From Possibility to Reality

10 Steps to Preparing a Successful Business Plan

Joel Hauff, The University of Arizona

https://dl.dropboxusercontent.com/u/7316584/NACASWest-BP.pptx

Outline

Identify the steps in developing a business plan

Examine each step and discuss how it fits into the overall plan

Relate each step to real-life examplesSpend some time working on your own

personal business plan

From Possibility…

The POWER

of an idea

Horse In Around Pet Care

…To Reality!

What is your big IDEA?

How can you MAKE IT HAPPEN?

Business Plan Steps

Step 1 – Pitch Your Business

Step 2 – Define Your Business Model

Step 3 – Detail Your Marketing Plan

Step 4 – Identify Your Target Markets

Step 5 – Explain Your Sales Model

Business Plan Steps (continued)

Step 6 – Identify Opportunities for Success

Step 7 –Supply Key Assumptions

Step 8 – Conduct a Cost-Benefit Analysis

Step 9 – Detail the Return On Investment (ROI)

Step 10- Develop a Plan for Assessment

Step 1 – Pitch Your Business

You should be able to explain in 15 seconds what your concept is, and why it is compelling (1-3 sentences) The strategic investment of resources for a

phased Student Union Memorial Center Master Plan will reenergize the facility with services and spaces demanded by the current generation of students. In turn, this will allow for us to recruit a higher caliber of student and retain them more successfully over time.

Step 2 – Define Your Business Model

How will you generate revenue? AND/OR

How will you save money? AND/OR

How will you increase the level or quality of service to your customers?

Business Planning Model

People Make Decisions

Revenues & Expenses Occur

Outcomes Reported

Decisions Evaluated

Business Planning Model

People Make DecisionsLet’s renovate the facility!

Revenues & Expenses OccurWe spent money on renovations,

got new business and had to take care of it.

Outcomes ReportedHere’s what the facility

renovation did for us!Program Evaluation

Was it worth it?

Business Model

Student Union Master Plan Move ‘destination points’ to lower level Add new retail concepts based on student trends to

increase student satisfaction Add additional point-of-sale opportunities to

increase revenues and decrease lines Add additional interior and exterior seats to

increase customer capacity Complete the exterior portions of the building with

intentional seating, canopies and more-welcoming entry points

Marketing vs. Selling

What is the difference between marketing and sales? “Selling is getting rid of something you’ve

got. Marketing is having something you can get rid of.”

Each requires a different range of skills and knowledge for success

Both are dependent upon one another

Step 3 – Detail Your Marketing Plan

How will you pitch your idea to customers and strategic partners?What options do you

have to market to them?

Which will be the most effective?

Marketing – The 4 P’s

The strategic elements of a marketing planProduct – what are we going to sellPrice – what do we need to charge for itPromotion – how do we let people know

about itPlacement – where do we sell it

Marketing strategies are applied globally

Marketing Plan – Specific Details

Product – Einstein Bros. BagelsPrice - VariesPromotion – Social Media, Limited Print

Media, Coupon Books, Digital SignagePlacement – Facebook, Twitter, Arizona

Daily Wildcat, Student Insider, Camptoons, Union Channel 12

Marketing Plan

Product – SUMC Phased Renovation Plan

Price - $6.5 millionPromotion – Surveys, Focus groups,

Information Sessions, 1-on-1 MeetingsPlacement – Student constituencies,

Admissions, Campus Life, Institutional Leadership

Step 4 – Identify Your Target Markets

What is (are) your unique target market(s)?Students – need to know

they support this priority and possible pricing for services

Senior Vice President for Business Affairs – need him to fund the plan

Step 5 – Explain Your Sales Model

Summarize and explain how you intend to capture customers (or gain support) for your business modelWho are you selling to?What are your sales

strategies?Who are your strategic

partners (if any)?

Sales Steps

Introduction Discovery

(Background) Presentation Follow-up Closing

Sales Model

WhoStudent Constituencies

What StrategiesArchitectural renderingsAnecdotal data regarding student

engagementLight financial data showing sustainability

Strategic Partners Vice President for Student Affairs

Sales Model

WhoVice President for Business Affairs

What StrategiesSurvey DataDetailed Pro Forma DataLight anecdotal data regarding student

engagementStrategic Partners

Vice President for Student Affairs

Step 6 – Identify Opportunities for Success

Conduct a SWOT analysis:What are your idea’s

Strengths?What are your idea’s

Weaknesses?What are your idea’s

Opportunities?What are your idea’s

Threats?

SWOT Assessment

Strengths - physical or service-

oriented advantages

Weaknesses - physical or service-

oriented limitations

SWOT Assessment

Opportunities - external plans,

interests or forces that contribute to your ability to succeed

Threats - external plans, interests or

forces that work against your immediate goals

Step 7 – Supply Key Assumptions

With any plan, there is some guesswork involvedWhat elements of the plan can make or

break it?Budget projections for construction costs are

realisticHave not reached point-of-sale saturation pointStudent survey data is representative of the total

populationSales estimates are realistic

Step 8 – Conduct a Cost-Benefit Analysis (Pro Forma)

Money talks What will your

revenues be under this business plan?

What will your costs (direct and indirect) be under this business plan?

What benefit(s) will be gained?

What is the bottom line?

Step 9 – Detail the Return On Investment (ROI)

How long will it take to see a return on any investment made?

What are the projected minimum and maximum returns?

What are the factors that will increase (or diminish) ROI?

Defining The Business Plan

What is my plan for increasing ROI?How will you generate

revenue? AND/ORHow will you save

money? AND/ORHow will you increase

the level or quality of service to your customers?

Calculating ROI

The simplest way to calculate ROI is:

ROI = [Gain from Investment] – [Cost of Investment] * 100% [Cost of Investment]

ROI = [100,000] – [75,000] * 100% = 33.33% [75,000]

Increasing ROI

There are three structured ways to increase ROI: [Gain from Investment] increases while [Cost of

Investment] remains the same [Cost of Investment] decreases while [Gain from

Investment] remains the same [Cost of Investment] increases, but [Gain from

Investment] also increases to a larger proportion than the [Cost of Investment]

ROI = [Gain from Investment] – [Cost of Investment] * 100[Cost of Investment]

Addition of Web Registration Service for Customers Current ROI = 33.33% Increase in Costs by $8,000 for new business

component

Modeling Profit & ROI

ROI = [110,664] – [83,000] X 100% = 33.33%[83,000]

ROI = [x] – [83,000] * 100% = 33.33% [83,000]

ROI = [x] – [83,000] = [83,000] * .3333

ROI = [x] = 110,663.90

ROI = Gain Increase of 10,663.90

Modeling Profit & ROI

How can I do this on a global scale for my idea?Pro Forma DocumentsProfit/Loss StatementsCash Flow Summaries

Microsoft Excel as a tool

Step 10 – Develop a Plan for Assessment

How will we measure our ‘success’?How often will we measure it?What will we specifically measure?What are the critical milestones to achieve?How long will we give our plan to be

successful before we make changes or pull the plug altogether?

Business Plan – Summary

Assemble all information into an executive summary document No more than 2-3

pages or 10 PowerPoint slides

Tailored to a specific audience

Printed and bound

Closing

Think BIG – no idea is too impossible to explore

Let your PASSION for your idea come through in your preparation for and presentation of it

Be HONEST – with yourself and with others around you

Do the WORK to prove your idea has merit and can be achievable