MHR 4460 FINAL

• Your reader will anticipate that challenges and risks exist and will want to know what they are • Your reader will want to see evidence that you are aware of the risks and challenges that exist

Challenges and Risks o You should be very candid and transparent in identifying any major anticipated design and development challenges (and risks) for two reasons: You should discuss the possible impact of challenges on the development of your product, the costs involved, and the timeline for bringing your product or service to market

Lean startup Idea => build => product => measure => Data => learn=> repeat (Build, measure, learn)

Companies can shorten their product development cycles by adopting a combination of business-hypothesis-driven experimentation. It begins with a business model and is followed by quick rounds of experimentation of the plan and gathering feedback before executing. What are the three integral processes each startup should follow?

-by describing the opportunity and shows how the proposed business meets the opportunity. -amount of funds being requested and the amount of equity the business is willing to surrender

Content of the executive summary Each section of the executive summary contains a synopsis of the same section in the broader business plan -It's important that the first section of the executive summary, covering the company description, begins... -Most experts recommend that the executive summary state the _________________________________________________________________ (in a section called "Status and Offering") if the summary is being shown to investors

labor, material, consulting fees, prototyping, usability testing, and so on

Costs o This section should provide a budget for the remaining design and development work that needs to be done to bring your product or service to market o The budget should include the costs of... In most cases, exceeding your design and development budget will be one of the risks disclosed in the challenges and risks section

1. Capture attention of the investor 2. Problem from the perspective of the customer 3. A hypothetical situation could be effective 4. Customer's current negative outcome creates tension 5. Your solution to the problem relieves the tension

Good practices when delivering an effective elevator pitch

Unsolved problems

Many companies have been started by people who have experienced a problem and, in the process of solving the problem, realized that they were on to a business idea. Advances in technology often result in problems for people who cannot use the technology in the way it is sold to the masses— entrepreneurs who can develop modified products and services can often capitalize on this opportunity One technique that entrepreneurs use in solving a difficult problem is to find an instance where a similar problem was solved and then apply that solution to their problem

1. Prospect for (or gather) sales leads 2. Make the initial contact 3. Qualify the lead 4. Make the sales presentation 5. Meet objections and concerns 6. Close the sale 7. Follow up

Sales process (or cycle) varies by firm, but normally includes the following steps: Following a structured process to generate and close sales benefits a firm in two ways: (1) it enables a firm to fine-tune its approach to sales and build uniformity into the process and (2) it helps a firm qualify leads, so the firm can spend its time and money pursuing the most likely buyers

industry's key financial ratios

This information provides a point of reference to compare a company's financial and non-financial projections against

o After a firm segments its market, it selects a segment within the market to target o A big mistake is to define the target market too broadly or to try to target more than one segment simultaneously o Focusing intently on a single market allows a firm to become an expert in a specialized area rather than trying to spread itself too thin o A firm should assess the size of the market to make sure it is large and healthy enough to meet the firm's objectives

When estimating or selecting a target market we must consider:

• The most practical way to interpret a firm's historical or pro forma financial statements is through ratio analysis • Your readers will instantly recognize the general picture that a particular ratio conveys • A valuable use of a firm's ratios is to compare them to industry norms • The three most common categories of financial ratios are profitability ratios, liquidity ratios, and overall financial stability ratios

Why are financial Ratio Analysis important and what are the three most common ones?

Sales strategy

Your description should make it clear whether you plan to field your own sales force o Describe how many salespeople you will initially need, how their numbers will be ramped up as your company grows, and how they will be compensated o If distributing via intermediaries, describe how they will be chosen, and the ways in which the intermediaries will interface with the sales outlets in your industry o One way a new firm can innovate and provide unique value in the marketplace is via distribution and sales

The company description

___________ should start with a brief introduction that provides an overview of the company and reminds the reader of the reason it is starting. There are two major points to be mindful of as you start writing this section: o A business plan is a story about an opportunity and how a business will take advantage of the opportunity o You must establish credibility by using facts and providing proof of research

Distribution channels

______________ encompasses all the activities that move a firm's product from its place of origin to the consumer • This section of your business plan clearly identifies your distribution and sales plan in terms of who will make the sales. The first step in determining a distribution and sales strategy is to sort through the choices. The key to making the right choices among the alternatives is to think carefully about where people in your target market shop, and then about the most effective and economical ways to get your products in these outlets o Selecting the manner to distribute and sell a product or service is not a trivial issue; this critical issue lies at the heart of a firm's overall marketing plan and its ability to effectively reach its target market

Executive Summary

is a short overview of the entire plan, and is the first item that appears in the business plan. In many instances, an investor will first ask for an executive summary and will only request a full business plan if the executive summary is convincing. Rather than serving as an introduction to the plan, the executive summary is intended to be a summary that provides readers with a good sense of the entirety of the plan itself.

The First Screen

is a tool that provides entrepreneurs with the flexibility to consider multiple business ideas, rather than settling on a single idea from the outset

Industry Growth Rate

o An industry's growth rate should be reported on a percentage basis along with an interpretation of what the numbers mean o Some plans comment on how the industry growth rate compares to similar industries o If you are defining an industry that isn't being actively tracked by a reliable source, finding good sales data will require creativity and persistence

competitive analysis grid

o This is a tool for organizing and presenting the information you collect about your competitors • Show the key success factors for firms in your target market on the vertical axis of the grid, and then show your firm along with your four or five major direct competitors on the horizontal axis • In each box, rate yourself relative to your competitors on each of key success factors o Completing the competitive analysis grid may reveal that you're at a disadvantage over your competitors and help you make adjustments

Industry Sales Projections

o This section should report sales projections for your industry o You can quote from established sources, but do so sparingly; readers will want to know how you have interpreted the data o Include concrete numbers for what you think your industry's sales and sales growth rate will be for the next one to three years

- sales process - promotions mix

- A firm's_____________ (or cycle) depicts the steps it goes through to identify prospects and close sales. -______________refers to the specific tactics it uses, such as advertising and public relations, to support the sales process and enhance its overall brand This is the one area where hard work and ingenuity can make up for a lack of funds. Money can also be easily wasted if the sales process is not carefully thought through and executed

-branding strategy -differentiation strategy

-A company's name is normally the first thing that people associate with a business, and it can be an integral part of the company's __________ -The brand is a unique set of attributes that allow consumers to separate it from its competitors; you want a name that will facilitate rather than hinder the _____________.

-conventional structure -25 and 35 pages -overly flashy -the entrepreneur -enthusiasm

-The business plan should follow a.... -Most experts recommend a length of between.... -Effective business plans should be sharp, but not look expensive to produce or... -Business plan software can help provide structure, but all the content should come from.... -Outside assistance in putting the plan together is fine, but the ____________ of the founder should remain

industry

An __________ is a group of firms producing a similar product or service • They vary along many dimensions, including size, growth rate, structure, financial characteristics, and overall attractiveness • The trends affecting an ________ also matter • It is important that the ________ analysis section of your business plan focus strictly on the firm's _________ rather than the _______ and the target market simultaneously (A target market is the limited portion of an industry that a firm goes after or tries to appeal to at a certain point in time) • It's premature for a new firm to discuss a specific target market until an understanding of the broader industry is obtained • The _________ analysis should appear early in the business plan because it logically precedes the analysis of a firm's target market and marketing strategy

Positioning Strategy

Part of Overall Marketing Strategy section: o After selecting a target market, the next step is for a firm to select a "position" in the market o Position is concerned with how a firm is situated relative to its rivals (or potential rivals) o Determining which position to occupy and compete in is simply a judgment call on the part of a company based on its mission, its overall approach to the marketplace, and its competitive landscape

i. Customer-Driven Companies ii. Product- or Service-Driven Companies iii. Industry-Driven Companies iv. Personality- or Image-Driven Companies

Primary Consideration in Naming a Business The company name should complement the type of business the company plans to be. There are four categories to discuss when considering this issue: -i.) If a company plans to focus on a particular type of customer, its name should reflect the attributes of its clientele (e.g., Big and Tall Guys or ParentWatch) -ii.) If a company focuses on a particular product or service, the name should reflect the advantages that its product or service provide (e.g., 1-800-FLOWERS, XM Satellite Radio, Whole Foods Markets, TurboTax and Jiffy Print) -iii.) If a company plans to focus on a broad range of products or services in a particular industry, its name should reflect the category it is participating in (e.g., General Motors, Linens N Things, Home Depot) -iv.) Some companies are founded by individuals who place an indelible stamp on the company. In this case, it may be smart to name the company after its founder (e.g., Ben & Jerry's Homemade, Liz Claiborne, Magic Johnson Enterprises)

III. Industry Size(in dollars), Growth Rate(in percent), and Sales Projections

There are four general rules of thumb for completing this section: o Always display financial information, such as industry sales and growth rate, in a multiyear format, making it easy to spot trends o Display your information graphically if possible o Provide information about your industry on a regional or local basis if appropriate o Avoid the temptation to report only positive or flattering information about your industry

i.) Changing environmental trends ii.) Unsolved Problems iii.) Gaps in the marketplace

Three Most Common Sources of New Business Ideas

Industry Size

o Industry size is normally displayed in dollars over a three- to five-year period o The ideal size for a start-up is large enough to allow different competitors to serve different segments profitably but small enough that it isn't attracting the immediate attention of larger potential competitors o If your industry is broken down into easily identifiable segments, it may be appropriate to report the share (in percentage) of each segment o Some plans also report the contribution that a specific industry makes to its larger industry sector

o Survival o Lifestyle o Managed growth o Aggressive growth

—provides its owner just enough money to put food on the table and pay bills (handyman, part-time childcare) —provides its owner the opportunity to pursue a certain lifestyle and make a living at it (clothing boutique, personal trainer) —employs 10 or more people, may have several outlets, and may be introducing new products or services to the market (regional restaurant chain, multi-unit franchise) —bringing new products and services to the market and has aggressive growth plans (computer software, medical equipment, national restaurant chain)

Competitor Analysis

• A ____________ is a detailed analysis of a firm's competition • It helps a firm understand the positions of its major competitors and the opportunities that are available • You should never say that you don't have any competitors

-Threat of new entrants (Barriers to entry) -Rivalry or competition -Threat of Substitutes -Power of suppliers -Power of buyers Comment on the most important of the "five forces" in your business plan

Attractiveness can be evaluated using Michael Porter's "five forces" model: (The threats and powers all must be low in order to be attractive) • Relatively high barriers of entry to keep out competition. When the entry threat is low • Not enough rivalry to create cutthroat competition. • No good substitutes for the basic product or service • Limited power of suppliers to negotiate input prices up . When Power of suppliers is low • Limited power of buyers to force selling prices down. When the power is buyers is low

o Do not place unqualified friends or family members in key management positions o Don't assume that previous success in other industries automatically translates to your industry o Don't adopt a "one-man team" philosophy o Don't hire top managers who share no ownership in the firm o Be sure to disclose management team skill or competency gaps o Don't use vague or unclear language to discuss plans for filling the skill or competency gaps that are disclosed

Common mistakes to avoid in the management team section includes:

-Direct competitors -Indirect competitors -Future competitors

Competitor analysis section The first step in a competitor analysis is determining who the competition is. You should list a handful of competitors from each category comprising your: —businesses that offer a product that is very similar to yours, targeting the same customers that you are —offer close substitutes to the product you will be offering, targeting the same basic need that will be met by your product —companies that are not yet direct or indirect competitors but could move into one of these roles at any time

Legal issues regarding a name for the business

The general rule for business names is that they must be unique • To determine whether a name is available in a particular state, the entrepreneur must contact the secretary of state's office • Instructions for how to go about obtaining a trademark on a name and a logo are available at the USPTO website • The process for finding a name for a business can be frustrating because the most obvious names are often already taken • A complicating factor is getting an Internet domain name that is the same as the company's name • A brief mention should be made in the business plan that a company's name has been registered and trademarked, and that the Internet domain name has been secured • If these activities have not been completed, mention this step as pending so that you maintain credibility with the reader.

i. Strength of business idea ii. Industry-related issues iii. Target market and customer-related issues iv. Founder-related issues v. Financial issues vi. Overall potential

What are the components of First Screen

Industry Characteristics -industry structure -the nature of the participants in an industry -key ratios -industry's key success factors

• This section talks about the structure of your industry and lays out its competitive landscape The four key issues to deal with are:

(1) High potential ideas are typically drawn from one of the three sources of business ideas and are timely in terms of market introduction (2) For an entrepreneur to capitalize on an opportunity, its window of opportunity must be open (3) A new idea must "add value" for its buyer or end user in some appreciable way (4) New business ventures aimed at replacing products that people are reasonably satisfied with may have a difficult time succeeding (5) Investors are typically skeptical of business ideas that require people to make meaningful changes in behavior

5 criteria's pertaining Strength of business idea

• If you are developing a non-existent product, you'll need to include a section that describes the design and development of the product • If you're opening a more traditional business, then you don't normally need a section on product design and development; simply product-relevant information in the operations section • Your readers want an overall sense of how the business will be developed but generally are not looking for detailed explanations • The most important rule of thumb is to focus on the aspects that are either essential to the success of your business or that set you apart from competitors

General guidelines for the operations plan section

• Many investors and others look first at the executive summary, and then go directly to the management team section to assess the strength of the people starting the firm • There is a prevalent belief that unless a proposed new venture has a strong management team, little else matters • It's often not the idea or market that wins funding among competing plans, but the perception that one management team is better prepared to execute their idea than the others • Investors tend to evaluate management teams in the context of the type of business they're proposing and the type of funding or financing they're seeking • The best candidate for investment resides in Box 2 of the 2 x 2 matrix—an untested idea and a tested management team • The management team section should be crisp and to the point, with material such as resumes of key employees placed in an appendix • The way your management team is assembled provides an indication of the extent to which you're open to advice and you're able to generate enthusiasm for your firm • Clearly describe how your team will evolve; most new ventures will have gaps in their management teams at the business plan stage • Describe where the gaps are and how they'll be filled; for example, if the start-up can't afford to hire a marketing person during its product development state, that's understandable, but evidence should be provided showing where the firm is getting access to marketing expertise • Leaving issues like these unaddressed or unresolved gives the impression that the founders don't really know what they're doing and erodes credibility

Guidelines for Management Team and Company Structure

Entrepreneurial process

Idea => Search => Execute => Business

-environmental trends -business trends

Industry Trends This is arguably the most important section of an industry analysis because it often lays the foundation for a new business idea in an industry. The two types of trends that are the most important to focus on are: -The most important parts of this type of trend are economic trends, social trends, technological advances, and political and regulatory changes (Some industries experience slow or no growth for years, and then experience sudden upswings in growth as environmental change turns in favor of the industry -Other trends impact industries that aren't environmental trends per se, but are important to mention (You can't cover every possible fact affecting an industry, but you should mention the major trends)

- patents, trademarks, copyrights, or trade secrets - intangible but has value in the marketplace - trade secret - federal Economic Espionage Act - patents

Intellectual Property o This section should describe any________________ that you have secured or plan to secure. If you have not taken action on intellectual property issues yet, you should get legal advice so you can discuss your plans in this area o Intellectual property is any product of human intellect that is ______________________________ o A ______________ is any formula, pattern, physical device, idea, process, or other information that provides the owners of the information with a competitive advantage o The ________________ criminalizes the theft of trade secrets. The primary rule of thumb for deciding if intellectual property should be protected is to determine whether it's related to a firm's competitive advantage o Although trademarks and copyrights can be obtained fairly inexpensively, _________ are expensive to obtain, which poses a challenge for many start-ups. A provisional patent application allows a start-up to stake a claim to a particular invention for up to a year while it's deciding whether to move forward with a complete patent application o One sticky point in business plans is to decide how much to reveal about a company's potential intellectual property

Introduction a. Name of the proposed business b. Name of the founders c. One paragraph summary of the business Part 1: Product/Service feasibility a. Product/Service desirability b. Product/Service demand Part 2: Industry/Target Market Feasibility a. Industry attractiveness b. Target Market attractiveness c. Market timeliness Part 3: Organizational Feasibility a. Management Prowess b. Resource sufficiency Part 4: Financial Feasibility a. Total Startup cash needed b. Financial performance of similar businesses c. Overall financial attractiveness of the proposed business

Template for Completing a Feasibility Analysis:

First Screen

The "__________" is an entrepreneur's first pass at assessing the feasibility of a business idea. Once a business idea has been chosen, it is important to have a way to quickly assess the merits of the idea before subjecting it to full feasibility, business modeling, and business plan. Completing this is not intended to be either a lengthy process or a shot in the dark. It contains 25 items and should be able to be completed in less than an hour.

1. What is the problem you are solving? 2. For whom are you solving a problem? 3. What is your offering? 4. Who is your competition and how are you better? 5. How are you going to make money? 6. What resources are you asking for from the investor? 7. What will you give in return?

i. The seven key elements of an elevator pitch

Cost based Pricing & Value based pricing -cost-based pricing -value-based pricing

The two methods for determining the price of a product or service are ______________________: • In ________________, the list price is determined by adding a markup percentage to a product's cost. (The advantage of this method is that it's straightforward and easy to justify. The disadvantage is that it's not always easy to estimate what the costs of a product will be, particularly for a start-up). Companies are also finding it increasingly difficult to dictate prices to customers given customers' ability to comparison shop on the Internet to find what they believe is the best price • In ________________, the list price is determined by estimating what consumers are willing to pay for a product and then backing off a bit to provide a cushion. Sometimes, to make this determination, a company has to conduct focus groups or try different pricing options in test markets (Most experts recommend this because it hinges on the perceived value of a product or service rather than cost-based pricing, which ignores the customer. Value-based pricing also frequently produces a higher gross margin)

Gaps in the Marketplace

There are many examples of products that consumers need or want that are not available in a particular location or are not available at all. Key large retailers compete on price and target the mainstream customer, leaving gaps in the marketplace that boutiques and specialty shops can fill. A related technique for generating new business ideas is to take an existing product or service and create a new category by targeting a completely different target market or geographic area.

-o The key estimating the size of a target market is to explain the path that led to your conclusions -o If you are producing an enhanced version of something that is already available, numbers will be fairly easy to get -o Estimating the size of a target market for a market that doesn't currently exist, or a market that is specific to a particular location or geographic area, is harder -o Readers will normally judge projections based on (1) the reasonableness of the assumptions made, (2) the degree to which the numbers are anchored in facts, and (3) the extent to which it appears that a good faith effort was made to be as accurate as possible -o The best recourse, if you are stuck, is to talk with a reference librarian to see if there are additional information resources; editors of industry-specific trade journals and directors of trade associations are also good sources of information -o This section should also comment on industry trends that have the potential to affect the target market positively or negatively

When estimating or selecting a target market we must consider:

management team personnel management team ownership and compensation and common mistakes to avoid

• The management team of a new firm typically consists of the founder and a handful of key management personnel • The description should be largely factual but should be presented in a way that makes it easy to visualize where the firm is today and where it plans to be in the foreseeable future in regard to key management team personnel • Indicate the name or names of the founders, how many employees the company has, where the major gaps are, and how quickly the company will be adding personnel • The three major parts to this section are....

Effective pitch deck presentation PP must have 10 slides, no more than 20 minutes, and contain no font smaller than 30 points.

10/20/30 rule

The potential founder should also complete a self-assessment that is forthright and fair, understanding that few firms will score high on each of the five dimensions o The attributes that make for a strong founding team include (1) Experience in the industry the new venture is entering (2) Skills as they relate to the new venture's product or service (3) Social and professional networks in the industry the firm will be entering (4) Personal goals and aspirations that are consistent with the firm (5) Likelihood that a team can be put together to launch and grow the new venture

5 criteria's pertaining Founder-related issues

Researchers have found that 8 to 30 percent of the variation in firm profitability is directly attributable to industry factors such as ▪ (1) The number of competitors ▪ (2) Current lifecycle stage of industry ▪ (3) The growth rate of industry ▪ (4) The relative importance of the industry's products or services to its customers ▪ (5) Average operating margins for the firms in an industry are also important

5 criteria's pertaining Industry-related issues

(1) Identification of the target market in which the firm competes is extremely important. (A target market is a place within a larger industry or market segment that represents a narrower group of customers with similar interests) (2) The ability to create barriers to entry, a condition that creates a disincentive for another firm to enter the company's niche market, is an important aspect of any firm's potential competitive advantage (▪ Economies of scale ▪ Product differentiation ▪ Unique access to distribution channels ▪ Intellectual property protection such as patents) (3) Entrepreneurs should also consider the purchasing power of potential customers (4) The ease of making customers aware of the new product or service is also important (5) Another important issue is the growth potential of a firm's target market

5 criteria's pertaining Target market and customer-related issues

(1) The initial capital investment needed to start a firm is important ▪ At this point, the entrepreneur should have a sense of the magnitude of the investment; exact estimates will be developed later if the idea is indeed viable. (The average small business is started for about $10,000 with the majority coming from the owners' personal savings.) (2) The number of revenue drivers that a business has is also important ▪ Start-ups don't want to lose focus by creating multiple revenue drivers, but the financial potential of a firm is greater if it has several ways of generating sales (3) The time it takes a firm to break even or recoup its initial investment is also important (4) The next issue to consider is to assess the financial performance of businesses similar to the one you are contemplating (5) The final item in Part 5 refers to your ability to fund the initial product development and initial start-up expenses for your venture from personal funds or via bootstrapping

5 criteria's pertaining financial issues

Elevator Pitch

60-90 second "story" of your business

1. Key partners 2. Key activities 3. Key resources 4. Cost Structure 5. Value propositions 6. Customer relationships 7. Channels 8. Customer segments 9. Revenue Streams

9 components of the business model canvas. Key questions from each component 1.) Who are our key partners? Who are our key suppliers? Which key resources are we acquiring from our partners? Which key activities do partners perform? 2.) What Key activities do our value propositions, distribution channels, Customer relationships and Revenue Streams require? 3.) What Key Resources do our value propositions, distribution channels, Customer relationships and Revenue Streams require? (Financial, Physical, Intellectual, Human) 4.) What are the most important costs inherent to the business model? Which key resources are most expensive? Which key activities are most expensive? 5.) What value do we deliver to the customer? Which one of our customers problems are we helping to solve? What bundles of products and services are we offering to each segment? Which customer needs are we satisfying? What is the minimum viable product? 6.) How do we get, keep, grow customers? Which customer relationships have we established? How are they integrated with the rest of our business model? How costly are they? 7.) Through which channels do our customer segments want to be reached? How do other companies reach them now? Which ones work best and are most cost efficient? How are we integrating them with customer routines? (Includes marketing and raising customer awareness.) 8.) For whom are we creating value? Who are the most important customers? What are the customer archetypes? 9.) For what value are our customers willing to pay? For what do they currently pay? What is the revenue model? What are our pricing tactics?

Defining an industry

Briefly (no more than several sentences) describe the firm's industry: (The industry's SIC code and NAICS code should be provided) • A firm's industry can be defined narrowly or broadly (e.g., JetBlue can be defined as in the airline industry or in the transportation industry) • The definition determines the scope of the firm's overall sphere of concern • If your firm operates in two or more industries, you should identify all the industries that it participates in • It may be difficult to identify an industry that matches an innovative new product or service: (In the case of an innovative product or service, improvise by selecting industries that represent the closest fit, and then include additional pertinent information) (The advantage of this approach is that your analysis is anchored in established NAICS categories, which provide you with plentiful information.) (If you create a new definition that is more precise, it may be more difficult to accumulate good-quality information for your industry analysis)

i. Economic Trends ii. Social Trends iii. Technological Advances iv. Political Action and Regulatory Changes

Changing Environmental Trends i.) When the economy is strong, people are more willing to buy discretionary products and services • It is important to evaluate who has money to spend and what they spend it on (i.e., the increase of women in the workforce fueled a number of boutique clothing stores targeting professional women) • An understanding of __________________can also help identify areas to avoid (i.e., the advent of online auction sites like eBay has made it easy for people to sell used musical instruments, making this a difficult time to start a company selling musical instruments) ii.) Entrepreneurs must also understand the impact of _____________________ on the way people live their lives and the products and services they need • Often products do more to satisfy a social need than the more transparent need the product fills. iii.) ________________________ provide an ongoing source of new business ideas • It is important to recognize how technologies can be used to help satisfy basic or changing human needs • Once a technology is created products often emerge to advance it (i.e., the Apple iPhone has created an entire industry that produces accessories) iv.) New laws create opportunities for entrepreneurs to start firms to help companies and individuals comply with these laws • Occasionally, changes in government regulations motivate entrepreneurs to start firms that differentiate themselves by "exceeding" the regulation (i.e., an "extra safe" crib) • Political change can also create an environment for the emergence of new business ideas (i.e., threat of terrorism resulted in many firms becoming more security conscious and requiring products to meet their changing security needs)

1. Research 2. build assumption 3. Forecast Sales 4. Forecast Income, Balance sheet, cash flow 5. Sensitivity analysis 6. Reasonable test

Describe The financial projections process 1.) This step includes comparable businesses, industry and competitive research, conversations with potential customers, competitors, suppliers, experts. 2.) This step includes Sales and market size/growth Operating expenses, capital expenditures, working capital. 3.) Plan monthly and go out 3 to 5 years. 4.) Use multiple linked spreadsheets 5.) Develop 3-5 scenarios 6.) Comparable analysis, test all assumptions

marketing strategy, positioning, and points of differentiation and how they will be supported by price, promotional mix, and sales process and distribution strategy

Describe a company's marketing plan by articulating its... • The marketing section of the business plan must lay out specifically how you plan to make your target market aware of the existence of your product or service • Reinforce how your product provides its user unique value and differs from similar products in the marketplace • There are two things to be mindful of as you write this section: o The elements of a firm's marketing plan should be developed with the customer plainly in mind o You must detail exactly who will sell your product and how your sales process will work • Describe your sales process and the methods that you'll use to sell your product (e.g., via direct sales force, through distributors or wholesalers, through an alliance with companies that sell complementary products, or through some other means)

-two single-spaced pages. -section-by-section basis. -One summary that is part of the business plan and One summary that is a standalone document -short PowerPoint -last

Format of the executive summary -The executive summary should not exceed... -The cleanest format follows the structure and order of the plan on a... -There should be two versions of the executive summary.... -Some investors ask for a ___________ (10 to 15 slides) overview rather than a traditional executive summary -Entrepreneurs should write the executive summary ______ to make sure it accurately reflects the entirety of the business plan

• Even if you are a small firm, you should outline how the company is currently structured and how it will be structured as it grows • Company structure is a "nuts-and-bolts" type of issue that deals with the inner workings of a firm • The most effective way to illustrate a company's structure and lines of authority and accountability is to include an organizational chart in the plan • An organizational chart is a graphic representation of how authority and responsibility are distributed within the company • Companies are generally organized along functional, product, or geographical lines • There may be some unfilled boxes on the organizational chart, consistent with the "gaps" in management personnel shown in the skill profile • If your firm has more than one founder, you should comment on the specific role that each founder will take on as the firm moves forward • Some business plans complement their discussion of company structure with a brief analysis of how the firm will be managed from a leadership, motivation, and corporate culture point of view

Guidelines for company structure

o A high-involvement purchase o A low-involvement purchase

In many business-to-business start-ups, it's important to discern specifically who the "decision makers" are in the businesses you'll be trying to sell to. The length of a customer's buying process is often an important concern: o ______________is one for which the buyer is prepared to spend a considerable amount of time and effort searching o _______________ is one that a buyer makes with minimum thought because it does not have much impact on his or her life

Management Team Ownership and Compensation

Management Team Ownership and Compensation o You must also fully disclose the ownership structure of the new venture and the compensation of the members of the management team o List each owner, his percent ownership in the company, and his base compensation o An options pool is an inventory of company stock that is set aside for future employees o Attracting high-quality people to a start-up often necessitates the granting of stock options as an incentive form of compensation o Finally, it should be clear how the money for the firm has been raised so far

• Title of the position • Duties and responsibilities of the position • Previous industry and related experience • Previous successes • Education background • Team members who've worked together before are preferred because it usually means that they get along personally and trust one another • The skills and ability of the members of the team should complement one another rather than reinforce a single skill or competency

Management Team Personnel A brief profile of each member of the management team should be provided starting with the founder or founders including certain attributes: The next step in describing the management team is to identify gaps that exist. Complete a management team skill profile grid, indicating which skills are satisfied by each management team member. The grid illustrates the skills or competencies that currently have no coverage and roughly the number of people who need to be hired

(1) the objective quality of your product or service and (2) the perception of value that you create in the minds of your customers relative to competing products in the marketplace

Most experts warn start-ups to resist the temptation to charge a low price for their products in hopes of capturing market share. Most consumers make a price-quality attribution, naturally assuming that the higher-price product is also the better quality product. The price you're able to charge is largely a function of:

Concept test Buying intentions survey

Part 1: Product/service feasibility is an assessment of the overall appeal of the product or service being proposed a.)Product/service desirability ____________: 1 page doc =>(1) description of product or service, (2) intended target market, (3) benefits of product or service, (4) description of how the product or service will be positioned relative to competitors, (5) description of how the product or service will be sold, and (6) a brief description of company's management team. Concept statement should be shown to 5 to 10 people who are familiar with the industry the firm hopes to enter. In the back is a survey b.) Product/Service demand _____________: gauges customer interest in a product or service. The statement and survey typically features a question that asks how likely the subject would be to buy the product or service. Should be shown to 15-30 potential customers.

a.) In general, the most attractive industries for start-ups are large and growing, are young rather than old, are early rather than late in their life cycle, and are fragmented rather than concentrated ii. Some industries are characterized by such high barriers to entry, or the presence of one or two dominant players, that potential entrants are essentially shut out iii. You should also note the degree to which environmental and business trends are moving in favor of rather than against the industry b.) By focusing on a target market, a firm can usually avoid head-to head competition with industry leaders, instead of serving a specialized market very well ii. The challenge is to find a target market that is large enough for the proposed business, yet is small enough to avoid attracting larger competitors iii. Often, information from more than one industry and/or market must be collected and synthesized to make an informed judgment, especially if the firm is pioneering a unique area of the marketplace. c.) Determine if the window of opportunity for the product or service is open or closed ii. Study the simple economics of the industry to determine whether the timing is right for a new entrant iii. Firms that fail to conduct a thorough industry and target market analysis often find that the market is not large enough to maintain and grow the business

Part 2: Industry/target market feasibility is an assessment of the overall appeal of the industry and the target market for the product or service being proposed • Most firms do not try to service their entire industry, only a specific target market within the industry. It's important to assess both the broad industry and your specific target market a.) Industry attractiveness b.) Target Market attractiveness c.) Market timeliness

a.) A start-up should assess the prowess, or ability, of its initial management team ii. Individuals starting the firm should conduct honest and candid self-assessments iii. Two of the most important factors are passion for the business and understanding of the markets in which the firm will compete iv. Additional factors that define management prowess include prior entrepreneurial experience, depth of professional and social networks, degree of creativity, experience in cash flow management, and whether the team has college degrees b.) The focus in organizational analysis is on non-financial resources because financial feasibility is considered separately ii. Identify the 8 to 12 most important and potentially problematic non-financial resources and assess whether they are available iii. Examples of non-financial resources include office space, manufacturing space, key management employees, key support personnel, and support from state and local governments if applicable iv. One easily overlooked resource sufficiency issue that should be considered is proximity to similar firms, creating a cluster that can increase productivity of the participating firms

Part 3: Organizational feasibility analysis determines whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch its business a.) Management Prowess b.) Resource sufficiency

a.) Try to determine total cash needed to prepare the business to make its first sale ii. A detailed explanation of where the money will come from should be provided iii. If money will come from friends, credit cards, or a home equity line of credit, a reasonable plan should be stipulated to repay the money iv. When projecting start-up expenses, it is better to overestimate rather than underestimate the costs involved b.) Estimate a proposed start-up's potential financial performance by comparing it to similar, already established businesses ii. Utilize archival data available online, including financial reports on firms iii. Some industry trade associations publish data on the sales and profitability of firms in their industries iv. Basic Internet searches are also helpful v. Simple observation and leg work can also be used to gauge the type of sales to expect by estimating the number of customers and average purchase amount at various times of day c.) The extent to which a proposed business appears positive relative to each factor is based on an estimate or forecast, not actual performance ii. Important factors include the extent to which sales can be expected to grow during the first few years of the venture, percentage of recurring revenue to anticipate, the likelihood that internally generated funds will be available within two years, and the availability of exit opportunities for investors, if applicable

Part 4: For feasibility analysis, a preliminary financial analysis, is normally sufficient. The most important issues to consider at this stage are total start-up cash needed, financial performance of similar businesses, and overall financial attractiveness of the proposed venture a.) Total Startup cash needed b.) Financial performance of similar businesses c.) Overall financial attractiveness of the proposed business

Points of Differentiation

Part of Overall Marketing Strategy section: -o You should also clearly articulate your specific points of differentiation early in the marketing plan section of your business plan -o It's typically best to limit the points of differentiation that you talk about to two or three points, to make them memorable and distinct -o Make sure your points of differentiation aren't liabilities, if a discerning reader starts playing devil's advocate -o The most compelling forms of differentiation are created through innovations that are difficult to imitate because they are created by competencies unique to a firm -o A useful way for a start-up to visually depict its primary point of differentiation is through a product attribute map (A product attribute map is created by articulating two of a product's most important attributes, one on the x-axis and the other on the y-axis)

a. Development Status and Tasks b. Challenges and Risks c. Costs d. Intellectual Property

Product (or Service) Development Plan • Many seemingly promising start-ups never get off the ground because their product development efforts stall or the actual development of a product or service turns out to be more difficult than anticipated • A start-up must have a credible plan for ramping up the production of a product to satisfy the sales estimates in its financial projections • The sections that include the product development plan are:

advertising public relations Social Media other promotions-related activities

Promotions mix includes the specific tactics that a firm uses to communicate with potential customers including: -______________ is making people aware of a product in hopes of persuading them to buy it • The major goals of this are to raise customer awareness of a product, explain a product's comparative features and benefits, and create an association between a product and a certain lifestyle (or a certain objective in a business-to-business context). Media include direct mail, magazines, newspapers, radio, the Internet, television, and billboard advertising. Media used normally depends on the firm's target market. There are many downsides to conventional forms of advertising, which steers start-ups away from advertising on a broad basis: Low credibility, possibility that high percentage of viewers will not be interested, Message clutter, Relative costliness, perception that advertising is intrusive, possibility that poorly crafted ads run risk of irking target market. Most start-ups tend to be selective in advertising efforts, such as limiting their print ads to industry trade journals or using focused pay-per-click -______________ refers to efforts to establish and maintain a company's image with the public. The major difference between public relations and advertising is that public relations isn't paid for. Examples of public relations techniques include: • Press releases • Media coverage • Articles about the firm in newspapers, magazines, or industry press • Blogging • Monthly newsletters • Civic, social, and community involvement. Generating favorable public relations is better than advertising because it is more grassroots and doesn't seem to be as self-serving. The key to getting media coverage is to have a story to tell, rather than simply extolling the value of your product or service. -____________ consists primarily of blogging and establishing a presence and connecting with customers though sites like Twitter, Facebook, and Google+. The number one rule is to determine if a business's target market are active social media users. The largest group of social media users for men is in the 45-54-year age group and for women in the 25- 34-years age group. -Other promotional related activities examples are that some firms give away free samples or trial memberships as a way of exposing potential customers to their product or service. This type of initiative is often pursued to create "buzz" or word-of-mouth advertising. Buzz means creating awareness and a sense of anticipation about a company. In most cases, putting together a specific budget for promotional activities is helpful.

• Founders with none of their own money at risk • A poorly cited plan • Defining the market size too broadly • Overly aggressive financials • Hiding or avoiding weakness • Sloppiness in any area • Too long of a plan

Red Flags in a Business Plan

a. Company History b. Mission Statement c. Products and Services d. Current Status e. Legal Status and Ownership

Sections in the company description include -(a) This section should explain where the idea for the company came from. If the company has been in existence for a while, provide a brief timeline in narrative form and talk about its major achievements. You should also talk about the history of revenues, net income, and sales growth. -(b) The mission statement defines why a company exists and what it aspires to become. Written carefully, it can define the path a company takes and act as a financial and moral compass. Articulate the mission or purpose of the company in as few words as possible. Some companies also have mottos or taglines; these should be mentioned in this section of the plan. There is no set procedure for how to come up with a mission statement or tagline; founders often get together and simply brainstorm ideas. -(c) The products and services section should explain your product or service, including a description of how it is unique and how you plan to position it in the marketplace • Discuss how your company differs from others in terms of the products it offers, its location, and its price range • Identify who your clientele will be and why they would patronize your business instead of others • This is the ideal place to report results of your feasibility analysis • Explain any proprietary aspects to your product or service or explain how you will create barriers to entry • If you fail to candidly address difficult issues, such as creating barriers to entry, you will lose credibility. -(d) This section reveals what major milestones in development your company has already reached. • Three issues are particularly important to address: The current composition of your management team (If you are an early-stage venture, you should mention future staffing plans), Early customer reaction to your product or service (Summarize any results of feasibility analyses and indicate how close your product is to being market-ready). The financial status of your company (How has the company been funded? Do you have any debt, or have you surrendered company equity? Clearly state how much funding you are seeking and for what purpose) -(e) This section should indicate who owns the business and how ownership is split up • Describe the founders' agreement, outlining how ownership is to be shared among founders, if one has been established • If you have multiple founders and no founders' agreement, indicate that this step is pending to maintain credibility with your readers • Indicate your current form of business ownership: You are a sole proprietorship or general partnership if you have not yet incorporated or created any other type of business entity Better options for the long term include a subchapter S corporation, a C corporation, or a limited liability company (LLC) You will need to retain an attorney to help you resolve this matter)

Business plan process

Step 1. Identify a business idea Step 2. Screen or test the idea to determine its preliminary feasibility Step 3. Conduct a full feasibility analysis Step 4. Prepare a written business plan. Step 5. Present the business plan to investors and others

1. Brainstorming 2. Focus Groups 3. Library and Internet Research

Techniques for generating ideas 1.) Most common way to generate business ideas. A "session" in this is targeted to a specific topic about which a group of people are instructed to come up with ideas. In brainstorming, the leader asks participants to share their ideas and react to the ideas of other participants in a lively, freewheeling manner. A flip chart or whiteboard is often used to record ideas. One particularly effective approach to brainstorming is to utilize the three sources for new business ideas as a way of organizing the discussion. In the initial stages of this we should favor the quantity as opposed to the quality of ideas. 2.) This is a gathering of 5 to 10 people who are selected because of their relationship to the issues being discussed. This groups usually work best as a follow-up to brainstorming, when the general idea for a business has been formulated. They are usually conducted by trained moderators who know how to keep the group "focused" and generate lively discussion. 3.) Entrepreneurs would be making the mistake of overly linear thinking to assume that the process of researching does not begin until after the business idea has been chosen. Often the best ideas emerge when the general notion of the idea is merged with extensive library and Internet research. The best approach to using the library, an often-underutilized source of information, is to discuss your general area of interest with a reference librarian. Internet research is also important, including the use of search engines and "alerts" using keywords that pertain to your topic of interest.

• Homogeneity of needs and wants within the segment (not between) • Heterogeneity of needs and wants among segments • Differences within the segment are small compared to differences across segments • The segment is distinct enough that its members can be easily identified • It should be possible to determine the size of the segment • The segment should be large enough to be profitable

The requirements for successful market segmentation:

-Internal reason -External reason -Investors rely heavily on the business plan to make their decisions regarding initial investment. -The business plan helps a new company build credibility by providing detailed information and demonstrating that the entrepreneur has thought through each element of the business. -Placing highly or winning a university-, community-, or state sponsored business plan competition also helps to establish credibility for a firm

There are two primary reasons for writing a business plan —forces the founders of a firm to systematically think through each aspect of their new venture —communicates the merits of a new venture to outsiders, such as investors and bankers

experimentation and trial-and-error learning through customer feedback over formal planning

There is an emerging school of thought, associated with the Lean Startup movement, that opposes the idea of writing a business plan and advocates....

MVP (minimum viable product)

This is a strategy for iteratively learning about your customers. It "helps entrepreneurs start the process of learning as quickly as possible." In contrast to building a product you think has value, it proposes that you learn about your vision by getting potential customers to test an idea/prototype/initial offering, then adapt your product based on the feedback collected. it is simply the fastest way to get through the Build-Measure-Learn feedback loop with the minimum amount of effort ... Its goal is to test fundamental business hypotheses. An example is developing a prototype

• Proximity to qualified labor • Closeness to suppliers • Access to transportation, such as a major airport or an interstate highway • Access to international shipping alternatives • Proximity to customers with a profile conducive to a firm's business • Access to favorable state and local tax rates • Access to economic incentives for locating in a certain area • Proximity to high-quality community in terms of public education, recreational opportunities, health care, and the arts to attract a high-quality workforce

This section describes the geographic location of the business o There are several specific instances in which a business's location is a critical factoring its capability to operate efficiently and effectively: o You should describe the rationale for your location in this portion of your business plan

Slide #1: Title Slide #2: Company Purpose/Vision Slide #3: The problem/need Slide #4: The Solution Slide #5: The Timing Slide #6: Market Opportunity Slide #7: The Customers Slide #8: Competitor Analysis and Differentiation Slide #9: Traction Slide #10: Financials Slide #11: The Team Slide #12: Call to action (How much are you asking, how you will spend them and what are you offering in return

What are the different topics that need to be covered in a pitch deck?

i. Income Statement ii. Balance Sheet iii. Statement of Cash Flows

What are the three essential financial statements and how are they unique? -i.) The pro forma ________________ reflects the projected results of the operations for a firm for a given period of time. It is often referred to as a "profit and loss" because the pro forma income statement records all projected sales and expenses for a given period and shows whether the firm will be making a profit or experiencing a loss. There are three numbers that receive the most attention when evaluating an income statement: net sales, cost of goods sold, and operating expenses. In demonstrating anticipated year-to-year increases in expenses, you can use the constant ratio method, where general expense items are expected to increase at the same rate as sales if the actual numbers are not known. One ratio of particular importance in evaluating a firm's pro forma income statements is a firm's projected profit margins, or return on sales (ROS), computed by dividing net income by net sales. Pro forma income statements don't provide an indication of a firm's cash position; a firm can show excellent sales numbers and still run out of cash despite glowing income statements -ii.) A pro forma ________________ is a projection of a firm's assets, liabilities, and owner's equity at a specific point in time. Assets are listed in order of their "liquidity," or the length of time it takes to convert them to cash. Liabilities are listed in the order in which they must be paid. A balance sheet must always "balance," meaning a firm's assets must always equal its liabilities plus owner's equity. The major categories of assets listed on a pro forma balance sheet include current assets, fixed assets, current liabilities, long-term liabilities, and owner's equity. Balance sheets are somewhat deceiving in that firms spend money on many things that never show up on their balance sheets, intangible assets are not recognized on the balance sheet, and property must be valued at the purchase price instead of the current value. When evaluating a pro forma balance sheet, the two primary questions are whether a firm will have sufficient short-term assets to cover its short-term debts and whether it is financially sound overall. Overall financial soundness is assessed by computing a firm's overall debt ratio. Debt ratio is computed by dividing total debt by total assets -iii.) Many readers of your business plan will consider your pro forma ___________________ to be the most valuable of your financial statements. The cash flow statements provide an indication of whether a firm will be able to maintain a sufficient cash balance to get up and running successfully. To capture items in an organized manner, the cash flow statement is divided into three activities: operating activities, investing activities, and finance activities. It's important that all of a firm's pro forma financial statements be prepared as accurately and realistically as possible. Another financial instrument that is often used is the break-even analysis

Market analysis breaks the industry into segments and zeroes in on the specific segment (or target market) that the firm will tackle. The market analysis section focuses on describing a firm's target market, customers, and competitors, how it will compete in the marketplace, and potential sales and market share. The market analysis helps define the nature of the business and the remainder of the plan. It affirms that a company has a well-thought-out target market, understands its customers, and can generate sales in the face of competition. To raise investment capital, a firm must demonstrate that its target market has sufficient potential to enable it to rapidly increase sales and return to its investors an amount that is 5 to 20 times the original investment. Gaining this degree of insight and knowledge generally requires entrepreneurs to conduct both primary and secondary research.

Why do we need market analysis?

Feasibility analysis

____________ is the process of determining if a business idea is viable The step, along with the idea screening step, is investigative in nature and is designed to critically asses the merits of a business idea . The most compelling facts a company can include in a business plan are the results of its own feasibility analysis, especially feedback from industry experts and prospective customers. Completing a full feasibility analysis takes longer than a First Screen and should include both primary and secondary research

Marketing strategy

__________refers to a firm's approach to marketing its products and services in broad terms, which forms the basis of all its marketing-related activities • Begin the marketing plan section by articulating your marketing strategy because it sets the tone for the entire section • Another important reason for having a marketing strategy and for articulating it in a business plan is to make sure that a firm's marketing efforts are consistent with its overall mission and understanding of the market

business plan

is a written document that carefully explains every aspect of a new business venture. Inside the firm, this is used to develop a "road map" Outside the firm, it introduces potential investors and other stakeholders to the business opportunities.

Market segmentation geography demographic variables psychographic variables Behavioral variables Product type or usage segmentation

is the process of dividing a market into distinct subsets (or segments) that behave in the same way or have similar needs o Markets can be segmented in many ways, such as by: _________(city, state, country), ______________ (age, gender, family size, income), _________________(personality, lifestyle, values), _______________ (benefits sought, product usage rate, brand loyalty), and ________________ (varies by product)

a. Development Status and Tasks

o Most products follow a logical path of development that includes product competition, prototyping, initial production, and full production o Depending on the sophistication of your product- or service development process, products are assessed for their performance and technical merits as they pass from one step in the development process to the next o You should describe the point that your product or service is at and provide a timeline that describes the remaining steps o If you have involved prospective customers in testing early versions of your product and services, you should briefly comment on the process you've used and the results to date o If you are in the very early stages and have only an idea, you should explain how a prototype will be made o In some instances, a computer-generated, virtual prototype, which is less expensive than a physical prototype, is sufficient o There is typically a direct correlation between how far you are from having an actual product or service that can be sold in quantity to how risky your business is perceived to be o One nice touch that dresses up a business plan is to provide a picture of your product if it exists or an artist's rendition of what the product (or service setting) will look like after it's developed

Operations Model and Procedure

o The primary objective of this section is to show that you have a firm grasp on the operational details of launching and running your business o In many instances, the operations section will not be carefully dissected, but in some instances, the information that's included represents make-or-break issues for a firm o You can frame your operations discussion in terms of "back stage," or behind the scenes activities, and "front stage," or what the customer sees and experiences o Some business plans frame the discussion of their operations in the context of a "day in the life of a business" o Another useful way to illustrate how a product or service is produced is to include an operations flow diagram o An operations flow diagram shows the key steps in the production of a product or the delivery of a service o Some issues need to be singled out and discussed in more detail in this section: • An explanation of how your inventory will be stored and how frequently it will be turned over • A description of the length and nature of your product's production cycle • An explanation of where bottlenecks are likely to occur and how you will handle them • An explanation of how you will handle seasonal production loads • An explanation of how your quality control will be managed • An explanation of how your after-sale service, if applicable, will be handled

Operations Strategy and Plans

o This section deals with strategic and longer term issues pertaining to your operations strategy o An important issue that is normally covered is the portion of your production process that you'll perform in house as opposed to the activities that will be done by others o Although it sounds simple, the task of actually finding reliable partners and managing the operations flow can be complex o It may be helpful to include a sentence or two in this part of your plan that clearly makes the link between your business strategy and your operations strategy

Facilities and equipment

o You should list your most important facilities and equipment and briefly describe how they will be (or have been) acquired o If you will be producing your own product, you should describe the production facility that you have or are looking for o This is particularly important for a business-to-business start-up, especially if you are an OEM (original equipment manufacturer) o You may also want to comment on the degree to which you will hold foreign partners accountable for the working conditions in their factories and for their environmental standards o If your business is projecting fairly rapid growth, you should comment on how you'll be able to grow within your existing facilities or how you plan to transition from your existing facility to a larger one.

Industry structure -Concentrated industries (not common, but explain how you plan to compete) -Fragmented industries (Most firms launch into a fragmented industry) Some firms compete in concentrated industries by identifying a niche that is less expensive to compete in, or by using innovation to lower the cost to enter the industry (You will also need to report on the general attractiveness of an industry's competitive landscape)

refers to how concentrated or fragmented the industry is and whether the industry's competitive landscape is generally attractive or unattractive. Report on how concentrated or fragmented your industry is. _________________ industries are dominated by a few large firms. (An industry is this if large capital investments are required to participate, or if it has matured and consolidation has taken place.) _________________ include a large number of smaller companies. (An industry is typically this if it's in the emergence stage of its life cycle and/or the cost of entry is relatively low.)

-Board of Advisors -it requires less time and no legal liability is involved

• A ________________ is a panel of experts asked by a firm's managers to provide counsel and advice on an ongoing basis • Many people are more willing to serve on a board of advisors than on a board of directors because... • Most boards of advisors have between 5 and 15 members • Having a board of advisors can make your start-up stand out because, although having a board of advisors is widely recommended, most start-ups do not have one

-board of directors -(1) appoint the firm's officers, (2) declare dividends, and (3) oversee the affairs of the corporation -Inside director -Outside director -Providing guidance and support -competency gaps -Providing legitimacy

• If a new venture organizes as a corporation, it is legally required to have a ________________, which is a panel of individuals elected by the corporation's shareholders to oversee the management of the firm • Technically they have three responsibilities: • An ___________ is a person who is also an officer of the firm • An _________ is someone who is not employed by the firm • If you include this section in your plan, you should list your board members and provide a brief bio for each member • _____________ to the managers of the firm is the most useful role of the board of directors • Boards can also help fill ___________ within the company • If a firm gets investment capital, the investor will normally occupy a seat on its board of director • _____________ for a firm is another important function of a board of directors • It is assumed that a high-quality individual would be reluctant to serve on a board of a low-quality firm; this individual's presence on the board is known as "signaling" that the company has the potential to be successful • Investors like to see management teams, including the board of directors, that have people with enough clout to get their foot in the door with potential suppliers and customers • If a company doesn't currently have a board of directors, it may be prudent to indicate that the firm anticipates having a board of directors at some point in the future

-operations plan -operating model and procedures, business location, facilities and equipment, and operations strategy and plans

• The ____________ section of the business plan outlines how your business will be run and how your product or service will be produced • The topics that are generally included are:

Pricing Strategy

• This section should explain how you plan to price your product or service • The price a company charges for its products also sends a clear message to its target customers • State how you plan to price your product or services and provide a brief rationale for your pricing philosophy