TTMG5003P
Issues in Telecommunications
(Web-delivered section)

Winter 2009

Business plan specifications

All plans will be kept confidential and remain the intellectual property of the submitting teams.

Plans will be judged on the basis of both the viability of the opportunity and the quality/completeness of the plan itself.

Keep in mind what the business plan is trying to do: to explain to someone whom you want to commit to your business opportunity what the opportunity is, and why it will succeed.

TTMG 5003 business plans should include the following elements:

• Executive Summary
• Product/Service Offering
• Market Analysis/Marketing Plan
• Company and the Industry
• Management Team
• Operations Plan
• Risks Associated with the Venture
• Financial Plan

Executive Summary

• Very difficult to write well. Allow some time at the end of writing your business plan to polish the executive summary.
• Maximum two pages, 1 1/2 spacing.
• The objective of the summary is threefold: 1) to summarize the business opportunity and your plan for exploiting it, 2) to impress the reader as to the attractiveness of your opportunity, and 2) to convince the reader to proceed with reading the plan itself. 
• Outline what you want from investors (e.g., you are looking for an equity investment of $1.5M). Note that you should not price the equity that you may be offering to investors. For example, do not say something like "we are prepared to give up 30% of the equity in the new venture for $1.5M." Negotiations over price take place after the presentation of a business plan.
• Be sure to emphasize those points that you want the reader to remember about your plan once a couple of weeks have passed.
• There are many sources for information on executive summaries for business plans.  Here is one: http://www.inc.com/articles/2000/10/14875.html. Here is another one:  http://garage.com/resources/writingexecsum.shtml. The authors there argue that "the executive summary is the business plan in miniature. The executive summary should stand alone, almost as a kind of business plan within the business plan. It should be logical, clear, interesting -- and exciting. A reader should be able to read through it quickly and understand what makes your business tick. After reading your executive summary, a reader should be prompted to say, "So that's what those people are up to."

Product/Service Offering

• Describe the product/service that you will offer in more detail.
• Specify the value of your product/service to your customers, and how it will help them offer greater value to their customers. This is critical. Provide evidence of this potential value creation for customers to the extent that you can - testimonials from customers, customer survey results, initial orders, etc.

Market Analysis/Marketing Plan

• Specify the reachable market for your product/service.
• Segment this market and select a target segment. Outline why you have selected this target market. Remember that your target segment should be large enough and growing quickly enough to be a base for success, but also not so large nor growing so quickly that you cannot become a dominant supplier and subsequently protect this position.
• Outline how you plan to enter the target market - lead customers (including individual contacts if available), initial pricing strategy, level of customization, advertising and promotion, etc.

Company and the Industry

• Describe the company that you plan to create - how large, what competences, what structure.
• Place your company in its industry context. You can use the kind of factors that Porter uses in his "5-force model" to do this. Note that you should not use the term 5-forces, nor the jargon of the model in your plan.

Management Team

• The founding team - their experience and strengths, and how they compliment each other's strengths.
• Founding team roles and how they will work together.
• Founding team weaknesses and how these weaknesses will be addressed through hiring key managers.
• Plans for hiring key managers - locating them, timing of hiring, compensation packages, etc.
• If the management team is strong, then put this section earlier in the plan. "There are five important aspects of a new venture opportunity: management, management, management, market and product."

Operations Plan

• Implementation schedule.
• Resource acquisition plan - including personnel to be hired, partnerships, supplier and distributor relationships, manufacturing and outsourcing plans.
• Key contacts with a bank manager, accountant and lawyer.

Risks Associated with the Venture

• Outline the important risks that the new venture faces - potentially damaging events, key assumptions about technology, markets and competition.
• Plans for addressing these important risks - what will you do if ...

Financial Plan

• You must include cash flow projections for 5 years (quarterly for the first year, yearly for years 2 to 5). Also useful would be pro-forma income statements for years 1 through 5, and pro-forma balance sheets for the start of year 1 and the end of years 1 through 5.
• Carry out sensitivity analysis on your financial projections and show that you understand the key drivers for financial success (e.g., timing of critical events like product introduction, sales targets, gross margins, input costs).
• Plans for financing start-up and growth.