Developing a Sustainable Business Plan: Benefits, Viewpoints, and Effective Strategies

2. Chapter 16 Developing a sustainable business plan

3. Objectives • To define a sustainable business plan and demonstrate its value • To describe the benefits of a business plan • To set forth the viewpoints of those who read a business plan • To understand the mind-set of your five-minute reader • To see a complete outline of an effective business plan • To present some helpful hints for writing an effective business plan • To highlight points to remember in the presentation of a business plan • To underline some of the contrarian viewpoints on the importance of a business plan

4. Abusiness plan is a work of art • ‘You can’t raise money without a business plan … a business plan is a work of art in its own right. It’s the document that personifies and expresses your company. Each plan, like every snowflake, must be different. Each is a separate piece of art. Each must be reflective of the individuality of the entrepreneur.’ • Joseph R. Mancuso, How to Write a Winning Business Plan JuhanSonin, licensed under CC Attribution 2.0 creativecommons.org/licenses/by/2.0/ BP for Involution Studios‘Magical Software for Personalided Medicine’ JuhanSonin, licensed under CC Attribution 2.0 creativecommons.org/licenses/by/2.0/

5. But first ? • Why can’t you just start a business on the back of a napkin? • Who reads a business plan anyway? • What would a ‘sustainable’ business plan include? Startup Mena, licensed under CC Attribution 2.0 creativecommons.org/licenses/by/2.0/

6. Review slides from Chapter 3 Why do we say'sustainable' BP? • Traditional definition • surviving or maintaining a business’ viability against its competitors. • New definition • real commitment to the environment and climate change mitigation/adaptation as well as a revamping of the entire business model to its core. • providing products and services without jeopardising the environment. Sunshineconnelly, licensed under CC Attribution 3.0 Unported creativecommons.org/licenses/by/3.0/deed.en

7. The need for a sustainable business plan • Remember this slide from Chapter 1? • Famous roller-coaster entrepreneur Carl Miler’s brilliant innovation swept away by global warming. • Usually it’s about finance, marketing and personnel … • But today, more and more investors are demanding that BPs focus on People, Profits and Planet. • You must write for both definitions of sustainability. • BPs have to take into account … • volatile weather, economic instability, interruptions to transport, energy and water, availability of raw materials, food supply glitches, and regulatory changes Shawn Perez

8. The need for a sustainable business plan • What do you expect people to do with your product when they have finished using it? • Take electronic waste as an example. • The entire life cycle of the product must be considered. Curtis Palmer, licensed under CC Attribution 2.0 creativecommons.org/licenses/by/2.0/ cropped from original

9. Ecology of entrepreneurial business planning • A business is not separate from the biosphere. • Industrial ecology sees business as a series of interlocking ecosystems. • The biosphere surrounds the socioeconomic and regulatory systems in which the firm operates. • The goal is to pick the least burdensome environmental and social outputs when designing products and services.

10. Contrarian views on business planning • ‘Business plans are the equivalent of “intellectual push-ups”. Nice exercise, but not necessarily relevant to anything in the real world.’ Chris Potter, StockMonkeys.com, licensed under CC Attribution 2.0 creativecommons.org/licenses/by/2.0/ cropped from original

11. Lean canvasbusiness planning • Instead of writing a long and in-depth business plan, Lean Canvas Planners advocate a simpler approach, essentially on a single sheet of paper. • Osterwalder’s Business Model Canvas puts all the complicated strategies of your business in one simple diagram.  • Each box details your company’s strategy.

12. Lean canvasbusiness planning • Lean canvas may be useful for high-growth, technology gazelles. • But some entrepreneurs must first thoroughly research the customer. • Lean Canvas doesn’t help entrepreneurs determine if their company is truly financially viable without rigorous financial planning. • You are going to get nowhere with banks and private investors without a plan.

13. A short ‘pitch deck’ may be enough • What is the opportunity? • What gives you special advantages in solving the problem? • What makes you think that your people are especially qualified to grow this business? • What is the business model? • What makes it scalable? • How do you know you’ll have customers? • How do you connect to customers? • What is the secret of your expected sales success? • What have you learned from the competition? • What are the risk factors? • How will you make money? • How will you use the funds you raise?

15. In business planning, never forget your ‘north star goal’ • Achieved in a reasonable timeframe • Can be acted on by your team • Connects to the core of the business • Drives excitement and passion • Serves a higher purpose than business profitability • Solves a great human challenge • Leverages your organisation’s strengths

16. Benefits of the business plan • Stakeholders get a lot out of a business plan. • Provides the financial details. • Helps identify risks. • Provides a useful guide for assessing the entrepreneur’s planning and managerial ability. • May help you avoid a project doomed to failure! Brian Solis, licensed under CC Attribution 2.0 creativecommons.org/licenses/by/2.0/ cropped from original

17. Benefits for the entrepreneur • Forced to view the venture objectively • Scrutinises your assumptions • Lets you develop operating strategies • Quantifies your objectives, providing measurable benchmarks • Gives you communication tools for outside financial sources

18. Benefits for the funder • Gives them the details of the market potential • Show the venture’s ability to service debt or provide an adequate return on equity • Identifies critical risks, crucial events and contingency plans • Gives them a thorough business and financial evaluation • Give them a guide to assess your planning and managerial ability

19. Who reads the plan? • Obviously venture capitalists, bankers, angel investors, potential large customers, lawyers, consultants and suppliers • You need to understand three main viewpoints when preparing the plan • ‘Five-minute reading’ • Characteristics of the industry • Financial structure • Balance sheet • Quality of entrepreneurs • Establish the unique feature • Read over the entire plan lightly

20. How to structure a business plan ? • Eight to 12 sections (depending on the idea, the industry and the technical details) • Length of a plan is 25 pages • See complete outline in book in Table 16.2 Yahoo’s original BP Yahoo, licensed under CC Attribution 2.0 creativecommons.org/licenses/by/2.0/ cropped from original

21. How to structure a business plan ? See complete BP outline in book: Table 16.2. Yahoo’s original BP Yahoo, licensed under CC Attribution 2.0 creativecommons.org/licenses/by/2.0/ cropped from original

22. Business plan segments How to structure a business plan Sonny Abesamis, licensed under CC Attribution 2.0 creativecommons.org/licenses/by/2.0/ cropped from original

23. Business plan segments How to structure a business plan Sonny Abesamis, licensed under CC Attribution 2.0 creativecommons.org/licenses/by/2.0/ cropped from original

24. Use the business plan assessment tool in the book.

25. Updating the business plan • Update in the event: • of financial changes • of additional financing • of changes in the market • of launch of a new product or service • of new management team • to reflect the new reality.

26. A practical example See Appendix 1 for an example business plan – ‘Cocoa Samoa Ltd’

27. The pitch ? • Now that it is written, how can you (verbally) present your plan to an audience?

28. The pitch • Presenting the plan to stakeholders – especially funding providers • Either individually or in groups • Also known as ‘the elevator pitch’ • Be organised, well-prepared, interesting and flexible

29. The pitch • Know the outline thoroughly. • Use keywords that help recall examples, visual aids or other details. • Rehearse the presentation. • Be familiar with any equipment . • The day before, practiseit in full.

30. The pitch • Focus on the consumer pain. • Demonstrate a reachable market. • Explain the business model. • Tout the management team. • Explain your metrics. • Motivate the audience. • Answer: ‘Why you?’ and ‘Why now?’

31. The pitch

32. What to do if they turn you down

33. Key concepts ? (Close your books.) • What is a business plan and what does it describe? • What are the main segments in a business plan?

34. Key concepts A business plan is a written document that describes: • current status • expected needs • projected results of the new business.