by sid chambless [email protected] om 615-322-3154
TRANSCRIPT
The Executive Summary
• Management• Customer problem that is solved• Product or services offered• The market and marketing strategy• Competitive analysis• Funding needs and use of funds• Financial summary• Exit strategy
Management• Brief backgrounds of management and key individuals
• What is their role and relevant experience?
• Past successes and achievements• History of working together• Venture backing or successful exits• Any necessary hires?
Customer Problem Solved• Nature of the problem• What is the customer problem solved?• Why do customers need your product
or service?• Why will they pay for it?
• Scope of the problem• Who cares? How costly of a problem
is it for them?• How many possible customers have
the problem?• Use hard numbers not assumptions
Product or Services Offered
• How does your solution resolve the problem?
• How is your offering different, better, faster, or cheaper?
• Differentiating features and benefits - How is your solution better than others?
• Proprietary assets – trademarks, patents, trade secrets, special production skills, process, etc.
The Market and Marketing Strategy• Summary of market research conducted
• How many possible customers are there?• What are the total dollars available for
this product or service?• How do you attack that market?• How do you make money?• How will you sell it?• Customers - The best proof of a market
is a paying customer
Competitive Analysis
• Who else is solving the problem?• Who is your direct competition?
– “No one else is doing it this way” is not an answer
• Is there indirect competition?– Could be do nothing
• Competitive grid?– How does your solution stack up?
Funding Needs and Use of FundsCompany is seeking $1 million to fund its projected sales growth.
Uses of ProceedsSales Personnel and Support $500, 000
Inventory Purchases $350, 000
Trade Shows and Marketing $150,000
Total $1,000,000
Financial Summary• Projected summary income statement• Build from reasonable assumptions• Assumptions based on what you know
are better than estimates• Factor in the funds you are trying to
raise • Base your assumptions on customers
and units sold• Don’t use % of the market
Financial Summary2009A 2010E 2011P 2012P 2013P
Revenues 46,147$ 106,447$ 3,324,189$ 11,519,103$ 19,291,767$
Units 12 27 846 2,931 4,910
Direct Operating Expenses 19,911 285,830 1,534,537 3,370,923 6,752,118 General & Administrative 218,545 508,993 961,543 1,245,154 2,347,650 Sales & Marketing 226,352 654,306 961,286 1,742,266 2,893,765
Total Operating Expenses 464,808 1,449,129 3,457,366 6,358,344 11,993,533
Net Operating Income (Loss) (418,661)$ (1,342,682)$ (133,177)$ 5,160,760$ 7,298,233$
Funding Requirements
• How much cash is needed to reach positive cash flow?
• What is your lowest negative cash point?
• Will there be additional financing over time?
Exit StrategyBuyer Target Date Price/RevenuePrice/EBITDA
Thoma Bravo, LLC SonicWALL, Inc. 6/2/2010 2.40 16.60
MedQuist Inc. (MEDQ) Spheris, Inc. 2/2/2010 2.00 12.00
Merge Healthcare, Inc. (MRGE) AMICAS, Inc. 1/22/2010 2.00 26.50
Transcend Services, Inc. (TRCR) Medical Dictation Services, Inc. (MDI)8/25/2009 1.20 38.50
Advanced Computer Software (ASW)StaffPlan, Ltd. 7/15/2009 0.90 -
Transcend Services, Inc. (TRCR) Transcription Relief Services 3/26/2009 1.20 -
Transcend Services, Inc. (TRCR) DeVenture Global Partners, Inc. 12/20/2008 1.70 -
Advanced Computer Software (ASW)Adastra Software, Ltd. 7/23/2008 1.10 6.30
Transcend Services, Inc. (TRCR) OTP Technologies, Inc. 1/16/2007 1.00 -
Average 1.50 19.98
Here are some examples of recent acquisitions for our industry:
Final Thoughts
• Don’t negotiate in the plan • Don’t use a lot of jargon and
acronyms• Spell check and watch
grammar• Use images or graphs to break
up the reading• Present professionally• Put your contact information
on the plan
By Sid [email protected]