This document provides guidance on creating a business plan from Ken Berkun, President of Labels That Talk. It discusses the key reasons for having a business plan, including focusing the business and satisfying investors. It outlines the typical sections of a business plan like the executive summary, operations plan, financial plan, and provides tips for each section. Berkun emphasizes the importance of honesty, focus, and flexibility when creating projections and assumptions. The document uses an example business plan for Labels That Talk to illustrate the concepts.

1. Ken Berkun
President, Labels That Talk
berkun@soundpaper.com
http://www.slideshare.net/kenberkun/
business-plans-13598877
1

2. Who am I?
 President, Labels That Talk
 Co-Founder Singingfish.com
 Wrote business plan
 Successful (10X) exit
 Old Timer – 34 years in high tech
 Software development
 Project Management
 Technical Marketing
 Business Strategy
2

3. Who are you?
3

4. Why have a business plan?
4

5. Change
“Zero percent of businesses perform to plan.”
- Gordon Bell
5

6. The Real Reasons
 For yourself
 Change!
 The Process, not the goal?
 For your team
 Focus!
 For your investors
 Because they insist on it
 They aren’t going to read it
If it is not in the business plan either don’t do it or change the plan.
If it is too much trouble to change the plan – then DON’T DO IT!
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7. Key Elements
 Executive Summary
 Main Body
 Financial Plan
 Text
 Spreadsheet
 Elevator Pitch
Be Honest!
 3 Minute Pitch
 5 Minute Pitch
Don’t let me forget to talk about NDAs
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8. Executive Summary
 One Page
 Or not
 Bare minimum
 Doesn’t matter, they aren’t going to read it either
 You/Management
 Product/Service
 Market
 Business Model
 The Deal
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9. Main Body
 I. Presentation &  Operating Plan
Organization  SWOT Analysis
 Cover Page  V. Financial Information
 Table of Contents  Overview
 II. Executive Summary  Income Statement
 III. Sales & Market Potential  Cash Flow
 Products / Services  Balance Sheet
 The Market  Capitalization and Use of
 Sales and Marketing Plan Funds
 IV. Operating Plan  VI. Wrapping it Up
 Management Team  Exit Strategy or Payback
Analysis
 Go-To-Market Strategy
 Notices and Disclaimers
Source: http://www.greatbusinessplans.com/
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10. Mission Plan and Statement of
Ethics
The only thing I have ever found this good for is hiring.
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11. LTT Business Plan
1. Executive Summary
2. Soundpaper® - A Technological Break-Through
3. Intellectual Property
4. Product Features
5. The Opportunity – Market Size
6. The Competition
7. Execution Plan
8. Soundpaper Go to Market Plan
9. The Team
10. The Financial Plan
11. Pro-Forma Financials
12. Risk Factors
11

12. How Long?
 Just Long Enough
 And then a little bit shorter
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13. Sales and Marketing
 Sales & Market Potential
 Products / Services
 The Market
 Competition
 Sales and Marketing Plan
13

14. Sales & Market Potential
 Description of the Market
 Growth Rates and Key Trends
 Target Market (Including Location, if Retail)
 Size of Target Market
DO YOU HAVE A MARKET?
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15. Products and Services
 Product/Service
 What exactly are you selling?
 Intellectual property
 Do you have a product or a company?
 This is really about focus!
 Don’t try to be all things to all people.
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16. Competition
Technology Company Ease of Use Price
High-Density Labels That Talk Easy to Use; $100
Barcode (small) no contact scanner
scanner; all-
in-one unit $.01 labels
Microchip with Scrapbook Alive Easy to Use; $7 per unit
Battery (small) bulky;
battery
required
RFID En-Vision Awkward to $325
WHAT’S MISSING? America (small) Use; Pharma scanner
set-up $$$$
Barcode En-Vision Awkward to $1295
(database look- America (small) Use; Bulky; scanner
up) Database is
outdated
Barcode and AD Information Awkward to $395
Text to Speech & Use; Contact
Communication Scanner
(Korean – small)
Intel Text to Speech Intel Awkward to $1500
Reader/Kurzweil hold, slow
Reader Kurzweil operation
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17. Sales and Marketing Plan
Marketing Sales
Research The actual deal
Competition One to one
Market size and make up Product
Communications/Creating Closing the deal
Demand
Pricing Incentives
Long Term Short Term
 What makes a good sales and marketing plan?
 I don’t know.
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18. Operations
 Operating Plan
 Management Team
 Go-To-Market Strategy
 Operating Plan
 SWOT Analysis
18

19. Management Team
 Bios
 1 Page and 1 Paragraph
 Advisory Board
 Board of Directors
 Include:
 Lawyer(s)
 Accountants
 Other References
 Highlight empty positions
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20. Go To Market Strategy
 Distribution Channels
 Have you thought about how you will sell and deliver
your product or service?
 Direct or Indirect?
 Consider licensing – esp. if you have a product not a
company
 Often your biggest competition is Do Nothing! (I stole this)
 Focus groups, first sales, giveaways – anything to prove
that the market exists
If your answer is “go virile” then go home.
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21. Operating Plan
 Execution
 Cost
 Servers and Bandwidth
 Cost
 Manufacturing
 Plant, inventory, equipment, etc.
 Cost
 Software Development
 Did I mention cost?
21

22. http://www.businessballs.com/swotanalysisf
reetemplate.htm#SWOT analysis
inventors, origins and history of SWOT
analysis
SWOT
 Be f-cking honest
 Run this past your advisors
 Run it past your mother
Not This
This
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23. Financial Text
 Financial Information
 Overview
 Assumptions
 Projections
 Income Statement
 Cash Flow
 Balance Sheet
 Capitalization and Use of Funds
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24. Assumptions
All assumptions are wrong.
If an investor doesn’t like your projections then you can
change the assumptions.
You must go back and fix them as you learn reality.
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25. Projections
Projected Revenue and Income
EBITDA
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(10,000,000)
Revenue Income 25

26. Income Statement
The Income Statement shows your
Revenues, Expenses, and Profit for a
particular period. It's a snapshot of your
business that shows whether or not your
business is profitable at that point in time;
Revenue - Expenses = Profit/Loss.
Source:
http://sbinfocanada.about.com/cs/business
plans/a/bizplanfinanc_2.htm
Source:
http://www.accountingcoach.com/online-
accounting-course/04Xpg04.html 26

27. The Cash Flow Projection shows how cash is
Cash Flow expected to flow in and out of your business.
Ibid.
Source:
http://www.accounting4management.com/preparation_
of_statement_of_cash_flows.htm 27

28. Balance Sheet
The Balance Sheet presents a picture
of your business' net worth at a
particular point in time. It
summarizes all the financial data
about your business, breaking that
data into 3 categories;
assets, liabilities, and equity.
Ibid.
Source:
http://www.accountingcoach.com/online-
accounting-course/05Xpg04.html 28

29. Capitalization Labels That Talk - Pro Forma Capitalization
Warrants Warrants Warrants
(Cap Table) Ken Berkun (D)
Dollars
Revenue
Participation
Units
Outstanding
Shares
1,834,000
Issued
Convertible
Notes (A)
Revenue
Participation
Offering (B)
Options and
Equity Pool
(C ) Total
1,834,000
% Fully
Diluted
45.85%
Harvey Storms 520,000 520,000 13.00%
Peter Weiss 20,000 20,000 0.50%
Harvey Storms (E) 80,000 80,000 2.00%
Hank Turner (F) 75,000 75,000 1.87%
Michael Berkun (A)(D) $519,648 20.78593 332,575 332,575 8.31%
The Cap Table Other
Spreadsheet is a table used Relatives
Other Conv.
(A) $157,492 6.29967 100,795 100,795 2.52%
Debt
by partners or Holders (A) $123,749 4.94997 79,199 79,199 1.98%
shareholders in a business Revenue
Participation
Units (B) $1,200,000 48.00000 486,000 486,000 12.15%
to list who owns what in a Reserve for
startup Future
Issuance (B) 472,431 472,431 11.81%
Total $2,000,889 80.03557 1,834,000 540,000 512,569 486,000 627,431 4,000,000 100.00%
Note A Pro forma warrants to be issued if first closing occurs on September 30, 2010; final amount will determined by interest accrued
through date of first closing.
Note B Under the terms of the Offering 16 Revenue Participation Units accepted at the First Closing will receive warrants to purchase
16,000 common shares, the next 14 Units accepted will receive warrants to purchase 10,000 common shares per Unit and the
remaini
Note C The Company anticipates a limited number of option grants will be made to advisors and other parties prior to the first closi ng.
Note D Ken Berkun is the Company's Founder and CEO. Michael Berkun is Ken Berkun's brother.
Note E Mr. Storms is the Company's VP of Business Development.
Note F The Company anticipates hiring Mr. Turner as its Chief Operating Officer
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30. Use of Funds
IT HAD BETTER BE GOOD!
Series A Deliverables: Year 1
Functional Recorder/Scanner (manufacturing prototype)
Reference hardware design (for manufacturing)
Finalized Barcode design
Software running on PC
Software running on ASIC or embedded processor of choice
Decoding software on iPhone or other smart phone
Manufacturing ramped up and first shipments made
Full documentation
Marketing materials
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31. Summary
 Wrapping it Up
 Exit Strategy or Payback Analysis
 Notices and Disclaimers
 Risk Factors
If you are planning on raising
money you need to talk to a
lawyer about this. Period.
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32. ‹#›

33. Optional
 The Deal
 Call to Action
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34. Financial Plan
 Detailed Spreadsheet
 5 Year projections by quarter
 First 18 months month by month
• Tabs: • Taxes
• Summary • Headcount
• Sales & Revenue • Personnel
• Margins • Departmental
• Cash Flow • Charts
• Balance Sheet
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35. Summary
 Think about why you are making a plan
 Review the plan quarterly (fat chance!)
 If it is not in the plan, don’t do it, or take the time to
change the plan
 Be willing to walk away from bad business
 Focus! Focus! Focus!
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36. Resources
 SCORE
 http://hawaii.score.org/
 HVCA
 http://hvca.org/
 Hawaii Angels
 http://hawaiiangels.org/
 High Tech Development Corp.
 http://www.htdc.com/
 HiBEAM
 http://www.hibeam.org/
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