business planning
Download
Report
Transcript business planning
Business planning
An investor’s outlook
A presentation for the EIIL workshop
LPG 2 on Business planning
Brussels, March 15th 2010
by Mr Ties van der Laan
Ties Corporate Finance
10, rue des Alouettes, L-1121 Luxembourg-Cents
Luxembourg
m +352 691 427 566, t/f +352 427 566
e [email protected], i www.ties.lu
Who am I?
After nearly ten years in Dutch venture
capital companies (ING Group) I have
been coaching entrepreneurs and
management teams since 1999 to
raise finance, first through LIFT and
from mid 2002 as an independent
financial consultant (interim
controller/CFO and raising finance)
Agenda
The how and why of business plans
Some do's and don'ts
Outline and contents
Conclusion
Please feel free to interrupt me @ any time
Selling yourself
A business plan is a document in which
you sell yourself, your team and your
company in such a manner that you
receive an appointment with a
potential financier
Other functions
Operating manual for you, your team
Tool to
organise your thoughts and ideas
examine basic assumptions in detail
Attention: regular updates necessary
Information and assistance
Internet
Libraries
Bookshops
Market research specialists
Legal experts (IPR, ...)
Technicians
Accountants / financial consultants
Etc.
Some do's and don'ts (I)
Content (I):
Fully written by you (and your team)
Your “brain”, your vision, not reality
Focus on market, marketing, sales
Practical: focus on doing
No Q&A
Minimise use of graphics
Logical story and no bullets
Some do's and don'ts (II)
Content (II):
Not a thesis so no footnotes
No repetition
Attention: grammar and typing
Avoid the use of negative words
Concise, to-the-point
Easy to understand language (no jargon)
Some do's and don'ts (III)
Presentation:
Send by mail in hard copy, no email
No NDA (except to prevent sending on)
Separate documents (ES, BP, Annex)
ES: maximum 1-2 pages
BP: maximum 20-25 pages
Annexes: unlimited
Business plan outline
Executive summary
Market
Product
Management
Marketing
Cash flow: history and forecasts
Investor
Annexes
Executive Summary
The single, most important chapter
First part read (and maybe the last)
Powerful and persuasive message
< 500 words (1-2 pages, 5 min.)
Whole argument
Danger: last written
Attention: grammar, typing
Concise, to-the-point
Easy to understand language (no jargon)
Market
The place where it is happening:
Definition
Customers
Competitors
NB. Around 5/7 pages
Market: definition
No generic stories
Be very exact and practical both in
Geography (local market)
Sector (“no competition”)
Potential to go global
Market: customers
Potential customers in detail
Figures:
present size
projected growth
Independent sources
Market: competitors
Companies not technologies
Describe them precisely and in detail
Don’t be negative
Barriers of entry
Do not go up against the “big guys”
Product
No jargon and KISS!
Focus on competitive advantage = unique
selling points (USP) = why would customers
buy your product
Technology, features etc. in annex
IPR protection (if relevant)
NB. Maximum 1-2 pages
Management
Investors are looking for experienced
(“serial”) entrepreneurs and teams
CVs in annex
1. Why you and you alone can make this
happen (investors invest in people so sell
yourself)
2. (Non financial) achievements: more than
just an idea or proof of concept
NB. Around 2 pages
Marketing / sales
Attracting new customers
Practical e.g. in B2B
No. of visits per week/month
Value of sale
Success rate
Projected milestones
Reaction of competitors
Partnerships
No prices of products or services
NB. Around 6/7 pages
Cash flow: history, forecasts (I)
“Cash is king”
Focus on cash not P&L/balance-sheet
Monthly / quarterly liquidity analysis
Full history plus three years future
Neutral in time
Sensitivity analysis
Minimal salary demands
Cash flow: history, forecasts (II)
Spreadsheets in annex
Especially now: DIY or do-it-yourself
1. Assumptions
2. Summary of ratios
3. Conclusion
NB. Maximum 2 pages
Investor
Cash
Exit analysis
Risk analysis
NB. Around 2-3 pages
Investor: cash
Derived from your liquidity forecast
How much money (cash only!):
invested by you (and the team)
raised already and from whom
do you need, when and for what
Staggering your cash need
For marketing or growth
Board seat for investor
Nothing on VALUATION
Focus on making a “value proposal”
Investor: exit analysis
The business of an investor is buying shares
and selling shares
“Built to be bought”
No emphasis on IPO
Trade sale: extensive analysis of possible
buyers and why they will be interested
Investor: risk / SWOT analysis
Risks connected to investing or
SWOT analysis
Focus on mitigation
Financial situation is no risk/weakness
Challenge
Put your vision on paper in such a way
that you convince an outsider that
there is money to be made by
investing in your company
One very important note
If an investor decides not to invest in
you, your team and your company
it does not mean
that
you can not be
successful
Investors vs. entrepreneurs
Generalisation:
Investors know a lot about markets
but not a lot about products
Entrepreneurs know a lot about
products but not a lot about markets
Consequence: misunderstanding
My passions
Bridging the gap between investors
and entrepreneurs
Coaching entrepreneurs and
management teams
Bookkeeping
Personal financial planning
Interim controller/CFO
Contact details
Ties Corporate Finance
Ties van der Laan
10, rue des Alouettes
L-1121 Luxembourg-Cents
Mobile: (+352) 691 427 566
Fax: (+352) 427 566
Email: [email protected]
Internet: www.ties.lu