This is It... Last Week Before Presentations!

By now, most of you have completed all of your business plan tasks to date.  You've followed the instructions extremely well and have done a great job staying on top of things.  Collectively, my 2015-16 class (you guys) has taken to this project better than any of my 3 previous VE sections.  Thank you for your hard work and effort.  This week's entry is going to encompass two big portions of our project.  You will need to work diligently in order to get everything done, so please remain focused.

This week will be dedicated to completing the Executive Summary, arguably the most important aspect of the business plan, organizing the plan, a simple task as long as you follow the rubric, and creation of the electronic presentation that you will use when presenting to your investors.  Here’s the week’s breakdown:

Monday and Wednesday: Executive Summary

As stated earlier, the Executive Summary is arguably the most important aspect of a business plan.  Since it is the first section of your business plan, the executive summary serves two purposes.  Your Executive Summary serves as your first impression on any potential investor, since it’s the first thing they’ll read in your plan.  What you say, how you say it, and how it is presented can be a make or break for your venture.  If an investor doesn’t like what he/she sees in this section, chances are no further pages will be turned in your plan.  Think about it.  If you begin reading a book or an article online and the first few pages/paragraphs don’t exactly catch your eye, will you continue to read on?  Likely not.  Similarly, if an investor has numerous business plans on the table, will he/she really want to read through an entire 20/30/40/50+ pages if the beginning doesn’t sound so hot?  I doubt it.  Additionally, your Executive summary will allow you to highlight facts and statistics that will stand out in the rest of your plan.  Essentially, it will serve as a sneak preview for the reader. 

First, read through this article about how to write an executive summary and what to include.  Take notes on the 7 elements of the executive summary and jot down what you wish to include as you read.  Next, read page 1 of this live business plan for a bakery for an excellent model of a well-constructed executive summary.  Now, I understand that reading these two links is likely to occupy an entire class period if you put your mind to it.  This means there is no tolerance for talking during class.  That’s how it goes if you’re going to get this work done. 

Once you’ve finished your reading, it’s time to take what you’ve learned and put it into writing.  You’ll need to write a rough draft of at least 1 page and make adjustments throughout the week.  Remember, this section of the project is extremely important.  I’d assume you may begin writing this at the end of class on Monday, on your off day Tuesday (I won't hold my breath on that one), or at the beginning of class Wednesday.

Thursday and Friday: Presentation Preparation

I have already dropped the 2012 VE business plan presentation in my Public_Faculty folder, and have included the 2013, 2014, and 2015 plans in our Google Drive.  Please feel free to use these as models for your presentation.  The best aspects of these presentations are the graphics, transitions, and animations.  Think about it.  Would you really like to see a wall of text on every slide in a presentation?  Neither do investors!  Make it stand out.  Sell yourself.  Sell your business.  And, most importantly, stand out.  That’s the best way for you to make an impact and turn your vision into a reality.  It would be too easy if we all had startup capital in our bank accounts.  Fortunately for you, your plan will make that a reality.

After this, during the week of 3/7 we will begin our presentations.  

Let’s have a great week and finish our plans Viking Strong!

Financial Focus

In layman’s terms, efficiency means getting stuff done in a timely manner.  This week we have to do a lot of work in a short 5-day time frame.  The focus will be on completing a comprehensive financial plan for our business.  I realize you may not be aware of all the startup costs associated with your businesses, so I've included some questions for you to focus on when conducting your research.  Again, when answering these questions in your Google Doc, please link me to your sources so I can see you're not pulling them out of thin air and so you can cite them at the end of your final written plan.  Here's a look at this week's work:

Monday/Tuesday: Expenses (Fixed/Variable) and Blog

The time has come to begin looking for real numbers for our business.  How much money does it actually cost to run your business?  Many of you have already done at least some research about renting a facility, paying employees, advertising expenses, etc.  For Monday, the plan is to first list as many costs as you can for your business.  Consider these questions:

 
·        Will you have a facility?
·        How much is the rent for the amount of square footage you need?
·        Will you hire employees?
·        What will their approximate salary cost you? Multiply hourly wage by approximate hours per week by 52 (weeks in a year) or add up all annual salaries if you will not
How much will a business license (yes, you have to get one of those) cost you?
·        Will you advertise?
·        Approximately how much does the utility bill cost for a facility you plan to run?
·        Do you sell merchandise?  What is the cost to make or procure the merchandise?
·        What other consumable assets will you use on a monthly basis? (landscaping companies use fuel on a regular basis)

The list can go on and on.  My suggestion is that you find as many fixed and variable expenses as possible for your plan.  A simple web search can greatly help you.

Once you’ve sufficiently completed these tasks (or if we only have about 20 minutes left in class Tuesday), it’s time to blog about your progress.  Feel free to tell me:

What have you learned about being prepared for anything? 

How did you react to having to deal with the possibility that your original assumptions may have been wrong?

What did you learn about our economy? Has your opinion changed about anything?

How will the economy impact your business?

Were you aware of all the expenses your business would have to pay?  Which expenses stood out during your research?

Wednesday: Breakeven Analysis

Below is a photo of what a typical breakeven analysis might look like for a business plan.

Worry not.  I don’t expect you to go into such great detail for this project if you are not a member of the finance department at Pick-it Sweets & Treats.  What I would like you to do today is simple. 

·      First, add up your total fixed and the average of each variable expense you calculated last week. 

·      Next, take a look at how you generate revenue.  Do you sell merchandise?  Services?  Determine the average revenue generated per unit. 

For example, if you sell ice cream, I’m sure the menu items vary in size and price (maybe from $1.50 up to $6.50).  If you feel as if you’ll sell more of the $1.50 small cones, instead of having an average revenue per unit of $4.00, perhaps you will estimate it at $3.00 or $2.75.  Ultimately, what I’m looking for is proof that you understand approximate expenses and can determine how much merchandise (or services) you’ll have to sell to at least break even.

From the rubric:

Provide break-even amounts in total dollars or number of sales. Provide details about assumptions you used to perform analysis including the profit margin percentage. (Assume that all costs are fixed except for cost of goods sold.)

Once you have determined a break-even for your business, access the Excel Spreadsheet titled "Breakeven Analysis" from my Public folder and create your own chart.

Thursday: Projected Sales

Nobody goes into business with the hope of just breaking even.  Though this may be the outcome at first, I’m certain you wish to eventually turn a profit.  Take today to project a realistic number for your sales over the next 12 months.  Be honest, and understand that in your first few months in business, customers may not be responsive to the new guy in town.  Perhaps it may take a while before you start gaining ground on your competitors.  Determine a fair estimate for how much you believe you will sell during your first year and record the numbers in your notes.  I will provide you with yet another Excel spreadsheet that will make your projections stand out.

Friday: Financial Write-up and Blog Entry

Now that you have some concrete numbers drawn up for your business, it’s time to make those spreadsheets, graphs, and charts make sense.  Write a 250-word description of your break-even analysis and sales projections. 

A good way to frame this would be to write one paragraph describing how you determined your expenses, and another one detailing how you came up with sales projections.  I know that many of you have decided to purchase land and building, and have calculated monthly mortgage payments with taxes and insurance, while others have looked up average rent per square foot for commercial property.  Tell me about that, along with how you found other expenses.  Then write about how you determined how your sales will (hopefully) increase over time.  Do you believe it may take a few months for a certain advertising campaign to start bringing in the money?  Will word of mouth help bring in new business after your first few months?  Will you even turn a profit in your first year (many businesses don’t) or will it take more time?  Tell me about your road to breakeven.

Copy and paste your write-up into a blog entry and title it "(Insert Company Name)'s Financial Write-up" when finished.  Next week, we will create an Executive Summary, organize our plan, and prepare for the Shark Tank.

Let's Try to Have a Full Week of School

Well, the two day week I planned last week ended up being a one-day week.  Since we were already behind on the business plan, we'll need to complete everything in this blog by close of business Friday, regardless of how many days of class we have between 2/15 and 2/19.  We simply won't have the time to make commercials and workplace training videos I have planned for us in April & May if we don't get these business plans finalized and presented.

Beyond completing the business plan, you also have Mock Interview Competition (April 8) coming up, so we'll need class time to prepare our portfolios, refine our resumes, and re-draft cover letters. Last year many of you interviewed with our superintendent, our County Mayor, and other prominent business owners.  We have another star-studded lineup this year, so it's important to be at your best for this competition.  That means we can't let the weather drag us down.

Below is a list of all the stuff we'll need to do this week.  As you will see, it's a mixture of business plan prep and Mock Interview Competition prep.

Monday: External Opportunities and Threats

Again, reference this article for some questions that you may use to complete your analysis.  Think about it… your established competitors may be resting upon their laurels, and may be missing out on opportunities in the marketplace that you can use to your advantage.  Conversely, these established competitors do have name recognition and good reputations on their side.  Will this pose a threat to your business penetrating the market?  How will you address this?

We will again make use of the last 7 minutes of class to share out our findings.  I urge you to think hard when it comes to what “best practices” you can use for your own plan.  This is a great way to expand your thinking and be productive.

Tuesday: Discussion of Business Risks

Have you ever heard someone break down the word assume?  If not, let’s just consider you to be one of the lucky few.  In any case, the assumptions made in our SWOT analysis are likely to be backed by research about our industry.  Unfortunately, even with hundreds of hours of research, some assumptions end up being incorrect.  Today’s classwork deals with handling business risks and incorrect assumptions.  From the rubric:

·       Discussion of business risks - 5 points

o   Identify the risks that will occur if assumptions you have made are incorrect.

o   Provide a strategy for dealing with the risks identified.

Essentially, we’re making sure we have all bases covered.  Today’s work should be somewhat challenging, but fun.  Your final draft for discussion of business risks should be about 100-150 words.

Wednesday: SWOT Analysis Final Draft

OK, today we are going to put it all together.  Take your notes/draft for your SWOT analysis and make it pretty!  Here are a few ideas for making your final draft

Now, you can use tables in Microsoft Word or use Google to search for some SWOT analysis templates if you wish.  I found a really good one that’s in my Public_Faculty folder saved as Business Plan – SWOT Analysis Template.ppt as a PowerPoint file.  I happen to LOVE slide 2 of the presentation, and would use that for my SWOT analysis. 

Your assignment today is to find an aesthetically pleasing (and EASY TO READ) template and enter your findings as a final draft. This will be a fun and creative day!  I know it.

This activity should last approximately 10 to 15 minutes since you will have all the bullet points in place.  We will use the remaining class time to begin our research on current economic conditions.  The following items should be searched and logged in your Google Doc:

• National unemployment rate
• TN unemployment rate
• Prime Rate
• Average 30-year fixed mortgage rate
• Rate of inflation
• Rate of change of GDP
• What is the GDP?
• Value of USD vs. Euro vs. GBP

With this information, you will begin to think of how this information affects the buying power of your customers.  Are more people working?  Does this mean more people are available to buy your products/services?  How about borrowing and credit card spending?  We can have a nice discussion about this in class, which will lead to me explaining the dangers of credit.

Thursday: Current Economic Conditions

While you’ve already completed an industry analysis, on Tuesday and Wednesday, you will take a look at the economy from a “big picture” perspective.  The information you research at the end of class Wednesday is your guide for today's work.  Here’s a breakdown taken straight from our rubric:

·       Current economic conditions: a “snapshot” of the economic environment that may include information such as employment levels, interest rates, rate of inflation/deflation, rate of change of GDP, balance of trade, exchange rates, and/or any other information you think is appropriate.

Now, this “snapshot” is essential to determine what effects the economy will have on your business.  It’s one thing to report to me that consumer discretionary income is dwindling as a result of inflation.  It’s a completely different (and more thorough) situation when you explain that because of dwindling discretionary income, your profits will be negatively affected, since fewer consumers will be capable of actually paying for your products/services. It will be even more thorough if you balance the decrease in unemployment vs. increase in inflation (if this exists) to determine whether profits will be negatively or positively affected.  Seeing the whole picture is key for success.

Friday: Cover Letter Lesson

Today, you will take a break from the business plan and focus on preparation for our Mock Interview Competition with a lesson about Cover Letters.  Below is a screenshot of what Coach Bruce planned for this lesson in the LGI Room last year.  The plans are so well written, we're going to use them again!

The activities are well planned and will be a huge help for you.  If you want additional help with writing cover letters, consult with the following links:

1. How to write a cover letter & What is a cover letter?

2. What to include in a cover letter

3. What is "block form" all about?

Long story short, this week will consist of five days of work, whether we're in class all five days or not.  I strongly recommend you stay on top of things daily, make use of your Google Doc (so you can remotely work together without having to be face to face), and email me with any questions if they arise if we're not in class.  Staying on track will lead to us having a lot of success at Mock Interview Competition AND having a ton of fun doing more promotional business stuff.

Thanks for reading.  I hope to see you on Monday!

Two Days - Two Projects

Hopefully the snow doesn't ruin this week any further.  Below, I have outlined two simple projects that will help you complete your SWOT Analysis.  The main focus is to understand that strengths and weaknesses are internal, while opportunities and threats are external.

Please make use of the links I've provided and refer to our company business plan for further assistance.  I will not be in the building on Thursday, so use your resources.

Thursday: Internal Strengths and Weaknesses

Here is a great link to an article that summarizes how to compose a SWOT analysis.  The first two portions, strengths and weaknesses, deal with your internal operations.  In the article, there are bulleted questions that you can answer to complete your analysis for each section, but you may also choose to identify other highlights that are industry-specific if you wish.  For example, do you have any technology at your disposal that separates you?  Are your employees trained in a certain way that helps your business stand out?  Do you have offers or loyalty programs that are unique to your industry?  Essentially, how are you better than other established businesses?  Conversely, which areas of the business will you need to improve?

Tuesday: External Opportunities and Threats

Again, reference this article for some questions that you may use to complete your analysis.  Think about it… your established competitors may be resting upon their laurels, and may be missing out on opportunities in the marketplace that you can use to your advantage.  Conversely, these established competitors do have name recognition and good reputations on their side.  Will this pose a threat to your business penetrating the market?  How will you address this?

We will share out some of our findings in the last 7 minutes of class, so please work diligently and be prepared.  Also, don’t hesitate to use some great points from your classmates if you can add them to your plan.  The purpose of this exercise is to share best practices (buzzword: collaborate).  I urge you to think hard when it comes to what “best practices” you can use for your own plan.  This is a great way to expand your thinking and be productive.