Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ The Business Plan AGENDA Before you start What is a Business Plan? Why would you need a Business Plan? How to write a Business Plan Quality Measures in Business Planning The Contents

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ Before the Business Plan Your project must be conceptually finalized = What are your personal goals and ambitions? Is your scenario realistic? (Sanity check) Where is the pain? Does it really hurt? What is your value proposition? Quantify it – even if you have to guess a lot More guesstimates: How to it get up at running? What ressources, people and facilities do you need? The mental draft project plan starts to materialize. Next: how does the Masterplan look like?

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ What is a Project plan? 1.There is a goal – and it is specific 2.There is a process described by 1.Actions to conclude 2.Facilities needed 3.Hardware needed 4.Humans needed 3.There is a time table 4.There is a budget

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ What is a Business Plan? Two things: 1.The detailed rationale behind your business 2.The project plan for the business start-up Ad 1 : Information, analysis and conclusions to support the assumption that this can be achieved, and that the business model is applicable and realistic Ad 2: There is a goal – and it is specific There is a process described by Actions to conclude Ressources involved There is a time table with some milestones There is a budget with a cashflow projection 1+2: there is a business opportunity, and this is how we will exploit it.

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ Why a Business Plan - 1 Decicion A systematic review of the crucial issues: Estimates are substantiated Statistics have their saying Shortcomings and deficiancies materialize Perspectives and consequences are quantified YOU get a qualified basis for deciding whether or not to risk your future carreer and invest your future working life in implementing this project

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ Why a Business Plan - 2 Management Continous business development: Facts superseed fiction and estimates The management is forced to think longterm Problems are reckognized well before disaster day Consequences are implemented with due diligence YOU set the standards for the future management of the company

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ Why a Business Plan - 3 Funding How much capital do you need – and for what? Your investors incentives? Please explain. YOUR INVESTORS get a qualified picture of the project, the team, the perspectives, the risks and the gain. So the business plan is your investors first and crucial encounter with the founding team.

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ How is it done - 1 Preparations Pain and value proposition understood. Customers and Jury too. Product/service identified Business model defined Sanity checks performed (Customers, mentors, consultants etc.) Research Customers: statistics in various domains Value creation, value chains Competitors IPR and technology Analysis Synthesis gives the preconditions Draw up scenaria for your market entry Quantify the consequences From cashflow to capital demand Worst case scenario Critical parameters – contingency plans – possibly all over again

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ How is it done - 2 The Group Set up the management Be systematic: consider using agendas and minutes Check progress with deadlines Share the workload The project: Business planning is a project in itself - so Set up an activity list Allocate ressources: Best man W/M at every task Set up a time table with milestones. (Confer with the course manual)

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ Quality in Business Planning It takes time! Consistent and logic Statements: to-the-point Economical in pages and words Enthusiastic and optimistic - though credible Empathic: Customers Investors Competitors Employees Value creation is well understood and described Nothing of importance is conceiled (honesty prevails) Good art is quality, and quality takes time Robert Jacobsen In good art, the detail is seen in the entirety - - and entirety is seen ind the detail Karen Blixen

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ The contents - 1 The executive Summary: the Five P-Approach Pain, Potential, People, Platform, Project Some background: The people involved – CV and roles The Customer and the Pain The Value Proposition The market and the competitors Technology and IPR

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll Executive summary the single-most important section GetBetterQuick Ltd. is a new knowledge-based company with a high growth potential within on-line monitoring of physiological recuperation of out-patients in orthopaedic retraining programmes. Orthopaedic retraining is costly, it requires extra and inconvenient treatment, it is often neglected for same reasons, and as a result, a high number of patients do not recuperate to full performance. It goes without saying that this is not an ideal situation. Our system allows early discharge plus cost-efficient and convenient retraining and recuperation. Saving potentials of efficient treatment - to society, to healthcare and to patients - are high. In Scandinavia alone, the annual economic savings of a 10% reduction of bed days of orthopaedic patients, which is a realistic measure, are as high as 100 mio. /yr. End-users are patients with an internet connection in their homes. Customers are orthopedic departments. Users are physiotherapists and orthopaedic MDs. Buyers are hospitals and clinics. First 3 prototype systems have finalized clinical verification successfully. Results are published. The founding team comprises ---, M.Sc, --- MD, and --- MBA, with a background as a CEO of ---. It is our ambition to develop GBQ Ltd. into an international market leader within internet-based on- line monitoring of patients in retraining programs in their homes. We envisage to develop within the next five to six years, a company with an annual turnover above 25 mio., with more than 80 employees in high quality jobs and an export of innovative new monitoring systems, exceeding 20 mio. /yr. Several major players in the market indicate good exit opportunities, and GBQ Ltd is expected to be ready for acquisition some 4 – 6 years from kick-off. Valuation could amount to 30 – 50 mio.. We plan a quick expansion to this level through one ore two funding rounds. Our total capital requirement is 2 mill. The founding team so far has invested

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll Executive summary the single-most important section GetBetterQuick Ltd. is a new knowledge-based company with a high growth potential within on-line monitoring of physiological recuperation of out-patients in orthopaedic retraining programmes. Orthopaedic retraining is costly, it requires extra and inconvenient treatment, it is often neglected for same reasons, and as a result, a high number of patients do not recuperate to full performance. It goes without saying that this is not an ideal situation. Our system allows early discharge plus cost-efficient and convenient retraining and recuperation. Saving potentials of efficient treatment - to society, to healthcare and to patients - are high. In Scandinavia alone, the annual economic savings of a 10% reduction of bed days of orthopaedic patients, which is a realistic measure, are as high as 100 mio. /yr. End-users are patients with an internet connection in their homes. Customers are orthopedic departments. Users are physiotherapists and orthopaedic MDs. Buyers are hospitals and clinics. First 3 prototype systems have finalized clinical verification successfully. Results are published. The founding team comprises ---, M.Sc, --- MD, and --- MBA, with a background as a CEO of ---. It is our ambition to develop GBQ Ltd. into an international market leader within internet-based on- line monitoring of patients in retraining programs in their homes. We envisage to establish within the next five to six years, a company with an annual turnover above 25 mio., with more than 80 employees in high quality jobs and an export of innovative new monitoring systems, exceeding 20 mio. /yr. Several major players in the market indicate good exit opportunities, and GBQ Ltd is expected to be ready for acquisition some 4 – 6 years from kick-off. Valuation could amount to 30 – 50 mio.. We plan a quick expansion to this level through one ore two funding rounds. Our total capital requirement is 2 mill. The founding team so far has invested

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ The contents - 2 Market Research and - Analysis: Customers in numbers, types, geography, etc. Competitors in types, advantages and weaknesses Market analysis f.x. acc. to Michael Porter Entry barriers (technical, legal, etc.) Technology: How does it work? Why is it superior? Patent situation Freedom to operate Efficiancy of claims as entry-barriers Production issues Bill of materials, (BOM) and unit costs Necessary equipment, machinery etc.

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ The contents - 3 The business development scenaria: Qualified guesswork: Establish sales of units in a time domain, market A. Repeat for market B etc. Compute the consequences: Goods/hours sold per Month t N

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ The contents - 4 Quantified consequences: Sales, production data and operations combined yields - Cash, incoming and outgoing Budgets: Cashflow projections => capital requirements Profit and Loss Assets and Liabilities Consider to use different time units for short term and long term projections Risk Assesment and Contingency Plans Most critical parameters: look at them, one at a time. How to respond when worst case rules the day – and what happens?

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ A frequently used risk assesment: The SWOT Analysis Strengths Weaknesses Opportunities Threats

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ The Format All essential information delivered in first 5 pages Max 25 pages alltogether excl. annex All details, reports, bulky information, background readings, tables – even some of the budgets etc. in the annex Dont forget quality = consistancy and time This course: digital media only. PDF preferred. A good practice: Annex 1: detailed project plan from kick-off via 1 – 2 milestones to first critical results. Includes more detailed budget on expenditures and cashflow Includes milestone specifications Includes Criteria of Essentiality: Go/No-go specs.

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ Questions? More about Business plans on From the textbook: a business plan template to write intextbook McKinsey book on business planning: in-depth onbusiness planning business start-up preparations

Institut for Produktion og Ledelse Danmarks Tekniske Universitet John Heebøll VÆKSTHUS+ Thank you for to day! Teamwork makes the dream work