Business Plans Part 3 Taken from

Assignments to Date 1. Preliminary Mini Plan –Mission/Objectives –Keys to success –Target Market –Competitive Advantage –Basic Strategies 2. Company Summary & Product Description

Simplified Business Plan Outline Executive Summary Company Summary Product Description Market Analysis Summary Strategy and Implementation Summary Management Summary Financial Plan

Management Summary “If it isn’t a good place to work, it won’t be successful” Important to have quality of the workplace (where performance is high and people are happy) of the workplace in mind and to find ways to communicate this in the plan –Commitment to and enjoyment of work –Integrity (honesty) –Competence –Personal connection –Balance –Fun

Management Summary Basics –How many employees, managers, founders –Who are the most important members –Summary views of strengths of key personal (resumes should be attached to back of plan) Management gaps –Does organizational structure seem appropriate –Missing members –How you intend to fill them

Management Summary Organizational Structure –Include organizational chart Job Descriptions –Are organizational lines clearly drawn? –Is authority properly distributed? –Do you have jobs that include responsibility without authority? Other considerations –Do any employees have noncompete agreements with competitors –Who’s on the board? What do they contribute?

Management Summary (Approach 1) Develop numbers for personnel direct wages To get Personnel Burden multiply by 15% - 20% (includes indirect cost (insurance, taxes, sick pay, etc.) Use last three months and subsequent two years

Management Summary (Approach 2) More detailed Personnel Plan –Organized by department Include personnel burden –Payroll taxes and benefits –Should include your burden assumptions Payroll assumptions will be used in other projections –Profit and loss statement

Knowing Your Market Need to describe the general state of your industry and the nature of the business -Industry participants number and market share trade associations, conventions, publications - Distribution patterns to distributors, to retail stores, directly? - Competition main strengths and weaknesses

Knowing Your Market Resources (on our website) – – – – – – – –Trade associations and business publications – use favorite search engines

Knowing Your Market Practical Market Research Study Similar Businesses –Find similar but non-competing businesses that will share experiences –Look for people selling similar businesses –Shop the competition Talk to Customers –Do direct market research (talk face-to-face with a credible number of people to find out what they want) –Use well prepared online surveys Assess Potential Customers –Average age, income & education levels, buying patterns, values, etc.

Knowing Your Market Forecasting Your Sales Experience is important here – more of an art than science Avoid hockey stick projections and keep in mind market size and seasonal nature Simple Sales Forecast

Knowing Your Market Detailed Sales Forcast

Knowing Your Market Forecasting Your Sales Use graphics for monthly and annual sales

Knowing Your Market Forecasting Your Sales Charts and tables must be described in text –Summarize and highlight numbers in sales forecast tables. Are anticipated questions answered? Give the sales strategy behind the forecast –How and when to close sales prospects –How to compensate sales people –How to optimize sales processing –How to maneuver price, delivery, and conditions –How are sales people trained –Are details of sales programs given with milestones, responsible persons, and budgets Provide and justify the assumptions used

Knowing Your Market Market Segments Segmentation concept is crucial to market assessment and market strategy –Ex. – – –

Knowing Your Market Market Segments Analysis using tables and charts

Knowing Your Market Market Segments Charts and tables must be described in text –Begin with a summary Define the groups Justify them as targets Be concise –Explain your segmentation Display you wisdom and understanding of industry Discuss what characteristics distinguish different groups Discuss the strategy behind the segmentation “strategy is focus; it is creative and it doesn’t follow pre-written formulas” –Explain market needs, growth, and trends

Hurdle Reference Material Management Summary –Management Team Knowing Your Market –The Business You’re In –Know Your Market –Forecast Your Sales –Market