BAEP 554: Business Plan aka: Business Planning and Implementation Spring 2011 Instructor: Bryce Benjamin Off: 213.740.0641 Cell: 310.613.4006 E-mail: [email protected] Alt E-mail: [email protected] Bridge Hall One, Los Angeles, CA 90089-0801 Course Section: Wednesday 6:30 to 9:30pm Office hours: Reserved for open office hours: Wednesday 3:30pm to 5:00pm Email and voice mail are preferred for messages. Scheduled phone meetings are encouraged. 1. Reasons to take the course: This course provides students with the tools and insights to start their business. Entrepreneurs are not risk takers; they are risk managers. Feasibility is the process by which entrepreneurs assess and manage risk. Feasibility is a two-fold act. First, the entrepreneur takes an idea and shapes it within the industry‟s background, and turns it into a concept. That concept is then tested to assess market risks, distribution risks, the value of the benefits and, finally, the financial risks. Business climate and human resources are inherent in any new venture analysis. In the Business Plan, aka Business Planning and Implementation, the findings of the Feasibility study turn from a passive information based document into a living, evolving, implementation plan. There are many goals of achieving a workable the business plan. First and foremost, it serves as your road map as you embark on the entrepreneurial journey. Summary written versions of your plan are effective communication tools to outside parties, including associates you seek to join you, suppliers you seek to supply you, strategic partners, and/or investors, as well as other money sources. A formalized planning process and resulting business plan document will substantially help you address prospective partners‟ four critical questions: Why This – What is the pain/opportunity you plan to capitalize on? Why You – Why are you the person who can do this? Why Now – Why is this the time to begin the venture? Do others have too much of a head start? Or BAEP 554 Business Plan Spring 2011 Page 1 is this project something whose time has not yet come? Is it strategic in its outlook and tactical in its implementation? Why Me – Why am I the one who should invest or join the team or become your strategic ally? This course is built on the principles taught in the Introductory BAEP 551, GSBA 586 Courses. In the Introductory Courses, students are exposed to entrepreneurship. They are an about course. Students are introduced to entrepreneurship in the context of who you are. Either venturing as an individual or part of a team; starting in an existing company or starting de novo; or creation by acquisition or franchise, the characteristics of those who create new ventures are explored. However, entrepreneurship is more than people or passion; it is about action – what you do. What are the actions undertaken by those who create new ventures? Are they the same for all entrepreneurs in all scenarios? Obviously not. Entrepreneurship is an individual journey in which you choose to define the reward – it is the why you do it of entrepreneurship. This course takes the lessons of Feasibility BAEP 552 and develops an implementation Plan. Feasibility 552 is a “do it” course. In 551 or 586 you are lead on your journey by your instructor and by the class material or “think about it classes.” Feasibility is a “go find out” course that is also intense. In this course, you have signed up for an intensive boot camp experience in entrepreneurship. In 554, you are responsible for your journey. You are the President of You, Inc. and as such, you must be the place where the buck begins and ends. You are the driving force and you are the cause of your own success and failure. No excuses. The value of this implementation course is in formalizing how you think and act as an entrepreneur. This course is not limited to students who have an idea and wish to start a business immediately upon graduation. This course is for the rest of your life as an entrepreneur. It applies to individuals and teams starting ventures de novo or as part of an existing company. Most successful graduates spend the first several years learning an industry and gaining general life and business experience. When an opportunity arises, they have the toolset to recognize, define, test, and then exploit the idea. Entrepreneurship is a highly personal and competitive process. Students will be required to show high involvement and input. These twin goals are accomplished by the nature of the work assigned and the projects conducted. Entrepreneurship is not a „seat-of-the-pants‟ game. Business planning and the resulting plan documents should reflect careful research, require thoughtful analysis and process planning and will take a great deal of your time. This course is rigorous and robust. It begins with the assumption that you have chosen to make this journey. Each week there will be an assignment that will be most meaningful and educational if you place yourself in the position of an entrepreneur about to design and implement his or her journey. Balance has been struck in the scheduling and grading of assignments. 2. Course description and outcome: This course develops of analytical and conceptual skills necessary to define a plan for the implementation of a new venture. 3. Course prerequisites: BAEP students must be enrolled and in good standing in the Marshall School and must have completed BAEP 551 or GSBA 586 and either BAEP 552 or BAEP 599 (Technical Feasibility). BAEP 554 Business Plan Spring 2011 Page 2 4. Course goals: This course is designed as the capstone course for students to use to integrate all other courses taken in Entrepreneurship, New Venture Creation as well as applying in a different format, all of the courses you have taken at the Marshall School. Together they should serve as background to become entrepreneurial or to use entrepreneurial thinking and structures in their personal career choices. The course is integrative and multi-disciplinary. The course accomplishes its goal by teaching students how to develop their implementation plan. Our primary goal is to help you create a successful venture or to become part of an entrepreneurial team managing an emerging business. The course focuses on developing a proactive and effectual way for individuals to determine and pursue their goals. We train individuals to act and iterate on thought through implementation plans rather than optimization. The process of creating a Business Plan for an entrepreneurial venture and then executing it is our primary focus. Implementation planning, writing and presenting your business plan is the central core of this course. 5. Course content: This course is the Capstone Course of The Greif Entrepreneur Program at USC. To accomplish this goal, the course is divided into several major themes: Allocation of class sessions: Weeks One to Nine are designed to deal with the internals needed to put together a business plan. The pace during this section of the class is intense and it assumes you have invested heavily in learning about an industry of your choice. It also assumes that you have completed Feasibility and know the strengths and weaknesses of a particular pre-defined opportunity. If you feel the opportunity as defined in your feasibility plan is executable, then your task of providing a foundation for your business plan will be somewhat less complicated. If you feel your feasibility is not capable of being resurrected and must be altered to be feasible, then you will be challenged by the need to spend additional time in Feasibility while creating the implementation plan. We have a long experience with students concluding that their feasibility plan was in fact infeasible and incapable of successful execution, only to see them start a venture once they had modified their original concept. When we return from Spring Break, weeks Eleven through Fourteen will focus on various nuts and bolts issues every business confronts when it launches – legal structure & considerations, financing, strategic alliances and presenting your business to others. Weeks Fourteen and Fifteen provide you the opportunity to practice achieving the critical challenge of communicating your concept in a compelling manner to an interested third party. These exercises emulate the real world. Each student will give an overview of their venture to an assembled panel of judges. BAEP 554 Business Plan Spring 2011 Page 3 Overview of class time allocation: For the semester, the classes are divided so that the first half of each class has a theme that will be delivered by class members and/or a third party who is an Associate of the Entrepreneur Program – an alumnus, ally or Advisory Council members. These individuals deliver unique and pragmatic insights and form the background for creating sustainable companies. While all of the guest speakers listed have been confirmed as of the posting of this syllabus, these are all busy people and may run into conflicts as the semester progresses. Should one or more the speakers find it necessary to cancel, every effort will be made to have a substitute speaker of equal stature and caliber for the topic to be covered. The second half of each class is allocated to content instruction. We will rely heavily on the work you have done in the class and will have you present, discuss and give background on how you came to your premises. Class assignments: The attached class schedule lists the topics, outlines the assignments and defines the due dates for the semester. I am certain that there may be some confusion, and you need only ask for clarification in advance. Being late with an assignment, or not meeting the expectation after the fact or because you did not understand the assignment is a disappointing experience for both of us. You are responsible. You are the president of You, Inc. While the attached class schedule has been thoughtfully constructed to provide you the relevant learning opportunity to pursue your entrepreneurial journey, it is subject to revision based on class interests and or other factors as the semester progresses. 6. Learning objectives: In this class you will: Gain factual knowledge (terminology, classifications, trends) necessary to execute a business plan; Learn fundamental principles, generalizations and theories of starting a new venture; Learn to apply course materials (to improve thinking, problem solving, and decisions) to the practice of building a business; Develop a clear understanding and commitment to personal values and work ethic. 7. Required Materials: A series of articles and readings portions are available electronically through Harvard Business Publishing and the electronic library at Marshall. A separate email has been transmitted with directions on retrieving electronic versions of the articles. The link to Harvard Business Online is: (tbd) 8. Recommended or additional readings: O‟Malia, T. J. (2000). The Entrepreneurial Journey. Calabasas, CA: Brandywine Publishing Company. This book can be purchased in the Book Store. BAEP 554 Business Plan Spring 2011 Page 4 9. Attendance and preparation requirements: Attendance at all class sessions is mandatory. Failure to attend classes will have a negative impact on a student‟s grade. Students are expected to complete the exercises due and to read all assigned materials before class and to be prepared to present and discuss these materials. Attending class is critical to learning. One of the primary reasons for meeting to learn entrepreneurship is that a classroom experience (rather than studying the material alone) offers many chances to learn from each other. Entrepreneurship is inherently collaborative. It is a social process. Entrepreneurs find opportunities, adapt, change, and improve themselves by listening and learning from others. A class attendance form may be handed out at the beginning of each class. It will require your personal-consistent-full-signature. Initialing the class attendance form is not acceptable. Signing class attendance form is necessary because of University policies and the need to have a record of class attendance as part of the evaluation process. Students are responsible for signing this form at the beginning of class. Any student who signs the name of another student on the class attendance form will be subject to USC‟s discipline process. Students must arrive on time. Being on time is a mandate for successful relationships – especially in business. Arriving on time is a form of respect towards other students, the instructor, and to the guest speakers. Late arrivals disrupt class. Late arrivals often require the instructor to repeat information, which wastes the time of other students. Late arrivals disrupt the presentations of guest speakers and many guest speakers find late arrivals a form of disrespect. Lateness to class will be penalized. In the entrepreneurial world and in the real world, successful people live by a simple guideline, which states that you will treat each other, including your classmates, instructors, and guests, as you would treat your customers. If you are going to miss a class or have a valid reason for being late, please notify one of your instructors well in advance of the event. In Los Angeles, traffic is a fact of life – it just isn‟t an excuse for being late. 10. Academic integrity: Please be familiar with the Grading Policy and Academic Standards section of the USC Catalogue and the information on University Governance in the SCAMPUS, particularly Appendix A: Academic Dishonesty Sanction Guidelines. The use of unauthorized material, communication with fellow students during an in-class examination, attempting to benefit from the work of another student, and similar behavior defeats the intent of an examination or other class work is unacceptable to the University. It is often difficult to distinguish between a culpable act and inadvertent behavior resulting from the nervous tensions accompanying examinations. Where a clear violation has occurred, however, the instructor may disqualify the student's work as unacceptable and assign a failing mark on the paper. 11. Policy regarding returned graded work: Returned paperwork, unclaimed by a student, will be discarded after 2 weeks and, hence, will not be available should a grade appeal be pursued by a student following receipt of his/her course grade. BAEP 554 Business Plan Spring 2011 Page 5 12. Forming partnerships In the course of the semester year you may wish to join forces with other students who have a similar interest to yours. As a general guideline, such cooperation on individual projects such as an industry status is encouraged. However, teaming for the semester project requires prior approval and a compelling justification. You will need to prove to me that this is a synergistic union, not the mere allocation of work. 13. Grade breakdown and expectations: Class Grading Grading is the least enjoyable activity in teaching. To make it manageable, this course attempts to use grading as an incentive for actions desired. Therefore, grades are structured with a base and with a bonus opportunity. Your final grade is based on an evaluation of the following activities: Base Activities: Slides on Industry, Market, Target Customer, Value Chain 100 Personnel, Market & Operations Plan Sections 200 Pricing, Sales, Marketing, Competitive Analysis Sections 200 Financial Section 200 700 Final Business Plan 600 Slide Deck & Presentation 300 Sub Total 1,600 Outside Activities Stranger Diary Must be kept for entire semester and include a minimum of 25 strangers. 250 Classroom Activities: Class Attendance 100 Class Participation (as measured by contribution to class discussions) 400 Mentor Project Student must have a mentor knowledgeable in your industry. Each mentor must attend the Mentor event. 150 650 Total Points for the Semester 2,500 Bonus Points In addition to the outlined points, bonus opportunities are available to students. There are three ways to earn bonus points: BAEP 554 Business Plan Spring 2011 Page 6 Project presentations: (20 bonus points). Students will present various assignments and Major Projects (volunteers and cold calls, but only volunteers get points). Please e-mail your desire to be considered as a volunteer in advance. GoTo: (10 bonus points) sharing strangers. Plan to present at least one effort at Good Of The Order. This concept is to encourage your sharing of the contacts you make as you learn the industry. Articles, etc. are not appropriate for this class. Prepare appropriate slide(s) to highlight what you learned. Business Plan Presentations: (100 points). Advancing from the Semi Finals to the Finals carries a bonus of 100 points. Project relevancy and difficulty Grading weight will be given to the difficulty of the project undertaken. A simple project designed to build a life style business is easier to research and assess the feasibility as compared to a complex multi operational, technology based firm. The weighted factor will be assigned when the working concept has been approved. USC Grading Guideline What earns an “A”? An “A” at USC requires excellence. We look for excellence in this class in a number of ways, as described below. In order to avoid substantial disparities across courses, instructors in MBA courses are required to adhere to specific target grade point averages for each course they teach. The class average for a graduate elective in the Marshall School of Business is a 3.5. The grading system for this class is simple. It consists of assigning "points" that correspond to the “A to F” curve that will be reflected in your final grade. We will provide individual grade summaries during the semester. If you have any questions about your grade during the semester, please make an appointment to see the instructor to discuss these issues. Delivery of Assignments Papers are on time when a hard copy is turned in and a PDF version posted to Blackboard prior to the beginning of class. Posting to Blackboard is the final determinant that you have delivered your assignment appropriately. Delivery as an attachment is not acceptable unless you have cleared that by the Friday of the previous week of the due date. Papers up to one week late will lose 25% of the grade. Papers over one week late and up to two weeks late lose a second 25%, and any paper submitted over two weeks late will not be accepted, nor will they be read. Policy on Accommodations for Students with Disabilities Any student requesting academic accommodations based on a physical, psychological or learning disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to me as early in the semester as possible (by the second week of the semester). DSP is located in STU 301 and is open from 8:30 AM to 5 PM, Monday through Friday. The telephone number for DSP is (213) 740-0776. Confidentiality Policy Throughout the Entrepreneur Program's classes and events, students are exposed to proprietary information from other students, guest lecturers and faculty. It is the policy of the Entrepreneur BAEP 554 Business Plan Spring 2011 Page 7 Program that all such information is to be treated as confidential. By enrolling in and taking part in the Entrepreneur Program's classes and activities, students agree not to disclose this information to any third parties without specific written permission from students, guest lecturers or faculty, as applicable. Students further agree not to utilize any such proprietary information for their own personal commercial advantage or for the commercial advantage of any third party. In addition, students agree that any legal or consulting advice provided without direct fee and in an academic setting will not be relied upon without the enlisted opinion of an outside attorney or consultant, without affiliation to the Program. Any breach of this policy may subject a student to academic integrity proceedings as described in the University of Southern California University Governance Policies and procedures as outlined in SCAMPUS, and to any remedies that may be available at law. The Entrepreneur program, the Marshall School of Business, and the University of Southern California disclaim any responsibility for the protection of intellectual property of students, guest lecturers or faculty who are involved in Entrepreneur Program classes or events. Receipt of this policy and registration in our classes is evidence that you understand this policy and will abide by it. BAEP 554 Business Plan Spring 2011 Page 8 BAEP 554 Business Plan Class Schedule Spring 2011 Week 1.A Getting Acquainted 1/12 Elevator Pitches Each member of the class will introduce themselves and give an up to ninety second elevator pitch on the business concept they plan to pursue during this class. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1.B 1. Business Planning & Implementation and The Business Plan 2. Course Overview and Expectations: Yours & Mine Assignment Due: April 27 - Strangers Diary A high portion of your training in entrepreneurship comes from exploring your industry in order to recognize opportunities that can be exploited. Effective exploration requires that you contact many people you do not now know. These strangers hold the key to unlocking the information you need. Keeping data on these contacts and recording the value of these strangers will become part of your mindset. Strangers, mentors and your network will make a difference in your success and failure in life. Your contact with and sharing of strangers often provides a crucial resource. Your diary of strangers is a pivotal part of the grading of this class. The diary must cover the entire semester and contain a minimum of 25 strangers. Your Stranger‟s Diary is due on the second to the last day of class. (Strangers met from previous classes in entrepreneurship are not eligible for this course assignment.) Assignment Due: First Day of Class, 1/12 – Hard copy delivered in class and soft copy posted to Blackboard (BB) The professor requires a starting point. I need to gauge how thoroughly you completed your feasibility work. Therefore in no more than one page provide:  Your business or service concept statement including the pain it addresses in the market and how it is differentiated from competition in 100 words or less.  Answer each or the following four questions in 50 words or less  How did you reach proof of concept;  How did you reach proof of customer;  How did you determine dollars needed to start;  What keeps you up at night; what don‟t you know that you should know by now? BAEP 554 Business Plan Spring 2011 Page 9 Week 2.A What is a Mentor & Do You Need One? 1/19 GUEST SPEAKER: Mark Verge, CEO of Westside Rentals and Serial Entrepreneur - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2.B A. Review Business Plan Samples discovered by class. a. Volunteers get bonus points & will also cold call. B. Building your Team 1. Getting Started: Who is your team?  What skill sets do you need?  Whom do you know with those skill sets?  Do they have/need Industry knowledge?  What do they need to join the team? 2. Who are your advisors?  Should they be from your industry?  How will you choose them?  Why do they want to be part of your Team? 3. What does your org chart look like? What should it look like? Reading: Strategy is Easy but Tactics are Hard Good ideas and good products are a dime a dozen. Good execution and good management -in a word, good people- are rare. Strategy is easy, but tactics-the day-to-day and month-to-month decisions required to manage a business-are hard. That's why VC‟s generally pay more attention to the people who prepare a business plan than to the proposal itself. Assignment due by class time: Scour the web and library to find sample business plans and business plan outlines that you feel are good models and bring hard and soft copies to present in class. 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