machala ferrel

Report
The Business Plan
Janis Machala, Paladin Partners
Don Ferrel, SeaTec
Cofounders of BigScreen
About Us
 Janis
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Managing Partner,
Paladin Partners
Serial entrepreneur,
business advisory
services
Wang, Sun, Microsoft,
IT Start-ups
BA Psychology, MBA,
University of Iowa
 Long time active player in West
Coast venture and angel scenes
 NWEN, Alliance of Angels, Seraph
 Done lots of deals
 Don
• President/CEO, SeaTec
Consulting
• Serial entrepreneur,
business development,
large scale IT systems
integration
• Scitor, Rockwell
International
• BA Math, BS Physics,
Washington State
 Strong technical
acumen
 Excellent execution and
team building skills
 Fiscally conservative
About Our Company - BigScreen
 Simplified computing and
Internet for older adults
 Extends social and caregiving networks
 Trusted source for valueadded services
Purpose of a Business Plan
 Alignment of team(s)
 Operating plan
 Communication across company,
division, department, business
partners
 Investment capital
 Expansion capital (banks, leases)
 Merger/acquisition process
How to Use a Business Plan
 Executive summary
 Solicit interest
 Screen for investor candidates
 Mini business plan
 Banking/leasing document
 Potential acquirers
 Full business plan
 Team planning process
 Due diligence
What Investors Look For
How does the team think?
How detail oriented is the team?
How big is this market?
Is there sustainable competitive
advantage?
 What’s the growth plan?
 What does the technology roadmap
look like, short term or long term play
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Financial Projections
 Build 5 years
 Detail near years, extrapolate out
years
 Build from single unit economics
 Document assumptions
 Compare against top down
 Validate with market comparables
10 Must Answer Questions
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How large is your addressable market?
How fast is the market growing?
Who’s make up your management team?
What’s your “secret sauce?”
What are the barriers to entry/competitive
advantage?
What do your 5 year financials look like?
What’s your path to profitability?
Why is this a company versus a product/service?
Who’s your competition and how do you beat them?
Why can’t Microsoft do this? (or name any big,
established company…)
Creating Your Company’s Strategy
 Building a strategy is harder work
than building your product
 Think about
 What do you want your business to be
when it grows up
 Looking back from 5 years in future
 Perspectives of all stakeholders
 Anything that could go wrong
 Hope is not a strategy
Competitive Analysis
You always have competitors
Dig deep, be detailed, be honest
Compare features and benefits
Technology comparison
Whole product offering (pricing,
support, etc.)
 Channels, funding, customers…
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Sustainable Competitive Advantage
 Create barriers to entry
 Continually add value for your
customers (and your investors)
 Anticipate competition and make
plans for dealing with it
 Better widget, price erosion, market
share, different business model…..
 Avoid the trap of believing that your
main competitor is your exit strategy
Business Plan Format
 Pages: 10 to 30
 Kinko’s white bond
is good enough
 Simple binding
 Examples
 Handout – a good
example B Plan
 Discuss examples
of bad ones
Typical Outline
Executive Summary
Introduction and Business Premise
Market Analysis and Customer Needs
Product Overview
Value Proposition
Business Model
Business Operations Plan
Marketing and Sales
Market Entry
Transition to Revenue Service
Competitive Assessment
Partnership Strategy
Management Team and Advisors
Financial Projections
Key Business Metrics
Capital Structure/Financing Plans
Exit Strategy
Risk Analysis
Summary
User Friendly B-Plan is Key
 Investors receive hundreds of these
 Most plans don’t get fully read
 Reasons why:
 Logic is difficult to follow
 The business is not obvious
 Too much extraneous information or fluff
 Use the same techniques to write
your plan that you would use to write
a play, a song, software…..
Nuts and Bolts
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12 point type
Use a clean font
Don’t use bold or italics too much
Make sure your visuals are readable
No typos, proof-read thoroughly (including
the visual!)
Remember: not everyone has same printer
Check for grammar
Style consistency
If you can’t write, hire someone
Due Diligence
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Market assessment is initial focus
Customer market validation next
Team references and resumes critical
Secondary:
 Financials and assumptions
 Corporate structure and legal docs
 Patent applications
Resources
 Reading list
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Guy Kawasaki
Geoffrey Moore
Business 2.0
HBS Case Studies
 Workshops
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CIE Program
NWEN
WTC
SBA
 Archive
 Venture blogs
 Kauffman
Foundation
 Consultants
 Domain experts
 Funding experts
 Teambuilding
experts
Questions and Discussion

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