finalswat tank business plan talk ppt 15jan13 1

8/22/2019 FinalSwat Tank Business Plan Talk PPT 15Jan13 1

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Swat Tank Talk:Writing a Business Plan

January 15, 2013Eliot Ingram 93


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Agenda

Goals

Marketing mix

Reverse income statement

Feasibility study

Business plan

Conclusion


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Eliot Ingram - Background

Swarthmore College, Econ/PoliSci double major (1993)

MCS, education start-up (1993 97)

Wharton MBA, Entrepreneurial Mgmt major (1997 99)

Vcall, VC-backed internet start-up (1999 00)

Clear Admit, education consulting/publishing firm (2001 present)


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What Is Your Goal for Your Business?

What is your exit strategy?

How long do you want to run the business?

How long do you want your business to run independently?

Who is the natural acquirer of your business?

Do you want to grow a:

Small/niche/lifestyle business?

Large, scalable business?


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What Is Your Goal for Your B-Plan?

Internal/personal goals

Help you test assumptions

Think through strategic alternatives

External goals (funding considerations) Use plan to raise money from outside investors


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Steps to Take Before Writing Your Plan

Marketing mix exercise (3 Cs & 4 Ps)

Reverse income statement exercise

Feasibility plan


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Marketing Mix: 3 Cs

Customers

Who are they?

How many are there? (market size)

What are their needs?

Competitors

What firms are trying to meet the needs of the customers?

Company (you) How will you deliver a service that better meets customer

needs?


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Marketing Mix: 4 Ps

Product

How will you tweak your product or service to better meet theneeds of customers?

Price

How will you set prices? How does your pricing compare to similar services?

Promotion

How will you get the word out that you have a great product at

a great price? Placement (distribution)

How will you deliver your product or service to the customer?


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Reverse Income Statement

What it is/why use it?

A quick way to check financial assumptions

Start with your profit goal and work backwards

Profit goal

Cost assumptions

Revenue goal given profit goal & cost assumptions

Different Combination of Revenue Cost = Profit

Different Combination of fixed and variable costs = Costs

Different Combination of Price * Quantity = Revenue


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Reverse Income Statement Example

(Part 1) Assume profit goal is $100,000 per year

What revenue cost of good sold combination is realisticfor your proposed business?

$200,000 - $100,000 = $100,000 (50% gross profit margin)



$1,000,000 - $900,000 = $100,00 (10% gross profit margin)


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(Part 2) What Price*Quantity options make sense in order for your

business idea to generate $1 million in revenue?

100 customers paying $10,000 each?

1000 customers paying $1000 each?

10,000 customers paying $100 each? 50,000 customers paying $20 each?

Market size

What is the size of your target market?

$50 million market? $100 million market?

$500 million market?

What % of market size is needed to achieve # customers?

Ideally you serve a large market ($100 million+)


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(Part 3) Costs

What are the estimated fixed costs?

What are the estimated variable costs/unit?

Breakeven Volume = Fixed Cost/(Price/Unit VC/Unit)

Assume $3000 fixed costs

Assume $1/unit of variable costs

Price point of $4/unit

BEV = $3000/(4-1) = 1000 units sold to achieve BEV

A key milestone is to become cash flow positive fromoperations (when incoming cash from operations exceedsoutflowing cash from operations)

Breakeven Volume is a key way to determine when you willachieve positive cash flow


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Feasibility Study

What it is?

1-2 page written plan

1-page description of market size/financials

Why use it? A quick way to assess a new business idea

Might do this for 4-5 ideas before determining which businessidea to write up into a 30+ page business plan


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Feasibility Study: Questions to Answer

Succinctly describe your idea.

Who and how big is the potential market for your productor service?

What are the advantages/disadvantages over your

competitors? How do you differentiate yourself? What research did you rely on?

Itemize your start-up costs and your source funds.

What can you do to improve the business sales volume?

Discuss your risks and strategies for managing these risks. Discuss the feasibility for you to implement this idea.

See AlumNet Feasibility Study Example


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Summary of Pre-Business Plan Steps

Marketing mix

Help with marketing and strategy sections of business plan

Reverse income statement

Help with strategy and financials sections of business plan

Feasibility study

Provides overview for business plan


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Business Plan Outline

Summary/vision

Market analysis

Competitive analysis

Strategy

Products/services

Marketing and sales

Operations/key personnel

Financials


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Summary/Vision

Summary of business idea

Vision for your company


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Market Analysis

Market size/market growth rate

Market customer segments/target customer profile

Customer needs

(Use marketing mix 3 Cs in this section)


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Competitive Analysis

Key competitors

Who are they?

Competitive landscape

Fragmentation: Few large players vs lots of small players?

Changes in industry

Any consolidation happening?

How well are they meeting the customer needs?



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Strategy

Complete a SWOT Analysis

Strengths

Weaknesses

Opportunity

Threats

What is your strategy for serving the customers better thanexisting competitors?

How is your product faster/better/cheaper?



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Products/Services

Describe your product/service

How do you position it relative to competing products?

Do you have a product roadmap for developing a suite ofproducts?

Are you creating a product or a company with products?

(Use marketing mix 4 Ps in this section)


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Marketing/Sales

Price

What prices will you charge? Will you offer any discountsbased on volume, time of purchase, etc?

Promotion How will you get the word out that you have a great product at

the right price?

Placement/distribution

How will you deliver your service to your customers?

(Use marketing mix 4 Ps for this section)


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Operations/Key Personnel

Key personnel/qualifications

Include bios on founders/key advisors

Organizational structure

How will you organize your firm to market, produce anddeliver services to customers?


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Financials

Assumptions

Income statement (P&L) projection

Revenue - Cost of Goods Sold = Gross Profit

Gross Profit Overhead = Pre Tax Operating Profit

Operating Profit Capex = Pre Tax Profit

Pre Tax Profit Taxes = Net Profit

Cash flow statement

Cash from operations (similar to P&L)

Cash from investments (buying/selling equipment = Capex)

Cash from financing (raising debt/equity)

Balance Sheet = Assets Liabilities = Shareholder Equity

(Use reverse income statement for this section)


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Partners

Advisory board

Beta customers

Distributors

Marketing channel partners

Legal/Accounting


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Financing Your Venture

Bootstrapping/self fund

Prepayments from customers

Debt (secured vs. unsecured)

Equity

Friends/family

Angel investors

Venture capitalists

Strategics


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Conclusion

Think carefully about your business goals

Business plan is a snapshot in time

Always out of date

More about the process of creating the plan, not the planitself


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Reference Materials

Marketing mix document

Business plan outline

Developing a discovery-driven plan

See document

See link:http://faculty.msb.edu/homak/HomaHelpSite/WebHelp/Discovery_Driven_Planning_-_Annotated.pdf

Feasibility study example (AlumNet)
http://faculty.msb.edu/homak/HomaHelpSite/WebHelp/Discovery_Driven_Planning_-_Annotated.pdfhttp://faculty.msb.edu/homak/HomaHelpSite/WebHelp/Discovery_Driven_Planning_-_Annotated.pdfhttp://faculty.msb.edu/homak/HomaHelpSite/WebHelp/Discovery_Driven_Planning_-_Annotated.pdfhttp://faculty.msb.edu/homak/HomaHelpSite/WebHelp/Discovery_Driven_Planning_-_Annotated.pdfhttp://faculty.msb.edu/homak/HomaHelpSite/WebHelp/Discovery_Driven_Planning_-_Annotated.pdfhttp://faculty.msb.edu/homak/HomaHelpSite/WebHelp/Discovery_Driven_Planning_-_Annotated.pdf


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Contact Info

Feel free to contact me if you have questions

Eliot IngramClear Admit, [email protected]
mailto:[email protected]:[email protected]

finalswat tank business plan talk ppt 15jan13 1

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