Machala Ferrel

5/20/2018 Machala Ferrel

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The Business Plan

Janis Machala, Paladin PartnersDon Ferrel, SeaTec

Cofounders of BigScreen


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About Us

Janis Managing Partner,

Paladin Partners Serial entrepreneur,

business advisoryservices

Wang, Sun, Microsoft,IT Start-ups

BA Psychology, MBA,

University of Iowa

Don President/CEO, SeaTec

Consulting Serial entrepreneur,

business development,large scale IT systemsintegration

Scitor, RockwellInternational

BA Math, BS Physics,Washington State

Long time active player in WestCoast venture and angel scenes

NWEN, Alliance of Angels, Seraph

Done lots of deals

Strong technicalacumen

Excellent execution andteam building skills

Fiscally conservative


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About Our Company - BigScreen

Simplified computing andInternet for older adults

Extends social and care-giving networks

Trusted source for value-added services


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Purpose of a Business Plan

Alignment of team(s)

Operating plan

Communication across company,division, department, businesspartners

Investment capital

Expansion capital (banks, leases)

Merger/acquisition process


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How to Use a Business Plan

Executive summary Solicit interest

Screen for investor candidates

Mini business plan Banking/leasing document

Potential acquirers

Full business plan Team planning process

Due diligence


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What Investors Look For

How does the team think?

How detail oriented is the team?

How big is this market? Is there sustainable competitive

advantage?

Whats the growth plan? What does the technology roadmap

look like, short term or long term play


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Financial Projections

Build 5 years

Detail near years, extrapolate out

years Build from single unit economics

Document assumptions

Compare against top down Validate with market comparables


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10 Must Answer Questions

How large is your addressable market? How fast is the market growing? Whos make up your management team? Whats your secret sauce?

What are the barriers to entry/competitiveadvantage?

What do your 5 year financials look like? Whats your path to profitability? Why is this a company versus a product/service?

Whos your competition and how do you beatthem?

Why cant Microsoft do this? (or name any big,established company)


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Creating Your Companys Strategy

Building a strategy is harder workthan building your product

Think about What do you want your business to be

when it grows up

Looking back from 5 years in future

Perspectives of all stakeholders

Anything that could go wrong

Hope is not a strategy


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Competitive Analysis

You always have competitors

Dig deep, be detailed, be honest

Compare features and benefits Technology comparison

Whole product offering (pricing,

support, etc.) Channels, funding, customers


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Sustainable Competitive Advantage

Create barriers to entry

Continually add value for yourcustomers (and your investors)

Anticipate competition and makeplans for dealing with it Better widget, price erosion, market

share, different business model..

Avoid the trap of believing that yourmain competitor is your exit strategy


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Business Plan Format

Pages: 10 to 30

Kinkos white bondis good enough

Simple binding

Examples Handout a good

example B Plan Discuss examples

of bad ones

Typical OutlineExecutive Summary

Introduction and Business Premise

Market Analysis and Customer Needs

Product Overview

Value Proposition

Business Model

Business Operations Plan

Marketing and Sales

Market Entry

Transition to Revenue Service

Competitive Assessment

Partnership Strategy

Management Team and Advisors

Financial Projections

Key Business Metrics

Capital Structure/Financing Plans

Exit Strategy

Risk Analysis

Summary


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User Friendly B-Plan is Key

Investors receive hundreds of these

Most plans dont get fully read

Reasons why: Logic is difficult to follow

The business is not obvious

Too much extraneous information or fluff

Use the same techniques to writeyour plan that you would use to writea play, a song, software..


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Nuts and Bolts

12 point type Use a clean font Dont use bold or italics too much

Make sure your visuals are readable No typos, proof-read thoroughly (including

the visual!) Remember: not everyone has same printer Check for grammar Style consistency If you cant write, hire someone


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Due Diligence

Market assessment is initial focus

Customer market validation next

Team references and resumes critical Secondary:

Financials and assumptions

Corporate structure and legal docs Patent applications


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Resources

Reading list Guy Kawasaki

Geoffrey Moore

Business 2.0

HBS Case Studies

Workshops CIE Program

NWEN

WTC

SBA

Archive Venture blogs

KauffmanFoundation

Consultants Domain experts

Funding experts

Teambuildingexperts


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Questions and Discussion

Documents

Machala Ferrel