1、1Table of Contents1. The Route from Concept to Company .21.1. Success factors .21.2. Stages of development .32. The Business Idea.62.1. Developing a business idea .62.2. Elements of a promising business idea.72.3. Protecting your business idea .102.4. Presenting your idea to investors.113. The Busin
2、ess Plan.133.1. Advantages of a business plan.133.2. Characteristics of a successful business plan.133.3. The investors point of view.153.4. Tips on preparing a professional business plan.174. Structure and Key Elements of a Business Plan.194.1. Executive summary .194.2. Product or service .214.3. M
3、anagement team .224.4. Market and competition .244.5. Marketing and sales.274.6. Business system and organization .324.7. Implementation schedule .364.8. Opportunities and risks .384.9. Financial planning and financing.38Exhibit 2KEY FACTORS FOR SUCCESS OF INNOVATIVE START-UPSIdeasDegree ofinnovatio
4、nScopePatentCapitalAvailability/amountNeeds/responsibilitiesExits for investorsPeopleInventorsEntrepreneursTeammembersTraditional serviceprovidersAttorneysPatent lawyersTax consultants/accountantsMarketresearchersNetwork and exchangeCoachingNetworkingTeam buildingInnovative service providerVenture c
5、apitalistsHeadhuntersAngel investorsHigh-tech start-upconsultants1. THE ROUTE FROM CONCEPT TOCOMPANYNew, innovative companies generally try to grow from start-ups into established companieswithin 5 years. But they can seldom finance their activities alone along the way. Rather, theyare dependent on
6、professional investors with considerable financial clout. For entrepreneurs,financing is a critical question the business plan must thus be considered from the point ofview of potential investors right from the outset.1.1. Success factorsSuccessful companies arise from a combination of five elements
7、 (Exhibit 2).1.Haviinfforcan e2. MoneyWithbusinco2No business concept, no businessng an idea is just the beginning of the creative process. Many entrepreneurs are initiallyatuated with their inspiration, losing sight of the fact that their idea is the point of departurea long process of development
8、which must face and withstand tough challenges before itnjoy financing and market success as a mature business concept.mattersout somebody who invests money into the idea to grow it into a viable business, thisess will never become a reality. From early on, therefore, much attention must be paid ton
9、vincing investors to provide the necessary funding.3. No entrepreneurs, no enterpriseGrowing new firms is not a one-person job. It can only succeed with a team of, usually, three tofive entrepreneurs whose talents are complementary. Putting together well-functioning teamsis a difficult process one t
10、hat takes time, energy, and an understanding of human nature. Donot lose any time in putting your team together and work on perfecting it throughout the entirestart-up process. The characteristics of a high-performance management team are discussed inmore detail in section 6.3 of this Guide.4. Tradi
11、tional service providers will help you clear the first hurdlesYou will often need the advice of professional service providers, such as patent lawyers, taxadvisors, and market researchers - especially at the beginning. Getting the right informationearly (e.g., for registering a patent) can have cons
12、equences for later success or failure.5. Strong networks are a “shot in the arm“ for every new companyProfessional guidance for potential entrepreneurs through a network of sponsors, entrepreneurs,venture capitalists, and service providers is decisive in transforming viable ideas into realcompanies.
13、 Prime examples for such regional networks can be found in Silicon Valley and theBoston area.1.2. Stages of developmentThfirms venstage annote, thcompetitioIf inexstages of t3Exhibit 3STAGES OF START-UP DEVELOPMENTBusiness ideagenerationBusiness planpreparationStart-upand growthEstablishedcompanyInt
14、erest ofinvestorsFinancingdecisionsExit ofinitialinvestorse typical progression of the start-up and development of growing companies into establishedcan be subdivided into three stages. The end of each stage serves as a milestone forture capitalists by which to gauge the status of their investment.
15、Being familiar with eachd the challenges it poses may spare you wasted energy and disappointment. Pleasehowever, that the three stages in the development of a functioning start-up do not matche three phases in the development of a business plan within the framework of thisn (see Exhibit 3).you inten
16、d to be successful, this start-up process should influence both your activities as theitiator of a business concept and your path toward forming your own company. To a largetent, it is the demands of investors that will determine how you must approach the individualhe start-up.4Stage 1: Business ide
17、a generationThe beginning is the inspiration your solution to a problem. It must be evaluated todetermine if it delivers an actual customer value, whether the market is big enough, and justhow big it will be. The idea itself has no intrinsic economic value. It acquires economic valueonly after it ha
18、s been successfully transformed into a concept with a plan and implemented.You will need to start putting together your team as soon as possible, finding partners who candevelop your product or service until it is ready for market (or at least until shortly before). Inthe case of products, this stag
19、e usually involves a functioning prototype. You will most likelyhave to do without venture capital during this stage. You will still be financing your plan withyour own money, help from friends, perhaps state research subsidies, contributions fromfoundations, or other grants. Investors refer to this
20、 as “seed money,“ as your idea is still aseedling, not yet exposed to the harsh climate of competition.Your objective at this stage is to present your business concept and market which forms thefoundation of your new company so clearly and concisely as to pique the interest of potentialinvestors in
21、helping you cultivate your idea further.Stage 2: Business plan preparationAt this stage, it is most important to focus on the big picture: Dont lose sight of the forest for thetrees! The business plan itself will help you to focus as you must consider and weigh the risksinvolved, prepare for any con
22、tingency, and learn to anticipate a variety of possible situations or“scenarios.“ You will need to lay down plans and create a budget for the key activities of thebusiness for development, production, marketing, distribution, and finance. Naturally, youwill need to make many decisions, such as which
23、 customers or segments will you target? Whatprice will you ask for your product or service? What is the best location for your business? Willyou handle production yourself or outsource it to third parties? And so on.In preparing the business plan, you will come in contact with many people outside yo
24、ur start-up team. In addition to investors, you will talk to many specialists, including attorneys, taxadvisors, experienced entrepreneurs, and experts. The business plan competition organizerswill help you get in touch with just the right people. You will also have to begin reaching out toyour pote
25、ntial customers (i.e., by means of consumer surveys) to make initial assessments ofyour market. Always keep in mind that customer acceptance is an essential prerequisite to thesuccess of your company! Scout about for possible suppliers and perhaps close your firstagreements. You will also want to be
26、come aware of who your competitors are.This whole process will not come cheap. The team must continue to earn a living while runninga rudimentary operation and perfecting a prototype. Yet at this stage, you should also be ableto estimate your expenses. Financing will generally still be provided from
27、 the same sources yourelied on during stage one, although some investors may be willing to make the occasionaladvance. This stage concludes successfully for you as a new entrepreneur when an investorexpresses a willingness to finance your undertaking.Stage 3: Start-up and growthNow that the conceptu
28、al work is largely complete, it is time to start implementing yourbusiness plan. Your role now changes from that of architect to that of builder. Business successmust now be sought and achieved in the market. The day of reckoning has come when you willlearn whether your business concept was a good a
29、nd, ultimately, profitable one.Investor exit en route to becoming an established companyThe pullout of your initial investors is a completely normal step in the development of a start-up. For if everything has gone well, your risky venture will have gradually become a stableenterprise (see Exhibit 4
30、). In the course of its short life, you have created a number of jobs andwooed many customers with your innovative solution to their problem. Your commitment ispaying off as the value of your business increases.A profitable exit has been the objective for the venture capitalist from the outset. Capi
31、talrecovery can happen in very different ways. Normally, the business is sold to a competitor,supplier, or customer. Or it is listed on the stock exchange (the “initial public offering“ or IPO).It is also possible for investors who want out to be paid off by the other partners.562. THE BUSINESS IDEA
32、“There is nothing in the world aspowerful as an idea whose time has come.“Victor HugoThe above statement undoubtedly applies to ideas for starting a new business. But how do youcome up with such an idea? And how can you know if the idea for the business will have apromising future?Studies show that
33、the lions share of original and successful business ideas were generated bypeople who had already had several years of relevant experience. Gordon Moore and RobertNoyce, for example, had a number of years at Fairchild Semiconductors behind them beforeteaming up with Andy Grove to form Intel. But the
34、re are also examples of revolutionary ideasbrought to life by mere novices as Steve Jobs and Steve Wozniak demonstrated when theydropped out of college to start Apple Computer.2.1. Developing a business ideaIn economic terms, a spark of genius is worthless, no matter how brilliant it may be. For an
35、ideato grow into a mature business concept, it must be developed and refined, usually by manydifferent people.The initial idea must first pass a quick plausibility checkBefore you follow up on an idea, you should evaluate it in light of its (1) customer value,(2) market chances, and (3) degree of in
36、novation, as well as considering whether it will beboth (4) feasible and profitable. Talk your idea over with friends, professors, experts, and potential customers.The broader the support you find for your idea, the better you will be able todescribe its benefits and market opportunities. You will t
37、hen be wellprepared when the time comes to discuss your project with professionalinvestors. Is your idea really novel? Has someone else already developed it or evenapplied to patent it? Will it be possible to develop your idea in a reasonable period of time andwith a justifiable level of resources?I
38、t takes at least four weeks to develop a business ideaConsidering the multiple stages of development, it is improbable and fairly unrealistic thatyou will spend fewer than four weeks developing your concept. Generally, a business idea isnot worthy of being financed until it is so concrete that it ca
39、n be launched in the market in theforeseeable future at reasonable risk. Investors talk of the “seed phase“ of a business concept,5ELEMENTS OF A PROMISING BUSINESS IDEAExhibit 5ClearcustomervalueMarket ofadequate sizeFeasibilityandprofitabilitySufficientdegree ofinnovation1 24 3which usually has to
40、be financed with “soft“ money (i.e., from sources that as yet place no hardand fast demands on the success of the idea).The seed phase can take longer, in particular if the idea is ahead of its time. Although theperfect product has been found, it cannot yet be marketed because the development ofcomp
41、lementary technologies or systems is still in the works. One example is the Internet. Theideas for marketing products and services came early, but a lack of security in the availablepayment systems hampered and delayed its commercial exploitation for some time.2.2. Elements of a promising business i
42、deaA business idea can be considered promising if it has the following four elements (Exhibit 5):1. Clear customer valueThe key to success in the marketplace is satisfied customers, not great products. Customersspend their hard-earned money to meet a need or solve a problem. The first principle ford
43、eveloping a successful business idea is that it clearly shows which need it will fulfill and howit will do so. Initially, many entrepreneurs have the product and the technical details of designand manufacture in mind when they speak of their solution. Not so for the investor theinvestor first looks at the idea from the perspective of the market. For investors, customer
