Executive Summary

 A Business Plan identifies key areas of your business so you can maximize
the time you spend on generating income.
 Key investors will want to look at your Business Plan before providing
capital.
 A Business Plan helps you start and keep your business on a successful
path.
 You should prepare a Business Plan, although, in reality, many small
business owners do not.

Building a Business Plan

1
 What is a Business Plan?
 A Business Plan is a written document that defines the goals of your
business and describes how you will attain those goals.
 A Business Plan is worth your considerable investment of time, effort, and
energy.
 A Business Plan sets objectives, defines budgets, engages partners, and
anticipates problems before they occur.

Building a Business Plan

2
 10 Reasons Why You Need a
Strong Business Plan
1. To attract investors.
2. To see if your business ideas will work.
3. To outline each area of the business.
4. To set up milestones.
5. To learn about the market.
6. To secure additional funding or loans.
7. To determine your financial needs.
8. To attract top-level people.
9. To monitor your business.
10. To devise contingency plans.

Building a Business Plan

3
 How Detailed Should
Your Plan Be?
 Business plans differ widely in their length, appearance, content, and the
emphasis placed on different aspects of the business.
 Depending on your business and your intended use, you may need a very
different type of Business Plan:
– Mini-plan: Less emphasis on critical details. Used to test your assumptions,
concept, and measure the interest of potential investors.
– Working Plan: Almost total emphasis on details. Used continuously to review
business operations and progress.
– Presentation Plan: Emphasis on marketability of the business concept. Used to
give information about the business to bankers, venture capitalists, and other
external resources.

Building a Business Plan

4
 Assembling a Business Plan
Every Business Plan should include some essential components:
– Overview of the Business: Describes the business, including its products and
services.
– The Marketing Plan: Describes the target market for your product and explains
how you will reach that market.
– The Financial Management Plan: Details the costs associated with operating
your business and explains how you will pay for those costs, including the
amount of financing you may need.
– The Operations and Management Plan: Describes how you will manage the
core processes of your business, including use of human resources.

Building a Business Plan

5
 Seven Common Parts of a
Good Business Plan
 Business plans must help investors understand and gain confidence on
how you will meet your customers’ needs.
 Seven common parts of a good Business Plan are:
1. Executive Summary
2. Business Concept
3. Market Analysis
4. Management Team
5. Marketing Plan
6. Financial Plan
7. Operations and Management Plan

Building a Business Plan

6
 Part 1: Executive Summary
 The Executive Summary of a Business Plan is a 3-5 page introduction to
your Business Plan.
 The Executive Summary is critical, because many individuals (including
venture capitalists) only read the summary.
 The Executive Summary section includes:
– A first paragraph that introduces your business.
• Your business name and location.
• A brief explanation of customer needs and your products or services.
• The ways that the product or service meets or exceeds the customer needs.
• An introduction of the team that will execute the Business Plan.
– Subsequent paragraphs that provide key details about your business, including
projected sales and profits, unit sales, profitability, and keys to success.
– Visuals that help the reader see important information, including highlight
charts, market share projections, and customer demand charts.

Building a Business Plan

7
 Part 2: Business Concept
 The business concept shows evidence that a product or service is viable
and capable of fulfilling an organization's particular needs.
 The Business Concept section:
– Articulates the vision of the company, how you plan to meet the unique needs
of your customer, and how you plan to make money doing that.
– Discusses feasibility studies that you have conducted for your products.
– Discusses diagnostics sessions you had with prospective customers for your
services.
– Captures and highlights the value proposition in your product or service
offerings.

Building a Business Plan

8
 Part 3: Market Analysis
 A Market Analysis defines the target market so that you can position your
business to get its share of sales.
 A Market Analysis section:
– Defines your market.
– Segments your customers.
– Projects your market share.
– Positions your products and services.
– Discusses pricing and promotions.
– Identifies communication, sales, and distribution channels.

Building a Business Plan

9
 Part 4: Management Team
The Management Team section outlines:
– Organizational Structure: Highlights the hierarchy and outlines responsibilities
and decision-making powers.
– Management Team: Highlights the track record of the company’s managers.
You may also offer details about key employees including qualifications,
experiences, or outstanding skills, which could add a competitive edge to the
image of the business.
– Working Structure: Highlights how your management team will operate within
your defined organizational structure.
– Expertise: Highlights the business expertise of your management and senior
team. You may also include special knowledge of budget control, personnel
management, public relations, and strategic planning.
– Skills Gap: Highlights plans to improve your company’s overall skills or
expertise. In this section, you should discuss opportunities and plans to acquire
new information and knowledge that will add value.
– Personnel Plan: Highlights current and future staffing requirements and
related costs.

Building a Business Plan

10
 Part 5: Marketing Plan
 The Marketing Plan section details what you propose to accomplish,
and is critical in obtaining funding to pursue new initiatives.
 The Marketing Plan section:
– Explains (from an internal perspective) the impacts and results of past
marketing decisions.
– Explains the external market in which the business is competing.
– Sets goals to direct future marketing efforts.
– Sets clear, realistic, and measurable targets.
– Includes deadlines for meeting those targets.
– Provides a budget for all marketing activities.
– Specifies accountability and measures for all activities.

Building a Business Plan

11
 Part 6: Financial Plan (Slide 1 of 2)

 The Financial Plan translates your company's goals into specific financial
targets.
 The Financial Plan section:
– Clearly defines what a successful outcome entails. The plan isn't merely a
prediction; it implies a commitment to making the targeted results happen and
establishes milestones for gauging progress.
– Provides you with a vital feedback-and-control tool. Variances from
projections provide early warnings of problems. When variances occur, the
plan can provide a framework for determining the financial impact and the
effects of various corrective actions.
– Anticipate problems. If rapid growth creates a cash shortage due to
investment in receivables and inventory, the forecast should show this. If next
year's projections depend on certain milestones this year, the assumptions
should spell this out.

Building a Business Plan

12
 Part 6: Financial Plan (Slide 2 of 2)

 The Financial Plan is the most essential part of your Business Plan. It
shows investors the timeframes you have scheduled to make profits.
 Some elements of the Financial Plan include:
– Important Assumptions
– Key Financial Indicators
– Break-even Analysis
– Projected Profit and Loss
– Projected Cash Flow
– Projected Balance Sheet
– Business Ratios
– Long-term Plan

Building a Business Plan

13
 Different Financial Planning
Options (Slide 1 of 2)
 Short-term Forecast: Projects either the current year or a rolling 12-
month period by month. This type of forecast should be updated at least
monthly and become the main planning and monitoring vehicle.
 Budget: Translates goals into detailed actions and interim targets. A
budget should provide details, such as specific staffing plans and line-item
expenditures.
– The size of a company may determine whether the same model used to
prepare the 12-month forecast can be appropriate for budgeting.
– In any case, unlike the 12-month forecast, a budget should generally be frozen
at the time they are approved.

Building a Business Plan

14
 Different Financial Planning
Options (Slide 2 of 2)
 Strategic Forecast: Incorporates the strategic goals of the company into
the projections. For startup companies, the initial Business Plan should
include a month-by-month projection for the first year, followed by annual
projections for a minimum of three years.
 Cash Forecast: Breaks down the budget and 12-month forecast into more
detail. The focus of these forecasts is on cash flow, rather than accounting
profit, and periods may be as short as a week in order to capture
fluctuations.

Building a Business Plan

15
 Part 7: Operations and
Management
 The Operations and Management section outlines how your company will
operate.
 The Operations and Management section includes:
– Organizational structure of the company. Provides a basis for projected
operating expenses and financial statements. Because these statements are
heavily scrutinized by investors, the organizational structure has to be well-
defined and realistic within the parameters of the business.
– Expense and capital requirements to support the organizational structure.
Provides a basis to identify personnel expenses, overhead expenses, and costs
of products/services sold. These expenses/costs can then be matched with
capital requirements.

Building a Business Plan

16
 Key Takeaways From This
Module
 Business Plans are critical for the success of a company.
 Different businesses will require different types of Business Plans.
 All Business Plans have some essential sections that explain the core
aspects of the company.
 In order to help your company have a better chance of gaining interest
and investors, a Business Plan should include seven essential sections:
1. Executive Summary
2. Business Concept
3. Market Analysis
4. Management Team
5. Marketing Plan
6. Financial Plan
7. Operations and Management Plan

Building a Business Plan

17
 Sources and Citations
 Small Business Administration, Business Planning, How To Prepare a
Business Plan
 Gary Cadenhead, No Longer Moot
 Shirleen Glasin, ProSidian Consulting, Building a Business Plan
 Entrepreneur.com, Small Business Encyclopedia, Business Plans
 AllBusiness, A D&B Company, 10 Reasons Why You Need a Strong Business
Plan
 Business Owners Toolkit, Total Know-How for Small Businesses

Building a Business Plan

18
Building a Business Plan
19
August 2010
Business Plan
Presentation Format
The investor presentation must be clear, concise
and compelling to:
– Generate investor interest and build confidence
– Lead to additional investor meetings
Should be 20-30 minutes in length
Charts, graphics, pictures and verbiage should
be simple and easily read (no “eye tests”)
Each slide should have between 3 and 6 bullets
that are succinct (no paragraphs, uncluttered)
Presentation format may vary depending on the
company but the following format provides a
reasonable order and flow –it is but one
approach to making investor
4/9/2019 presentations.
20
 Order of Presentation
 Introduction
 Problem
 Solution
 Market, Customers
 Competitive landscape
 Business and Revenue Models
 Management Team
 Financial Projections Funding
 Timeline
 Summary
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 Introduction

 Briefly introduce yourself and your company

– Company name and company logo
– Presenters names (give titles if pertinent)

Slide time: approximately 30 seconds

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 Introduction--continued
[this is a very important slide that requires lots of time to
create because it must be succinct, comprehensive and
COMPELLING]

 Brief overview of company (elevator pitch)

• What exactly the company does (stated succinctly)
• What products or services are offered
• What problem is being solved, and
• Why these products or services are compelling, e.g., “…the only product that
enables [solution] to [the problem]…”

Slide time: approximately 1 minute

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 The
Problem/Opportunity/Need
 Define the problem or need in the market
 Describe how significant or prevalent the problem
may be
 If appropriate, describe why now is the right time for
a solution
 Provide a “problem” scenario that provides a basis
for your company’s product or service

Slide time: 60 to 90 seconds

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The Solution
(1 to 2 slides)
 Clearly and succinctly describe the company’s product or service
that will address the problem
 Illustrate the company’s solution with graphics, pictures or videos
as necessary (keep this very simple)
 Provide brief list of features, benefits and advantages
– What is the value proposition for the customer (How well will the product
or service solve the problem)?
• Cost savings, convenience, reliability, etc. (be specific)

 Describe “barriers to entry” created by your product (e.g.,

patents)

Slide Time: Approximately 01:30 (May require more than one slide)
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 The Solution

 Provide an understandable, practicle example of how

your product/service works or what it does.

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Sample Feature-Benefits Table
Features Benefits

Slide Time: Approximately 60 seconds

27
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Company Status/Progress

 Build investor confidence in your company

– Domain expertise of management and staff
– Customers and contracts established (letters of intent)
– Strategic partnerships established
– Product development status—describe milestones
achieved to reduce risk (e.g., alpha or beta testing)
– Other significant information to validate or reduce risk

Slide Time: Approximately 60 seconds

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 The Market
(2 to 5 slides)

 Describe market size, growth, trends and maturity

– Industry and market segment data (see sample, next slide)
 Market challenges
 What market segment(s) are served by the company?
 What is the company’s potential in the market?
– Estimated Revenue Growth in graphic or tabular form (see next slides,
for examples)
– Market share projections are optional

Slide Time: Approximately 90 seconds

(More than one slide may be required)

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Global Market for [your product]
Region Demand (US $ MM) % Globe
Asia 1700 32
Europe 1500 30
North America 1300 25
Latin America 415 8
Africa 200 4
Others 64 1
Slide Time: Approximately
4/9/2019
60 seconds 30
US Market with key segments
City World US $ MM % Country % World
Rank
New York 1 865 22.8 5.3
Los Angeles 3 300 8.3 1.9
Chicago 4 285 8 1.8
Dallas 21 105 2.8 0.64
San Jose 22 104 2.8 0.63
San 23 103 2.7 0.62
Francisco
San Diego 26 100 2.6 0.61

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Slide Time: Approximately 60 seconds
 Customers

 Describe the company’s current and potential

customers
– Profile of the optimal customer
– Value proposition to customer
– Validation of Customer Acceptance
• Customer Feedback, Survey Data, Testimonials
• Purchases, Letters of Intent
• Partners
– Example of customer

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 Competition and Advantage
(2 TO 3 SLIDES)
Competition
 Describe the direct (competing product or service) and
indirect competition (alternative solution) for your company
and its product or service.
 Describe specific strengths, weaknesses, and opportunities
related to competition.
 Describe how your product, technology or service
differentiates itself from the competition? [very important]

Competitive Advantage
 What is the company’s competitive advantage?
– Why will customers buy your product or service over the competition?
– Show a competitive matrix to illustrate differentiation (see next slide)

Subject Time: Approximately 2 minutes (more than 1 slide)

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Competitive Comparison
(see next slide for optional approach)

Product Advantages Disadvantages

Product A
~$12/100 units
Product B
~$30/100 units
Product C
~$17/100 units

My Company
Product
~$9/100 units

34
4/9/2019
Competitive Matrix
Product Feature A Feature B Feature C Feature D Feature
E
MY PRODUCT ● ● ● ● ●

Product 1 ● ●
Product 2 ● ● ●
Product 3 ● ● ●
Product 4 ● ● ●
Product 5 ● ● ●
Product 6 ● ●
35
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 Competitive Positioning

Yikes Your Company, Inc.

Flexibility

Zowie

Gizmo

Gadget.com Thingamabob

Yippee

Functionality

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End First Section

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Business Model and Marketing Plan
(2 TO 5 SLIDES)

 Describe the company’s business and revenue model

– What is the overall business strategy?
– How will you sell your product or service (distributors, internet)?
– How will the company generate revenue for its product or service?
– Describe the sales cycle for the company’s product or service
 Describe the Marketing Plan (if appropriate)
– What is the go-to -market strategy?
– What is the pricing model? Gross margin?
– How will you access customers? (including advert. and promo.)
– How will your product or service be distributed?
– What customer support will be needed?
 Note any commitments from partners, distributors, granting
agencies, etc. regarding benefits of your product
Slide Time: Approximately 90 seconds
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 Regulatory Issues
(not necessarily included in all investor
presentations)
 Include pertinent info regarding FDA, FTC, or other
pertinent government agency

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Management Team, Advisors

 Build investor confidence with team

– Credentials, proven track record, domain experience (do
not include weak credentials )
– Describe skill and experience gaps to be filled
 List the company’s leadership team
– Include name, position, experience (abbrev.)
– These are credentialed experts
 List of company Directors and Advisors
– Include name, summary of experience

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 Financial Projections
 Provide 3-5 year financial projections for the
company (abbreviated chart or graph—see next
slide)
– Include financial projections to show year-to-year growth
(show a basic income statement table—see next slide for
an example)
– Is the company overstating or understating market share
and/or growth?
– Can the company scale its operations as it grows?
 List major facts and assumptions
– Are the assumptions believable and achievable?
Slide Time: Approximately 90 seconds
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Financial Projections:
Income Statement Summary
2008 2009 2010 2011 2012
Revenue 500 5,207 12,203 25,565 51,894

COGS 402 3,270 7,179 14,395 29,145

Gross Profit 102 1,937 5,024 11,170 22,749

Oper Exp 4,318 3,572 4,229 8,165 16,445

Net Income (4,216) (1,635) 795 3,005 6,304

42
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Financial Projections:
Break Even Analyis
1200

1000
Break-Even
800
TR = TC Fixed Cost
Revenue

600 Total Cost

400
} Variable Cost
Total Revenue

200

0
0 20 40 60 80 100 Units Sold

Total Fixed Cost

[ B/E(Quantity) = Price per Unit – Var. Cost per Unit
]
43
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 Funding
 What funding has the company received to date?
– Amounts and sources
 How will the company be financed?
 How much money is the company currently seeking from
Investors?
– How will the funds be used? (use tabular format—see next slide for an
example)
– What key value-building milestones will be achieved with funds (market
test, market expansion, etc.)
 Anticipated future funding needs
 What are the exit strategies for the company? (when?)
 What is the expected ROI for investors
Slide Time: Approximately 2 minutes (this section is more than one
slide)
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Startup Budget/Use of Proceeds

First year Budget Cost

Salaries 510,000
Repairs & maintenance 8,400
Local Advertising 5,000
Marketing 51,400
Accounting and legal 5,000
Rent 17,798
Internet & Telephone 5,940
Equipment 48,000
Domain Name 10
Total $651,548
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 Use of Proceeds Breakdown
Use of Funding Proceeds

3% 0%
Salaries (includes payroll taxes)
0%
7% 0% Repairs & maintenance
1%
1% Local Advertising
8%
Marketing
1% Accounting and legal
Rent
1%
Internet & Telephone
Taxes (Real estate, etc.)
Depreciation
Equipment
78% Domain Name
Miscellaneous expenses

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 Timeline

 Use a Gantt Chart for key milestones or use the

preferred model shown on the next slide.

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 Timeline of Milestones

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Idea

Primary
Research

Feasibility
Analysis

Relationships
Secured

Business Plan

Prototype Install
(Fall Gardens)

Funds Raised

Neighborhood
Mkt.

Initial Contracts
Value-Added Milestones Timeline (Sample)

2nd Financing
1st Financing $1Million
$660K
2007 2008

Development Break-even
Milestone 1 Product 1 Milestone Sales Milestone
December First Sales July December

Beta Test Product 1 2nd Product

Milestone Partnered* Development
Milestone
Sept.

* Company retains co-dev./co-promotion rights 4/9/2019

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 Summary

 What do you want your audience to remember

about the company?
– Unique and Sizeable Opportunity
– Unique product or service
– Competitive Advantage, Strengths
– Marketing Approach, Customers, Sales Pipeline
– Intellectual property
– Management team
– Other…

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