Mic boostcamp finance presentation

Boost Camp

By MIC

Xavier CORMAN 1 9/11/2011

Finance

• Writing a Business Plan• Starting a P&L• How to finance your start-up• Public helps for starters• Business Angels


Notions

• Balance Sheet - Bilan• P&L – Compte de résultat• Cash-flow – Trésorerie• Business Plan – Plan d’affaires• Financial Plan – Plan financier


Balance Sheet

Non Current Assets(Actifs Immobilisés)

Equity (Capital)

LT Debts

ST DebtsCurrent Assets

(Actifs circulants)

ACTIVE PASSIVE


Profit & Loss (P&L)

Revenues (Sales…)

COGS (Cost of Sales)

General Expenditures

Personnel Costs

Depreciation

Financial cost

Profit

Gro

ss m

argi

n

EBIT

DA


Cash-Flow


Expenses

Revenues

Cash-flowNeeds

How to finance your start-up ?


EquityLT DebtsST Debts

FFF

B A

V C

Public

Banks

Shareholders

Suppliers

Banks

Shareholders

What is dilution ?

Start Serie A Serie B0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

85%68%

51%

15%

12%

9%

20%

15%

0.25

VC 2VC 1BAFounder(s)


WHAT IS IN A BUSINESS PLAN ?

What is the purpose of a business plan ?


"Writing a business plan forces you intodisciplined thinking, if you do an intellectually

honest job. An idea may sound great, but when you put down all the details and numbers, it

may fall apart.“

Eugene Kleiner, Venture Capitalist


Why to write a business plan ?

1. To look at the idea in an objective way.2. To study the feasibility of the idea3. To check the business model4. To understand the financial needs5. To have an operational tool to start the business6. To help the management

A business plan ismuch more

than a financial plan !


The business plan – contentThere is no prescribed format, the following sections are usually included.

1. Executive summary2. Mission3. Problem4. Solution5. Technology6. Market and industry analysis7. Marketing and sales8. Manufacturing and operations plan9. Team: why you?10. Financial plan11. Sensitivity analysis12. Status and timeline13. Proposed investment


Presenting to investors

Investors are not familiar with the technology of your product or the industry jargon.

Describing your concept clearly and incisively is your goal.

You must be able to convey the basic mechanics of your business idea to an investor with credibility.

There will be plenty of time at a later point for detailed descriptions and exhaustive financial calculations.


1. Executive summary

Mimics your pitch

Should be very compelling and inviting to read the rest

“Summary” -> try one page


2. Mission statement

Define your business at the most basic level In less than 30 seconds, explain:

Who your company is ? What you do ? What you stand for ? Why you do it ?

Explain what business you are in, purpose, strategic goals and business values.

SHORT !3-4 sentences


3&4. From problem to solution

SOLVE A PROBLEM! Show the problem and for whom this is a problem Why are incumbents (if they exist) not able to address this

problem? SOLUTION?

What is it? Show it (sample, picture, demo, …) Why is it attractive? Is it durable? Is it timely ? Does it do something better? Does it create VALUE?


5. Technology

How does it work? Does it work? Has it been successful elsewhere? Why has nobody else come up with it? Is it patented / licensed? Who owns the rights?


6a. Market and industry analysisThis section of the plan should include: A general description of your market The niche you plan on capitalizing on and why The size of the niche market. Include supporting documentation A statement and supporting documentation as to why you believe

there is a need for your product or offering by this market What percentage of the market do you project you can capture? What is the growth potential of the market? Include supporting

documentation Will your share of the market increase or decrease as the market

grows? How will you satisfy the growth of the market? How will you price your goods or services in the growing

competitive market?


6b. Competition

Identify your closest competitors. Where are they located? What are their revenues? How long have they been in business?

Define their target market. What percentage of the market do they currently have? How do your operations differ from your competition? What do

they do well? Where is there room for improvement? In what ways is your business superior to the competition? How is their business doing? Is it growing? Is it scaling back? How are their operations similar to yours and how do they differ? Are there certain areas of the business where the competition

surpasses you? If so, what are those areas and how do you plan on compensating?


7. Marketing and sales

How will you make money? Who is your target customer? Mix (4 Ps):

Product and production - can you provide what the customer wants.

Pricing policy - right price and quality (do you have prove of willingness to pay?!!!!)

Promotion - how do you communicate to your potential customers.

Place – where will you be selling.


8. Operations and production

How are you going to produce the product or provide the service at a profit? Manufacture or sub contract out.

What resources are required? Infrastructure, staff, equipment Now/future?

How do you ensure the right quality?


9. Team

Often read the first! Why you? What is your history?

What do you know? What are your skills? Whom do you know and who knows you? What is your reputation?

How does the team profile fit with the opportunity, the context and the deal struck?

How committed are the people to the venture? Lacking or critical team members?


10. Financial plan

Gross margins and operating margins Projection of the cash inflows and outflows of the business.

Actual and expected revenues Actual variable and fixed costs Use benchmarks if possible

Prepared monthly in year one (could be quarterly in years 2 to 5). Takes into account the timing of receipts and payments. Includes both capital and revenue income and expenditure. Shows the cash requirements of the business.

Pro-forma P&L and balance sheets Pro-forma break-even chart


11. Sensitivity analysis

Know your critical assumptions “Delhaize will love our green product because they focus a lot on

their environmentally friendly image” “Consumers will love our this new IT platform, because it is

cheaper” …

Best case / worst case scenarios Identify risks in your business model

What happens if the market changes, you run out of cash before your first order, you don’t reach your targets…

What will you do when that happens?


12. Status and timeline

Step #1 - Set Up the Outline for Your TimelineHighlights of your business' projected growth and development

Step #2 - Research Your PointsBack up your predictions with viable research

Step #3 - Use Your Data to Refine Your TimelineStep #4 - Add References to Your Business Timeline

How did you generated your data and predictions ?Step #5 - Clean Up Your Business Timeline

Formatting the graphic so that it looks professional and easy to read


13. Proposed investment

Nature of the deal

What are you asking and offering?


The 12 deadly sins in business plans (Gordon Baty / Zero stage capital)

1. Too Long2. Poor Writing: grammar, redundant, unpersuasive3. Poor Layout: illogical, illegible, poor illustration4. No Executive Summary5. Unclear Product Features: jargon, proprietary features, current

development status6. No Backup on Team7. Unsupported Market Estimates / No Primary Research8. Superficial Competitive Analysis9. Creative Accounting Formats10. Unfocused User Benefits: no Unique Selling Proposition11. No Demonstrated Customer Knowledge12. Lack of Compelling Reason to Invest Now


Conclusion

A business plan is a living story that demonstrates how an opportunity can become a new venture, not just the writer’s dreams and wishes

Always use a pitch / business plan presentation as an opportunity to learn. There is no better critic than an investor.


Why a Financial Plan ?

• To understand where and how you make money

• To convince investors (including yourself) that you will be profitable

• To build quickly different scenario


Short Financial Plan

Quick estimation of – Projected sales– Cost of goods sold– Workforce– General Expenditures (Marketing Costs)– Investments

If first estimations are positive


Extensive Financial Plan

• Spreadsheet is THE tool (XLS, Open Office, etc.)

• Use an existing template (ABE, other)OR

• Build your own spreadsheet


Structure of the spreadsheet

• Assumptions• Sales• Profit & Loss• Cash-Flow• Balance Sheet


Some tips

• Use an existing spreadsheet’s template• Monthly or Quarterly• 3 to 5 years• Avoid a fixed starting date• Put editable fields in a different colour


Example of Financial plan1. Début des activités

Date prévue pour la constitution et le lancement des activités

Le premier exercice comprend donc une période de: 12 mois

2. Chiff re d'aff aires

2.013 2014

Anneé 2 trim 1 Année 2 trim 2 Année 2 trim3 Année 2 trim 4 Année 3 trim 1

Produit 1 21% 533 551 611 911 1.411

Produit 2 21% 888 918 1.018 1.518 2.351

Produit 3 21% 355 367 407 607 940

Produit 4 21% 4.795 4.955 5.495 8.195 12.695

Produit 5 21% 7.991 8.258 9.158 13.658 21.158

Produit 6 21% 3.197 3.303 3.663 5.463 8.463

Total subscriptions 17.758 18.350 20.350 30.350 47.017

29,07 29,07 29,07 29,07 29,07

35,43 35,43 35,43 35,43 35,43

47,83 47,83 47,83 47,83 47,83

29,07 29,07 29,07 29,07 29,07

33,56 33,56 33,56 33,56 33,56

42,56 42,56 42,56 42,56 42,56

15.487 16.003 17.747 26.468 41.003

31.459 32.507 36.050 53.765 83.289

16.986 17.552 19.465 29.031 44.973

139.383 144.027 159.725 238.214 369.029

268.169 277.104 307.306 458.316 710.000

136.036 140.569 155.889 232.494 360.167

607.521 627.762 696.183 1.038.288 1.608.462

3. Coûts des ventes

42,56

1.744

162.336Produit 5 151

100 2.000

35,43 35,43

47,83

Produit 1 29,0729,07

35,43

47,83

77 15.321

96 1.913

87

1.510 30.202

49,1%

66,2% 66,2%

367.762

43,0%

Produit 2 66,2% 66,2%

1. % des Achats de marchandises par rapport aux ventes

43,0%

12 mois

Le plan fi nancier couvrira dès lors la

période suivante:

2012

2014

12 mois

Année 1 Année 2 Année 3

2012 2013

Année 1 trim1 Annéee 1 trim 2Taux de TVA

43,0%Produit 1

Produit 3

Hypothèses du plan fi nancier

Taux de TVA Année 1 Annéee 2 Année 3

Année 4

2015

Année 1 trim3

360

3. Chiff re d'aff aires par produit (hors TVA)

Produit 1

10.283

Produit 2

Produit 2

Produit 3

177 3.54318

12 mois

538

215

60

100

40

Année 1 trim4

12 mois

540

1.93518

29,07

45 900 4.838

2.903

2. Prix unitaire de vente pour chaque produit (hors TVA)10.750

47,83

35,43

15.698 84.376

42,56

9.375

33,56

19.043

785

47,83

29,07 29,07 29,07 29,07

3

5

2

27

0

1

0

29,07

3

2

10

5

Produit 3 10

Produit 4 78

68.421

766Produit 6 82.349

342

49,1%

42,56

3.421

9

43,0%

49,1% 49,1%

Année4

43,0%43,0%

1/ 01/ 2012

1. Quantités prévisionnelles

323

Produit 4

Produit 5 33,56 33,56 33,56

Produit 4 43,0% 43,0%

Produit 6 42,56


Questions & Answers

Xavier CORMAN 35

Download this presentation and an example of Business Plan from Mc Kinsey: http://www.slideshare.net/xaviercorman

9/11/2011

http://www.slideshare.net/xaviercorman

Mic boostcamp finance presentation

Economy & Finance

managementa business

business plan contentthere

business idea

business model4

business superior

niche market

target market

market increase