BUSINESS PLANNING Panel Miguel Hernandez Founder CFO by
BUSINESS PLANNING
Panel Miguel Hernandez Founder, CFO by Design George Gremse Vice Chairman, SCORE Broward
STARTING A BUSINESS IS NOT REALLY THAT HARD IT’S STAYING IN BUSINESS THAT IS THE CHALLENGE!
Business Success Rates 2 Year Success Rate 5 Year Success Rate
Business Planning “By failing to prepare, you are preparing to fail. ” Benjamin Franklin “…. If you do not know where you want to go then any road will take you there…. ” Lewis Carroll
What is a Business Plan? • Looking ahead and determining the directions you want to take your business • A business plan can be: – A formal written document – Doodles on the back of a napkin – The results of brainstorming on a white board – Bullet points in an e-mail • The key is to have a plan that you as an owner/manager can initiate actions on to achieve.
Benefits of a Business Plan • Blueprint for improvement, direction, & growth • Explain business to customers/suppliers • Oftentimes needed for financing • Strategic partnering • Attract key people
Other benefits of a Business Plan • Better understanding of the business: – Who are your customers – Why will they buy your product or service – What resources will you need – Who is the competition – Can you create value and make $
Getting Started
Business Planning Framework Mission/Vision/Values Elevator Speech Business Model Canvas Lean Business Plan 1) Executive Summary 2) Business Description Business Plan 3) Market Analysis 4) Marketing Mix Strategy 5) Operating Plan 6) Management Team 7) Financial Plan 10
Mission Statement Mission statement is a short, descript, and focused statement of purpose for an organization Ideally it should be no longer than a paragraph; but must clearly indicate the purpose, culture, and direction of the organization Mission statements describe organization's fundamental purpose (reason for being) to stock holders, customers, clients, employees, and the general public http: //www. company-statements-slogans. info/
Mission Statement “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. “ Starbucks "Wal-Mart’s mission is to help people save money so they can live better. " Google's mission is to organize the world’s information and to make it universally accessible and useful.
Vision Statement Aspirational description of the goals an organization would like to achieve or accomplish in the future or long-term
Vision Statement AMAZON: Our vision is to be earth’s most customercentric company; to build a place where people can come to find and discover anything they might want to buy online. MICROSOFT: Empower people through great software anytime, anyplace, and on any device.
The Elevator Pitch • What is it? – A 60 second overview of business, idea for product/service or project – Called “elevator pitch” because it can be delivered during a ride on the elevator • Why do we need it? • Generate interest and buy-in from customers, investors, bosses, employees
The Elevator Pitch • Structure your elevator pitch as five components: • What is the problem? • What is your solution? • Who are you & why are you the one to solve the problem? • What is the value proposition? • What is the call to action?
Elevator Pitch Example We are a boutique recruitment agency that helps tech companies hire the best programmers. We run our own hackathons to identify talent and match them with our clients. This helps companies hire top talent without too much effort on theirs. We have some clients on retainer, but we also work with some companies for specific openings. You could stop by at our next hackathon in Palo Alto to get a better sense of how we scout talent.
Business Modeling Business Model Canvas
Business Model Generation More startups fail from a lack of understanding the market, and business model than from a failure of product / service development
Business Model Generation Business Model Hypotheses Business Plan + Financial Model
Model your business or concept • Lay out the components of how your business operates: – Think in images & bullet points vs. sentences & paragraphs – Fill in what you know. Do not dwell on what you don’t – Go back later & fill in details
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Business Model Generation 23
Value Proposition 24
Value Proposition Template
Value Proposition Example Hilti capitalizes on game changing opportunity to increase profitability by turning products it normally sells into a service. . . Problem / Need Contractors make money by finishing jobs on time with the right tools. Contractors don’t make money by owning tools. Customer Value Proposition “For contractors that need to increase site productivity, leasing just the tool(s) needed when you need them will translate into greater profitability, and no-repair or storage hassles. ”
Business Model Generation 27
Customer Segments 28
Business Model Generation 29
Channels 30
Business Model Generation 31
Customer Relationships 32
Business Model Generation 33
Revenue Streams 34
Business Model Generation 35
Key Resources 36
Business Model Generation 37
Key Partners 38
Business Model Generation 39
Key Activities 40
Business Model Generation 41
Cost Structure 42
Business Model Generation 43
Moving forward with planning Lean Business Plan Formal Business Plan
Business Plans
Lean Business Plan • Lean business planning starts with a lean business plan. • The lean plan contains four essentials every business needs. • It’s a streamlined core plan for running the business – Not a document or detailed plan, full of descriptions, to be presented to investors or lenders. https: //leanplan. com/what-is-a-lean-business-plan/
Lean Business Plan – Key Steps • • Create a lean plan Test the plan Review your results Revise your plan
Components of a Lean Business Plan • Strategy – What you want to do and who your customers and competitors are. Identify the problem you are solving and follow up by explaining your solution • Tactics – How are you going to make your strategy happen – marketing, sales, team, outside resources • Schedule – You must initiate activity. What are the timelines? When do you get in front of potential customers • Financial Business Model – Do the numbers work? How will you make money? Build a basic sales forecast and budget https: //leanplan. com/what-is-a-lean-business-plan/
https: //leanplan. com/what-is-a-lean-business-plan/ 49
Can be a one page plan https: //leanplan. com/what-is-a-lean-business-plan /
Top of page
Bottom half of page
Formal Business Plan
“Planning is an unnatural process; it is much more fun to do something. The nicest thing about not planning is that failure comes as a complete surprise, rather than being preceded by a period of worry and depression. ” Sir John Harvey-Jones 54
Write a business plan • Formal document – Build on the business modeling process – Expand bullet points and notes into sentences & paragraphs – Tailor sections to whom it is meant for: • Bank – Venture Capitalist – Strategic Partner – Many templates available on line – Require financial projections
Business Plan Table of Contents 1) Executive Summary 2) Business Description 3) Market Analysis 4) Marketing Mix Strategy 5) Operating Plan 6) Management Team 7) Financial Plan 56
Executive Summary • Write this section last! • One – two pages • It is the summary of the important elements of your business plan • Must grab the reader’s attention and whet their desire for more information • Many people will read this section first, go to the financial projections and then go back to the rest of the plan – if they are still interested
Business Description • Company sketch – Legal entity, ownership, location, management • Mission/Vision/Values • Key Activities – Design, manufacturing, distribution, sales, service, manufacturing • Business model canvas summary – Value proposition, client base, partners, key resources
Market Analysis • • • Industry profile Competition profile Segmentation profile Target market profile Market position vs. competition
Marketing Mix Strategy • • Product/Service Promotion Place
Operating Plan • Product/service realization • Regulatory/environmental/legal requirements • Suppliers • Internal/external
Management Organization • Management team • Professional and advisory support
Financial Plan • • • Pre-opening expenses Sales forecast Operating expenses Projected cash flow Income statement Balance sheet • Breakeven analysis
Appendices (Optional) • • • Business model canvas Industry/market studies Magazine articles Brochures/advertising material Extra financial documents Limit docs to significant few
Business Planning Framework Mission/Vision/Values Elevator Speech Business Model Canvas Lean Business Plan 1) Executive Summary 2) Business Description Business Plan 3) Market Analysis 4) Marketing Mix Strategy 5) Operating Plan 6) Management Team 7) Financial Plan 65
SBA. gov
Example of online templates
SBA. GOV
SBA. GOV
Business Plan Templates https: //wellsfargoworks. com/ https: //www. score. org/resource/business-plan-template-startupbusiness
The business model Canvas XYZ Company Key Partners Your Body text This is a sample text, insert your own text, Key Activities Your Body text This is a sample text, insert your own text, Key Resources Your Body text This is a sample text, insert your own text, Cost Structure Your Body text This is a sample text, insert your own text, Value Proposition Your Body text Customer Relationship Your Body text Iteration #1 Customer Segments Your Body text This is a sample text, insert your own text, Channels Your Body text This is a sample text, insert your own text, 04 -Jan-2013 This is a sample text, insert your own text, Revenue Streams Your Body text This is a sample text, insert your own text,
Google Docs 74
Resources and Next Steps https: //youtu. be/IP 0 c. UBWTgp. Y Website: www. cfobydesign. com Email: mah@cfobydesign. com Phone: 888. 833. 8864 ext 700 Website: www. browartd. score. org Email: george. gremse@scorevolunteer. org Phone: 201. 916. 6280 Sign up for one-on-one mentoring at www. broward. score. org 75
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