Business Plan: Business Plan: Inception to Inception to FruitionFruition

Bala Mulloth, Ph.D.Bala Mulloth, Ph.D.

Office of Innovation Office of Innovation Development and Development and Entreprenuership,Entreprenuership,

NYU-PolyNYU-Poly

A Word A Word from…..from…..EntourageEntourage

http://www.youtube.com/watch?v=NVMdb5CzyLE

Four-Legged Stool Find Opportunity—Idea—Passion

Study It — Student of Industry

Execute — Time & Talent

Money—Fuel To Your Engine

No Magic Wand...

What Does THE PLAN What Does THE PLAN Reveal?Reveal?

Create or add significant value to a Create or add significant value to a customer or end usercustomer or end user

Solve a significant problem, or meet a Solve a significant problem, or meet a significant want or need for which significant want or need for which someone will pay a premiumsomeone will pay a premium

Have robust market, margin, and Have robust market, margin, and moneymaking characteristicsmoneymaking characteristics

Fit well with the founder(s) and Fit well with the founder(s) and management team at the time, in the management team at the time, in the marketplace, and with the risk-reward marketplace, and with the risk-reward balancebalance

Writing a Business PlanWriting a Business Plan

Steps outlining the process Steps outlining the process by which a business plan is by which a business plan is writtenwrittenSegmenting informationSegmenting informationCreating an overall scheduleCreating an overall scheduleCreating an action calendarCreating an action calendarDoing the work and writing Doing the work and writing

the planthe plan

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The Well-Written Business The Well-Written Business PlanPlan

OrderlyOrderly

SuccinctSuccinct

PersuasivePersuasiveDraws readers in, keeps their interest, Draws readers in, keeps their interest,

and convinces them of the potential and convinces them of the potential for this opportunityfor this opportunity

Based on Based on reasonablereasonable assumptions assumptions

Answers the important questionsAnswers the important questions – – Articulates how your team will address Articulates how your team will address the 3-5 key drivers of your businessthe 3-5 key drivers of your business

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Additional TipsAdditional Tips

Prioritize the points you are Prioritize the points you are making into three categories:making into three categories:Need to know – without this the Need to know – without this the

plan makes no senseplan makes no senseGood to know – directly supports Good to know – directly supports

and gives context to your and gives context to your essential pointsessential points

Nice to know – to Appendix?Nice to know – to Appendix?

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Executive SummaryExecutive Summary

Arguably the most important Arguably the most important section of the business plansection of the business plan

Highlights from each section of Highlights from each section of the BPthe BP

Do not cut and paste!Do not cut and paste!

Should be written and re-written Should be written and re-written during the planning processduring the planning process

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New Venture IdeaNew Venture Idea

What existing need or want does the What existing need or want does the concept fill? concept fill? What is the problem you What is the problem you solve?solve?

Describe the service/product. How will Describe the service/product. How will it change the way people live or it change the way people live or work?work?

Who is your customer? What are your Who is your customer? What are your market segments? market segments?

What is the unique selling benefit? What is the unique selling benefit? (e.g. why will they buy?)(e.g. why will they buy?)

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Business/Financial ModelBusiness/Financial Model

Sources of revenue and funding—required investmentSources of revenue and funding—required investment

Financial returnsFinancial returns

What are your cash needs for operations? What are your cash needs for operations? Cash flow statement—start-up and Cash flow statement—start-up and growthgrowth

Financial projections—Financial projections—3 year income statement3 year income statement with revenue, cost of goods sold, with revenue, cost of goods sold, expenses and projected margins.expenses and projected margins.

How do you plan to scale the business?How do you plan to scale the business?

Business Model of Business Model of Sorts…Sorts…

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Market AnalysisMarket Analysis

Size of potential marketSize of potential market Target segmentsTarget segments Current competition and possible new Current competition and possible new

entrantsentrants What are the critical success What are the critical success

factors/risks and how will you manage factors/risks and how will you manage them?them?

What is your competitive advantage? What is your competitive advantage? How will you “go to market?” What is How will you “go to market?” What is

the marketing plan—branding & 4Psthe marketing plan—branding & 4Ps

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Operations PlanOperations Plan

How does the business work?How does the business work? Product developmentProduct development LogisticsLogistics Human resourcesHuman resources Physical facilitiesPhysical facilities Operating and sales cycleOperating and sales cycle

Articulate milestones for new Articulate milestones for new venture. What is your current venture. What is your current status?status?

ManagementManagement

What are the team’s What are the team’s qualifications for qualifications for executing the executing the plan plan successfully?successfully?

Who are the necessary key hires?Who are the necessary key hires?

http://techcrunch.com/2010/10/08/yahoo-startups/?http://techcrunch.com/2010/10/08/yahoo-startups/?utm_source=feedburner&utm_medium=feed&utm_campaignutm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29=Feed%3A+Techcrunch+%28TechCrunch%29

A Sample A Sample Pitch…Pitch…

Angels to VCsAngels to VCs

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Ten QuestionsTen Questions

1)1) Is the business an opportunity with real potential Is the business an opportunity with real potential or just an idea?or just an idea?

2)2) Does the product or service add significant value to Does the product or service add significant value to the customer? the customer?

3)3) Is the industry in which the product or service will Is the industry in which the product or service will compete growing, stable, or declining?compete growing, stable, or declining?

4)4) Does the firm have a well-defined target market?Does the firm have a well-defined target market?

5)5) Does the firm have an exciting and sensible Does the firm have an exciting and sensible business model? Will the firm be able to defend its business model? Will the firm be able to defend its position? position?

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Ten QuestionsTen Questions

6)6) How will the firm’s competitors react to its How will the firm’s competitors react to its entrance into its markets?entrance into its markets?

7)7) Is the management team experienced, skilled, Is the management team experienced, skilled, and up to the task of launching the new firm?and up to the task of launching the new firm?

8)8) Is the firm organized in an appropriate manner?Is the firm organized in an appropriate manner?

9)9) Are the financial projections realistic. Do they Are the financial projections realistic. Do they project a bright future for the firm? What rate of project a bright future for the firm? What rate of return can investors expect?return can investors expect?

10)10) What are the critical risks surrounding the What are the critical risks surrounding the business, and does the management team have business, and does the management team have contingency plans in place if risks become actual contingency plans in place if risks become actual problems?problems?

Contact:Contact:bmulloth@poly.edubmulloth@poly.edu

LinkedIn: LinkedIn: http://www.linkedin.com/in/http://www.linkedin.com/in/

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