T H E ONE- HOUR BUSINESS PLAN T H E ONE- HOUR BUSINESS PLAN THESIMPLEANDPRACTICALWAY TOSTARTANYTHINGNEW JOHN McADAM Coverdesign:Wiley CopyrightC2013byPioneerBusinessVentures,Inc.Allrightsreserved. PublishedbyJohnWiley&Sons,Inc.,Hoboken,NewJersey. PublishedsimultaneouslyinCanada. Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,or transmittedinanyformorbyanymeans,electronic,mechanical,photocopying, recording,scanning,orotherwise,exceptaspermittedunderSection107or108 ofthe1976UnitedStatesCopyrightAct,withouteitherthepriorwritten permissionofthePublisher,orauthorizationthroughpaymentoftheappropriate per-copyfeetotheCopyrightClearanceCenter,222RosewoodDrive,Danvers, MA01923,(978)750-8400,fax(978)646-8600,oronthewebatwww.copyright.com. RequeststothePublisherforpermissionshouldbeaddressedtothePermissions Department,JohnWiley&Sons,Inc.,111RiverStreet,Hoboken,NJ07030, (201)748-6011,fax(201)748-6008,oronlineatwww.wiley.com/go/permissions. 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HD62.5.M38632013 658.1'1—dc23 2013019138 PrintedintheUnitedStatesofAmerica. 10987654321 C ONTENTS Setting the Tone ix Introduction xi Why These Cornerstones Build the Best Foundation for Any Business Plan xvi Module1 What Are You Offering? 1 Create a Value Proposition That Makes a Stronger Business Model The Need 5 The Solution 8 Features versus Benefits 10 Advantages 14 Written Exercise: Write Your Value Proposition 19 Value Proposition Exercise #1—The Value Proposition Building Blocks 20 Value Proposition Exercise #2—‘‘What Do You Do?’’ 22 Value Proposition Exercise #3—‘‘What Do You Want?’’ 24 v vi CONTENTS Module2 Who Are You Offering To? The Customer Target Market 27 The Only Sustainable Source of Business Funding for the Long Term Customer Target Market Introduction 29 Market Size: The Addressable Market 31 Customer Demographics and Demographic Profiles 33 Customer Categories 34 Second-Phase Customers 35 The Customer Target Market Funnel 35 Public Relations 38 Advertising 41 Marketing 44 Sales 47 Written Exercise Preparation 51 Customer Target Market Exercise: Methods and Lists 52 Module3 Who Are Your Competitors? Competitive Positioning 55 Viewing Your Offering Through Your Customers’ Eyes Competitive Positioning Table Exercise 64 CONTENTS vii Module4 What’s Next? Next Steps 69 What Milestones and Action Plans Do for Your Business Milestone Introduction 72 Business Milestone Definition 76 Essential Elements of a Business Milestone 78 Examples of Business Milestones 79 Milestones in Practice: Sandbagging, Overstatement, and Balance 81 Action Plan and Goals Defined 84 Milestone Quality Control Check: ‘‘Stiflegoal’’ and ‘‘Stiflestone’’ 86 Milestone and Action Planning Worksheets 89 Module5 How Much Money Will You Make? The New Offering to Cash Mini-Budget 93 A Simple Way to Predict How Much Money You Will Likely Make How Much Money Will Your Business Model Make? 96 Selling Price 102 Average Sales Cycle Time/Customer Acquisition Time 105 Unit Sales Forecast 107 viii CONTENTS The New Offering to Cash Mini-Budget Worksheet Exercise 112 Conclusion: Pulling It All Together 117 Using Your One-Hour Business Plan to Earn Customers Today I Love Beta Users of Innovations and You Should, Too 127 CEOs and Entrepreneurs Have a Lot in Common 130 Other Applications of the One-Hour Business Plan 132 On the One-Hour Business Plan Concept— Is It a Gimmick? 137 Get Feedback on Your Plan Foundation from Advisors, Colleagues, and Mentors with Successful Exits 139 Benefits of Sending Us Your Worksheets 142 Help Us Get the Word Out—This Works! 143 Final Thoughts 147 Acknowledgments 153 Index 159