Business Planning and Market Research
Who? Jane Nolan MBE Entrepreneur in Residence, Newcastle University Careers Service MD Venture Coaching and Consulting Ltd First Year Ph. D
MARKETS approach M – markets – need to understand objectively analyse the needs of the marketplace, its size and dynamics. What are the unmet needs, USPs, benefits? A- approach – how will you commercialise the idea? What will people pay? What would the business model be?
Markets Approach R – returns – the rewards and risks in the business and how the shareholders and managers will be rewarded for their efforts K – knowledge – what is the uniqueness of the business? Can it be protected in some way through patents, copyrights and trademarks
MARKETS approach E – ethics – are the ethics of the team and the business or industry aligned T – team – skills, resources, capabilities, shared values and vision, capable of functioning well? S – sustainability – long term sustainability in order to compete effectively
Business Plan: Format per Finance Tree Idea What is it? Applications explored Key Markets Users/ Benefits Environment / competition Strategy What is your goal By When? What type of business are you? How do you make money (sales) ? Revenue model Delivery / production Team and systems Risks / risks managed Finance Cash flow forecast (cumulative) Breakeven Investment needed Investment return 6 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Exec Summary Business Model Mission Ownership Governance Management Risks Key Personnel Resources Quality Assurance Marketing Products Financial Model Investment Offering
Need to Consider Proposition People • How much Funding needed? - enough to grow Potential • Financial return Path to market Proven • Forecasts and exit Is there a significant enough market? Is it scaleable? Do you have innovative, defensible products? Do you have a strong management team? 7
Market research Helps you decide whether setting the business up is a good idea Helps you understand the market better – find your niche, identify opportunities Helps you segment your market and understand your customers and needs – Improves chances of success Target effectively, meet needs better
Market research Market as a whole Customers Competitors Collaborators? Primary sources – from customers Secondary sources – market reports and studies
Know yourself and your niche Guy Kawasaki - Founder and Managing Director of Garage Technology Ventures http: //ecorner. stanford. edu/author. Material. Inf o. html? mid=1176
Who is your Customer? - Segmentation - Socioeconomic factors – profession, income, age, gender, location - Character – lifestyle, personality, trendsetter/follower - Behaviour – usage, convenience, frequency of use
Who is your customer? Business Markets- segmentation Company size- SME, large Industry type – Pharmaceutical, NHS, IT, education, media, local government Location – local, national, international
Competitor Analysis • • who they are what they offer how they price their products what the profile and numbers of their customers are compared with yours • what their competitive advantages and disadvantages are compared with yours • what their reaction to your entry into the market or any product or price changes might be Source: Business Link
Competitor Analysis Companies House – check their accounts! Annual Reports Google Look at http: //www. businesslink. gov. uk/bdotg/actio n/layer? =en&topic. Id=1073900131
Collaborators Who could you work with? Who could help you establish yourself in this market? How could you benefit? How could customers benefit?
Research process Decide what market you are in Agree the aim of your research How will you record analyse it? – need to think it through as a team Carry out the research – MCCC Turn your research into intelligence Build your plans based on detailed market knowledge and understanding
Sources of secondary market information • COBRA (the complete business reference adviser) is available through the Careers Service and will be an invaluable source of information for your business. • Additional resources include: – Business Link: www. businesslink. gov. uk/bdotg/action/sector. Site. Map – Chamber of Commerce - business directories
Cobra – Practical Information Resource (available online in The Elevator) BIFs and BOPs: Business Information Fact Sheets Business Opportunity Profiles (market synposes) e. g. No 59. Questions to help you choose a business idea, No 47. A guide to sources of market and business information, No 4. a guide to writing a business plan, No 174. A summary of sources of finance for small firms, No 8. A guide to understanding profit and loss accounts, No 54. A guide to costing a product or service etc.
Useful Web Sites www. Bl. uk – British Library (or http: //www. ncl. ac. uk/library/resources/other_catalogues/) www. cim. co. uk – Chartered Institute of Marketing www. scavenger. net – market reports (previously cobweb information) www. datamonitor. co. uk – market reports www. marketresearch. org. uk – Market Research Soc. www. mintel. co. uk – consumer market reports www. neighbourhood. statistics. gov. uk – local population statistics http: //www. ncl. ac. uk/press. office/figures. phtml - university facts and figures
Useful websites…continued www. nisra. gov. uk – Northern Ireland statistics www. statistics. gov. uk – Office for Nat. Statistics www. the-list. co. uk – market reports www. upmystreet. com– socio-economic information for local population www. ons. gov. uk – national statistics for social & regional trends www. datadepot. co. uk – as above
Useful Resources www. ipo. gov. uk Patents, Trademarks Newcastle City Library – Patents Advice Centre Rise Up Intelligence – via the Elevator
Market Research Needs to be an ongoing process Curiousity and questioning Listening Watching trends – STEEP analysis Markets, customers, competitors, collaborators all keep evolving Challenges and Opportunities
STEEP S – Social T – Technological E – Environmental E – Economic P – Political PESTLE (adds in Legal)
SWOT analysis – Strengths, Weaknesses, Opportunities, Threats useful analytical tool: http: //www. businessballs. com/swotanalysisfr eetemplate. htm#swot-analysis-matrix
XING A commercialisation and planning Tool 90 key decisions Familiarises you with the terminology of business planning and development An opportunity to work on your idea and consider how you would turn it into a business Consider your goals and how to achieve them
Business Structures Type Sole Trader Description Sole owner, can employ others Advantages Easiest and cheapest to establish Price, A and Sarmiento, T, 2008 Disadvantages Owner personally responsible without limit for business losses. No income if ill/on holiday
Business Structures Type Description Advantages Disadvantages Partnership Joint ownership across partners Spreads risk, more attractive to investors, broader skill and knowledge base All partners are responsible for the actions of others, has cost implications Price, A and Sarmiento, T, 2008
Business Structures Type Description Advantages Disadvantages Limited Co (Ltd) Creates separate legal entity owned by shareholders, Company has a legal identity Clear structure for seeking funding, attractive to investors, limited liability for debts Higher set up costs, accounts are public and must be filed with Companies House Price, A and Sarmiento, T, 2008
Business Structures Type Description Advantages Disadvantages Limited Liability Partnership LLP Half way house between partnership and Ltd Co, mainly used for firms of professionals eg Consultants, solicitors Separate legal Identity, can own and hold property, employ people Liable for all its debts to full extent of assets Price, A and Sarmiento, T, 2008
Raising Finance YOU (£ 0 -£ 10 k) Seed Funds – Friends and Family (£ 0 -£ 50 k) – Grants and Competitions (£ 0 -£ 50 k) – Loans (£ 10 k-£ 800 k) Equity Finance – Angels (£ 20 k-£ 500 k) – Venture Capitalists (£ 1 m-£ 20 m----? ) Initial Public Offering – Company shares traded on the stock market
Xing Idea in 10 words or less SMART Goal S? M? A? R? T?
XING Idea in 10 words or less SMART Goal Specific Measurable Acheivable Realistic Timed
Xing themes Strategy – Goals, structure, R&D, training, eventual exit Actions – practical actions – bank account, legal entity, business plan, IP Finance – how will you finance it? Marketing – market research, brand, understanding your market, pricing, segmentation, distribution People- wide range of skills needed
Rise Up – Careers Service, Kings Gate Elevator – market research and other resources General discussion for the competition: Jane. nolan@newcastle. ac. uk To take forward your business idea in the future: make appointment with Development Officer
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