Components of a Business Plan

Jill Kline Wyoming SBDC

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Wyoming SBDC

Strengthen Wyoming businesses and create economic growth by providing excellent management assistance, educational programs and helpful resources for Wyoming small businesses and entrepreneurs.

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WSBDC Contacts

Region I:

Bill Ellis (307) 352-6894 Toll Free in WY 800-348-5205 e-mail: [email protected]

Serving Sublette, Lincoln, Uinta, and Sweetwater counties.

Region II:

Robbi Welch (307) 754-2139 Toll Free in WY 800-383-0371 Fax: (307) 754-0368 e-mail: [email protected]

Serving Park, Big Horn, Washakie, Hot Springs, Fremont, and Teton counties.

Fremont County Office:

Margie Rowell (307) 857-1174 Toll Free in Wyoming 800-969-8639 e-mail: [email protected]

Region III:

Leonard Holler (307) 234-6683 Toll Free in WY 800-348-5207 e-mail: [email protected]

Serving Converse, Natrona, Niobrara, and Platte counties.

Region IV:

Arlene Soto (307) 632-6141 Toll Free in WY 800-348-5208 e-mail: [email protected]

Serving Goshen, Laramie, Albany, and Carbon counties

Region IV Satellite Office:

Bill Schepeler (307) 766-3515 e-mail: [email protected]

Region V: Jill Kline

(307) 682-5232 Toll Free in WY 888-956-6060 e-mail: [email protected]

S

erving Sheridan, Johnson, Campbell,

Crook, and Weston counties.

http://www.uwyo.edu/SBDC/offices.html

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Why develop a Business Plan?

“All the work you do in thinking up your idea, testing it, studying it, and producing it, has been for nothing if you can’t sell it . Whether you start you own business to produce and sell your invention, subcontract out the manufacturing part, or sell your rights in return for a percentage of the proceeds, you need a business plan .”

- Pamela Riddle Bird, PhD, Inventing For Dummies CEO, Innovative Product Technologies, Inc.

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Why develop a Business Plan?

“You've just come up with an idea. What to do next? There is no exact order of what you should be doing. But we like to suggest two broad areas for inventors to embark on. First, learn all you can about running a business, even if you hope to license your idea .

Second, write a business plan.

Even if you hope to license your idea, (and that's actually a rarity among the successful inventors we've met) you'll still need to have a plan.” -

Mark Ellwood, Past UIA Board of Directors

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Why develop a Business Plan?

“A business plan is vital for enterprises needing investment, grant funding or significant borrowing; more so for innovation ventures , as the greater number of ‘unknowns’ makes it even harder to attract backing. But don’t make the mistake of thinking that only other people need your business plan . It’s primarily a tool to reveal possibly awkward truths about your business to you.” -

a Creative Investor

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Three Types of Plans

• Summary Plan – 10 pages, 3 important points • Comprehensive Plan – 10-40 pages,

seeking capital

or alliances • Operational Plan – 40+ pages, for going concerns, part of an annual process 7

The Summary Plan

• The Business – Legal Structure, Products or Services, Management, Personnel, Record Keeping • Marketing – Target Market, Competition, Advertising • Financials – Summary of Needs, Use of Funds, 3 Year Cash Flow Projections, Income Projections 8

The Comprehensive Plan

1. Executive Summary 2. Problem 3. Solution 4. Business Model 5. Secrets 6. Marketing and Sales 7. Competition 8. Management Team 9. Financials 10.Current Status 9

Executive Summary

• Define problem, solution, business model, and why your solution is better • Write it last • Grab readers attention • No more than 2 pages!

• Most important part of your plan and usually written last 10

Problem

• What problem are you solving?

• Describe how the “state of the art” is insufficient • Get your reader to agree that the current situation isn’t optimal • If there isn’t a problem, take your idea back to the drawing board 11

Solution

• How do we solve the “Problem”?

• Explain what you sell • State your value proposition 12

Value Proposition Worksheet

• First Sentence: – For (target customer) – who (statement of the need or opportunity), – the (product/service name) is a (product/service category) – that (statement of benefit). • Second Sentence: – Unlike (primary competitive alternative), – our product (statement of primary differentiation).

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Business Model

• Explain how you make money – Who pays you?

– How do you collect?

– What are your channels of distribution?

– How do you integrate suppliers?

• Use examples if necessary • Be complete 14

Secrets

• Describe your technology, process improvement, etc.

• Use charts, diagrams, schematics, as much as possible • Understand your Intellectual Property 15

Marketing and Sales

• Define your primary, secondary, and other audiences • Show some numbers • How will you find, sell, and retain customers?

• Advertising and promotion budget • Identify your leverage points 16

Competition

• Everyone has competitors!

• Provide a complete view of the competitive landscape • Direct and indirect competitors • Current and anticipated competitors • Competitor strengths and weaknesses • Your competitive advantages 17

Management Team

• Describe your key players – Management Team – Board of Directors – Board of Advisors – Major Investors • Who are you missing?

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Financial Projections

• Cash Flow Projections • Income Projections • Balance Sheets • Assumptions 19

Current Status

• Describe your major milestones and tasks – Technology – Fundraising – Customer Development, etc.

• Where are you now?

• Brag about your accomplishments • Talk about the next steps 20

Investor Pitch Slides

10/20/30 Rule

1. Title 2. Problem 3. Solution 4. Business Model 5. Secrets • • • • 6. Marketing and Sales Competition Management Team Financials Current Status 21

Good Reading

• Crossing the Chasm

–

Geoffrey Moore • The Art of the Start – Guy Kawasaki • Inventing For Dummies – Pamela Riddle Bird 22

Internet Resources

WSSI Inventor Resources Page -

http://uwadmnweb.uwyo.edu/SBIR/inventorresources.html

Innovative Products Technologies, Inc. -

http://www14.inetba.com/inventonecom/

Business Plan Development Tools (online) –

http://www.uwyo.edu/sbdc http://www.sba.gov/starting_business/index.html

Sample Plans –

http://www.bplans.com/samples/sba.cfm?DCMP=OTC-sba_course 23

Thank you! Questions?

Jill Kline, Region V Director (307) 682-5232 1-888-956-6060 [email protected]

Serving Sheridan, Johnson, Campbell, Crook, and Weston counties.

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