Lecture Entrepreneurship: Chapter 8 - Zacharakis, Bygrave, Corbett

Chapter 8 - The business planning process. The goal of this chapter is to give you an introduction to entrepreneurial financial planning. Unlike in existing businesses, which have an operating history, entrepreneurs must develop their financials from scratch. There are no previous trends in revenue and costs that you can use as a basis to project future revenues and costs.

THE  BUSI NESS  PLANNI NG  PROCESS Chapt e r   Zacharakis, Bygrave and Corbett, Entrepreneurship, New York: Wiley, 2017 © You Need a Business Plan  q It is a small investment in time and cost when compared to the time and cost of starting a business q It forces the entrepreneur to think critically about all aspects of the business venture q It can later be used as a benchmark to monitor the progress of the business q Describes the details of how you will exploit your opportunity q Creates opportunities to raise critical questions …and to research and find answers q Relatively small investment in time and cost “Plans are useless, but planning is indispensable” - GEN Dwight D Eisenhower Zacharakis, Zacharakis, Bygrave Bygrave & Corbett, and Corbett, Entrepreneurship, Entrepreneurship, New York: New Wiley, York: Wiley, 2017© 2017 © Business Planning is a Continuous  Process q q q q Begins when you start thinking about a new venture Accumulate a critical mass of learning Organize summary information to share your idea and to identify gaps Focus on critical aspects of the business model Keep in mind—the business plan is a “living document.” It will continue to evolve as you progress Zacharakis, Zacharakis, Bygrave Bygrave & Corbett, and Corbett, Entrepreneurship, Entrepreneurship, New York: New Wiley, York: Wiley, 2017© 2017 © Your Business Plan as a “Story” Key takeaways for your business are found in the process of developing a well-written story q How will stakeholders interpret your plan? q A tagline creates a unifying plot line that organizes your thinking q Stick to the “general format” of business plans q “A business plan is the persuasive, yet concise, story about where the company came from, where it’s going and how it will get there.” Shane Eten, Founder & CEO BluCarbon Zacharakis, Zacharakis, Bygrave Bygrave & Corbett, and Corbett, Entrepreneurship, Entrepreneurship, New York: New Wiley, York: Wiley, 2017© 2017 © Business Plan Format – Keep it Simple! Zacharakis, Zacharakis, Bygrave Bygrave & Corbett, and Corbett, Entrepreneurship, Entrepreneurship, New York: New Wiley, York: Wiley, 2017© 2017 © A Business Plan is Judged by  Its Cover ­ Create a Good One! The Cover q An “Eye­catcher” q Control Distribution q Disclaimer q Simple…but  Important Details Clearly Identify q Company Name q Tagline q Contact Information q Date of Publication Imagine the frustration of an excited potential investor who can’t find your contact information – that plan will be rejected Zacharakis, Zacharakis, Bygrave Bygrave & Corbett, and Corbett, Entrepreneurship, Entrepreneurship, New York: New Wiley, York: Wiley, 2017© 2017 © Draft an Executive Summary q q q q q Most Important (and Exciting) Section Write it after you have researched your venture Capture the reader’s attention – the HOOK Highlight the potential of the Opportunity Provide compelling information on: ü Description of the Opportunity ü Competitive Advantage ü Business Concept ü Business Model & Economics ü Industry Overview ü Team & Offering ü Target Market ü Financial Snapshot Zacharakis, Zacharakis, Bygrave Bygrave & Corbett, and Corbett, Entrepreneurship, Entrepreneurship, New York: New Wiley, York: Wiley, 2017© 2017 © Your plan should cover 9 main  areas Zacharakis, Bygrave and Corbett, Entrepreneurship, New York: Wiley, 2017 © Three Essential Types of Business Plans q q q Operational Plan q Internal use  q Often 80+ pages Formal Plan q External use   q Roughly 25 to 40 pages Expanded Executive Summary q for enticing interested stakeholders q In lieu of a full business plan   q Typically 7 to 10 pages  Zacharakis, Zacharakis, Bygrave Bygrave & Corbett, and Corbett, Entrepreneurship, Entrepreneurship, New York: New Wiley, York: Wiley, 2017â 2017 â Presentations should be direct Should be able to communicate your business opportunity in 10-12 slides Cover page w/ product picture Opportunity description Illustration of how your product solves a problem Details as needed Competition overview Entry and growth strategy Overview of business model Zacharakis, Bygrave and Corbett, Entrepreneurship, New York: Wiley, 2017 © 10 Recap q q Business planning allows the entrepreneur to better anticipate questions and gaps instead of reacting to them Entrepreneurs can get feedback from experts, including investors, vendors and customers Zacharakis, Zacharakis, Bygrave Bygrave & Corbett, and Corbett, Entrepreneurship, Entrepreneurship, New York: New Wiley, York: Wiley, 2017© 2017 © ... cost “Plans are useless, but planning is indispensable” - GEN Dwight D Eisenhower Zacharakis, Zacharakis, Bygrave Bygrave & Corbett, and Corbett, Entrepreneurship, Entrepreneurship, New York:... BluCarbon Zacharakis, Zacharakis, Bygrave Bygrave & Corbett, and Corbett, Entrepreneurship, Entrepreneurship, New York: New Wiley, York: Wiley, 2017© 2017 © Business Plan Format – Keep it Simple! Zacharakis,. .. Snapshot Zacharakis, Zacharakis, Bygrave Bygrave & Corbett, and Corbett, Entrepreneurship, Entrepreneurship, New York: New Wiley, York: Wiley, 2017© 2017 © Your plan should cover 9 main  areas Zacharakis,