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Business Plan Preparation. Frank Moyes Leeds College of Business University of Colorado Boulder, Colorado. Today’s Agenda. Topics PRODUCT/SERVICE Margins Read BP pp 6-7 Elevator Speech In the Fire Hand-in 3 alternative value propositions Model company description. Next Week.

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business plan preparation

Business Plan Preparation

Frank MoyesLeeds College of Business

University of ColoradoBoulder, Colorado

Product/Service

today s agenda
Today’s Agenda

Product/Service

  • Topics
    • PRODUCT/SERVICE
    • Margins
    • Read BP pp 6-7
  • Elevator Speech
  • In the Fire
  • Hand-in
    • 3 alternative value propositions
    • Model company description
next week
Next Week

Product/Service

Is This a Real Business? (max 10 slides)

Interim Peer Evaluation

Make an appointment with instructor for a 30 min meeting about where you are.

in the fire grading
In the Fire Grading

Product/Service

business plan elements
Business Plan Elements

Product/Service

Executive Summary

Company Overview

Market & Industry Analysis

Product/Service Description

Marketing Plan

Operations Plan

Development Plan

Management

Competitive Advantage

Financial Plan

Funding

product service sections
Product/Service Sections

Product/Service

Features

Benefits

Proprietary Rights

Stage of Development

features
Features

Product/Service

  • Detailed description
    • Attributes
    • Environment
    • Use photos, images, schematics
  • What is unique?
  • What is evidence that customers want these features?
  • Systems approach – how produce & deliver
  • Don’t assume people know or understand your product/service
attributes

0

Attributes

Bad Slide

Product/Service

Performance: durability, quality of materials, defect levels, tolerances, construction, dependability, functional performance (acceleration, nutrition, taste), efficiency, safety, styling, packaging, etc.

Cost: purchase price, quantity discounts, operating costs, repair costs, cost of extras or options, cost of installation, trade in allowance, likely resale value, etc.

Availability: carried by local stores, credit terms, quality of service available from local dealer, delivery time, credit card, on-line transactions, etc.

Service: hours, warrant, guarantee, return/replacement policy, upgrades, maintenance, training, installation, repair service, spare parts, customer support, tech support, training, product design, make to order, level of inventory, quotation response time, lead time, quality certification, employee capabilities, etc.

Environment: location, atmosphere, layout, fixtures, aesthetics, style, sound, lighting, color, etc.

benefits
Benefits

Product/Service

Describe major benefits - be specific

What is the evidence that benefits are understood by the market?

benefits1
Benefits

Product/Service

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.

Convenience?

Objective is distinguish between benefits & features, not put into categories

features benefits
Features & Benefits

FEATURES are about the product or service and are often tangible attributes

BENEFITS are about the customer and are often about their needs, desires, dreams

features benefits1
Features & Benefits

FEATURES justify a product’s existence.

BENEFITS motivate (re)purchase.

features benefits2
Features & Benefits

FEATURES are rational.

BENEFITS are emotive.

To define the key benefits, keep asking: “Why does my customer care about that?”

breathe right nasal strips
Breathe Right Nasal Strips

FEATURES

  • Flexible, spring-like bands gently lift nasal passages.
  • Special adhesive holds strip comfortably in place.
  • Improves airflow by 31%.
breathe right nasal strips1
Breathe Right Nasal Strips

BENEFIT (L1) BENEFIT (L2)

Reduces Snoring My spouse sleeps

My spouse is cheerful

My marriage thrives

Relieves Congestion Great night’s sleep

I feel energetic

Higher performance

I achieve my dreams

other examples
Other Examples…

FEATURE BENEFIT

Overnight delivery Saves your job

“When it absolutely…

Inexpensive Biz Lodging Peak Performance

“No, but I did sleep at a Holiday Inn last night”

Intoxicating refreshment Look sexy, get the girl (every beer ad)

slide17

attribute

benefit

value

emotional

connection

Pathway to Brand Loyalty

product service conclusions
Product & Service Conclusions

Product/Service

  • Make it real
    • Photo, rendering, specs http://leeds-faculty.colorado.edu/moyes/html/documents/Business%20Plan/Amari%20Final%20BPLAN.pdf
    • Prototype
    • Evocative description
  • Make it exciting
  • Sell your concept
quality
Quality

Product/Service

moments of truth
Moments of Truth
  • Each customer contact is called a moment of truth.
  • You have the ability to either satisfy or dissatisfy them when you contact them.

6-22

quality dimensions i
Quality Dimensions I

Product/Service

Performance - the primary operating characteristics of the product or service

Features - the characteristics that supplement the basic functioning of the product or service

Reliability - probability of the product or service failing within a specified period of time

Conformance - the degree to which a product or service meets acknowledged standards

quality dimensions ii
Quality Dimensions II

Product/Service

Durability - a measure of product life (both technical and economic)

Serviceability - the speed, courtesy, competence, and ease of repair or recovery

Aesthetics - how a product or service looks, feels, sounds, tastes, or smells

Perceived Quality - various tangible and intangible aspects of the product from which quality is inferred

service quality dimensions
Service Quality Dimensions

Product/Service

Reliability - ability to perform service dependably & accurately - receive mail at same time each day

Responsiveness - willingness to help customers & provide prompt service - avoid keeping customers waiting for no apparent reason.

Assurance - knowledge & courtesy of employees and ability to convey trust and confidence - being polite and showing respect for customer.

Empathy - provision of caring, individualized attention to customer - being a good listener.

Tangibles - appearance of physical facilities, equipment personnel and communication material - cleanliness. .

margins
Margins

Revenue – COG’s Revenue

Revenue – Variable Costs

Revenue

Net Earnings Revenue

Sales, General & Admin Revenue

Product/Service

% Gross Profit Margin

% Contribution Margin

% Net Profit Margin

% Operating Expenses

slide27

Margins %

Product/Service