Business Plan Reviews Nov’07
Group# 01: Systegration Devices Inc.
Product: EZ-Shop
Overall (16/20%) Exec Summary is lacking details. 133% in 3 yrs (tot or annual?). Clear presentation but financial attachments are hard to read.
Management & Organization (9/10%) Advisors good. Organization chart is better in main text, rather than in Appendix.
Marketing (26/30%) Product – takes a while for you to describe it; instead you are talking about it rather than saying WHAT it is. I’m not convinced about the viral marketing approach for this type of offering. This section is a bit light. It’s good to see that you did some mkt research.
Finance (26/30%) Annual CF statements are not really required. I suspect these are the business student’s contribution. It’s better, for the business plan, to do a monthly cash flow (as per the web link) so that you can determine startup funding requirements. Your assumptions are fine. Glad to see the Breakeven analysis and Case Study.
Risk Factors (9/10%) Plans to patent - OK. No mention of malfunction or theft? But covered in App 1 – strategies to reduce shrinkage. Did a SWOT – nice touch!
TOTAL 86
Group# 02: Shorka Systems Ltd
Product: Shorka Shark Deterrent
Overall (14/20%) You call this a Business Proposal – that’s a little different from a business plan. Your Executive Summary needs a lot of work. You only talk about the need but don’t give the numbers (eg deaths/injuries) and there’s NO summary information, although I found some in the Introduction section. You are inconsistent in the use of the Company name. There are some typos and grammatical errors.
Management & Organization (8/10%) this part is good.
Marketing (24/30%) Product – is the fear of attacks real? i.e. 123 attacks in 2 yrs but only 18 from White Pointers. The idea is cute, though. Is there really competition? This may provide some validation. Targeting $200 MRSP adds a lot to a surfboard’s cost. You say .1 to 10% of new board sales – how do they get these numbers? $15M by yr 5 - really? Do a sanity check on this. I bet that not many board manufacturers hit these kinds of numbers. You mention 2 competitors. What do you know about them - Especially with respect to their financial performance and market share? You did lots of work (maybe too much?) on the Product “P”. HOW will you sell?
Finance (24/30%) 50X return offered? Lots of work on costing (good!). Summary financial statements are missing. No Balance sheets – tsk, tsk.?
Risk Factors (5/10%) Patent will be sought (patent chart is good!). Still need to do the research on effectiveness. Section on Risk Factors is completely missing (hmmmm).
TOTAL: 75
Group# 03: Vit Canada Company (a Partnership)
Product: A service? Was this allowed pursuant to assignment guidelines?
Overall (15/20%) No cover? The Fact sheet adds a nice touch and partially makes up for the lack of financial numbers in the Executive summary which makes it far too vague. Your Mission (or Product) should be more front & Centre….I had to dig to figure out what the Company does (I’m still not sure). Some of the screenshots in the Appendix are hard to read.
Management & Organization (7/10%) Why a partnership structure? Lots of advisors (good!). The document refers to a board of directors but doesn’t define it – which may be inappropriate for a partnership anyway.
Marketing (24/30%) A SWOT analysis is nice. What’s the pain? The need? You got some good demographic data. Revenue growth numbers under Market Share heading are difficult to follow. How are the competitors doing sales-wise and how will Vit take away market share?
Finance (26/30%) 263% investment growth rate by end of yr 5. (IRR?) It’s very difficult to do financial projections for internet services companies. Did the business student do the statements of cash-flow (looks like accounting style Cash Flow statements). You should be clear as to how the $300K startup capital was determined. Will the corporate structure preclude some of the usual sources of capital?
Risk Factors (8/10%) OK.
TOTAL 80
Group# 04: Amotrolex
Product: 24PT 24 Hour Personal Trainer
Overall (13/20%) Your Executive Summary is far too brief. There’s no summary data. The whole Business Plan in general needs lots of proofreading.
Management & Organization (8/10%) Should include your names in the chart.
Marketing (22/30%) This section is very weak. Where’s the Datasheet? WHAT is the product?
Finance (22/30%) I can see business student’s influence on cash flow – did financial statement type cashflows – not the type of cashflow to determine capital requirements. Where are the monthly numbers? How do you know how much capital is required? Looks like some of the monthly P&Ls are missing or incomplete. You refer to SERD and you call it something I’ve never heard of. Do you mean SRED? You need more discussion on your capital requirements. There’s too much detail on capital costs – who cares about office chairs?
Risk Factors (9/10%) Good.
TOTAL 74
Group# 05: Plex Technology
Product: Smart Massage Patch
Overall (17/20%) Nice style, layout and presentation. It would be nice to have this as one PDF document rather than a collection of PDF files. Makes for more work. You won’t want to send an investor something like this. Very hard to follow the paging and read on-screen – frustrating for the reader (me). Forced me to print it and collate it. The photos added a nice touch, though.
Management & Organization (9/10%) Good. Advisory board has been identified but not the full Board.
Marketing (28/30%) Good competitive and industry analysis.
Finance (27/30%) The Financial projections are well done. “A return of 587% on $300K is substantial” …BUT by when (or is this annualized?). Many of the funding sources mentioned no longer exist – do your homework!
Risk Factors (6/10%) I couldn’t find anything on this. Regarding IP, a patent number is mentioned but nothing is said about it…..hmmmm.
TOTAL 87
Group# 06: Hedgehog Security Inc
Product: InstantAlert Home Security System
Overall (18/20%) Nice style and layout, attractive. Minor grammatical errors. Exec summary quite good. But, it says in 5 years, company is expected to exceed $15M in value which happens to be the sales figure at that time. What’s the justification for this valuation? It’s a complete plan, but I must confess it is a bit hard to believe.
Management & Organization (7/10%) A Board is mentioned but I can’t find it.
Marketing (26/30%) Good work on Competition.
Finance (26/30%) 300X? in 5 years? Really? You assumes no investors – where will startup funds come from? $105K in total funding requirement is hard to believe. I couldn’t find the explanation for this.
Risk Factors (9/10%). OK.
TOTAL: 86
Group# 07: Pensito Inc
Product: em Charge Cell
Overall (18/20%) Your Executive Summary and Factsheet are very good, maybe a tad too long. Layout and presentation – nice, clean, good illustrations, very readable. Overall, somewhat too lengthy for this assignment. The text begs one to validate numbers in the appendices.
Management & Organization (8/10%) Board - who? Advisors are good.
Marketing (28/30%) Too much emphasis on the Product P. Not clear about the differentiation between licensing and royalties. Lots of good work done here.
Finance (28/30%) 400% return in 5 years! Do you mean 4X your money back in 5 years? (Cannot say that you guarantee this – dangerous!). Looking for $5M of which $4M is contingency (unheard of!). GP of $89M in 5 years – hard to believe!. 30% for $5M, means a valuation of over $16M today and $64M in 5 yrs (using 4X) but with GP of $89M that doesn’t make sense. There is virtually no discussion under the “Funding Required” section.
Risk Factors (9/10%) Good
Additional plans (eg HR, implementation schedule) add a nice touch.
TOTAL: 91
Group# 08: Aphesco Solutions Inc
Product: Spoil Foil
Overall (16/20%) Executive summary is thin. Not much is said about the revenue and profit potential, ie how much money you are going to make. What do you mean by “approximately” 701183 people? Why mention cumulative net worth (and not other, more important, financial information?
Management & Organization (8/10%) Nice selection of advisors! What is your corporate jurisdiction? Your name selection is good but I see no discussion on it.
Marketing (26/30%) I’m not sure why you focus on Vancouver. You say there is no competition. I don’t buy that. There’s no such thing as no competition. Yet, it seems you do recognize this in Appendix B.
Finance (28/30%) This section is quite well done, but I’d like to see more discussion on the capital requirements. It’s great that you will go without investors and therefore you need to be even more convincing that you have sufficient funding. What about a discussion on ROI for investors?
Risk Factors (8/10%) Regarding your full patent application, you cannot wait more than one year after filing a provisional.
TOTAL: 86
Group# 09: MedVision
Product: NaviVein
Overall (16/20%) Nice, clean presentation. Executive Summary is not at all well done. It lacks key points such as revenues and profits, info on the team, potential, etc.
Management & Organization (9/10%) This section is well done. You could have included some discussion on corporate formation, e.g. choice of jurisdiction.
Marketing (27/30%) Fairly well done. There should be more rationale on why the selling price is so low in comparison to competitive units.
Finance (26/30%) It’s dangerous to have a decreasing gross margin. There should be some discussion on this. Also, you cannot have a gross margin of 429% (This is impossible - the max is 100%). Your projections appear reasonable although I’m suspicious of the low amount of startup funding required.
Risk Factors (8/10%) This section could use some work. There are many more risks that have not been discussed. Mitigation strategies should also be covered.
TOTAL: 86
Group# 10: Sigma Technologies
Product: Unique ID System
Overall (17/20%) Nice graphics/aesthetics – very attractive. The Executive Summary has no summary financial information. Without this, how do I assess the attractiveness of the business? What’s the opportunity? The Fact sheet is good – I read this together with the Executive summary to comprise a complete summary. But, still, more info from the business plan should be extracted here. It is not clear from reading this WHAT the UID is.
Management & Organization (8/10%) Under “Operations and Personnel”, I do not recognize some of these faces - ;>) - are these the students that skipped my classes?.
Marketing (26/30%) Under “Product Offering”, I have difficulty understanding your product(s). I am left guessing about certain things (people using others’ ID) and safety issues (ie vehicle controlled speed reduction – could be a problem if acceleration is required to avoid an obstacle). More should be said about just WHAT the product is and how it works. What makes it compelling to buyers? Under “Positioning Strategy”, I would suggest that your vertical axis labels be reversed with high price at the top. There should be more discussion on installation – is this an OEM product or an after-market (Canadian Tire style) gadget? Pricing choice and channel pricing discussion is lacking.
Finance (26/30%) It looks like your cash flow statements are of the financial statement form (I see the business student influence here) as opposed to the type to give you startup capital requirements (is this the business student’s influence?). Are the numbers shown in $1,000’s? Where’s the discussion on financing – capital required (how’d you get the $300K referred to in the Executive Summary?), what are assumptions, etc, target ROI, valuation rationale, etc.
Risk Factors (9/10%) This part is fine.
TOTAL: 86
Group# 11: Inspirational Energy Inc
Product: PED (Power Source)
Overall (15/20%) Your Executive Summary has no summary information. Where’s the datasheet?
Management & Organization (8/10%) Board? Why give investors >50%? They will control your company. What about giving yourself some sweat equity?
Marketing (25/30%) 4P’s take up only ½ page – should be more like 2 or 3 pages – this is a very important discussion (the most important!)
Finance (25/30%) You should discuss your funding needs. $947,112 is a strange number. Why not $1M? Discuss valuation? Seems there’s no value placed on the IP/idea. Statements show Sales but no CoGs – that’s impossible. You show SRED as only 35%. What about BC’s 10% and the overhead proxy (can be 68%!). Is your GM enough? You say that investors get their money back in 2012 and get at least 8%. Why 8%? How can you say this (dangerous!).n Your cash flow statements look like they came from the business student – they are the Fin Statement type – not the type we covered in class that lets you determine your startup capital requirements.
Risk Factors (9/10%) Good.
TOTAL: 82
Group# 12: Innovative Safety Integrated Systems Ltd
Product: Lifeline Distributed Network
Overall (15/20%) Executive Summary – weird comments under Financial Summary – where is the financial summary?
Management & Organization (7/10%) You say the business is a partnership but you add LTD to the name – a fundamental error. How did you come up with 20% for investors? How will you do this under a partnership?
Marketing (24/30%) Good competitive analysis.
Finance (27/30%) I’m not sure that annual cash flows are needed (did this come from the business student?). Good breakdown on CoGs. Good proformas – nicely done. You need to have a discussion on startup capital required.
Risk Factors (8/10%) This section needs some work; it’s a bit thin.
TOTAL: 81
Group# 13: Trailer Innovations
Product: Roll Over Warning System (ROWS)
Overall (15/20%) The overall presentation is very good. However, the Executive Summary is far too brief – there are no highlights .
Management & Organization (8/10%) OK, looks like an external Board – who?
Marketing (26/30%) The market research discussion on tractor vs trailer is not quite clear. You did good work on market opportunity and target market. Check your advertising costs. Did you really set up a website? Competition: Stability Dynamics, Ontario with LG Alert (good!). Why still a preliminary datasheet?
Finance (28/30%) plan to get an L/C for $200K collateralized by parents. End of yr 2 offer $220K for 20%. MC $975K based on 1.5X Rev. Target $930K MC in yr 5. They say this is 49% (I get 62%!). Balsheets – lot of cash in yr5. Shd add liab + equity for the reader. CF looks OK. Extensive financials, judging from terminology, looks like the biz students exerted some influence. Did monthly for 5 yrs (not necessary).
Risk Factors (9/10%) lots mentioned, unrealistic patent timeline.
TOTAL: 86
Group# 14: NaviaTech
Product: Navitop
Overall (19/20%) Very good Executive Summary.
Management & Organization (8/10%) Advisors good but why would they work for free? What about the Board?
Marketing (27/30%) Market info – over 500 GPS Receiver manufacturers in Canada alone! Why do you need a market study to convince your clients there is demand. Good market definition.
Finance (28/30%) You claim 1500% return by 5th year (ie. 15X) using current valuation of $5M and an exit valuation of $76M – it’s a good idea to state this as an annualized ROI for comparison purposes with other investment opportunities
Risk Factors (6/10%) There is almost no discussion on this. Why? Because you did a SWOT analysis, you’re not being too heavily penalized.
TOTAL: 88
Group# 15: Portable Solutions Inc.
Product: Easy Play (portable displayer)
Overall (15/20%) The Executive Summary is a bit light. Key points are covered, but minimally. Nothing is said about the investment opportunity and the investment returns. In the Business Overview, you comment that investors will get back double their money in 2010. Is this attractive considering the risk?
Management & Organization (7/10%) Do you really think you can incorporate using your name? Why does Jaswinder get 51%? Good page on management team.
Marketing (23/30%) re Pricing – I don’t follow your discussion on GM. How do you get 60% when your “retail” price is only $250 and your cost is $150? I don’t see much of a “plan” here. I cannot figure out what you are going to do to generate the phenomenal first years sales that you project.
Finance (25/30%) Very impressive sales, but experience tells me that to do $57m, you’re going to need a lot more than $2.5m in funding. You should really get into a discussion on this. Your financial dissertation is almost non-existent. Your sales projection looks like a one-product company/product life cycle – not good. This will never attract investors. Revenues should always increase. If not, why start a company? Why not just sell your IP/idea to another firm?
Risk Factors (7/10%) Discussion on risks a bit brief.
TOTAL: 77
Group# 16: Guerra Solutions Inc.
Product: i-DRY (Clothing Drying System)
Overall (15/20%) Executive Summary – much too brief. I can’t tell what your product is, why someone would want it, how much revenue you will generate, your profit, and your return on investment. There are also a few typos. The overall presentation and style are fine, though.
Management & Organization (9/10%) Good work regarding your advisory board composition. What about your Board of Directors? Who are they?
Marketing (25/30%) What’s the point of referring to a $2.1 billion industry? Where are the product specifications? I couldn’t find anything about power consumption – something which would be of interest to a buyer. Under pricing, if the product costs $600, why do you want to sell it for $1100? What’s the logic behind this? This low markup may preclude certain channels.
Finance (25/30%) There’s not much discussion here. I’d like to see more said about the amount of startup funding you need and how you determined this?
Risk Factors (8/10%). OK.
TOTAL: 82