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Business Plan Preparation. Frank Moyes Leeds School of Business University of Colorado Boulder, Colorado. Tonight’s Agenda. Topics Opportunity/Need Market Analysis Segmentation Financial Comp Model Company Evaluate MRP & Hecho en Casa business plans Hand-in Interview List. Next Week.

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Presentation Transcript
business plan preparation

Business Plan Preparation

Frank MoyesLeeds School of BusinessUniversity of ColoradoBoulder, Colorado

Market Analysis

tonight s agenda
Tonight’s Agenda
  • Topics
    • Opportunity/Need
    • Market Analysis
    • Segmentation
    • Financial Comp
    • Model Company
  • Evaluate MRP & Hecho en Casa business plans
  • Hand-in Interview List

Market Analysis

next week
Next Week
  • Topics
    • Industry Analysis
    • Competitive Advantage
    • Value Chain
    • Business Model
  • Read
    • BP pp 11-13, 27
    • Business Model Assignment
  • In the Fire
    • Opportunity/Need
    • Value Proposition

Market Analysis

opportunity need
Opportunity/Need
  • What is the pain?
  • What problem is being solved?
    • Dissatisfaction with current products/services
    • Poor quality or service
  • Must be compelling
  • Must be easily understood by TM

Market Analysis

market analysis
Market Analysis
  • Market: “group of current and potential customers having the willingness and ability to buy product/services to satisfy a need.”
  • Industry: “group of sellers that offer product/services that are similar and close substitutes for one another.”

JW Mullins, New Business Road Test

Market Analysis

market analysis sections
Market Analysis Sections
  • Market size & growth
  • Trends
  • Target Market
  • Channels of distribution

Market Analysis

market analysis macro
Market Analysis (Macro)
  • What is the size & growth potential?
  • Historic and future
  • Must indicate sources
  • Segment your market

Lot’s of numbers – show in tables

Market Analysis

market segmentation macro
Market Segmentation (Macro)
  • Groups of customers – demographics & psychographics
  • Products – features, benefits, prices
  • Geography – see Hecho en Casa
  • Distribution channels
  • Sector – industrial (see MRT), consumer, government

Objective is to identify potential entry points

Market Analysis

trends
Trends
  • What changes are taking place – economic, socio-cultural, political/legal, global, environmental, demographic, technological
  • Positive and negative trends
  • Dissatisfied groups
  • Must provide your sources

Market Analysis

target segment micro
Target Segment (Micro)
  • Best point of entry
  • What is the size & growth potential?
    • Consumer - demographics & psychographics
    • Business – types of organizations, buying decisions
  • Understand customer behavior
    • How are products used?
    • How are buying decisions made?

It’s not about you!

Market Analysis

target market micro
Target Market (Micro)
  • Benefits are understood, compelling & differentiated
  • Potential to grow & expand to other segments
  • Evidence that the customer wants to buy
    • Customer research is key
    • Surveys provide credibility
    • Lurk & Listen

Market Analysis

channels of distribution
Channels of Distribution
  • What is normal for your market?
  • Distributors, wholesalers, dealer, retailer, internet, system integrator, Value Added Retailer (VAR) Original Equipment Manufacturer (OEM)
  • How are buying decisions made

Market Analysis

value proposition 3 elements
Value Proposition -3 Elements
  • What are the features?
  • Who is the target market?
  • What are the benefits?

Market Analysis

value proposition
Value Proposition

“XYZ is a_______[describe] company. By its _______[feature(s)], it provides ______ [unique benefit(s)] to ______[target market]”

Market Analysis

simple value proposition sst corporation
Simple Value PropositionSST Corporation

“SST is a stainless steel toothbrush company. By its one bristle brush made of high tensile stainless steel, it provides an exhilarating tooth cleaning experience to thrill-seeking X-gen consumers”

Market Analysis

simple value proposition dell computer
Simple Value PropositionDell Computer

“Dell Computer sells personal computers to consumers. Our build-to-order manufacturing and customer-direct sales enable us to offer custom built computers at very competitive prices. Our customers get the computer that they have always imagined and save money.”

Market Analysis

simple value proposition vic s coffee
Simple Value PropositionVic’s Coffee

“Vic’s Coffee is a Boulder based coffee house. Its gourmet coffee, convenient and fast service, provide a welcoming environment for people who want to meet with their friends or a stimulating morning coffee for on-the-go business people.”

Market Analysis

value proposition19
Value Proposition
  • Proflowers serves the “price sensitive and convenience oriented customers” with the “freshest cut flowers at a competitive price”, because of their unique sourcing and Fed/Ex shipping arrangements.
  • FTD.com serves the “mid-to high-end market” by providing the “easiest way to send flowers and gifts” because of their strong brand name, market communications and supplier network.

e-Commerce; Rayport & Jawroski

Market Analysis

financial comp s
Financial COMP’s
  • Company in your marketplace.
    • NAIC code
    • Publicly traded
    • Industry ratios – see Selected Resources Guide Library
  • Key financial measures to compare when developing strategy and projections
  • Reality test

Market Analysis

model company
Model Company
  • Identify company in your marketplace
  • Different segment, products, target market
  • Done just what you want to do
  • Provides credibility

Market Analysis

business plans
Business Plans
  • Metal Removal Technology
  • Hecho en Casa

Market Analysis

features
Features
  • Describe the product or service - range, environment, employees
  • What are the key product/service attributes (performance, cost, quality, social, availability, service, and environment)?
  • How is the product/service produced and delivered? Does the process provide a competitive advantage?

Market Analysis

target market
Target Market
  • Who is the target market? Why?
    • Demographics
    • Psychographics or life style
    • Social status: infers certain behavior
  • How are buying decisions made? What are the criteria? Who makes the decision? Who influences the decision?

Market Analysis

what are the benefits
What Are the Benefits?
  • Emotional: ambition, power, independence, achievement, ambition, pride of ownership, comfort, love, friendship, security, style, self Improvement, etc.
  • Social: status, image, popularity with friends or family members, reputation of brand, personal relationships, style, fashionable, etc.
  • Health: stress, fitness, mental capacity, strength, sex life, quality of life, muse, etc.
  • Financial: revenue, costs, savings, productivity, pricing, profitability, market share, save time, productivity, etc.
  • Life style: convenience, saves time

Market Analysis

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