In 2016, VC-backed startups raised $100.8bn in about 8300 deals worldwide. How did these companies (the startups and the investors) find each other? The traditional approach is both expensive and inefficient. Our matching platform has been set up to facilitate the overall process.
Investaura Management Consultants is pleased to announce the publication of its new book on Business Planning for Managers and Entrepreneurs (ISBN 978-3-9813734-2-4), written by Pierre A. Lurin, a Managing Partner at Investaura. The paperback edition complements the hardback edition first published in 2010, which has been updated and improved. Apart from the new cover, the book addresses a wider audience and includes a foreward where the author shares his recent experience acquired over the period 2010-2014, as well as personal insight on current and future trends. An accompanying eBook (ISBN 978-3-9813734-4-8) also complements the paperback version.
The book is available on Amazon worldwide, including:
- Amazon USA
- Amazon Canada
- Amazon UK
- Amazon Germany
- Amazon France
- Amazon Italy
- Amazon Spain
- Amazon Japan
as well as many other bookshops. Enjoy!
Finding a good business plan template in Excel format can be really hard, for the following reasons:
You need the right level of detail. More often than not, the templates provided by others (your corporate HQs, your boss, you name it) are much too detailed – if you work for a large company, you know what I mean. In those horrible templates, you really wonder who might ever read the hundreds and thousands of rows that try to forecast what could happen 10 years down the road….
If you are looking at an existing business, the financial projections should also take the recent past into account. Too often, the templates don’t seem to care about what happened in the last couple of years. If you haven’t analysed the recent performance of the company, how can you pretend that your 7-10 year forecast is realistic?
Forecasting ‘costs’ is hard, but forecasting ‘markets’ and ‘revenues’ is really a lot harder. One way to address this challenge is to forecast the market in two different manners: by regions / countries on one hand, and by product lines / products on the other hand. And then reconcile them so that the two projections are aligned.
Finally, the financial plan must look good. Not only it must support the story that you are trying to sell (to your management, or to investors), but it must also be visually appealing.
In the ICT industry, there are quite a lot of software and service businesses (as well as hardware, for sure), with the added charm that gross margins can be (very) high, and working capital requirements low (who doesn’t love prepayments or annual software / service fees paid upfront?). So we have reflected these salient features of the ICT industry in the template below. Business Planning Template PDF (9324 downloads)
Enjoy the template in PDF format! If you want a copy of the business plan in Excel, provided by Investaura Management Consultants, you need to register for the ‘Business Plan templates‘ package on the web side. Beside this template, the package also provide a Business Plan in Excel specifically for Telecoms operators (service providers). Check our various packages here.
For those of you who don’t have the time and money to go to business school, don’t worry! You can learn Strategy by reading books and putting the lessons learned into practice.
Three business school professors have travelled through the USA visiting SMEs and small business owners to uncover how they run their business and put strategy into action (http://www.roadside-mba.com/).
Roadside MBA: Back Road Lessons for Entrepreneurs, Executive, and Small Business Owners
written by Michael Mazzeo (Northwestern University’s Kellogg School of Management), Paul Oyer (Stanford University’s Graduate School of Business) and Scott Schaefer (University of Utah’s David Eccles School of Business). The book covers the following contents:
- Scaling a business
- Establishing barriers to entry
- Product differentiation
- Setting prices
- Managing your brand
- Negotiating effectively
- Incentive for employees
- Battling the big boys
- Strategy is a continuous process
You will also discover a new law of business, called ‘Mazzeo’s law’:
Mazzeor’s law : The answer to every strategic question is “It depends”.
Corollary 1: The trick is knowing what it depends on.
Corollary 2: If the answer to a question isn’t “It depends”, then it’s not a strategic question.
You’ll find the book on Amazon UK, as well as many other bookshops.
We love what Sequoia Capital says about Business Plan. The original can be found on their web site, but we are pleased to reproduce it below:
We like business plans that present a lot of information in as few words as possible. The following business plan format, within 15–20 slides, is all that’s needed.
Define the company/business in a single declarative sentence.
Describe the pain of the customer (or the customer’s customer).
Outline how the customer addresses the issue today.
Demonstrate your company’s value proposition to make the customer’s life better.
Show where your product physically sits.
Provide use cases.
Set-up the historical evolution of your category.
Define recent trends that make your solution possible.
Identify/profile the customer you cater to.
Calculate the TAM (top down), SAM (bottoms up) and SOM.
List competitive advantages.
Product line-up (form factor, functionality, features, architecture, intellectual property)
Average account size and/or lifetime value
Sales & distribution model
Founders & Management
Board of Directors/Board of Advisors
There are 4 main categories of financial ratios and KPIs used by financial practitioners, each addressing a specific question:
Question 1: “Is the business profitable?” -> Profitability ratios, calculated from the P&L (e.g. Gross margin, EBITDA margin, EBIT margin)
Question 2: “Is the business liquid in the short term?” -> Liquitidity ratios, calculated from the Balance Sheet (e.g. current ratio, liquid ratio, cash ratio)
Question 3: “Is the business financially stable in the long term?” –> Stability ratios, calculated from the Balance Sheet (e.g. debt-to-equity ratio, gearing, debt cover ratio)
Question 4: “Is profitability high enough compared to what we have invested?” –> Capital Efficiency ratios (e.g. ROE taking an ‘equity’ perspective; ROIC taking an ‘entity’ point of view).
In additional, practitioners often undertake a Cost Structure Analysis, as well as a Working Capital Analysis (e.g. receivables days, inventory days, payable days).
This analysis is not hard when you understand the meaning of these ratios, and how to calculate them. To help you get started, Investaura Management Consultants is pleased to provide you with this Financial Ratio Analysis template.
You need to register for free as a ‘Discovery’ member on this web site to download the Financial Ratio analysis template (more than 7500 downloads). Go to the registration page.
Recently we came across Telektronikk.
Telektronikk was the international data and telecommunications journal of the Telenor Group, presenting research, analyses and updates on industry challenges to experts, students and other readers from all over the world. Each issue was dedicated to a specific theme. Telektronikk was discontinued in 2010 after 106 years of publication. Which is a pity, because Telektronikk published great stuff. Like this publication on Telecommunications Forecasting (1685 downloads) .
Business planning and costing don’t have to be complicated. They aren’t! Investaura is pleased to provide you with this simple Excel template to help you get started.
Jean-Francois Gallouin, Professeur at Ecole Centrale Paris, one of the French ‘Grandes Ecoles’, talks about how different start-ups and large groups can be, and why they need each other. (in French)
When you pitch to VCs, the primarily product that you are selling is: YOU!
Even more important than the business idea, VCs are investing in people: YOU and your team. So in a very short period of time, YOU have to make them like YOU. They have to be confident that YOU bring the following characteristics:
- Integrity (‘Can we trust you with our money?’)
- Passion (‘Are you ready to leave what you currently do? put your days, nights and week-ends into the new business?’)
- Experience (‘Have you done something similar before?’)
- Knowledge (‘Do you have domain expertise?’)
- Skills (‘Do you have the skill to run the business, technically, commercially etc?’)
- Leadership (‘Do you have a team? If you don’t have the skills, can you find people who are ready to follow you?’)
- Commitment (‘Will you be there until the end?’)
- Vision (‘How will you change the world?’)
- Realism (‘Do you understand how tough it is to change the world?’)
- Coachability (‘Can you listen and learn from the experience of others?’)
Here is the video:
If you ever thought that you understood what Competition and Strategy are about, then think otherwise.
Understanding Michael Porter: the Essential Guide to Competition and Strategy
written by Joan Magretta, and published by HBR Press (2012), is the best book we have ever read on the topic, and most likely the best ever written.
It is a very, very good summary of Michael Porter’s work and contains many real-life examples (IKEA, Dell, Zara, Southwest Airlines, to name a few). And above all the book is very enjoyable and easy to read. If you have not done so already, then buy it and read it! You will gain a competitive advantage over those in the industry who have not read it so far.
In particular, you will learn that:
- “Competition is about profit, not market share. There is no honor in size or growth if those are profitless.
- Vying to be the best is an intuitive but self-destructive approach to competition. Competitive advantage is not about beating rivals; it’s about creating unique value for customers. If you have a competitive advantage, it will show up in your P&L.
- A distinctive value proposition will translate into a meaningful strategy only if the best set of activities to deliver it is different from the activities performed by rivals. Competitive advantage lies in the activities, in choosing to perform activities differently or to perform different activities from rivals.
- No strategy is meaningful unless it makes clear what the company will NOT do. Making trade-offs is the linchpin that makes competitive advantage possible and sustainable.
- Good strategies depend on many choices, not one, and on the connections among them. A core competence alone will rarely produce a sustainable competitive advantage.”
Thanks Joan for writing this fantastic book. You’ll find the book on Amazon UK, as well as many other bookshops.
If you are planning to launch a start-up, you need to put yourself into shape. Learn from Rocky Balboa what it takes:
- you need to believe in yourself, and believe that you will succeed – whatever everybody else (friend or foe) is telling you
- you need to recognise the opportunity when you see it – and this is unlikely to be the first opportunity that crosses your way
- you are going to be scared but that’s normal – get on with it!
- you need to get started – stop the day-dreaming of becoming a champion: get moving!
- you need to train, fight and become the best – you are unlikely to be the best when you start
- you need to accept set-backs, learn from them, and get back onto the stage – you learn more from your failures than from your successes
- you need endurance and build it up step by step, day by day, week by week – you won’t make much progress on a single day, but over months and years, you will be miles away from where you started
- you need to make sacrifice when you have to – you can’t have it all at once
- you need to enjoy success when you win!
Watch this video of Rocky and get started now!
A great financial planning template is provided on Harvard Business Online, the web site of Harvard Business School Publishing. Click here to download the Excel template. Or click there to explore other free online tools from Harvard ManageMentor®.
If you need other templates, in particular telecoms specific ones, feel free to contact us.
For those of you who are either new to financial statements, or want to learn how to read financial statements like Waren Buffett does, and better understand “what he saw”, there is this fantastic easy-to-read little book:
Warren Buffett and the Interpretation of Financial Statements: The search for the Company with a Durable Competitive Advantage
from Simon & Schuster. Check it on Amazon.
Forget P/E ratios when buying stocks! This book invites you to put your focus on what really matters: Gross Margin; SG&A; EBIT Margin; Earnings / Price ratio; Fixed assets; R&D expenses; Retained earnings and growth in Retained earnings; Debt; Return on Equity; Return on Assets.
Interestingly you will also learn why Warren does like high-tech firms – they have to spend huge amounts of money on R&D to keep their competitive advantage; and even then, their durable advantage might wear out. Think of Nokia and how its market capitalisation went down from USD 78bn in early 2006 to USD 7bn in July 2012 (-90%). Warren does not like that, and the book explains why these stocks are not the right ones to become mega-rich over the long term. And why buy stocks if you don’t want to become rich?
Even more important, you will learn how Warren looks at a share as an ‘equity bond’ i.e. its pre-tax earnings (equivalent to the bond coupon / interest payment), the historical growth of earnings and their relation to the current share price. When Warren bought Coca-Cola in the late 80s at USD 6.5 a share, he bought shares in a company that was essentially generating a pre-tax earning of 11% on his USD 6.5 investment, and had been growing its earnings at an annual rate of 15% historically. 20 years later, Coca-Cola generates an EBIT per share of more than USD 4, so the company is paying Warren a pre-tax yield of 60% (post-tax 40%) on his initial investment. Do you know a bond that increases its coupon from 11% to 60% over 20 years?
Whatever the current stock market price of Coca-Cola is, the Coca-Cola ‘equity bond’ was a fantastic investment for Warren. And whatever the ups and downs on the stock market, the market eventually recognises this kind of performance and increases the price of the shares to a level that reflects their true value. And the value of a Coca-Cola share is around USD 76 in mid-July 2012…
Thinking about launching a new business? Then there is one book not to be missed:
Entrepreneur’s Tookit: Tools and Techniques to Launch and Grow Your New Business
from Harvard Business School Press. In this book, you will learn the following:
- Self-Diagnosis: Do you have the right stuff to start a business?
- Finding and Evaluating the Opportunity: Is it real and large enough?
- Organizing the Entreprise: Which form is best for you?
- Building a Business Model and Strategy: How they work together
- Writing a Business Plan: The basics
- Financing the Business: Where’s the money?
- Angels and Venture Capitalists: For serious outside equity
- Going Public: Adventures in the capital markets
- Entreprise Growth: The challenge to management
- Keeping the Entrepreneurial Spirit Alive: The ultimate challenge of success
- Harvert Time: Reaping what you have sown
This book is a must read for any new entrepreneur. You can buy it on Amazon.
Last but not least, there is a collection of business tools available on the Harvard Business Essentials companion web site, included a pro-forma financial plan template. Get your own copy!
For our French readers in Europe, Canada, Africa and the rest of the world: there is a fantastic guide on startups for entrepreneurs, published by Olivier Ezratty, a freelance consultant, university guest speaker and ex-Microsoft manager – and also graduate of Ecole Centrale Paris, the French ‘Grande Ecole’.
The guide, now in its 16th edition, is a must-read for those who want to set up a start-up in France, or elsewhere.
It is free and can be downloaded from Olivier’s web site.
Serial entrepreneurs are a great source of knowledge for all those who want to create successful and lasting businesses, whether small or large.
And the best thing about it is that their advice is available for free. Take a look at It’s called fishing not catching, a web site maintained by Ben T Smith IV. Ben is an Advisor to, investor in, and founder of technology and media companies.
Enjoy the tips and insight!
Watch “A Day Made of Glass” and take a look at Corning’s vision for the future with specialty glass at the heart of it.
Sometimes, business plans need to take a really long-term perspective.
Remember 20 years ago? This was the year 1992. Windows 95 had not made its big bang yet, and we were still batling with Windows 3.1 – unless you had a Mac at that time. When you think about it: Windows 95 is about 15 years old only!
20 years is not such a long period of time, but a lot of things have happened since then in the IT, telecom and consumer electronics space:
- the mobile explosion, SMS, the Internet boom, smart phones, UMTS, 4G
- the DVD, the iPod, digital TV, HD TV, the iPad
Some stuff are really difficult to forecast over a period of 20 years. But others are not. For example population growth and shift in demand and supply across main world regions.
Large companies do this kind of exercices. OK, maybe not with a 20 years horizon, but 5-10 years instead. But you get the idea.
If you want to know what the world will be like in 2030, there is a fantastic research document called The Trend Compendium 2030 provided by the German Consultancy Roland Berger. Enjoy!