business plans for the real world. why a business plan? strategic guide lenders investors
TRANSCRIPT
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Business PlansBusiness Plans
For The Real World
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Why a Business Plan?Why a Business Plan?
Strategic Guide
Lenders
Investors
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Strategic GuideStrategic Guide
Where Do You Want To Go? How Are You Going to Get There? What Market Niches? How Much is it Going to Cost? Greatest Profit Opportunity?
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Lender ExpectationsLender Expectations
Good Business Track Record Ability to Repay Staying Power Collateral
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Investor ExpectationsInvestor Expectations
Competitive Advantage Huge Market Strong Management Team Strong Marketing and Sales Plan Some Skin in the Game Obscene Return Exit Strategy
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Entrepreneurs Start Businesses:Entrepreneurs Start Businesses:
To Capitalize on an Invention To Pursue a Passion To Be Their Own Boss To Get Rich
---All Need an Exit Strategy
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Exit StrategiesExit Strategies
Selling the Business Transferring the Business to a Family Member Taking the Company Public Being Acquired by a Larger Company
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Funding Sources:Funding Sources:
Savings Friends and Family Financial Institutions / Banks Angel Investors Venture Capital
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Business Plan ContentBusiness Plan Content
Executive Summary Company Description Product/Services Description Industry Overview Market Analysis Competitors
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Business Plan ContentBusiness Plan Content
Customers Marketing and Sales Plans Development Operations Management
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Business Plan ContentBusiness Plan Content
Personnel Financial Summary Financials Offering Appendices
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Executive SummaryExecutive Summary
A mini-business plan in one or two pages Highlights the most important points of your
business plan It is NOT an introduction to the plan It must grab your reader, and entice him/her to
read further
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Executive SummaryExecutive Summary
Identify the company, its background, structure and location
Describe what the company does, and the market it serves
Describe the market potential for the company’s products and services, market trends, etc.
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Executive SummaryExecutive Summary
Outline the backgrounds and experience of the top management team
Describe the funding required, the purposes for which it will be used, the collateral available (if for a lender), and the expected outcomes
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Company OverviewCompany Overview
Brief Company Introduction– Mission statement– Location, size, history– Market and products– Overview of company capabilities– Objectives
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Products/ServicesProducts/Services
Products / Services– What does it do?– Uniqueness– Competitive Advantage
Technology– Brief description– Applications
Commercialization Status– Brief overview
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Industry OverviewIndustry Overview
Set The Stage Industry Definition and Description
– Major players within the industry– Factors driving dynamics– New products and developments
Legislation and Policies Driving the Industry Historical and Future Trends
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Market AnalysisMarket Analysis
Market Definition– Primary Market– Secondary Markets
Market Size and Trends– Current total revenues– Predicted annual growth rate
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CompetitorsCompetitors
Direct Competitors– Who are they?– Size and product breadth– Revenues and profitability– Strengths and weaknesses– Market shares
Indirect Competitors
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CustomersCustomers
Customer Characteristics– Who are they?– Why do they buy?– Need satisfied by the product/service– How is the need currently filled?– What are the alternatives?– Who makes the decision to buy?– How frequently do they purchase?
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Marketing and Sales PlansMarketing and Sales Plans
Statement of Opportunity Marketing and Sales Objectives Existing Customers Potential Customers
– Prospects targeted– How prospects will be targeted and qualified
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Marketing StrategiesMarketing Strategies
Product/Service Strategy Pricing Strategy Distribution Strategy Advertising and Promotion Strategy Sales Strategy Marketing and Sales Forecasts
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Marketing and Sales PlansMarketing and Sales Plans
Marketing Programs– Direct Mail– Trade Shows– Advertising– Internet– Publicity/Public Relations– Marketing Budget
Pricing– Basis for targeted price point– Margins and profitability by volume levels
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Marketing and Sales PlansMarketing and Sales Plans
Sales Plan– Sales force structure – (direct or reps)– Sales expectations/quotas– Margins given to intermediaries– Service and warranties– Sales Budget– Organizational chart indicating planned growth
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DevelopmentDevelopment
R & D Plan– Objectives– Milestones and current status– Difficulties and risks– Staffing– R & D Budget and assumptions
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OperationsOperations
Manufacturing/Production Plan– Objectives– Facilities– Staffing– Subcontractors– Quality Control– Budget / Operating Expenses
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ManagementManagement
Company Organization Management Team Administrative Expenses
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Management TeamManagement Team
President VP Finance VP Sales VP Marketing VP Manufacturing Board of Advisors
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PersonnelPersonnel
Human Resource Plan– Staffing Objectives– Organizational Structure– 3-5 year growth plan– Budget
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Summary of FinancialsSummary of Financials
Financial Objectives– Time to Cash Flow Positive– Time to profitability
Financial Assumptions Capital Requirements Exit Scenario
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FinancialsFinancials
Pro-forma Cash Flow Projections Pro-forma Profit & Loss Statements Pro-forma Balance Sheet
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A pro forma financial statement is defined as "a financial statement prepared on the basis of some assumed events and transactions that have not yet occurred." Historical financial statements are used to measure an organization's past financial performance and condition. Without historical financial statements, financial analysis and evaluation would not be possible and management, board members, investors, and customers would be largely in the dark about how well an organization has done.
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Pro forma financial statements are similar to historical financial statements in appearance and use, except that they focus on the future instead of the past and are based upon assumptions rather than hard fact. Historical statements should be real, solid, and scientific, while pro forma statements allow management to exercise a certain amount of creativity and flexibility. Pro forma statements reflect a dynamic environment in which change is still possible and a variety of different alternatives can be followed. They take the same forms as historical statements, the most common being the income statement, the balance sheet, and the statement of changes in financial position.
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OfferingOffering
Investment Requirements Pro-forma Valuation of Business Offer
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AppendicesAppendices
Resumes of Key Management Patent Information Customer List Testimonials Supplemental Financial Spreadsheets References
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http://www.sba.gov/category/navigation-structure/counseling-training
http://www.sba.gov/content/starting-business http://www.score.org/resources/business-plans-financial-st
atements-template-gallery http://www.dothan.com http://www.sba.gov/content/why-do-you-need-one
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Questions?Questions?