Transcript Writing a Winning Business Plan

Writing a Winning
Business Plan
University of California-Irvine
February 1, 2011
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Marshel Sheperd
One “A”
One “L”
Two “H”s
Three “E”s
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My Business
Background
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My Goal for Today
Exec Summary
“A overview to get
you excited…”
Business Plan
“Details that will
get you hooked.”
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Purpose of Both
• Articulate Vision & Reasoning
• How To Turn $ to $
• Intro of Management Team
• Outline Known Risks &
Challenges
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Goal of Overall Plan
• Investment Consideration
• Position Against Difficult & Critical
Issues
• Attract Talent
• Create Credibility
• Memorable Milestone Roadmap
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Tone of the Plan
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Pleading a Case
Anecdotes & Trends
Timeliness--Why Now?
How World Is Changed
With You
• Unlock Big Time Value
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Creativity +
Adaptation
What You Should Know
• You Won’t Think of It All—
But Try—Work In Progress
• People, Markets,
Competitors, Customers
May Change
• Revenue Model Might
Change if Incentives Aren’t
Right
• End Game Mission Should
Remain Sturdy
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An Example: Our Story
100,000,000 Known
Cases Annually
1. Poor methods of
diagnosis—Dissatisfaction
2. Growing Market—
Importance
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Version 1.0
Direct to Consumers
(No Eye Dr. Needed)
Too Risky &
Complicated
Direct to Optometrist
& Ophthalmologists
Little Incentive
to Switch
Version 2.0
Version 3.0
Win Over Eye Drop
Solution Companies
Partner For
Better Solutions
Win Over Insurance
Companies
Preventative
Care
Version 3.1
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Where Are We Today
• Timing—Market Needs to Mature a Bit
Before We Make Sense
• Building Relationships & Credibility
with Science World
• Simplifying Our Market Entry Pathway
• Many Challenges to a Product Business
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The Business Plan
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Plan Components
• Exec Summary
• Company
Description
• Market Evidence
• Product or Service
• How You Make $
• Customer Analysis
• Marketing Plan
• Financial Plan
• Management Team
• Competition (Existing
& Entrants)
• Operating &
Milestone Risks
• Exit Strategy
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Executive Summary
• This is a 1-Pager (aka Tear Sheet)
• What Is The BIG DEAL?
– What Are You Solving? How Bad Is It…
– Why Should Investors Care? How Big Is It…
– Who Needs It Solved? How Many Are There…
– Why Do They Care? How Important Is It…
– Who Pays You? How/Who Pays, Can They…
– What Stage Is This? How Far From Payback…
• Goal Is To Get the Reader To the Plan
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Market Overview
• What Defines Your Market?
– Segmented Attributes?
• How Big Is The Market?
• What Market Conditions Create The
Problem You Solve?
– Is there another way to solve it that dominates
your solution?
– Aspirin vs. Pain Killer
• Goal is to Give Undeniable Evidence That
Market Is There & Ready
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Product or Service
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What Does It Do?
How Does It Do It?
Key Defining Attributes? From the Customer…
Are Differences WOW or Eh?
Do Customers Need to Switch…Will They?
Why?
• What Position Will It Take In The Market?
– Is it Defensible? Is it Scalable?
• Goal is to prove the solution is believable,
warranted, and superior.
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Product or Service
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Product Milestones
• What Key Assumptions Need To Be Proven?
• Small & Large, Investors Want to See Them
All
• Don’t All Need to Be Large—Smaller Steps
Shows Momentum
• Goal is to Show Grasp of Knowledge to Get
to Market
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Marketing
• Demand—How Bad Do They Want It?
• Distribution—How Will You Reach Your
Market?
• Purchase Consideration & Behaviors—Know
Your Customers and What Makes Them Excited
• Goal Is to Layout Your Market Domination
Strategy—Pricing, Quality, Geography, Mobility
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Potential Customer Base
• Why Will They Give You Money?
• Do They Have Money To Afford It At Your
Cost Structure?
• What Are Their Expectations of Quality?
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Management Team
• Who Does What? Qualifications?
• Who Else Do You Need?
• How Will You Get Them?
• Management Is Critical—Don’t Overlook
This!
• Goal Is to Show Why You Are The Right
Team, If Not Complete—Who Do You Need
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Business Model
• Who is Paying? Who is Using?
• How Often Are They Buying?
• How Valuable Is It To Them?
• Razor / Razorblade?
• Think Incentives & Natural Flow
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Competition
• Who Are Your Competitors
– Answer better not be “None”
• What Are Your & Their Advantages &
Disadvantages
• What Are The Gaps? Does Closing Them
Matter?
• Who Else Can Enter this Space if it Proves to
Be Lucrative? How Will Slow Them?
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Barriers to Entry
• Great Businesses Will Attract Copy
Cats…What Will Stop/Slow Them?
– Intellectual Property
– Economies of Scale
– Critical Relationships
– Capital Requirements
• Goal Is to Show How Each of These Matter
To Your Model
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Financial Plans
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Income Statement (3 to 5 years)
Balance Sheet (3 to 5 years)
When Funds Are Required & Uses
Key Assumptions
Financial Model—What Are the Economic
Drivers?
• Goal is to Present a Cogent Plan that Aligns
with the Rest—Does It Make Sense?
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Exit Strategy
• IPO
• Operate & Grow It
• Seek Corporate Buyout
• Goal is to Show Investors (including you &
your team) When They Will Get their Money
Back + Rate of Return
– FYI…A Business “Made to Operate” is What
Corporate Acquirers Want to See
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Other Things to Consider
• Investors, Customers, Partners, Employees,
and Success is ULTIMATELY the Result of
the People Involved
– Advice: Fall In Love with You + Your Idea
• Don’t Do It Alone…You Will Not Think of
Everything
• Build Trust In Each Other—It Will Be Rough
& Rocky…
• Know Exactly What You Want and When
You Want It—Ask For The Money
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Other Things to Consider
• How Much Money Would You Put On The
Line?
– Did You Put Money On the Line?
– This is Not a Solid Argument for Investors
• How Committed & Passionate Are You To
the Idea?
– Are Your Teammates Equally Committed &
Passionate?
• Remember…Goal of Plan Is To Get You To a
Meeting
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Other Things to Consider
• Don’t Need to Solve the World’s Biggest
Problems from Day 1
– Plan Needs to Be Believable & Achievable
• Textbooks Won’t Have the Answer.
– Critical & Creative Thinking Will
• Know Your Pain Tolerance
• Minimum Living Expenses to Survive
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Parting Words
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Think Critically and On Your Feet
Be Creative
Have Fun
Take Criticism, But Don’t Let It Stop You
– Nobody Loves Your Vision As Much As You
Do!
• Good Luck
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Thank You
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Questions?
Marshel Sheperd
[email protected]
(203) 979-6047
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