corn maze or harvest? · corn maze or harvest? who has a business idea, either a product or...

prepared for

Grant County Innovators and Entrepreneurs Club 15 November 2012

by

Phil Jackson Small Business Development Center Jobs Counselor,

Southern Wisconsin Region [email protected]

608.698.7422

Corn Maze or Harvest?

Why pick?

mailto:[email protected]

Corn Maze or Harvest? Who has a business idea, either a product or service? Who has a business providing that product or service? Let’s take a poll of those with an idea but not yet selling the product or service: When do you intend to start sales? 1 year? 2 years? Longer? Who came here to learn about writing a BUSINESS PLAN? Who likes to write?

Do you need that thing?

Corn Maze or Harvest? How do you make money with a corn field?


Traditional business plans describe one path to money

What if: The yield is low? (product) Prices drop? (market) Customer doesn’t show up? (customer)

Corn Maze or Harvest? A BUSINESS PLAN

Does everyone need one?

Do you need one?

When?


A traditional BUSINESS PLAN

presumes you have the ANSWER


Traditional business plans describe one path to money

A business must consider several risk factors: -Product risk -Market risk

-Customer risk

Corn Maze or Harvest? Reducing Risk

- Diversify products (in area of expertise) - Find new markets - Diversify customer base

Corn Maze or Harvest? Create Flexibility, Consider Options

1. Plant rows, grow corn, harvest, sell (SOSO) or

2. Plant rows, grow corn, create maze and -charge admission, 6 weeks income -then harvest and sell

Corn Maze or Harvest? Create Flexibility, Consider Options

- Options do not have to be mutually exclusive

- Better options tap different customers

- Better options address different risks (P, M, C)

Corn Maze or Harvest? Planning does not require a Business Plan

Planning for Business

This is not a word play but it is

Another way to think about it!

Corn Maze or Harvest? Planning for Business

What is it? A way to think about options A tool to compare choices A plan to reduce risk


Describe: 1. What – the product 2. Who – the market and customer


3. How: to identify Who to reach Who much to charge to make or get What


Research is needed! - Who and What are considered together - Who and How to identify Who - Who and How to reach Who - Who and How much to charge for What - Who and How to get or make What

Corn Maze or Harvest? Where to start?

With Who! What does Who want? Is your What it? What will Who pay for What? When does Who want What?

Who knows!

Corn Maze or Harvest? Who knows

Talk with a few Who’s. Listen to what they say. Focus on comments to reduce:

Market Risk Customer Risk Product Risk


Research is needed! Tabulate what the Who’s said. Adjust your thoughts. Rephrase the questions.

Ask the Who’s, and a few new Who’s, again. - Repeat as needed until Knowledge


Adjust your plan to fit the hard won Knowledge.

Tweak the What, if necessary. Design an outreach program Price the What, ship the pre-sells


This may be all you need to do. If you have a What that Who will buy

and the resources to get and promote it,

then you may be done.

Corn Maze or Harvest? Still want a

BUSINESS PLAN?

Some need one to raise capital or get a business loan


Create a minimal one. 1. You, legally and commercially

2. Your business


3. Declare who Who is Know and describe market space Know and describe who Who is Estimate how many Who’s exist Estimate % of Who’s that will buy This gives Number of Who’s that will buy


Estimated Revenue = Number of Who’s that will buy

X

Units each Who will buy X

Price per unit of What


Estimated Costs - Cost of goods and inputs Wages Salaries, Office costs, Utilities, etc (overhead)

Outreach expenses (marketing, advertising, etc.)

Legal stuff and professional help expenses


Subtract Estimated Costs from Estimated Revenue to get Estimated Profit/<Loss>

Is the number encouraging?


Attempt to thumbnail this out for up to 5 years. 3 years is often enough to see the picture. Remember to calculate revenues and costs growth each year.

Corn Maze or Harvest? A BUSINESS PLAN ‘final’ Decision Time

-Happy about profit picture? Do it! -Convinced it just won’t work? Drop it. -Still could work, but… Then add/change Who’s, reduce costs, and

review revenue:cost picture again.


or A Business Plan

Phil Jackson [email protected]

608.444.7134

mailto:[email protected]

Corn Maze or Harvest? Stuff to consider: -Base financials on high-low-expected values: Shows sensitivity/risk of business idea. - There are several more areas to include in a traditional business plan. For example the management team, existing competition, unique value proposition, cash flow analysis, and more. - The Small Business Development Center offers an Early Training Program to assist business understanding and write a traditional business plan. Nearest available Centers offering ETP are in Madison and LaCrosse. -A business plan has several functions: 1. show the entrepreneur how solid the plan is; 2. allow the entrepreneur a low cost opportunity to create a solid business; 3. demonstrate to investors, including the bank, the business is worthy; 4. etc.

corn maze or harvest? · corn maze or harvest? who has a business idea, either a product or...

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