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Today’s saying
What we have here is a failure to communicate.
-A famous prison movie
Finding a USP for the Business
Understand resources available to entrepreneurs
Understand issues involved in successfully selecting outside resources
Understanding the USP that successfully drives a new business
Understand the importance of a successful executive summary and the financial
proposition
Understand success factors in writing a business plan for a new venture
Resources
Cheap is expensive
Expensive may not be worth it
You can easily recognize self-taught brain surgeons by the bloody mess they
have made of their business. Don’t be one.
Questions:
What is the difference between selling and marketing?
Which is more important?
Which is addressed by USP?
Finding a USP for the Business
The ideal business is a post-office box to which people send cash.
Your 4 marketing choices
Sell old products to old customers
This
is the least risky strategy
Sell new products to old customers
Sell old products to new customers
Sell new products to new customers
This
is the riskiest strategy
Define your target market
It is easier to get a piece of an existing market than it is to create a new
one.
Who will buy from you?
Why?
Target market - cont.
What are their buying patterns?
Reason / trigger for purchase
Frequency of purchase
Interval between purchases
Quantity of each purchase
Where used?
How used?
Method of payment
What are your buyers sensitive to?
Price
Quality
Brand name
Product features
Selling method
Packaging
Convenience
Service
Location
Credit policy
Return policy
Maintenance
Warranty
Market Size
Current size
Growth rate
What changes are occurring?
How do the changes effect your business?
What strategic opportunities are available as a result of your analysis of
the target market?
Competition
Don’t underestimate it
Don’t be afraid of it
Don’t be emotional about it
Don’t over-react to it
Don’t under-react to it
Competitive Analysis
Customer perception:
features,
costs, quality, durability, maintenance, image, perceived value, relationships,
social value, etc.
Operational Factors:
your
financial resources, your customer’s budgets, economies of scale, operational
efficiencies, product line breadth, strategic partnerships, personnel
Future Competition:
barriers
to entry - patents, start-up costs, expertise, market saturation
What strategic opportunities are available as a result of your analysis of
the competition?
Marketing Plan & Sales Strategy
How do you make customers aware of your product or service?
What message are you trying to convey to customers about your company?
What specific methods do you use to deliver and reinforce those messages?
How do you secure actual sales?
The 4 P’s of marketing
Product
Price
Place
Promotion
What are customers buying from you?
Selection
Time savings
Quality
Price
Fashion
Experience / Assurance
Solutions / Information
The 5 F’s that customers want
Functions - meet their
needs
Finances
- savings,
increased productivity
Freedom
- convenience,
time
Feelings - self-image,
respect for company
Future - how will it
effect their lives
Who’s productivity is more important - yours or your customer’s?
The 90’s consumer’s biggest concern
Stress
Always rushed
Never enough time
Too worried
Predictable Consumer Trends
Aging Population
Working Women
Changing Household Make-up
Declining Real Income
Exploding Ethnic Population
What strategic opportunities are available as a result of the message you
will send your customers, the manner that you will deliver it in, and the way
that you will sell your product?
Selling
To sell an idea, make it tangible
You must differentiate yourself from the competition
Be confident.
You cannot
sell anything until you sell yourself.
Do not deviate from your specialty
zero
in on a particular niche and milk it
Exceed the customer’s expectations
then
ask for a referral
Listen to your customers
Selling is providing value
Customers will only pay for value that they can see
Value is judged through the eyes of the customer
One cannot recognize value if one knows nothing about it
Chose two of the following:
price
quality
speed
Value is directly related to the level of relief a customer receives
Selling is relieving pain
Start by identifying the customer’s pain
for
some reason, many prospects keep their pain hidden
Customers will pay to make their pain go away
Get permission, and an agreement to be paid, before you solve anything
Most people will pay you to bear their risk
for
most people, risk is painful
About Customers
Large customers can be your worst customers
Small customers can be your worst customers
Bill them promptly and teach them to pay on time
Protect yourself from theft
Beware of professional customers
Keep business relationships separate from other relationships
Customers will only realize the value of your time when you do
Customers will pay more for comfort than for skill
Not everyone who needs you deserves you
More about selling
Cross sell
A broad mix of customers reduces your business risk
You will not stay in business without sales
Nothing happens until something is sold
Who do you need to sell to?
Customers
Suppliers
Employees
Regulators
Investors
Yourself
What is the best tool in selling to this diverse group of "buyers"
Your
Business
Plan
Preparing a business plan
Who here can accurately predict the future?
For those of you who can not, why go through the bother of preparing a
detailed plan?
"If you don’t know where you are going, any road will do"
-anonymous
Just make sure you bring enough toll money
-MG
What your plan does for you
Provides you with:
a road map - structured thinking about the future
a sales tool
motivation
a sanity check
a way of raising funds
a way of arranging strategic alliances
A living, growing business has certain requirements
Usually must be self-sustaining at some stage
Must have a competitive edge needed by target buyers
Usually structured to reward founders at some stage
Usually requires $ and other resources to start and grow
RESOURCES
People
mgmt., directors,
legal, finance
Assets
plant, equipment,
patents, etc.
Financial
venture
capitalists, lenders
Business Plan
Entrepreneurs seek to control other people’s resources
Money
People
Space
Equipment / Material
Rule: Marshall-Minimize-Control
Marshall (innovatively,
when the need arises)
Minimize
(bootstrap)
Control
Staged financing
Use other people’s resources whenever possible.
EFFECT:
Less debt, more equity financing
Greater flexibility to change
Lower sunk cost, easier to terminate
Minimizes fixed costs to accelerate reaching BEP (break even point)
TEAM
Make sure the business objectives and your objectives agree
What kind of business do you want to do?
Why?
What are your business life objectives?
Make $ ?
Enjoyment ?
Fulfillment ? Live out a dream?
Does your plan accommodate this?
Business plan tests
Is it credible?
Does it outline a time and action plan?
Does it provide enough detail and information for approval?
Is it exciting and involving?
Most common reasons ventures are not funded:
Lack of confidence in management
Unsatisfactory risk / reward ratio
Absence of a well defined business plan
Investors’ unfamiliarity with products, processes, or markets
The business’ unattractiveness to investors
Effective Persuasion
Project your best character traits into your presentation
Understand your audience - and use that understanding to achieve your goal
Develop two agendas - one for persuasion, one for action
Utilize the strongest arguments to make your case
Learn to overcome resistance
Best test of a business plan
Can you accurately, adequately, completely, and convincingly summarize it in
one exciting, interest-generating page?
__________________________________________________________
Types of Analysis
SWOT
Financial Analysis
Probability and Statistics
Buddhist meditation
Executive Summaries
Target your reader: This may be the only thing the reader reads, so try hard
to give him what he wants.
Banks want track records
Venture capitalists want new technology
Angels want excitement
Division presidents want synergies
People grading papers want everything, all presented in a brief, concise
manner
"How to Write a Great Business Plan"
The People
The Opportunity
The Context
Risk and Reward
"Should Smaller Companies Plan?"
Goals
Marketing
Sales
Production
Operations
Finances
Control
SRG text
Very light, just hitting a couple of very key points
Timmons (pg. 420)
Description of the business and concept
The opportunity and strategy
The target market and projections
The competitive advantages
Economics, Profitability, Harvest Potential
The team
The offering
How I (probably) would have done it
Target your audience - why do they care?
Start with a conclusion
Proclaim the opportunity - what currently exists, how / why it can be made
better
Discuss the economics and finances as they relate to the opportunity
Raise a few potential issues and resolve them
Summarize and re-conclude
MG Criteria
Your concept makes sense
Your business has been thoroughly planned
Management is capable
A clear market exists
You can hold your own with competition
Your financial projections are realistic
Money sources will get their money back
Papers from class
Need more excitement, forcefulness, etc.
Generally weak summaries and conclusions
Excellent qualitative analysis
Good SWOT analysis
Good identification of USP
Need to focus more on the numbers - business is about personal satisfaction
and $
5 Groups Compared
One Group did an SRG type narrative.
The other four groups focused primarily on the company and the opportunity
One group did a great job selling the principles, one group never mentioned
them
Two groups did a great job discussing the industry, one barely mentioned it
5 Groups Compared (cont.)
One group did a good job discussing financial projections
Two groups discussed the offering (deal)
One group discussed competitive concerns in realistic terms
One group discussed Fenchel’s pricing power, cost structure, and margins
5 Groups Compared (cont.)
Two groups emphasized the changes that will occur as a result of new
ownership
One group discussed profitability in quantitative terms
Of the 8 marketing opportunities the class identified, 2 groups discussed 6
of them, one group discussed 5, 1 group discussed 2, and 1 group discussed 1.
So, What did we learn?
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Michael Goldman & Associates, L.L.C. - Consulting
& CPA Services 
