1. Business planning
From A to F
Δρ. Ηρακλής Αγιοβλασίτης

2. From A to F(unding)
A. Defining the plan
B. Authoring the plan
C. Sales
D. Marketing
E. Financials
F. Funding

3. A. Defining the plan
What is and what is not

4. 1. What is the business plan?
• Plan for the creation and management of business
• Goal setting instrument
• Connect the dots
• Owners’ manual
• The map

5. The map

6. 2. Why write a business plan?
1. Objective & Critical tool
2. Focus ideas & Feasibility study
3. Business model
4. Communication tool
5. Financial projection
6. Operational tool
7. Inhouse vs Outsourcing

7. 3. Advantages of great business plans
• Fundraising ability
• Attracting management team & employees
• Setting goals
• Easily adapted
• Providing indices to measure progress
• Continuously updated
• Can stand critical review

8. B. Authoring the plan
Templates

9. No right format

10. 1. Executive Summary
2. Company Description
3. Market Analysis
4. Organization & Management
5. Marketing & Sales
6. Service or Product Line
7. Funding Request
8. Financials
9. Appendix
US Small Business Administration

11. 1. Executive summary
• The mission statement
• History of the business
• Names of founders and the functions they perform
• Location of business
• Description of facilities
• Products manufactured/services rendered
• Banking and investment relationships
• Summary of company growth including financial or market highlights
• Summary of management’s future plans

12. 2. Company description
• High level look at how all of the different elements of your business fit
together
o Nature of your business as well as primary factors that you believe will make
your business a success
• Marketplace needs that you are trying to satisfy
o Include the ways in which you plan to satisfy these needs using your products
or services. Finally, list the specific individuals and/or organizations that you
have identified as having these needs.
• Primary success factors (for example):
o Ability to satisfy your customers’ needs
o Highly efficient methods of delivering your product or service
o Outstanding personnel
o Key location

13. 3. Market analysis
• Industry description and outlook
o Description of your primary industry
o Current size of the industry
o Historic growth rate, trends and characteristics related to the industry
as a whole
 What life cycle stage is the industry in?
 What is its projected growth rate?
 What major customer groups are within the industry?

14. 3. Market analysis
• Competitive analysis
o Identify your competition by product line or service as well as by
market segment
o Assess their strengths and weaknesses
o Determine how important your target market is to your competitors
o Identify any barriers which may hinder you as you are entering the
market
• Regulatory restrictions
o Current governmental regulatory requirements
o As well as any changes that may be upcoming

15. 4. Organization & Management
• Organizational structure
o Create an organizational chart with a narrative description
• Ownership information
o Include legal structure and ownership details
• Management profiles
o Discuss key people in your company and their backgrounds

16. 5. Marketing & Sales Strategies
• Market penetration strategy
o Strategy for growing your business
o Horizontal strategy where you would provide the same type of products to different users
o Vertical strategy where you would continue providing the same products but would offer
them at different levels of the distribution chain
• Communication strategy for reaching customers
• Sales force strategy
o If you are going to have a sales force, do you plan to use internal or independent
representatives?
o How many salespeople? How will you train your sales force?
o What is the compensation for your sales force?
• Sales activities
o When you are defining your sales strategy, it is important that you break it down into
activities.

17. 6. Service or Product line
• Detailed description of your product or service
o Specific benefits of your product or service
o Ability to meet consumer needs
o Advantages your product has over that of the competition
o Present development stage your product is in (i.e., idea, prototype,
etc.)
• Information related to your product’s life cycle
• Any copyright, trademark, patent, and trade secret information
• Research and development activities you are involved in or are planning to
be involved in.

18. 7. Funding request
• Current funding requirement
• Future funding requirements
o Typically the next five years
o At least three years of revenue generating years
• How you will use the funds you receive?
• Long-range financial strategies

19. Cash flow analysis

20. 8. Financials
• Historic and prospective financial statements
o Income statements
o Balance sheets
o Cash flow statements
• For each year you have been in business

21. 9. Appendix
• Resumes
• Credit history (personal & business)
• Product pictures
• Letters of reference
• Details of market studies
• Magazine articles or book references
• Licenses, permits, or patents
• Legal documents
• Copies of leases
• Building permits
• Contracts
• List of business consultants, including attorney and accountant

22. Sequoia Capital
Yahoo
Google
Electronic Arts
Cisco
Paypal
Linkedin

23. Sequoia Capital Business Plan template
1. Company Purpose
• Define the company/business in a single declarative sentence
2. Problem
• Describe the pain of the customer (or the customer’s customer)
• Outline how the customer addresses the issue today
• Include research and evidence of the problem

24. Sequoia Capital Business Plan template
3. Solution
• Demonstrate your company’s value proposition to make the customer’s life
better
• Show where your product physically sits
4. Why now
• Set-up the historical evolution of your category
• Define recent trends that make your solution possible

25. Sequoia Capital Business Plan template
5. Market size
• Identify the current and expected customers
• How many dollars are spent on goods & services like yours
• What are the trends (opportunities & threats)?
6. Competition
• List competitors
• List competitive advantages

26. Sequoia Capital Business Plan template
7. Product or service
• Functionality, features, architecture, etc.
• Development and describe the roadmap
• Illustrate via
o Sketches
o Pictures
o 3D renderings
• Intellectual property

27. Sequoia Capital Business Plan template
8. Business model
• Revenue model with pricing strategy
• Average account size and lifetime value
• Sales and distribution model
• Key partnerships and suppliers

28. Sequoia Capital Business Plan template
9. Team
Founders and management
Board of directors
Board of advisors
10. Financials
Income statement, cash flow statement, and balance sheet
11. Closing

29. In any case
Watch out for the audience!
• Attention span: 20 pages

30. Summary
Do
• Consider prevailing formats for your plan
• Adapt pending the audience
• Be clear, specific, and convincing
Don’t write a:
• long
• confusing mess with
• no convincing path to profitability,
• limited understanding, and
• a weak team

31. Best practice
• Have a main business plan
• Update it regularly
• 5-year P&L
>>> Adapt!

32. C. Sales
Assumptions: Realistic or Imaginary?

33. Sales
1. Managing the sales pipeline
• Generating leads
• Planning
• Closing sales
2. Building one-to-one relationships
• Customer data
• Regular, targeted communication
3. Establishing a sales budget

34. Lead
Selling
Sold
Leads-to-Sales Call %? Sales Call-to-Close %?
1. The sales pipeline

35. Lead Selling Sold
Cold calling
- Plan, prepare,
practice
- Warm-up
Networking
- Personal and
professional
- Build and
maintain the
network

36. Lead Selling Sold
Cold calling
- Plan, prepare,
practice
- Warm-up
Networking
- Personal and
professional
- Build and
maintain the
network
– Sell solutions, not
products
– Guide meetings
– Understand the
influencers
– Keep your head
up

37. Lead Selling Sold
Cold calling
- Plan, prepare,
practice
- Warm-up
Networking
- Personal and
professional
- Build and
maintain the
network
– Sell solutions, not
products
– Guide meetings
– Understand the
influencers
– Keep your head
up
– Show them the
money
– Ask for the sale
– Offer payment
terms or
discounts
– Build a
referenceable
customer
– Budget for next
year

38. 2. One-to-one relationships
Maximize sales by picking the BEST customers
Collect customer information
• Know your customer
• Study prospective and current customers
• Setup a database
Customize the sales approach
• Build individual profiles
• Get personal
Incentive
Loyalty card
Sign-up scheme

39. 3. Establishing a sales budget
Start with sales costs as a percentage of sales
• $10 product price
• $7 expenses (not including sales cost)
• $3 profit (not including sales cost)
• $0 to $3 (0 to 30%) is sales cost; estimate $3
• For a 1,000 product forecast in yr. 1; sales budget = $3,000
Consider the lifetime value of the customer
• Factor in revenues from recurring purchases
Opportunity costs of various sales approaches

40. Sales: to plan or not to plan?
• Revenue goals are realized through a series of well
planned steps
• Sales and marketing budgets are dependent on proper
sales forecasts
• Managing the sales pipeline is critical to plan and
implement the sales strategy

41. D. Marketing
Not advertising

42. Marketing
1. Explore customer needs and wants
2. Build a marketing plan that addresses
these needs and wants
– Now and in the future
3. Define a marketing mix that works
– And that is adaptable
4. Pricing: how to

43. 1. Customer and problem
- Who are the customers?
- What are their problems?
- Confirm/revise your assumptions about
• Types of customers
• Needs and wants
• “Day in the life”
• ROI for customer
• Minimum and desired feature sets
• Willingness to pay

44. 2. Marketing Plan
1. Product/service description and features,
2. Promotion and advertising details,
3. Pricing model
• Business model
• Prices
4. Placement/distribution and sales plan.
• Sales methods to include personal selling and/or sales channels, etc.

45. 3. Marketing mix (4Ps)
Product
• Brand
• Features
• Design
• Quality
• Packaging
• Warranties
• Returns policy
• Functions

46. 3. Marketing mix (4Ps)
Product
• Brand
• Features
• Design
• Quality
• Packaging
• Warranties
• Returns policy
• Functions
Price
• List price
• Discounts
• Credit terms
• Payment
period

47. 3. Marketing mix (4Ps)
Product
• Brand
• Features
• Design
• Quality
• Packaging
• Warranties
• Returns policy
• Functions
Price
• List price
• Discounts
• Credit terms
• Payment
period
Promotion
• Public relations
• Advertising
• Sales force
• Direct
messages

48. 3. Marketing mix (4Ps)
Product
• Brand
• Features
• Design
• Quality
• Packaging
• Warranties
• Returns policy
• Functions
Price
• List price
• Discounts
• Credit terms
• Payment
period
Promotion
• Public relations
• Advertising
• Sales force
• Direct
messages
Place
• Channels
• Locations
• Inventory
• Fulfillment

49. 4. Pricing
Key considerations are
– Your cost (direct costs plus overhead to including marketing, salaries, etc.)
– Competitor prices (current and future)
>> Research
Suggested approach
– Price just below (10-20% less) comparable competitors, and offer better
service than them.
– If your product is significantly better, it’s OK to charge more than competitors.

50. 4. Pricing >>> Competition
• Benchmark against which to evaluate prices
• Even new innovations have competitors
– Customer’s may not choose to adopt the new technology
– Competitive substitutes
• Cross-Price elasticity of demand
– % change in one product’s sales due to a % change in a price of another
product
• Increase in complementary competitors may increase prices

51. 4. Pricing >>> Customers
Price ceiling is determined by customer’s perception of value & competitive
options
• Product Benefits
− Functional: attractive to users
− Operational: reliability, durability, efficiency
− Financial: credit terms, leasing options
− Personal: psychological satisfaction
• Costs
− Monetary: price, transportation, installation
− Nonmonetary: product failure, obsolescence

52. 4. Pricing >>> New Revenue Streams
– New uses for existing products
– Offer whole product (end-to-end solution)
– Offer product bundles
– New, less price-sensitive, segments
– Offer product derivatives under a price lining
strategy
– IP
> outright sale vs licensing
> single vs multiple users
> pay-per-use vs subscription

53. E. Financials
Do the math!

54. 1. Objective
• 95% percent of start-ups fail due to:
o Lack of MONEY
o Lack of TIME
• Managing finances effectively can help you from running out of money
prematurely and from spending money at the wrong time

55. 2. Who do they help?
• Investors understand
o The profit potential of your firm
o How much money you need to get there
o On what timeline and for what purpose
• Entrepreneurs understand
o Level of risk/reward for your venture
o Value of your company (and in turn, your percent ownership) when it’s
time to raise capital for the venture

56. 3. How do they look?
1. Income statement
₋ Summarizes revenues and expenses
2. Cash flow statement
₋ Sum of retained earnings minus the deprecation
provision made by the firm
3. Balance sheet
₋ Summarizes the assets, liabilities, and
shareholders’ equity at a specific point in time

57. 4. Income statements
Revenue (Sales)
– Money paid to the company by customers in exchange for the sale of a
product or service by the company
Costs of Goods Sold (COGS)
– Direct costs to produce each product or offer each service
– For a product, all components and manufacturing costs
– For a service, all costs of fulfillment; all labor costs.
– Costs of goods sold are often variable as component and manufacturing
costs drop as volume increases.

58. 5. Income statements
• Revenue forecasts: What can we sell,
given the market, our pricing, and our
capability?
• COGS forecasts: How will our costs of
goods sold change as our revenues
change?

59. 6. Income statements
SG&A forecasts: What marketing/sales
effort do we need to reach our revenue
goals? What infrastructure do we need to
support our business?
• How much money do we need to
accomplish growth?

60. Sales forecast

61. Income statement

62. • Reports cash receipts and payments
• Lists all cash going in and out by category
1. Operating activities: Cash changes by operating the company
2. Investing activities: Cash changes from buying/selling assets (equipment,
building)
3. Financing activities: Cash changes by borrowing funds, selling stock,
paying dividends, reducing debt, etc.
2. Statement of cash flows

63. Cash flow

64. Current Assets
(liquid in less than a year)
Fixed Assets
Other Assets
Cash and equivalents
Accounts receivable
Inventories
3. Balance sheet
Property, plant and
equipment (minus
Depreciation)
Intangibles (minus
depreciation)
Investment securities
Total assets = Total liabilities + Shareholder’s equity
Current Liabilities
(payable in less than a year)
Long-term liabilities
Shareholder’s
equity
Accounts payable
Accrued expenses
Short term debt
Common stock
Additional paid-in capital
Retained earnings
Bank loans
Bond issued

65. Balance sheet

66. Summary
• Financials statements are a valuable tool
to both investors and entrepreneurs
• Critical to determine how much money
you need when and for what purpose
• Quantifying the risk and reward is an
early step to determining if to launch the
venture

67. F. Financial capital
Show me the money!

68. Where does startup money come from?

69. Bootstrapping
Why?
• Owned by founders
• Easy ownership terms
• Controlled by founders
• Lower pressure
• Little time spent on fundraising

70. Bootstrapping
Why NOT?
• May constrain growth due to limited capital
• Lack of funding commitment for future
• Loss of advice and social capital from professional
investors

71. Questions to answer
• How much money you need?
• What will the money will be used for?
• At what stage is your business in?
• What is your capacity to repay the
money?

72. Advantages
– No share of ownership required
– More borrowing allows for potentially
greater return on equity
– During periods of low interest rates, the
opportunity cost is justified since the
cost of borrowing is low
Disadvantages
– Regular (monthly) interest payments are
required.
– Continual cash-flow problems can be
intensified because of payback
responsibility.
– Heavy use of debt can inhibit growth and
development.
Debt vs Equity
- Ownership (equity) in the
companies is sold to
investors.
- High risk - unsecured!
>> Term sheets

73. The funding gap

74. The funding gap >>> Solved (?)
1. Angel investors
2. Crowd-funding
3. Grants
• National Programmes
o Microloans
• European programmes
o The SME Instrument

75. Concept &
Feasibility
Assessment
Innovation
R&D activities
Commercialisation
Phase 2 Phase 3
Market
• Feasibility of concept
• Risk assessment
• IP regime
• Partner search
• Design study
• Development, prototype,
testing
• Miniaturisation/design
• Clinical trials
• Etc.
• Facilitate access to
private finance
• Support via networking
, training, coaching,
knowledge sharing,
dissemination
Lump sum:
~ 50.000 €
~ 6 months
Output-based payments:
1 to 5 M€
12 to 36 months
No direct funding
Phase 1
Idea
SME Instrument

76.  10% budget of SME instruments
~5200 proposals funded-10% success rate
 Funding: lump sum 50.000 €
 Duration: ~ 6 months
 Target group: Innovative SMEs
 Single company support possible
 Other organisations= subcontracting
 Input: idea/concept – Business Plan 1 (~10 pages)
 Activities: Feasibility of concept; Risk assessment; IP regime;
Partner search; Design study; Pilot application….
 Output: elaborated “Business Plan 2”
 Call: always open with 4 cut-off dates/year
(first cut-off dates for Phase 1 around June 2014- 18/06/2013)
 Evaluation: 2 evaluators, remote, quality threshold
 Time to(TT) contract: 8-12 weeks
H2020 - New SME instrument
Phase 1: Concept & Feasibility Assessment

77.  90% budget of SMEs instruments (~1700 proposals of 1,5 Mio. € ;
success rate ~30 to 50%)
 Funding: 1 to 5 Mio. € / Duration: 12 to 24 months
 Target group: Innovative SMEs
Single company support possible / Other organisations= subcontracting
 Input: business plan 2 + description of activities under phase 2 (~30 pages)
 Activities: Development; Prototyping; Testing, Piloting;
miniaturisation, scaling-up, market replication, research
 Output: “Investor-ready Business plan 3”
 Call: always open with 4 cut-off dates/year (first cut-off for Phase 2: 24/09/2014)
 Evaluation: 3 evaluators, remote, quality threshold
 TT contract: 150 days
H2020 - New SME instrument
Phase 2: R&D, demonstration, market replication

78.  2% budget of SME instrument
 No direct funding
 Promote instrument as quality label for successful projects
Objective: Provide support and facilitate access to
Private finance
EU financing instruments (debt & equity facility)
Networking, training, information addressing IP management, knowledge sharing,
dissemination…
Connection to public procurement activities
 Key account Management will be carried out by EENs & coaching by external specialists
H2020 – New SME instrument
Phase 3: Commercialisation & Coaching

79. Open calls

80. 1. Space-SME-2014-1: SME Instrument
2. ICT-37-2014-1: Open Disruptive Innovation Scheme (implemented through the SME instrument)
3. NMP-25-2014-1: Accelerating the uptake of nanotechnologies, advanced materials or advanced
manufacturing and processing technologies by SMEs
4. PHC-12-2014-1: Clinical validation of biomarkers and/or diagnostic medical devices
5. SFS-08-2014-1: Resource-efficient eco-innovative food production and processing
6. BG-12-2014-1: Supporting SMEs efforts for the development - deployment and market replication of
innovative solutions for blue growth
7. SIE-01-2014-1: Stimulating the innovation potential of SMEs for a low carbon energy system
8. IT-1-2014-1: Small business innovation research for Transport
9. SC5-20-2014-1: Boosting the potential of small businesses for eco-innovation and a sustainable
supply of raw materials
10. DRS-17-2014-1: Critical infrastructure protection topic 7: SME instrument topic: “Protection of Urban
soft targets and urban critical infrastructures”
11. BIOTEC-5a-2014-1: SME boosting biotechnology-based industrial processes driving competitiveness
and sustainability
Open calls

81. 18/06/2014
24/09/2014
17/12/2014
Deadlines
Phase 1

82. Specific Challenge: The challenge is to provide support to a large set of early stage
high risk innovative SMEs in the ICT sector. Focus will be on SME proposing
innovative ICT concept, product and service applying new sets of rules, values
and models which ultimately disrupt existing markets.
The objective of the ODI is threefold:
• Nurture promising innovative and disruptive ideas;
• Support their prototyping, validation and demonstration in real world conditions;
• Help for wider deployment or market uptake.
Proposed projects should have a potential for disruptive innovation and fast
market up-take in ICT.
In particular it will be interesting for entrepreneurs and young innovative companies
that are looking for swift support to their innovative ideas.
The ODI objective will support the validation, fast prototyping and
demonstration of disruptive innovation bearing a strong EU dimension.
Scope: ODI will be implemented through the SME instrument which consists of
three separate phases and a coaching and mentoring service for beneficiaries.
Participants can apply to Phase 1 with a view to applying to Phase 2 at a later date,
or directly to Phase 2.
ICT-37

83. In phase 1, a feasibility study shall be developed verifying the
technological/practical as well as economic viability of an innovation
idea/concept with considerable novelty to the industry sector in which it is
presented (new products, processes, design, services and technologies or
new market applications of existing technologies). The activities could, for
example, comprise risk assessment, market study, user involvement,
Intellectual Property (IP) management, innovation strategy development,
partner search, feasibility of concept and the like to establish a solid high-
potential innovation project aligned to the enterprise strategy and with a
European dimension. Bottlenecks in the ability to increase profitability of the
enterprise through innovation must be detected and analysed during phase 1 and
addressed during phase 2 to increase the return in investment in innovation
activities. The proposal should contain an initial business plan based on the
proposed idea/concept.
The proposal should give the specifications of the elaborated business plan,
which is to be the outcome of the project and the criteria for success.
Funding will be provided in the form of a lump sum of EUR 50.000. Projects
should last around 6 months.
ICT-37

84. In phase 2, innovation projects will be supported that address the specific challenge ODI and
that demonstrate high potential in terms of company competitiveness and growth
underpinned by a strategic business plan. Activities should focus on innovation activities such
as demonstration, testing, prototyping, piloting, scaling-up, miniaturisation, design,
market replication and the like aiming to bring an innovation idea (product, process,
service etc) to industrial readiness and maturity for market introduction, but may also
include some research. For technological innovation a Technology Readiness Levels of 6
or above (or similar for non-technological innovations) are envisaged; please see part G
of the General Annexes.
Proposals shall be based on an elaborated business plan either developed through
phase 1 or another means. Particular attention must be paid to IP protection and
ownership; applicants will have to present convincing measures to ensure the possibility of
commercial exploitation ('freedom to operate').
Proposals shall contain a specification for the outcome of the project, including a first
commercialisation plan, and criteria for success.
The Commission considers that proposals requesting a contribution from the EU of between
EUR 0.5 and 2.5 million would allow phase 2 to be addressed appropriately. Nonetheless,
this does not preclude submission and selection of proposals requesting other amounts.
Projects should last between 12 and 24 months.
ICT-37

85. Expected impact:
· Enhancing profitability and growth performance of
SMEs by combining and transferring new and existing
knowledge into innovative, disruptive and competitive
solutions seizing European and global business
opportunities.
· Market uptake and distribution of ICT innovations.
· Increase of private investment in innovation, notably
through private co-investments and/or follow-up
investments in successfully supported SMEs.
· The expected impact should be clearly substantiated in
qualitative and quantitative terms (e.g. on turnover,
employment, market seize, IP management, sales,
return on investment and profit).
ICT-37

86. One pager
How can we help?

87. • ICT-37
Topic/ Grant
• Brand name
Title/ Aconym
• What we are planning to do
Objective
• 5 Key questions
Background
• + Who wants them (Impact)
Results
• How?
Phases
Consortium
Cost/Duration

88. 5 Key Questions
• Why bother?
• Why at a European Level?
• Is it already available?
• Why now?
• Why you?

89. Impact – 5 more key questions
• What will come out of the project? (Expected results)
• Who wants these results? (Lead users)
• Why do they want these results?
• How do you plan to tell the Lead users about the results?
• What further development steps will be required?

90. Εθνικό Κέντρο Τεκμηρίωσης
www.ekt.gr
Δρ. Ηρακλής Αγιοβλασίτης
E: agiovlasitis@ekt.gr
T: @hercagio
P: 210 727 3921