Chapter 5 Feasibility & Business Planning Entrepreneurship

Business Concept Clear and concise description of an opportunity 4 Elements: The product/service and features The customer The benefit The distribution Purpose: to focus your thinking and begin the Business Planning process

Feature A distinctive aspect, quality or characteristic of a product or service

The Customer Demographic of people that you are trying to reach and sell to Done thru: Marketing Advertising Word of mouth Reputation

Benefit Something that promotes or enhances the value to the customer Example: convenience, good deal

Distribution How can you get your product/service to your customers Retail store Wholesale – selling to retail stores Mail order Online Door-to-door delivery

Concept Statement Eastside Sports offers sporting equipment and apparel to local teams and to people who play sports. It provides the convenience of one-stop shopping at a retail outlet in the customer’s own neighborhood. Lower East Side, Manhattan, New York City

Feasibility Analysis The process used to test a business concept Does it have potential to sell? Is there enough demand? What are my margins?

Define Vocabulary from book on back of your notes Industry Competitive Grid Prototype Target Customers Business Model

5.2 The Business Plan Entrepreneurship

Business Plan a document that describes a new business and a strategy to launch the business

Business Plan It contains several sections and is written with great detail People that you would like to read your business plan would include: Investors Bankers Potential Management Partners

Purpose of the Business Plan Emphasize key points that will persuade the reader of the value of your Business Concept

Business Plan Sections Executive Summary Management Team Plan Company Description Product & Service Plan Mission & Vision Statements Industry Overview Market Analysis Competitive Analysis Marketing Plan

Business Plan Sections 10. Operational Plan 11. Organizational Plan 12. Financial Plan 13. Growth Plan 14. Contingency Plan 15. Cover Page 16. Title Page 17. Table of Contents 18. Supporting Documents

1. Executive Summary a brief recounting of the key points contained in a Business Plan

Vision and Mission Statement Vision statement- establishes the scope and purpose of a company and reflects its values and beliefs. Walt Disney’s vision for his company was “to bring happiness to millions.” Frank’s vision might be “to open the world of sports to neighborhood residents.” Mission statement- expresses the specific aspirations of a company, the major goals for which it will strive. Frank’s mission might be “To provide equipment to 100 customers by the end of the of the first year.”

Operational Plan Distribution channel- is the means by which you deliver the product or service to the customer. Direct Channel- delivery the product or service directly to the customer. Indirect Channel- You sell to a wholesaler. The wholesaler finds retail stores and other types of outlets to carry your product.

Developing a business plan Make a Research plan and gather data List questions you want answered Identify the type of data that will answer those questions Set up a Notebook to Organize Your Data Write the source of each item Separate sections for each part Write a Draft Sort Data Set up document with headers or use a business plan template

Common Mistakes Projecting Exaggerated Growth Levels Be conservative Trying to be a Jack-of-all-Trades Investors prefer a team Claiming Performance That Exceeds Industry Averages Should project performance slightly below average Underestimating the need for Capitol Project enough capital to grow the company until there is sufficient internal cash flow. Allow extra for the unexpected

Sources of Business Plan Information Small Business Administration(SBA)- a federal agency that provides services to small businesses and new entrepreneurs. Provides publications for a minimal charge Gives special assistance to women, minorities, and the physically challenged Offers financial assistance Service Corps of Retired Executives (SCORE)- Provides free, confidential face-to-face and email counseling to small business

Sources of Business Plan Information Small Business Development Centers (SBDCs)- Administered by the SBA 63 centers offer information and guidance Chambers of Commerce Local chamber offices provide information about the local economy, business trends, and business needs. Trade Associations- offers technical and general assistance to entrepreneurs in a specific profession or industry.

Packaging and Presenting Package professionally Bind the plan Use index tabs to separate sections Use an easily readable 12pt. Font like Times New Roman Use bold subheadings and bullets Include a logo Number each copy, include a Statement of Confidentiality that the reader should sign. Place a statement on the cover page prohibiting copying of the plan.