Marketing plan• Industry profile• Competition profile• Customer profile• Marketing plan:

– Target market– Pricing policies– Gross margin on products– Break-even analysis– Distribution channels– Sales and advertising strategy

Competition grid

Competitors Target market Marketing strategy (e.g. price, quality, location)

Advantages Disadvantages

Direct

Indirect

Future

The market (customers and marketing)

Customers Product/service Price Distribution Promotion

Primary

Secondary

Walkins

Market study

• Marketing mix: – Product– PRICE– Distribution– Promotion

Who/what Sets Price?• Costs?

• Competition?

• Distribution chain (Suppliers, buyers)?

• Customer value?

19.3 © 2004 Ewing Marion Kauffman Foundation

Margin and break even point

• Gross margin = sales – direct (var.) cost– The margin includes what you take home as

profit + what you have to pay on bills.– Percentage = (price – var. cost) / sales

• Break-even point

Fixed costsBE =------------------------------------------------- Sales price per unit – variable cost per unit

Pricing

Break-Even Point

19.1 © 2004 Ewing Marion Kauffman Foundation

Table lamps

Excellency in a business plan

• Business concept

• Management team

• Financing

• Keys to success

• Understanding of challenges

Management and organization plan

• Ownership– Legal form: Proprietorship, partnerships, corporation

(Nov. 9)• Contracts (Nov. 9) • Board of directors (Oct. 19)• Organizational blueprint

– Management team– Compensation + employee ownership– Organizational chart + delegating

• Infrastructure• Insurance,

Legal Ownership optionsIssues Sole proprietorship Partnerships Corporation Limited Liability Company

Number of owners

One 2 or more Limited to 75 in case of S Corporation

2 or more

Liability Owner liable General partners liable. Limited partners only liable to amount of investment

Shareholders liable to amount invested. Officers maybe personally liable

Members only liable to amount of investment

Transfer of property

Free to sell. Assets transferred to estate upon death with valid will

General partners require consent from others. Limited partners can transfer but subject to partnership agreement

Free to sell. Slightly limited by S corporation status.

Permission of majority of members needed to transfer interest

Continuity of life of business

Dissolution on death of owner

Dissolution on death or separation of one general partner unless otherwise specified

Continuity of life Most states allow perpetual existence. Unless otherwise stated in agreement.

Start- up costs Filing fees for DBA and business license

Filing fees for Attorney’s fees for agreement

Attorney fees for incorporation, documentation and filing.

Attorney fees for incorporation, documentation and filing.

Taxation Pass-through (38 percent rate)

Pass-through (38 percent rate) Double-taxation (35 percent or 38 if S)

Pass-through (38 percent rate)

Ability to raise capital

limited moderate High high

Distribution of profits

Go to owner Shared as established in agreement Paid as dividends according to agreement and shareholder status.

Shared based on agreement or articles of organization

Dimensions of organizational blueprints

Criterion for selection •Skills•Exceptional potential•Fit with the team

Basis for attachment •Compensation (“money”)•Qualities of the work (“work”)•Work group as community (“love”)

Coordination and control

•Direct monitoring (content)•Peer and/or cultural control (context)•Professional standards (results)•Formal processes or procedures (behavior)

Source: Baron, J., and M.T. Hannan. 1999. Organizational blueprints for success in high-tech start-ups: Lessons from the Standford Project on Emerging Companies. California Management Review, 44:3: 8-36.

Momenta Corp

• Identify or “imagine” Kamran Elahian preferred delegation style

• Most appropriate hiring policy?

• Is its current policy the most appropriate?

• Most appropriate way of motivating this profile of employees