Entrepreneurship Chapter 5.2: The Business Plan – Flashcards
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Business Plan
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A document that describes in detail a new business and the strategies to launch that business.
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Explain those circumstances and types of businesses where you could start a business before writing a detailed business plan.
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What would investors be most interested in a business plan? Why?
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What would banker's be most interested in a business plan? Why?
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What would potential employees be most interested in a business plan? Why?
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What would potential management be most interested in a business plan? Why
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Purposes of the Business Plan
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Parts of a Business Plan
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Executive Summary, Company Description, Mission and Vision Statements, Management Team Plan, Product and Service Plan, Industry Overview, Market Analysis, Competitive Analysis, Marketing Plan, Operational Plan, Financial Plan, Growth and Expansion Plan, Contingency Plan.
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Executive Summary
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A short, concise explanation of the key points contained in a business plan.
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Elements of an Executive Summary
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*Synopsis of each of the sections of a business plan. *Comprehensive: can you describe each element in 2-3 sentences? *Dynamic description and explanation of the problem the business will solve. *Provide evidence that was gathered through research to prove the business is going to be a success. *No more than two pages. *You do not get a second chance for a first impression!
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Company Description
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Describes the company's background information and business concept, outlines the size, scope, and type of business, the entrepreneurial opportunity and why the venture will succeed. Business milestones (successes) that have already been achieved.
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Vision and Mission Statements
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Describes the guiding principles by which a company will function.
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Vision Statement
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Describes the scope and purpose of a company and reflects the company's values and beliefs. A broader statement.
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Mission Statement
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Describes more specific aspirations for the company. The major goal for it to achieve.
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Aspirations
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What a business hopes to attain or has a desire to accomplish.
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Management Team Plan
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The qualifications, experience and talent your management brings to the venture.
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Product and Service Plan
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Presentation of the product or service your business will offer. Include: unique features and benefits, possible spinoffs, and additions.
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How is understanding achieved in a business plan?
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Clear and concise writing, descriptive writing, compelling concept statement.
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Spin-offs
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Additional products or services that can be developed as the business grows and expands. Spin-offs give power to the possibility of a venture growing and succeeding.
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Industry Overview
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Research into the company's that provide similar, complementary, or supplementary products and services. Every business operates within an industry. Description of trends and patterns within your industry. The product's life cycle.
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Market Analysis
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Development of Customer Profile. Analyzes your customers and your competition. Contains geographic, economic, and demographic data about the site placement for an offline business.
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Competitive Analysis
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Must describe and prove the proposed business has a competitive advantage! Thorough research into your competitors. Analysis of the primary strengths/weaknesses, objectives, strategies and other information relative to competitors.
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Marketing Plan
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Describes the strategies you will take to make the customer aware of and want your product. Includes description of your market niche, pricing strategies, company image, marketing tactics, your media plan, and marketing budget.
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Organizational Plan
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Element of a business plan in that examines the people who will run the firm are examined, including management's philosophy and the form of business organization that will be used. Describes how key management will be compensated and employment policies.
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Financial Plan
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Forecasts the future success of a business by clearly articulating how profit will be made, intervals of financial success to achieve, and projections of financial gain.
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Growth Plan
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Describes how the business will expand in the future.
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Contingency Plan
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Research and examination of the probable risks for a business and how to minimize those risks.
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Elements Necessary for Plan
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Cover page, title page, table of contents, supporting documents.
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Common Mistakes in Developing a Business Plan
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*Projecting exaggerated growth levels *Overestimating one's ability *Projecting performance that exceeds industry averages *Underestimating the need for capital
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Why do investors prefer a team rather than an individual in business start up?
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Sources of Business Plan Research
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*SBA *SCORE *SBDCs *Chamber of Commerce *Trade Associations *Government Sources
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Presenting and Packaging Your Plan
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You never get a second chance to make a first impression!
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Presentation of Your Business Plan
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Packaging: Professionally done, correct binding, paper, images and graphics (charts and graphs).
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Formatting
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Includes he type font size and style, set up of line spacing, page numbering, and copy readability.
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A government run agency that provides services to small businesses and entrepreneurial ventures.
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SBA =
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An association that provides free, face-to-face and email business counseling along with downloadable, free business and legal documents.
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SCORE =
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A program that provides management assistance to small business owners.
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SBDCs
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A local government agency that provides information about the local economy, business trends, and business needs.
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Chamber of Commerce
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Associations provide general assistance to entrepreneurs in specific industries. Provides valuable information such as start-up costs, market research, and trend analysis. Provides critical networking opportunities.
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Trade Associations
