Components Of A Business Plan

Components of a Business Plan Jill Kline Wyoming SBDC 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 WSBDC Contacts Region I: Bill Ellis (307) 352-6894 Toll Free in WY 800-348-5205 e-mail: bellis@uwyo.eduServing Sublette, Lincoln, Uinta, and Sweetwater counties Region IV: Arlene Soto (307) 632-6141 Toll Free in WY 800-348-5208 e-mail: sewsbdc@wyoming.com Serving Goshen, Laramie, Albany, and Carbon counties Region II: Robbi Welch (307) 754-2139 Toll Free in WY 800-383-0371 Fax: (307) 754-0368 e-mail: director@wir.net Serving Park, Big Horn, Washakie, Hot Springs, Fremont, and Teton counties Region IV Satellite Office: Bill Schepeler (307) 766-3515 e-mail: WTSchep@uwyo.edu Region V: Jill Kline (307) 682-5232 Toll Free in WY 888-956-6060 e-mail: sbdc@vcn.com Serving Sheridan, Johnson, Campbell, Crook, and Weston counties Fremont County Office: Margie Rowell (307) 857-1174 Toll Free in Wyoming 800-969-8639 e-mail: wsbdc@wyoming.com Region III: Leonard Holler (307) 234-6683 Toll Free in WY 800-348-5207 e-mail: sbdc@tribcsp.com Serving Converse, Natrona, Niobrara, and Platte counties http://www.uwyo.edu/SBDC/offices.html Why develop a Business Plan? “All the work you 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 Why develop a Business Plan? “You've just come up with an idea What to 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.” Directors - Mark Ellwood, Past UIA Board of Why develop a Business Plan? “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 Three Types of Plans • Summary Plan – 10 pages, important points • Comprehensive Plan – 10-40 pages, seeking capital or alliances • Operational Plan – 40+ pages, for going concerns, part of an annual process 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, Year Cash Flow Projections, Income Projections The Comprehensive Plan Executive Summary Problem Solution Business Model Secrets Marketing and Sales Competition Management Team Financials 10.Current Status Executive Summary • Define problem, solution, business model, and why your solution is better • Write it last • Grab readers attention • No more than pages! • Most important part of your plan and usually written last 10 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 11 Solution • How we solve the “Problem”? • Explain what you sell • State your value proposition 12 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) 13 Business Model • Explain how you make money – Who pays you? – How you collect? – What are your channels of distribution? – How you integrate suppliers? • Use examples if necessary • Be complete 14 Secrets • Describe your technology, process improvement, etc • Use charts, diagrams, schematics, as much as possible • Understand your Intellectual Property 15 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 16 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 17 Management Team • Describe your key players – Management Team – Board of Directors – Board of Advisors – Major Investors • Who are you missing? 18 Financial Projections • Cash Flow Projections • Income Projections • Balance Sheets • Assumptions 19 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 20 Investor Pitch Slides 10/20/30 Rule Title Problem Solution Business Model Secrets Marketing and Sales • Competition • Management Team • Financials • Current Status 21 Good Reading • Crossing the Chasm – Geoffrey Moore • The Art of the Start – Guy Kawasaki • Inventing For Dummies – Pamela Riddle Bird 22 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/sbdc http://www.sba.gov/starting_business/index.html Sample Plans – http://www.bplans.com/samples/sba.cfm?DCMP=OTCsba_course 23 Thank you! Questions? Jill Kline, Region V Director (307) 682-5232 1-888-956-6060 sbdc@vcn.com Serving Sheridan, Johnson, Campbell, Crook, and Weston counties 24