SHARE

FREELY

The

Startup
Guide 2013 Edition

Building a Better World

Through Entrepreneurship

RYAN ALLIS With Ellen Daly

CEO of Connect.com
More slides at www.startupguide.com

 ENTREPRENEURSHIP

Create
STARTUPGUIDE.COM
A plan 440
 ABOUT THIS PRESENTATION

THIS presentation IS PART OF A LARGER slide DECK on

building a better world through entrepreneurship

For more slides & CONTENT visit:

Startupguide.com
STARTUPGUIDE.COM 441
cREATE A PLAN SHOULD YOU CREATE A PLAN BEFORE A PROTOTYPE?

SOME ENTREPRENEURS
choose not to create a plan at all
And just start working
On a prototype or
Minimum viable product
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cREATE A PLAN WHY A LITTLE BIT OF PLANNING IS HELPFUL

I find that it’s helpful to at least

create a short slide deck or exec summary
To ensure you know what you’re building
& What problem you’re Solving
before you start building

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cREATE A PLAN YOUR COMPANY PITCHDECK
Many ‘Business PLANS’ ARE created as sLIDE DECKS WHICH INCLUDE:

1. TEAM
2. PROBLEM
3. PRODUCT & TECHNOLOGY
4. MARKET & COMPETITION
5. revenue model
6. FINANCIAL PROJECTIONS
STARTUPGUIDE.COM 444
cREATE A PLAN the problem

In your plan, CLEARLY ILLUSTRATE

THE PROBLEM YOU ARE SOLVING
HOW YOU ARE SOLVING IT
AND FOR WHOM
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cREATE A PLAN the product

SHOW PICTURES OF A PROTOTYPE

OR WIREFRAMES & MOCKUPS
And MAKE YOUR SPECIFIC SOLUTION
EASILY VISUALIZED
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cREATE A PLAN the product

SHARE YOUR PRODUCTION TIMELINE

AND KEY MILESTONES TOWARD
INITIAL PRODUCT DELIVERY
AND DISCUSS FUTURE PRODUCTS
AND SERVICES
STARTUPGUIDE.COM 447
cREATE A PLAN the market

ADDRESS THE FOLLOWING ABOUT YOUR MARKET

SUPPLIERS
BARRIERS TO ENTRY
INTELLECTUAL PROPERTY
MARKET SIZE
MARKET TIMING
DIRECT COMPETITORS
POTENTIAL PARTNERS
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cREATE A PLAN revenue model

ADDRESS THE FOLLOWING IN YOUR REVENUE SECTION

B2B or B2c
DISTRIBUTION CHANNELS
WHOLESALE VS. RETAIL REVENUE
ONE TIME VS. SUBSCRIPTION REVENUE
USER & CUSTOMER GROWTH ASSUMPTIONS
UNIT COSTS AT SCALE
UNIT REVENUE AT SCALE
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cREATE A PLAN Financials SECTION

ADDRESS THE FOLLOWING IN YOUR FINANCIAL PROJECTIONS

REVENUE ASSUMPTIONS
COST ASSUMPTIONS
Revenue by Month
COST BY MONTH BY CATEGORY
NET INCOME BY MONTH BY CATEGORY
TIME TO BREAKEVEN
FUNDS NEEDED TO REACH NEXT MILESTONE
TOTAL EXPECTED FUNDS NEEDED
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cREATE A PLAN Financials PROJECTIONS
EXAMPLE 60 Month PRO FORMA P&L PROJECTIONS
$1,500,000

$1,000,000

$500,000

$0
Aggregate
($500,000) breakeven

($1,000,000)

($1,500,000) MONTHLY
breakeven
($2,000,000)

($2,500,000)
0 6 12 18 24 30 36 42 48 54 60

Revenue Expenses Aggregate Net Income

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cREATE A PLAN Financials PROJECTIONS
Here’s a REALLY BASIC Example financial PROJECTION

2015% 2016% 2017% 2018% 2019%

Revenue% 18,127% 50,984% 143,401% 403,340% 1,134,461%
Expenses% 103,408% 118,539% 139,017% 287,553% 640,004%
Net%Profit% <85,281% <67,555% 4,384% 115,787% 494,457%

your financial projections

Should list out expenses by major categories
(Labor, Marketing, Servers, OFFICE SPACE, etc.)

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cREATE A PLAN SLIDE DECK checklist

MAKE SURE YOUR DECK ANSWERS ALL THESE QUESTIONS

! Who’s on your team?
! What is their background?
! WHAT IS THE NEED FOR THE PRODUCT?
! HOW WILL THE PRODUCT BE PRICED?
! WHAT IS THE SIZE OF THE MARKET?
! IS THE MARKET READY FOR THE PRoDUCT?
! WHAT WILL IT COST TO PRODUCE THE PRODUCT?
! WHAT IS THE TOTAL START-up COST?
STARTUPGUIDE.COM 453
cREATE A PLAN SLIDE DECK checklist

MAKE SURE YOUR DECK ANSWERS ALL THESE QUESTIONS

! HOW MUCH IS NEEDED TO REACH BREAKEVEN?
! WILL YOU NEED TO ACQUIRE ANY IP?
! WHO IS YOUR TARGET CUSTOMER?
! WHAT ROLES WILL YOU FILL IN THE FUTURE?
! WHAT ARE YOUR FUTURE PRODUCTS?
! WHAT ARE YOUR ANNUAL Revenue PROJECTIONS?
! WHAT ARE YOUR ANNUAL COST PROJECTIONS?
! WHAT ARE YOUR ANNUAL PROFIT PROJECTIONS?
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cREATE A PLAN incorporate

NOW THAT YOU HAVE YOUR PLAN

It’s time to become official

AND INCORPORATE
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cREATE A PLAN incorporate

THE BENEFITS OF INCORPORATING

MUCH LOWER TAXES (only pay taxes on profit)
LIABILITY PROTECTION
BEING TAKEN SERIOUSLY
ABILITY TO OPEN A BANK ACCOUNT
ABILITY TO HIRE EMPLOYEES
ABILITY TO RAISE INVESTMENT
ABILITY TO GAIN CORPORATE CREDIT
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cREATE A PLAN incorporate

TO INCORPORATE YOURSELF
YOU JUST NEED TO KNOW
THE NAME OF THE COMPANy
THE STATE YOU WISH TO INCORPORATE IN
THE NUMBER OF SHARES TO CREATE
THE INITIAL OWNERSHIP OF THOSE SHARES
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cREATE A PLAN incorporate

YOU CAN INCORPORATE VIA

LEGALZOOM.com
INCORPORATE.COm
OR VIA ANY CORPORATE LAW FIRM

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cREATE A PLAN incorporate

IN THE U.S. you can start a

S Corp Most firms that plan on raising
C Corp capital are Delaware C
Corporations
LLC
BENEFIT CORP
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cREATE A PLAN incorporate

IN CHOOSING A LAW FIRM LOOK AT

REPUTATION & REFERENCES
START-up EXPERIENCE
INTRODUCTION TO INVESTORS
IPO EXPERIENCE
PARTNER CHEMISTRY
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cREATE A PLAN incorporate

ONCE INCORPORATED YOU’ll

RECEIVE YOUR
ARTICLES OF INCORPORATION
SET OF BYLAWS
SET OF STOCK CERTIFICATES
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cREATE A PLAN incorporate

THEN if in the U.S. YOU CAN GET AN

EMPLOYER IDENTIFICATION NUMBER
FROM THE IRS (YIPEE!)
AND OPEN A BANK ACCOUNT

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cREATE A PLAN What matters is execution

Don’t spend too long on planning.

BUSINESS IDEAS ARE A DIME A DOZEN
WHAT REALLY MATTERS IS
THE OPERATIONAL EXECUTION
AND THE QUALITY OF the team.
STARTUPGUIDE.COM 463
 SHARE
FREELY

The

Startup
Guide 2013 Edition

Building a Better World

Through Entrepreneurship

RYAN ALLIS With Ellen Daly

CEO of Connect.com
More slides at www.startupguide.com