2. Why Businesses Fail Can Name a Local Business that Failed for the Reasons Given? Record them. Lack of money Lack of business experience Poor management skills Inefficient inventory control Poor credit management Poor location Improper budgeting Lack of advertising

3. Skills of Entrepreneurs Which of Your Classes Teaches These? Basic Skills: math, reading and writing, effective speaking and listening, and knowledge of current technology Problem-Solving and Decision-Making Planning

4. Bellringer (You Do) List 5 of the these characteristics that apply to YOU and explain how.

5. Bellringer Why is planning important for any business venture?

6. Today, I Will... Discuss the process of developing an idea for a business Describe the components of a business plan Explain the types of financing available for new businesses

7. Developing a Business Idea Starts with a great idea or vision Market research is the gathering and analyzing of information about a business A market is all the people and organizations that might purchase a product.

8. Next Step: Consider Startup Strategies Start a new business Purchase an existing business Buy a franchise

9. Start a New Business Need a new product or operating strategy hat sets the business apart from the competition Must a have a detailed plan to attract customers Unique opportunity to build a reputation

10. Purchase an Existing Business Advantages Removes some of the risks of opening a new business Probable cash flow from business Movement of money into and out of a business Disadvantages Purchase price may be more expensive than starting from scratch Old/outdated inventory or equipment May need to agree to keep current employees on payroll

11. Buy a Franchise License to sell a company’s goods or services within a certain territory or location Gives the right to sell an established product Franchisee, person or company that buys a franchise Franchisor, person or company that grants a franchise

12. Business Plan Written statement of goals and objectives for a business with a strategy to achieve them Needed to apply for financing through banks

13. Business Plan Executive summary Company description Market analysis Organization and management Service or line of goods Marketing and sales Funding request (if applicable) Appendix

14. Executive Summary Description of the business and why it will be successful Should include a mission statement, sentence describing purpose of the business Founders and their roles should be explained One to two pages that grab attention of readers

15. Company Description Describe the business activity. Is the business a provider of goods or services? Will there be a physical location, online store, or both? Identify the market need. How do the goods or services meet a need in the market? Who is the customer? Explain competitive advantages. Why will this business succeed? What advantages does this business have over its competitors?

16. Market Analysis Provides overview of the industry and market that the business will serve. Current and projected size of the entire market and identifies competitors Describes characteristics of the target market and customer needs the business will satisfy

17. Organization and Management Details how the company is organized and run Includes the business structure (proprietorship, partnership, corporation, or LLC) May include organizational chart showing chain of command Biographies of company leaders are presented, their ownership, and involvement Special licenses and permits held are listed

18. Products Details what the business will sell, product’s life cycle, and plan for pricing Competitiveness should be discussed (why goods/services will be successful despite competition

19. Marketing and Sales Strategy Strategy for building and growing the business Plan for reaching customers, such as promotions, advertising, and public relations System for selling th product, such as retail location with sales associates, direct sales representatives, or online store Average sale amount per customer to make a profit

20. Financial Plans New business usually needs start-up capital Money necessary to start and open a business

21. Financial plans section of the business plan contains pro forma financial statements. Pro forma balance sheet: reports the assets, liabilities, and net worth Pro forma income statement: projects revenues and expenses to sow whether or not a business is profitable Pro forma cash flow statement: reports anticipated sources and uses of cash from operations, investing, and financing activities. Based on estimates of future business performance, sales, and expenses Should contain cost estimates for a one year period and summary of start-up costs

22. Appendix May include company brochures, copies of published articles about the business, and photographs of products Resumes of those in leadership roles Permits and contracts

23. Business Financing Capital structure, way a business is financed Determines who has control of the business and decision-making power

24. Debt Financing Borrowing money that must be repaid for use in the business Requires collateral to back up a loan An asset pledged that will be claimed by the lender if the loan is not repaid Property or items of value a business owns Loan programs guaranteed by US Small Business Administration

25. Equity Financing Capital brought into the business in exchange for a percent of ownership in the business When used, investors gain a percentage of ownership in the business Venture capital, money invested by investors who form partnerships or groups to pool investments Get a voice Angel investors, private investors who fund start-up businesses Don’t use voice

26. Check Your Understanding (We do) Why is it important for entrepreneurs to know their market? What is an advantage of buying a franchise? Identify the sections of a business plan. List the three financial statements that should be included in the financial plans section of a business plan. Name two sources of equity financing.

27. Group Project Business Plan Project Business Plan PDF