• Financial summary
• Funding
• Risks
• Funding Offering
• Conclusion (3 key points)

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How to Make an Effective Investor Presentation

• Sources
• Jim Linfield, Cooley Godward
• Deloitte Touche
• accelerator

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Title Slide

• Name of your firm
• Date
• Name of investor firm
• Optional How much money is being sought for this
  round?
• Appropriate graphics (logo, etc.)

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Overview

• Elevator speech (not on slide)
• Value proposition (not on slide)
• Introduce team
• 3 key points want investors to remember
• Get their attention

Get their attention
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The Problem

• What problem are you solving?
• Must be easily understood communicable
• Validate by referring
• Customer research
• Interviews use quotes

What is the pain?
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Opportunity

• Size growth
• Trends
• Focus on your segment

Bases for Marketing Plan
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The Solution

• Describe what you do
• Key features
• Benefits to target customer (could be a 2nd
  slide)
• Future products/services

What are the unique benefits?
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Target Market

• Validation - use your customer research
• Consumer
• Demographics psychographics
• How make buying decisions
• Business
• Types of companies
• How make buying decisions

Who's your customer
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Competition

• Identify your competitors
• Current future
• Direct indirect
• Strength weaknesses
• Barriers to entry that you face

Positioning
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Sustainable Competitive Advantage

• How are you different than your competitors
• Perceptual maps
• Barriers to entry that you can create
• Resources and capabilities

Sustainable
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Go to Market Strategy(could be 2-3 slides)

• High Level description
• Target market
• Distribution - channel
• Positioning
• Sales strategies
• Communications
• Pricing strategy
• Roll out plan
• Partnerships

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Go To Market Strategy
Today
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Go To Market Strategy
Tomorrow
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Management

• Key officers
• Backgrounds
• Accomplishments
• Who is missing?
• Interim management

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Financial Summary
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Risks

• 2 or 3 that are unique to you venture
• What can go wrong what must go right?
• How will you mitigate

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Funding Offering

• Sources Uses
• Different rounds
• Amount being raised
• of Company
• Return on Investment
• See Hecho en Case Chalk2Me
• Debt
• Repayment terms
• Interest rate
• Exit

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Hecho en CasaSources Uses Statement
Financing Amount Ownership Uses of Funds
Round A (June 2005) 315,000 41.0 Salaries 221,800 Inventories 60,100 Working Capital 16,400 Capex 15,000 Other 1,700
Round B (Oct. 2006) 310,000 15.5 Salaries 197,100 Inventories 79,200 Capex 30,000 Other 3,700
Round C (Q3 2007) 170,000 4.0 Salaries 122,000 Inventories 41,700 Capex 6,300
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Conclusion

• Summarize 3 key points
• Good investment
• Questions

Viable company
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Backup Slides

• Revenue Model
• Customer research summary
• Operations
• Key benchmarks
• Key financial assumptions

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Be Ready to Talk About Your Critical Assumptions

• Margins
• Comps
• Key assumptions
• Break-even
• Major expenditures
• Working Capital
• Burn rate

Back up Slides
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Suggestions

• Use your customer surveys to support
• Tell a story
• Dont be boring
• Use charts, graphs, simple tables