tsh master class business plans don't be a gnome

8/3/2019 TSH Master Class Business Plans Don't Be a Gnome

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Business Plans:

Dont be a gnome!


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VIDEO

http://www.youtube.com/watch?v=TBiSI6OdqvA&feature=player_detailpage
http://www.youtube.com/watch?v=TBiSI6OdqvA&feature=player_detailpagehttp://www.youtube.com/watch?v=TBiSI6OdqvA&feature=player_detailpage


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GNOME VIDEO

The how matters...

They wont alwayscome if you build it...


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Contents

1. Purpose of a business plan

2. The thinking behind

3. What to include

4. How to tips and resources


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Purpose of a business plan

Internal

Develop / validate an idea

Track progress

Externalo Investorso Debt providerso Co-founderso Customers

One doc but may needtweaking for different

audiences


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The thinking behind (1/2)

Is there an unsatisfied need ? Do you have a way of effectively addressing this need?o OR is there a need you can satisfy better than

alternatives?

What is your target market prepared to pay you tosatisfy the need? What will it take to get them to switchfrom using an alternative?o OR is there another way to monitise? (e.g. advertising)

Do economics work once the business is up andrunning?

Before writing theglossy book think through the basicsQ1

Q2

Q3


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The thinking behind (2/2)

How long much and time does it take to reach up andrunning? What are the risks ?

Do overall economics work on a reasonably short timeframe(2-3 years)?

Do you have what it takes (people, expertise, experience, )to get from point A to point B? Can you get what you lack elsewhere?

Are you committed enough (be honest with yourself)?

Q4

Q5

Q6

Q7If you answered YES to all of the above you are now ready

to write a business plan!


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Elevator pitch

By now you should have something along the lines of...

For [target customers]

Who have [compelling reason to buy]

Our product is a [new product category / challenger]

That provides [key benefit (which solves problem)]

Unlike [competitor / substitutes]

We have [key point of differentiation]

30-60 seconds to generate interestSource: Crossing the Chasm

This will be refinedafter doing proper

research butimportant to have

basics early


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Key components

Market positioning -- NEED

Product / services -- SOLUTION

Market strategy -- UNFAIR ADVANTAGE

Operations -- BUSINESS MODEL (rest of)

Team -- ENGINE ROOM

Financials -- BOTTOM LINE

Show you have done your research (market, costing,customer needs/demads/price sensitivities)


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Market positioning

Size + growth of addressable market

Porters 5 market attractiveness(margins, trends)

Target market defined & described -

how will you reach them? Competition / substitutes never

say no competition!

Market dynamics / likely responseto entry from incumbents

Broader picture economy,regulations geopolitics, culture

Solve a significant problem?

Robust market, margin, andmoneymaking characteristics?($50m+, 20%+ growth, 40%+margins)


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Product / service

Product / service

Pricing

What makes it different ?

Is it ready? What is still required to develop?

Need to have defensible barrierso Technology (patents, etc)o Domain knowledgeo Network effecto Partnershipso Culture / loyalty


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Market strategy

Describe how plan to reach target customer ahead / better than of competition

o WOM / direct marketing / SEO

What is your unfair advantage ?

o First movero New category o Price leader (efficiency? volume?)o Quality leader (domain expertise? premium?)o

Niche (knowledge of niche)


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Operations

How different is business model from competition?o Direct vs. indirecto In-house vs. outsource vs. crowd-sourceo Franchise vs. ownedo Auction

Other componentso Locationo Officeso Logisticso Manufacturing


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Team

Demonstrate to boost investor confidence o Expertise (sector, knowledge of customer base, technical)o Experience (startup, BD)o Passiono Personality (ability to attract talent / lead)o team experience (overcome obstacles)

Address any gaps in skills / resourceso Make sure have core in -house (e.g. technology expertise)

o Be clear on what is missing


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Financials

Projectionso Income statements accounting profit, EBITDA, how long takes to

get to break even, show until exit (e.g. 5 years) o

Cash flow king, timing matters, monthly typically for Yr1 and Yr2,show seasonality, working capital requirements, capex

Fundingo Be clear on how large is the gap / how plan to plug it AND repay

o Exito When / how (IPO, trade, PE)o How much (exit multiple, resulting IRR, cash flow x)

Its easy to underestimate costs / overestimate revenues /get timing wrong here get reader comfortable by showingyou have done research (comparable businesses, quotesfrom suppliers, survey of customers)


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Tips and resources

The Great British Business Show Nov 17/18 (free)

Business Link www.businesslink.gov.uk

Smarta www.smarta.com

Business plan software www.paloalto.com

Business model inspiration www.businessmodelinspiration.com Business plan templates www.bplans.com

For random questions [email protected]
http://www.businesslink.gov.uk/http://www.smarta.com/http://www.paloalto.com/http://www.businessmodelinspiration.com/http://www.bplans.com/mailto:[email protected]:[email protected]://www.bplans.com/http://www.businessmodelinspiration.com/http://www.paloalto.com/http://www.smarta.com/http://www.businesslink.gov.uk/

tsh master class business plans don't be a gnome

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