Entrepreneur’s ToolkitTool 3: Business Plan

Business Plan tool-kit

Business Plan tool-kit – From BM to BP

From Business Model… …To Business Plan

After modeling the process to generate, market and get revenues from your value proposition …

… you must now formulate a structured roadmap of this process to implement the designed model : this is the Business Plan

THE BUSINESS PLAN

Types and uses

Business Plan tool-kit – What is a business plan?

The Business Plan is :

• The roadmap that formalizes the reality of the opportunities you address,

• The description of the content of your Business Model,

• The first promotional tool of your project

Business Plan tool-kit – Types of BP

There are different types of Business plan

• The Elevator Pitch – a one minute oral presentation

• The Lite Business Plan -approximately 10 pages/14 slides

• The Full Business Plan - approximately 30 to 40 pages

• The Operational Business Plan - 40 pages or more

Business Plan tool-kit – Types of BP

The different types of Business plan

• The Elevator Pitch is a one to two minutes oral presentation a synthetic description of the product/market

domain of the business and the value proposition offered to clients

a straightforward announcement of your demand a hook to capture attention

Business Plan tool-kit – Types of BP

The different types of Business plan

The Lite BP is the formalized presentation for the 20 mn pitched

description of your project a concentrate of the project likely to convince

stakeholders to support it

Business Plan tool-kit – Types of BP

The different types of Business plan

The full BP is : the detailed description of your project that

encompasses all relevant and reliable justifications for expected outputs and related required assets

completed by descriptions of organizational structure and operational processes to form the Operational BP.

The Business plan

The pitched Business Plan:The Lite BP

Business Plan tool-kit – The BP template

Focus on the Lite Business Plan

Why the 14 slides Lite BP ?

It covers the whole scope of the generation, of the deployment and the prospect of the entrepreneurial project

This is the BP formalization commonly agreed by entrepreneurship professionals for an efficient presentation of the entrepreneurial project,

This has been experienced with thousands of entrepreneurs

Business Plan tool-kit – The BP template

The 14 slides1. VISION/MISSION2. BUSINESS OPPORTUNITIES3. SOLUTION/OFFER4. VALUE PROPOSITION/CUSTOMER BENEFITS5. TARGETED MARKET 6. COMPETITION7. SIMPLIFED BUSINESS MODEL8. GO TO MARKET STRATEGY 9. THE TEAM10. HISTORY OF THE PROJECT 11. THE NEXT 18 MONTHS12. KEY FIGURES13. RISKS14. DEMAND

BP tool-kit – 1: Vision/Mission

Vision« We could say that is the projected picture in the future of the expected position of our products on the market, according to our current understanding of the evolutions of the industry and society »Louis-Jacques Filion

Mission The mission defines what we do - or what we expect to do - stressing the main benefits for the Customers and taking into consideration the values and expectations of the stakeholders.

Stating clearly the nature of the project

BP tool-kit – 1: Vision/Mission

BP tool-kit – 2: Business Opportunities

• Identifying market opportunities is identifying a latent demand, imperfectly satisfied, or unsatisfied.

• Opportunities emerge from:– New possibilities offered by a technology– Unsatisfied needs of the customers– Unsolved problems faced by users– Current or expected regulations – Evolution in society (demography, social issues, way

of life, ageing, new behaviors, …)

What has made you think there is room for business

BP tool-kit – 3: Solution/Offer

• Describe the product/service/solution that takes advantage of the market opportunities you plan to address

• Be clear in order for people to easily understand what you expect to do.

• Do not hesitate to illustrate with examples, prototypes, …• Stress what you do better than your competitors.• If you have a patent, mention it and explain what it

covers and where.

Understanding clearly what will be proposed to the client

BP tool-kit – 3: Solution/Offer

Understanding clearly what will be proposed to the client

BP tool-kit – 4: Value Proposition

What will make the client purchase the offer !A KEY part of the BP

• The value proposition is the formulation of the offer in a way that values the benefits for the customer.

• The value, called also customer benefit, is created by the features of the offer.

• The value proposition differentiates your solution from competition as a «unique selling proposition».

• This value can be rational (money, performance), emotional (social status), or both.

BP tool-kit – 4: Value Proposition

Value Propositionin practice:

Ex: High performance Computing

BP tool-kit – 4: Value Proposition

Value Propositionin practice:

Ex: Private Clinical Investigation Centers for faster time to market and cost savings

BP tool-kit – 5: Targeted market

Showing that you know to whom you are selling

• The targeted market segment (not more than 2)– Main characteristics– Size, and if possible, expected growth rate– Competition (provide a representative benchmark as

a sample of the strategic group we will belong to)

• Where are the customers for the first 1M€ turnover?

BP tool-kit – 5: Targeted market

Sourced from BeNomad

Example: BeNomad

Our Customers

Hardware manufacturers- Professional terminals : Barcode reader, PDA, etc.- Embedded terminals : GPS + GSM/GPRS.

System integrators- Transport solution specialists,- Generic.

Software editors- Call center, emergency,- Fleet management,- Mobile application.

BP tool-kit – 6: Competition

Knowing competitors helps validate you can enter the market

• Who are competitors on each targeted segment?• What is their weight on the market? • Can they exercise market power? (influence market behavior)• What are their characteristics, their strategic posture?• What are their retaliation capacities when you will enter the

market?

BP tool-kit – 6: Competition

Knowing competitors helps validate you can enter the market: a check-list for investigation

 Who are they? Number: is the sector concentrated (monopoly, oligopoly)? Excess or insufficient capacities Market shares: stability or evolution (volume, value) Image, Notoriety…

 What is their strategy and what are their objectives? Do they apply the same formula Do they innovate? Did they establish barriers to entry?

What are their competitive advantages?

 What are their strengths and weaknesses?

What would be their capacity to react?

 What is the profile of their Executive Management Where do they come from? Education? Career? “same profile” or diversity?

How to identify them and know them?

Via customers Professional branch Information from suppliers Benchmarking of the “best

in class” Study of their products

and associated services Study of their targeted

segments Price surveys Study of their value chain Any certification ?

BP tool-kit – 7: Simplified business model

The way this will be turned into a profitable business

This part focuses on the key choices of the firm’s strategic positioning in the

value chain of the targeted market segment and the related cost and revenue model

BP tool-kit – 7: Simplified business model

The way this will be turned into a profitable business

• Position in the external value chain

• Value capture consequences of your position

• Revenue model: nature, source & revenues breakdown

• Cost model: cost structure, including the possible externalization or «variabilization»! Pay attention to the source of value creation/destruction (internal/external value chain)

• The Business Model must be specific, and simple

BP tool-kit – 7: Simplified business model

Map DataProviders

Example: BeNomad

Revenue

increase

Productivity increase

Rapid ROI

Integrators

Software Editors

Integrators

Software EditorsIntegrators

Software Editors

End usersEnd users

End users

Fees

Royalties

License fees

New sourceof revenues

Sourced from BeNomad

BP tool-kit – 7: Simplified business model

Example: ADACSYS

BP tool-kit – 7: Simplified business model

Example: VenomeTech

CROservices

REVENUE STREAM 1

REVENUE STREAM 2

BP tool-kit – 8: Go to market strategy

How my offer will be marketed

• Sales strategy, i.e. how do we deliver the offer to customers?

• Communication strategy, i.e. how do we promote and create the awareness of the market as regards the offer?

• Development strategy, i.e. what are the main steps of expansion ?

• Is there an internal (e.g. between BUs) or external partnership policy?

BP tool-kit – 8: Go to market strategy

Example: BeNomad

An indirect sale strategy accelerates product deployment

- a real « multiplier effect. »

A seeding strategy based on pilots for :- technical and market validations,- positioning and product improvements.

The technology enables to address other markets - from the transportation market to mobile GIS.

Business Development strategy

Sourced from BeNomad

BP tool-kit – 9: The Team

Why this combination of skills is a winning formula

• The role of key people involved in the project, and the degree of their involvement (tell us: are you in fact onboard or do you keep you former job?)

• Former positions in companies relevant to the project.

• Skills related to the job they will fulfill.

BP tool-kit – 10: Genesis of the project

• Chronology of the main steps the project went through.

• Proofs of success (patents, available prototypes, initial sales, letters of intent, posters, grants, publications….)

• Partnerships,• Recommendations from opinion leaders, …

The tangible track record of the project, so far

BP tool-kit - 10: Genesis of the project

Admin- Company incorporated in July 2002,- Support of public incubator (PacaEst),- Grant from the French Ministry of Research (70 k€).

Sales & Marketing- sales activity began in Autumn 2003,- 2 contracts signed.

R&D- product V1 is released : API for Microsoft and JAVA environments.- Roadmap : new functions to be added in Vnext.

Development Status

Example: BeNomad

Sourced from BeNomad

BP tool-kit – 11: The next 18 months

Showing you are realistic and what will need to be financed

• Development of products/ services• Commercial strategy• Patenting• Partnership• Recruitment• ...

BP tool-kit – 11: The next 18 months

Showing a realistic path of what must be financed

BP tool-kit – 11: The next 18 months

Example: VenomeTech

BP tool-kit – 12: Key figures

Giving an idea of the project’s financial weight

BP tool-kit – 13: Risks

The hurdles and risks to be mastered

Focus on the 2 or 3 specific risks of the project

Technological riskHuman riskFinancial riskAcceptation by the marketOver-estimation of demandOver-estimation of value propositionRegulationsTiming to market, …

Indicate the responses in case the risk should occur and the backup solutions

BP tool-kit – 14: Demand

What you are requesting

• Amount of money expected (highlight the funding part of the entrepreneurs!)

• Support to the valorization, dissemination of the project

• Technological, commercial support, …

! Explain the usage of the fund !

Ex: Need for 500 k€ for the DEVELOPMENT phase

- to staff R&D for the product evolution- to boost sales activity.

BP tool-kit – The Lite Business Plan - Synthesis

The 14 slides Lite BP

is the formalized and structured roadmap of your project covers the whole scope of the generation, of the deployment and

the prospect of the entrepreneurial project is a commonly agreed template for an efficient presentation of

the entrepreneurial project that will draw attention of attract reassure Convince

all stakeholders that may influence the success of the project is the support of your first commercial action

BP tool-kit – Questions

Q1: What is not a correct assumptiona) A business plan must help understanding the interest of the innovation by non-specialists of the

field of businessb) It is impossible to develop a business without a business planc) A business plan formalizes the business model into a roadmap

Q2: Choose the two correct assumptionsd) The business model should be worked out before formulating the business plane) The lite business plan should not reveal clearly the real competitive advantage provided by the

innovationf) The pitch of the lite business plan is a sales speech

Q3: Select the statement that applies to the lite business plan presentation g) It can be used to attract future employeesh) The list of the topics addressed in the business plan generally depends on the field of businessi) It supports the elevator pitch

BP tool-kit – Questions

Q4: Which of the following slide of the Lite BP explains the way you are going to sell your innovation?a) The Value Propositionb) The next 18 monthsc) The go-to-market strategy

Q5: Choose the correct assumptiond) The slide describing the simplified business model focuses on the revenue and cost streamse) The slide describing the simplified business model is a copy a the business model canvasf) The slide describing the simplified business models describes mainstream clients, key partners, and

costs and revenue streams

Q6: According to you and commonly accepted objectives of the Lite BP, g) The Lite BP describes the details of the project and the way it will be implemented in practiceh) The Lite BP contains 14 slides, but it can be shorten if the audience knows the topici) The Lite BP supports your argumentation during a discussion to convince non experts and experts to

support the project