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Session 9
Required Reading: Session 9
PLANS
The Art of the Start, Chapter 3, The Art of Writing a Business Plan.
PITCHES
The Art of the Start, Chapter 4, The Art of Pitching.
The Plan-As-You-Go Business Plan, Chapter 5, pages 233-236
Optional Resources: Session 12 – Plans and Pitches
These resources provide ideas from other business and marketing experts. They are not required reading for this session.
ARTICLES
Seth Godin: Nine steps to PowerPoint magic
Seth Godin: Really Bad PowerPoint
Assignment: The Business Plan
All assignments should be completed using Business Plan Pro and saved as a .BPDX file or exported to a .PDF file.
Must Have:
Your business plan must include as a minimum the following components, identified here as either text topic or table. Most of these were separate assignments throughout the course, and should now combine into a single business plan document.
Summary (could also be called “Executive Summary”). This is a text topic. It should include all of the information detailed in Assignment 1: The Business Opportunity. Business Plan Pro automatically includes the Highlights Chart. You could also use what you did for the assignment on Summary Memo and bundle that into the plan.
Market Analysis. Text topics and at least one table. Should include all of the information detailed in Assignment 2: Market Analysis. Pictures and pie charts and bar charts are welcome.
Strategy. One of more text topics. Ideally you’ve got something along the lines recommended in the reading, strategy as a combination of identity, market, and strategic focus. There’s an outline example here, A View of the Strategy Portion and you can click on it to jump to the Heart of the Plan material available online, which you also have in that Heart of the Plan section of The Plan-As-You-Go Business Plan book in the readings.
Competitive Edge. This is a text topic. It’s also called Secret Sauce. This would have been discussed in Marketing Strategy. And you can also, read The Secret Sauce on the Web.
Startup Plan: This is exactly as in the assignment on Startup Plan. That’s at least one text topic and two tables, one for startup costs and another for startup funding. The best way to handle the text topic is to make sure that it includes the most important assumptions and explains how you intend to raise the money required (loans, investors, personal savings, etc.)
Sales Forecast. Exactly as in the assignment on Sales Forecast. That’s sales and cost of sales estimated for the first 12 months and then added up into year 1, and then a larger more general projection for years 2 and 3 of the plan as well. And it includes a text topic that explains your assumptions, and, ideally, a couple of business charts as well.
Projected Profit & Loss. Exactly as in the assignment on Projected Profit & Loss. At least one text topic and a table; business charts would also be nice. If it’s obvious how you make money then you don’t need to elaborate, but for some of the more innovative new technology plans, if how you make money isn’t obvious, then please make sure you talk about the business model.
Nice to have:
Cash flow. That requires some interaction between the profit and loss, which you already have, and the balance sheet, which you don’t necessarily have. With Business Plan Pro, it’s almost automatic. There’s a lot of detail available in the appropriate sections of The Plan-As-You-Go Business Plan book and Hurdle: The Book on Business Planning ebook found within the software resources.
Business offering (describing your product or service). This goes well after the summary and before the market analysis.
Company description: ownership, facilities, and so on. Goes well right after the summary, before the business offering section.
Business model (as noted in the Projected Profit & Loss point above, only if it isn’t obvious).
Financial plan: description of funding sources, return on investment for investors, exit strategy.
Remember that business planning requires a lot of flexibility. Every business plan is unique to the business and its specific situation.
Working with the Business Plan Pro Starting File
Step-by-step
VERY IMPORTANT: Use the Plan Setup to make sure you’re set for the standard plan: not the simple, and not the more detailed. If you don’t, then the wrong outline points show up.
While this isn’t a class in writing, and not even in business writing, it is about starting a business and that, like it or not, includes being able to communicate well. Here are some tips:
Simple is better. Simple writing makes the same impression as a clear and uncluttered room when you enter it.
Bullet points are fine. When a thought is so completely obvious that nobody could ever want more explanation, then you can get away without more explanation. Most bullet points, however, need dressing. Don’t just tick off an entire topic and think you’ve covered it.
The following are common errors in word usage. Think of the feeling you get with fingernails on a chalk board:
Then and than. Then is sequential, than is comparison. If we have more of this than that, only then can we move forward.
It and its. It’s annoying when an apostrophe shows up where it’s none of its business.
Apostrophes.
Showing possession: Susan’s book, Bill’s book
Showing contraction: don’t, please, didn’t, won’t.
Apostrophes don’t have anything to do with plural except for their natural look when it’s the boys’ book, for example. Or the cars’ problems. You have a plural word ending in s, like so many plurals do, and then you add an apostrophe to show possession.
Common misspellings. Buisiness makes me unhappy. Use spell check to catch these.
Their, there, they’re. Their problem, they’re going to fix it, but not until after they get there.
There is, there are. Unless there is just one item, then there are more than one items. Unless there is a set of problems, or a number of problems.
It’s not hard to avoid most of the very common mistakes. If you’re not sure, take a look at this quick Google search for common writing mi
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Session 8
– The Web
Required Reading:
• Chapter 11, Spin the Web, 3 Weeks to Startup
Optional Resources: The Web
These resources provide ideas from other business and marketing experts. They are not required reading for this session.
• 5 Solid Reasons Why Facebook Does Not Matter More Than Your Company Website
– Cash and Taxes
Required Reading:
• Chapter 15, Keeping Track, 3 Weeks to Startup
• Chapter 17, Paying Taxes, 3 Weeks to Startup
• Chapter 5, Pages 194-210, The Plan-As-You-Go Business Plan
Optional Resources: Cash and Taxes
These resources provide ideas from other business and marketing experts. They are not required reading for this session.
Internal Revenue Service (IRS)
The IRS offers free information to help you understand the tax laws. Click on each link and choose to read online or save to your computer. These and other resources can be found at irs.gov
• Tax Guide for Small Business (Publication 334)
• Business Expenses (Publication 535)
• Travel, Entertainment, Gift and Car Expenses (Publication 463)
• Circular E, Employer’s Tax Guide (Publication 15)
• Employer’s Supplemental Tax Guide (Publication 15-A)
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Session 7
Required Reading: Session 7
– Getting Financed
• Chapter 5, Getting Financed, 3 Weeks to Startup,
• Chapter 5, The Art of Bootstrapping, The Art of the Start
• Chapter 7, The Art of Raising Capital, The Art of the Start
Other reading:
http://www.openforum.com/idea-hub/topics/money/article/3-alternative-sources-of-funding
http://www.bnet.com/blog/smb/4-alternative-sources-of-funding-for-your-small-business/4645
Required Reading:
– Building a Team
• Chapter 8, Build Your Team; and Chapter 9, Manage Your Team, 3 Weeks to Startup
• Pages 107-113 on metrics; Pages 156-161 on budgeting and payroll, The Plan-As-You-Go Business Plan
• Chapter 6, The Art of Recruiting, The Art of the Start
Assignment: Sales Forecast
This assignment will be completed using the Business Plan Pro .bpdx file outline that you downloaded and saved as part of Assignment: Market Analysis, and updated for Assignment: Startup Plan.
Assignment Steps
Your Sales Forecast assignment should include the following:
A text explanation. You should include at least a paragraph or two explaining the main assumptions. Why your forecast is this amount and not double, or half of that? For example, if you built your Sales Forecast based on some assumptions (good idea), such as the number of chairs and tables and occupancy in a startup restaurant, then please describe those assumptions.
Sales by month for the first 12 months of your plan, summed into a total for the first year, and then projected by year for the second and third years. These should usually (but not always) be broken into units and price (revenue) per unit.
Direct costs of those sales estimated by month for the first 12 months of your plan, summed into a total for the first year, and then projected by year for the second and third years.
And don’t forget that there are about 500 sales forecast examples in the sample business plans free online at www.bplans.com. You can do a key-word search to look for different types of businesses to find a sample similar to your business type.
Assignment: Profit & Loss (Income Statement)
This assignment will be completed using the Business Plan Pro .bpdx outline file that you downloaded and saved as part of Assignment: Market Analysis, and which you have been adding to as you complete each assignment.
Assignment Steps
This assignment includes two tables and text explanations for each table. The tables are:
Personnel plan: This table should list your projected salaries and wages for the first year, broken into 12 months and then summed for the year, and then annually for the second and third year.
Profit & Loss: Once you have completed the Sales Forecast and the Personnel plan tables, Business Plan Pro automatically transfers the totals to the Profit and Loss table. Within the P&L table, you will need to list ongoing expenses. Each expense row should include estimates for the first 12 months, then summed for the first year; and then annual estimates for the second and third year.
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Session 6
Required Reading: Session 6 – Sales Forecasting
• 3 Weeks to Startup, Chapter 16, Managing the Money
• The Plan-As-You-Go Business Plan, Chapter 5, pages 126-131; 148-161
• The Plan-As-You-Go Business Plan, pages 129-155, sales forecast
Assignment: Startup Plan
Before you begin…
Re-open the Business Plan Pro minimum outline .bpdx file that you saved as part of Assignment: Market Analysis. You will continue to build into this .bpdx file with each assignment.
Assignment Steps
Your Startup Plan should contain a text explanation of what your startup costs and startup funding numbers are, plus two tables, the Startup Costs and the Startup Funding tables. The table explanations can be found here:
1. Startup costs, as explained on pages 161-165 of The Plan-As-You-Go Business Plan book. Or you can click here for the online version of the book.
2. Startup funding, as explained in the online example from the online version of The Plan-As-You-Go Business Plan.
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Session 5
Assignment : Market Analysis
This assignment reinforces the discussions from Session 3 & 4: Market Analysis & Market Strategy.
NOTE: If you have not already downloaded the MinimumBusinessPlan.bpdx file, please follow these instructions. You will use this file to complete this and the rest of the assignments 2 during the course:
Download MinimumBusinessPlan.bpdx
Open this file in Business Plan Pro
Use the “Save as” command to save a copy of the file as yourname_businessplan.bpdx
Follow the instructions to complete the exercise using your business plan file
NOTE: Saving under a different file name preserves the original file, in case you decide to create a second business plan using this customized outline.
ASSIGNMENT STEPS
Each topic should include a paragraph describing the key points for that topic:
Market Analysis Summary: The main chapter level topic should be a summary of its sub-topics. If you finish the sub-topics first, it will be easier to create a summary paragraph of the most important points.
Ideal Target: Create a profile of one ideal target customer (or organization). Use your imagination. Describe the ideal target customer including why he or she buys, what his or her problem is, how old, economic status, family status, favorite media, where you find this person to send a message, and more. A picture is a good idea.
Market Segmentation: Most markets divide into meaningful groups. For a local restaurant, segments might include families, university students, high school students, older people. Create a table showing how the market divides into segments, as suggested by this illustration:
The Market Analysis table is a simple spreadsheet, with projected years along the top, segment names on the side, and totals along the bottom. For this assignment you are looking at larger general market segments, so make educated guesses, as long as they make sense.
There is a detailed explanation of the table and how it shows segments, including even the Compound Average Growth Rate formula in the last column, in the online version of Hurdle: The Book on Business Planning, in the section called Your Target Market Forecast.
Business Plan Pro includes a pie chart of your Market Analysis table. Here is an example:Market Segmentation Pie Chart
You can probably see how this chart links directly reflects the present year market segmentation, the first annual column in your market forecast table.
Market Growth: Ideally you cite experts: a market expert, market research firm, trade association, or credible journalist. This isn’t a class in market research. For this assignment, you have only three pages total, including the table and chart, so be specific and be brief.
Market Trends: Market trends could be changes in demographics, changes in customer needs, a new sense of style or fashion, or something else. It depends on what business you are in.
What factors seem to be changing the market, or changing the business?
What developing trends can make a difference?
Here are a few examples:
A building supply store might note the trend toward remodeling older homes instead of buying new homes, or a trend toward more rooms in larger houses, despite smaller families, because of home offices, dens, and exercise rooms.
A grocery store might note a trend toward Asian foods or spicier foods, or toward fresher, healthier foods, or development of a new shopping area in a different part of town.
A credit and investment counselor might note demographic trends, such as baby boomers aging, leading to a greater need for estate planning and retirement planning.
Look to market trends as a way to get ahead of the market, to know where it is going before it gets there.
Market Needs: For each market segment included in your strategy, explain the market needs that lead this group to buy your product or service:
Did the need exist before the business was there?
Are there other products or services or stores that offer different ways to satisfy this same need?
Do you have market research related to this market need?
It is always a good idea to try to define your retail offering in terms of target market needs, so you focus not on what you have to sell, but rather on the buyer needs you satisfy. As a shoe store, for example, are you selling shoes or are you satisfying the customer needs for covered feet? Are there additional underlying needs, such as style and prestige for fashion footwear, or padding for runners, or jumping for basketball players, that relate to selling shoes? Are kids buying status with their basketball shoes?
Competition: Mention the main competitors, and the strengths and weaknesses of main competitors. You might consider:
Their products, pricing, reputation, management, financial position, channels of distribution, brand awareness, business development, technology, or other factors that you feel are important.
What segment of the market do they operate in? What seems to be their strategy?
How much do they impact your products, and what threats and opportunities do they represent?
Links for the Powerpoint presentations:
Session 3 Business Basics & Market Analysis
Required Reading: Session 4 – Market Strategy
The readings discuss marketing and branding. How are these different?
3 Weeks to Startup, Chapter 10, Branding
3 Weeks to Startup, Chapter 12, Spread the Word
The Art of the Start, Chapter 8, the Art of Partnering
The Art of the Start, Chapter 9, The Art of Branding
Optional Reading
Optional readings give more information, but they are not required reading.
The Plan-As-You-Go Business Plan, Chapter 3, Pages 83-92
The Plan-As-You-Go Business Plan, Page 97, The Business Model
Links for the Powerpoint presentations:
Session 2 Concept Kickstart
Required Reading: Session 3 – Market Analysis
This chapter is required reading for this session:
3 Weeks to Startup, Chapter 3, About Your Market
Optional Reading
This chapter is not required reading, but it does support the reading for this class session:
The Plan-As-You-Go Business Plan, Chapter 5, Pages 210-218
Required Reading: Session 3 – Business Basics
3 Weeks to Startup, Chapter 2, Need to Know, pages 21-23
3 Weeks to Startup, Chapter 4, Make it Legal
3 Weeks to Startup, Chapter 17, Paying Taxes
Links for the Powerpoint presentations:
Session 1 Introduction
Session 1 Entrepreneurship
Required Reading: Session 2 – Concept Kick Start
These chapters are required reading for this session:
3 Weeks to Startup – Chapter 1: Concept Kick Start
The Art of the Start — Chapter 2: The Art of Positioning
Make sure you have also finished the reading for the first class — Chapter 1: The Art of Starting from the book The Art of the Start.
Optional Reading
This chapter and video are not part of the required reading for this session. They are provided as additional resources only.
The Plan-As-You-Go Business Plan — Chapter 3, The Heart of the Plan
This video a recorded interview of Tim Berry on SBTV.com: What is The Value of Your Idea? How Do You Protect It?
Optional Resources: Session 2 – Concept Kick Start
These resources provide ideas from other business and marketing experts. They are not required reading for this session.
“The following blogs support the belief that an idea alone has no value. Ideas on their own are just not that important.”
A Really Good Answer to a Very Common Question
“What Were They Thinking?” Awards
Forget it; Your Idea has no Value
If Execution is What Matters, Where Does That Leave Ideas?
Slippery Idea Ownership Updated
And one more, on learning business from failure. “Why things fail is important. Each case is different, and your case and my case are more different still; but you and I should go through these cases.”
25 Best Startup Failure Post-Mortems of All Time