Business Plans “Good Business Plans are Practical” Taken from

Planning is a Process

Four Elements Supporting Successful Plan Implementation 1. Is the plan simple, easy to understand and to act on? Does it communicate its contents easily and practically? 2. Is the plan specific? Are its objectives concrete and measurable? Does it include specific actions and dates of completion, specific persons responsible and specific budgets?

Four Elements Supporting Successful Plan Implementation (cont.) 3. Is the plan realistic? Are the sales goals, expense budgets, and milestone dates realistic? Nothing stifles implementation like unrealistic goals. 4. Is the plan complete? Requirements of a business plan vary, depending on the context. There is no guarantee, however, that the plan will work if it doesn't cover the main bases.

Use of a Business Plan Define and fix objectives, and programs to achieve those objectives Create regular business review and course correction. Support a loan application Define agreements between partners Set a value on a business for sale or legal purposes Evaluate a new product line, promotion, or expansion Define a new business (this will be our use)

No Time to Plan? “Not enough time for a plan. I can't plan. I'm too busy getting things done.” A business plan now can save time and stress later. Too many businesses make business plans only when they have to. The busier you are, the more you need to plan.

Business Plans Don’ts Don't use a business plan to show how much you know about your business Nobody reads a long-winded business plan: not bankers, bosses, nor venture capitalists (50 pages max)

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

Initial Business Plan Assignment Mission/Objectives – what’s the true nature of your business (don’t be too narrow), how will you build customer satisfaction, what is your workplace philosophy, what value to the customer do you offer Keys to success – limit to three and focus on those Target Market – good educated guess Competitive Advantage – what distinguishes you and your product Basic Strategies – how will you develop the company and products

Use of Graphics Tables and charts present information in visual formats with greater impact that words alone Plan should include graphs, bar charts, and pie charts to illustrate –cash flow (single most important numerical analysis in a plan) –sales forecast with break-even info –profit and loss statements –projected balance sheet –projected business ratios –market analysis

Examples

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Break-Even Analysis Need to know –Average per-unit sales price –Average per-unit cost –Monthly fixed costs –Projection of unit sales/month