Chapter 15

Development, Milestones & Exit Plan

Group Members

 III – BM – 2 Phay Aung Nay Chi

 III – BM – 17 Su Lai Phyu Sin Htoo
 III – BM – 21 Moe Yoon Htet
 III – BM – 52 Hnin Yu Wai
Where do you want to go?
o The company must figure out how to get the success it wants.

o One of the most important aspects of the business planning process is the examination of
long-term goal.

o In developing the company’s long-term plans, it must evaluate its goals, milestones, risks and
exit plan.

o By keeping milestones can make the company keep on track and develop specific objectives.

o Investors have a great interest in this section of the business plan.

o In this section, the specific ways whereby the company can be judged and the risks involved
will be spelled out.
Goals
 In founder-led and small companies, the personal goals of the entrepreneurs and the
goals for the business should reasonable relate to one another.

 People probably have a vision of what their companies may be.

 The vision may not be well-formed or may be very specific.

 The vision that is held for the company shapes the nature of the company’s day to day
activities.

 It also determines the priorities for the expenditure of the resources.

 In assessing the business concept, consider which of the following visions you have for your company and
yourself –

1. Steady Provider – Maintain a stable level of profit

2. Innovator – Produce new and different products or service; act on creativity

3. Quality Leader – Develop a reputation for excellence; take pride in creating the best

4. Market or Industry Leader – Dominate the market in terms of sales and products with well-known
name

5. Niche Leader – Do only one thing, but do it extremely well

6. Exploiter – Take advantage of the trends of the moment or copy the success of others

These Goals are not necessarily mutually exclusive and can be chosen more than one, if they aren’t contradictory.
 The Company Vision Worksheet can also be used to focus the thoughts about the future
for the company.

 Although these concepts are relatively intangible, they have tangible consequences.

 Example – See the company as Innovator sacrifice short-term profits for the
ability to experiment
Market leader position the company to grow to a
substantial size

 To give substance to the vision, express the goals in concrete terms.

 This process will help to understand and articulate the goals but it is only meant for
internal planning.
Company Vision
Describe the vision you hold of your company for the next decade.

Overall Long-Term Development –

Specific Goals One Year Five Years Ten Years

Number of Employees
Number of Location
Annual Sales
Profits or Profit Margin
Number of Products or Services
Awards or Recognition Received
Ownership Allocation
Other

Business Strategies
One Year –

Five Years –
Ten Years –
Strategies
• Must consider what business strategy will take your company from its present situations
towards your long-term goals.

• Developing an overall strategy gives you the basis for deciding on the priorities for
specific actions and expenditures of funds.

• Among business strategies, you might undertake are

Market Penetration
Promotion and Support
Expansion
Increase Focus
Diversify
Refocus
Priorities
• To implement those strategies, you must undertake specific actions.

• To clarify the significance of particular activities relative to your long-term goals, develop
a set of priorities for the expenditure of your resources.

• A list of priorities is a critical tool for every business.

• Although this list does not need to be included in a business plan for outside financing
resources, it would be wise to refer to it whenever making major business decisions.
Milestones Achieved to Date
• Delineating the milestones you’ve achieved to date likewise shows the level of
commitment you’ve made to your new business.

• A potential investor can get a sense of the financial and time expenditures that you’ve
had to invest to reach the achievements to date.

• A list of such milestones can be included in the front of your written plan, directly after
your Executive Summary.

• If yours is an annual plan for an existing company, you can indicate the milestones
achieved since your last plan.
Future Milestones
 How will you and your investors know that you are making sufficient progress towards your goals?
Eg - Long-term goal ; Sale $3.00 M in 5 years
Need in sale ; Year 2 ?
Year 3 ?
 Milestone list allows to see what you specifically plan to accomplish, and it sets out clearly
delineated objectives (part of your business plan).

 Focus on objectives you intend to achieve and dates by which you expect to accomplish
them.
These must be defined in concrete terms and a number assigned to any measurable activity.

 Show how you intend to build your company.

(roll out products, add new location , secure strategic relationships , etc.)
This list creates a detailed picture of your company’s future & gives a clear idea of the size and scope
of the company envision.
Note - Everything takes longer than planned; problems always arise.
Allow yourself plenty of time .
Risk Evaluation

Potential Risk
 Financing Decision of investors Vs
Potential Rewards

 Risk Evaluation assessed the risks facing in each area & described the steps
you can take or have already taken ,
Exit Plan
 Banks and individuals Lend money You

You Pay income + interestBanks and individuals

 They evaluate on the basic of whether there’s enough profit in your operating budget to pay back
the loan.

 Investors’ profit is earned in a different manner from banks and lenders.

• Some put money in for the long-run , expecting to take an active part in the development &
operation of the company and getting their reward through the distribution of the profits.

• Others, venture capitalists, plan to liquidate

their investment – to convert their holdings to

cash or easily traded stock.

• They want to know how they will get profit

out of their investment. They want to see

your exit plan.

Developing an Exit Plan
 Considering your potential exit plan benefits you as well as investors.
 Devoted substantial time and money of your own to this company, and you should have
an idea of the way in which you’ll reap rewards.
 If there is more than one partner or principal in the business, having a clear exit strategy
can reduce the friction.
 Generally, sophisticated investors look for companies that can go public or that are
candidates for acquisition by larger companies.
 Investors like these exit strategies because they can get out of the company cleanly,
usually with substantial rewards, either an IPO – an initial public offering or the sale of the
company.
 In very successful companies, the investor has little motivation to sell and the amount of
money needed to purchase their stock could be prohibitive.
 In less successful companies the investors may want to get out, but the entrepreneur is
unlikely to have the extra cash necessary to buy them out.
Preparing the Development, Milestones & Exit
Strategy Section of Your Plan
 The two most important aspects of your Development section are your milestones list
and the description of your exit plan.

 Through these, investors get a clear idea of how the company has grown, will continue
to grow and how they will realize their financial rewards.

 For a plan to be used for internal purpose, more details can be included about the
specific priorities for expenditure of resources.
Exit Plan Options
Option Description Advantages Disadvantages
Go Public Sell shares in the Stock easily Must be large
company to the convertible to cash, company: approx.$25
public, traded on a liquidity; current to $ 50 million; highly
stock exchange or management stays. regulated’
“over the counter”. management can be
replaced by
stockholders.

Acquisition Bought by another Receive cash and/or Must be appropriate

existing company. stock; current fit for existing co;
management may management leaves
have continuing role. or has new boss.

Sales Bought by individuals. Receive cash. Must find willing

buyer; management
goes.

Merger Join with existing Combined resources; New partners or

company. current management bosses; usually little
may stay; may receive or no cash; less
stock or some cash. control.
Exit Plan Options
Option Description Advantages Disadvantages
Buy-out One or more Seller gets cash; Must have
stockholders buy other stay in sufficient cash;
out the interests of control of company. seller must be
another. willing.

Franchise Sell concept to Receive cash; Concept must be

others to replicate. current appropriate; legally
management stays; complicated.
future potential.

Hand Down Give company to Stays in family; Family tension; no

next generation. current cash; tax
management may implications.
continue.

Close End operations. Relatively easy; No financial

feeling of being reward; feeling of
finished. loss.
 ANY
QUESTIONS ?
Thank You So Much for listening