My name is Lindsay Cross and I am a current MBA student at the Richard Ivey School of Business. Our team recently competed in
The 10th annual IBK Capital-Ivey Business Plan Competition . We presented our new venture, Seguin Air, which is a unique flight chartering service which will be based in Southern Ontario. Here is my day-by-day blog of creating a business plan that could stand up to the competition.
Monday, March 24
My name is Lindsay Cross and I am a current MBA student at the Richard Ivey School of Business. Originally from Aurora, Ontario for the past seven years I have lived in Vancouver where I attended the University of British Columbia and completed an undergrad degree in Human Kinetics. Upon graduation I remained in Vancouver and worked for a small marketing and communication company allowing me to gain valuable experience before applying to school to complete my MBA. This is my first submission to my weeklong blog which will follow myself and my team, Adam Ditkofsky, Jill Newsome, Kevin Halmos and Scott Robertson, through our involvement in the
The 10th annual IBK Capital-Ivey Business Plan Competition . We will be presenting our new venture, Seguin Air, which is a unique flight chartering service which will be based in Southern Ontario.
The IBK/ Ivey Business Plan Competition began in January with the invitation for MBA students from across Canada to submit their business plans for review. With over 30 submissions, we were excited to learn that we had been selected as a Top 10 finalist to compete for the final prize of $25,000 All ten finalists have been invited to attend a two day competition being held at the Richard Ivey School of Business, University of Western Ontario on March 28th-29th. The competition is the largest student-run graduate business plan competition in Canada. Judges have been selected from Canada's top venture capital, private and corporate firms.
Over the past three months, we have worked extremely hard to develop and evolve our original idea into a business plan. Growing up in an aviation family, I was exposed to small planes at a very young age. When I was 16 years old I began working towards my Private Pilot's license. Since obtaining my designation, I continue to enjoy flying and try to make time to fly with my father and brother whenever I can. The convenience that flying offers has been a privilege that I have enjoyed throughout my life. The idea discussion began in September when myself and some friends had made plans to go to Muskoka for the weekend. We all left school planning to meet at the cottage in 5 hours, the approximate time it would take to drive from London to Muskoka. As Jill and I drove out to the London airport (15 mins from our house) we couldn't help but feel guilty that we planned to fly with my father in our small plane, land on the lake and be at the dock in an hour! Once we all arrived (and they realized how we got there) we spoke about how great the convenience was of flying and how frustrating it is sitting in traffic. After a conversation with my father, we began to write the Seguin Air business plan.
The general concept behind Seguin Air is that it is a flying service that will provide the flexibility for individuals to tailor their travel itinerary needs and will specifically target the Toronto to Cottage Country traveler. Additionally, Seguin Air will offer sightseeing tours allowing customers the opportunity to experience a beautiful bird's eye view of the Muskoka's.
The aviation industry has become consolidated as the two major players in Canada, Air Canada and Westjet, share the Canadian market. However, there are still large opportunities in the Canadian charter business. It is through segmenting the chartering industry and focusing on a niche market that the aviation industry can be made profitable. Individuals seek the convenience and comfort that a flight service can offer. Customization of air service for this market allows small airlines to build a sound market share and avoid competition with the large key players. Customized affordable air service allows people the opportunity to avoid hassles at airports, eliminates lost baggage, reduces waiting times, and provides a comfortable and efficient means of travel. Seguin Air has discovered a small niche market in the Muskoka, Toronto and the Greater Toronto area. The services Seguin Air will offer will target the needs associated with convenience travel to Ontario cottage country, provide special corporate golf packages from Toronto to the Muskoka area and supply thrilling sightseeing tours around Northern Ontario. It is through concentrating all business efforts on a specific target population that Seguin Air will successfully meet the needs of the market and provide investor profitability.
The Seguin Air team will be working hard this week in preparation for the tough competition that we will be facing this weekend. The competition has brought together very talented individuals from across Canada with quite diverse new venture ideas. We look forward to the week and the challenge ahead.
Wednesday, March 26
It's Wednesday night and we are continuing to finalize our presentation for the competition. After meeting with our faculty advisor, Paul McKnight, to discuss our progress we have realized there are a number of areas that we had overlooked and need to focus more attention on. As Paul began his questions, we became frightened and a little nervous about how much work laid ahead of us. We have a lot more details to cover such as finalizing our load factor breakeven numbers and making it more clear how we plan to make a profitable idea more attractive to potential investors.
The aviation industry is a tough industry and there have been many small start-ups that have not made it. However, there are also many success stories. Wardair, which began as a small charter service in 1953 in Yukon and the Northwest Territories, was a very successful business before being purchased by Canadian Airlines in 1989. This company was able to be profitable by offering reliable, quality service at a lower price. Additionally, Wardair began by targeting a small market and growing over time. Westjet has also been a success story. We feel that by focusing on a very niche market, Southern Ontario, we can make Seguin Air profitable by catering to the needs of these individuals. Specifically we plan to offer services that will provide flexibility for our customers to tailor their travel itineraries. Seguin Air will offer charter services for those individuals who want to get to their destination without any hassles. We also believe that the proposed location of the service, Gravenhurst Bay at the Muskoka Wharf, will generate interest from the tourists to the area as well as the cottage and local residents. Recently, the Gravenhurst Bay on Lake Muskoka has undergone a transformation with a large amount of development which will drive more traffic to the area. Seguin Air hopes to capitalize on this by offering sightseeing tours to cater to the tourist market needs.
Over the past few days, a number of people have offered their advice to us for the competition. Generally, it has been recommended that we need to recognize at the very beginning of our presentation the downfalls of the aviation industry that exist and how we are going to address these. We plan to do this upfront by immediately presenting our breakeven numbers, our projected revenues and how we hope to achieve these. We have had a lot of positive feedback on our idea from various students, faculty and friends. However, we know it is going to be tough to sell an aviation start-up to the judges. We continue to build our financial models and become comfortable with our numbers. We have also reached out to contacts within the industry in order to get their advice.
My brother, Michael Cross, is currently working as an Air Ambulance Pilot in Sault St. Marie and has been a great asset to our project. He has offered his insight into areas such as how many hours we can expect to fly, specifics on the Transport Canada Regulations we must abide by when establishing an operating certificate and general information on employing pilots and staff. We have come to realize there are a lot of details that must be reviewed when starting a charter service. The regulations, as set by Transport Canada, are very rigorous (which is a good thing) and as a result it is important to cover all areas now before the business develops. Seguin Air will fly a number of different aircraft on one operating certificate which means the staff (including pilots) must be approved to operate all aircraft. We are learning that maintenance is a huge consideration that must be taken into account not only in the financials, but in scheduling as an aircraft will be out of service during its routine inspections. When developing the business plan we must take this into account and how we plan to reduce the negative impact that having a plane in for maintenance will have on the bottom line. In addition to my brother, my father, an entrepreneur himself, has helped us along the way with some valuable advice from his past business experiences. He has supported us in continuing to look for creative ways to attack the issues we have been facing. I know there has been a few tense moments between the team many hours have been spent developing a financial model only to realize the numbers we are looking for will not be achieved. Having to constantly revise our predictions can be frustrating. As well there have been times where we lay out a plan only to realize there is a Transport Canada Regulation we weren't aware of. With some creative thinking, and knowledge from my dad, we have managed to get through these challenges. Overall the experience has made me realize the importance of reaching out to external contacts and mentors to learn as much as possible from their experiences. It is easy to build a business plan, but to actually realize the potential can only come from speaking with industry professionals who have seen it first hand.
Today was a long day, but we seem to be making some good progress. Between juggling our regular courses and preparing for this competition, I think we are all beginning to feel the pressure! However, the hope of reaching our ultimate goal of the $25,000 prize has kept us going. I think for each of us the money will be spent differently, but being recognized as the 2008 IBK Business Plan Competition Winner represents a lot more than anything the money will buy. Well, except for the trip I plan to take to New York City to visit my best friend……..
We lost Jill today as she boarded a plane to Spain to compete in another business plan competition! Her contributions will be missed.
Thursday, March 27
Another long day. Between 6 hours of class (and close to that in class prep time), we have managed to meet to go over some final details. I think we are all starting to feel nervous and excited as the competition begins tomorrow morning. Our slide show presentation is almost finalized, however we are finding the tough part now is trying to prepare for the question session that immediately follows our presentation to the judges. We have 15 mins to present and then 20 mins of Q&A. We feel this is where we need to shine in order to prove to the judges that we have done our homework and we are serious about our idea.
After speaking to my brother today, he suggested that one area we should strengthen is how we are going to manage the many risks associated with operating aircraft as a commercial service. He identified some risks such as weather issues, boat traffic, noise complaints, safety and plane maintenance scheduling. The most unpredictable risk is the weather which could have detrimental effects on our business. When we were calculating our projected hours of flying we did account for the "no fly" days due to poor weather, however it is impossible to accurately predict these. There are two types of flight rules that relate to the weather conditions in which it is legal to fly in. Instrument Flight Rules (IFR) refers to a set of flight regulations whereby navigation is in reference to instruments only. Visual Flight Rules (VFR) differs as the pilot is responsible for navigation and obstacle avoidance. As we are learning, the two types of regulations not only apply to the type of license the pilot must hold, but also to the certification that the aircraft has. Seguin Air will have two aircraft that will be suitable to fly IFR and all capable of VFR. An additional challenge is that many of the proposed Seguin Air flights will originate from a lake. This means that there are automatic restrictions such as no night landings or take-offs and the waves on the lake must be at a minimum. Fortunately, Muskoka Regional Airport is located 20 mins away which is a fully operational airport with lights for night use and IFR certified (oh, and the airports must have the appropriate certification for IFR flights as well). We plan to make use of this airport in the instance the lake is not suitable for landing, or IFR flights must be flown. We are beginning to realize how extensive the rules and regulations are surrounding an aviation business. Speaking with my brother and my dad has really helped to answer some of our questions and understand industry restrictions in more depth, but still feel we have lots to learn.
Before starting our business plan, I was the only team member with aviation experience which was very limited. Each member brought very different backgrounds and experience to the table. There have been some challenges in terms of having to take the time to research and become acquainted with the dynamics of the industry in order to gain a better understanding of the environment. I think most entrepreneurs enter into a business idea due to a passion. My previous boss, Robin Wilson, who has been a great mentor to me, would always say "find something you love and then make it your job". This has stuck with me as I believe this is what drives many entrepreneurs into starting their own business. Having a background and knowledge of the industry has many advantages such as increased access to contacts, a sound understanding of the players in the industry and, as we are learning, the ability to know the regulations and restrictions that exist. Building a team with diverse backgrounds has allowed us to work from each others strengths and through reaching out to external contacts with have managed to increase our knowledge and understanding of the aviation world.
It's late and I still have more work to do on this presentation and prepare a last minute assignment for the class I will be missing tomorrow. It's going to be a long day tomorrow, but I am looking forward to meeting the other teams and learning of their ideas.
Friday, March 28
Today was a very insightful, but tiring day. We began the day with breakfast and a welcoming speech from the competition organizing committee. We were then provided with an hour to do a practice run of our presentation. Scott and I had not had much time to practice as we were both up quite late trying to finish other school projects, so we were definitely looking forward to the hour to get comfortable with the information we would be presenting. First time through was a little rough as we tried to iron out the last minute details, specifically the order of our presentation and how it would flow. We have struggled the past few days in determining the order we will present our slides. We are learning that presenting a business plan is quite a bit different then the presentations that we have become familiar with in class. The major difference is that when you present a business plan, you are not only presenting an idea, but are asking the audience for a capital investment of a certain amount. Essentially, you are asking them to believe in your idea and trust their investment with you. This can be a tough ask to sell and difficult to generate excitement for the business. We have had the opportunity to work with a number of individuals including our faculty advisor and an Ivey faculty member who each have offered valuable advice to us. Both have emphasized the importance of being very clear of our idea, our potential market, our differentiating factors, our management team as well as our financial predications. Having only 15 mins to present, we have run into difficulty deciding what information to include and what to leave out. We have ended up creating two completely different slide shows, one for the presentation and one for the Q&A session.
In the afternoon, we were involved in a workshop on how to effectively present business plans. The presenter was Dan Mothersill who is a serial entrepreneur and currently the President of the National Angel Organization. It seemed that all who attended thoroughly enjoyed the presentation and took many valuables lessons from it. Dan mentioned in his presentation that he reads close to 1000 business plans a year and had many insights into what makes a good pitch. He spoke about the importance of recognizing the "pain" in the marketplace that your product or service will "cure". He also emphasized identifying the size of the market, the potential share you believe you can get and the ultimate bottom line projections. After completing the workshop, I think each team walked away with a new insight. We walked away with many and the stress of realizing that we still had some crucial gaps to fill in our presentation……..
The presentation is due by midnight tonight. As Scott and I continue to revise the slide deck, we are starting to feel the pressure as the clock nears the deadline. We will be competing at 9am tomorrow morning against two teams from Simon Fraser University with the winner advancing to the finals. We both know the competition is fierce and have some great, innovative ideas. However, it has been a great experience so far and we look forward to the challenge tomorrow.
Saturday, March 29
Saturday began with us presenting at 9am. The presentation was 15 mins and then 20 mins Q&A (the question period is what we were most nervous about). There were five judges in the room, all from different organizations and backgrounds. Scott and I were both anxious to present and felt we were very prepared. We had stayed at school the night before quite late making final revisions and doing some last minute practicing. As a result, both of us were not running off of a lot of sleep. It is amazing what adrenaline can do to your energy level!
The presentation went really well and both of us walked out of the room feeling like we had handled the questions confidently. The judges seemed intrigued by our idea, but questioned us on areas such as our financials and specifically what affects a spike in gas prices would do to our bottom line numbers. They also asked what our anticipated market size is and what the details were on our marketing strategy. We felt that we had handled the questions with ease and the judges seemed happy with our responses. We were competing against two other teams, both from Simon Fraser University. The first team had a new technology they had developed for the Pulp and Paper industry and the second had created an innovative way to communicate with one another on a mountain when skiing. Although we knew little about each of the concepts, we knew the competition would be tough as every business plan in the competition was unique with very talented individuals presenting them.
Lunch came and it was time to learn of the finalists. They were Romanov Caviar (Queen's University), Ideal Energy (University of Windsor) and DFos (Simon Fraser University). Unfortunately, Seguin Air did not make it into the final three; however we were both extremely happy with our performance and were proud of presentation. We also had received some good feedback from the judges. In the end, Romanov Caviar was the winner with DFos in second and Ideal Energy taking third place. It was a great experience to be in the room to listen to the three finalists present. Each had a very innovative product and compelling presentations.
The competition is over and what an amazing experience it was. I don't think that there was one participant who did not learn from this event. The organizing committee, Randy Tupaz, Vinay Chopra, Cecilia Liu, Sameer Panjwani and Kevin Mouchantaf did an amazing job of running a very successful event. I congratulate all of the teams that were involved as every team showed dedication and perseverance. Scott and I both felt that every aspect of the competition was a rewarding experience and feel confident that our future entrepreneurial ventures will be that much more successful as a result of what we've learned in preparation for the competition and the competition itself. We worked extremely well as a team and I thank him for all of his hard work and for making the experience as great as it was!
As I complete this final blog, I would like to share some final thoughts I have learnt throughout the weeks of preparation for the competition as well at the event. Preparing a business plan is a lot of work and can be very mundane. However, listening to the various guest speakers and speaking with some of the judges, they all emphasized the importance of having a business plan. It is a crucial step for every entrepreneur to take as it helps to provide a road map from where you are to where you want to go. The presenter yesterday, Dan Mothersill, had some great tips on presenting a business plan. He stressed the importance of the executive summary as many people who read the plan do not have the time to go through a 30 page document and instead just review the first few pages. He also spoke about how to develop a short pitch that summarizes the business idea, what he called the "Dead Lobster" (we didn't really get a full explanation on his choice of terminology and no one really asked!). The "Dead Lobster" should be a short concise pitch that addresses the "pain" in the marketplace and the "cure" your service or product proposes. For Seguin Air, the pain that we are addressing is the inconvenience of sitting in traffic for hours on route to cottage country. Seguin Air helps to solve this by offering affordable flight services from Toronto to cottage country. With the help of Dan, we were able to develop an effective pitch which ended up being the opening to our presentation. The "Dead Lobster" should grab the audience's attention immediately and provide them with an understanding of the business idea.
Although, we did not win the money, Seguin Air is still proposing to take-off this year. I would like to thank my brother and my parents for providing the information and the support they have. I'm sure my brother will not miss my late night phone calls to ask what the maintenance schedule is on an airplane or how much fuel it consumes. I would also like to thank Paul McKnight who consulted with the Seguin Air team a number of times and aided in the development of our idea. Finally, I congratulate all of the participants and look forward to watching as your businesses develop!