Entrepreneurship I

Class #8

VOSG IBusiness Plan and

Finances

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VOSG I

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VOSG I• Name and tagline• Mission statement• Opportunity • SWOT• Product/service description• Industry analysis• Target market analysis (segment,

target, position)

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VOSG I continued

• Competition• Competitive analysis• Customers• Marketing and sales strategy

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Sample outline

• Executive summary• Description of business• Market • Competition• Sales and marketing• Management

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Executive summary

• Short• Opportunity• Compelling• Synopsis of high points of plan• Tells a story

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Description of business

• Details• Informs• Demystifies technology• Graphics• “Unfair” advantages

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Market

• Analysis• What need do you fill or problem

do you solve?• Industry overview/trends• Market size• Primary market(s)• Customer profile

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Competition

• Analysis• I have no competitors = NO!• Who is your competition?• What are their strengths and

weaknesses?• Competitive advantages• SWOT

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Competition

ABC Inc. XYZ Inc. Me Inc.

Feature 1 Yes No Yes

Feature 2 Slow Medium Fast

Feature 3 No Yes Yes

Cost High Medium Low

Volume Medium Low High

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SWOT

Strengths

ThreatsOpportunities

Weaknesses

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Sales and marketing

• STP (segment, target, position)• Pricing• Strategies• Tactics• Marketing plan

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Management

• Founders/owners• Operations• Board of directors• Board of advisors

= Proven team with past success and drive to succeed again.

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VOSG I appendix

Summary of market research done to date

Contact names and numbers of people talked to (suppliers, partners, experts)

Customer contact summary (survey results, etc.)

Sample of survey or questions asked Summary of future market research

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Business plans

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Purpose of the business plan• External

– credibility– raising money– selling the business– strategic partners– basis for grants

• Internal– goals– control– new product idea

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Essence of the plan

• What is your business?• Why will you succeed?• Who will buy?• Why should I believe you?• What is the opportunity ?

= The Story

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Key elements

• Economically viable product or service with attractive markets.

• Established attack plan that can be replicated.

• Seasoned management team that has demonstrated that it can carry out the attack plan.

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Key drivers

• What are the key drivers to the venture’s success?– Manufacturing - yield on a production process– Magazine publishing - anticipated renewal

rate– Software - distribution

• At what level of sales does business begin to make a profit?

• When does cash flow turn positive?

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9 key questions1. Who is the new venture’s customer?2. How does the customer make

decisions about buying the product or service?

3. To what degree is the product or service a compelling purchase?

4. How will the product be priced?5. How will the venture reach all the

identified customer segments?

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9 questions continued

6. How much does it cost (time, resources) to acquire a customer.

7. How much does it cost to produce and deliver the product or service?

8. How much does it cost to support a customer?

9. How easy is it to retain a customer?

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Critical success factors

• People- founders, management and support

• Opportunity- profile of business

• Context- big picture (opportunities and threats)

• Risk and reward- what can go wrong and right - response

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Time

Money

time to positive cash flow

potential reward

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Forming a business

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Structure

• Legal entity:– sole proprietor– partnership (LP)– limited liability company (LLC)– subchapter S Corp. (S)– C corp.

• Intellectual property position (IP)

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More structure

• Issuing stock• Founders• Board members• Advisors• Staffing• Funding (credit card, friends and

family, angels, vc)

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Still more structure

• Options• Space• Development• Launch

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Entrepreneurial options• Start a business

– idea– resources

• Buy an existing business– expertise– resources

• Franchise– expertise– resources

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I’m already an entrepreneur

• State of the business• Challenges ahead• Growth potential• Strategies