Business Plans for Engineers

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Business Plans for Engineers

• John Callahan
• Business and Systems
• Carleton University
• Monday, Jan 28, 2002

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Three Points

• Engineers do not see the whole picture
• Seeing the whole picture is critical
• Doing a business plan trains you to see the whole
  picture

3
Engineering is Only Part of the Problem
Business issues
Engineering issues
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Product Developmentand Management
Product Development (cost)
Product Management (profit)
Product ideas
Design
End of product life
Product specification
Product introduction
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Having a JOB vs.Creating Entrepreneurial Value

• 40 year old engineer
• A good JOB - 120K per year
• Must keep working for salary
• JOB pressure, layoffs, young competition
• 40 year old tech entrepreneur
• Salary of 120K per year
• Owns 10 of the company
• Can cash out value creation
• Knows how survive tech churn

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Starting a Business

• Idea to opportunity
• Start-up
• Small group of principals
• Insider funding
• Business creation
• Product/service development
• Private investors angels and venture capitalists
• Making
• Market success
• Acquisition or IPO

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Business Plans Play a Key Role

• Internal audience
• What are we doing what, why, how, who, when
• Executives who will fund opportunity
• Personnel who will execute
• External audience
• Bringing people on board
• Venture capital sources
• Bankers

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Opportunity Definition-ask these questions

• What is the product or service?
• Who is the customer?
• What is the customer value?
• Why you?
• So what? Who cares? Why you?

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Ideas vs. Opportunities

• Every time you get a good business idea, ten
  other people are having the same idea at the same
  time
• An opportunity is a product or service idea for
  creating value for reachable customers that
  allows you to make a profit
• An idea is not an opportunity

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Screening Opportunities
Product/service development
Idea generation
Value creation
Screening

• Real, initial buyers
• Large and growing market
• Low required investment
• High margins
• Basis for competitive advantage

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From One Sentence to a Full Business Plan
So what? Who cares? Why you? Fit with
capabilities Lead buyers Competition Market
size/segments Full economic analysis Risk
assessment
So what? Who cares? Why you? Lead
buyers Competition Fit with capabilities First
cut economics
So what? Who cares? Why you?
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Typical Business Plan Specs

• Sections
• Summary for investors
• Company and the Industry
• Product/Service Offering
• Market Analysis, Marketing Plan
• Operations Plan
• Management Team
• Implementation Schedule
• Risks Associated with the Opportunity
• Financial Plan
• 20 30 pages total

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Learn How to Write a Business Plan

• Add engineering value within your company
• Understand the status of your project/team
• Advance into management
• Start your own company

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Wes Nicol Business Plan Competition

• Web site http//www.business.carleton.ca/nicol_co
  mpetition/
• Entry deadline Wednesday, February 6
• Deadline for business plan Monday, March 25
• Prizes 6000, 3000 and 1000

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Three Points

• Engineers do not see the whole picture
• Seeing the whole picture is critical
• Doing a business plan trains you to see the whole
  picture