MANA 3325 – Thurburn Lecture #4 Slides Product or Service Feasibility Primary Research – Most Valuable & Expensive: Customer Surveys Focus Groups Prototypes

MANA 3325 – ThurburnLecture #4 Slides Product or Service Feasibility

Primary Research – Most Valuable & Expensive:• Customer Surveys• Focus Groups• Prototypes• In-Home Trials

Secondary Research – Less Pertinent & Less Expensive:• Trade Associations• Direct Mail Lists• Demographic Data• Census Data• Market Research by Others• Articles• Local Data• Internet

MANA 3325 – ThurburnLecture #4 Slides

Financial Feasibility

• Capital Requirements Do we have enough cash to do it? If not… can we raise the cash needed?

• Estimated Earnings Does it generate enough cash to sustain itself?

• Return on Investment Can we get a better return doing something else for a lower risk?


Should We?

Can We?

How Do We?

Did We?

Would We?


Should We?Does it fit our Vision and Mission?

Can We?Do we have adequate resources?

Perform a Feasibility Analysis

How Do We?Develop a Business Plan

Specify Objectives

Did We Achieve our Goals?Implement the Business Plan

Measure Results

Would We Do It Again?Do we pull the plug?

If so… When?


The Business Plan

Why Make a Business Plan?


The Business Plan

Good Planning Improves Results

Increase Probability of Successful Financing

Helps Prevent Mistakes… I wish we hadn’t !


The Business Plan

Who is the Plan for?

• Yourself… essentials may be enough.

• Partners… more extensive

• Investors… most extensive

The More $$$ the More EXTENSIVE


The Business Plan

• Company• Strategy• Marketing• Implementation• Projections• Financing


The Business Plan

• Company• Title Page• Table of Contents• Exec Summary• Vision & Missions• History• Industry Profile• Products & Services


The Business Plan

• Strategy• Goals• Objectives• Business Strategy


The Business Plan

• Marketing• Marketing Strategy• Marketing Research• Customer Research• Competitors Analysis


The Business Plan

•Implementation• Management Team• Plan of Operations


The Business Plan

•Projections• Assumptions• Projections• Summary & Cash Flow• Income Sources• COG• Expenses• Payroll Detail


The Business Plan

•Financing• Loan Details if applicable• Investor Details if applicable


The Business Plan

The 5 Cs of Capital and Financing

Capital

Capacity

Collateral

Character

Conditions


The Business Plan

The 5 Cs of Capital and Financing

Capital – Enough? and Balance of Debt vs Equity

Capacity – Cash Flow

Collateral – Liquid or Fixed Assets

Character – Creditor History

Conditions – Terms of Loan

The Business Plan


Yourself… essentials may be enough.

• Marketing Strategy• Competitor Analysis• Financial Projections

MANA 3325 – ThurburnLecture 09-10-13 Slides

The Business Plan


“Partners”… more extensive … add the

• Vision & Mission• Business & Industry Profile• Plan of Operations• Partner Buy In T&C


The Business Plan


Investors… most extensive… add the…

…. Full Business Plan….

The More $$$ the More EXTENSIVE


The Business Plan


A Plan Must Pass Three Tests

1. The Reality Test:

2. The Competitive Test:

3. The Value Test:

Define Reality Test…?

The Business Plan


The Reality Test – proving that:

• A market really does exist for your product or service.

• You can actually build or provide it for the cost estimates in the plan.

Next… Define the Competitive Test

The Business Plan


The Competitive Test – evaluates:

1. A company’s position relative to its competitors.

2. Management’s ability to create a company that will gain an edge over its rivals.

Next define the Value Test

The Business Plan


The Value Test – proving that:

• A venture offers investors or lenders an attractive rate of return or a high probability of repayment.

The Business Plan


The Business Plan

• Company• Strategy• Marketing• Implementation• Projections• Financing


What are the sub-parts of the Company Section of a Business Plan?

The Business Plan

• Company• Title Page• Table of Contents• Exec Summary• Vision & Missions• History• Industry Profile• Products & Services


What is the difference between Features & Benefits?

The Business Plan


Features vs. Benefits

Feature – a descriptive fact about a product or service:

“an ergonomically designed, more comfortable handle”

Benefit – what a customer gains from the product or service feature:

“fewer problems with carpal tunnel syndrome and increased productivity”

What are the sub-sections of the Strategy Section?

The Business Plan

• Strategy• Goals• Objectives• Business Strategy


What are the sub-sections of the Marketing Section?

The Business Plan

• Marketing• Marketing Strategy• Marketing Research• Customer Research• Competitors Analysis


What are the sub-sections of the Implementation Section?

The Business Plan

•Implementation• Management Team• Plan of Operations


What are the sub-sections of the Projections Section?

The Business Plan

•Projections• Assumptions• Projections• Summary & Cash Flow• Income Sources• COG• Expenses• Payroll Detail


The Business Plan

Proposed Financing

• Loan Details if applicable

• Investor Details if applicable


The Business Plan

Capital – Enough? and Balance of Debt vs Equity

Capacity – Cash Flow

Collateral – Liquid or Fixed Assets

Character – Creditor History

Conditions – Terms of Loan


The Business Plan


Tips on Preparing a Business Plan

1. Make sure your plan has an attractive cover. (First impressions are crucial.)

2. Rid your plan of all spelling and grammatical errors.

3. Make your plan visually appealing.

4. Include a table of contents to allow readers to navigate your plan easily.

5. Make it interesting.

The Business Plan


Investors

Family: The first place you go… need to get some buy in.

Friends: The second place… should be interested.

Network: Hopefully it is full of people with money.

Suppliers: If an extension of an existing business this is a great source of financing.

Money People: Angels, Mezzanine, Growth Stage, M&A

Documents

MANA 3325 – Thurburn Lecture #4 Slides Product or Service Feasibility Primary Research – Most Valuable & Expensive: Customer Surveys Focus Groups Prototypes