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AP Primer i in i Entrepreneurship E t hi
Fall2013
Content
2008PrenticeHall Fall 2013 A Primer in Entrepreneurship, Prof. Dr. Ulrich Kaiser Seite 2
AP Primer i in i Entrepreneurship E t hi
PartIIDevelopingSuccessfulBusinessIdeas Lecture4 WritingaBusinessPlan
Agenda
1.TheBusinessPlan 2 GuidelinesforWritingaBusinessPlan 2. 2.1StructureoftheBusinessPlan 2.2ContentoftheBusinessPlan 2.3Style/FormatoftheBusinessPlan 3.OutlineoftheBusinessPlan 4.PresentingtheBusinessPlan
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Questions
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Whatisabusinessp plan? Whataretheprimaryreasonstowriteabusinessplan? Whyisitimportantforabusinessplantofollowaconventionalstructure ratherthanbehighlyinnovativeandcreative? What Wh tshould h ldbe b included i l d din i abusiness b i plan l and d whatarethemostimportanttopicstodiscuss?
tobeansweredintodayslecture.
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1TheBusinessPlan
Abusinessplanisawrittennarrative(2535pages)thatdescribeswhatanew businessplanstoaccomplishandhowitplanstoaccomplishit. TheBusinessPlanisadualpurposedocument. Itisimportant,sinceitisbothaninternaldocumentandasellingdocument. Insidethefirm Theplanhelpsthecompanytodeveloparoadmaptofollowinexecuting itsstrategiesandplans. plans Outsidethefirm Theplanintroducespotentialinvestorsandotherstakeholderstothe businessopportunitythefirmispursuingandhowitplanstopursueit.
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1TheBusinessPlan
Therearetwoprimaryaudiencesforafirmsbusinessplan:afirmsemployees, andinvestorsaswellasotherexternalstakeholders.
Afirmmustvalidatethefeasibility internal employees ofitsbusinessidea,developan effectivebusinessmodel,and haveagoodunderstandingofits competitiveenvironmentpriorto presentingitsbusinessplantoits investors/otherstakeholders external audiences.
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1TheBusinessPlan
Aclearlywrittenbusinessplanisimportantforboththemanagement teamandtherankandfileemployeesofanewventure.
internal employees
Aclearly l l written itt business b i plan, l which hi harticulates ti l t the th visionandfutureplansofthefirm,helpsthe employeesofafirmtooperateinsyncandmove forwardinaconsistentandpurposefulmanner.
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1TheBusinessPlan
Externalstakeholders,suchasinvestors,potentialbusinesspartners,potential customers,andkeyemployeeswhoarebeingrecruitedtojoinafirm,arethe secondaudienceforabusinessplan. Afirmsbusinessplanmustmakethecasethatthe firmisagooduseofaninvestorsfundsorthe attentionofotherexternalstakeholders. Thekeyistoincludefactsgeneratedthrougha properlyconductedfeasibilityanalysis. Abusinessplanringshollowifitisbased strictlyonwhatanentrepreneurorteam offoundersthinks thinks willhappen.
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!
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2GuidelinesforWritingaBusinessPlan
structure
structure content style/format
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2GuidelinesforWritingaBusinessPlan
2.1StructureoftheBusinessPlan Tomakethebestimpression,abusinessplanshould followaconventionalstructure.
BasicStru ucture
Typically,investorsareverybusypeopleandwantaplan wheretheycaneasilyfindcriticalinformation.
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2GuidelinesforWritingaBusinessPlan
2.1StructureoftheBusinessPlan
Softwarepackagesemployaninteractive,menudriven approachtoassistinthewritingofabusinessplan.
However,entrepreneursshouldavoidcreatingaboilerplate planthatlooksasthoughitcamefromacannedsource.
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2GuidelinesforWritingaBusinessPlan
2.2ContentoftheBusinessPlan TheBusinessPlanshouldgiveclearandconciseinformationonallthe importantaspectsoftheproposedventure.
longenough YET
toprovidesufficientinformation,
shortenough tomaintainreaderinterest.
www.oeag.at
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2GuidelinesforWritingaBusinessPlan
2.2ContentoftheBusinessPlan
2008PrenticeHall Fall 2013 A Primer in Entrepreneurship, Prof. Dr. Ulrich Kaiser Seite 14
2GuidelinesforWritingaBusinessPlan
2.3Style/FormatoftheBusinessPlan TheappearanceoftheBusinessPlanmustbecarefullythoughtof.
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3OutlineoftheBusinessPlan
Mostbusinessplansdonotincludealltheelementsintroduced:Each entrepreneurmustdecidewhichelementstoincludeinhisorherplan. a) b) c) d) e) f) g) h) i) j) k) ) l) CoverPageandTableofContents ExecutiveSummary TheBusiness ManagementTeam CompanyStructure,Ownership,andIP IndustryAnalysis MarketingPlan OperationsPlan FinancialPlan CriticalRiskFactors Appendix pp PuttingItAllTogether
A Primer in Entrepreneurship, Prof. Dr. Ulrich Kaiser Seite 16
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3OutlineoftheBusinessPlan
a)CoverPage shouldincludethenameofthecompany, p y,itsaddress, ,itsphone p number,thedate,andcontactinformationfortheleadentrepreneur. b) )ExecutiveSummary y isashortoverviewoftheentirebusinessplanandshouldbecreated aftertheplanisfinished;itprovidesbusyreaderswitheverythingthat needstobeknownaboutthenewventure ventures sdistinctivenature nature. Inmanyinstances,aninvestorwillfirstaskforacopyoftheexecutive summary yandwillrequest q acopy pyofthefullbusinessp planonly yifthe executivesummaryissufficientlyconvincing.
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3OutlineoftheBusinessPlan
c)TheBusiness Themosteffectivewaytointroducethebusinessistodescribethe opportunitytheentrepreneurhasidentified thatis,theproblemto solveortheneedtobefilled andthendescribehowthebusiness planstoaddresstheissue. Thedescription p oftheopportunity pp yshouldbefollowedby yabriefhistory y ofthecompany,alongwiththecompanysmissionstatementand objectives. Anexplanationofthecompanyscompetitiveadvantageandabrief descriptionofthebusinessmodelfollow.
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3OutlineoftheBusinessPlan
d)ManagementTeam Oneofthemostimportantthingsinvestorswanttoseewhenreviewing theviabilityofanewventureisthestrengthofitsmanagementteam.If itdoesnotpass passmuster, muster ,mostinvestorswillnotreadfurther. SkinInTheGame isoftencalledtheamountofmoneythe management g teamhasinvested. Investorswaryifthereisnoskin. relevantemployment professionalexperience significantaccomplishments educational d ti l b background k d
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RelevantInformation
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3OutlineoftheBusinessPlan
e)CompanyStructure,Ownership,andIntellectualProperty Thissectionshoulddescribeanddiscuss
1 1. 2. 3.
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Theintellectualpropertyownedbythefirm,includingpatents, trademarks,andcopyrights
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3OutlineoftheBusinessPlan
f)IndustryAnalysis Thissectionshoulddiscuss
1. 2. 3.
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Majortrendsintheindustryinwhichthefirmintendsto compete,alongwithimportantcharacteristicsoftheindustry, such hasits it size, i attractiveness, tt ti and dprofit fitpotential t ti l Howthefirmwilldiminishorsidesteptheforcesthatsuppress itsindustrys y p profitability y Thefirmstargetmarket,alongwithananalysisofhowitwill competeinthatmarket
3OutlineoftheBusinessPlan
g)MarketingPlan TheMarketingPlanimmediatelyfollowstheindustryanalysisandprovides detailsaboutthenewfirmsproductsandservices. Thissectionisvery yimportant p toinvestors, ,sinceitissupposed pp to assurethemthatanewventurehasaproductthatpeoplewillbuy andhasarealisticplanforgettingthatproducttomarket. Thissectionshouldcontain.
. .
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3OutlineoftheBusinessPlan
g)MarketingPlan Afterreadingthissection, section aninvestorshouldbeconfidentthatthefirm firms s
areinsyncwithoneanotherandmakesense.
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3OutlineoftheBusinessPlan
h)OperationsPlan Thissectiondealswiththedaytodayoperationsofthecompanyandshould describeanddisclose
providersthatwillbenecessarytobuildtheproductorproducethe servicethefirmwillsell,
3OutlineoftheBusinessPlan
i)FinancialPlan Thissectionmustdemonstratethefinancialviabilityofthebusinessand includesexplanationsanddescriptionsof
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3OutlineoftheBusinessPlan
i)FinancialPlan
!
toremember Thebusinessplanshouldbebasedonrealisticprojections. Ifitisnotandthecompanygetsfundingorfinancing, therewillmostcertainlybeadayofreckoning. Investorsandbankersholdentrepreneurs p accountablefor thenumbersintheirprojections.
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3OutlineoftheBusinessPlan
j)CriticalRiskFactors Althoughavarietyofpotentialrisksmayexist,abusinessshouldtailorthis sectiontodepictitstrulycriticalrisk.
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3OutlineoftheBusinessPlan
k)Appendix ymaterialthatdoesnoteasily yfitintothebody yofabusinessplan p should Any appearinanappendix. Examplesofmaterialsthatmightappearintheappendixinclude:
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3OutlineoftheBusinessPlan
l)PuttingAllTogether
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3OutlineoftheBusinessPlan
The10mostimportantquestionsabusinessplanshouldanswer
Istheindustryinwhichtheproductorservicewillbecompetinggrowingstable, ordeclining?
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3OutlineoftheBusinessPlan
The10mostimportantquestionsabusinessplanshouldanswer
4PresentingtheBusinessPlantoInvestors
TheOralPresentationoftheBusinessPlan material. ! PreparationofPowerPointslides:sharpandnotclutteredwithmaterial ! Followtheinstructions(timeslots,etc.). ! Bewellrehearsedandpresentsmoothly. H agood Have did ideaof fwhat h questions i and d f feedback db ktoexpectf from ! investorsandbepreparedforthesequeries Intheinitialmeeting,investorstypicallyfocusonwhetherareal opportunityexistsandwhetherthemanagementteamhasthe experienceandskillstopullofftheventure.
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4PresentingtheBusinessPlantoInvestors
Thereare10PowerPointslidestoincludeinanInvestorPresentation. 1. 2. 3 3. 4. 5. 6. 7. 8. 9. Title Problem S l ti Solution Businessmodel g team Management Industryandtargetmarket Competition Intellectualproperty Financialprojections
Doyouknowtheanswer?
?! ?! ?!
Fall 2013
Whatisabusinessp plan? Whataretheprimaryreasonstowriteabusinessplan? Whyisitimportantforabusinessplantofollowaconventionalstructure ratherthanbehighlyinnovativeandcreative? What Wh tshould h ldbe b included i l d din i abusiness b i plan l and d whatarethemostimportanttopicstodiscuss?
testyourself.
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References
Barringer,B.andD.,Ireland(2008):Entrepreneurship SuccessfullyLaunching NewVentures,Pearsons PrenticeHall.
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Outlook
2008PrenticeHall Fall 2013 A Primer in Entrepreneurship, Prof. Dr. Ulrich Kaiser Seite 36