1. iDISC ToolkitATTACHMENT Business Plan Model for IncubatorsExecutive SummaryThe Executive Summary is the essence of the Business Plan. It is a condensed version thatshould interest the reader in the contents of the Plan, providing a fairly solid understandingof what will be set out in detail in the body of the document.Although it appears at the start of the Business Plan, the Executive Summary should bedrawn up only after the entire document has been analyzed and written, in order to avoid asuperficial approach.The Executive Summary should have a businesslike tone, in order to prompt immediateinterest in the reader, who can be drawn in through the concept, the rate of return, or eventhe style with which the ideas are presented.A suggested format for this Summary is the presentation of the Business Plan by sections,in order to get across the basic ideas, and the highlights of each of them, focusing on eachof the function areas.Description of the IncubatorThis item should give a brief overview of the incubator, explaining how it was establishedand its current stage (already in operation, being planned or implemented); what are itsobjectives; what is the type of incubator (technology-based, traditional sector, mixed, art,social, etc); what are its main activities.Attempts should be made to answer the following questions: what clients does it intend toservice (target market); where is it located; what is its area of support? Other importantaspects in this section are related defining the: Vision of the future; Mission of the incubator the raison dtre of an organization. A good Mission Statement should answer the following questions: what does it do? How does it do it? Why, for whom, where? With what social accountability; Current organization chart and human resources structure; Available facilities and equipment; Development partnerships and experience; Marketing partnerships and experience; Annual revenues of the incubator (specify whether they are its own or third parties).Note: These topics should be covered briefly, as they will be set out in greater detail furtheron.Products and ServicesIn order to be effective, an incubator needs to offer services that endow the companies itsupports with a keener competitive edge. Consequently, plenty of attention should bedevoted to this topic.

2. iDISCToolkitThe characteristics of the services should be described clearly and simply, listing all theservices offered by the incubator and their applications.The value of its services should be underscored what are its exclusive intangible benefitsor characteristics in order to demonstrate the potential of the incubator and the benefitsthat it offers, as entrepreneurs are frequently unable to focus on benefits that are nottangible.Also describe the innovative models or services that the incubator intends to introduce inthe future.Marketing PlanThe Marketing Plan should explain how the incubator intends to handle and react to marketconditions in order to generate resources and ensure the continuity of its services.The market challenge is one of the most difficult to deal with, in order to ensure the successof a business, and things are no different for an enterprise incubator.Consequently, it is important to analyze whether or not there is a real market demand forthe services offered by the incubator, as well as defining its market share according to theregional vocation. Otherwise, not all the talent and money in the world will manage to makethis incubator successful.According to Meeder in Forging the Incubator How to Design and Implement a FeasibilityStudy for Business Incubation Program, NBIA Publications (1993), after gathering all theinformation that allows you to identify sources of potential clients as well as assessesmarket demand for management assistance services, you are ready to consider severalother important questions as you prepare your market plan: Have you prepared a written market strategy? The written document will serve tocommunicate the strategy to others who can assist in the implementation of the plan andit helps you to maintain constant attention to this management responsibility. How can you position yourself, your staff and board to initiate marketing and salesactivities rather than just to react to opportunities for promoting your program? Too often,managers react to marketing and sales opportunities rather than pro-actively createthose opportunities. Your marketing plan should include methods for you to regularlyinitiate marketing and sales opportunities. Do you plan to escrow/allocate funds for marketing and sales activities? It is important toput resources behind the plan. Often, marketing and sales activities areundercapitalized. Some managers wait until they have some extra money before theyinvest in marketing and sales. It rare to have extra money. Do you use the word incubator as the primary descriptor to prospective tenants? It maybe better initially to emphasize the service aspects of the program and the facilityfeatures and let the entrepreneur learn about the concept of incubation after they areenrolled in your program. 3. iDISC Toolkit Do you split your potential customers into vertical segments to help target specialfeatures of your program to customers? This is a method often employed by marketingconsultants to attempt to identify common characteristics among a group of potentialcustomers, then create and match features of a product or service to thosecharacteristics. Do you have plans to establish a track system to guide your staff and board throughthe correct process of presenting the facilities and services of your program toprospective client companies? The most successful sales organizations have standardroutines that everyone from maintenance to board chairman masters. Thisstandardization allows everyone to be comfortable with selling and to be consistent inpresenting important information. Do you have a clear statement of how you are distinguished from your competitors?You need to know your competitors and how to quickly describe why you are differentthan your competitors. Are you planning to become an active member in your state and national incubationassociations? This industry is relatively new. The developments within this industry areoccurring at a rather fast pace. The best way to keep up with this change is throughthese associations. Will your marketing materials focus primarily on what just happened vs. what is plannedto happen? It is much more effective to focus on what just happened that you considerbeing newsworthy and including the reasons why your program was directly responsiblefor helping to cause the event. Will your incubation program staff and service providers have regular planning sessionsto focus on new services for our existing clients and to plan activities that demonstrateyour services to prospective clients? This type of proactive approach to marketing yourprograms services is an important component of any marketing plan. Will you actively use your clients successes to market to target groups? The mosteffective marketing message is a positive message from a satisfied customer.Some steps for drawing up the Marketing Plan are:Step One: Incubator PositioningThis means how the incubator is positioned in terms of the market. For instance: does italways work with a Greenfield policy when launching new models?Step Two: Define the market situationDescribe its macro-environment:Outside influences are factors over which the incubator has little or no control, such assector regulations, production resources, technological changes and clients. By describingthese influences, it should explain the nature and source of the influence concisely, togetherwith the potential impact and the resulting risks or opportunities, as well as the way in whichthe enterprise can handle these influences. The Market Market Trends Opportunities / Threats Significant Outside Factors 4. iDISCToolkitWhen defining the market it is important to: Survey up-to-date data Try to define the size of the market, even it only approximately Segment this market according to the business Strive to base the analysis on the environment closest to the incubator: itscompetitors, clients and suppliers.Example: Data provided by the Small Business Bureau (SEBRAE), the Brazilian Institute forGeography and Statistics (IBGE), the Trade Federation (Fecomercio), etc.Ensure that you have answered the following question as fully as possible: What is my market?Step Three: Enterprise StatusDescribe its microenvironment:The analysis of the microenvironment consists of studying the internal influences weakand strong points that directly affect the performance of the incubator and that it can control.It is important to visualize them and then analyze the potential of the strong points and seekalternatives for working on the weak points. Consequently, the following should be noted: Its Strengths (Strong Points); Its Weaknesses (Weak Points); Its Competitive Advantages; Significant In-House Factors.When describing the enterprise, the following factors are important: Frankness; Clearness; Commitment to reality and what is possible.Ensure that you reply fully to the following questions: Who are we? How are we?Step Four: Define its Objectives Define it objective(s) in a clear and straightforward manner; When defining the objective, it is important to: o Clearly explain its support by all those involved in its organization; o Focus on its market objective (clients, suppliers and competitors); o List them by order of priority and rank them on a time basis (separating out theshort, medium and long-term objectives).Examples of Objectives: 5. iDISC Toolkit Contribute to generating jobs; Encourage the development of new technologies; Increase the number of enterprises serviced.Ensure that you reply fully to the following question:What are we going to do?Step Five: Define its strategies Define the strategies for attaining the objectives proposed through its Marketing Mix; The answers to the following questions outline these strategies: o Am I going to extend my services? Modify them? Add more value? o Am I going to lower prices? Keep them unchanged? Increase them? o Am I going to extend my area of operations? Will I reduce it? Seek partnerships? o When am I going to run promotions? What type of promotion? What is the message? Will I take part in fairs and events? What about advertising? When defining strategies, it is important to: o Focus on the client, meaning the enterprises and their development; o Establish the strategies in a clear and straightforward manner.Step Six: Marketing Mix Product (for an incubator, what services will be offered) Price this indicates the fees charged by the incubators (royalties and fees to cover the basic cost) to underwrite the services supplied; Area this aspect is not fully applicable, as it covers channels of distribution and the areas in which the incubator operates. As the incubator does not sell products, there is no distribution structure, and its area of operation consists of the entrepreneurs in region where it functions. Promotion what are the promotional strategies (website, promotional material, service portfolios, site visits, bulletins, participation in fairs and events, etc.)Step Seven: Strategic AnalysisThe strategies should be defined in order to maximize the strong points, work on the weakpoints, take full advantage of opportunities and neutralize threats.Operating PlanThis item should describe the work methods used for the functioning and operationalizationof the activities of the incubator. It is important to mention the following main points: Selection process present the approval criteria, the project prospectingmechanisms; the selection process; phases; etc.; Rules for the incubation period specify the length of incubation, as well as possibleextension periods; performance indicators for the incubator and the enterprises; etc.; 6. iDISCToolkit Oversight and assessment of the enterprises describe how the assisted enterprisesare monitored, presenting the tools used and the frequency with which thisundertaken, etc.; Legal relationship with the enterprises present how the link between the incubatorand supported enterprises is formally established; Fund-raising mechanisms specify the sources of funds for bringing the activitiesinto operation and the types of uptake;Incubator Actions and Targets PlansThis section should decide on the targets (quantified objectives) and set deadlines. Thisstage is of much importance for monitoring the results achieved by the incubator andpossibly correcting any distortions or poorly-defined strategies.It is a good idea to define three-year targets, updated every twelve months.Financial PlanThe financial section will present projections on the financial performance of the incubatorthat may well become the most important parameters for assessing its sustainability ratings,if properly drawn up, serving as guidelines for seeking the resources needed to underpin theproper functioning of the Program.It is advisable to draw up projections for more than one scenario, even if only one of them isincluded in the formal plan. One projection should be drawn up based on a business-as-usual scenario, another should present the best-case situation, with another giving theworst-case scenario.As most of the incubators do not have their own legal status, but are rather linked to theirsponsor institutions (foundations, associations, etc) and own no assets, the equity balancesheet is optional. However, it is suggested that should a detailed cash-flow forecast shouldbe prepared.According to DORNELAS1 the incubators should present detailed cash-flow planning,focusing their efforts on understanding and managing this flow. As there are many differentsources of funds, this planning should include not only indications of how the funds will beused, but also where they will be sought.Another suitable tool is the Statement of Sources and the Uses that lists the origin of thefunds and the purpose for which they are intended. The projection showing the generationof revenues by the incubator itself should not be forgotten, brought in through the services1DORNELAS, Jos Carlos Assis, Planejando Incubadoras de Empresas: Como Desenvolver um Plano deNegcios para Incubadoras. Rio de Janeiro: Campus, 2002. (Planning Business Incubators: How to develop aBusiness Plan)2 MEEDER, Robert. Forging the incubator How to Design and Implement a Feasibility Study for BusinessIncubation Program, NBIA, 1993. 7. iDISC Toolkitthat it offers, while striving to reduce its dependence on outside funds as much as possible,working towards self-sustainability. Some model tables are presented below:Specification Quantity Unit ValueTOTAL Laboratories and workshops Audiovisual resources Retrofitting the space Office desks Typist chairs Director chairs Boardroom chairs Fax machine Printers Computers Round Boardroom table Steel filing cabinets Basic office materials Software Telephone switchboard Leased photocopy machine Others TOTAL Table 1 - Investments in Facilities, Equipment and FurnitureAmountSource Year I Year IIYear IIITotalIN-HOUSE RESOURCESBasic Costs FeeRoyalties paidbytheenterprisesCapacity-building events andcoursesSubtotalTHIRD PARTY REVENUES***Sponsor entitySebrae tendersOther sourcesSubtotalOVERALL TOTALTable 2 - Forecast Revenues 8. iDISCToolkit Amount FunctionMonth YearManagerBusiness Management AssistantCommunications AssistantCommunications TraineeAdministration TraineeTOTAL Table 3 - Expenditures on StaffTotal Description Activity Per YearParticipation in events on incubator1 Incubator Course on Marketing Strategies, Negotiatingand Sales (staff)Other training sessionsSUBTOTAL Course on Finance Course on Marketing2 Resident BusinessManagementCourseEnterprises(entrepreneurs) Course on Sales Price Course on Sales and Negotiating TechniquesSUBTOTALTOTALTable 4 - Expenditures on Training 9. iDISCToolkit DescriptionYear I Year II Year III Revenues Own Revenues Third Party Revenues Subtotal Investment Expenditures Training Furniture, Equipment and Consumption Material Staff Marketing Expenses Subtotal Balance (1-2) Self-Sustainability Table 5 ConsolidatedManagement and OrganizationThe success of an incubator is linked closely to its staff and an effective organizationstructure. Consequently, its team should consist of professionals with managerial abilities,dynamic, flexible and endowed with networking skills.This topic should define the personality of the incubator and outline its form of management:describing the decision-taking process, and explaining whether decisions will be taken on aparticipative or centralized basis. Additionally, other points should be covered such as: Management Team the professional experience of the individuals should bepresented whose actions play a decisive role in the success or failure of theincubator, as they will perform crucial roles in its operation. It is not enough for themto be brilliant and motivated, but they must also be able to turn plans into reality andmust have the skills required for implementation. This topic should highlight theincubator managers and assistants. Organization Chart the links and the share-out of responsibility should bepresented within the organization. Policy and strategy the staff selection, training and remuneration policies should beexplained, outlining the philosophy guiding the organization and placement of staff, inorder to allow a better understanding of the incubator style.