Tom Eckmann ENTRE 440-540 – Business Plan Practicum 1 ENTRE 440/540 – Business Plan Practicum • Clearly state your name! • What do you need? • Join a team? - what kind? what do you have to offer? • Another team member? – What skills or experience? • Resource Help? - Market data? Introduction? Sign-up in front of class One Minute Pitches Sign-in - Sit down front - Name tents!
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Tom Eckmann ENTRE 440-540 – Business Plan Practicum 1
ENTRE 440/540 – Business Plan Practicum
• Clearly state your name!
• What do you need?
• Join a team? - what kind? what do you have to offer?
• Another team member? – What skills or experience?
• Resource Help? - Market data? Introduction?
Sign-up in front of class
One Minute Pitches
Sign-in - Sit down front - Name tents!
2
ENTRE 440-540AB Business Plan Practicum
“On-ramp to the 2014 U.W. Business Plan Competition”
Tom Eckmann 206-441-2067
Welcome!
ENTRE 440-540 – Business Plan Practicum Tom Eckmann 3
January 8 “Is entrepreneurship for you?” and “Good business ideas”
Business models and financial projections
Legal considerations for startups
Insights from past BPC participants
Bootstrapping a startup
Raising investor capital
Business planning and risk assessment
Markets, competition and “uniqueness”
Lean Startup, library resources, and “networking night”
Course Journey
January 15
January 22
January 29
February 5
February 12
February 19
February 26
March 5
March 12 Dreaming Big! (who says the sky’s the limit?)
Tom Eckmann ENTRE 530 - Entrepreneurial Decision Making 4
Business Models and Financial Projections
What is a business model?
Depiction of how company creates, delivers and captures value
How the business makes money!
Tom Eckmann ENTRE 530 - Entrepreneurial Decision Making 5
Business Models and Financial Projections
Business model = pro-forma financial projections covering a 3-5 year planning horizon
• Profit and Loss Statement - “Bottoms up”
• Forecast sales (units and dollars) • Pricing assumptions
• Cost of goods or sales • Cost assumptions
• Operating Expense • Staffing projections
• Balance Sheet (A/R, inventory, cash, financings, cap ex)
• Cash Flow
Tom Eckmann ENTRE 530 - Entrepreneurial Decision Making 6
Business Models and Financial Projections
Drives a discussion of:
Revenue sources and growth rates Cost drivers Sensitivity and risk factors (what if’s) Scalability analysis Investment requirements over time Critical success factors
Tom Eckmann ENTRE 530 - Entrepreneurial Decision Making 7
Business Models and Financial Projections
Business model communicates:
Major milestones Key assumptions and data sources When business breaks even (cash) and becomes a
“profit engine” Amount and use of capital needed to start and grow Expected return on investment
Today’s Agenda
ENTRE 440-540 – Business Plan Practicum Tom Eckmann 8
Guest Speakers
Jesse Proudman, founder, Blue Box Group
Adam Tratt, founder, Haiku Deck
Class discussion
Next Week
Guest Speaker
Tom Eckmann 9
Jesse Proudman
ENTRE 440-540 – Business Plan Practicum
* Blue box confidential 10
Business Models
* Blue box confidential
Jesse Proudman
Who am I?
Self employed since I was 13…
Founded Blue Box from my Dorm
Room at UPS in ’03.
Bootstrapped Blue Box for 10
years.
Closed $4.3M Series A in Dec
’12. $14M Series B in Dec‘14.
Heavily Involved in Buerk Center
and UW BPC. Jones / Foster
Accelerator Mentor.
@blueboxjesse on Twitter
* Blue box confidential
What’s Blue Box?
12
Private Cloud as a Service
* Blue box confidential
Operating Private Clouds with un-matched efficiency…
On-demand private cloud at scale
Platform Box Panel
Private Cloud Management Engine
Elastic Capacity Provisioning
CMDB, CRM, Support and Billing
OpenStack Lifecycle Management
* Blue box confidential
What’s OpenStack?
14
* Blue box confidential 15
* Blue box confidential 16
Example of Business Models
Fee Based Models (Credit Card Processing)
Product Sales
Consulting Services
“The Ink-Jet Model”
Licensing Models
Multi-Level Marketing
Subscription Services (Recurring Revenue!)
More?
* Blue box confidential 17
* Blue box confidential 18
* Blue box confidential 19
* Blue box confidential 20
* Blue box confidential 21
* Blue box confidential
Your Business Model
Is the numeric story of your business
Dynamic Living Spreadsheet
You should update it… Daily?
Weekly?
Monthly?
Any time you get new information?
Should be built using formulas and assumptions
* Blue box confidential 23
Accrual
vs.
Cash Basis
* Blue box confidential
Components of a Business Model
Revenue How will you make your money?
Cost of Sales How much does it cost you to deliver your
product?
Sales and Marketing How much does it cost to sell more of your
product?
G&A What are all the “other” expenses you have to
operate your business?
* Blue box confidential 25
Revenue
(How do you make your money)
* Blue box confidential
Revenue Examples
* Blue box confidential
Revenue Examples
* Blue box confidential 28
Cost of Sales
(How much does it
cost to make your product)
* Blue box confidential
Cost of Sales Examples
* Blue box confidential
Cost of Sales Examples
* Blue box confidential 31
SG&A
(Everything else)
* Blue box confidential
SG&A Examples
* Blue box confidential
SG&A Examples
* Blue box confidential
Concrete
examples
* Blue box confidential 35
* Blue box confidential 36
* Blue box confidential
* Blue box confidential 38
Closing Thoughts
* Blue box confidential 39
Business Models
Guest Speaker
Tom Eckmann 40
Adam Tratt
ENTRE 440-540 – Business Plan Practicum
Tom Eckmann ENTRE 530 - Entrepreneurial Decision Making 41
Business Model Recap
• Defines how venture makes money; indicator of viability
• Communications tool for team, investors and bankers
• Guide in decision making
Understand what’s important (business model drivers)
Focus time and resources on key leverage points
Pivot or persevere based on learning (Lean Principles)
Keiretsu Forum (Angel Events)
Tom Eckmann 42 ENTRE 440-540 – Business Plan Practicum
Keiretsu Forum – Seattle Chapter Meeting Thursday, February 12th
(12:30 - 4 pm)
The forums will feature 4 start-up companies who have been carefully selected from our
screening processes with 25-minute presentations (with Q&A), plus 2-3 update presentations
from past presenting companies. Continental lunch and refreshments provided.
10 guest seats available – to register, email [email protected] If you register, you MUST attend!
Tom Eckmann ENTRE 440-540 – Business Plan Practicum 43
Wrap-up
Next Week: Legal Basics for Startups
Bill Bromfield, partner, Fenwick & West
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