How does the business work
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How Does the Business Work?. The Business Plan and the Business Model. Margarita Antonova. Volunteer Trainer @ Telerik Academy. academy.telerik.com. Business System Analyst. Telerik Corporation. IT. Developers. Business. Product. Table of Contents. Software product vs. SaaS

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How Does the Business Work?

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How does the business work

How Does the Business Work?

The Business Plan and the Business Model

Margarita Antonova

Volunteer Trainer @ Telerik Academy

academy.telerik.com

Business System Analyst

Telerik Corporation

IT

Developers

Business

Product


Table of contents

Table of Contents

  • Software product vs. SaaS

  • The Business Plan

    • Break-even

  • Workshop 1: How do they work?

  • The Business Model

    • Types

  • Workshop 2: Financial Plan


Packaging software

Packaging Software

Defining the combination of product and services we are selling


Software products

Software Products

  • Definition

    a single application or a group of applications built to be used by the client

  • Key concept

    the client owns the product and usually needs to install it in order to take advantage of it


Software products1

Software Products

  • Key features:

    • License & Support fee – grant permission of usage

    • Life-cycle – common stages in the life of a product on the market: inception, market entry, promotion, growth,

    • Product line – set of related systems that address a market segment, build from common assets allowing for reuse (http://www.sei.cmu.edu)

    • Product ecosystem – a group of products or products and services (hardware, software, support, etc.)


Software service

Software Service

  • SaaS Definition – software as a service – a software delivery model where the client uses the benefits of the software without necessarily owning the software

  • Key concepts:

    • SaaS is in the Cloud

    • Deployment is instant

    • Typically accessed through a browser

    • Hardware is outsources

    • Technical support belongs to the Cloud, the client only need training

    • Reduced IT costs


Workshop 1 how are they organized to make money

Workshop 1: How are they organized to make money?

vs.


Business plan

Business Plan

Short term planning for the success of your business


Business plan1

Business Plan

  • Definition 1 – an idea of how we are getting the funds to produce: equipment, overhead, salaries, taxes, licenses, etc. and how we are getting the profits to break even

  • Definition 2 – a list of business goals, the reasons they are achievable and a plan to achieve them

  • Definition 3– [tell the bank] what you plan to do and how you plan to do it


Business plan2

Business Plan

  • Key concepts:

    • Strategic – today I can do this, tomorrow I want to do that and here is how

    • Short term – covers the next 3-5 years

    • Can serve different purposes:

      • Financial – not a financial document but expected by the investor

      • Communication – use to display idea and goals to stakeholders

      • Plausibility – evaluate the idea for the business

      • Improvement – organize and understand the business in order to develop it

      • Finality – not final, can be enhanced and further improved based on discussions, needs and goals


Business plan3

Business Plan

  • Structure:

    • Executive Summary – state what you want to achieve

    • Business Description – explain the industry and the key features of its markets including future possibilities

    • Marketing Plan – supported with the market analysis:

      • Identify the target market

      • Explain the competitive environment

      • Describe the product and its development


Business plan4

Business Plan

  • Structure:

    • Operations Plan – describes:

      • Organization of the company: departments and their roles

      • Human Resources needed – training and outsourcing

      • IT communication needed

    • Risk analysis – identify potential hazards

      • Procedures to handle risk – strategic, legal and financial

      • Discuss business continuity


Business plan5

Business Plan

  • Structure:

    • Financial Plan – current and/or future break down of the financial policies in the business

      • Financing the business – current and future sources: investors, own capital, profit, etc.

      • Financial forecast:

        • Cash flows – source and amount of needed cash for obligations

        • Income Statement – ability to obtain cash

          • profit = revenue - cost

        • Balance Sheet – annual summary of the financial situation

          • Assets = Liabilities + Equity


Business plan6

Business Plan

  • Structure:

    • Decision-making Criteria – having a business is ultimately a financial decision

      • Break-even analysis

        • when is BEP (break-even point) expected

        • BEP is the point at which cost = revenue

      • Net Present Value and the time value of money

        • What is the current value of the future cashflows

        • If negative or insufficient, is the business worth doing?

      • ROI – return on investment for the creditors


Business plan7

Business Plan

  • What is the business model:

    • How the company will create, deliver and establish value

    • Should take into consideration Web 2.0 concepts – user generated contend, networking, collective intelligence, focus on experiences, etc.

    • Not all business models are effective or profitable


Business plan8

Business Plan

  • Types of business models:

    • Offline & online presence

    • Advertising

    • No middle-man

    • Direct sales

    • Franchise

    • Freemium


Business plan9

Business Plan

  • Example:

    • http://www.entrepreneur.com/landing/216013#pas_sbp

  • Resources:

    • http://www.bplans.com/

    • http://www.entrepreneur.com/businessplan


Workshop 2 financial plan

How much money is required to get your business started and generating revenue?

Identify needed capital requirements by determining where your business stands today, and what is needed in order to move forward. 

Where do you get your money from?

If you are in need of outside funding, what will be the sources and uses of funds requested.

What needs to happen to break-even?

Play around with financial projections and forecasts to determine the volume of sales needed to cover your expenses and to become profitable.

Workshop 2: Financial Plan


Software company typical structure

Software CompanyTypical Structure

http://academy.telerik.com/student-courses/...


Homework assignment

Homework Assignment

  • Finish up the Financial Plan

  • Write out the Operations Plan


Free trainings @ telerik academy

Free Trainings @ Telerik Academy

  • Business Skills for Developers @ Telerik Academy

    • http://academy.telerik.com/student-courses/soft-skills-and-business-skills/business-skills-for-developers/about

    • Telerik Software Academy

    • academy.telerik.com

  • Telerik Academy @ Facebook

    • facebook.com/TelerikAcademy

  • Telerik Software Academy Forums

    • forums.academy.telerik.com


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