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Writing The Winning Business Plan

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Title: Writing The Winning Business Plan


1
Writing The Winning Business Plan
  • Jack DerbyDerby Management

2
Why create a Business Plan?
  • Most importantly, for you your team
  • You need one for a startup
  • You need one for a corporation
  • The actual process of planning is the key.
  • It consolidates management direction.
  • It provides debate finally consensus.
  • Its used as a guide when speed bumps happen.
  • Its your company your personal scorecard.

3
Why else?
  • No Business PlanNo money.
  • The Six Stages of Successful Sources
  • FFA Friends, Family Acquaintances
  • Private angels
  • Venture capitalists
  • Corporate investors
  • Strategic partners
  • Banks

4
Writing a plan is tough work
  • It requires disciplined balance
  • Its visionary, but logical.
  • Its financially perfect, but flexible.
  • Its for today, but also for 3-5 years out
  • Its a formal Plan, but its easy to read.
  • Its creative, but it follows The Rules.

5
How do you start?
  • Pay attention to The Dos Donts.
  • Above all else
  • Be compelling
  • Be brief, focused, deliberate
  • Focus on customers how you will sell them.
  • Provide market research hard data
  • Be innovative describe barriers to others.
  • Create an experienced management team

6
The 25 Dos
  • Be brief direct detailed.
  • Get to the bottom line quickly.
  • Identify what the business is immediately
  • Identify the business model immediately.
  • Focus on your customers.
  • Define whats compelling.
  • Define whats unique.

7
The 25 Dos
  • Be realistic with yourself.
  • Remember, you're investing your career.
  • Define long term objectives for 3 to 5 years.
  • Describe the 3 to 4 primary strategies.
  • Focus on your sales model channel strategies.
  • Include your ecommerce strategies.
  • Make realistic, but exciting, projections.

8
The 25 Dos
  • Support strategies with detailed tactics.
  • Substantiate with accepted market research.
  • Discuss very objectively your risks.
  • Answer the question of why customers buy.
  • Describe the barriers to entry for others
  • Convince your reader about success.

9
The 25 Dos
  • State how much money you will need.
  • Define exactly how the funds will be used.
  • State clearly your exit strategy.
  • Stick with proven and accepted plan formats.
  • Don't try to be cute!

10
The 15 Donts
  • Write about history. Focus on the future.
  • Focus only on you your technology.
  • Use highly technical buzz descriptions.
  • Forget about objective customer research.
  • Make unsubstantiated statements or claims.
  • Create revenues that you wont make.
  • Include detailed budgets.

11
The 15 Donts
  • Forget what makes your plan different
  • Experienced management
  • Large and growing markets
  • Proven sales models channels
  • Experienced sales penetration tactics.
  • Innovative technologies

12
The 15 Donts
  • Assume anything.
  • Forget what your reader wants.
  • Define valuations in the actual plan.
  • Attempt to write the business plan alone.
  • Extend the process more than two months.
  • Include copies of resumes technical papers.
  • Forget to proofread, proofread proofread.

13
Dont just start writing
  • PreparationThe Key to Success.
  • Whats my Vision?
  • Can I say it so that anyone understands it?
  • What business are we in today?
  • What about in 3 years?
  • Are we really innovative?
  • What about in 3 years?

14
Dont just start writing
  • PreparationThe Key to Success.
  • What do we really know about
  • Our future product roadmap
  • What our service offerings could be.
  • The market data, trends, forecasts.
  • The new technologies in development
  • The competition
  • Who are our customers will be in 3 years?

15
One more preparation task
  • Think about your starting assumptions.
  • Externally, what do I think will happen about
  • Economic trends
  • Markets that I am entering
  • Technology changes
  • Regulations

16
One more preparation task
  • Define your starting assumptions
  • Internally, what do I want expect for
  • Sales revenue growth rates
  • Product costs and margins
  • Sales expense percentages
  • GA expense percentages
  • Receivables, payables, financing, capital
    models.

17
Now, you can finally start writing.
  • What you need
  • A quiet place and time.
  • All of your data easily available.
  • Start working by yourself.
  • Get the content down quickly.
  • Send a first rough draft to others quickly.
  • Write draft after draft after draft after..

18
You have two options today
  • The Traditional Business Plan
  • 7-8 sections
  • 20-30 pages with financials
  • More detail markets, products technologies
  • Business Plan Lite
  • 2 sections
  • 8-10 pages with financials
  • An extended Executive Summary

19
The traditional plan
  • Certainly preferred by us
  • Provides an opportunity to provide clear details
  • Brings out the richness of the business idea.
  • Details the business and sales models
  • What follows here is the traditional format
  • 7-8 sections
  • 20-30 pages

20
Business Plan Lite
  • A result of the times
  • Today, time to read is the driver.
  • Requires you to
  • Be an excellent writer
  • Provide great detail with very well chosen words
  • Get your points across succinctly with clarity.
  • Sections 1 2 7 create the BP Lite

21
Whats included?
Vision Strategies Tactics Operations
Actions
22
Whats included?
  • 7-8 Sections
  • Executive Summary
  • Introduction to the business
  • Definition of your products services
  • Overview of your markets
  • Overview of your sales marketing plans

These become the Business Plan Lite.
23
Whats included?
  • Overview of product development roadmap
  • Summary of manufacturing operations
  • Bios of your management team
  • Four pages of financials
  • Brief appendices if necessary

24
Section 1 The Executive Summary
  • 2-3 pages
  • Make it compelling
  • Your Idea
  • Your Markets
  • Your business and sales models
  • Your competitive advantages
  • Your management team
  • Your use of the funds

25
Section 2. Whats the Business?
  • This section is focused on
  • The Business Opportunity
  • The Markets
  • The Technology
  • The Products

26
Section 2. Whats the Business?
  • This section must define
  • a clear Vision
  • clear strategies
  • a well defined business model
  • a dedicated, believable Mission
  • a strong sense of management experience

27
Section 2. Whats the Business?
  • The products their value add services
  • features benefits, innovation, technology
  • The markets
  • research data
  • competition
  • The customers
  • who they are their needs

28
Section 3 Sales Marketing
  • The most important section
  • 3.1 Whats the Market?
  • Customer analysis their needs
  • Worldwide market size trends
  • Competitive strengths weaknesses
  • Value creation for your products services

29
Section 3 Sales Marketing
  • 3.2 The Marketing Plan
  • What are your marketing strategies?
  • What are the data points to measure success?
  • What is your price positioning why?
  • What are your primary tactics in years 1 2?
  • What are your primary events in year 1?

30
Section 3 Sales Marketing
  • 3.3 The Sales Plan
  • Whats your Sales strategy?
  • What standard channels will you use?
  • Is there an innovative channel?
  • What are your penetration tactics?
  • Whats your sales model?
  • Whats your hiring training plan?
  • Whats your measurement reporting?

31
Section 4 Engineering and RD
  • What are your core technologies?
  • Provide sufficient, but not numbing, detail.
  • What is your development status?
  • Describe your primary milestones.
  • Be conservative.
  • Assume development will be late.
  • Detail the technical teams background.

32
Section 4 Engineering and RD
  • What is your strategy for future products?
  • Define in text with graphics your roadmap
  • Define common platforms and architectures.
  • What your IP patent strategy?
  • What is your IP strategy?
  • If you have patents, provide a status table.
  • If not, define why not in a positive manner.

33
Section 5 Operations/Manufacturing
  • Whats your Manufacturing strategy?
  • Outsource or not?
  • Why why not?
  • What is core in Manufacturing?
  • What are your unique capabilities
  • What are your unique processes?

34
Section 5 Operations/Manufacturing
  • Focus on your customers in your
  • Distribution strategy
  • Quality strategy
  • Value added services that you will employ

35
Section 5 Operations/Manufacturing
  • What is your Customer Support strategy?
  • Customer order fulfillment tactics
  • Primary objectives
  • Delivery
  • Response time
  • Primary policies
  • Outsource or not?
  • Future services that you will provide?

36
Section 6 Senior Management
  • Management
  • The 1 reason that investors do not invest.
  • Experience counts first.
  • Dedication counts second.
  • Ability to rapidly learn is third
  • Too strong an ego is a negative.

37
Section 7 The Financials
  • The Rule Everything Must Hang Together
  • Your vision and strategies in text must tie in.
  • Your market growth objectives must tie in.
  • Your business and sales models must tie in.
  • Your margin percentages must tie in.
  • Your cost of goods must tie in.
  • Your expenses must reflect standard percentages.

38
Section 7 The Financials
  • You need
  • PLs
  • 1st year by month
  • 2nd year by quarter
  • 3rd year by year
  • Balance Sheets for each year
  • Cash Flows for each year
  • 3-4 pieces of paper only

39
Section 7 The Financials
  • You need to list your
  • Primary assumptions
  • Primary categories for the use of the funds
  • What are the primary risks?
  • Other than the normal of early stage companies
  • If nothing specific, do not list any.
  • Whats your exit strategy?

40
Section 8 The appendices
  • Provide only the compelling things
  • Product data sheets for primary products
  • Any critical publication.
  • Do not provide resumes.
  • Do not include patents.

41
Where do I go for help?
  • Good textbooks
  • Rich, Gumpert
  • Anything from HBS Press
  • Anything from Inc.
  • Inc Magazine inc.com
  • Startup.wsj.com
  • MIT Enterprise Forum workshops

42
Where do I go for help?
  • MIT Enterprise Forum TCN seminars
  • The best local entrepreneurship schools
  • MIT Sloan , Babson, HBS, Bentley
  • Professional Mentors Coaches
  • Venture capital investors
  • The big CPA firms
  • PWC, Deloitte, Ernst, Andersen.
  • The big law firms
  • Testa,
  • INC, Fortune Small Business

43
Derby Management
  • Coaching
  • One on One senior management
  • One on Team senior management
  • Strategic Planning
  • Business Plan writing editing
  • Fundraising
  • Recruiting and replacing players

44
How to find us
  • Derby Management
  • 20 Park Plaza
  • Boston, MA 02116
  • Office 617-266-9266
  • Cell 617-504-4222
  • jack_at_derbymanagement.com
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