Post on 16-Nov-2014
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Launching A New Venture: Successful Elements of a Business Plan
By David J. Freschman
Adjunct Professor – MBA program LIM College, NYC
Managing Principal of Innovation Capital Advisors, LLC.
MNGT 702 – Launching New Ventures
Textbook – New Venture Creation: Entrepreneurship for the 21st
Century/ 8th Edition
By: Jeffry A. Timmons and Stephen Spinelli
Elements of a Venture Backed Business Plan• Executive Summary• The Industry and the Company • Product(s) or service(s) Offered• Market Research• The Economics of the Business• Marketing and Distribution Strategy• Product & Service Development• Manufacturing and Operations Plan• Management Team• The Financial Plan• The Company Offering• Appendices
Innovation Capital Advisors, LLC. | David J. Freschman
Executive Summary
• Grab the investors attention by describing a compelling business opportunity
• Identify a need or opportunity being addressed in a large and growing market
• Present a business that will solve a problem, or take advantage of that
opportunity
• Demonstrate that you have the know-how and the team to start and grow a
company successfully.
• Example of a Executive Summary Layout
• Description of the Business Concept and the Business
• Opportunity
• Target Market
• Competitive Advantages and Value Proposition
• Projections
• Economic, Profitability, and Exit Opportunity
• Management Team
• The Deal
Innovation Capital Advisors, LLC. | David J. Freschman
The Industry and the Company• Explain the type of industry you are entering
• Identify if the industry is a mature, growing or declining
• Describe the company and the business model
Innovation Capital Advisors, LLC. | David J. Freschman
Product(s) or Service(s) Offered• Describe the company’s product(s) or servicing
offerings
• Describe the feature and benefits
Innovation Capital Advisors, LLC. | David J. Freschman
Market Research and Analysis• Identify customer profile. Determine why
the customer will purchase your product or service, how much they will buy at what price.
– Include list of existing customers, if any
• Cleary define the Market Size and Trends
• Discuss Competition, Value Proposition and why the customer will buy your product or service versus the competition
Innovation Capital Advisors, LLC. | David J. Freschman
The Economics of the Business• What is the company’s Gross and Operating
Margins
• Identify Profit Potential and Sustainability
• Identify what are your Fixed, Variable, Semi-variable Costs
• Calculate how many months to breakeven
• Calculate how many months to reach positive cash flow
Innovation Capital Advisors, LLC. | David J. Freschman
Marketing & Distribution Strategy• Define overall marketing and
distribution strategy. How will the company increase brand awareness of their product and service, and how will they company convey their benefits?– Pricing
– Sales Tactics
– Service and Warranty Policies
– Advertising and Promotion
– Distribution
– Sales ForceInnovation Capital Advisors, LLC. | David J.
Freschman
Product & Service Development• Development Timeline and Task List
• Identify potential risk and challenges
• Product Improvement and New Products
• Expenses
• Proprietary Concerns
Innovation Capital Advisors, LLC. | David J. Freschman
Manufacturing and Operations Plan• Operating Plan
• Geographical Location
• Facilities and Maintenance
• Strategy and Plans
• Regulatory and Legal Issues
Innovation Capital Advisors, LLC. | David J. Freschman
Management Team
• Discuss what relevant experience each person brings to the business and be specific.
• Outline the type of key managerial experience you want and how you plan to recruit that person.
• Key management and compensation layout:• Key Management Personnel (CEO, CTO etc.)• Management Compensation and Ownership• Other Investors• Employment and Other Agreements and Stock
Option and Bonus Plans• Board of Directors• Other Shareholders, Rights, and Restrictions• Supporting Professional Advisors and Services
Innovation Capital Advisors, LLC. | David J. Freschman
The Financial Plan
• Actual Income Statements and Balance Sheet
• Projected Income Statements
• Projected Balance Sheets
• Projected Cash Flow Analysis
• Breakeven Chart and Calculation
• Cost Control
Innovation Capital Advisors, LLC. | David J. Freschman
Proposed Company Offering• Desired Financing
• Offering
• Capitalization
• Use of Funds
• Investor’s Return
Innovation Capital Advisors, LLC. | David J. Freschman
Appendices
• Purpose– Supporting documents used to enhance your
business proposal.• Includes
– Photographs of product, equipment, facilities, etc.– Copyright/Trademark Documents– Legal Agreements– Marketing Materials– Research and or Studies– Operation Schedules– Organizational Charts– Job Descriptions– Resumes– Additional Financial Documentation
Innovation Capital Advisors, LLC. | David J. Freschman