MOTEPPCABE Getting the Business Plan Right Presented by Steven R. Kopits

19.04.23

MOTEPPCABE

Getting the Business Plan Right

Presented bySteven R. Kopits

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Common Problems

Business plans and information memoranda often fail to

address critical issues regarding the investment, and

often considerable effort is invested in the wrong

activities. Many of these problems can be overcome

with MOTEPPCABE analysis.

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Investment Criteria

MOTEPPCABE

MO: Market Opportunity

TE: Team

PP: Profit Potential

CA: Comparative Advantage

BE: Barriers to Entry

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Who is your customer?

What do they want?

How much will they pay?

Market Opportunity

Define and describe an archetypical customer

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Market Opportunity

Size: $50 million revenue in Year 5

Your company has to have significant size potential

Market Communication

Can you communicate with your potential clients cost-

effectively?

Credibility: Will they believe you?

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Market Opportunity

Market Access Will your potential clients let you in the door?

Can you distribute your product?

Are the channels open?

Are they available at low cost?

Can you bill for your product and control client payment risk?

How long is the purchasing cycle?

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Management Team

Three Attributes Integrity (Attitude)

Experience (Knowledge)

Competence (Skills, Drive, Energy)

Two Questions from VC’s Do I trust them with my money?

Can they perform the functions required?

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Management Team

Complete Management Team

General management capability

Sales and Marketing

Operations

Technology (IT)

Strategic finance

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Management Team

Strong understanding of market & competition current products/services, prices and costs

organizations and business models

sales and distribution (existing and proposed) obtain specific LOI’s (term sheet) from potential

customers

tricks of the trade

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Profit Potential

Can I serve my clients at a profit?

Refers to implementation Business Model

Organization & Structure

Factor costs

Cash Flow Issues Payment risk

Timing of payments

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Comparative Advantage

Product or service must be materiallyBetter or Cheaper

”Materially” is defined from the client’s perspective Difference has to be big enough to induce a switch

from his current supplier 50% is not a bad number

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Barriers to Entry

How will I hold on to my market share in the future, especially when bigger and better capitalized companies enter my market?

Barriers to Entry Unique technology, patents or know-how Economies of scale

Manufacturing, purchasing, sales, marketing, cross-selling, R&D, personnel utilization or specialization, customer inertia, ‘first mover’ (but with care!)

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Case Study 1 - SuperScan Monitors

After six years of research and development with a team of PhD scientists, SuperScan has developed a monitor with 10 times the capabilities of ordinary monitors at only three times the cost. The technology has many potential applications at the advertising, medical, and entertainment fields and has great potential to take market share in the $56 billion monitor market.

Why won’t SuperScan be funded at this stage?

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Case Study 2 - Portal.hu

Portal.hu is a leading Hungarian internet portal, with over

1 million visitors per day. Along with Other.hu, Portal.hu

dominates the internet advertising market in Hungary.

How strong are Portal.hu’s barriers to entry?

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Materials

You can find the presentation at

www.firsttuesday.com/budapest

and

www.hvca.hu

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Contact

Steven R. Kopits email: steven.kopits@gmail.comPrinceton, New Jersey, USA+1 508 685 1200