ENTREPRENEURIAL

FINANCE

CH3: Case Study Go-Figure, Inc.

Task # 3 Prepared by

YI-JU CHEN

CHIEN-CHING LIN

Case Study Go-Figure, Inc.

•Go-Figure, a newly formed corporation, has developed a proprietary circuit board inspection system.

•It uses a unique technology for circuit boars inspection and has for a patent on technology.

•Product testing shows success and the technology is much less costly than alternative methods of inspection and visual inspection.

•According to market research, there are 30,000 manufacturing lines that could be served using this technology

Case Study Go-Figure, Inc.

•The firm is seeking an addition $l million from outside investor by issuing business angel common stock at $1 per share.

•Minimum investment is $25,000.

•The entrepreneur and members of board own existing equity.

•The management team is looking for additional expertise and is willing to consider board membership for a well-qualified investor.

Assignments

As an employee of Go-Figure, Inc.and been deputed with the job of putting a draft business plan that will be circulate to prospective investors.

•Develop a brief outline of the major part of the Go-Figure business plan should be.

•Prepare a list of questions any out side investors would want to have answered before investing.

•After developed the outline, explain in which sections of plan each of following might be address.

Sections of Plan Might be Address

A. Commitment of the entrepreneur

B. Present and future financial needs

C. Specifics of opportunity

D. Competition

E. Sources of competitive advantage

F. Capabilities of management

G. Harvesting

First Assignment (1) A brief outline of the major part of the Go-Figure business plan

• COVERSHEET

• TABLE OF CONTENTS

• EXECUTIVE SUMMARY

• BUSINESS DEVELOPMENT

• MARKET ANALYSIS

• MARKETING AND SALES ACTIIVITIES

Source:@ 1997 Inland Empire Small Business Development Center

First Assignment (2) A brief outline of the major part of the Go-Figure business plan

•OPERATIONS PLAN

•ORGANIZATION PLAN

•CRITICAL RISKS AND PROBLEMS

•FINANCIAL PLAN

•OVERALL SCHEDULE

Source:@ 1997 Inland Empire Small Business Development Center

Second Assignment (1) A list of questions any out side investors would want to have answered before investing.

Q1. What type of business does Go-Figure Inc. have?

Q2. What is the purpose of this business?

Q3. What is the key message or phrase to describe the

business of Go-Figure Inc. in one sentence?

Q4. What is the reason for starting this business?

Q5. What is the products or services of Go-Figure

Inc.?

Sources: BizPlan Express , South-Western College Publishing 1998

TOP 20 QUESTIONS, this template as an initial summary for bankers or investors

Second Assignment (2) TOP 20 QUESTIONS

Q6. What are three unique benefits of Go-Figure Inc.

products?

Q7. Does Go-Figure Inc. have data sheets, brochures, diagrams,sketches, photographs, related press releases or other documentation about company’s products/ services?

Q8. What are the products applications?

Q9. What’s the motivation to develop the products?

Q10 Are this products or services used in connection with

other products?

Sources: BizPlan Express , South-Western College Publishing 1998

Second Assignment (3)

TOP 20 QUESTIONS

Q11. List the top three objections to buying Go-Figure Inc.’s product or service immediately?

Q12 When will Go-Figure Inc.’s products be available?

Q13 Who are Go-Figure Inc.’s target audiences?

Q14 Who are Go-Figure Inc.’s competitors?

Q15 How are Go-Figure Inc.’s products differentiated from that of the competitors?

Sources: BizPlan Express , South-Western College Publishing 1998

Second Assignment (4) TOP 20 QUESTIONS

Q16. What is the pricing of Go-Figure Inc.’s products versus

the competitors?

Q17 Is Go-Figure Inc.’s making any special offers?

Q18. What plans does Go-Figure Inc.’s have for advertising

& promotions?

Q19. How will Go-Figure Inc.’s finance Company growth?

Q20. Does Go-Figure Inc. have the management team

needed to achieve the goals?

Sources: BizPlan Express , South-Western College Publishing 1998

Third Assignment (1) Explain in which sections of plan each of following might be

address.

•Commitment of the entrepreneur

1. ORGANIZATION PLAN ---

A.Management

1.Management structure 2. List key managers 3. Duties and responsibilities of key managers

Present and future financial needs It might be addressed in: 1. EXECUTIVE SUMMARY ---- Financial projections & Amount of money being sought, in what form, and for what purpose

2. FINANCIAL PLAN ---

A. Funding Requirements----Now $1 million. B. Long Range Financial Strategy C. Exit Strategy for Investor(s) D. Historical Financial Data E. Financial Projections F. Supporting Financial Data

Third Assignment (2)

Third Assignment (3) Specifics of opportunity

It might be addressed in:

1. EXECUTIVE SUMMARY ----

2. BUSINESS DEVELOPMENT ----

A. Description & history of the business

B. Product/Service---- The unique technology for circuit boars

inspection.

1. Proprietary position/competitive advantage

2. Present status of Product or Service

3. Product potential

4. Specific benefits of the Product or Service

5. Stage of Product life cycle

6. Research and Development efforts -current and ongoing

Third Assignment (3)Specifics of opportunity It might be addressed in:

3. MARKET ANALYSIS ---

A. Market Analysis

1.Market research and analysis

2.Industry description and outlook - size, trends, major customers

3.Targeted Market needs, demographics, geographic location

4.Secondary Target Market -needs, demographics, geographic location 5.Market size, trends, and growth potential for both Primary and Secondary Target Markets

6.Barriers to Entry - cost, time, brand loyalty, technology, personnel,proprietary product, regulatory requirements, staying power of competition

7.Estimated market share and sales

B. Market Test Results - Customer reactions, feedback, willingness to purchase

Third Assignment (4)

Third Assignment (5)

Significant Risk

It might be addressed in:

1.CRITICAL RISKS AND PROBLEM ---. Identify and Discuss

"What If. .." scenario

A. Risks involved with venture and/or assumptions B. Plans for minimizing impact of risks or unfavorable developments

Third Assignment (6) Competition & Sources of competitive advantage

It might be addressed in:

1. EXECUTIVE SUMMARY--- Marketing strategy and attractiveness

of market &Management strengths

2. BUSINESS DEVELOPMENT ---

A.Product/Service ---The unique technology for circuit boars inspection.

1. Proprietary position/competitive advantage

2. Product potential

3. Specific benefits of the Product or Service

4. Stage of Product life cycle 5. Research and Development efforts - current and ongoing

Third Assignment (7) Competition & Sources of competitive advantage

It might be addressed in:

3. MARKET ANALYSIS---

C. Competition

1. List of competitors indirect and direct

2. Potential new competitors

3. Similarities/dissimilarities of competitors to your company

4. Internal and external strengths/weaknesses

5. Market share - current and projected

6. Competitors' public image 7. Growth potential

Third Assignment (8)

Competition & Sources of competitive advantage

It might be addressed in:

4. OPERATIONS PLAN --

C. Operating Competitive Advantages

1. Various factors -geography, techniques, technology,

economies of scale,experience of personnel and processes

Third Assignment (9)

Capabilities of management

It might be addressed in:

1. EXECUTIVE SUMMARY --- Management strengths

2. ORGANIZATION PLAN ---

A.Management

1.Management structure 2. List key managers

3. Duties and responsibilities of key managers 4. Compensation and benefits 5. Qualifications and experience 6. Planned management additions

Third Assignment (10)

Harvesting

It might be addressed in:

1. EXECUTIVE SUMMARY --- Management strengths

2. FINANCIAL PLAN---

A. Exit Strategy for Investor(s)

B. Financial Projections

3. OVERALL SCHEDULE --- Realistic schedule that shows the

timing of major events of the plan