ENTREPRENEURSHIP Small Business Plan Dr. Muslim Suardi, MSi., Apt. Faculty of Pharmacy University of Andalas

Planning “The systematic process of developing an outline for the accomplishment of a goal or set of goals” Planing is one of the most important skills needed for starting a business

FORMULATING A BUSINESS PLAN 1.Concept History & Background 2.Goals & Objectives 3.Marketing Plan 4.Legal Requirements 5.Form of Ownership 6.Financial Plan 7.Organization, Management & Staffing Plan 8.Special Considerations

1. Concept History & Background –Description of Product & Service –Idea History –Summary of Experience

2. Goals & Objectives Short Term & Long-Term Goals Example: Work part time while planning a new business, then at the end of one year quit my other job & devote all of my efforts to opening & managing the new business.

3. Marketing Plan A.Consumers & Demand B.Competition C.Geographic Market D.Pricing Policy

A. Consumers & Demand Profile Costumer: Age Income Occupation Family status Estimation: how often a typical costumer will want to buy the product or service & at what price.

B. Competition “A rivalry between companies that sell similar products/services”

C. Geographic Market A crucial step in planning a business. Correctly identifying the geographic market makes setting realistic sales goals easier.

D. Pricing Policy D. Pricing Policy A carefully considered pricing policy can help you achieve your sales & profit goals

4. Legal Requirements Entrepreneurs should determine What patents Copyrights Agreements Contracts Or other legal arrangements will be need to carry out day-to-day business

5. Form of Ownership Sole Proprietorship Partnership Corporation

Sole Proprietorship “ A business established, owned, and controlled by a single person”

Advantages of Sole Proprietorship Simple to start No formal action is required Started immediately Total control Receive all the profit Income tax as an individual only

Disadvantages of Sole Proprietorship Unlimited responsibility for losses, debts, and other liabilities The owner must make all the decisions The owner is the only person who can arrange financing or capitalization Business ends upon the owner’s death

Partnership Partner “individuals who voluntary agree to conduct a partnership” General Partnership “A partner who actively engages in the day-to-day management of the business & is fully liable for any actions for, by, & against the business” Limited Partnership “A partner who does not actively engage in day-to-day management of the business & has liability limited to extend of his or her investment in the business”.

Advantages of Partnership Start-up can be simple Pays no income tax Partners share responsibilities of decision making, management, & capitalizing the business. Partners share any & all liabilities Liability is limited in the limited partnership

Disadvantages of Partnership High percentages of partnership break-up Partners carry unlimited financial liability Each partner carries liability for the errors of his or her partners Partners, potentially, have less control due to shared decision making & shared management Partners must share profit Partnership termination may disrupt business

Corporation “A legal entity created by law” Advantages: Limited Liability Ability to raise capital Continuity of business Transferable ownership Disadvantages: Double taxation Charter costs Regulation Lack of control

6. Financial Plan –Initial Capitalization Plan –Projected Income Statement –Projected Operating Expenses –Cash Flow Projection

7. Organization, Management & Staffing Plan –Organization Chart –Employee Requirements –Resumes –Personal Financial Statements –References

8. Special Considerations –Production & Manufacturing Needs –Facility Needs –Education & Training Needs –Land & Utility Needs –Research & Development