You have now seen a real business plan. And we've also discussed the advantages and disadvantages of the Ruby Cub business plan. Now what I would like to do is to welcome back Ted Ladd, adjunct professor from the Hult Business School in San Francisco, to talk to us a little bit what he considers to be the four key elements of a business plan. Ted, please tell us, what does a business plan have to contain from your point of view, and how do you think the participants of this MOOC should be using different scenarios to plan ahead? So my first suggestion in contemplating a business plan is actually a warning. Don't write the business plan too early. You need to have outlined a business model and gone out to speak with, get outside the building, and go talk to prospective customers to test each of the different pieces of the business model, to ensure that this is actually a valid business model. If you have an invalid business model or even an untested business model, don't go on to then provide more detail on how you'd execute it. That's, that's not a good use of time. So let's assume that you have a valid, validated business model. And therefore you want to start to add some content to it. A good business plan has four different sections. Financial projections, staffing projections, who is actually going to be on the team. Some marketing projections. How are you going to reach people and bring them in. And then some operations projections. How are you going to actually produce the good, or the service, and get it to the peop-, to the customers? For each of those four different pieces, obviously they're going to involve both numbers and descriptions. So, the financial plan isn't just numbers. You need to explain where the revenues are coming from, where the costs are coming from. They're all tied together, right? The staffing plans, who you're going to hire then flows into the financial plans, which flows into how much money you're going to have, and, therefore, how much you're going to have to charge, and how much you can spend on marketing and how much you need for your sales process. So all four of these different pieces are interrelated, and all four of them rely on numbers and narrative. For each of those four pieces, I recommend that you have the first, the base line. Here's what we think is going to happen. Here are our projections as we think this will unfold, and here's what-, how we will react. Here's what we will do with our own actions and our own money to implement this particular business model and to bring it to customers. You could also put in another scenario there. If things go incredibly well, here's the vision that we have for expanding even farther. This our dream. Here's the operational plan for what we will do if this is wildly successful. At the same time, you need to have a scenario that goes the other way. If things, if the demand for this product, or if the cost, is underwhelming. Or if the costs are higher than expected. Or if the marketing is more expensive. What is the, the, the worst case scenario? And when you're doing the worst case scenario, you also need to draw a line in the sand for yourself, where if you actually implement this business, and you follow this business plan, and you are worse in your, than your worst case scenario projections are, you need to have the self-discipline to stop, or at least to envision a major change to what you're doing. So, four different pieces: financial, staffing, marketing, operations, and for each of those four different pieces a baseline case, what you think is going to happen, a best case, which has some grand dreams, and then a worst case scenario. And those pieces together will form a detailed business plan.
