Writing a Business Plan Dr. Michael Entzeroth CSO/COO Cennerv Pharma (S) Pte Ltd, Singapore
Agenda Reasons for writing a business plan Business plan content Executive Summary The company: description and goals Products and/or services Market analysis and strategy Operational plans and SWOT Analysis Management, Board and team members Financial statements and plans (Environmental impact) Kiss of death Summary - 2 -
Why Writing a Business Plan Define goals what do you achieve by when Elaborate objectives for how and when the goals are met Describe how to access personal and operational resources required to achieve the goals Delineate how these resources will interact to meet the goals Rationalize the feasibility and financial viability of the business plan To access financial means to meet the goals and objectives - 3 -
Notes for Consideration The author of a business plan must remember: Who is the audience to read the business plan Banker Venture Capitalists Angel Investors Emphasis is on the financial plan and business opportunity Even of relevance and interest, science is secondary - 4 -
Notes for Consideration Keep language simple and avoid jargon and acronyms. Technical terms must be explained in layman s terms Using graphics, flow charts and pictures can greatly help understanding Despite your interest in painting the brightest picture, stay with the facts and don t shy to mention risks and challenges. Most complete but succinct plans are between 30 50 pages - 5 -
Executive Summary The part of the business plan investors may read to learn about: the industry, the products and services how much money is required and proposed capitalization terms, i.e. debt or equity, terms and use of the proceeds current net worth of the company Profile of top management/ key people, including their track records Any unique competitive advantage, such as patents or proprietary technologies - 6 -
The Company: Characterization and Goals The section needs to describe the company history the company organization and legal structure relevant background of key players NB Do not replicate information found in later sections - 7 -
Products and/or Services Description What to make and sell Is there a regulatory process to comply with Who are the component suppliers and is there a backup Are products new or mature in terms of their sale cycle Has there been a test marketing Exhibit buyers a pattern when purchasing Include drawings or pictures of the products - 8 -
Products and/or Services Proprietary/Ownership position Copyrights, trademarks, patents or other legal proprietary rights Potential for Growth and Development How to the products fit into the landscape Is there a differentiation or unique selling point (USP) Technologies and Skills Does the product process require specific technologies or skills Does the company have staff with the required talent set - 9 -
Market Analysis and Strategy The topic comprises two sections, i.e. a) Market Identification and Evaluation and b) Strategic Market Planning describing The Industry Description and Trends Target Markets - Existing and proposed Market Size, Potential and Location Competitor Situation Key Players and Strength Projected Sales and Market Share Tools for Ongoing Market Evaluation - 10 -
Market Analysis and Strategy Strategic Market Planning Product Warranties and Service Policies Pricing Policies Sales Strategy and Management Distribution - 11 -
Production and Operational Plans Covering: Location: City, Region and Site Land and Structural Improvements Plant/Facility Layout Production Strategy and Control Methods Labor Needs - 12 -
SWOT Analysis SWOT stands for Strengths, Weaknesses, Opportunities and Threats It describes internal and external factors that might influence the future of an enterprise: Strengths: characteristics of the business or project that give it an advantage over others. Weaknesses: characteristics that place the team at a disadvantage relative to others Opportunities: elements that the project could exploit to its advantage Threats: elements in the environment that could cause trouble for the business or project - 13 -
SWOT Analysis- Example Strength Global presence Strong industry standing Robust launch portfolio with revenue growth underscored by the commercialization of main product High growth of cardiovascular product franchise Weaknesses Patent expiry for biggest selling product franchise Weak core portfolio key product franchises into expiry Blockbuster growth strategy with certain therapy markets to just one or two products Opportunities Therapeutic diversification and expansion into other diseases segments Strong potential growth from vaccines Diversification into biologics market via acquisitions - 14 - Threats Continued exposure to patent expiries and risk of generic competition The high generic-exposure expiry portfolio, requires growth from its launch portfolio, reflecting a higher risk growth strategy versus predominant core-driven growth
Management Personnel One of the most important chapters in a business plan: Legal Organization Organization Chart Ownership and Methods of Compensation Key Personnel Board of Directors and Advisors Support Services, e.g. Accountant Services Management Development and Training - 15 -
Financial Statements and Plans Provide information on Historical Income Statements, Cash Flow Statements, and Balance Sheets (if available) Projected Income Statements, Cash Flow Statements, and Balance Sheets Projected Breakeven Analysis by Product/Service Capital Requirement Proposed Exit Strategy - 16 -
Income Statements - 17 -
Cash Flow Statements - 18 -
Balance Sheet - 19 -
Optional Impacts on the community may be added if appropriate, including Environmental impact Employment impact, local recruitments, training Economic benefits, e.g. use of local resources and suppliers - 20 -
Appendix Any material that does not easily fit into the body of a business plan should appear in an appendix. Examples of materials that might appear in the appendix include: Resumes of the top management team members Photos or diagrams of product or product prototypes Certain financial data Market research projections. - 21 -
Kiss of Death Phrases Avoid to use statements such as: Growth is inevitable The product/service will sell itself We have no competition The business runs itself Our target market is the general public everyone can use our product/services Our past experience guarantees the success of this business - 22 -
Sources for Business Information Trade associations PhRMA Trade magazines Business press WSJ Business Times Company documents Annual reports SEC 10K s Investment banks Venture capital firms Public Databases Clinicaltrials.gov Fda.gov/cder Globocan.iarc.fr Commercial Databases Thomson Reuters Frost & Sullivan FiercePharma - 23 -
Conclusion A business plan is the most important document to describe the company s activities and prospects It comprises a detailed descriptions of the financial prospects of a company, its structure and organization and key management One of the main objectives of a business plan is to convince possible investors of the benefits investing in the business - 24 -
Presenting the Business Plan to Investors Tips on Making an Oral Presentation to Investors When asked to meet with an investor, the founders of a new venture should prepare a set of PowerPoint slides that will fill the time slot permitted The presentation should be smooth and well rehearsed. The slides should be sharp and not cluttered with material The first rule in making an oral presentation is to follow instructions of the investor
The 10 20 30 Rule Guy Kawasaki (born August 30, 1954) is a Silicon Valley author, speaker, investor and business advisor He strongly advises that a PowerPoint presentation should have ten slides, last no more than twenty minutes, and contain no font smaller than thirty points Video - 26 -
Presenting the Business Plan to Investors Ten PowerPoint Slides to Include in an Investor Presentation 1. Title slide 2. Problem 3. Solution 4. Business model 5. Management team 6. Industry and target market 7. Competition 8. Intellectual property 9. Financial projections 10.Current status, amount of money requested, and projected use of funds
Questions? Thank You For more information, please contact: Dr. Michael Entzeroth, Cennerv Pharma (S) Pte Ltd Email: michael@cennervpharma.com Website: http://www.cennervpharma.com - 28 -