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Explains how to how you will make it happen. Purpose o

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Explains how to how you will make it happen. Purpose of Plans. Find resources ... Also, Trader Joe's, Whole Foods. Talking to customers: 450 chefs and 150 retailers ... – PowerPoint PPT presentation

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Title: Explains how to how you will make it happen. Purpose o


1
Writing Business Plans
2
What Does a Business Plan Say?
  • Describes an idea
  • Explains how to how you will make it happen

3
Purpose of Plans
  • Find resources
  • gt Money -- from investors, donors
  • gt People -- recruit employees
  • Guide management -- running the business
  • Win Contests!

4
Quality Counts
  • Want or to win contests?
  • you need a good plan
  • Good business plan -- difficult to write
  • Badly written and incomplete Plan

75 of Plans
5
What is Quality?
  • Exciting or unique content
  • Well written
  • Thorough -- have thought about details
  • Data-based (versus your opinions-based)

6
Outline of the Plan -- 25 Pages
  • Cover page
  • Disclaimer
  • Index
  • Executive Summary
  • Main Body
  • Financial Projections
  • Exhibits

Goal Induce reader to want to learn more
Goal Induce reader to actually read this
7
The Executive Summary
  • Summary must be great
  • Thats all most people will read
  • 2 - 4 pages long
  • 1,400 words or less
  • Easy to read
  • Easy to understand

8
Key Elements in the Summary
  • 1. Type of business
  • 2. Uniqueness -- what is special
  • 3. Management -- experience
  • 4. Upside potential

9
Make Sure to Address
  • What is the market opportunity?
  • How is the Company new/different?
  • Comparative advantages ?
  • Weaknesses ?

10
Mission Statement
  • More important for a nonprofit than a for profit.
  • Defines your business or social goals
  • Also important to be focused and realistic

11
Main Sub Sections
  • Market -- size, growth
  • Customers
  • Unique product
  • Competition
  • Expansion Strategy
  • Profit Strategy
  • Marketing plan
  • Production plan
  • People
  • Financial Plan

12
(No Transcript)
13
The Market for Your Business
  • How large is it ?
  • Is it growing ? By how much ?
  • What are the gaps, needs, opportunities ?

13
14
Caution Look at the Right Market!
  • The U.S. tent market -- is 100 million
  • We make high-end, backpacking tents
  • In 5 years, we will ship 5 million in tents
  • We only need 5 of the market, right ?

Piece of cake ?
14
15
Wrong!
5 million in sales 50 of market, not 5
15
16
  • Market Drivers - over 3 years
  • US seafood consumption up 12 - 12 billion
  • US tilapia consumption up 110 - 400 million
  • Demand for organic meat fish up 120

Over 70 of Americans would by organic seafood if
available 60 strongly prefer domestic
17
Research the Customers
  • Who are they demographics, traits
  • How many are there?
  • What do they want?
  • What can you do for them?

Find out!
18
The Product -- or the Service
  • Write down a description
  • What is it ?
  • How does it work ?
  • List the main features
  • List main benefits -- to customers

18
19
  • The Product
  • Fresh farmed tilapia fillets
  • Seafood Safe and Organic
  • 100 organic feed
  • Purified and filtered re-circulated water

20
Use the Product Description to
  • Conduct interviews
  • Do surveys
  • Ask customers if they want your product !

21
Serious Interest ?
  • Will they try a free demo ?
  • Can you quote them?
  • Will they sign up -- if it works ?
  • What price would they pay?
  • What are any key issues/concerns?

22
A Word to the Wise
  • Try to avoid -- the missionary sale
  • Mission driven -- versus -- market driven
  • People want to buy it
  • Not people should buy it

22
23
  • Customers
  • Suppliers of restaurants, grocery fish stores
  • Also, Trader Joes, Whole Foods

24
  • Talking to customers
  • 450 chefs and 150 retailers
  • Majority prefer environmentally responsible fish
  • Local restaurant owner customers care
  • Distributor Not enough good farms

25
The Competition
  • Who are the competitors ?
  • How do they compete ?
  • How are we different ?

25
26
Know Thy Competition
  • Always is more competition -- than you think
  • Compare major features of your product
  • gt To all competitors products
  • gt To competing alternatives -- do nothing

26
27
Key Avenues For Investigation
  • Why has no one done this before ?
  • What is unique ? Better ?
  • Find ALL of the competitors
  • Construct a competitor grid

27
28
Competitor Grid -- Reason To Buy
28
29
No Reason for Customer to Change
X
X
X
X
X
X
X
X
Buyer has no reason to switch -- probably wont
29
30
New, Growing Market?
  • Maybe there are a few similar competitors
  • But the market is growing fast

Ok, but it wont hurt to be different, somehow!
30
31
  • Competition
  • 96 of tilapia imported, mostly frozen, not
    organic
  • Most US farm-raised small, not organic

The Good Fish tilapia will be more expensive vs.
competitors
32
Beware the Status Quo
  • People hate to change
  • Or to pay -- for what was free

32
33
Wrecking A Wetland
  • If you get away with it, 99 of the time
  • And it costs 10,000, the other 1
  • Most people will just risk it!

Be Realistic!
33
34
Beware the Free Alternative
  • Government
  • Charities
  • Rich people

Does someone offer your service for really cheap
- or for nothing?
34
35
Next Steps
Now what?
  • The market is growing
  • You have a unique service
  • Customers want you
  • You have a competitive advantage

35
36
Production / Operations
  • How do you make your product/service?
  • Buy equipment and make it yourself?
  • What materials, labor do you need?
  • Hire another company to make it?

37
Used to be
  • Making your product
  • Raw materials (steel, nails, tools)
  • Labor (union, hourly)
  • Capacity (bottlenecks)
  • Factories, warehouses
  • Delivery (ships, trucks)

38
Now, more likely to be
Often Called Operations
  • Providing your service
  • Raw Materials (ideas, creativity, service)
  • Labor (professional, outsourced)
  • Capacity (hours in the day, innovation)
  • Offices or Work-from-Home
  • Delivery (Customer on-site, Internet)

39
Make A List
  • What are your product inputs?
  • What will your production plan be?
  • How will you deliver to customers?
  • Ensure quality, reliability?
  • Provide customer service?

40
People might be your main input
  • Sales people
  • Customer service
  • Engineers, scientists, IT
  • Industry experts

41
  • Operations
  • Facilities Pod System, heating
  • Production planning 28 week growth cycle
  • Feed Organic vegetarian
  • Staff Monitor equipment, move, clean, fillet
    fish
  • Delivery Distributors pick up
  • Byproducts Waste and offal

42
Marketing Strategy
  • You know your customers
  • Who they are
  • How many there are
  • What they want
  • What you can do for them

43
You know your message
  • Our product
  • Has the best service
  • Lasts longer
  • Has unique features

44
Now, how do you get them to buy?
Often, the Biggest Challenge
  • This is
  • Selling
  • Promotion
  • Advertising

45
Many Methods
  • Google ads
  • Magazines
  • Trade Journal Ads
  • Flyers
  • Attend trade shows
  • Mailing lists
  • Telemarketing
  • Sales Force

46
How to Decide?
  • Ask some potential customers
  • Where would they go?
  • For information?
  • To buy?

47
Pricing Strategy
  • Should you price
  • Same as the competition?
  • More than the competition?
  • As the lowest priced option?

48
  • Marketing Strategy
  • Hire Sales Force
  • Visit customers, explain the benefits
  • List in organic seafood directories
  • Advertise with trade associations
  • Host events, tours, tastings

49
Expansion / Growth Strategy
  • Start small then grow big
  • Start with one product, then add others?
  • Sell in one store, then more?
  • One geography, then expand?

50
People Strategy
  • Who are your key management people?
  • Who are you missing but will hire?
  • Strategy for hiring and retaining people?
  • Advisory board or board of directors?

51
Financials
Projections
52
  • Financials do research on key drivers
  • How many fish per Pod System?
  • How many Pod Systems?
  • Costs of systems equipment, food, staff
  • Selling administrative costs?
  • Ongoing maintenance costs?

53
  • Revenues
  • Each Pod System produces 50,000 lbs fish/yr
  • Fresh organic tilapia sells for 5.63/lb
  • One Pod in Year 1, Seven Pods in Year 2, etc.

54
Revenue Projections (000)
50
346
722
1,155
2,020
282
1,948
4,065
6,503
11,373
55
  • Costs of producing fish
  • Energy, Staff, Fingerlings, Fish food
  • Packaging, Delivery
  • Costs for marketing, administration
  • Sales people
  • CEO, IT, Human Resources, etc.

56
Financial Projections (000)
(285)
(325)
67
529
1,181
57
  • The Good Fish needs to raise 750K over 2 years
    to
  • Rent space
  • Buy Pod Systems
  • Hire staff

Prove they can grow and sell fish!
58
Some Tips on Writing -- Keep It Simple
  • Short words
  • Short sentences
  • Short paragraphs

59
Break Up Dense Text
  • Use bullet point lists
  • Smart
  • Lucky
  • Rich
  • Famous

Use Charts
60
Keep Tables Simple Clear
61
Beware of Common Mistakes
Unsubstantiated Hype
  • Paradigm Shift Inc will revolutionize the
    industry with its game changing strategies.
  • Why should I believe you?
  • What does this even mean?

Huh?
62
Other Common Mistakes
Lots of Foot Notes
  • Dont do this

Do this
More than 50 of women would pay more for
comfortable high heeled shoes.1 1
Euromonitor report on Footwear in the USA. June
2003.
According to a 2003 study by Euromonitor, more
than 50 of women would pay more for comfortable
high heeled shoes.
63
Other Common Mistakes
  • Dont say we or our
  • Say XY Inc or the Company
  • Avoid words like leverage

64
Other Common Mistakes
  • Repeating yourself word for word
  • No one wants to read the same thing twice
  • Using dark colors in charts / graphics
  • They dont print out well

65
Good Things
  • Numbers! Quotes! Sources!
  • Details -- explain what you mean!
  • Relevant research
  • Short paragraphs, bulleted lists
  • Pictures, graphs, simple tables

66
Final Words of Advice
  • Do your homework!
  • Use data, research talk to customers!
  • Not just your opinions
  • Start small, then grow bigger
  • Be credible dont over-promise
  • Remember Good writing matters

67
Questions?
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