seminar 6: putting it all together: writing the ideal business plan
TRANSCRIPT
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Writing a Startup Business Plan
Ben Mumby-Croft
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• Review the business planning process
• Understand why it matters for startups
• Introduce basic startup business plan format and structure
Today’s session
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About me
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• University lecturer
• Marketing & business practitioner
• 10+ years experience
• Primarily Small-to-Medium Enterprises (SMEs) and Startups
Experience
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Light Blue Software
Working with startups
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Q. Why plan?
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Planning process…
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Startup context…
Thinking Planning Doing
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The purpose of your plan is to move you from
thinking to doing
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AS QUICKLY AS POSSIBLE!!!
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The challenge for startups…
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“A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.”Eric Ries, The Lean Startup
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Do I REALLY need a business plan?
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YES!You do!
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Having a business
idea is easy
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The Startup Fallacy
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Turning it into a business, is VERY
difficult!
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The Startup Chasm
It’s a long way from here to thereAnd lots can happen on the way
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• Getting your good idea to bear fruit is hard
• Will probably require startup and growth funding
• You need a clear understanding of the journey
Taking the first steps…
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You need to plan ahead…
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To convince investors that you know what you’re
doing…
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To avoid making obvious mistakes…
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To reach your destination as quickly
as possible!
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Two key roles of the business plan
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Q. Why do startups fail?
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They run out of CASH!
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2 reasons…
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Over planning…
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Under-planning!
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Under-planning!
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The startup business plan…
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There’s no shortage of advice!
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BUT there’s also no magic formula…
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Here goes anyway…
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1. Executive summary
1. The Problem/Opportunity
2. The Solution
3. Business model
4. The Market
5. Competitors & USP
7. Marketing & Sales
8. Management Team
9. Finance
10. Current Status, Key Milestones, Next Steps
Appendices
The Startup Business Plan
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• A short and concise summary of the customer need, your solution, your business model and what makes you unique
• This should also make a compelling statement to potential investors
• Write this page last!
1. Executive Summary
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• What specific customer challenge or problem does your idea address?
• Try and quantify the scale of the problem from the point of view of the customer
• The bigger problem, the bigger the need, the more attractive your business is!
2. The Problem
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• What is the proposed product or service that you have developed that will solve this problem?
• What key benefits does it provide; try and quantify these from the point of view of the customer e.g. reduces costs by £X, reduces emissions by Y% etc.
• Keep it simple and avoid jargon!
• A picture paints a thousand words!!
3. The Solution
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• Describe in clear and simple language how your business is going to make money e.g. one-off transaction, subscription model, commission etc.
• If your business model is complex, or involves multiple channels of distribution consider using a simple diagram
• Show me the money!!!
4. The Business Model
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• Describe your target market in terms of: size, structure, geographical spread, key customer types etc.
• Make sure you also demonstrate that you show good qualitative understanding of your target customers e.g. what they want, how to reach them etc.
• Identify the addressable market
5. The Market
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• Who are your key competitors & on what basis do they compete e.g. quality, price etc?
• What makes your product/service compellingly different – what’s your USP?
• Why will people fall over themselves to buy you?
6. Competitors and USP
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• What are your sales goals?
• What mix marketing channels are you going to use to communicate your USP to target customers?
• What specifically are you going to do and when?
• Don’t break the bank!
7. Marketing & Sales
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What is a brand?
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• What specifically makes you and your team qualified to get this business off the ground.
• Describe the key players of your management team, including age, experience, and skills and knowledge
• Make sure you identify any key gaps
8. The Team
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• Provide a 3-year forecast containing projected cash flow, P&L etc.
• Provide additional metrics in terms of projected customer numbers, conversion rates etc.
• How much capital will you need to get off the ground?
• Make sure you outline all of the key assumptions behind your forecasts
9. Finances
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• Explain the current status of your product or service and what the near future looks like if you are successful in winning.
• Make sure you list key milestones covering the the next 12-months e.g. product launch, first customer sales etc.
• Close with a bias towards action!
10. Current Status & Next Steps
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…I lied about the £10,000 pounds
9.
30am – 10.30am: Leadership refresher
10.30am – 11.00am: Coffee break
11.00am – 12.30pm: Interactive exercises
12.30pm – 1.30pm: Lunch
1.30pm – 3.00pm: Interactive exercises
3.00pm – 3.30pm: Coffee break
3.30pm – 4.30pm: Partner presentations
10. CURRENT STATUS, NEXT STEPS…• Explain the current status of your
product or service and what the near future looks like if you are successful in winning.
• Make sure you list key milestones covering the the next 12-months e.g. product launch, first customer sales etc.,
• CLOSE WITH A BIAS TOWARDS ACTION!
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1. Executive summary
1. The Problem/Opportunity
2. The Solution
3. Business model
4. The Market
5. Competitors & USP
7. Marketing & Sales
8. Management Team
9. Finance
10. Current Status, Key Milestones, Next Steps
Appendices
The Startup Business Plan
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Top tips
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• Avoid acronyms NMR, CDMA, ASCII, WDTM
• Functionality – what does this product/service do NOT how does it work
• Use customer scenarios
• Your job is to explain your idea to investors and make it easy for them, whilst balancing with enough detail
Tip 1 – Minimise Complexity
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• Make sure it’s easy to read
• Vary sentence length
• Repeat key messages
• Short paragraphs, wide margins, 11+ font
Tip 2 – Make it easy to read
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Write as you would speak NOT as in a
textbook
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Do a word cull after the first draft CUT
unnecessary words
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Give it to your partner to
read…
Does it make sense?
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REMEMBER!
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A good business plan…Sets out a compelling vision of the
futureAnd shows how this will be made
real
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+
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A good startup business plan should get you to
first base…But you’ve got to make the
running from there!
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No business plans are
ever right!
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