Develop a Business Plan Chapter 3 - Entrepreneurship

3-1: Importance of Business Plan Business plan - is a written document that describes all the steps necessary for opening and operating a successful business A business plan has many purposes...

Business Plan Overview Answers three key economic questions Who will run business and who will supply it with goods? How business will win over competitors What to do to keep customers Provide detailed financial information to show how business will earn a profit

Purposes of a Business Plan Explains idea behind your business and how your product/service will be produced and sold. Sets specific objectives and describes how your business expects to achieve them.

Purposes of a Business Plan 3. Describes the backgrounds and experience of the people who will be running the business. Why is this necessary?

Importance of Business Plan Makes you think of all aspects of your business. May help you secure financing for your business. Helps you communicate your ideas to others. May serve as a tool for managing your business.

3-2: Elements of a Business Plan Three Basic Components regardless of business size or structure: Introductory elements Main body Appendix

Main Body of Business Plan Introduction Marketing Financial Management Operations Concluding Statement

Introductory Elements of Bus. Plan Cover letter Title page Table of contents Statement of Purpose Executive Summary

Appendix of Business Plan Includes supporting documents that provide additional information and back up statements provided in the body of report. Tax returns & personal financial statement Copy of proposed lease/agreement of building Licenses and legal documents Letters of recommendation Copies of letters of intent (suppliers) Copies of large sales contracts

3-3: Creating an Effective Bus. Plan - Information needed for a business plan requires a lot of planning and research. - You have many resources to help you with your business idea and business plan: Community, Government, and Professional Print Resources Online Resources

Community, Gov’t, and Professional The Small Business Administration (SBA) - federal administrative agency created to help start, build, and grow businesses. The Office of Small Business Development Centers (SBDC) - provides management and assistance to current/future small business owners.

Community, Gov’t, and Professional 3. Service Corps of Retired Executives (SCORE) - is made up of more than 10,500 retired executives who volunteer time to provide entrepreneurs with real-world advice and know-how. 4…Chamber of Commerce, Trade Associations, Professional Consultants, Financial Institutions

Mistakes in Business Planning Unrealistic Financial Projections An Undefined Target Market Poor Research Ignored Competition Inconsistencies in the Business Plan