The Startup Guide - Create a Business Plan

The

2013 Edition

Building a Better World Through Entrepreneurship

With Ellen Daly

ENTREPRENEURSHIP

Create A plan

ABOUT THIS PRESENTATION

THIS presentation IS PART OF A LARGER slide DECK on building a better world through entrepreneurship

For more slides slides & CONTENT visit visit::

Startupguide.com

CREATE A PLAN BEFORE A PROTOTYPE? cREATE A PLAN SHOULD YOU CREATE

SOME ENTREPRENEURS choose not to create a plan at all And just start working

On a prototype or Minimum viable product

cREATE A PLAN WHY A LITTLE BIT OF PLANNING IS HELPFUL

I find that it’s helpful to at least create create a short short slide deck or exec summary summary To ensure you know what you’re building & What problem you’re Solving before you start building

cREATE A PLAN YOUR COMPANY PITCHDECK Many ‘Business PLANS’ ARE created as sLIDE DECKS WHICH INCLUDE:

1. TEAM 2. PROBLEM 3. PRODUCT & TECHNOLOGY 4. MARKET & COMPETITION 5. revenue model 6. FINANCIAL PROJECTIONS

cREATE A PLAN the problem

In your plan, CLEARLY ILLUSTRATE THE PROBLEM YOU ARE SOLVING HOW YOU ARE SOLVING IT

AND FOR WHOM STARTUPGUIDE.COM

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cREATE A PLAN the product

SHOW PICTURES OF A PROTOTYPE OR WIREFRAMES & MOCKUPS And MAKE YOUR SPECIFIC SOLUTION

EASILY VISUALIZED

cREATE A PLAN the product

SHARE YOUR PRODUCTION TIMELINE AND KEY MILESTONES TOWARD INITIAL PRODUCT DELIVERY AND DISCUSS FUTURE PRODUCTS AND SERVICES STARTUPGUIDE.COM

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cREATE A PLAN

the market

ADDRESS THE FOLLOWING ABOUT YOUR MARKET

SUPPLIERS BARRIERS TO ENTRY INTELLECTUAL PROPERTY MARKET SIZE MARKET TIMING DIRECT COMPETITORS POTENTIAL PARTNERS

cREATE A PLAN revenue model

ADDRESS THE FOLLOWING IN YOUR REVENUE SECTION

B2B or B2c DISTRIBUTION CHANNELS WHOLESALE VS. RETAIL REVENUE ONE TIME VS. SUBSCRIPTION REVENUE USER & CUSTOMER GROWTH ASSUMPTIONS UNIT COSTS AT SCALE UNIT REVENUE AT SCALE STARTUPGUIDE.COM

449

cREATE A PLAN Financials SECTION

ADDRESS THE FOLLOWING IN YOUR FINANCIAL PROJECTIONS REVENUE ASSUMPTIONS COST ASSUMPTIONS Revenue by Month COST BY MONTH BY CATEGORY NET INCOME BY MONTH BY CATEGORY TIME TO BREAKEVEN FUNDS NEEDED TO REACH NEXT MILESTONE TOTAL TOTAL EXPECTED FUNDS NEEDED

cREATE A PLAN Financials PROJECTIONS

EXAMPLE 60 Month PRO FORMA P&L PROJECTIONS $1,500,000 $1,000,000 $500,000 $0 Aggregate breakeven

($500,000) ($1,000,000) ($1,500,000)

MONTHLY breakeven

($2,000,000) ($2,500,000) 0

6

12

Revenue STARTUPGUIDE.COM

18

24

Expenses

30

36

42

48

54

60

Aggregate Net Income 451

cREATE A PLAN Financials PROJECTIONS

Here’s a REALLY REALLY BASIC Example financial PROJECTION

Revenue Expenses Net Profit

2015 18,127 103,408 <85,281

2016 50,984 118,539 <67,555

2017 143,401 139,017 4,384

2018 403,340 287,553 115,787

your financial projections Should list out expenses by major categories categories (Labor, Marketing, Servers, OFFICE SPACE, etc.)

2019 1,134,461 640,004 494,457

cREATE A PLAN SLIDE DECK checklist

MAKE SURE YOUR DECK ANSWERS ALL THESE QUESTIONS ! Who’s on your team?

What is their background? ! What WHATT IS THE NEED FOR THE PRODUCT? ! WHA ! HOW WILL THE PRODUCT BE PRICED?

WHAT IS THE SIZE OF THE MARKET? ! WHAT ! IS THE MARKET READY FOR THE PRoDUCT?

WHATT WILL IT COST TO PRODUCE THE PRODUCT? ! WHA ! WHAT IS THE TOTAL START-up COST?

cREATE A PLAN SLIDE DECK checklist

MAKE SURE YOUR DECK ANSWERS ALL THESE QUESTIONS ! HOW MUCH IS NEEDED TO REACH BREAKEVEN? ! WILL YOU NEED TO ACQUIRE ANY IP? ! WHO IS YOUR TARGET CUSTOMER?

WHATT ROLES WILL YOU FILL IN THE FUTURE? ! WHA WHAT ARE YOUR FUTURE PRODUCTS? ! WHAT WHATT ARE YOUR ANNUAL Revenue PROJECTIONS? ! WHA WHATT ARE YOUR ANNUAL COST PROJECTIONS? ! WHA WHAT ARE YOUR ANNUAL PROFIT PROJECTIONS? ! WHAT

cREATE A PLAN incorporate

NOW THAT YOU HAVE YOUR PLAN It’s time to become official

AND INCORPORATE STARTUPGUIDE.COM

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cREATE A PLAN incorporate

THE BENEFITS OF INCORPORATING MUCH LOWER TAXES (only pay taxes on profit) LIABILITY PROTECTION BEING TAKEN SERIOUS SERIOUSLLY ABILITY TO OPEN A BANK ACCOUNT ABILITY TO HIRE EMPLOYEES ABILITY TO RAISE INVESTMENT ABILITY TO GAIN CORPORATE CORPORATE CREDIT

cREATE A PLAN incorporate

TO INCORPORATE YOURSELF YOUU JUST NEED TO KNOW YO THE NAME OF THE COMPANy THE STATE YOU WISH TO INCORPORATE IN

THE NUMBER OF SHARES TO CREATE THE INITIAL OWNERSHIP OF THOSE SHARES

cREATE A PLAN incorporate

YOU CAN INCORPORATE VIA LEGALZOOM.com INCORPORATE.COm OR VIA ANY CORPORATE LAW FIRM

cREATE A PLAN incorporate

IN THE U.S. you can start a S Corp C Corp LLC BENEFIT CORP

Most firms that plan on raising capital are Delaware C Corporations

cREATE A PLAN incorporate

IN CHOOSING A LAW FIRM LOOK AT REPUTATION REPUTATION & REFERENCES REFERENCES START ST ART-up -up EXPERIEN EXPERIENCE CE INTRODUCTION TO INVESTORS IPO EXPERIENCE PARTNER CHEMISTRY

cREATE A PLAN incorporate

ONCE INCORPORATED YOU’ll RECEIVE YOUR ARTICLES OF INCORPORATION SET OF BYLAWS SET OF STOCK CERTIFICATES

cREATE A PLAN incorporate

THEN if in the U.S. YOU CAN GET AN EMPLOYER IDENTIFICATION NUMBER FROM THE IRS (YIPEE!) AND OPEN A BANK ACCOUNT

cREATE A PLAN What matters is execution

Don’t spend too long on planning. planning. BUSINESS IDEAS ARE A DIME A DOZEN WHAT REALLY MATTERS IS THE OPERATIONAL EXECUTION AND THE QUALITY OF the team.

The

2013 Edition

Building a Better World Through Entrepreneurship

With Ellen Daly