Business Plan Preparation

1
Business Plan Preparation

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

2
Tonights Agenda

• Topics
• PRODUCT/SERVICE DESCRIPTION
• Margins
• Read BP pp 6-7
• OneButton (Vilo) business plan
• Elevator Speech
• In the Fire
• Preliminary Market Analysis Results
• Preliminary Interview Results
• Turn-in
• 3 alternative value propositions
• Customer Survey Questionnaire

3
Next Week

• Team to make appointment with instructor next
  week
• Marketing Plan
• Revenue Model
• Read BP pp 14-18

• In the Fire - Prelim Industry Analysis
• Model company description
• Hand in
• 10 Call Reports
• Preliminary Competitive Matrix
• Model company description

4
In the Fire Grading
5
Business Plan Elements

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

6
Product/Service Sections

• Features
• Benefits
• Proprietary Rights
• Stage of Development

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Features

• Detailed description
• Attributes
• Environment
• Use photos, images, schematics http//leeds-facult
  y.colorado.edu/moyes/html/documents/Business20Pla
  n/Amari20Final20BPLAN.pdf
• What is unique?
• What is evidence that customers want these
  features?
• How produce deliver systems approach
• Dont assume people know or understand your
  product/service

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Attributes
0

• Performance durability, quality of materials,
  defect levels, tolerances, construction,
  dependability, functional performance
  (acceleration, nutrition, taste), efficiency,
  safety, styling, packaging, etc.
• Cost purchase price, quantity discounts,
  operating costs, repair costs, cost of extras or
  options, cost of installation, trade in
  allowance, likely resale value, etc.
• Availability carried by local stores, credit
  terms, quality of service available from local
  dealer, delivery time, credit card, on-line
  transactions, etc.
• Service hours, warrant, guarantee,
  return/replacement policy, upgrades, maintenance,
  training, installation, repair service, spare
  parts, customer support, tech support, training,
  product design, make to order, level of
  inventory, quotation response time, lead time,
  quality certification, employee capabilities,
  etc.
• Environment location, atmosphere, layout,
  fixtures, aesthetics, style, sound, lighting,
  color, etc.

Bad Slide
9
Benefits

• Describe major benefits - be specific
• What is the evidence that benefits are understood
  by the market?

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Benefits

• Emotional ambition, power, independence,
  achievement, ambition, pride of ownership,
  comfort, love, friendship, security, style, self
  Improvement, etc.
• Social status, image, popularity with friends or
  family members, reputation of brand, personal
  relationships, style, fashionable, etc.
• Health stress, fitness, mental capacity,
  strength, sex life, quality of life, muse, etc.
• Financial revenue, costs, savings, productivity,
  pricing, profitability, market share, save time,
  productivity, etc.
• Convenience?
• Objective is distinguish between benefits and
  features, not put into categories

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Feature vs. Benefits
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Product Service Conclusions

• Make it real
• Photo, rendering, specs
• Prototype
• Evocative description
• Make it exciting
• Sell your concept

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Quality Dimensions I

• Performance - the primary operating
  characteristics of the product or service
• Features - the characteristics that supplement
  the basic functioning of the product or service
• Reliability - probability of the product or
  service failing within a specified period of time
• Conformance - the degree to which a product or
  service meets acknowledged standards

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Quality Dimensions II

• Durability - a measure of product life (both
  technical and economic)
• Serviceability - the speed, courtesy, competence,
  and ease of repair or recovery
• Aesthetics - how a product or service looks,
  feels, sounds, tastes, or smells
• Perceived Quality - various tangible and
  intangible aspects of the product from which
  quality is inferred

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Service Quality Dimensions

• Reliability - ability to perform service
  dependably accurately
• Responsiveness - willingness to help customers
  provide prompt service
• Assurance - knowledge courtesy of employees and
  ability to convey trust and confidence
• Empathy - provision of caring, individualized
  attention to customer
• Tangibles - appearance of physical facilities,
  equipment personnel and communication material

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Margins
Revenue COGs Revenue

• Gross Profit Margin
• Contribution Margin
• Net Profit Margin
• Operating Expenses

Revenue Variable Costs Revenue
Net Earnings Revenue
Sales, General Admin Revenue
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Margins