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Roadmap for the company

to follow over multiple years

• Formal document used for the long-range planning of a company’s operation

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 Strategic description of how a start-up
will advance its technology and achieve
profitability and success

What is a Reflects the changing conditions of the

business and the market in which it
business plan? operates

Demonstrates to outside investors that

both the market and product or service
fits in the market

• Strategic description of how your start-up will advance its technology and
achieve profitability and success.
• Living document and will need to be revised to reflect the changing conditions of
the business and the market in which it operates
• demonstrates to outside investors that you have thoroughly explored both the
market and how your product or service fits in that market.
• It typically includes background information, financial information, and a
summary of the business
• Typically has components that are more “set in stone” than a business model
canvas, which is more commonly used as a first step in the planning process and
throughout the early stages of a nascent business
• Describe the business and industry, market strategies, sales potential, and
competitive analysis, as well as the company’s long-term goals and objectives.

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 Effective business plan purpose
• Helps focus on the ideas
• Creates a track to follow in the early stages of business growth
• Creates benchmarks against which progress can be measured
• Provides a document for attracting equity or debt financing

• It helps you focus your ideas.

• It creates a track for you to follow in the early stages of business growth.
• It creates benchmarks against which you can measure progress.
• It provides a document for attracting equity or debt financing

• Internal planning tool and working plan

• Investment tool outlining financial projections
• Attracts investors
• Presentation plan, intended for an outside audience that may or may not be
familiar with your industry, your business, and your competitors
• Contingency plan by outlining some “what-if” scenarios and exploring how you
might respond if these scenarios unfold.
• used to interest potential investors, employees, and other stakeholders
• executing the vision concept
• providing supporting details
• required by financial institutions and other stakeholders
• providing a picture and roadmap to go from conception to creation
• together the goals, plans, strategies, and resources of a business
• minimize risk and may save you from significant financial and professional losses

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 resulting from an unprofitable business
• Helps you systematically consider all aspects of the business
• critical for a start-up that is trying to secure external funding
• Usually projects financial data over a three-year period and is typically required by
banks or other investors to secure funding
• Provides a roadmap from conception to creation
• Systematically considers all aspects of the business
• Attracts potential investors, employees, and other stakeholders
• Presentation plan for outside audience
• Investment tool outlining financial projections
• Contingency plan that explores how to respond to possible scenarios
• Requirement by financial institutions and other stakeholders

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 Types of business plans

Brief business plan

Extended executive
Full business plan
summary

• Executive summary
• summarizes key elements of the entire business plan
• opportunity to broadly articulate the overall concept and vision of the
company for yourself, for prospective investors, and for current and future
employees.
• brief business plan is similar to an extended executive summary from the full
business plan.
• brief business plan
• concise document
• provides a broad overview of your entrepreneurial concept, your team
members, how and why you will execute on your plans, and why you are
the ones to do so.
• You can think of a brief business plan as a trailer to the full movie
• executive summary summarizes key elements of the entire business plan, such as
the business concept, financial features, and current business position. The
executive summary version of the business plan is your opportunity to broadly
articulate the overall concept and vision of the company for yourself, for
prospective investors, and for current and future employees.
• A typical executive summary is generally no longer than a page, but because the

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 brief business plan is essentially an extended executive summary, the executive
summary section is vital. This is the “ask” to an investor. You should begin by
clearly stating what you are asking for in the summary.
• full business plans can vary in length, scale, and scope

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• Executive summary
• Business description
•
•
Market strategies
Marketing plan Important
Competitive analysis
sections
•
• Operations and management plan
• Financial analysis
• Design and development plan

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 Executive Summary
• Most important part of the plan
• Acts as an elevator pitch
• Snapshot of the business with key points and issues
• Usually the first opportunity to catch the interest of an investor

• The executive summary is a snapshot of the business. It acts as an elevator pitch

and is usually the first opportunity to catch the interest of an investor.
Consequently, it is the most important part of the plan.
• The executive summary should provide an overview of your business with key
points and issues. Because the summary is intended to summarize the entire
document, it is most helpful to write this section last, even though it comes first in
sequence. The writing in this section should be especially concise. Readers should
be able to understand your needs and capabilities at first glance. The section
should tell the reader what you want and your “ask” should be explicitly stated in
the summary
• Describe your business, its product or service, and the intended customers. Explain
what will be sold, who it will be sold to, and what competitive advantages the
business has.

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 Executive Summary
• Describe the business, its product or service, and the intended
customers
• Explains what will be sold, who it will be sold to, and what
competitive advantages the business has

• The executive summary is a snapshot of the business. It acts as an elevator pitch

and is usually the first opportunity to catch the interest of an investor.
Consequently, it is the most important part of the plan.
• The executive summary should provide an overview of your business with key
points and issues. Because the summary is intended to summarize the entire
document, it is most helpful to write this section last, even though it comes first in
sequence. The writing in this section should be especially concise. Readers should
be able to understand your needs and capabilities at first glance. The section
should tell the reader what you want and your “ask” should be explicitly stated in
the summary
• Describe your business, its product or service, and the intended customers. Explain
what will be sold, who it will be sold to, and what competitive advantages the
business has.

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• What is the company’s mission?
• Why is it important?
• How will the company make money
pursuing its mission?
• How will the company develop its
technology into products?
Must
• What experience do the founder and
management team have?
• How much money is necessary?
answer
• What level of return can an investor expect?
• Why that level of return?

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Example

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 Business description
• Acts as an extended, more descriptive elevator pitch
• Describes the industry, product, and business and success factors
• Provides a current outlook as well as future trends and developments
• Addresses the company’s mission, vision, goals, and objectives
• Summarizes the overall strategic direction, business model, and the
company’s value proposition

• The business description provides more extensive information concerning your

company’s mission than was provided in the executive summary. If the executive
summary is an elevator pitch, then the business description is similar to an
extended, more descriptive elevator pitch, helping investors quickly understand
the business’ goals and its unique position.
• This section describes the industry, your product, and the business and success
factors. It should provide a current outlook as well as future trends and
developments. You also should address your company’s mission, vision, goals, and
objectives. Summarize your overall strategic direction, your reasons for starting the
business, a description of your products and services, your business model, and
your company’s value proposition.

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 Must
• Nature of the business
• Customer needs to be satisfied
• Explanation on the products, technologies,

include
or services in addressing customer needs
• Specific companies or customers to serve
• Competitive advantages

• The nature of the business and the marketplace needs the business will
satisfy
• An explanation of how the start-up’s products, technologies, or services
address those needs
• The specific companies or customers the startup will serve
• The competitive advantages the start-up has, such as personnel,
technology, or value creation

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Example

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 Market strategies
• Present market research on the current state of the business
industry segment
• Compare with competitors in terms of pricing, distribution, promotion
plan, sales potential
• Acknowledge that no market is void of competition

• The market analysis presents market research showing the current state of your
start-up’s industry segment, as well as the target market for your product or
service
• Here you should define your market in terms of size, structure, growth prospects,
trends, and sales potential. You’ll want to include your TAM and forecast the SAM.
• This is a place to address market segmentation strategies by geography, customer
attributes, or product orientation. Describe your positioning relative to your
competitors’ in terms of pricing, distribution, promotion plan, and sales potential.
• Investors want to know that you have carefully considered and fully understand
the market your start-up will target. Further, the market analysis must honestly
address the competitive environment. Unfortunately, there is no market that is
void of competition, and investors are keenly aware of this. Even new products in
so-called “uncontested markets” face indirect competition from substitute
offerings. The analysis should acknowledge this reality
• Additionally, most investors want to see independent evidence of market
validation. Examples of this include the results of your market research, customer
surveys, and interviews

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 Market strategies
• Define the market in terms of size, structure, growth prospects,
trends, and sales potential
• Address market segmentation strategies by geography, customer
attributes, or product orientation
• Show evidence of market validation

• The market analysis presents market research showing the current state of your
start-up’s industry segment, as well as the target market for your product or
service
• Here you should define your market in terms of size, structure, growth prospects,
trends, and sales potential. You’ll want to include your TAM and forecast the SAM.
• This is a place to address market segmentation strategies by geography, customer
attributes, or product orientation. Describe your positioning relative to your
competitors’ in terms of pricing, distribution, promotion plan, and sales potential.
• Investors want to know that you have carefully considered and fully understand
the market your start-up will target. Further, the market analysis must honestly
address the competitive environment. Unfortunately, there is no market that is
void of competition, and investors are keenly aware of this. Even new products in
so-called “uncontested markets” face indirect competition from substitute
offerings. The analysis should acknowledge this reality
• Additionally, most investors want to see independent evidence of market
validation. Examples of this include the results of your market research, customer
surveys, and interviews

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 Must
• Nature of the business
• Customer needs to be satisfied
• Explanation on the products, technologies,

include
or services in addressing customer needs
• Specific companies or customers to serve
• Competitive advantages

. At a minimum, the market analysis should contain:

A specific description of the target market
The revenues and growth rates of the market, including a five-year projection
A demonstration of a strong market need for your product or service
A competitive analysis
The results of marketplace interviews or other primary market research

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Example

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 Market strategies
• Shows how the product or service will be viewed by the customers
versus the competition
• Outlines and describes an effective overall marketing strategy with
detailed budget

• There are many factors that go into the marketing process For the business plan, it
is important to show how your product or service will be positioned in the minds
of customers versus the competition.
• Here you should outline and describe an effective overall marketing strategy for
your venture, providing details regarding pricing, promotion, advertising,
distribution, media usage, public relations, and a digital presence. Fully describe
your sales management plan and the composition of your sales force, along with a
comprehensive and detailed budget for the marketing plan

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 Market strategies
• Provides details on pricing, promotion, advertising, distribution,
media usage, public relations, digital presence
• Fully describes the sales management plan and composition of the
sales force

• There are many factors that go into the marketing process For the business plan, it
is important to show how your product or service will be positioned in the minds
of customers versus the competition.
• Here you should outline and describe an effective overall marketing strategy for
your venture, providing details regarding pricing, promotion, advertising,
distribution, media usage, public relations, and a digital presence. Fully describe
your sales management plan and the composition of your sales force, along with a
comprehensive and detailed budget for the marketing plan

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 Must
• Key factors in the customer selection
process
• Customer perception of competitor

consider
performance in the key factors
• Market share goals and how to achieve
them

Elements deserving consideration are:

Key factors in the customer selection process
Customer perception of competitor performance in the key factors
How your start-up’s offering will perform in the key factors
Market share goals and how they will be achieved

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 Competitive analysis
• Statement of the business strategy as it relates to the competition
• Outlines and evaluates major competitors
• May include price, benefits, quality, type of features, locations, and
distribution/ sales

• statement of the business strategy as it relates to the competition

• identify who are your major competitors and assess what are their market shares,
markets served, strategies employed, and expected response to entry
• conduct a classic SWOT analysis and complete a competitive-strength grid or
competitive matrix.
• Outline your company’s competitive strengths relative to those of the competition
in regard to product, distribution, pricing, promotion, and advertising.
• construct company’s competitive strengths properly for the relevant
features/benefits (by weight, according to customers) and how the startup
compares to incumbents.
• show clearly how and why the startup has a clear (if not currently measurable)
competitive advantage.
• Some common features in the example include price, benefits, quality, type of
features, locations, and distribution/sales.

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Example

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 Operations and management plan
• Outlines how a company will be managed
• Describes the organizational structure and form of ownership
• Highlights the backgrounds, experiences, qualifications, areas of
expertise, and roles of the management team members
• May include additional information on stakeholders and professional
service firms providing management support

• outline how you will manage your company

• Describe its organizational structure
• address the form of ownership and, if warranted, include an organizational
chart/structure
• Highlight the backgrounds, experiences, qualifications, areas of expertise, and
roles of members of the management team
• mention any other stakeholders, such as a board of directors or advisory board(s),
and their relevant relationship to the founder, experience and value to help make
the venture successful, and professional service firms providing management
support, such as accounting services and legal counsel.

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 Financial analysis
• Provides the current status of the business
• Outlines realistic expectation of the business after five years
• Determines the cash needed for the business to succeed
• Identifies the reasonable revenues and profits expected from the
investment

• provide the current status of the business

• realistic expectation of its position after five years
• determine the cash needed for the start-up to succeed, as well as the reasonable
revenues and profits that can be expected from the investment.
• detail how any cash invested in the business will be used
• seeks to forecast revenue and expenses
• project a financial narrative
• estimate project costs, valuations, and cash flow projections
• present an accurate, realistic, and achievable financial plan for your venture
• Include sales forecasts and income projections, pro forma financial statements, a
breakeven analysis, and a capital budget.
• Identify your possible sources of financing

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Example

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 • Focus on the customer and the market
need, NOT on the technology
• Acknowledge the competition honestly
• Include elements of the strategic plan
• Ask for ongoing feedback from an
experienced entrepreneur
When preparing
• Discuss current capital structure
• Make sure the plan flows narratively from a business plan
section to section
• Keep the business plan as concise as
possible

• To reiterate some of the most important concepts you should be mindful of when
preparing the business plan:
• Focus on the customer and the market need, NOT on the technology
• Acknowledge your competition honestly
• Include elements of the strategic plan
• Ask for ongoing feedback from an experienced entrepreneur
• Discuss current capital structure
• Make sure the plan flows narratively from section to section
• Keep the business plan as succinct as possible

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 The business plan should be
treated like a top-secret
document

CONFIDENTIALITY

The business plan contains sensitive information about every aspect of the business
and the personal financial status of all owners. Therefore, it should be treated like a
top-secret document. All copies should be consecutively numbered and strictly
accounted for in writing. All recipients of the plan must sign an agreement that they
will not make copies of the plan or disclose details to anyone other than financial
advisors. The receipt also requires that if the person is not interested in investing in
the company’s future growth, the business plan will be returned. Distribute the
business plan on a strict “need-to-know” basis for the protection of the business and
all those involved

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 Business Start-up & Resource Guide by
The North Carolina Small Business and
Technology Development Center

References Entrepreneurship by Laverty

The Start-up Handbook by the University

of Illinois

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 Quiz 4: Competitive advantage
Deadline: June 16, 11:59PM
To do:
1. SWOT and PEST analysis
2. Pre-recorded 3- min video reporting

Announcements Peer evaluation forms

Final exam pitching

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