ENTR Final

Wisdom is realizing that the business plan is a

"living document"

Positioning describes a company's offering relative to attributes:

-what customers care about most? -including price, quality and convenience

4 basic ways to use inventory as security for a loan

1. Chattel mortgage- specific inventory used to secure the loan 2. Floating (blanket)- lain is secured by all borrower's inventory 3. Field warehouse- lender physically separates and guards the pledged inventory right on borrower's premises 4. Public warehousing- lender transfers the pledged inventory to a separate warehouse

13 parts of business plan

1. Cover 2. Table of contents 3. Executive Summary 4. Industry, customer, competitive analysis 5. Comp & product description 6. Marketing plan 7. Operatins plan 8. Development plan 9. Team 10. Critical risks 11. Offering 12. Financial plan 13. Appendices

6 common mistakes

1. Not understanding the revenue drivers 2. Underestimating costs 3. Underestimating time to generate revenues 4. Lack of comparable 5. Top-down vs bottom down forecasting 6. Underestimating time to secure financing

4 F's of financing

1. founders 2. family 3. friends 4. foolhardy investors

3 Financial statements

1. income statement 2. statement of cash flow 3. balance sheet

4 reasons why ENTR's face unique marketing challenges

1. limited resources in financial, managerial, time 2. limited market info 3. Decision-making inclined to be muddled by personal biases and beliefs 4. poorly established relations with multiple audiences

4 p's of marketing

1. product strategy 2. product differentiation 3. product life cycle 4. product diffusion

2 reasons why factoring without recourses may be preferred

1. the company doesn't have to worry that nay bills will be returned- form of insurance 2. Factor expresses the extra charge for factoring without recourse as part of the daily interest rate

Maturity of loans

Banks prefer 90-day maturities, even when the ENTR will clearly need the money for longer because the 3 month maturity gives the bank a chance to check the ENTR's financial statements regularly

Business plan AKA

The story

Segment

a group of customers defined by certain common bases characteristics that may be demographic, psychographic, or behavioral

Venture capital helps by

accelerating the commercialization of new products and services, gives US companies a ver considerable advantage in competition worldwide

Communications mix

advertising, sales promotion, public relations, person selling, direct marketing

Great benefit of business planning process

allows the ENTR to articulate the business opportunity to various stakeholders in the most effective mannor

The business planning process allows the ENTR to better ____ instead of ____

anticipate; react

Marketing is a delicate balance of

art and science

cash flows starts with

bottom line (profits) of the income statement

Classic venture capital goes to

companies with a very high degree of innovation and rate of growth; they only invest in companies with super-star potential

Targeting

compares the defined segments and then selects the most attractive one

Competition profile matrix

creates a powerful visual catch-point & conveys info about your competitive advantage and is the basis for your company's strategy

Business planning raises ____

critical questions about the feasibility of the venture

ENTR's can get feedback from

experts, including investors, vendors and customers

A company will not usually lend the _____ of the ____

full face value; accounts receivable pledged

Factoring without recourses

if the company doesn't pay its bills, the factor must absorb the loss

Venture capital

invested in companies that are already in business, rather than in nascent companies with products or services that are still on paper

Accurate targeting is important since:

it is not always clear which customer segments represent the best target market and finding out may require some research and some trial and error

When the factor actually collects the bill

it may send the comp additional money to recognize collections higher than the original estimates

Format of the business plan

keep your plan as close to "general format" bc if a venture capitalist becomes frustrated with an unfamiliar format, it is more likely that she will reject it rather than try it. Easy to follow and understand

When does planning start?

literally when you start thinking about your new venture

Comparable method

look at how your company compares to industry averages and benchmark companies

Marketing communications convey messages to the ____ about the ____

market; company's product and services and the company itself

Pledging is also called

non-notification financing

Business angels

often ENTR's themselves, or former ENTR's who invest some of their wealth in seed and early stage businesses. Angel investment frequently precedes formal venture capital.

Focus on what key success factors?

ones that often lead a customer to buy a specific product

Plan must establish a

opportunity worth exploiting and detail how to accomplish it

It's necessary for ENTR's to

scale up or change focus

Factoring

selling accounts receivable at a discount to finance a comp known as the factor. The factor takes over credit checking and collection

Traditional bank lending:

short-term bank loans

Segmentation & targeting ate the processes marketers use to ID _____

the "right" customers for their comp's products & services

Pledging with notification

the borrower instructs its customers to pay their bills directly to the lender (often a bank)

Factoring with recourses

the company doesn't pay the bill within a pre-determined time, the factor collects from the company

Most important aspect of writing the business plan

the learning that goes on as you ID your concept and then research the concept, the industry, the competitors, customers

Integrated marketing communications

the process of finding the most effective way to communicate with customers and influence their actions

The best way to gather info

through network and tradeshows

short-term

unsecured loan made for 90 days

Pledging

using accounts receivable as collateral for a loan from a finance bank

Marketing

An org function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the org and its stake holders

Balance sheet formula

Assets= Liabilities + EQ

Mistake #5- Top down forecasting

Investors want to see the cost of acquiring, serving, and retaining the customer, i.e how you are planning to capture your market share

Mistake #1- Not knowing rev drivers

Make sure you recognize your drivers. Avoid "conservative" adjective

Income statement

Rev- COGS- SM&A costs- DEPR- Interest & debt- taxes

T or F: marketing practices vary depending on the type of comp and the products/services it sells

T

T or F: your metrics will hardly match the industry averages

T; but you need to be able to explain and understand the difference

Rule of thumb for successful venture capitalists

Team>Idea