Unit 5 - Business plan Flashcards
Business Plan: definition
“Document that presents a business opportunity, identifies its target market and provides details about how the entrepreneur plans to pursue it”
Business Plan: purpose
- Identify the key aspects of the business
- To obtain financing
- To manage: maintain attention and control
- Improve the business model
Business plan TYPES
Plans for EXTERNAL stakeholders:
✦ Mini-business plans (pitch deck,)
✦ “Traditional” business plans (in disuse)
Plans for INTERNAL planning and control:
✦ Go-to-market plans (product launch)
✦ Operational plans (resources, investment…)
Business Plan: structure
NO FIXED RULES
NO STANDARD MODEL
DEPENDS ON AUDIENCE
Merging four key components (Depending on the plan +/- detail)
- People
- Opportunities
- Context
- Agreements
People
- Founders and experience (on the ground and jointly)
- Need to recruit new hires
- Motivations, commitment and exits
Opportunities
- Market sizing and growth potential
- Competitors: advantages and barriers
- Validated Business Model
- Opportunity to expand your business model to other markets
Context
- Business critical variables
- Sensitivity analysis and variability
- Risk management – contingency planning
Partnerships
- Clients: prepayment and loyalty
- Suppliers : strategic, key to the business
- Investors: not just financial support
- Importance of management per stages
Business plan: STRUCTURE - criteria
- Phases (time led)
- Areas (main functions of the Company)
- Activities (customer facing, value chain…)
- Combination of several criteria
Business Plan structure: Contents
- Introduction: Company description and objectives
- Market: Customers
- Competitors: Current and future
- Product and processes: operations
- Marketing plan: how to sell
- Finance plan: Forecast
- Legal and Shareholding aspects
- Annexes
PITCH DECK - concept
- Slides to support the elevator pitch
* A quick overview of the company and product
PITCH DECK - utility
To draw attention to potential investors, customers, partners… and stand out from others
ONE PAGER - concept
An executive summary that condenses, on a single page, all the relevant information about the company
ONE PAGER - utility
To draw investor’s attention (with key data), to “intrigue” him/her and to make him/her request more information on of the company and product
One Pager Contents
- Logo: Legible, recognizable, memorable and representative
- Twitter Pitch or tagline: Sentence explaining who the company is, what it does and why it is important to others
- Problem or “pain point”: Need to solve the client
- Business model: How money is made
- Solution: Value proposition, why it is superior to its alternatives. Images and details about functionalities (product)
- Market: Current size, evolution in recent years, potential, TAM, SAM and SOM…
- Competition: Data of each company (turnover, valuation, prices…)
- Company profile: list or table, with general data (sector, date of foundation, investment to date…) and key metrics (“traction”, turnover…)
- Team: Names, surnames, positions and experience (if there are mentors or investors)
- Contact: Person, email, phone and website of the project
Market size estimation
TAM: Total addressable market
Size of the largest possible market, independently from our ability to reach and serve it
Calculation:
Total demand (Sales of competitors)
Industry total sales volume
Use: Sector reports (Gartner, Nielsen. IDC…)
Market size estimation
SAM: Serviceable available market
Market we can actually reach and serve with the model we have designed (technology, capacity, channels…)
Calculation:
Maximum amount of units our model can sell per year
Use: direct research, reference of competitors
Market size estimation
SOM: Serviceable obtainable market
Realistic market share we can obtain considering our resources and our competitors
Calculation:
Traction and growth hacking metrics
Use: Budgets, surveys, data from competitors
INVESTOR DECK - concept
An executive presentation covering all business fundamentals in detail
INVESTOR DECK - what is the purpose?
To start the process of selling the company
Investor Deck Contents
- COVER: Name, logo and tagline
- PROBLEM: Description and quantification (TAM), who has the problem (B2C, B2B, B2B2C, women, young people…)
- SOLUTION/PRODUCT: quantify effectiveness as a solution against competitors (pain killer vs. vitamin), features, images, demos, videos…
- MOMENT: Why go to market or grow now (growth, evolution of technology, regulatory change…), product metrics, traction, sales…
- MARKET: SAM and SOM, indicating how they are calculated, and the expected evolution for the coming years
- COMPETITION: Description of competitors, positioning achieved, current (or sought) competitive advantage(s)
- BUSINESS MODEL: how it monetizes, margin, recurrence and deposit profitability compared to competitors
- MARKETING & SALES: current and future channels, costs and conversion rates
- TRACTION: Evolution of KPIs based on the business model compared to similar companies
- TEAMS: Positions and experience of key people (mentors, investors…) and founders
- FINANCIAL ANALYSIS: Graph with the evolution and expectations for income, expenses and cash consumption (at least 3 years)
- FINANCIAL NEEDS: Size of the investment round, objectives to be achieved and what the capital raised will be used for
- FINAL SUMMARY: Key ideas to highlight
- CONTACT: Company logo and contact details (usually CEO)
What financial documentation does an investor need?
- Profit and loss accounts and balance sheets achieved and expected (evolution)
- State of cash-flow and cash burn rate
- Explanation and metrics of the “traction”achieved
- Calculation assumptions
What is the financial documentation provided to the investor for?
- Analyze the real situation of the company
- Evaluate their evolution and trajectory
- Make comparisons and scenarios
- Study a due diligence process
