Aspects of a Business Plan

Objectives To contrast management and leadership styles. To analyze the communication that occurs within and among businesses. To identify and examine the parts of a business plan.

Main Menu Management & Leadership Internal vs. External Communication The Business Plan

Management & Leadership

Three Management Styles Delegating Participating Telling

Delegating Management characteristics include: to trust employees’ work ability to have a high workload to be confident Works best when employees: are willing to do the job know how to do the job Employees need: low level of support low level of guidance

Participating Management characteristics include: to involve the group to facilitate teamwork Works best when employees: have the ability to do the job receive a high amount of support Employees need: high level of support low level of guidance

Telling Management characteristics include: Works best when employees: to be a micromanager to be a teacher to be a facilitator Works best when employees: are not willing to do the job are not able to do the job Employees need: high level of support high level of guidance

Three Leadership Styles Autocratic Democratic Laissez faire

Autocratic Leadership characteristics include: Should be used when: to be driven by authority to tells others what to do to limit discussions and new ideas to limit the group teamwork Should be used when: time is limited group skills and knowledge are lacking group is not acquainted with each other Should not be used when: group has a strong sense of teamwork spontaneity is desired members have skill and knowledge

Democratic Leadership characteristics include: Should be used when: to involve the group to promote a sense of teamwork to ask before telling Should be used when: time is available team is motivated group has some degree of skills or knowledge Should not be used when: group is unmotivated group has no skill or knowledge group has conflicts among themselves

Laissez Faire Leadership characteristics include: Should be used when: to give little or no direction to give opinions only upon request to have no “in charge” position Should be used when: group has a high degree of skill and motivation group has a strong sense of teamwork group has a familiar routine Should not be used when: group has no sense of team group has a low degree of skill and knowledge group needs to be told what to do

Traits of a Good Leader Include: hard working assertive decisive courageous logical trustworthy solves problems self-confident listens speaks effectively motivated understanding respectful

Internal vs. External Communication

Internal Communication Occurs within an organization Flows horizontally or vertically horizontally between employees on the same level, coworkers also known as lateral communication vertically between subordinates and superiors downward communication travels from supervisor to subordinate upward communication travels from subordinate to supervisor

The Grapevine Is the most widely used internal communication system Is an informal system where: communication flows rapidly information is often inaccurate or needs clarification

External Communication Occurs between an organization and people outside of the organization Flows through a public relations person or a manager Examples: press releases interviews publicity and promotion

The Communication Process communication channels: spoken written nonverbal barriers barriers SENDER RECEIVER message feedback encodes message decodes message

The Communication Process Consists of these five steps: The sender encodes a message The sender selects a channel and sends the message The receiver decodes the message The receiver provides feedback The sender and receiver remove or minimize any barriers blocking effective communication

Sender Encodes Encoding When organizing message Goal is when a sender selects and organizes message to be sent When organizing message select words to clearly convey message ensure nonverbal signals match verbal message Goal to make sure the message received is as close as possible to the message sent Sender selects channel with the least barriers

Sender Selects Channels With the least barriers: nonverbal communication two-way examples include: facial expression, eye contact, body language, hand gestures spoken communication examples include: informal conversations, interviews, telephone conversations one-way examples include: speeches, oral reports, intercom announcements, voice mail written communication examples include: letters, memos, reports, press releases, e-mail, facsimiles

Receiver Decodes Decoding When interpreting the message, the receiver: is when the receiver breaks down the message received and interprets it When interpreting the message, the receiver: considers both verbal and nonverbal messages prevents distortion considers whether or not the two messages match

Receiver Provides Feedback is the response to the sender’s message the receiver provides can be verbal and/or nonverbal

Sender & Receiver Clarify If the message received does not match the message sent the sender must modify or adjust the message for understanding the receiver must give appropriate feedback The process should continue until the message is clear to sender and receiver

Barriers to Effective Communication Physical and mental distractions interruptions noises preoccupation with other matters developing a response rather than listening poor timing Differences between speaker and listener age education culture experiences

Barriers to Effective Communication Speaker traits unclear message lack of sympathy for listener distracting nonverbal characteristics suspect motive Listener traits poor listening skills not open to new and different ideas lack of empathy for speaker negative feelings about the speaker low interest level

The Business Plan

A Business Plan Must be developed by anyone interested in starting a business Is a road map of where the business will be going Is a written proposal describing a prospective business to potential investors and lenders Should: convince investors and lenders the business will be profitable identify necessary legal procedures for start-up establish month-to-month steps to profitably operate the business

A Business Plan Includes five sections: Executive Summary Business Description and Analysis Organization and Marketing Plan Financial Plan Supporting Documents Business Plan

Executive Summary Highlights proposed business Describes: products and/or services to be offered type of ownership the skills and experiences being brought to business the uniqueness and strengths of the business in all areas market and competition analysis Highlights financial data Should be no longer than two pages Should convince the audience to read the rest of the plan

Business Description & Analysis Includes details such as: business type business philosophy product description self-analysis trading area analysis market segment analysis analysis of potential location

Business Philosophy Includes: mission statement: the purpose of the organization vision statement: where an organization is headed in the future and should capture the long-term picture of what the organization will become personal philosophy of management: how management will organize, motivate and communicate with employees

Self-Analysis Describes details concerning the business’s: education and training: the level of expertise the owner, managers and employees have and how it will enable success strengths and weaknesses: elements which should be taken advantage of and elements which must be avoided or properly managed personal development plan: the plans for the growth of the business

Trading Area Analysis Discusses where the business will operate, including details such as: geographic, economic and demographic data: area population broken down by characteristics including location, income, age, race, gender, etc. possible competitors: number and size, strengths and weaknesses, and plans to deal with and overcome them

Market Segment Analysis Defines the business’s target market the group of customers which the business identifies as most likely to find value in its products and therefore is most important to focus marketing efforts on Identifies the target market’s needs, wants and buying habits, and how the business addresses these

Organization & Marketing Plan Includes details concerning: proposed organization proposed product proposed marketing plan

Proposed Organization Outlines: the type of business ownership: number of owners, percentage owned by each and how each is involved the management profile: identifies managers, their education, prior employment and defining characteristics, their obligations to the business, and the business’s obligations to them personnel needs and organizational structure: number of employees, functions of each department, and the lines of communication within and among departments

Proposed Product Discusses the business’s products and services including: suppliers: where raw materials needed for production will come from manufacturing plans: how and where the product will be made and for what cost inventory procedures: how the business will handle and store products which are ready to be sold

Proposed Marketing Plan Describes strategies for the activities which will communicate value to customers branding, packaging, promotions, advertising, public relations, etc. Identifies plans for pricing policies base price ranges, discounts, sales, etc. Describes the sales strategies which will be used sales force, projected sales volume, etc.

Financial Plan Include these details: sources of capital personal sources external sources projected income and expenses personal financial statement start-up costs business income business expenses income statement(s) balance sheet cash-flow statement

Supporting Documents Concerning business communication include: letterhead and business cards for correspondence with employees and customers list of potential communication barriers with employees and customers employee rules and regulations designed to prevent and help resolve conflicts list of potential liaisons developed with other organizations within the community explanation of the benefits of community involvement

Supporting Documents Regarding marketing include: sample fliers advertisements company newsletters Of legal and miscellaneous nature include: certificates licenses, tax requirements codes sample policy and procedures manual

Resources U.S. Small Business Administration http://www.sba.gov/index.html Sample Business Plan from Bplans.com http://www.bplans.com

Acknowledgements Production Coordinators Krista Scott Amy Hogan Graphics Editors Jennifer Donaldson Daniel Johnson Production Manager Geoff Scott Technical Writer Jessica Odom Executive Producer G.W. Davis © MMXIV CEV Multimedia, Ltd.