Corn Maze or Harvest?

Corn Maze or Harvest?
Why pick?
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?
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?
Corn Maze or Harvest?
How do you make money with a corn field?
Corn Maze or Harvest?
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?
Corn Maze or Harvest?
A traditional
BUSINESS PLAN
presumes you have the
ANSWER
Corn Maze or Harvest?
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
Corn Maze or Harvest?
Planning for Business
Describe:
1. What – the product
2. Who – the market and customer
Corn Maze or Harvest?
Planning for Business
3. How:
to identify Who
to reach Who
much to charge
to make or get What
Corn Maze or Harvest?
Planning for Business
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
Corn Maze or Harvest?
Planning for Business
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
Corn Maze or Harvest?
Planning for Business
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
Corn Maze or Harvest?
Planning for Business
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
Corn Maze or Harvest?
A BUSINESS PLAN
Create a minimal one.
1. You, legally and commercially
2. Your business
Corn Maze or Harvest?
A BUSINESS PLAN
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
Corn Maze or Harvest?
A BUSINESS PLAN
Estimated Revenue =
Number of Who’s that will buy
X
Units each Who will buy
X
Price per unit of What
Corn Maze or Harvest?
A BUSINESS PLAN
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
Corn Maze or Harvest?
A BUSINESS PLAN
Subtract Estimated Costs
from
Estimated Revenue
to get
Estimated Profit/<Loss>
Is the number encouraging?
Corn Maze or Harvest?
A BUSINESS PLAN
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.
Corn Maze or Harvest?
Planning for Business
or
A Business Plan
Phil Jackson
[email protected]
608.444.7134
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.