The difference between a business ‘pitch’ and a business ‘plan’ and the advantages of both
The good, the bad and the ugly approach to a PowerPoint presentation
Things to consider if you are presenting your business idea to obtain investment
The different types of investors and which type is right for your business
How you can determine the amount of investment you really need
OVERVIEW
Once you have decided on your business idea, figured out who your target market is, analyzed the market and picked the best way to reach your ideal customer, estimated your sales, costs of sales and expenses, you have the key elements in place to describe your business. Whether it’s an abbreviated pitch presentation or a complete business plan, the information is now available to you to use in the format that best meets your needs.
Nancy Duarte On Slide Presentations
The book is Slide:ology, and this five-minute video on Bnet is a great summary.
If you can’t get the video off of this site, click here for the source video on bnet.
Tim Berry: Video Summary of Business Planning
This interview is a couple of years old now, but I thought it was a pretty good summary of business planning as applied to real-world companies. It was done on the floor of a trade show of eBay vendors.
How your business legal structure can affect your taxes
Tax implications based on a calendar year or fiscal year setup
Types of tax-deductible business expenses
Online resources for tax questions
OVERVIEW
Cash is critical. Cash means money in the checking and savings, not just coins and bills. Critical content is the cash flow, and understanding the difference between cash and profits. This is vital. We’ve left it for the end so the related financials are clear. We’ll also work again on presentation skills, working with Powerpoint, preparing the document to back-up your feasibility plan.
DEFINITIONS
Cash: Normally means banknotes and coins, as in paying in cash. The term is used in a business plan to represent the bank balance, or current account balance.
Cash Flow: An assessment and understanding of cash coming into and flowing out of a business in specific periods of time.
Profit: An accounting concept, normally the bottom line of the Income Statement (also called Profit or Loss statement). Start with sales, subtract all costs of sales and all expenses, and that produces profit before tax. Subtract tax to get net profit.
How to determine what you want your business website to do for you (contact only, selling online, etc.)
Ways to attract visitors to your website
What Search Engine Optimization (SEO) is and what it means to your website ‘presence’ on the Web
What ‘analytics software” is and what it can do for your website
Different marketing programs to get people to your website, and how to keep them coming back
OVERVIEW
No matter if your do business in your town or around the world, the Internet has become an essential small business marketing tool, and a website can be an essential marketing tool for your business, even if it starts out as contact information about your business, its location, phone number and email address. Just as shoppers have used the phone book to locate businesses in their town, now those same shoppers are searching online. You want them to find you.
In this class you will learn about gathering your initial team, working with your required professionals, planning for and then recruiting employees. We will also review the legal implications of the employer-employee relationship. For this topic area the Required Readings are essential.
OVERVIEW
Few businesses are really one-person businesses. Even those with no employees are still likely to need bookkeeping and accounting help, an attorney, and business allies. They should be considered part of your business team.
You don’t have to know everything and be everything and do everything to own your own business. You have to understand how to gather a team.
You don’t have to live the numbers if you have somebody on the team who does.
You don’t have to sell well if you have somebody on the team who does.
You don’t have to know the industry inside out if you have somebody on the team who does.
In this class you will complete a Startup Funding table, based on your earlier estimates for startup costs and expenses. You will also learn the different types of financing available to help start a business, and what kinds of financing works for what kinds of startups.
OVERVIEW
While most entrepreneurship classes focus on the more sophisticated finance related to venture capital, we want to also look at what happens in the vast majority of the real world startups. Including:
Most startups are self financed, which is what we also call bootstrapping. I saw a study published by Wells Fargo, in about 2005, showing that the average cost of a startup in the United States is $10,000.
We do not want to forget the difference between owning a business entirely yourself, and dealing with partners. Essentially, if you can own it yourself, then you’re probably better off. One exception to the rule is when you want to have partners for reducing risk, bringing in know-how and experience, and peace of mind.
Most businesses have some level of startup cost estimates related to strategy. It’s much more about strategy than it is about requirements of the type of business. For example, food service startups run the gamut between costing almost nothing for some kinds of catering, to the startup costs of a portable lunch stand, to the startup costs of a small local restaurant, to the startup costs of an ambitious restaurant in a major urban location.
Types of financing depend on at least two factors: first, the size of investment required; second, the desireability of the investment to potential investors; and third, the preference of the startup entrepreneurs themselves.
Venture capital is limited to a few thousand (maybe 5K, 6K, something like that) new startups every year. These are very exclusive ventures, with proven management teams, defensible business models, good markets, and good product-market fit.
Angel investors are generally organized and knowledgeable, and they qualify as investors according to the SEC. Some research indicates more than 200,000 angel investors in the United States. They invest amounts in the hundreds of thousands, generally.
Friends and family should be very carefully limited because there are a lot of legal restrictions. These investments might work for tens of thousands of dollars, in some cases hundreds of thousands.
Bootstrapping is doing it yourself, without outside investors, without sharing ownership, with or without bank loans, credit card financing, or other borrowed money.
DEFINITIONS
Angel Investor: An individual who invests his or her own money in an entrepreneurial company.
Venture Capitalist (VC): A person or investment firm that makes venture investments, and … are expected to bring managerial and technical expertise as well as capital to their investments.
Business Valuation: What a business is worth. jTypes of valuation include:
In this class we’re going to pull together the numbers of a business plan. Using hands-on with Business Plan Pro, we will forecast sales and estimate starting costs, and we will estimate our ongoing expenses, to show how the plan comes together with projected profits and loss, balance sheet, and cash flow.
OVERVIEW
Forecasting is more art than science. Like the weather forecast, it’s a mixture of research, experience, and educated guessing. You can do it. Whether you like numbers or not, there are some basic estimates you just have to make. Think of it as lists of educated guesses.
DEFINITION
Sales Forecast: The level of sales a single organization expects to achieve based on a chosen marketing strategy and assumed competitive environment. The process of estimating what your business’s sales are going to be in the future.
The difference between ’startup’ and ‘ongoing’ expenses and assets
The difference between ‘expenses’ vs. ‘assets’ and how they are treated for tax purposes
The difference between ‘profits’ vs. ‘cash’
OVERVIEW
Start-up expenses are those expenses incurred before the business is running. If expenses come after the start of the plan, they are ongoing expenses and they belong in the profit and loss table in the appropriate month.
DEFINITION
Expenses: Items or services paid for that are deductible against taxable income. Common business expenses are rent, salaries, advertising and travel.
Assets: Property that a business owns, including cash and inventory, office equipment, plant and equipment, accounts receivable, and investments. Assets cannot be deducted from taxable income, the way expenses can.
Forecasting is more art than science. Like the weather forecast, it’s a mixture of research, experience, and educated guessing. You can do it. We’ll do case studies and sample today and prepare you for your next assignment, due next week, a sales forecast.
This is hands on, with numbers, and examples, how to forecast sales and estimate starting costs. Whether you like numbers or not, there are some basic estimates you just have to make. Think of it as lists of educated guesses. You don’t have to.
If you should happen to miss this class, the reading provides a lot of detail and background, and there are also some additional links that might help:
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Class 12: Plans and Pitches, Classes
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Posted by Tim Berry