business plan

&

Business plan lecture 1 Vienna, Jan-Feb. 2013

Before we start: the business plan and me a long story

Restructuring at UBS the effect of a credit bubble.

I2B largest business plan competition in Austria in 1999.

Prepared e-business investment of € 25 mio. with 5 large companies as

shareholders.

Restructured the e-business company at the end of the e-business

bubble.

Restructured a number of conventional companies in Eastern Europe, the

effect of another credit bubble.

Same mistakes generating the same consequences over and over

FH JOANNEUM, BUSINESS PLAN, IIB/2011/VO

2

Structure of the lecture

About entrepreneurship and business plans

How to write a business plan

Business case: producer of enamel pots in Eastern Europe


3

1. Before we start

2. Definition

3. Reasons for writing

3. Circumstances

4. Particularities

5. Case study

6. Next steps

4


Before we start:

Who knows what is a business plan?

Who has already written a business plan or part of a business plan?

Who wants to be an entrepreneur?

Who already has an idea and wants to implement it (has started to

develop it)?


5

Before we start: motivating the entrepreneur


6

Before we start: motivating the entrepreneur


7

Before we start: some examples of failures


8

Large Format Digital

Based in Edgerton, Wis., the company printed advertisements on the side

panels of trucks. It opened in 1998 and closed in March.

AT ITS PEAK In 2006, business took off, growing about 60 percent a year

until 2008. In 2007, sales were $3 million and the company had 15

employees.

WHAT WENT WRONG When the business was growing, Ms. Kavanaugh

and Jeff Rank, her co-founder and husband, decided to spend $1 million to

build their own installation facility, which they believed would save them

money in the long term. The mortgage closed on the same day in September

2008 that Lehman Brothers filed for bankruptcy. Within a month, Large

Format’s workload fell 50 percent. “It was literally like someone turned off a

faucet,” said Ms. Kavanaugh.

http://www.nytimes.com/2011/01/06/business/smallbusiness/06sbiz.html

Before we start: some examples of failures


9

SixDegrees.com was the original online social network

SixDegrees.com was the original online social network, based on the game "six

degrees of Kevin Bacon" and the idea that we're all six degrees away from

everyone on Earth. It had high growth from its start in 1997 but people probably

weren't ready for a full fledged social network.

Believe it or not, Webvan was NOT doomed

Webvan's home groceries delivery service is eponymous for many of the doomed-

to-fail startup. You may be doomed to fail if you spend $1 billion on warehouses

and SUN servers before you launch. But home groceries deliveries online is a

great business for latecomers like FreshDirect Read more: http://www.businessinsider.com/startup-failures-2011-5?op=1#ixzz2FJV9wtZq

http://www.businessinsider.com/startup-failures-2011-5?op=1








Before we start: is this opportunity for me*?

Good opportunities are rooted in personal experience

Experience shapes the perception of opportunities; they are not the same

for everyone.

Your skills and capabilities provide the basis of your comparative

advantage in exploiting an opportunity

A real opportunity is one that enables you to use and leverage the skills

and expertise you have acquired over time

Ask yourself: What makes this opportunity mine?

10


*Source: entrepreneurship lecture, London Business School, 99


Innovation in product:

11


http://en.wikipedia.org/wiki/File:Palmpilot5000_eu.png


Innovation in process:

12


http://en.wikipedia.org/wiki/File:Dell_Logo.svg


Innovation in customer experience:

13


http://en.wikipedia.org/wiki/File:Starbucksdesk.jpg


Entrepreneur with experience in electronics who wants to set up a chain of

fast food restaurant

Investor: have you ever worked in a fast food restaurant?

Entrepreneur: work in one? I would not even eat in one. I

cannot stand fast food

14



Before we start: a strong team means*

Proven relevant experience in the industry, market, technology

Track record in achieving results, particularly P&L

Diversity of personal qualities, styles and perspectives

Completeness and balance in terms of skills and expertise

Mutual trust, commitment and ability to manage conflicts.

15



Before we start: VC and buyout investors are financing strong

teams*

For VC

Leadership potential of lead entrepreneur

Leadership potential of management team

Recognised industry expertise in management team

Track record of lead entrepreneur

Track record of management team

For buyout

Leadership capabilities of management team

Track record of management team

Sustained share competitive position

Track record of team leader

Completeness and balance within the management team

16


*Source: Trade-off in the Investment Decisions of European Venture Capitalists, Sue Birley, Dan Muzyka and Benoit Lejeux

Management Buyout: Perception of Opportunities, Sue Birley, Michael Hay and Dan Muzyka

Before we start: is the timing of the opportunity right*?

Personal time

Enough experience accumulated to start

I can move rapidly to seize the opportunity

I and those around you can bear the personal costs

I am devote enough of my time to do it and for long enough

Industry or market time new opportunities

Technology internet, electric cars,….

Regulations low cost airlines

Social new ways of working, communicating,…

Fragmented industries

Investor time

Window of opportunity for financing

Does the time plan of my investor coincide with my time plan?

17



Before we start: is the timing of the opportunity right*?

Industry or market time new opportunities

Technology internet, electric cars,….

Regulations low cost airlines

Social new ways of working, communicating,…

Fragmented industries

18



Dropbox The Inside Story Of Tech's Hottest Startup - Forbes.flv

Before we start: is the opportunity scalable and saleable*?

Is it a life style opportunity or a scalable opportunity?

VC are interested in scalable opportunities, not in life style

businesses.

Entrepreneurs should consider life style opportunities as the chances

to succeed are much higher.

19



Before we start: scalability means very few make a lot of

money

20


*Source: http://app-promo.com/wake-up-call-infographic/

Before we start: am I developing an opportunity or an idea*?

What distinguishes and opportunity from an idea is its

Timeliness

Fit with personal experience and expertise

Tangible value proposition that creates real customer benefit

A way of creating customer value that is generalisable to many customers

21



1. Before we start

2. Definition


3. Circumstances

4. Particularities

5. Case study

6. Next steps

22


Definition*

A business plan is not only a requisite for seeking finance from investors,

its is also an essential document for describing aims and objectives and

enabling the measurement of progress towards achieving them.

The business plan provides the means to:

appraise the present and future of the business

define short- and long-term objectives

establish a framework for action to achieve those objectives.

It is not just a set of numbers. It is a story,…

23 * Business ,the Ultimate Resource, A&C Black, London, 2006


1. Before we start

2. Definition


3. Circumstances

4. Particularities

5. Case study

6. Next steps

24


Why ? Do I need a business plan?

Zuckerberg: Startups Don't Need Or Have The Time To Write A Business Plan Read more: http://www.businessinsider.com/mark-zuckerberg-facebook-business-plan-for-startups-2012-5#ixzz2FJkTFpu5

“60 %of the Inc 500 CEOs surveyed did not create formal written business plans

before launching their companies”.

"In these highly turbulent markets, the costs of doing the analysis or writing a plan

exceed the benefits.“

Read more: http://www.antiventurecapital.com/plans_bhide.html


25

http://www.businessinsider.com/mark-zuckerberg-facebook-business-plan-for-startups-2012-5


















http://www.antiventurecapital.com/plans_bhide.html



Why ? Do I need a business plan (summary of video) ?


26

1. Identify and clearly articulate your Heart and purpose. Whether you want to call it

vision, Heart, purpose or calling, be very clear on the why of a business — the bigger

goal at hand.

2. The team is more important than any idea or plan. The top three priorities should be

people, followed by people, and then people.

3. Think big, start small, then scale or fail fast. Per Lederhausen's advice, set the right

first "start small" milestone; it will usually involve seeing people's willingness to buy or at

least try your product.

4. Focus on a well-defined market sub-segment or niche. At least to start, think of

where you can potentially be the best. This strategy is almost always more successful

than being just another player in a massive market.

5. Understand your business model. How you will make money is more important than

pages of Excel showing financials that are simply too hard to predict at this early stage

anyway. Understand instead the basic way you will make money - is it through

transactions, advertising, subscriptions, etc? Anthony Tjan is CEO, Managing Partner and Founder of the venture capital firm Cue Ball, vice chairman of the advisory firm

Parthenon, and co-author of the New York Times bestseller Heart, Smarts, Guts, and Luck (HBR Press, 2012).

But! That is a business plan

http://www.cueball.com/



http://www.parthenon.com/

http://hsgl.com/

http://hsgl.com/

http://hsgl.com/

http://hsgl.com/

http://hsgl.com/

http://hsgl.com/

Particularities of Steve Jobs approach ?

“We have a great product”

Is it enough to be successful??


27

Why ? Yes I need a business plan.

For sure, I need a plan. I need to know what I am about to start because I

will need to convince:

myself

my family if they help with financing

my financing partners

my colleagues and future colleagues

my suppliers and customers.

BUT: it is unlikely that the plan will be implement as designed.

28


Moving in phases

29


The plan has to be implemented

If it is necessary to have a plan, it is of course even more important to

have the necessary strength to implement it:

Kochabo, the idea and already € 250/T from investors

2004, Rezeptkonzept, the idea and the missing implementation 30


http://www.kochabo.at/

1. Before we start

2. Definition


3. Circumstances

4. Particularities

5. Case study

6. Next steps

31


When to write a business plan

Start-up

New product / service

Unproven market

Unproven team

No/limited financing

Turnaround situation

Existing product / services

Changing market

Quality of team

Financing issues

32


1. Before we start

2. Definition


3. Circumstances

4. Particularities

5. Case study

6. Next steps

33


Particularities

Complex task

Trying to predict the future

Working in team, in most cases with team members that have a different idea

of the venture or of the situation.

This is my baby syndrome

Requires a deep understanding of the functioning of a company from the client

to the finished products and its delivery, including the impact of this process on

the financial situation.

34


1. Before we start

2. Definition


3. Circumstances

4. Particularities

5. Case study

6. Next steps

35


Kochabo

Sizing the opportunity

Who is a typical customer?

How large is the market in Austria ?

36


To end up on a positive note:

“My dream is that we would have a National Entrepreneur Day, with the

following message:

Most of you will fail, disrespected, impoverished, but we are grateful for the

risks you are taking and the sacrifices you are making for the sake of the

economic growth of the planet and pulling other our of poverty. You are the

source of our antifragility. Our nation thanks you*”.

*Antifragile, Nassin Nicholas Taleb, Random House, 2012


37

business plan

Documents