Transcript Document

Presented by the
UH Pacific Business Center
Program (PBCP)
David M. Gillespie
PBCP is a partner with the Shidler in providing
economic technical assistance throughout
the Pacific Region. The PBCP also operates
the Honolulu Minority Business Enterprise
Center. We have extensive experience and
expertise in business plan development.
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Document/Submission Requirements
 Prefer PDF format
 Less than 1mb single
file
 Single Spaced (min.), 12 Point Font
(min.), 1” Margins all around (min.) &
8.5” X 11” paper size
 Emailed as attachment to:
[email protected] by 5pm on 4/4/08, AND
 Five hardcopies to PACE office
If Mailed - postmarked by 4/4/08
If Hand Delivered – At PACE by 5pm on
4/4/08
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Document Specification Requirements
Sheet – 1 page
Executive Summary – Maximum
Cover
2 pages
Business
pages
Plan – Maximum 10
Attachments
or Appendices –
Maximum 10 pages, open format
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Judging Criteria
Overall Appeal -10%
Attractiveness of Market Opportunity-15%
Value Created by the Product/Service-15%
Competitive Advantage of Venture-15%
Operational & Technological Viability15%
6) Management Team Capability-15%
7) Capital Requirements & Financial Forecast
-15%
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Suggested Organization
1. Cover Sheet
2. Exec. Summary - Overall
Appeal (10%)
3. Overview of the Firm
6. Marketing Plan/Strategy
– Competitive Advantage (15%)
7. Operations Plan –
Operational & Technical
Viability (15%)
Team – Team
4. Market Analysis – Market 8. Management
Capability (15%)
Opportunity (15%)
5. Products/Services
Offered – Value
Created (15%)
9. Financial Plan – Capital
Requirements & Projections
(15%)
10. Appendices &
Attachments
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Data Requirements:
 Team Name
 Business Name
 Names of All Team Members
Other:
 Logo Development
 Balanced Sheet with Lots of White
 Use of Color
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Judging Criteria 1 - Overall Appeal of the Plan
(10%): Compelling “vision”; enthusiasm;
greater than the sum of its parts.
The business plan judge will probably obtain most of
his/her ‘appeal’ in reading your Executive Summary.
Write the Final Executive Summary Last
Things will change as you write the plan
 The Executive Summary you already
turned in can be adjusted/changed.
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‘Elevator Pitch’ – The reader must ‘get it’ in the
Executive Summary.
 Who – Manoa Tansgenics, Inc., a start up life
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science company
What – Provide genetically modified mice, a novel
gene insertional methodology and gene therapy
research development.
How – Use a proprietary gene insertion technology
invented by the two business founders
Why – Transgenic mice market at $180 million;
once technology validated potential for gene therapy
market projected at $5.7 billion in 2011
How Much & Return – Need $2.5 million for
research; offer 15% equity in the firm. Once reach
20% market penetration, firm sold/merged/IPO.
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Other Key Items to Address:
 Mission and Objectives
 Product, Process, or New Business
Model
 The ‘Pain’ the Above will relieve
 Target Market – Customers, Value
Added, Competitors, Competitive
Advantage
 Business Model – Who pays, how much,
and how often. Model margins
The Executive Summary MUST stand on its own;
don’t copy sections word for word from the
business plan narrative—a common mistake.
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Include/Expand By the Level of
Importance to Your Business Plan
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Technology & Intellectual Property
Management Team
Milestones/Goals
Revenue/Cash Projection
Funding Needs & Use of Proceeds
Investor Potential Return & How and
When Returned
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Major Sections to Consider – A way
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of introducing the firm
Value, Vision & Mission
History
Distinctive Competence
Technology
Competitive Advantage
Strategy and Objectives of Firm
Major Milestones Achieved to Date
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Judging Criteria 2 - Attractiveness of
Market Opportunity (15%)
 Market
size and growth
potential
 Your
firm’s potential in this
market
 Expected
margins and net profit
long-term potential
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Market Profile - Show you know the market you
are entering
 Demographic/Geographic/Psychographic or
Business Profile
 Maturity of Industry – Which Phase: Start-Up,
Growth, Maturity, Decline
 Size of Market – Units and Dollars
 Growth Potential – Tie it to research and in units
and dollars over time
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Market ‘Pain’
 Needs – What is the ‘pain’ of this market
 Set it up so that your product relieves ‘pain’
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 Market/Industry
‘Business Model’
What is the current set-up (business
model) for businesses in this market.
What is the margin and net profit
profile of this market/industry –
financial research
Is there a niche unsatisfied, or a better
business model— set it up so your
product/service, and, or business
model is the answer.
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 Competition – Who else provides the service or
product and what else do they provide their customers
 Competitive
Position of Leaders
 Market
Share Distribution - % of the
market pie by leader, market share
growth
 Barriers
to Entry – How difficult is it to
enter the market you’re interested in.
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Judging Criteria 3 - Value Created by the
Product/Service (15%)
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How will you relieve the ‘pain’- what is
the unique value of product/service
Importance of Product/Service to
Customer
Product/Service Description or
Prototype
Features and Benefits of
Product/Service
Market Reaction to Product/Service
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Product/Service Description – Clear,
concise and complete. Detail in
Appendix
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Product Benefits & Features – The
things that will relieve the ‘pain’ you
identified in Market Analysis.
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Product/Service Customer Reaction –
Sampling, interviews, testimonials
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Product SWOT – If appropriate
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 Cleary Describe Product Need
Need may not be fully recognized by
the market at this time
Describe how you see the ‘need’
developing
 Product Development Plan
Current level of product development
Phasing plan of product development
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Judging Criteria 4 - Competitive Advantage of the
Venture (15%)
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How Will the Product Gain Market
Share Against Competitors
Market Share and Growth Profile
Potential
How Long to Get Product/Service to
Market
What Business Model/Distribution
Method Will Position the Firm Best
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Business Model Proposed
 Be
as specific as possible. Clear,
concise explanation (B2B, B2C, etc.)
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Product Market Development Plan
 Phases
of development: drawing,
prototype, pilot manufacturing
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Overcoming Competition – How?
 Pricing,
Business Model, Quality,
Market Tactics
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 Focused
Target Market(s) Profile
Size and Trends of Markets
Demographic, Geographic,
Psychographic or Business Profile
Buying Sensitivity
Vulnerability to Economic Factors
Purchasing Patterns
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 Pricing
Recovery
Strategy – Image Awareness, Cost
 How
will you fit within the market? - Above
Market, Match Competition, Below Market ?
 Promotional Strategy
 Media – Web-based, Print, TV: what does
the competition do?
 Message – What will be your key message; Is
it focused on your core business?
 Promotional Budget – Sales growth requires
a matching promotional budget.
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Sales Strategy – How will sales be
developed and processed
 Sales
Generation in the Business
Model
 Sales
Force Management
 Order
Processing
 Compensation
Plan
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 Sales
Projections
 First
Year – by quarter; then yearly
 By Product/Service Line
 By Units and Dollars
 Other
Marketing Activities
 Service
and Support Capability
 Strategic Alliances
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Judging Criteria 5 - Operational &
Technological Viability (15%)
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Product/Service Production
Product/Service Distribution
Production obstacles and how you
will overcome them
Any essential technology property and
how will it be protected
Develop a plan timeframe
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Production Plan – Where produced or
developed – materials required & sources, outsourcing
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Technical requirements of producing
the product/service and how met.
Patent protection or other means of
protection
Distribution Strategy – How will you get
your product/service to the customer
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Retail, Wholesale, Distributor, Internet,
Licensing, Franchising – tie into the
business model
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Manufacturing Requirements – by
order of importance to the plan
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Facilities – plan for growth
Equipment
Outsourcing
Third-Party Agreements
Contracts
Licensing
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Milestones – Make/Break Activities
Schedule
of key activities to be
accomplished – GANTT Chart
Specific/Crucial
Objectives:
Timeframe
Responsibility of who?
Results expected
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Judging Criteria 6 -Management Team Capability
(15%)
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Venture management/expertise needs
Education, experience, skills of team
Acknowledge skill gaps and show how
you will overcome them – hire, contract,
etc.
Role of each team member in the
development of the venture – dual roles
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 Names
 Roles
and Positions
 Experience and Education
 Other Related Experience
 ‘Gap’ Experts – Technical skills
 Strategic Alliances
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Show that Your Organization is Set to Meet the
Growth You Planned For
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Principal Players – Do you have the right
people in the right places? Will the firm’s
expertise requirements change as the firm
grows?
 Consultants and Specialist – Are industry
changes severe enough to bring on experts?
 Organizational Structure – What is your
organizational structure and will it be
appropriate for your firm’s growth?
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Judging Criteria 7 - Capital Requirements &
Financial Forecast (15%)
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Capital
 Needs
– Capital asset purchases, start-up
expenses, working capital
 Sources – Venture Capitalist, lenders, FFF?
 Phasing – Start-up, 1st, 2nd, other rounds
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Entity Ownership structure
Investment Exit Strategy
Project Evaluators – ROI, NPV, IRR
Cash Flow - when turn positive
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 Financial
Forecast
P
& L Summary
Cash Flow Summary
 Cash
Flow Breakeven – When does
firm turn to positive cash flow
 Investor
Return – ROI, Dividends,
Capital Returns, NPV, IRR
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Stages of VC Funding:
 Seed
– Develop proto-type
 Early Stage – Launch product
 Growth Stage – Expand marketing
 Mezzanine – Add resources,
acquire other firms
Develop a structure/mix of funding
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 Income Projections – Revenues,
COGS and major expense categories. $
and %.
 Cash Flow Forecasts –Too little cash
(common problem) for working capital.
 Cash Flow Break-Even Analysis –
Do you need to generate more or less sales
to cover operating costs than what you
originally planned for?
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Income Statement Format
 Major Revenue Categories – Ascending
Order
 By product/service type
 Show Key % - Gross & Operating Margins
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Major Expense Categories – Ascending
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Level of Detail
Order
 COGS, Personnel, Rent
 By Quarter for the first 12 months
 By Year after first 12 months
 Three years minimum, five years maximum
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Cash Flow – Direct Method
 Operating Activities
Revenues, Direct Materials and Labor,
General & Admin. Expenses
 Investing Activities – Asset
Purchases
 Financing Activities – Dividends,
Return on Investment
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Be sure you have a financial macro & micro
understanding of your venture and that micro
and macro are in sync.
 Macro
View – The financial big
picture: Review, understand and
analyze the financial statements you
generate.
 Micro
View – The financial details:
Pricing strategy, margins, mark-up of
the product or service you are offering.
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Examples of what you can put in the Appendix
Detailed Financial Documents
 Start-up Cost Schedule
 Funding Sources Detail
 Detailed
Income Projections
 Balance Sheet Projections
 Detailed Cash Flow Projections
 Cash Break-Even Analysis
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Assumptions Critical to Your Plan
Interest
Rates: Long & short-term
Sales on Credit
Inventory Turnover
Personnel Overhead
Licensing Agreement
Other
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Product/Service
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Detailed Description, Drawings,
Production Processes
Management Team
Resumes
 Consultants/Experts Qualifications
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Other
Market Research Data
 Relevant News Articles
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6 C’s Of A Winning Business Plan
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Complete – No missing sections, cover all the
judging points.
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Clear – Concept of your product/service, its
market, and business model are explained
completely during the first read of the plan.
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Credible – The plan makes ‘sense’.
No crazy
revenue projections, outrageous market share
claims, belief in a lack of any competition, etc.
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6 C’s Of A Winning Business Plan
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Compelling – Draws the reader into the business
concept they way a good novel draws in a reader. The
reader buys into your idea because your plan is
convincing and your narrative is persuasive.
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Customer Focused – Show you understand your
customer and how you will relieve their pain.
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Concern for Investor/Lender – Show how, and
when, debt/equity is returned and ROI is developed.
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‘Form’ of the Plan
 Use of Charts and Graphs
 Simple,
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Font Type and Size Changes
 Limited
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Clean, Easy to Read
Changes - subtle
Color
 Make
sure it prints ‘ok’ in black and
white
 Shading and texture for graphs/charts
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Number the pages
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Plan Development
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Many contributors—one writing voice
Proofread by non-team member
Support assumptions when ever possible
Business Plan Team Skill Needs
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Marketing – Research, Market Size, Sales Est.
Financial – Projections & Statement
Development
Plan Wording
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Positive word choices; not “might”, “maybe”,
“probably”; but don’t overstate or exaggerate.
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Business Plan Judges Are Hawaii
Business Professionals
Bankers,
Business Owners, Gov’t
and Non-Gov’t Organization
Employees
Business Service Providers –
Accountants, Lawyers, Consultants
Investors, Venture Capitalist
Entrepreneurs
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Software & Website Assistance:

Business Plan Pro – palo-alto.com
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Business Plan Builder – jianusa.com
Business Plan Writer Deluxe
 Bplans.com
 Businessplans.org – sample plans
 Microsoft Business Planner – Office
Pro
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Good Luck to
All!!
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