Greetings and welcome to Session 3 of forming, funding and launching a technology startup company. In this session, we're going to talk about integrating and presenting the business plan. We'll summarize the percents of purpose and the overall structure which we've been introducing in the last few videos and we'll look at the process as a whole. We'll also talk about each of the individual chapters, the executive summary, the company overview, the product plan, the market plan, the management and operations plan, and the financial plan which underpins all of this. Then we'll take a look at the risk analysis, and the last and perhaps one of the most important parts of the business plan, the summary and outlook and because this is where we leave the last impression for our reader. Let's jump right in. We'll also talk about presenting the plan, a critical part of constructing a business plan, and then which individual parts may be presented or used for different types of circumstances and situations. You might recall, we reviewed the sense of purpose and we've introduced that in our previous videos. But just to recap a little bit here is to recognize they're both internal and external uses of the business plan. Now, internally for strategic operations and planning and staffing, and it's just a number of different tasks and functions of the early-stage startup company. Externally, what is the face to the world? How might we use the plan for marketing and for funding and potentially even recruiting, or for speaking with partners or customers? There's a range of internal and external uses of the business plan and as a model or a medium, if you will, of communicating, communicating with stakeholders including suppliers, customers, employees. Of course, it's an integral part of our ability to raise capital, and determining how debt and equity fit into our initial capital structure. It gives us a plan of action, how we are challenged with the business plan to articulate, that how we are actually going to implement strategy and delay that out in a coherent and meaningful and logical way and then to understand and communicate what are the resources and including finance or capital equipment and etc that we may need to implement the plan. From that perspective, it serves like a map, if you will, or a blueprint, giving us a structure or a framework from which we are using to build our business. Of course, being adaptive in nature, we always want to be on the outlook for how we may update or integrate any new information, new insights that we may gain, or perhaps more accurate data that allow us to make better decisions and occasionally, invite us to adjust our original plan. Maintaining a careful review of the plan in relation to the sources of information is important so that we keep our strategic direction oriented and we have a sense of checks and balances built in through that review process. It can support making better business decisions overall. This really is what the business plan is about. It's how to support making better business decisions. Ultimately how we harvest profits, how we bring value back into the company. Even what we may think about as a exit of the venture as a whole, all of that can be packaged within the plan, to help initial investors, partners, and stakeholders understand our strategy. To the extent that we can be open and transparent and communicating that strategy, then we are inviting others to participate and become involved. You might recall, we talked about the business plan as a process. It's a dynamic process and we introduced the business ecosystem, this complex array of suppliers and customers and stakeholders and owners and employees, just a wide range of different elements that make up this complex system in the entrepreneurial environment. Then what we are challenged to do in that environment conduct our market research or financial analysis and develop our strategies and understand what resources that we actually have available and recognizing that all of these things are interacting with and in some sense had various levels of dependencies with one another which is part of the reason why the business planning process is a challenge to do in a linear fashion. It's important to get this broad holistic perspective and understanding and from that perspective, then begin developing the individual parts, which is partly why we've introduced the business plan and a number of different videos as we've been going along to start building that ecosystem, to build that vision, that broader scope of the whole company and the whole market environment, and in that context constructing our business plan and recognizing that along the way, we may need to continuously adjust and adapt to changing conditions. The important thing is that we have a process for integrating learning, for integrating new knowledge and experience and observation, and bringing that back into the plan, and updating our process. We continuously make micro course adjustments, if you will, which inform us how to better implement our strategy. We're going to go through the plan actually chapter by chapter. Again, a quick summary of what that looks like right up front as the executive summary, it's very short. It's high level. It actually has a summary paragraph of every other chapter in the business plan. Then the first chapter is just a simple company overview. Think of it like an introduction. You want to clarify, what's the name of the company and how long has it been around and what is the current situation? What is the vision and the mission? Just how you would introduce the company. Then the product plan. This is where we clarify, what is the customer problem? What is the solution? What are our competitive advantages? How are we presenting an offering value to our customers, and then the market plan where we define and characterize the industry that we're in? We give definition to the size and to the customer and we characterize their working environment of the market so that we understand how our product or service is going to be introduced to deliver value, to solve customer problems. Then management and operations planning. We looked at these separately, the management component and the operations component. In this lean or smaller business plan, we're actually combining these two together. We'll look at the individuals, the key management staff, and their roles and responsibilities and we'll also look at the operation side, the location strategy, the business structure, and how we envision operating or functioning to realize our vision, to deliver value in the form of products and services to our customers. Then underpinning all of this is the financial plan that includes the revenue model and the assumptions that we've made to build the model and to build out our financial forecast. What capital we might need for startup cost, for example, or capital equipment, initial equipment that might be needed to build our products or services. Then the last couple of chapters in the business plan, one introduce risk analysis. Here, we're just looking on more or less a high level of identifying what are obvious or clear, not that we can recognize risks associated with launching our business. These could be competitive risks, they could be financial risk, they could be risk of lack of experience, or working in a rapidly growing environment. There's any of market. There's any of a number of different types of key risk factors associated with a startup technology company. The point here is that with our risk analysis, we want to be as clear as possible about the ones that we're aware of, that the key risk factors that we can recognize and we clarify how we anticipate mitigating those risk. Introducing a mitigation strategy or summary, if you will, and not going into a whole lot of detail here, but just acknowledging that we recognize their risks and here's how we intend to approach them. Then the last chapter is the summary and outlook. This is a very important chapter. Because it's the last impression that we leave with our customers, with our potential investors or whoever may be reviewing the plan. We want to be clear about what we're asking for, what the next steps are, etc, and bringing the plan to a close. Now, we think about the format. We're actually looking at both structure and form, or in essence, how we're presenting the information. And while our focus up to now has been about largely about content, now we're going to think about how we're actually going to present that. We want to be consistent with font, for example, something very simple, but 12-point Times New Roman is the recommendation here is single-spaced, one-inch border is all around, page numbers in the lower right. Now you may have in the up above in the upper right, maybe a name of the company or something, or if you want to get fancy, you could even have a heading of the chapters, etc. But this is the bare minimum so that ideally, you want the reader to be able to navigate in the document and find their way around. That means something as simple as page numbers, but also could include a table of contents. You'll have a title page, of course, with the name of the company and maybe you have a confidential marking. It is recommended that you do and company name and tagline, maybe contact information, this thing. We'll go through that in a little bit more detail but the confidential marketing is especially important if you're asking individuals to sign a non-disclosure agreement in order to receive the business plan. For investors, you want to present a fully polished plan. This would have all of the detailed financials and then all of the other information, basically, the complete plan, but there may be other versions of the plan that you have as well. This support both internal and external needs. If you're using the plan as a planning document internally with key employees or board members, you may or may not need the financial statements or you may actually be using the actuals, for example, versus performance. That individual choice about how you're managing your internal operations, but the point being that the business plan can serve as a guide for exactly that. Then externally, as we mentioned earlier, customers, suppliers, marketing, promotion, you may not have the financial statements there or depending if there's a specific interaction where you do want them. But in general, the point being is if you design the plan, the format, you can actually pull and insert different pieces or make slight adjustments for various different stakeholders, internal and external to the company. You always want to have a cover letter or some kind if you're sending the plan. You may have short and long versions of the plan. As I mentioned above, you can take individual sections. That's why, for example, each of the chapters are designated two pages front and back of a single piece of paper and that could be sent as an individual stand-alone informational piece depending on the interaction or the party receiving the document. As a matter of process, it's good to track your documents, especially if you have hard copies or doesn't matter, hard copies, digital copies. The extent that you send the documents out, you want to create some tracker so that you know who has it, what number of the plan that they have. I do recommend numbering the business plans. Then the critical dates, and the follow-up status. Then at some point, you'll always asked for the plan to be returned especially if the business is not going to go any further or something like that. It's looking at it as proprietary information, guarded information. Then in that regard, you may determine in some cases that you'd like to have a non-disclosure agreement in place. Now, truth be told I would say many, if not, most, potential investors are not likely to sign a non-disclosure agreement, especially if they're professional investors. They just looked at so many business plans and listen to so many deals, it's hard for them to make those commitments. On the other hand, there are certain circumstances and situations, especially, for example, if you're interacting, or presenting to private individuals. At least speaking to the issue of non-disclosure and perhaps having a non-disclosure agreement in place. There's two and we're going to talk about non-disclosure in our legal session. I think that's in Session 4. But the point being that it communicates more than just the document itself. It communicates that you value the information and you value the work that's been done, and that even though non-disclosures or NDAs are often referred to, they're legal contract, yes and they're extremely difficult to enforce but at the same time, just by virtue of asking for one, you are communicating that you value the information and that you want to guard it and work with the individual to protect that. A good consideration is an NDA, but this is the general outline and format of a business plan. That brings us to the end of Video 1 of seven. I'll see you shortly for Video 2.
