From Possibility to Reality 10 Steps to Preparing a Successful Business Plan Joel Hauff, The...
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Transcript of From Possibility to Reality 10 Steps to Preparing a Successful Business Plan Joel Hauff, The...
From Possibility to Reality
10 Steps to Preparing a Successful Business Plan
Joel Hauff, The University of Arizona
https://dl.dropboxusercontent.com/u/7316584/NACASWest-BP.pptx
Outline
Identify the steps in developing a business plan
Examine each step and discuss how it fits into the overall plan
Relate each step to real-life examplesSpend some time working on your own
personal business plan
From Possibility…
The POWER
of an idea
Horse In Around Pet Care
…To Reality!
What is your big IDEA?
How can you MAKE IT HAPPEN?
Business Plan Steps
Step 1 – Pitch Your Business
Step 2 – Define Your Business Model
Step 3 – Detail Your Marketing Plan
Step 4 – Identify Your Target Markets
Step 5 – Explain Your Sales Model
Business Plan Steps (continued)
Step 6 – Identify Opportunities for Success
Step 7 –Supply Key Assumptions
Step 8 – Conduct a Cost-Benefit Analysis
Step 9 – Detail the Return On Investment (ROI)
Step 10- Develop a Plan for Assessment
Step 1 – Pitch Your Business
You should be able to explain in 15 seconds what your concept is, and why it is compelling (1-3 sentences) The strategic investment of resources for a
phased Student Union Memorial Center Master Plan will reenergize the facility with services and spaces demanded by the current generation of students. In turn, this will allow for us to recruit a higher caliber of student and retain them more successfully over time.
Step 2 – Define Your Business Model
How will you generate revenue? AND/OR
How will you save money? AND/OR
How will you increase the level or quality of service to your customers?
Business Planning Model
People Make Decisions
Revenues & Expenses Occur
Outcomes Reported
Decisions Evaluated
Business Planning Model
People Make DecisionsLet’s renovate the facility!
Revenues & Expenses OccurWe spent money on renovations,
got new business and had to take care of it.
Outcomes ReportedHere’s what the facility
renovation did for us!Program Evaluation
Was it worth it?
Business Model
Student Union Master Plan Move ‘destination points’ to lower level Add new retail concepts based on student trends to
increase student satisfaction Add additional point-of-sale opportunities to
increase revenues and decrease lines Add additional interior and exterior seats to
increase customer capacity Complete the exterior portions of the building with
intentional seating, canopies and more-welcoming entry points
Marketing vs. Selling
What is the difference between marketing and sales? “Selling is getting rid of something you’ve
got. Marketing is having something you can get rid of.”
Each requires a different range of skills and knowledge for success
Both are dependent upon one another
Step 3 – Detail Your Marketing Plan
How will you pitch your idea to customers and strategic partners?What options do you
have to market to them?
Which will be the most effective?
Marketing – The 4 P’s
The strategic elements of a marketing planProduct – what are we going to sellPrice – what do we need to charge for itPromotion – how do we let people know
about itPlacement – where do we sell it
Marketing strategies are applied globally
Marketing Plan – Specific Details
Product – Einstein Bros. BagelsPrice - VariesPromotion – Social Media, Limited Print
Media, Coupon Books, Digital SignagePlacement – Facebook, Twitter, Arizona
Daily Wildcat, Student Insider, Camptoons, Union Channel 12
Marketing Plan
Product – SUMC Phased Renovation Plan
Price - $6.5 millionPromotion – Surveys, Focus groups,
Information Sessions, 1-on-1 MeetingsPlacement – Student constituencies,
Admissions, Campus Life, Institutional Leadership
Step 4 – Identify Your Target Markets
What is (are) your unique target market(s)?Students – need to know
they support this priority and possible pricing for services
Senior Vice President for Business Affairs – need him to fund the plan
Step 5 – Explain Your Sales Model
Summarize and explain how you intend to capture customers (or gain support) for your business modelWho are you selling to?What are your sales
strategies?Who are your strategic
partners (if any)?
Sales Steps
Introduction Discovery
(Background) Presentation Follow-up Closing
Sales Model
WhoStudent Constituencies
What StrategiesArchitectural renderingsAnecdotal data regarding student
engagementLight financial data showing sustainability
Strategic Partners Vice President for Student Affairs
Sales Model
WhoVice President for Business Affairs
What StrategiesSurvey DataDetailed Pro Forma DataLight anecdotal data regarding student
engagementStrategic Partners
Vice President for Student Affairs
Step 6 – Identify Opportunities for Success
Conduct a SWOT analysis:What are your idea’s
Strengths?What are your idea’s
Weaknesses?What are your idea’s
Opportunities?What are your idea’s
Threats?
SWOT Assessment
Strengths - physical or service-
oriented advantages
Weaknesses - physical or service-
oriented limitations
SWOT Assessment
Opportunities - external plans,
interests or forces that contribute to your ability to succeed
Threats - external plans, interests or
forces that work against your immediate goals
Step 7 – Supply Key Assumptions
With any plan, there is some guesswork involvedWhat elements of the plan can make or
break it?Budget projections for construction costs are
realisticHave not reached point-of-sale saturation pointStudent survey data is representative of the total
populationSales estimates are realistic
Step 8 – Conduct a Cost-Benefit Analysis (Pro Forma)
Money talks What will your
revenues be under this business plan?
What will your costs (direct and indirect) be under this business plan?
What benefit(s) will be gained?
What is the bottom line?
Step 9 – Detail the Return On Investment (ROI)
How long will it take to see a return on any investment made?
What are the projected minimum and maximum returns?
What are the factors that will increase (or diminish) ROI?
Defining The Business Plan
What is my plan for increasing ROI?How will you generate
revenue? AND/ORHow will you save
money? AND/ORHow will you increase
the level or quality of service to your customers?
Calculating ROI
The simplest way to calculate ROI is:
ROI = [Gain from Investment] – [Cost of Investment] * 100% [Cost of Investment]
ROI = [100,000] – [75,000] * 100% = 33.33% [75,000]
Increasing ROI
There are three structured ways to increase ROI: [Gain from Investment] increases while [Cost of
Investment] remains the same [Cost of Investment] decreases while [Gain from
Investment] remains the same [Cost of Investment] increases, but [Gain from
Investment] also increases to a larger proportion than the [Cost of Investment]
ROI = [Gain from Investment] – [Cost of Investment] * 100[Cost of Investment]
Addition of Web Registration Service for Customers Current ROI = 33.33% Increase in Costs by $8,000 for new business
component
Modeling Profit & ROI
ROI = [110,664] – [83,000] X 100% = 33.33%[83,000]
ROI = [x] – [83,000] * 100% = 33.33% [83,000]
ROI = [x] – [83,000] = [83,000] * .3333
ROI = [x] = 110,663.90
ROI = Gain Increase of 10,663.90
Modeling Profit & ROI
How can I do this on a global scale for my idea?Pro Forma DocumentsProfit/Loss StatementsCash Flow Summaries
Microsoft Excel as a tool
Step 10 – Develop a Plan for Assessment
How will we measure our ‘success’?How often will we measure it?What will we specifically measure?What are the critical milestones to achieve?How long will we give our plan to be
successful before we make changes or pull the plug altogether?
Business Plan – Summary
Assemble all information into an executive summary document No more than 2-3
pages or 10 PowerPoint slides
Tailored to a specific audience
Printed and bound
Closing
Think BIG – no idea is too impossible to explore
Let your PASSION for your idea come through in your preparation for and presentation of it
Be HONEST – with yourself and with others around you
Do the WORK to prove your idea has merit and can be achievable