writing an effective business plan

Writing an effective

business planUsing the business model canvas, pitch deck presentations and real life examples

LaunchBase, Maastricht University, June 8, 2015

Benno Groosman MScBA - www.groosman.info

Today’s content

• Relevance of this topic

• Business model canvas + valueproposition design

• Pitch deck

• Full business plan (two versions)

• Extra resources

www.groosman.info 8-6-2015

Relevance of a business plan

• No business plan = no funding.

• Focus, accountability and looking back/forward.

• Everybody has ideas. Only a few reachtheir goals, and this requires planning.

• A plan can be a feasibility test.


STEP 1:Business model canvas (BMC)

• The BMC is a simple yet powerful tool totest your (business) idea.

• Each section is filled in by yourhypotheses, which you can test later. A BMC is a tool for iteration. You can even test multiple ideas or different business models (on different canvases) to get anindication of the most feasible idea.


www.groosman.info

http://image.slidesharecdn.com/bmcmeeiv2emadsaif-130130052951-phpapp02/95/business-model-canvas-101-27-638.jpg?cb=1390285295

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• Strong business model

• Lots of marketing

• Value proposition not convincing

Let’s make a strong value proposition:

essential for startups!


www.groosman.info

https://c1.staticflickr.com/9/8041/7888051104_9bddf08f67_b.jpg

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www.groosman.info

http://advenio.es/wp-content/uploads/2013/04/value_proposition_designer_draft.jpg

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STEP 2:Pitch deck

• A pitch deck can be used to present your business toinvestors. Using this fixed format helps you to cover all the important parts an investor is interested in (and youshould focus on).

• Use a maximum of 15 slides: you have space for crucialextra slides for your startup and you can change the follow order of some slides.

• The following slides are taken fromhttps://www.crowdfunder.com/resources/templates/Investor%20Pitch%20Deck%20Template.ppt


https://www.crowdfunder.com/resources/templates/Investor Pitch Deck Template.ppt

Investor Pitch Deck Outline

1) Elevator Pitch

2) Momentum, Traction, Expertise: Your key numbers

3) Market Opportunity: Define market size & your customer base

4) Problem & Current Solutions: What need do you fill? Other

solutions

5) Product or Service: Your solution

6) Business Model: Key Revenue Streams

7) Market Approach & Strategy: How you grow your business

8) Team & Key Stakeholders (Investors, Advisors)

9) Financials

10) Competition

11) Investment: Your ‘Ask’ for funding, Basic use of funds

Optional Slides: Exit Strategy, Partnership Agreements, Product/Service Demo,

Existing Sales/Clients, Your “Special Sauce”

8-6-2015 www.groosman.info

Vision / Elevator Pitch

A quick one-liner summary that combines your

vision/product and the mission of your company

Keep it short and memorable

Try: making it relatable… as in “We are X for Y”

(“We are AirBNB for Event Spaces”)

(“We are the Starbucks of Frozen Yogurt”)


Traction

Show your timeline and milestones to date

Growth metrics are key at early stage

Highlight press, partnerships, accolades

Customer success stories and/or testimonials


Market Opportunity

Define Your Market: What business/space you are in

Total Market Size: Dollar Size, Your Place/Niche

Customers: Clearly define exactly who you serve

Macro Trends & Insights


The Problem

Define the real problem/need you’re solving, and for who.

Who else is already doing this, and how are they

going about it and what are they not getting right

or doing wrong?

Current Solutions


Product / Service

Tell the story of your customer and how customers

use/value your product or service

Images and visuals are better than lots of text: show

don’t tell


Revenue Model

Who is your primary customer & how do you make money

What is the pricing / model

Revenue and # of customers to date

Show basic math on revenues and conversion rates

Life-time value of an average Customer (How many months,

how many dollars?)


Marketing & Growth Strategy

Where are your customers looking today and finding

help?

Where will you get in front of them?

How will you achieve your target growth rates?

What are the most important and unique channels and

methods you will use to find and win customers?

How are you doing it differently than others in the

space?


Team

Highlight key team members and their prior positions,

successes, domain expertise

Demonstrate relevant experience

Which roles are the keys to success in your

company/space?


Financials

Include 3-5 years of financial projections

Mention key & critical assumptions in your model of

expenses, customer conversion, market

penetration %

Highlight each of these Yearly for at least 3 years:

• Total Customers

• Total Revenue

• Total Expense

• EBITDA


Competition

Where do you exist in the larger overall Market Space?

What are your Advantages?

How is your place in the market unique to you, and the

right one for your company growth and customers?

Who are the competitors, why have they succeeded, and

how do you truly differentiate from them?


Investment

State how much Capital you are raising, and with

what general Terms: Equity, Debt, Convertible Note

What is the timing of your Capital raise?

Who are your existing & notable investors, if any?

What are your key Use of Proceeds (as % of total

raise)

• Founder salaries

• Sales & Marketing

• New hires

• Technology / Product or Service development

• Capital expenses / equipment


STEP 3:Full business plan

• The business plan is the most used document for startupcompetitions, incubator acceptance, investor contracts, bank funding, some government grants etc.

• I never met an entrepreneur who likes to write a business plan, but most agree on the benefits of a plan that is regularly updated.

• Banks don’t fund R&D and want securities, investors go for return on investment, governments want to contributeto society, startup competitions award innovation, etc. Take your audience into account while writing a plan.

www.groosman.info

Following business plan slides inspired by: http://www.slideshare.net/goldfinger80/investor-presentation-template-1227413

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Business plan0. Summary• Problem

• Market

• Team

• Technology/Solution

• Customers/Revenue Model

• Go to Market

• Competition

• Financials

• Milestoneswww.groosman.info 8-6-2015

Business plan1. Team

• List key team members and brief history

• Highlight former work together and the length of the professional relationships

• Highlight former startups or corporate experience

• Are there any gaps in your team that this funding will help to fill?


Business plan2. The Problem

• What is the problem you are solving?

• Describe the pain points you are addressing

• Quantify the pain and how deep it is

• Why does the problem exist?

• Why has no one solved this before?

• What barriers exist?

• Why are you addressing them?

• What advantages do you have in solving this problem?www.groosman.info 8-6-2015

Business plan3. Solution (product/service)

• Say what your primary product/service does

• Say how this is an improvement

• What stage are you at?

• Pictures of your product/servce in action

• Visual/chart on how your product/service works

• Is your product/service defensible? (Patents, trademarks, model rights etc.)


Business plan4. Business model

• Who are your customers?

• How do you make revenue?

• What is your pricing model?

• How profitable are customers?

• How do you make sure your customers keep buying?


Business plan5. Market Size

• How big is the problem you are solving?

• Can you quantify it?

• Are there any references?

• Investors want to know that this is a good opportunity that they can build a big business around. You need to show that the market is significant enough.


Business plan6. Go to market

• How will you reach your customers in an economical way?

• What is your distribution strategy?

• What channels will you use?

• Are there key partnerships you have locked up?


Business plan7. Competition

• Who are your main competitors?

• How are they currently addressing the problem you are solving?

• In which key ways is your product/service superior?

• What (IP) protection do you have?


Business plan8. Financials

• Provide financial information for current year and previous year

• Provide 3 to 5 year forward looking projections

• Provide top line revenues, costs, and margin figures

• How much have you raised to date?

• How much are you looking for now?

• What milestones will you achieve with the funding you are looking for?


Alternative business plan content• The following slides present the table of contents is from my

startup Salusion, it is to illustrate that fixed formats don’talways have to be used. Find a logical way of presenting yourplan, without forgetting crucial business information.

• For 5 years we’ve been updating our business plans: forcompetitions, banks, informal investors, VC’s, strategicpartners, goverment grants and even as a “information memorandum” to sell the company’s assets.

• Present more facts and less assumptions in your plan!

• Use visuals/infographics for the key parts of your plan.

• In appendices you can go in dept, not in the main content. Main content should be ~20 pages (maximum).


Alternative business plan contentTable of content Salusion startup0. Summary

1. Company details

a. Core activities

b. Mission and vision

c. Team

d. Organizational structure

2. Current situation

Describe the market and the current problem(s). The reader of the business plan has to get a feeling of the current situation. You quantify it in chapter 5.

8-6-2015www.groosman.info

Alternative business plan contentTable of content Salusion startup

3. Product (or service)

a. Describe your startup’s solution.

b. Unique qualities solution.

c. Intellectual property.

d. Benefits of product/service.

4. Business model

a. How do you make money?

b. Key activities.

c. Production and distribution chain with strategic partners.



5. Marketing and market

a. Sales proposition

b. Substitutes

c. Competition

d. Target market and target customers

e. Quantify the market (size)

f. Market trends (future development market size etc.)

g. Potential other markets



6. Price, promotion and forecast

a. Analyze the price of substitute products and/or cost savings for using your product

b. Determine sales price product

c. Distribution channels (and revenue margin)

d. Promotion

e. Sales forecast for 5 years

7. Risk analysis

a. SWOT analysis

b. Risks and corresponding strategy to minimize risks8-6-2015www.groosman.info

Alternative business plan contentTable of content Salusion startup8. Current financial situation

a. Annual reports or current spending to date

b. Total funding to date

9. Financial forecast

a. Funding need now (asked) and future

For b. and c. first 2 years per month, other 3 years per quarter:

b. Financial exploitation 5 years (costs, revenues, results etc.)

c. Liquidity forecast

10. Appendices with (technical) details and supporting facts


Some extra resources

• http://www.businessmodelgeneration.com/canvas/bmc

• https://canvanizer.com/new/business-model-canvas

• http://www.slideshare.net/Sky7777/the-best-startup-pitch-deck-how-to-present-to-angels-v-cs

• http://www.pitchenvy.com/

• http://www.businessinsider.com/airbnb-a-13-billion-dollar-startups-first-ever-pitch-deck-2011-9?op=1&IR=T

• http://onboardly.com/startup-pr/best-startup-pitch-decks-of-all-time/


http://www.businessmodelgeneration.com/canvas/bmc

https://canvanizer.com/new/business-model-canvas

http://www.slideshare.net/Sky7777/the-best-startup-pitch-deck-how-to-present-to-angels-v-cs

http://www.pitchenvy.com/

http://www.businessinsider.com/airbnb-a-13-billion-dollar-startups-first-ever-pitch-deck-2011-9?op=1&IR=T

http://onboardly.com/startup-pr/best-startup-pitch-decks-of-all-time/

Good luck!Benno Groosman MScBAwww.groosman.info

Follow me:

www.twitter.com/benno_groosman

www.slideshare.com/benno_groosman


http://www.twitter.com/benno_groosman

http://www.slideshare.com/benno_groosman

writing an effective business plan

Small Business & Entrepreneurship