A business plan is a very serious exercise, which is why we wanted to have a bit of fun! Includes some suggestion on structure, on how and why building and Executive Summary, present financials and risks, business systems, channels, consumers and customers, marketing and commercial plan
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2. AMATI
Agenda
& Associates
• Executive Summary
• The Product and/or Service
• Market opportunity and competition
• Team
• Marketing and commercial plan
• Business System
• Financials
• Risks
• Project Plan
2
3. AMATI
Executive Summary
& Associates
How long is the executive summary?
Take your knowledge
So that it can be read
In 5 minutes….
Summarize it
…While creating a
Great first impression
3
4. Executive Summary: the structure
AMATI
& Associates
Five topics
1.
2.
3.
4.
5.
Product and Service
• --------• --------• --------Market Size, Trends and
Competition
• --------• --------• --------Business System
• --------• --------• --------Financing Needs
• --------• --------• --------Risks and Hurdles
• --------• --------• ---------
4
5. Executive Summary Key Dimensions: Product/Service
AMATI
& Associates
Start with what makes your idea unique (and keep it credible!)
What are your unique super-powers?
5
6. Executive Summary Key Dimensions: Product/Service
AMATI
& Associates
Who is your target? What value are your creating for them?
6
7. Executive Summary Key Dimensions: Market and Competition
AMATI
& Associates
How big is the ‘pie’? Who are your competitors?
Asia Pacific
South America
Global Sales by Category
(Value; 2011)
Europe
North America
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8. AMATI
Executive Summary Key Dimensions: Market and Competition
& Associates
What are the key market trends?
Value
Volume
+13%
-3%
+13%
2002
2005
2009
Price
2002
2005
2009
Customer Service
•
•
•
•
•
•
•
•
•
----------------------------------------------------------------------------------
+10%
-2.5%
+17%
2002
2005
2009
2002
2005
2009
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9. AMATI
Executive Summary Key Dimensions: Marketing and Commercial Plan
& Associates
Marketing and sales investment, and revenues expectations
Marketing Investment
n
n+1
n+2
Commercial Investment
n
n+1
n+2
Revenues
n
n+1
n+2
9
10. AMATI
Executive Summary Key Dimensions: Business System
& Associates
Describe your business system and which activities you plan doing in-house
R&D
PRODUCTION
MARKETING
✔
•
•
•
•
•
•
-------------------------------------
SALES
✔
•
•
•
•
•
•
-------------------------------------
•
•
•
•
•
•
-------------------------------------
DISTRIBUTION
SERVICE
✔
•
•
•
•
•
•
-------------------------------------
•
•
•
•
•
•
-------------------------------------
•
•
•
•
•
•
-------------------------------------
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11. AMATI
Executive Summary Key Dimensions: Financing Needs
& Associates
How much money do you need? And what for?
Cumulative Cash Flow!
• Capex
• Marketing
• Operations
• Commercial
• ….
n
n+1
n+2
n+3
Source: own analysis
11
12. Executive Summary Key Dimensions: Risks and Hurdles
AMATI
& Associates
What are the risks, how do they impact the cash flow?
EBITDA Yr. 3 (‘000 EUR)
Average transaction
(-10% /+ 10%)
Price
(-10% /+ 10%)
COGS (+10% /-10%)
Logistics
(+10% /-10%)
FX
(+10% /-1%)
Insurance
(+10% /-10%)
Source: own analysis
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13. AMATI
Agenda
& Associates
• Executive Summary
• The Product and/or Service
• Market opportunity and competition
• Team
• Marketing and commercial plan
• Business System
• Financials
• Risks
• Project Plan
13
15. The product/ service
AMATI
& Associates
Describe your product/ service by highlighting its benefits, ambition and uniqueness
Source: own analysis
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16. Which Consumers/ Customers and Need-states
AMATI
& Associates
Describe your target(s) and identify their need-states. What do you offer them, that your
competitors don’t?
Enjoyment
Vitality
Us vs. Them!
Comparison!
Conviviality
Power
Belonging
Recognition
Security
• --------!
• --------!
• --------!
• --------!
• --------!
• --------!
Control
Source: own analysis
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17. AMATI
Sources of Revenues
& Associates
What are you going to make money from? Detail all of your source of revenues
Revenues (‘000 EUR)
Product 1
• ------------• ------------• ------------• ------------Product 2
• ------------• ------------• ------------Licensing
• -------------
n
n+1
Product 1
n+2
Product 2
n+3
Licensing
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18. AMATI
Agenda
& Associates
• Executive Summary
• The Product and/or Service
• Market opportunity and competition
• Team
• Marketing and commercial plan
• Business System
• Financials
• Risks
• Project Plan
18
20. AMATI
Market and Competition
& Associates
How big is the cake? Volume, Value, Market Trends, specific and relative to your opportunity
Value
Volume
+13%
-3%
+13%
2002
2005
2009
Price
2002
2005
2009
Customer Service
•
•
•
•
•
•
•
•
•
----------------------------------------------------------------------------------
+10%
-2.5%
+17%
2002
2005
2009
2002
2005
2009
20
21. AMATI
Market and Competition
& Associates
Consider major channels/ segments if their development is not uniform
Value
Volume
Channel
B, 49%
Channel
A, 51%
Channel
B, 53%
Channel
A, 47%
CAGR Volume 05-09
Forecast Volume 10-12
Channel A
Channel A
Channel B
•
•
•
•
•
•
-------------------------------------
Channel B
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22. AMATI
Market and Competition
& Associates
Position on relevant axes your competitors and identify opportunities
Competitors Mapping
Variety
Source: Skopos
22
23. AMATI
Market and Competitors
& Associates
Who is taking the Lion’s share? And where? By segment or by region….
Asia Pacific
South America
Global Sales by Category
(Value; 2011)
Europe
North America
23
24. AMATI
Agenda
& Associates
• Executive Summary
• The Product and/or Service
• Market opportunity and competition
• Team
• Marketing and commercial plan
• Business System
• Financials
• Risks
• Project Plan
24
28. AMATI
Agenda
& Associates
• Executive Summary
• The Product and/or Service
• Market opportunity and competition
• Team
• Marketing and commercial plan
• Business System
• Financials
• Risks
• Project Plan
28
30. AMATI
Marketing and Commercial Plan
& Associates
Develop a detailed marketing plan for the first 12 months and provide top-line investments by
marketing segment for Year 2 and 3
Marketing
Activities
•
•
•
•
•
•
-------------------------------------
J
F
M
A
M
J
J
A
S
O
N
D
BUDGET BUDGET
Yr. 1
Yr. 2
•
•
•
•
•
•
-------------------------------------
•
•
•
•
•
•
-------------------------------------
BUDGET
Yr. 3
•
•
•
•
•
•
-------------------------------------
30
31. AMATI
Marketing and Commercial Plan
& Associates
Develop a detailed account/commercial plan for the first 12 months by clarifying promotional
activities as well as expected sales
Activities
•
•
•
•
•
•
-------------------------------------
Investment
•
•
•
•
•
•
-------------------------------------
Expected
Sales
•
•
•
•
•
•
J
F
M
A
M
J
J
A
S
O
N
D
-------------------------------------
31
32. AMATI
Agenda
& Associates
• Executive Summary
• The Product and/or Service
• Market opportunity and competition
• Team
• Marketing and commercial plan
• Business System
• Financials
• Risks
• Project Plan
32
35. AMATI
Business System
& Associates
If your reference market has sub-channels/sub-segments you should detail each one of
them
Description
Channel 1
Rote-toMarket
• ------• -------
Channel 2
• ------• -------
Channel 3
Relative Size
• ------• ------Channel n.1
• ------• -------
Channel n
Channel n.2
• ------• -------
35
36. AMATI
Agenda
& Associates
• Executive Summary
• The Product and/or Service
• Market opportunity and competition
• Team
• Marketing and commercial plan
• Business System
• Financials
• Risks
• Project Plan
36
38. AMATI
Financials
& Associates
First of all a summary of best/worst case scenarios
Gross Margin I
EBITDA
Capex
EBITDA Margin Year 3
EBITDA (Yr. 3)
Break Even
€ 406,023
€ 1,600,000
8%
€ 1,700,000
Alternative 2
50.6%
Gross Margin II
74.6%
Gross Margin II
Alternative 1
Gross Margin I
74.6%
50.6%
EBITDA
Capex
EBITDA Margin Year 3
€ 386,223
€ 1,800,000
8%
EBITDA (Yr. 3)
€ 600,000
Break Even
ca. 5 years
ca. 4 years
Source: own analysis
38
39. AMATI
Financials
& Associates
Detailed presentation of sources of revenues and hypothesis
Revenues (‘000 EUR)
Product 1
• ------------• ------------• ------------• ------------Product 2
• ------------• ------------• ------------Licensing
• -------------
n
n+1
Product 1
n+2
Product 2
n+3
Licensing
39
40. AMATI
Financials
& Associates
Assess the marketing and commercial investment, and explain how they drive revenues
Marketing Investment
n
n+1
n+2
Commercial Investment
n
n+1
n+2
Revenues
n
n+1
n+2
40
41. AMATI
Financials
& Associates
Focus on how you build the Costs and what Capex you require
COGS
Hypotheses
• ------------• ------------• ------------• ------------• ------------• ------------• ------------• -------------
n
n+1
n+2
Capex
n
n+1
Hypotheses
• ------------• ------------• ------------• ------------• ------------• ------------• ------------• -------------
n+2
41
43. AMATI
Financials
& Associates
Provide a valuation for the company based on several methods and % you are willing to sell
What % of Shares?!
DCF
• ------------• ------------• ------------• ------------Multiples
• ------------• ------------• -------------
Source: own analysis
43
44. AMATI
Agenda
& Associates
• Executive Summary
• The Product and/or Service
• Market opportunity and competition
• Team
• Marketing and commercial plan
• Business System
• Financials
• Risks
• Project Plan
44
46. AMATI
Risks
& Associates
Present the risks, define the impact on the base financial scenario and which countermeasures you are planning to take
EBITDA Yr. 3 (‘000 EUR)
Risks
• -----------• -----------• -----------• ------------
Countermeasures
• -----------• -----------• -----------• ------------
Source: own analysis
46
47. AMATI
Agenda
& Associates
• Executive Summary
• The Product and/or Service
• Market opportunity and competition
• Team
• Marketing and commercial plan
• Business System
• Financials
• Risks
• Project Plan
47