INTERESTING NEWS STORY Eric Hale of Oregon won one million dollars on the Powerball lotto. When he was little him and his brother made a pact that if they ever won the lotto they would split it- he kept his promise and him and his brother are walking away with $335,000

UNIT II: BUSINESS TYPES LESSON 2 BUSINESS PLANS

BUSINESS PLAN "... a good business plan can help to make a good business credible, understandable, and attractive to someone who is unfamiliar with the business. Writing a good business plan can’t guarantee success, but it can go a long way toward reducing the odds of failure.” - Ernst and Young Business Plan Guide

BUSINESS PLAN A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals

BUSINESS PLAN FORMAT The written plan will contain the basics of any particular business Who will run it (management plan) What it will sell and to whom (description) What capital, labor and natural resources inputs it needs (including startup money, parts and whole products it buys) How it will make money Best marketing strategy

WHO NEEDS THIS? A business plan is needed by those embarking on a significant endeavor that is likely to consume a significant amount of time, money, and resources One is not needed for freelance work to supplement income Both startup businesses and existing business use business plans to make their management and objectives clear

STARTUP BUSINESSES A business plan can go a long way in helping startup business find out which direction to begin moving Having a clear business plan helps the founders to break uncertainty into meaningful pieces like sales projection, expense budget, milestones, and tasks

STARTUP BUSINESS A startup business plan should be focused on explaining what the new company is going to do, how it is going to accomplish stated goals, and—most importantly—why the founders are the right people to do the job The plan should detail the amount of money needed to get the business off the ground, and through the initial growth phases that will lead (hopefully!) to profitability This is an important step when trying to secure investors who want to know how much money you need and how you will make them money

EXISTING BUSINESSES Existing Businesses should already have a business plan in state, but it should be revisited often as the company grows and changed when necessary An existing business can use a business plan to reinforce strategy, establish metrics, manage responsibilities and goals, track results, and manage and plan resources including critical cash flow

EXISTING BUSINESSES For existing businesses, a robust business planning process can be a competitive advantage that drives faster growth and greater innovation. Businesses that write plans and use them to manage their business grow 30 percent faster than businesses that take a “seat of the pants” approach

WHY IS THIS IMPORTANT? Business plans are used to get capital for starting or adding to the business Goal is to persuade investors or a bank to put money into it. A business plan allows us to analyze how a specific business works, and thus how you or I should deal with it.

TWO TYPES Business plans may be internally or externally focused Externally focused: target goals for external stakeholders (investors and customers) Internally focused: Target intermediate goals required to reach the external goals (development of a new product, new service, etc.)