# Presentation: 335846

## Components of a Business Plan

- Jill Kline
- Wyoming SBDC

## Wyoming SBDC

- Strengthen Wyoming businesses and create economic growth by providing excellent management assistance, educational programs and helpful resources for Wyoming small businesses and entrepreneurs.

**Notes:**
The Small Business administration is our federal funding partner.  The Wyoming Business Council is our state funding partner and our program is administered through a partnership with the University of Wyoming. 

In a nutshell , the SBDC provides free, confidential business consulting to anyone in Wyoming that owns or would like to own a small business.  

## WSBDC Contacts

**Region I:  **Bill Ellis(307) 352-6894
- 	Toll Free in WY 800-348-5205e-mail:  bellis@uwyo.edu_[_x000b_](mailto:bellis@uwyo.edu)_*Serving Sublette, Lincoln, Uinta, and Sweetwater counties.*
**Region II: **Robbi Welch
- 	(307) 754-2139
- 	Toll Free in WY 800-383-0371Fax: (307) 754-0368e-mail: director@wir.net*Serving Park, Big Horn, Washakie, Hot Springs, Fremont, and Teton counties.*
**Fremont County Office: **Margie Rowell(307) 857-1174
- 	Toll Free in Wyoming 800-969-8639 e-mail: wsbdc@wyoming.com
**Region III: **Leonard Holler(307) 234-6683
- 	Toll Free in WY 800-348-5207e-mail: sbdc@tribcsp.com*Serving Converse, Natrona, *
*	**Niobrara, and Platte counties.*

**Region IV: **Arlene Soto(307) 632-6141
- 	Toll Free in WY 800-348-5208e-mail: sewsbdc@wyoming.com*Serving Goshen, Laramie, Albany, and Carbon counties *
**Region IV Satellite Office:*** *Bill Schepeler(307) 766-3515e-mail: WTSchep@uwyo.edu
**Region V: *** ***Jill Kline**
**	**(307) 682-5232
- 	Toll Free in WY 888-956-6060e-mail:  sbdc@vcn.comS*erving Sheridan, **	**Johnson, Campbell,**** ***Crook, and Weston counties.

- http://www.uwyo.edu/SBDC/offices.html

## Why develop a Business Plan?

- 	“All the work you do in thinking up your idea, testing it, studying it, and producing it, has been for nothing if you can’t sell it.  Whether you start you own business to produce and sell your invention, subcontract out the manufacturing part, or sell your rights in return for a percentage of the proceeds, you need a business plan.”
*	**	**- Pamela Riddle Bird, PhD, *_*Inventing For Dummies*_
*	**	**CEO, Innovative Product Technologies, Inc.*

**Notes:**
Founder and Chief Executive Officer of Innovative Product Technologies, Inc. (IPT, Inc.). which is a product and technology based market commercialization corporation 

A business plan is the first step you take toward turning your invention into a marketable reality.  

Potential investors may understand a business proposal much better than they understand the technology of an invention.  Investors will look at the profit-and-loss possibilities 

## Why develop a Business Plan?

- 	“You've just come up with an idea. What to do next? There is no exact order of what you should be doing. But we like to suggest two broad areas for inventors to embark on. First, learn all you can about running a business, even if you hope to license your idea. Second, write a business plan. Even if you hope to license your idea, (and that's actually a rarity among the successful inventors we've met) you'll still need to have a plan.”
- 			- *Mark Ellwood, Past UIA Board of Directors*

**Notes:**
Mark Ellwood, past United Inventors Association Board of Directors recommends that you first learn all you can about running a business and then write your business plan.  

## Why develop a Business Plan?

- 	“A business plan is vital for enterprises needing investment, grant funding or significant borrowing; more so for innovation ventures, as the greater number of ‘unknowns’ makes it even harder to attract backing.  But don’t make the mistake of thinking that only other people need your business plan. It’s primarily a tool to reveal possibly awkward truths about your business to you.”
- 						- *a Creative Investor*

**Notes:**
And an investor has been noted as saying not only is a business plan important for any business looking for funding but its even more important for ventures involving innovations.  He also reminds innovators that the plan is not just for other people, developing the plan gives you the opportunity to really learn the nitty-gritty information about what you want to do.

## Three Types of Plans

- Summary Plan
- 10 pages, 3 important points
- Comprehensive Plan
- 10-40 pages, _**seeking capital**_ or alliances
- Operational Plan
- 40+ pages, for going concerns, part of an annual process

**Notes:**
Summary-for bankers, first timers, feasibility testing, small businesses.
Full-comprehensive plan with a good amount of detail
Operational-describes how your business operates, handles challenges, plans growth, very strategic

We can also have business cases, but not covered today.

## The Summary Plan

- The Business
- Legal Structure, Products or Services, Management, Personnel, Record Keeping
- Marketing
- Target Market, Competition, Advertising
- Financials
- Summary of Needs, Use of Funds, 3 Year Cash Flow Projections, Income Projections

**Notes:**
Answers 3 major questions: How will we operate, Who are our customers and how will we reach them, and Will we be profitable doing this. 

Summarize 3 sections into one paragraph each, create executive summary, add supporting documents.

Show how banker reads a business plan.

## The Comprehensive Plan

- Executive Summary
- Problem
- Solution
- Business Model
- Secrets

- Marketing and Sales
- Competition
- Management Team
- Financials
- Current Status

## Executive Summary

- Define problem, solution, business model, and why your solution is better
- Write it last
- Grab readers attention
- No more than 2 pages!
- Most important part of your plan and usually written last

**Notes:**
If you don’t get their attention here, they won’t read further.

## Problem

- What problem are you solving?
- Describe how the “state of the art” is insufficient
- Get your reader to agree that the current situation isn’t optimal
- If there isn’t a problem, take your idea back to the drawing board

## Solution

- How do we solve the “Problem”?
- Explain what you sell
- State your value proposition

**Notes:**
A value proposition is a clear statement of the tangible results a customer gets from using your products or services. The more specific your value proposition is, the better. 
Strong value propositions deliver tangible results like: 
Increased revenues 
Faster time to market 
Decreased costs 
Improved operational efficiency 
Increased market share 
Decreased employee turnover 
Improved customer retention levels 

First Sentence:
For (target customer) 
who (statement of the need or opportunity), 
the (product/service name) is a (product/service category) 
that (statement of benefit). 
Second Sentence:
Unlike (primary competitive alternative), 
our product (statement of primary differentiation).

## Value Proposition Worksheet

- First Sentence:
- For (target customer)
- who (statement of the need or opportunity),
- the (product/service name) is a (product/service category)
- that (statement of benefit).
- Second Sentence:
- Unlike (primary competitive alternative),
- our product (statement of primary differentiation).

## Business Model

- Explain how you make money
- Who pays you?
- How do you collect?
- What are your channels of distribution?
- How do you integrate suppliers?
- Use examples if necessary
- Be complete

**Notes:**
If you have a brand-new, paradigm shifting model, explain it in terms of existing models.

Be complete. For your reader, this is where your idea becomes a business.

## Secrets

- Describe your technology, process improvement, etc.
- Use charts, diagrams, schematics, as much as possible
- Understand your Intellectual Property

**Notes:**
Make sure that you correctly articulate how your Intellectual Property is protected. Contact the RPC for more information.

## Marketing and Sales

- Define your primary, secondary, and other audiences
- Show some numbers
- How will you find, sell, and retain customers?
- Advertising and promotion budget
- Identify your leverage points

**Notes:**
Target markets. Don’t be afraid of leaving someone out. You can’t sell to everyone.
Do your market research, market size, psychographics,   talk about MRC, GroBiz 
Marketing Strategy- it needs to work without breaking the bank. Start-ups usually don’t buy SuperBowl spots
Where will you spend money on marketing? Use a supplementary budget when crafting your plan. Tell about pet-peeve of $100/month
What are the key leverage points in your Marketing Strategy? How many contacts must be made, close rate, etc. Make sure that you tell the reader that you understand the importance of having a good strategy.

## Competition

- Everyone has competitors!
- Provide a complete view of the competitive landscape
- Direct and indirect competitors
- Current and anticipated competitors
- Competitor strengths and weaknesses
- Your competitive advantages

**Notes:**
No one is burying money in the back yard waiting for your product to hit the market.
Make sure that your readers know that you understand the industry and external environment. 
Be thorough! Too much is better than too little
Don’t be dismissive. GE is not, “Too big and slow.” They are, “Well capitalized and market savvy.”
Tell your readers why your product is good, not why the competition is bad.

## Management Team

- Describe your key players
- Board of Directors
- Board of Advisors
- Major Investors
- Who are you missing?

**Notes:**
One paragraph on each person will do. Not a resume. It’s okay for start-ups to have unproven managers. Describe what skills they bring to the business. 
Put your management team together first. 
If you need help putting together a Board, talk to your local Economic Development professionals
If you already have major investors, tell everyone.

## Financial Projections

- Cash Flow Projections
- Income Projections
- Balance Sheets
- Assumptions

**Notes:**
If you need examples, we have worksheets and spreadsheets, or look on the internet.
Project for at least 3 years, possibly 5.
Your numbers need to be “defendable.”
Make sure that your projections jive with what you’ve said earlier in your plan.
Explain your underlying assumptions in terms that the reader can understand, like # of customers, market share, hits on your web page
Anything else can be brought in later. Cap tables, etc.

## Current Status

- Describe your major milestones and tasks
- Technology
- Fundraising
- Customer Development, etc.
- Where are you now?
- Brag about your accomplishments
- Talk about the next steps

**Notes:**
It’s easy to update this last section as your business develops rapidly
Shows your readers that there is action behind this plan

## Investor Pitch Slides

- Title
- Problem
- Solution
- Business Model
- Secrets

- 6.  Marketing and Sales
- Competition
- Management Team
- Financials
- Current Status

- 10/20/30 Rule

**Notes:**
10 slides, 20 minutes, 30 point font

These are the slides you will need.

## Good Reading

- _Crossing the Chasm_* – *Geoffrey Moore
- _The Art of the Start_ – Guy Kawasaki
- _Inventing For Dummies_ – Pamela Riddle Bird

## Internet Resources

**WSSI Inventor Resources Page -**** **
- http://uwadmnweb.uwyo.edu/SBIR/inventorresources.html
**Innovative Products Technologies, Inc. - **
- http://www14.inetba.com/inventonecom/
**Business Plan Development Tools (online) –**** **
- http://www.uwyo.edu/sbdc
- http://www.sba.gov/starting_business/index.html
**Sample Plans – **
- http://www.bplans.com/samples/sba.cfm?DCMP=OTC-sba_course

**Notes:**
WSSI Inventor's Resources
What If the SBIR Program Is Not Appropriate For My Innovation?
In General:United Inventors Association (UIA)UIA Inventor's Ten CommandmentsUnited States Patent and Trademark Office
In Wyoming:Wyoming Inventors' GroupWyoming State Library Patent and Trademark Depository LibraryWyoming Research Product CenterManufacturing-WorksWyoming Small Business Development CenterRocky Mountain Inventors Association
Some Innovation Evaluation Services:Wisconsin Innovation Service CenterWashington State University Innovation Assessment CenterUS Department of Energy Industrial Technology ProgramI2 Innovation Institute

## Thank you! Questions?

**Jill Kline, Region V Director**
**	****(307) 682-5232 **
**	****1-888-956-6060****	****sbdc@vcn.com****	*****Serving Sheridan, ******	******Johnson, Campbell, ******	******Crook, and Weston ******	******counties.***