Writing a Winning Business PlanLari E. Mobley, MBA, Ph.D.
Jeff McHugh, MBA, CMA
Portions adapted from Katan Associates, UCI, 2015
Agenda
• What is a business plan?• Guidelines and judging criteria• Sections• Tips and suggestions• Q & A
Dilbert on Business Plans
A brief explanation
https://youtu.be/PDWvcsTloJo
What is a business plan?
• A business plan is a written description of your business’s future– Statement of goals– Reasons they are attainable– Plans for reaching them– People who will make it happen
• Plans don’t sell new business ideas to investors. People do.
Guidelines for Biola Start-up
• Business plans must not be over fifteen pages, excluding the cover page and table of contents.– Cover page should include company name,
team member names, school affiliations, undergraduate, graduate, alumni status.
• Margins must be one inch on all sides.• Body text should be 12 pt. font.
Guidelines for Biola Start-up
• Document text should be single-spaced.• Submit documents only as a single file in
Adobe Acrobat format (.pdf format).• Due Date:
– Must post Written Business Plan to: BiolaStartup2016.istart.org by March 14, 2016, 11:59PM.
Judging criteria
• Quality of business plan = 30%– Executive summary &
company overview– Products or services– Market need– Market potential– Competitive advantage– Management– Financial forecasts
Judging criteria
• Faith-based component = 20%– Are Biblical values and principles represented?– Does the business serve the common good and
impact the world for Christ?• Impact of presentation = 30%
– Evidence of a market, ability to execute, and return on investment
• Judges’ assessment of idea= 20%– Would they invest their own money?
Glossary of business plan terms
Executive summary
• The executive summary is clear and effective as a stand-alone document– What problem are you solving? – How will your business solving the problem? – Who are your customers? – Who are your competitors? – How viable is your business? – How do you make money?
Products or services
• What is the product or service? • What are its attributes? • What are the advantages and potential
drawbacks?
Products or services
• Why/how is your product/service more compelling than existing ones or the competition? What is the stage of development?
• Do you have a proprietary position or intellectual property protection planned or in place?
Market need
Market need
• What specific conditions in the market have created the problem you are solving?
• How will your product/service take advantage of the opportunity?
Market need
• Who are your customers and what are their attributes?
• Clearly define your potential customers and why they will pay for your product or service
Marketing by Guy Kawasaki
• https://youtu.be/uFDnT_xgqJ0?t=5m4s
Market potential
• What are the characteristics of the market for your product or service?
• How will you reach the market? – Hint: “word of mouth” is not a strategy. It means
“we have no clue.” • How big is the market opportunity: number
of potential customers & annual sales? – How do you know this?– How believable are your numbers?
Market potential
• Can you narrow the market to a manageable segment? – Demographic, psychographics, geography,
behavior– No, “everyone” is NOT your customer
• How will you dominate the market? – e.g. through pricing, quality, geography
• Is there a market niche where you will have competitive advantage?– Can you sustain this advantage? How?
Build a bottom-up model
• NOT this:– There are 1.3 billion people– 1 percent want Internet access– We’ll get 10% of that
potential audience– Each account will yield $240 per year– 1.3 billion people x 1% addressable market x 10%
success rate x $240/customer = $312 million!• And—added bonus—look at how conservative these
principles are!
Source: The Art of the Start, by Guy Kawasaki
Build a bottom-up model
• BUT this:– Each salesperson can make
10 phone calls per day that get through to a prospect
– There are 240 working days per year
– 5% of sales calls will convert within 6 months– Each successful sale will bring in $240 worth of business– We can bring on board 5 salespeople– 10 calls/day x 240 days/year x 5% success rate x 5
salespeople = $144,000 in sales the first yearSource: The Art of the Start, by Guy Kawasaki
Competitive advantage
• Competitive Matrix: – Who are your competitors? – Their strengths & weaknesses? – Your strengths & weaknesses? – How will you close the gap? – How easily can competition close gap?
Competitive advantage
• Yes, you have competitors– The “old way of doing things” can be a competitor– Doing nothing can be a competitor– Saying you have no competition is a nonstarter
• It’s your job to show how you are superior to the competition, not that it does not exist
Competitors by Guy Kawasaki
• https://youtu.be/uFDnT_xgqJ0?t=5m42s
Competitors: what NOT to do
Source: The Art of the Start, by Guy Kawasaki
Competitors: what to do
Source: The Art of the Start, by Guy Kawasaki
Management
• Who are key team members and their respective roles?
• What are their relevant experiences and accomplishments?
• What other areas of expertise are you lacking?
• When will you need additional team members?
Financial forecasts
• Income statement• Balance sheet• Funds required & uses• Key assumptions• Financial model
Tips and suggestions
• Don’t forget key expenses– Salaries and payroll taxes
• Unless you are independently wealthy– Licenses, permits, patents, and
trademarks– Insurance
• Business, workman’s comp, vehicles, other– Websites are not free– Social media is not free
Tips and suggestions
• Explain your “go to market strategy”– How will you get your first customers?– How exactly will they hear about you and decide
to buy your product or service?– Are they both willing and able to pay?
Tips and suggestions
• Do your research– Read sample business plans– Have others read your plan– Check your numbers for accuracy and believability
• Be realistic
Final thoughts
• Our success comes from the Lord
“He did this all so you would never say to yourself ‘I have achieved this wealth with my
own strength and energy.’ Remember the Lord your God. He is the one who gives you
power to be successful…” - Deuteronomy 8: 17-18 (NLT)
Questions
• Any questions?