1. Today’s Topic
Writing Business
Plans
March 10th 2010
Meetup #1
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2. Today’s Presenter
An Entrepreneur
Invited to Dragon’s Den
Co-founder of MosaStore Inc.
Business Plan Expert – also winner of
largest business plan competition of Canada
Master of Business Administration &
Bachelor of Engineering
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3. Why you need a business plan?
For Investors
– Marketing document
– Foot-in-the-door philosophy – e.g. Hotmail
Founders
– Organize your ideas
– Market Research
For others
– Potential employees
– Suppliers / customers
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4. What should a business plan
communicate?
Sell the team of entrepreneurs!
– Qualities
– Network
– Passion
– Thought process
Sell the opportunity
– Market and profit potential
– Strategy
Sell a deal?
– No! Negotiations come later!
– How much money you need
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5. Template Structure
Approximate structure
– Executive summary (1-3 pages)
– Customer and market analysis (3-4 pages)
– Business model and competitive strategy (3-4
pages)
– Competitor analysis (2-3 pages)
– Implementation plan (2-4 pages)
– Risk section (1-2 pages)
– Financials Highlights and Assumptions (1-2 pages)
– Financials
– Founder Résumés
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6. Executive summary
Purpose: To convince the reader to read on
Length: Short! Less than 1000 words
Contents: All key elements in your business plan
– Company Name
– Positioning Statement
– Product/service description (uniqueness)
– Market size (data on size, growth & competition)
– Brief Business model and strategy
– The management team's qualifications
– financial summary, required amount, use of funds and
exit strategy
Style: Clear, dynamic, positive and exciting
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7. Example
Positioning Statement
Sentence #1: Segmentation
For (target customer)
who (statement of the need or opportunity),
the (product/service name)
that (statement of benefit)
Sentence #2: Differentiation
Unlike (primary competitive alternative),
our product (statement of primary
differentiation).
www.20minMBAs.com Developed by Geoff Moore, The Chasm Group
8. Example
Positioning Statement
(Product/Service) High performance, low cost and
flexible software storage solution (for) small to mid-
size companies and educational institutes (who) are
facing storage challenges in the midst of electronic
data explosion.
(Unlike) costly solutions, (our) product efficiently
utilizes the existing storage and network resources to
provide effortless expandability, and in turn, lowering
capital and operational IT expenditures.
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9. Customer and market analysis
Clearly articulate the customer need
– Explain importance of customer need
– Is there a willingness/ability to pay?
Provide secondary market research
– Estimate size and growth potential of your market
– Provide relevant market segmentation
Provide primary evidence of market needs
– Customer (and competitor) testimonials
– Survey evidence, focus groups
Always lead the analysis with facts and
figures…
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10. Example
Market Research
Number Uninsured and Uninsured Rate: 1987 to 2006
Number in millions , rates in percentage
50
45
40
35
30
Number Uninsured
25
Uninsured Rate
20
15
10
5
0
1985 1990 1995 2000 2005 2010
Source: U.S. Census Bureau, Current Population Survey, 1988 to 2007 Annual Social and Economic Supplements
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12. Competition analysis
Never belittle the competition
– Worst possible statement: “There is no competition”
– Second worst possible statement: “Criticize competition for their
strength”
Actual competition
– Never hide what you know
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14. Business model and strategy
Statementof business model
– Discuss basic business logic
– Define scope of business
– Discuss revenue model
– Provide graphical analysis only if
business model complex
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16. Implementation plan
Marketing and Sales
– What channels? What sales force? Etc.
– What advertising? What image? Etc.
Operations
– How do you plan to build the company?
– What resources do you need?
Employment
– What kind of employees? Corporate culture?
– What compensation structures?
Milestones
– What are our concrete targets?
– When do you plan to get there?
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17. Risk section
Why should I disclose my risks?
You choose:
– Either you identify and frame risks yourself…
– …or other people will do that for you!
Candidly identify all major risks
Explain your mitigation strategy
What level of detail?
– Show awareness, not paranoia
– Risk section ≠ legal risk disclosure
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18. Financials
Clearly present highlights of financials
– Key assumptions, revenues, earnings, margins, funding
needs, exit strategy… depends on business
Explain your main assumptions
Financials focus on Profit and Loss (Income statement)
Need Cash Flow statement for funding requirement
Balance sheet rarely matters
Frequency depends on type of business
– Most investors want five year projections
– Broad-brush: first two years quarterly, then yearly
– Fine-comb: first two years monthly, then quarterly
– Many other variations… you can’t win
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20. Founders’ résumés
Very Important!
Highlight and explain relevance not only the
quality of your résumé, but also its
relevance for the business opportunity at
hand!
Also discuss role of founders and future
management as part of the plan!
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21. Thank You
Comments/Suggestions
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