TERM PROJECTpart 2
■ A well-done competitor table succinctly portrays a value proposition offering relative
to your competition in tabular form.
■ Competitor table lays out the decision-making process of the customer among
– Write like a customer
■ Who are your competitors? No competitor?
– Internet search, North American Industry Classification System, industry
■ It should get updated and referenced often.
Competitive OfferingYour Business
Home Depot Garden
Wildcat Garden Center
Value PropositionNative, distinctive, and
uncommon plants, trees and
Lowest prices for the most
plants and materials
One-stop shopping for all
your garden center needs
Geographic area server7-mile radius of single location
with mobile outreach
10-mile radius of multiple
5-mile radius of single
Core products or services
Locally grown green goods,
glowers, plants trees and
shrubs, and premium
flowers, nursery stock,
garden tools, greenhouses,
planters, water, and
Everything from plants to
pots, chemicals, accessories
Landscape architecture design,
sourcing perfect plants, in-
house delivery, installation,
Installation, low-prices sales,
project how-to-guides for do-
category event sales, private
Premium price for a premium
product to premium
customers, 50% gross margin
Name brands at low prices
Event sales, prices within
20% of Home Depot’s for
overlap, 45% gross margin
pricing on all other products
Café? No No No
■ A good business plan provides a guide, like a road map, for you to reference when
you need one.
– Talk to your customers first before you write any business plan.
■ Milestones represent significant events in the life of a business
– It can be used to check whether your business is on the right track.
■ How can we possibly predict what our business will be doing 90 days from now, or
one, three or even five years from now?
■ We need the milestones to happen.
– Action plans and items
■ Three elements
– A significant business event, a deliverable date, and a measurable description
of the business event.
■ What are some classic milestones in business?
– Completing the product or service prototype for customer testing.
– Hiring the first employee
– Obtaining the first sales order
– Receiving your first customer payment
– Paying back your investors
■ With the proper level of sandbagging
built into your milestone, you can
reduce uncertainty and myriad
– You do not want to create future
business millstones that you
cannot achieve because they
might also be used as weapons
■ Action plan and action items for the
■ Recording the early customer financial transactions is the most important part of
the budget process.
– We ignore most expenses for now, except for those that enable us to achieve
the first customer transaction.
■ Mini budget is a major cornerstone for your business model, and we will see how it
naturally folds into a more complete profit-and-loss budget.
■ Selling price: the price at which something is offered for sale.
– Market-based method: based on your competitors’ selling prices.
– Mark-up method: establishing a selling prices based on all known costs.
■ Cost of goods sold: the direct costs attributable to the production of the goods sold
by a company.
– This amount includes the cost of the materials, direct labor costs, packaging
costs, inland freight, etc.
– For service goods, costs related to employee training, travel, and printed
materials should be considered.
■ Average sales cycle time/customer acquisition time
– How many days will it take you to acquire your first customer?
– You will need to estimate and later refine your average sales cycle time as a key business model performance indicator.
■ Add (#) of days from first contact to customer conversion for all deals = Total (#) of days for all sales combined
■ Total (#) of days for all sales combined / (#) of deals = (#) of days for Average Sales Cycle. E.g., 20 days / 50 transactions = 0.4 day.
■ Unit sales forecast
– How many units of your offering you can sell in your average sales cycle time?
– How many customers can you approach in one month?
Mini Budget (an example of Aruba)
■ Aruba’s snorkeling business example
– 2.25 trips per day (0.25 from the night snorkeling.)
– Two vans seating five people each on average. The second van breaks down a
■ Unit sale forecast by month.
– 30 days * 2.25 snorkeling event per day * 1.25 vans * 5 people per van *
0.65 average van capacity
– 274 average snorkeling unit sales per month.
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