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Notes from the Executive Summary Workshop

  1. An executive summary is to a business plan what a resume is to a job search.
  • The difference is that the person reading it has no job description and no pre-concieved notion about the business.

The Executive Summary speaks of
  • The potential investor opportunity.
  • Partners and employees.
  • It is a resume for the full plan and answers the 3 Whyss:
    • Why this?
    • Why now?
    • Why this team.
  • Why do we need a business plan:
    • To get Financing
    • Find a strategic partner
    • Explain to the customers/suppliers
    • It is the business result of planning.
    • It tells
      • Who are the customers
      • Why does one need your services/product?
      • What is the cost of the product or service?
  • It is a selling document on
    • Your vision
    • Your image
  • It is defensible.
  • A business plan has the following sections:
    • An executive summary explaining the opportunity.
    • Market Research
    • The economics
    • The marketing plan.
    • Design and Development
    • Manufacture and Operations
    • The Management team
    • The schedule
    • Risks/Problems and Assumptions
    • The Financial plan
    • Appendices
  • Technology is NOT a section
  • 1. There must be a cover page with
    • The company name
    • The address
    • Telephone number
    • Confidentiality
    • Security
    • Number of Copies
  • There must be a table of Contents
  • The Executive Summary
    • This is not an introductiion
    • This is not a preface
    • This is not the highlights
    • IT IS A BUSINESS PLAN IN MINIATURE
    • It's size can be 2 to 5 pages
    • It is logical, clear, interersting, exciting
    • It reads like a resume.
    • It answers
      • Who the customer is
      • What is the vision
      • What are we doing
      • Where is the market
      • How much $$$
    • It describes the business concept, the opportunity and the strategy
    • It describes the product, the market size and the startup costs
    • It explains the payoffs.
  • The body of the plan describes
    • The market opportunity
    • How big is this market?
    • The trend, How fast it will sell and how the busines will grow.
    • Why is this the right time: Convergence of the opportunity solution
The Market Analysis Section describes
  • The existing and planned products
  • The market segments
  • Market players and the competition
  • The competetive advantages
  • The marekt share of the current players
  • Your potential market share.
  • If you win, who will be hurt and what will they do about it?
  • What is your market strategy?
  • Pricing and Distribution
    • Price and margin
    • Distribution must match strategy/pricing.
    • Sales tactics: Who is the 1st customer, 2nd...?
    • How will you reach your customer base?
    • Advertising and Promotion
  • Development Plan
  • What is the status of product development?
  • What development is needed?
  • Describe the time and resources required.
  • Do you need to produce a complete product?
  • What are the development risks and difficulties
  • What are the product pipeline plans?
  • Describe your action plan.
    • What you'll do and when.
    • What are your credibility testors?
    • What is your sequence to build value?
    • How will you eliminate or reduce dependency?
    • How will you coordinate schedules and gain value recognition?
  • Appendices:
    • Separately bound.
    • Resumes of management team
    • Product Literature
    • Trade and Business press
    • Patents
    • Testimonials
    • Technical information
    • Confidentiality
    • Technical- Techinical person discussion
Finetuning the plan:
  • H ave it reviewed by an independent reader. This personmay be
    • A retired industry professional
    • A customer
    • A consultant
    • A professor
  • It is usually read in the following sequence
    • A- First Reading- Like a Resume
    • B- Second Reading-For Justification for an investment
    • C- Commitment to the plan.
  • First Impression
    • Idea too good to ignore
    • Financial promise too good.
    • Good reputable team.
    • Action plan which is credible and focussed.
  • The details must give an assurance of insight commitment and follow through.
  • The format and style must be passionate but sane.
Reasons for failure
  • Insufficient market
  • No credibility to technology:
    • Too wild.
    • Too blue sky.
    • Not protectible- Do patent search
    • Too mundane
  • Investment too large for promise.
  • Failure to understand the market
    • Too optimistic.
    • Too naive about hurdles
    • A runoff in all directions
    • Not ambitious enough
    • Regulatory barriers not addressed
    • Gaps are filled by hand-waving.
    • No promise
  • Team not credible.
  • Cosmetic reasons for rejection
    • Not understandable
    • Too much jargon
    • Naive projections
    • Misspellings, grammar
    • Too long
    • Ignored basics
    • Forget marketing, my technology is best
    • Naive writing

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