ELC 200 Day 13

Writing an E-Biz

Plan

Agenda

• Questions from last Class?• 2 Days till Daytona Beach Bike Week

– http://www.daytonachamber.com/bwhome.html

• Today we will be talking about how to write an eBiz Plan– The completed eBiz plan is worth 22% of your

grade

Why Write a Plan• The process of preparing a business plan will force you to think about

your business, research some options, recognize opportunities and risks, and test some of your assumptions

• A business plan will help you identify the cash needs of your business;

• A business plan can be used to raise funding from banks and from investors;

• A business plan can be used to tell employees, investors and others about your plans and strategies

• A business plan provides a benchmark against which to compare the progress and performance of your business.

• Writing a business plan as a student allows the student to tie many of the concepts learned in classes into one cohesive body of knowledge that has personal value for the student

Src: http://www.cbsc.org/ibp/doc/intro_bp.cfm

Why eBiz instead of just biz?• The Internet is unlike any other sales channel.

– The Internet allows companies to distribute information at the speed of light and at almost zero cost, to reach customers with both reach and range, to introduce new and innovative business models, to reduce costs and generate savings, and many, many more differences, as discussed in your textbook. However, the Internet also creates more bargaining power for the customer, creates a more perfect information market to the customer's benefit, and makes it easier for competitors to invade a company's marketplace, also as discussed in your textbook. So the first, and biggest, difference in e-business planning is the need for the entrepreneur to recognize the different and unique capabilities of the Internet and begin to think differently, and creatively, about the opportunities and problems the Internet presents.

• The Internet is global.– Being on the Web means your business will be visible to an international

audience. This introduces complexity for payment options (e.g., show prices in US dollars or local currency?), distribution channels, Web site design, and returns.

• Web storefronts never close.– Being on the Web means your store will be open 24 hours a day, 7 days a

week. Your e-business plan must account for this difference in Web hosting and customer service requirements.

Why eBiz instead of just biz?• The Web allows greater opportunities for personalization of content,

one-to-one marketing, and customer self-service. – Because the Web allows these and other customer service features, your

competitors can make them part of their e-commerce strategy, so you must too.

• E-commerce is conducted at Internet speed. – This means Web site deployment must be planned in months, or even

weeks, not years. First-mover advantage will be lost if companies are unable to move at Internet speed, and business plan readers will know that.

• Customer focused:– Business has always been about "getting close to the customer" but that

was in a world without the potential of personalization, one-on-one marketing, data mining, concurrent reach and range, and customer relationship management. The Internet, and the customer-oriented applications that the Internet makes possible, means that the every e-business must be totally focused on the customer. This belief is evident throughout this tutorial with requirements for clearly defining the value proposition the business offers to the customer, identify target markets, and a competitor analysis from a customer point-of-view.

Src: http://myphliputil.pearsoncmg.com/student/bp_turban_introec_1/PlanFund.html

Writing Style• To develop an effective business writing style:

– Use shorter sentences. – Use simpler sentence structures. – Use active voice. – Write from the point of view of the company. – Write more univocally. (The voice of the company is always

already a social voice). – Identify the agents of actions unless there is a good reason for

hiding agency. – Avoid nominalizing verbs. (changing verbs into nouns, i.e.

"decide" into "decision.") – Recommend action rather than refer to individual mental states. – Avoid qualifiers that weaken recommendations or express doubt. – Avoid self reference and references to individual states of mind.

Src: http://www.uoregon.edu/~ddusseau/101/199/style.html

Style ExamplesUse shorter sentences: "U.S. Research, Inc. conducted the interviews." 

Use simpler sentence structures:  "The product name must meet the following tests:" (Not, "If we want the product to sell well in the Northwest and eventually in select, international markets as well as to compete with distributors of similar name brands, the name must meet the following tests:)  

Use active voice:"The term, ‘Cascade’ conjures images of nature." (Not, "Images of nature are associated with the term, ‘Cascade.'") 

Write from the point of view of the company:"The company must change the name of its bottled water product." (Not, I recommend that the company change the name of its product.")  

Write more univocally. (The voice of the company is always already a social voice). "The company must change the name of its bottled water product." (Not, "Even though Jerry in the Advertising Department and Sue in Public Relations disagree, the company must…etc.")

Style Examples

Identify the agents of actions: "The sales representatives adopted a new approach." (Not, "A new approach was adopted.") 

Avoid nominalizing verbs: (changing verbs into nouns, i.e. "decide" into "decision.")"The managers decided to change the name of our project." (Not, "The managers made a decision."

Recommend actions rather than refer to individual mental states:"We recommend names that parallel the age-old and pure qualities of the product." (Not, "We believe you should use…," or "We think," "We imagine," "We presume," etc.)

Avoid qualifiers that weaken recommendations or express doubt: "We recommend that your company avoid ‘earth surface’ words." (Not, "We tentatively recommend that your company, if at all possible, avoid,‘earth surface’ words.")

Outline for a eBiz Plan Cover pageTable of contents1. Executive Summary2. Company Description

1. Mission and vision statement2. Value proposition3. Plan objectives

3. Products and services offered4. Marketing Analysis and Plan5. Operational Plan 6. Management and Organization7. Financial StatementsAppendixes

Plan Format Title page

– Title of paper– Your name(s) – Date– Class– Instructor’s name

Table of Contents– Identify the locations of the parts of your paper

Sections 1-7 – Title of the 7 Sections (i.e. Executive Summary, Company Description …

Financial Statements)• 16 Point Bold Type Face

– Narrative• 12 point type face• 1” right and left margins• 1“ header and footers• Sources properly documented via footnotes• Double spaced

Length of Paper (Excluding Title Page, Table of Contents and Appendixes)should be at least 10 pages but not to exceed 30 pages.

General Guidance• Executive Summary

– Even though this is the first part of the Plan it is written Last – No more than two pages– Explain the fundamentals of the proposed business

• What will your product be?• Who will your customers be?• Who are the owners? • What do you think the future holds for your business and your

industry?

– Make it enthusiastic, professional, complete, and concise.– If applying for a loan, state clearly how much you want, precisely

how you are going to use it, and how the money will make your business more profitable, thereby ensuring repayment.

– Just the facts! Shirt and Sweet!

Company Description

• Industry Analysis– Research

• Mission and Vision statement– Creative

• Value proposition– Written from your customers perspective– The stronger the value proposition that greater

your changes of success

• Plan objectives– Identify Goals, objective ands milestones

SMART Objectives• Specific:

– The objective tells exactly what, where, and how the problem or need is to be addressed.

• Measurable: – The objective tells exactly how much, how many, and how well

the problem/need will be resolved.

• Action-oriented: – The objective uses "activity indicators" to insure that something

will be done. As with goal-setting, use action-oriented verbs such as deliver, implement, establish, and supply.

• Realistic: – The objective is a result that can be achieved in the time allowed.

• Time-bound: – The objective includes a specific date for it's achievement

Business models

• Identify more than one but less than 4 models that your company uses or supports

• Resources– http://digitalenterprise.org/models/models.html– http://gsbwww.uchicago.edu/fac/

steven.kaplan/research/taxonomy.pdf– Your text Book

Products and Services

• Describe in depth your products or services– (technical specifications, drawings, photos, sales

brochures, and other bulky items belong in Appendices).

• What factors will give you competitive advantages or disadvantages? – Examples include level of quality or unique or

proprietary features.

• What are the pricing, fee, or leasing structures of your products or services?– How does your product or services lead

Marketing Plan

• Market research

• Economics

• The four P’s

• Strategic

• Done when you take ELC 310 eMarketing

Operational Plan

• Where the rubber meets the road

• Production– Make it or buy it– Suppliers, distribution networks– Supply Chain

• Legal and regulatory Issues

• Humana resources issues

• Financial Polices

Management and organization

• Management Structure– Sole ownership– Partnership – LLC or Inc.– Talent

• Organizational structure– Flat

• Professional advisory– Advisory Boards– Consultants

Financial Statements• Startup Expenses and Capitalization

– How is the company funded?• Venture capital, Debt, personal

– Startup costs– Cash budgets– Personal financial statements – Opening Day Balance Sheet

• Pro Forma (projections)– 12 month P&L– 3,4, 0r 5 years projections

• Income statements and balance sheets– Projected Cash Flow

• Analysis– Break even– Return on investment

Presenting a Plan

• 10 min pitch!• Know the audience

– Who are they– Do they already know the business

• Have Professional presentation visuals – http://www.3m.com/meetingnetwork/presentations/

pmag_effectivevisuals.html

• Provide an Overview– Let the audience know what you are going to tell them

• The visuals should support the presentation• Leave time for Q&A

Evaluation of the E-Biz Plan• The following scale will be used to evaluate the plan and

presentation. • Plan 75%

– Perceived viability of the initiative 25%– Originality 10%– Adherence to desired format 10% – Clarity 15%– Succinctness 5%– Creativity 10%

• Presentation 25%– PowerPoint Quality 10%– Oral effectiveness 10%– Perceived enthusiasm for initiative 5%

100%

Top Ten eBiz plan mistakes

1. The plan is poorly written

2. The plan presentation is sloppy

3. The plan is incomplete

4. The plan is too vague

5. The plan is too detailed

6. The plan makes unfounded or unrealistic assumptions.

7. The plan includes inadequate research.

8. You claim there's no risk involved in your new venture.

9. You claim you have no competition.

10.The business plan is really no plan at all

Src: http://www.entrepreneur.com/article/0,4621,324609,00.html

Assignment 4

• Do the first part of the eBiz Plan– Company description– Use resources available in WebCT

• Due Monday March 27