Presentation - Mckinsey - How To Write A Business

050301LNZXL756LTDE-P1HowtoWriteaBusinessPlanHowtoWriteaBusinessPlanImperialCollege6March2001Thisreportissolelyfortheuseofclientpersonnel.Nopartofitmaybecirculated,quoted,orreproducedfordistributionoutsidetheclientorganizationwithoutpriorwrittenapprovalfromMcKinsey&Company.ThismaterialwasusedbyMcKinsey&Companyduringanoralpresentation;itisnotacompleterecordofthediscussion.EntrepreneurshipChallenge050301LNZXL756LTDE-P11ContentsContents•Businessstart-upprocess•WritingtheBusinessPlan•Constructingtheteam050301LNZXL756LTDE-P12ContentsContents•Businessstart-upprocess•WritingtheBusinessPlan•Constructingtheteam050301LNZXL756LTDE-P13StagesofaStart-upStagesofaStart-upStage1Stage2Stage3BusinessideagenerationBusinessplanpreparationStart-upandgrowthEstablishedcompanyInterestofinvestorsFinancingdecisionExitofinitialinvestors050301LNZXL756LTDE-P145keyfactorsforsuccessofinnovativestart-ups5keyfactorsforsuccessofinnovativestart-upsIdeas•Degreeofinnovation•Scope•PatentTraditionalserviceproviders•Attorneys•Patentlawyers•Taxconsultants/accountants•MarketresearchersPeople•Inventors•Entrepreneurs•TeammembersCapital•Availability/amount•Needs/responsibilities•ExistsforinvestorsNetwork&exchange•Coaching•Networking•Matchmaking•Innovativeserviceprovider–Venturecapitalists–Headhunters–Businessangels–Start-upconsultants050301LNZXL756LTDE-P15ElementsofapromisingbusinessideaElementsofapromisingbusinessideaCLEARCUSTOMERVALUEMARKETOFADEQUATESIZEFEASIBILITYANDPROFITABILITYSuccessfulideasdemonstratehowbigthemarketis,thetargetcustomersandhowtheproductdiffersfromthecompetitionSUFFICIENTDEGREEOFINNOVATIONCreateanewproductoranewwayofdeliveringanexistingproduct–dobothandcreateanewindustryIdeasshouldbefeasiblewithrealistictimeandresourceplansThekeytosuccessissatisfiedcustomers,notagreatproduct“Thereisnothingintheworldaspowerfulthananideawhosetimehascome”VictorHugo050301LNZXL756LTDE-P16InnovationclassificationschemeInnovationclassificationschemeNewproduct•MicrosoftNewindustry•NetscapeExistingindustry•Skilledtrades•EngineeringofficesNewbusinesssystem•DellConventionInnovationBusinesssystemConventionInnovationProduct/service050301LNZXL756LTDE-P17RoleoftraditionalserviceprovidersRoleoftraditionalserviceprovidersPatentlawyersTaxconsultantsMarketresearchersPATENTSTAXMARKETRESEARCHProfessionaladvisorscanhelptoclearhurdlesLongtermsuccess050301LNZXL756LTDE-P18Roleofaventure-capitalcompanyRoleofaventure-capitalcompany£££•IPO(InitialPublicOffering)•Saleofstaketothirdparties•Seedcapital(prestart-up)•Start-upcapital(atorshortlybeforestart-up)•Expansioncapital•Young,growingcompaniesCapitalrecoveryInvestments5–8yearspostStart-up050301LNZXL756LTDE-P19CollectiveteamstrengthCollectiveteamstrengthWellconstructedteamsprovideastrongbasisforsuccessTeammembersInventorsEntrepreneursTeammembersFinanceSUCCESS050301LNZXL756LTDE-P110NetworksupportNetworksupportSTART-UPVenturecapitalistsFriendsSponsorsOtherstart-upsServiceprovidersPeersEntrepreneursAcademicsUseallconnections050301LNZXL756LTDE-P111ContentsContents•Businessstart-upprocess•WritingtheBusinessPlan•Constructingtheteam050301LNZXL756LTDE-P112“WritingaBusinessPlanforcesyouintodisciplinedthinking,ifyoudoanintellectuallyhonestjob.Anideamaysoundgreat,butwhenyouputdownallthedetailsandnumbers,itmayfallapart”EugeneKleiner,VentureCapitalist050301LNZXL756LTDE-P113CharacteristicsofasuccessfulBusinessPlanCharacteristicsofasuccessfulBusinessPlanYourcallingcardThedocumentthereaderwillrememberyoubyObjective•Accurate•PositiveandcriticalClear•Wellstructured•StandaloneSimple•PlainEnglish•Non-technicaltermsConsistent•Style•Analyticaldepth050301LNZXL756LTDE-P114ElementsofaBusinessPlanElementsofaBusinessPlan5.Marketingandsales6.Businesssystemandorganisation7.ImplementationscheduleBusinessconceptDraftbusinessplan‘Final’businessplanFocusofthisphasePartofthisphaseImportance1.Executivesummary2.Productorservice3.Managementteam4.Marketandcompetition8.Opportunitiesandrisks9.Financialplanningandfinancing050301LNZXL756LTDE-P115Keyquestions–1.ExecutiveSummaryKeyquestions–1.ExecutiveSummary•Whatisyourbusinessidea?Inwhatwaydoesitfulfilthecriterionofuniqueness?•Whoareyourtargetcustomers?•Whatisthevalueforthosecustomers?•Whatmarketvolumeandgrowthratesdoyouforecast?•Whatcompetitiveenvironmentdoyouface?•Whatadditionalstagesofdevelopmentareneeded?•Howmuchinvestmentisnecessary(highlevelestimation)?•Whatlongtermgoalshaveyouset?•Whataretheresultsofyourdetailedbusinessplanning?•Whatareyourexactfinancingneeds?•Howwillyoudelegatemanagementtasks?•Howmuchproductioncapacityisnecessary?•Howwilltheimplementationofyourbusinessideabeorganised?•Whatareyournextconcretesteps?•Whatdoyouestimateyourfinancingneedstobe?•Whatarethesales,costandprofitsituations?•Whatarethemostimportantmilestonesalongthewaytoyourgoal?•Whattestcustomershaveyouapproached/couldyouapproach?•Whatdistributionchannelswillyouuse?•Whatpartnershipswouldyouliketoenterinto?•Whatopportunitiesandrisksdoyouface?•Whatisthepictureonpatents?BusinessconceptDraftbusinessplan‘Final’businessplan050301LNZXL756LTDE-P11