Participation Requirements

All entrants are required:

To register online and submit the required release forms;
To submit all documents and materials by the stated deadlines;
To participate in the workshops;
To have the leadership and majority of team members be members of the Laurier community;
To respond to requests made by the organizing team in a timely matter;
To attend all competition events and the final event. Those teams that are not able to present at the allotted date and time will be disqualified.

Those selected as finalists are required to make a presentation to a panel of judges and to attend the awards ceremony and reception showcase. Details will be communicated directly to the teams at the appropriate time.

For the purposes of this competition, students enrolled in double degree programs between UW and WLU are considered to be a student of the institution at which their registration is held.

Eligibility for Participation

The registration process requires entrants to provide information about their team, as the formation of well-rounded teams is important to increase the probability of success for the venture. A team is defined as having both:

“Principal(s)” – the individual(s) with an ownership (of the project) or position in the company; and
“Extended Team Members” – the individual(s) fulfilling specific role(s) but who do not have an ownership position.

The inclusion of Laurier students, staff and/or faculty on the team is required to fulfill the developmental objectives of the competition.

A “student” is defined as any person registered in an undergraduate or graduate degree program at Wilfrid Laurier University. For the purposes of this competition, students enrolled in double degree programs between UW and WLU are considered a student of the institution at which their registration is held.

Eligibility of Plans

Ideas/concepts and the corresponding plans submitted must be the original work of the entrants.

While teams are required to submit written plans/material, the competition is about the commercial merit of the proposed venture. The judging panel will focus on the idea, its potential for economic success, and the likelihood of achieving that success based upon the team’s plan, experience, and progress to date. The plan must cover the whole business concept and implementation for a seed/start-up venture or for the expansion of an existing enterprise.

Please Note: The judging panel reserves the right to disqualify any entry that, in its judgment, violates the letter of these guidelines or the spirit of the competition.

Judging

A panel of judges from the venture community, including entrepreneurs, venture capitalists, and experienced professionals will read the entries and attend the presentations. (the Sustainable Hawk Fund is judged differently – please see web site)

Each judge has developed his/her own “mental model” by which they will evaluate the entries. This is generally the same model they use on a day-to-day basis as professionals. The following ten questions provide a common denominator for evaluation criteria considered by each of the judges. These criteria are commonly used by private investors, corporate managers and venture capitalists in evaluating the attractiveness of new venture opportunities.

Is the business opportunity, as presented, both highly attractive and clearly realistic?
Do the market and financial projections demonstrate that the team understands its business?
Is the plan clear and well-written?
Can this venture achieve a leadership position in the market?
Has the team gone out to the market already to test its ideas?
Is the team of sufficient breadth, balance, and quality to make its ideas happen?
Will the ego of the founder(s) get in the way of success?
Does the team have the necessary communications skills to present a compelling story?
Are the team members dedicated to the venture and their roles in the group?
Does the team have a clear plan for spending the investment money it receives?
Is this business going to be around in 5 years?

All decisions of the judging panel are final.

Legal Considerations

Intellectual Property Rights for Entrepreneurs

Intellectual property rights are an extremely important issue for the entrepreneur. Concepts, ideas, inventions must be protected in order to develop and maintain competitive advantages in the marketplace. Please refer to the Canadian Intellectual Property Office for more information – http://strategis.ic.gc.ca/sc_mrksv/cipo/welcome/welcom-e.html

Confidentiality

All competition judges, mentors, and organizers with access to the entries agree verbally to respect the confidentiality of competition participants. The judges and mentors are mostly professionals who regularly deal with confidential information in the course of their work. We have asked them to treat your work with the same care and respect for confidentiality. We also ask them to remove themselves from participating if they have a conflict of interest.

Resources

The following resources are provided for reference only, as a compliment to the current Business Model Canvas framework, as they may be helpful in guiding your thinking as you develop your plan.
Business Plan Outline

This is a recommended structure for a business plan from New Venture Creation: Entrepreneurship for the 21 ^st Century by Jeffry Timmons and Stephen Spinelli.

1 Executive Summary
- 1 Description of the Business Concept and the Business
- 2 Opportunity and Strategy
- 3 Target Market and Projections
- 4 Costs
- 5 Competitive Advantages
- 6 Economics, Profitability, & Harvest Potential
- 7 The Team
- 8 The Offering

2 The Industry and the Company and its Product(s) or Service(s)
- 1 The Industry
- 2 The Company and Concept
- 3 The Product(s) or Service(s)
- 4 Entry and Growth Strategy

3 Market Research and Analysis
- 1 Customers
- 2 Market Size and Trends
- 3 Competition and Competitive Edges
- 4 Estimated Market Share and Sales
- 5 Ongoing Market Evaluation

4 The Economics of the Business
- 1 Gross and Operating Margins
- 2 Profit Potential and Durability
- 3 Fixed, Variable, and Semi-variable Costs
- 4 Months to Breakeven
- 5 Months to Reach Positive Cash Flow

5 Marketing Plan
- 1 Overall Marketing Strategy
- 2 Pricing
- 3 Sales Tactics
- 4 Service and Warranty Policies
- 5 Advertising and Promotion
- 6 Distribution

6 Design and Development Plans
- 1 Development Status and Tasks
- 2 Difficulties and Risks
- 3 Product Improvement & New Products
- 4 Costs
- 5 Proprietary Issues

7 Manufacturing and Operations Plan
- 1 Operating Cycle
- 2 Geographical Location
- 3 Facilities and Improvements
- 4 Strategy and Plans
- 5 Regulatory and Legal Issues

8 Management Team
- 1 Organization
- 2 Key Management Personnel
- 3 Management Compensation & Ownership
- 4 Other Investors
- 5 Employment & Other Agreements & Stock Option & Bonus Plans
- 6 Board of Directors
- 7 Other Shareholders, Rights & Restrictions
- 8 Supporting Professional Advisors & Services

9 Overall Schedule

10 Critical Risks, Problems, & Assumptions

11 The Financial Plan
- 1 Actual Income Statements & Balance Sheets
- 2 Pro Forma Income Statements
- 3 Pro Forma Balance Sheets
- 4 Pro Forma Cash Flow Analysis
- 5 Breakeven Chart and Calculation
- 6 Cost Control
- 7 Highlights

12 Proposed Company Offering
- 1 Desired Financing
- 2 Offering
- 3 Capitalization
- 4 Use of Funds
- 5 Investors Returns

13 Appendices

Business Analysis Frameworks

There are several business analysis frameworks that have been developed to analyze and evaluate existing and new industries/markets/products. Although it is not necessary to incorporate these frameworks into your business plan, you can use these frameworks to think through answers to some of the strategic questions that the readers of your business plan may ask you.

Porter’s 5 Forces

This framework is used primarily to evaluate the attractiveness of an entire industry based on its structure. As might be expected, industries which face significant threats, lack pricing power and/or face rivalry, have significantly lower profitability than those industries which do not. Porter’s 5 Forces can also be used to evaluate your individual firm based on its ability to exploit the industry structure better than its rivals. The 5 Forces are:

Rivalry among Competitors: Increasing competitive intensity amongst your competitors will lead to lower profit margins and/or lower market share (sales revenue) and consequently to lower profitability.

Supplier Power: The more ‘power’ your suppliers have over you, the more they are able to charge you, thus increasing your costs and decreasing your profitability and flexibility.

Buyer Power: The more ‘power’ your buyers have over you, the less they are willing to pay for your products, thus reducing profitability.

Threat of Substitutes: The higher the likelihood that your customers may switch to substitute products or services (those that are not currently competing with your product), the less you are able to charge them, thus reducing your profitability.

New Entrants: The fewer barriers there are to enter a market, the more likely are new competitors to enter your market and steal market share (sales revenue) and/or reduce profit margins. Just the threat of entrance (rather than the actual entry) can lead to declining profitability because the fear of making your company’s market space too attractive to new competitors.

Although Porter’s 5 Forces gives a static snapshot of how attractive an industry looks (a predictor of how profitable is the average firm in the industry), entrepreneurs generally focus on the more dynamic interactions between the industry structure and their own organization (a predictor of how profitable a specific firm is in the industry).

In developing your business plan you should think through the following questions:

How can my company exploit the current industry structure better than its rivals?
How can my company adapt to imminent changes in the industry structure better than rivals?
How can my company change the industry structure to its benefit?
How long can my company sustain such an advantage over its competitors?

Rivalry Increases with:

Industry growth
High fixed costs and low variable costs
High value added
Intermittent over-capacity
Low product differentiation
Low brand recognition
Low switching costs (all the incremental costs that are incurred by the customer in switching or changing suppliers)
Number of competitors
Corporate stakes
High fixed costs or highly specialized assets
High barriers to exit (the cost of exiting an industry, e.g. While most U.S. Airlines lost hundreds of millions of dollars in the late eighties, very few actually exited the industry until they ran out of cash. Even after bankruptcy, many returned to the industry because the cost of shutting down and selling all the planes and laying-off people was greater than annual recurring losses.)

Supplier Power Increases with:

Differentiation in inputs
Importance of supplier’s product/service in cost
Structure of industry
Lower switching costs of suppliers
Higher impact of inputs on cost or differentiation
Lower number of substitute inputs
Higher threat of forward integration (willingness to merge with buyers of their product, e.g. Intel used to sell its chips to motherboard makers and now has started building motherboards itself)
Lower importance of volume to suppliers
Lower supplier concentration

Buyer Power Increases with:

Bargaining leverage
Buyer concentration, small number of buyers
Low buyer switching costs
Buyer information
Buyer ability to integrate backward
Availability of substitute products
High price elasticity (sensitivity to price)
Low product differentiation
High brand recognition of buyers products
Low impact on buyer’s product quality
Decision makers incentive

Threat of Substitute Increases with:

Relative performance of substitutes
Lower switching costs (all the incremental costs that are incurred by the buyer to switch to substitute products e.g. The cost for a car owner to move from gasoline to diesel)
Higher buyer propensity to substitute

Barriers to Entry Increase with:

Economies of scale
Proprietary product differences
Brand recognition
High switching costs for customers
Capital requirements
Difficulty to access distribution channels
Absolute cost advantage for incumbents
- Learning curve advantages (as companies accumulate experience in providing products/services, their costs decrease as they ‘learn’ experientially what is the most cost effective way of providing these products/services)
- Access to necessary inputs
Proprietary low-cost design
Government regulation, restrictions on entry
Expected retaliation

The 3C’s of Business Strategy

Customer – Economic value to the customer

Individual

Who is the customer
Perceptions
Loyalty
Volume
Switching Costs
Profitability of Customer
Preference
Purchase Behaviour
Usage

Market

Size
Growth
Segmentation
Shares
Maturity
Trends

Product

Price
Differentiation
Life-Cycle
Technology
Substitutes

Company – Evaluate the organization

Economics

Costs
Profitability
Capacity to develop product
Capacity to produce product
Breakeven analysis
Experience curve
Financials
Channels
Organizational structure
Intangibles

Fit

Strategy and vision
Strengths/weaknesses
Culture
Resources
Organizational structure
Brand Equity
Incentives
Core Competencies/capabilities

Competition – Evaluate the competitive forces in the industry

Competitor Analysis

Size, number of competitors, market share
Competitor responses
Current strategy
Strategic value of product and commitment to product
Corporate goals
Core Competencies/Capabilities
Economics of Scale/Scope
Cost structure
Experience curve
Resources; financial, channels, organization, intangibles (brand loyalty, culture)
Relative product positioning
Substitutes
Expected response to competitive moves

In developing your business plan you should think through the following questions:

Customers

Who are my company’s potential customers? Why would they want to buy our products/services?
Can these customers be segmented into smaller identifiable groups? What are their characteristics? Should we treat some segments of customers differently?
How large is the market for our products/services? How fast will the market grow? How much of the market can we capture?
How much can we charge for our products/services (or how much will our customers be willing to pay)?

Company

What will be the cost of providing (invested capital, manufacturing costs, distributing costs, after-sales service costs, basically all costs) our products/services? How much must we sell before we make money? What characteristics of the product or service will reduce ongoing support costs?
What are the capabilities/competencies critical to succeeding in our industry? What is our competitive advantage and why is it sustainable?

Competitors

Who are our competitors? What are their products? What are their strategies? What are their capabilities? What are their costs? What will be their competitive response to our entry into their market? Can we survive their reaction to our entry into their market?

The 4P’s of Marketing

Product:

Must fit within positioning decision and market segmentation (e.g. high end vs. low end; customer; industry)
Differentiation vs. commodity
Features and capabilities
Reliability, quality, brand name, reputation
Packaging, size
Service, warranties
Future strategy for the product

Placement (Distribution):

Channel – decision based on product specifics, level of control desired and margins desired
Coverage – tradeoff between coverage levels and costs
Inventory – levels, turnover, carrying costs
Transportation – alternatives, efficiencies, costs

Price:

Consider both retail price and discounts
Pricing strategy (e.g. Marginal Cost = Marginal Revenue; Skim = high price, make profits now; Penetration = low price, gain market share)
Seek volume or profits
Perceived value, cost plus margin pricing
How does price relate to the market, size, product life-cycle, competition
Economic incentives to channel (commissions, margin)
Establish barriers to entry

Promotion:

The Buying Process
- Consumer awareness of the product
- Interest for the product
- Trial
- Repurchase
- Loyalty

Select Sales Method
- Pull (e.g. Advertising)
- Push (e.g. Discount to distributor)
Five categories of promotional methods
- Advertising: medium, reach (share of target market reached) and frequency (number of times reached)
- Personal Selling (when direct contact with customer is needed)
- Sales Promotion
- Incentives to consumer (e.g. Coupons, refunds, samples, premiums, contests)
- Sales force and Channel member incentives (e.g. Sales contests, point of purchase displays, spiffs (payments to dealers), trade shows, franchise reputation, in-store demonstrations)
- Public Relations and Publicity
Direct Sales