Business Plans: The Roadmap to Your Success Presented by: Edward S. Balian, Ph.D. Q-Stat Management Consulting Silver Sky, Incorporated --Since 1977--

Business Plans:Business Plans:The Roadmap to Your SuccessThe Roadmap to Your Success

Presented by:Presented by:Edward S. Balian, Ph.D.Edward S. Balian, Ph.D.

Q-Stat Management ConsultingQ-Stat Management ConsultingSilver Sky, IncorporatedSilver Sky, Incorporated

--Since 1977----Since 1977--

(c)2007 Edward S. Balian, Ph.D. (c)2007 Edward S. Balian, Ph.D. ALL RIGHTS RES ALL RIGHTS RESERVED.ERVED.

Q-Stat Management ConsultingQ-Stat Management Consulting

Started in 1977 Started in 1977 (as a Division of Silver Sky, Inc.)(as a Division of Silver Sky, Inc.)

Over 80 clients to dateOver 80 clients to date Consulting in:Consulting in:

EntrepreneurshipEntrepreneurship Marketing ResearchMarketing Research Quality Systems (ISO, TQM, etc.)Quality Systems (ISO, TQM, etc.)


So---Where Do We Start?So---Where Do We Start?

A long journey, with a few speed bumps.A long journey, with a few speed bumps. The quality of your shock absorbers?The quality of your shock absorbers? You will learn a lot, no matter what happens.You will learn a lot, no matter what happens. Is a map or “Plan” really necessary?Is a map or “Plan” really necessary? What’s in it?What’s in it? What’s NOT in it?What’s NOT in it? ““Hey, why can’t I just use a software template and Hey, why can’t I just use a software template and

forget it?” forget it?” The Bottom-Line: Your The Bottom-Line: Your credibility!credibility!


The Preliminary StuffThe Preliminary Stuff

Your Goals: What do you REALLY want Your Goals: What do you REALLY want directly from this venture?directly from this venture?

Your Vision: In 1 year, 5 years, 10 years?Your Vision: In 1 year, 5 years, 10 years? Can your significant other survive it? (we Can your significant other survive it? (we

already know we entrepreneurs are half-crazy.)already know we entrepreneurs are half-crazy.) Is entrepreneurship for everybody and Is entrepreneurship for everybody and

anybody? anybody? (You already know THAT (You already know THAT answer!) answer!)


$$$$ Money-Money-Money Money-Money-Money $$$$

Your Funding Source Options:Your Funding Source Options: Loans (Bankers)Loans (Bankers) Investors (Venture Capitalists)Investors (Venture Capitalists) Family and Friends (Good Luck…!)Family and Friends (Good Luck…!) YourselfYourself Mixture of all the above sources (most common)Mixture of all the above sources (most common)


Entrepreneur Entrepreneur Fears and ConcernsFears and Concerns Over Over Funding OptionsFunding Options

Typical entrepreneurial concerns with any of the Typical entrepreneurial concerns with any of the usual funding options:usual funding options:

The The “100% of Nothin’”“100% of Nothin’” Foolish Greed Theory Foolish Greed Theory The The “…But It’s My Baby”“…But It’s My Baby” Ownership-Anxiety Ownership-Anxiety

SyndromeSyndrome The The “They Will Steal My Idea”“They Will Steal My Idea” Paranoia Paranoia

CorollaryCorollary The The “I Want to be My Own Boss and Answer “I Want to be My Own Boss and Answer

to Nobody”to Nobody” Neurosis Neurosis


ARE YOU STILL WITH ME?ARE YOU STILL WITH ME?

Q&A: Let’s talk for a moment…Q&A: Let’s talk for a moment…


10 Sections to a Business Plan10 Sections to a Business Plan

OK, let’s GO. OK, let’s GO. Here are the 10 Sections of a typical Business Here are the 10 Sections of a typical Business

Plan, in order:Plan, in order:


Your Business Plan:Your Business Plan:Section I: Basic Information Section I: Basic Information

(Talkin’ ‘Bout (Talkin’ ‘Bout YOU!)YOU!)

Name and address of businessName and address of business Nature of businessNature of business Financing sought (how much $$ and over what Financing sought (how much $$ and over what

suggested time frame?)suggested time frame?) Confidentiality statementConfidentiality statement


Section II.Section II.Executive SummaryExecutive Summary

or…”Dude, I’m just too busyor…”Dude, I’m just too busy to read your pitch.” to read your pitch.”

Summarize the entire Business Plan here!Summarize the entire Business Plan here! Believe it or not, this just may be the only Believe it or not, this just may be the only

section your audience reads---complete it section your audience reads---complete it carefully!carefully!

Have this reviewed by respected peers or a pro Have this reviewed by respected peers or a pro in the field before presenting it.in the field before presenting it.


Section III.Section III.Industry AnalysisIndustry Analysis

SWOT Matrix of Your Proposed Business:SWOT Matrix of Your Proposed Business: StrengthStrength WeaknessWeakness OpportunitiesOpportunities ThreatsThreats

S & W in the presentS & W in the present

O & T in the futureO & T in the future


Section IV.Section IV.Description of Your VentureDescription of Your Venture

What is it? (What is it? (EXAM #1EXAM #1: Can you explain your : Can you explain your venture idea in less than three minutes to a venture idea in less than three minutes to a complete stranger?)complete stranger?)

Size (projected in 1, 3, 5 years, in $$ gross Size (projected in 1, 3, 5 years, in $$ gross revenue)revenue)

Personnel requiredPersonnel required Equipment/space requiredEquipment/space required Background of the Entrepreneurs involvedBackground of the Entrepreneurs involved


Section V.Section V.Production PlanProduction Plan

(only as needed; service industries can skip this Section—(only as needed; service industries can skip this Section—lucky you!)lucky you!)

Manufacturing processManufacturing process Physical plant descriptionPhysical plant description Machinery and equipmentMachinery and equipment Proposed suppliers of raw materials and/or Proposed suppliers of raw materials and/or

support helpsupport help


Section VIaSection VIaMarketing PlanMarketing Plan

The FOUR P’s of Marketing, Explained for The FOUR P’s of Marketing, Explained for Your Venture:Your Venture: Product (or service) Product (or service) (you might also include The Boston (you might also include The Boston

Consulting Group Quadrant chart here)Consulting Group Quadrant chart here)

Price (retail/wholesale, estimates)Price (retail/wholesale, estimates) Placement (aka, distribution)Placement (aka, distribution) Promotion (includes both advertising and publicityPromotion (includes both advertising and publicity

—two different things)—two different things)


Section VIb.Section VIb.Marketing PlanMarketing Plan

Marketing Research, either before, after or during the Marketing Research, either before, after or during the development of The Four P’s.development of The Four P’s.

Field-Testing or Pilot-Testing a prototype. Use primary or Field-Testing or Pilot-Testing a prototype. Use primary or secondary hard data or focus groups or both.secondary hard data or focus groups or both.

On-going market research takes place in all established On-going market research takes place in all established corporations.corporations.

Caution: Don’t Caution: Don’t assumeassume a “need” for your venture in the a “need” for your venture in the marketplace— marketplace— demonstrate it.demonstrate it.

Can you afford not to do at least some market research?Can you afford not to do at least some market research? The advantages of doing your homeworkThe advantages of doing your homework The chance of potential flop without research The chance of potential flop without research


Section VII.Section VII.Organization PlanOrganization Plan(Sorry, it was inevitable: (Sorry, it was inevitable:

Time to bring on the Lawyers and the Accountants)Time to bring on the Lawyers and the Accountants) Form of OwnershipForm of Ownership

C-CorpC-Corp S-CorpS-Corp LLCompanyLLCompany PartnershipPartnership Sole PropSole Prop

Why that form of ownership was chosen?Why that form of ownership was chosen? Liability and tax issues tend to prevail here.Liability and tax issues tend to prevail here.


Section VIII.Section VIII.Contingency PlanContingency Plan

((or: If things don’t work out, can I split to or: If things don’t work out, can I split to South America with the investors’ money?)South America with the investors’ money?)

““What if” scenarios: altering the Plan as, if, What if” scenarios: altering the Plan as, if, and when necessary.and when necessary.

Changes in the roadmap direction depending Changes in the roadmap direction depending upon specific benchmarks: what indicators and upon specific benchmarks: what indicators and when? (Usually financial, but could be other when? (Usually financial, but could be other indicators)indicators)


Section IX.Section IX.Financial PlanFinancial Plan

(Yeah—all the FUN stuff!)(Yeah—all the FUN stuff!)

Pro Forma Income Statement (1, 3, 5 and 10 Pro Forma Income Statement (1, 3, 5 and 10 years)years)

Cash Flow ProjectionsCash Flow Projections Pro Forma Balance Sheet: Pro Forma Balance Sheet:

(Assets=Liabilities + Shareholder Equity)(Assets=Liabilities + Shareholder Equity) Break-Even AnalysisBreak-Even Analysis Sources and application of funds over timeSources and application of funds over time


Section IX Section IX (con’t)(con’t)

Financial Plan TipsFinancial Plan Tips The MOST COMMON error for all The MOST COMMON error for all

entrepreneurs? entrepreneurs? GUESS:GUESS: __________________ sales revenue__________________ sales revenue __________________ expenses__________________ expenses

Keep your salary at Keep your salary at 15% or less15% or less of total fiscal of total fiscal year expenses, but indicate to your year expenses, but indicate to your investors/bankers how you intend to survive investors/bankers how you intend to survive the time period(s).the time period(s).


Section X.Section X.AppendixAppendix

(For the real detail hounds…)(For the real detail hounds…) Market Research DataMarket Research Data

Analysis of data (REAL analysis or just cute Analysis of data (REAL analysis or just cute graphs and pie charts?)graphs and pie charts?)

Database(s), primary and/or secondaryDatabase(s), primary and/or secondary FindingsFindings

Contracts, leases, etc.Contracts, leases, etc. Price lists from primary suppliersPrice lists from primary suppliers Product detail photos, worksheet details, etc.Product detail photos, worksheet details, etc. Reference sources/bibliographyReference sources/bibliography


Are You Still With Me?Are You Still With Me?

Q/A Q/A OK, let’s talk (again). OK, let’s talk (again).


Q-Stat Management ConsultingQ-Stat Management Consulting

Corporate Basic Rate Corporate Basic Rate no basic rate increases since 1994no basic rate increases since 1994 $20,000 retainer @ $290 per hour.$20,000 retainer @ $290 per hour.

““Start-Up” Entrepreneur’s Start-Up” Entrepreneur’s Special RateSpecial Rate (individuals only)(individuals only) Initial 18 consulting hours @ $1600 retainer.Initial 18 consulting hours @ $1600 retainer.


Thank You and Best of Luck!Thank You and Best of Luck!

Edward S. Balian, Ph.D.Edward S. Balian, Ph.D.San Diego, California, USA.San Diego, California, USA.

Since 1977:Since 1977:Q-Stat Management ConsultingQ-Stat Management Consulting

A Division ofA Division ofSilver Sky, IncorporatedSilver Sky, Incorporated

www.Q-STAT.comwww.Q-STAT.comwww.SilverSkyIncorporated.comwww.SilverSkyIncorporated.com

760-809-9778 (PST)760-809-9778 (PST)[email protected]@gmail.com

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Business Plans: The Roadmap to Your Success Presented by: Edward S. Balian, Ph.D. Q-Stat Management Consulting Silver Sky, Incorporated --Since 1977--