cuarto trimestre
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Quarter 4: Making PlansQuarter 4: Making Plansfor the Futurefor the Future
May 3, 2023Copyrighted in its entirety, Innovative Learning Solutions,
What is new?Venture capital opportunityWhat goes into a business plan?Venture capital presentationsLearning points
Feature R&D // Licensing // DebtVC Investment // Tactical plan
Time
Demand
Introduction
You Are Here
Growth
Maturity
Decline
New brand features, sales offices, and plant capacity will push you into the growth phase.
Time
Profit
Costs to setup and grow the business
0
Time
Profit
Costs to setup and grow the business
0
Revenue
Time
Profit
Costs to setup and grow the business
0
Revenue
You are here You are tryingto get here
Free cash flow
Cash shortfall
Expand owners’ equity (bring in new investors)
Leverage your investment (borrow money from others)
Sell part of the company to venture capitalists• venture capitalists are willing to invest up to $4,000,000• venture capitalists may ask for up to 60% of the company in
exchange for their investments
Borrow money
Demand is up for the entire industry.
Your firm has established itself as a viable competitor.
New sales outlets would greatly expand distribution, drive up unit volume, and thereby reduce unit costs.
New brand features could be brought on the market if you invest in R&D. These brand features will increase customer satisfaction, and thereby demand.
New production capacity will allow substantial market expansion.
Copyright Dominique Garval 2003
Objectives Strategy Tactics
Actual actions and operations that are
necessary toexecute strategy
Set of carefullyselected / integrated
business prioritiesto achieve objectives
Results to be attained beforea certain date
- Gen. George Patton
- Gen. Dwight D. Eisenhower
- Adm. Rickover
- Almost any venture capitalist
History of firm // Performance to date Strategic analysis // Corporate strategyMarketing strategy // Channel strategy
Manufacturing strategy // Human resource strategyFinancial strategy // Tactical details
Pro forma financial statementsWhat is in it for the investors?
A tactical plan is a series of interconnected tactics purposely organized to be executed in a particular order in time and space for the purpose of achieving specific strategic goals
Q4 Q5 Q6 Q7 + Going Forward
Larger flat screenFast internet
Comfort keyboard High speed processor
R&D
NewBrands
Sales Offices
Prices
New laptop
Chicago Paris Sao Paulo
Penetrate
Porta 2800Main 2000
Penetrate
Porta II 3200Premium new brand
Main II 3100
New desktop
Historical Future
Q4 Q5 Q6
0 13,680 12,130Beginning Cash Balance
Q1 Q2 Q3
616,106 2,234,341311,966
Revenues+ Licensing Income+ Other Income+ Interest Income
= Total Receipts from Operations
Production
+ R&D+ Quality Cost
+ Licensing Fees
+ Advertising
000
000
13,680 6,450
671,1000 0
2,542,48000
0
0
5,325,162 12,681,800
00
000
13,680 6,450 671,100 2,542,480 5,325,162 12,681,800
0
00
00
0
00
00 0 0 0
104,516 299,8140 417,078 735,148
16,863 210,938 273,799 595,811185,000 2,451,927 400,00
595,215 1,160,403 2,383,428 5,682,588125,00
Receipts from Operating Activities
Disbursements from Operating Activities
0
120,000
Each team is given 12-15 minutes to present its business plan to 4 investors.
One or more Venture Capitalist will later visit your firm to ask questions for 5 to 10 minutes in order to better understand the plan, the team and the risks and rewards of investment.
One or more VCs will enter into negotiations to invest in your firm.
Each venture capitalist will quickly assess the risk of an investment in each team and decide the amount to invest and the price at which he/she is willing to buy stock.
Each venture capitalist can invest up to $4,000,000.
Investors are encouraged to consider a stock price between 70 and 120 per share.
The venture capitalists are independent investors, they do not have to agree.
The venture capitalists may not give you all the money that you request if they are worried about the balance of the risk and reward of your plan.
To make up the difference, the Fast Eddy Venture Capital Fund will be contacted.
Fast Eddy will invest the balance of what is needed at $10/share less than the lowest share price in industry.
The business plan consists of a Power Point presentation, plus the tactical plan and pro forma financial statements.
The $4,000,000 in common stock currently in your firm’s Q4 financial statements is only for planning.
Your Business Coach will adjust the amount of stock and stock price paid by each investor after they have made their decisions.
Quarter 4 decisions will be due a little later in order to give you time to review your financial options and let your Coach enter the correct investment amounts.
Complete Q4 decisions. Next, prepare the tactical plan and pro forma financial statements
through Quarter 6 and have them ready to review by your Business Coach.
Meet with your Business Coach to review your tactical plan and pro forma statements during your normal executive briefing.
Then prepare your Power Point presentation and submit it to your Business Coach for review and feedback.
Your Coach will provide a presentation schedule with times and dates.
Complete Q4
Work on TacticalPlan & Pro Formas
Review with BusinessCoach Normal EB Time
Work on Business Plan Presentation
Ask BusinessCoach for Review
Present Business Plan to VCs
Receive Final Equity Investment
Wrap up Q4
President owns the presentation
VP of Finance/Accountingowns the tactical plan, proforma financial statements,and stock price negotiations.
Have a stock price andinvestment amount in handbefore you meet with theVCs.
Manage the future Take the initiative now by expending resources that will shape the events and opportunities of the future.
Management of StrategyDiscover the causes of performance shortfallsAdapt to new opportunities and problemsWork on the margin to improve performance
• where should money be spent next?• how can we get more out of our current investments?
Strategic and tactical planningSpecify objectivesPerform strategic analysisEvaluate strategic optionsChoose strategic directionSelect strategic thrustsTime phase tactics into the futureWork investment money and debt to support tactical plans
Understanding cash flowsc
ash is king
how is profit different from cash?
You can not go to Hawaii on market share (at the end of the day, wealth creation is the goal)
Competition or cooperation - strategic alliances with competitors• multiplying resources• developing markets more quickly versus helping the competition
Game theory and prisoner’s dilemma (if I do this and they do that, then …….?)
Negotiations
Marketconditions
Marketingstrategy
Marketingtactics
Marketassessment
Marketperformance
Manufacturingconditions
Manufacturingstrategy
Manufacturingtactics
Manufacturingassessment
Manufacturingperformance
Human resourceconditions
Human resourcestrategy
Human resourcetactics
Human resourceassessment
Human resourceperformance
Financialconditions
Financialstrategy
Financialtactics
Financialassessment
Financialperformance
ENVIRONMENTAL ANALYSIS
BusinessStrategy
FEEDBACK
BusinessPerformance
Assessment of Business Conditions
BUSI
NES
S LE
VEL
FUN
CTIO
NAL
LEVE
L
STRATEGY
Marketobjectives
Manufacturingobjectives
Human resourceobjectives
Financialobjectives
Strategic analysis
Strategic PlanCorporate
Each function
Tactical plan through Q6
Pro forma financial statements through Q6
Competitor AssessmentSWOT (strengths, weaknesses, opportunities and threats)
Market positionSegments Geography
Competitive strength Ranking in market Which firm is a threat?Market performance
Demand and market shareCustomer satisfaction (brands, prices)
Financial performanceCashProfitability
Mission // Culture // ProblemCorporate objectives // Financial Resources
Basis of Competitive AdvantageStrategic Thrusts
Controls (targets to be achieved by Q6)
Strategic analysis
Strategic thrusts
Tactics to support strategic thrustsL
ist key decisions to be made over next three quarters
Link key decisions to strategic thrusts
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