Components ofa business plan

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Components of a Business Plan

Jill KlineWyoming SBDC

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Wyoming SBDC

Strengthen Wyoming businesses and create economic growth by providing excellent management assistance, educational programs and helpful resources for

Wyoming small businesses and entrepreneurs.

http://www.uwyo.edu/

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WSBDC Contacts

Region I: Bill Ellis(307) 352-6894 Toll Free in WY 800-348-5205e-mail: [email protected] Sublette, Lincoln, Uinta, and Sweetwater counties.

Region II: Robbi Welch(307) 754-2139 Toll Free in WY 800-383-0371Fax: (307) 754-0368e-mail: [email protected] Park, Big Horn, Washakie, Hot Springs, Fremont, and Teton counties.

Fremont County Office: Margie Rowell(307) 857-1174 Toll Free in Wyoming 800-969-8639 e-mail: [email protected]

Region III: Leonard Holler(307) 234-6683 Toll Free in WY 800-348-5207e-mail: [email protected] Converse, Natrona, Niobrara, and Platte counties.

Region IV: Arlene Soto(307) 632-6141 Toll Free in WY 800-348-5208e-mail: [email protected] Goshen, Laramie, Albany, and Carbon counties

Region IV Satellite Office: Bill Schepeler(307) 766-3515e-mail: [email protected]

Region V: Jill Kline

(307) 682-5232

Toll Free in WY 888-956-6060e-mail: [email protected] Sheridan, Johnson, Campbell, Crook, and Weston counties.

http://www.uwyo.edu/SBDC/offices.html

mailto:[email protected]

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Why develop a Business Plan?

“All the work you do in thinking up your idea, testing it, studying it, and producing it, has been for nothing if you can’t sell it. Whether you start you own business to produce and sell your invention, subcontract out the manufacturing part, or sell your rights in return for a percentage of the proceeds, you need a business plan.”

- Pamela Riddle Bird, PhD, Inventing For Dummies

CEO, Innovative Product Technologies, Inc.

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“You've just come up with an idea. What to do next? There is no exact order of what you should be doing. But we like to suggest two broad areas for inventors to embark on. First, learn all you can about running a business, even if you hope to license your idea. Second, write a business plan. Even if you hope to license your idea, (and that's actually a rarity among the successful inventors we've met) you'll still need to have a plan.”

- Mark Ellwood, Past UIA Board of Directors

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“A business plan is vital for enterprises needing investment, grant funding or significant borrowing; more so for innovation ventures, as the greater number of ‘unknowns’ makes it even harder to attract backing. But don’t make the mistake of thinking that only other people need your business plan. It’s primarily a tool to reveal possibly awkward truths about your business to you.”

- a Creative Investor

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Three Types of Plans

• Summary Plan– 10 pages, 3 important points

• Comprehensive Plan– 10-40 pages, seeking capital or alliances

• Operational Plan– 40+ pages, for going concerns, part of an

annual process

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The Summary Plan

• The Business– Legal Structure, Products or Services,

Management, Personnel, Record Keeping

• Marketing– Target Market, Competition, Advertising

• Financials– Summary of Needs, Use of Funds, 3 Year

Cash Flow Projections, Income Projections

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The Comprehensive Plan

1. Executive Summary

2. Problem

3. Solution

4. Business Model

5. Secrets

6. Marketing and Sales

7. Competition

8. Management Team

9. Financials

10.Current Status

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Executive Summary

• Define problem, solution, business model, and why your solution is better

• Write it last

• Grab readers attention

• No more than 2 pages!

• Most important part of your plan and usually written last

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Problem

• What problem are you solving?

• Describe how the “state of the art” is insufficient

• Get your reader to agree that the current situation isn’t optimal

• If there isn’t a problem, take your idea back to the drawing board

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Solution

• How do we solve the “Problem”?

• Explain what you sell

• State your value proposition

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Value Proposition Worksheet

• First Sentence:– For (target customer) – who (statement of the need or opportunity), – the (product/service name) is a (product/service

category) – that (statement of benefit).

• Second Sentence:– Unlike (primary competitive alternative), – our product (statement of primary differentiation).

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Business Model

• Explain how you make money– Who pays you?– How do you collect?– What are your channels of distribution?– How do you integrate suppliers?

• Use examples if necessary

• Be complete

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Secrets

• Describe your technology, process improvement, etc.

• Use charts, diagrams, schematics, as much as possible

• Understand your Intellectual Property

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Marketing and Sales

• Define your primary, secondary, and other audiences

• Show some numbers

• How will you find, sell, and retain customers?

• Advertising and promotion budget

• Identify your leverage points

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Competition

• Everyone has competitors!

• Provide a complete view of the competitive landscape

• Direct and indirect competitors

• Current and anticipated competitors

• Competitor strengths and weaknesses

• Your competitive advantages

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Management Team

• Describe your key players– Management Team– Board of Directors– Board of Advisors– Major Investors

• Who are you missing?

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Financial Projections

• Cash Flow Projections

• Income Projections

• Balance Sheets

• Assumptions

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Current Status

• Describe your major milestones and tasks– Technology– Fundraising– Customer Development, etc.

• Where are you now?

• Brag about your accomplishments

• Talk about the next steps

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Investor Pitch Slides

1. Title

2. Problem

3. Solution

4. Business Model

5. Secrets

6. Marketing and Sales • Competition• Management Team• Financials• Current Status

10/20/30 Rule

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Good Reading

• Crossing the Chasm – Geoffrey Moore• The Art of the Start – Guy Kawasaki• Inventing For Dummies – Pamela Riddle Bird

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Internet Resources

WSSI Inventor Resources Page - http://uwadmnweb.uwyo.edu/SBIR/inventorresources.html

Innovative Products Technologies, Inc. - http://www14.inetba.com/inventonecom/

Business Plan Development Tools (online) – http://www.uwyo.edu/sbdchttp://www.sba.gov/starting_business/index.html

Sample Plans – http://www.bplans.com/samples/sba.cfm?DCMP=OTC-sba_course

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Thank you! Questions?

Jill Kline, Region V Director(307) 682-5232 [email protected] Sheridan,

Johnson, Campbell, Crook, and Weston counties.