Feasibility and Business Planning 2.2 The Business Plan

What you will learn . . . The Business Plan: Your Road Map to Entrepreneurial Success The Parts of the Business Plan Common Mistakes in Preparing Business Plans Sources of Business Plan Information Packaging and Presenting the Business Plan

The Business Plan: Your Road Map to Entrepreneurial Success Business Plan – a document that describes a new business and a strategy to launch that business. May reveal problems Helps ensure that you plan for all aspects of operations Investors, bankers, potential management and strategic partners

The Parts of the Business Plan May differ in order and name MUST include a financials section

The Parts of the Business Plan Executive Summary Management Team Plan Company Description Product and Service Plan Vision and Mission Statements Industry Overview Market Analysis Competitive Analysis Marketing Plan Operational Plan Organizational Plan Financial Plan Growth Plan Contingency Plan Cover Page, Title Page, Table of Contents and Supporting Documents

Executive Summary A brief recounting of the key points contained in a business plan. No more than two pages Include the most important info from each section Start with a story explaining why it will be a success May be the only part read

Management Team Plan Qualification of you and your partners Discuss plan to fill any gaps Partnerships Advisory boards Consultants

Company Description Outlines the company’s background information and basic concept Size Scope Type of business Why you think it will succeed

Product and Service Plan Present the product or service you are offering Clear and compelling concept statement Unique features and possible spin-offs Spin-offs – additional products or services that might exist later

Vision and Mission Statements The guiding principles by which the company functions. Vision statement – the scope and purpose of a company and relfects its values and beliefs “To bring happiness to millions.” - Walt Disney “To open the world of sports to neighborhood residents.”

Vision and Mission Statements, cont. The specific aspirations of a company, the major goals for which it strives “To provide equipment to 100 customers by the end of the first year.”

Industry Overview Research into the industry Trends and growth within the industry

Market Analysis The more you understand your customers, the better your chances of success. Customer profile (use primary and secondary sources) Determines marketing and sales strategies Analyzes customers and competition Contains geographic, economic, and demo data about the site for the business

Competitive Analysis Demonstrates the advantage(s) the business has over competitors Talk to customers, vendors, suppliers and employees Websites Visits

Marketing Plan How customers will be aware of the products or services Includes market niche, pricing, company image, marketing tactics, media plan and marketing budget

Operational Plan All of the processes in the business that result in the production and delivery of the product or service. Distribution channel – how you will deliver the product or service to the customer. Direct channel – you deliver directly to the customer. Indirect channel – sell products to a wholesaler.

Organizational Plan The people aspects The legal form of business The management philosophy The role and compensation of management personnel and important employment policies.

Financial Plan Forecasts for the future of the business Explains the assumptions made when the forecast figures were calculated Proves the business will be financially healthy

Growth Plan How the business will expand in the future

Contingency Plan The probable risks How to minimize the risks Changing economic conditions Lower-than-expected sales How to minimize the risks

Cover Page Company name Address Phone number Web site address Company logo

Title Page Company name Names, titles and addresses of owners Date the business plan was issued Name of the preparer

Table of Contents & Supporting Documents Headings and page numbers Supporting Documents items Exhibits Documentation relevant to the business

Common Mistakes in Preparing Business Plans Projected exaggerated growth levels Trying to be a Jack-of-All-Trades Claiming performance that exceeds industry averages Underestimating the need for capital

Sources of Business Plan Information Small Business Administration (SBA) Service Crops fo Retired Executives (SCORE) Small Business Development Centers (SBDCs) Chambers of Commerce Trade Associations

Packaging and Presenting the Plan Bind – spiral works Index tabs to separate sections Easy-to-read 12-pt. font Bold subheadings and bullets Logo at the top of each page Number each copy Statement of confidentiality for ready to sign A statement on the cover prohibiting copying of the plan