MHR 423 Creating the Business Plan

1. MHR 423Creating the Business Plan Spring 2006 Dr. Stan Abraham MHR Dept.

2. Principal Course Objectives • To understand what goes into, and write, a business plan for a new or emerging business needing financing • To make a five-minute convincing “pitch” of that business plan One prerequisite • MHR 320 or EBZ 306

3. Value of the Course • Most entrepreneurs have no formal education in entrepreneurship • Some even have no formal education! • Many have never written a business plan • Many are engineers, scientists, artists, or other professional that have no business experience or acumen whatever • Epitomizes Cal Poly Pomona’s philosophy of “learning by doing” • You will actually write a business plan and do a five-minute pitch for the business at the end of the quarter before invited guests (investors or other knowledgeable people)

4. My Expectations of You • Take more responsibility for your own learning • You won’t learn as much if you don’t • Commit to having a very good group experience • Your workload and stress level will increase exponentially if you don’t, and your grade will suffer proportionately • Plan carefully and organize well • There is a lot to get done in the quarter • Pay attention to all deadlines • Getstartedearly

5. My Role as Professor • To create a friendly and fun environment for learning • To act as a resource, coach, expert, and sounding board for you as you develop your business plan • To provide useful feedback at all times • Especially with your assignments • To give mini-lectures on each topic based on my experience

6. The Business Plan External Analysis(Individual) • Done in groups • Based on a business idea you come up with • Written in stages • Improved through feedback from grading • Experience putting the whole plan together • Everyone be responsible for the whole document • Culminates in a 5-min. dazzling presentation before guests Marketing Plan Financial Planand Projectionsand other sections Final Business Plan

7. Participation Grade (10 pts) • Nothing happens until I know all your names (week 3) • Attendance gets four points • Remaining six points for asking questions and contributing to discussion during video discussions and final presentations • I scale all participation at the end of the quarter relative to the student that has participated most • Each unexcused absence over two loses one grade point • Sixunexcused absences gets an ‘F’ in the course • Eight absences of any kind also gets an ‘F’

8. Excused vs. Unexcused Absences • An excused absence is when a student informs me about an absence for a good reason (Cal Poly event, family emergency, accident, job-related) • Could be ahead of time or after the fact • Oversleeping or being unable to find a parking spot is not a good reason • Absences include • Coming to class more than 20 min. late • Leaving more than 20 min. early • Sleeping for more than 20 min. cumulatively • An unexcused absence is when I have no idea why you missed class

9. Grading Grade points are allocated as follows: • External-environment paper……………20 • Group marketing-plan paper…………..10 • Group financial-plan paper……………..15 • Five-min. presentation (group).………15 • Final Business Plan (group)…………….30 • Participation (4+6)………………………..10 Total……………………….100 Group grade is 70% of total

10. Group Contribution Rating Factor • It’s patently unfair for students that “coast” or do poor or not enough work to receive the same group grade as others in the group • Group work comprises 70% of a student’s grade • Students will complete a peer-rating-evaluation form at the end of the quarter • I will use those data to assign a Group Contribution Rating Factor (GCRF) to each student • GCRFs > 1.0 will enhance a student’s group grade (they will have done more than their fair share of group work) • GCRFs < 1.0 will penalize a student’s group grade (they will have done less than their fair share of group work)

11. Written Work • First drafts must never be handed in • I will not grade a first draft • Always edit your work once, preferably twice • Consider assigning someone this critical task • Business writing is concise and clear • If you find writing difficult, you must go to the University Writing Center for help • Take pride in your work—a quality business deserves a quality business plan • Final reports poorly written will lose points • Ask questions about anything you are not sure of • Revise sections based on my feedback

12. Videos and Discussion • On each of three video sessions, I will show a video of two startup companies making a pitch to a panel for funding • After each company founder has appeared before the panel, the class will discuss which of them deserves the funding more • Then a final clip will be shown with the decision of the panel as to which one it considered better • The experience puts you in the role of investor • The class discussion part will earn you participation points, but is otherwise not graded

13. Learn from previous feedback… • I will share with you feedback I gave to groups in previous classes on their Marketing Plan • Names have been removed to protect the innocent • The feedback may induce you not to make the same mistakes • You will note my feedback is constructively critical and more severe than the grades I gave • Although I may not be so lenient now

14. A Final Word • Past students felt tremendous pressure all quarter long to get the work done • So get started right away • Set earlier deadlines and stick to them • Allow enough time to edit your work • Past students found the Financial Plan and Projections to be the most difficult • Come see examples of business plans in my office • Get help

15. A Final Word (cont.) • A business plan has other sections besides the early drafts you turned in • Don’t forget about them • Past students complained about most of the grade being earned through group assignments • You need the group to do the work • Make sure everyone in the group contributes • This will be the most useful training experience you could possibly have as you prepare to start your own company • Short of actually starting it

16. Any Questions?