Transcript General
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New Venture Challenge Phase II Kickoff: Presentations and Business Plans
Steven Kaplan and Ellen Rudnick
Graduate School of Business University of Chicago
S. Kaplan E. Rudnick
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Agenda
Preparation for classroom presentations.
Guidelines for developing business plans.
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Preparation for classroom presentations.
3 Each team will present twice.
– – First time in March / April.
Second time in End of April / May when business plans are more complete.
We will contact each team in our respective sections to set presentation dates.
Teams will have 45 to 50 minute time slots.
– Should aim for 25 minutes to present. Do not go over.
– – Leave 20 to 25 minutes for discussion.
Be concise.
Goal is to make plans better.
– – Welcome criticism, don’t fight it. Have thick skin.
Presentations and critiques are very helpful.
S. Kaplan E. Rudnick
Strategy for presentations
4 Between now and presentation: –
Talk to customers / potential customers.
» Will they buy product / service? Why? » What do you have to do to get them?
» What will they pay?
– – Get beta customers?
Identify and approach resources that can help.
» Advisors?
» Employees / management?
» Alliances / partners?
» Suppliers?
» Other strategic relationships?
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Strategy for presentations - 2
5 At presentation: – Do not waste much time at 5000 feet.
» “This is a big market.” – – – Get into details quickly.
The more details / granularity, the better.
Make sure that you: » Describe typical customer.
» Describe what typical customer does today.
» Describe how typical customer benefits from your product / service.
» Describe why customer will buy from you.
» If you do not do this, we will ask you to do it.
» Earlier you do this the better.
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Strategy for presentations - 3
Once audience understands business and value proposition, then (not necessarily in this order): – Describe market size.
» Segment as well as you can.
– Describe how much of that market you will get to and how you will get to it.
– – – Describe and analyze competitors.
Describe your competitive advantage / what is special.
Describe management team.
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Strategy for presentations - 4
7 How can we help? Ask for help / suggestions: – – Describe what you are unsure of that you need to investigate.
Describe the resources you would like to obtain: » Advisors?
» Employees / management?
» Alliances / partners?
» Suppliers?
» Other strategic relationships?
First presentation should be designed with goal to elicit feedback and get information.
– – Idea is to be as open as possible, not defensive.
May be painful anyway.
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Developing a Business Plan
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Functions of the Business Plan
Planning tool – Evaluate strategies, define needs, set objectives.
Sales Document for Raising Capital – – Introduction to the business.
Tool for basing investment decision.
Measure and Monitor Performance – – How much progress is made against original objectives.
Identify emerging problems.
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Business Plan is a Process
Plan will be edited, reworked, revised over time.
Almost impossible to predict the road map for success this early.
Ability to adapt to new and unforeseen developments key to success.
Even the most successful business plans adjust.
– – Microsoft.
Amazon.
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Elements of the Business Plan
Executive Summary Company Description Management Product Marketing and Sales Operations Financial Statements and Projections Appendices 11 S. Kaplan E. Rudnick
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Executive Summary
Most important part of plan; investors will not read further if story not compelling 2-4 pages.
Should be done after preparing the rest of the plan and it should distill each section of the plan.
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Executive Summary - 2
– – – – – – Should include: – – – The company’s background.
The product / service and its technology (any proprietary advantages) Description of value proposition.
» How do customers benefit? Before and after.
» Why will they buy from you?
» How will you get them?
Market potential for the product.
Management team and its track records Key advisors and/or strategic relationships Key financial data: five year forecasts Amount of capital required Key milestones S. Kaplan E. Rudnick
Company Description
Purpose: Communicate origins of company and its goals Brief and Direct.
Explain organizational, research, development and other activities that have occurred to date.
Summarize both short and long term objectives of the company.
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Management
Management capability single most important factor to investors.
Should describe relevant experience and accomplishments of team members.
Include resumes in appendix.
Do not overstate abilities of team.
Recognize gaps and how you intend to fill them.
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Product or Service
16 What need is the product / service filling?
– – What is value proposition?
Make sure that you: » Describe typical customer.
» Describe what typical customer does today.
» Describe how typical customer benefits from your product / service.
» Describe why customer will buy from you.
Product attributes: competitive or proprietary advantages.
If in development stage what needs to be done to complete development? How long will it take?
If technology intensive discuss nature of technology, ownership issues, prior applications, competing technologies. S. Kaplan E. Rudnick
Marketing and Sales
Market understanding critical to establishing credibility with investors General market issues: size, projected growth, driving forces, segments, characteristics Who are the customers and what motivates them?
Where do the customers fit in the distribution chain? What are the distribution and sales channels to reach these customers?
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Competition
Identify competing products and technologies Assess competitive strengths and weaknesses Consider using a comparative table to rank competitors on features/characteristics What might be defensive reaction of competitors to this product?
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Revenue model
Estimate market penetration over time Product pricing strategy Sales and Distribution strategy 19 S. Kaplan E. Rudnick
Operations Issues
In-house or contracted resources Cost related issues 20 S. Kaplan E. Rudnick
Financial Statements and Projections
Income statements, Balance Sheets and Cash Flow Statements for five years – Monthly for year 1 and quarterly thereafter Should be bottom-up with top-down reality check.
Key assumptions in the projections Sensitivity Analysis: Impact on projections from changes in the assumptions Realistic, logical and attainable!!!
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Items for Appendices
Detail of Financial Forecasts Management resumes/bios Patent Information Pictures or drawings of product Relevant articles in press or trade journals Market research information Summary of key contracts or business relationships 22 S. Kaplan E. Rudnick
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Our availability:
Generally available. Call or e-mail first to make appointment.
Steve – – – Call: 702-4513. Fax: 702-0458.
E-mail: [email protected]
Ellen – – – Call: 834-3781. Fax: 702-0458.
E-mail: [email protected]
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“Make no small plans!”
Aim as high as you can imagine.
If you think you have a real, valuable plan, go after the best: – – – – Go after the best employees.
Go after the best advisors.
Go after the best strategic relationships.
Do not think that MBA students cannot go after them.
Speed, Speed, Speed!
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Team Introductions and Elevator Pitches
Professor Kaplan (34104-01, Wed./Fri.)
Advanced Chromatography Systems The Auto Shop, Inc.
Changing World Foods CUBIS Group Inc.
DriveBase Edu Fin Feations Harvey Washbanger’s & Co.
InfoUnity Maroon Biotech P.A.R.I.S.
PowerDict, Inc.
Supertilities Toul AB WITco
Professor Rudnick (34104-81, Mon.)
Brides Noir CorrelSoft, Inc.
Custodial Engineers DS2 GMB Plastics LLC Kid’sFirst Loren Brown Hair Studios Marketing Decision Partners Milega Occuity Omnichip Proxy •Mate PureChem Raicore Networks Symphony Design S. Kaplan E. Rudnick