2. Developing a Business Plan
Chapter 4
What types of research might you conduct to help develop a business plan?

3. 4 Developing a Business Plan
Chapter 4
For a business to grow and succeed, a sound business plan and effective financial management are essential.

4. free enterprise system business plan strategic plan marketing plan
Developing a Business Plan
Chapter 4
free enterprise system
business plan
strategic plan
marketing plan
financial plan
accounting
transaction
generally accepted accounting principles (GAAP)
budget
merchandise
inventory
cash flow
negative cash flow

5. Developing a Business Plan
Chapter 4

6. Discuss the importance of financial management for a business.
Developing a Business Plan
Chapter 4
Section 1
A Plan for Business
Discuss the importance of financial management for a business.
Explain the components of a business plan.
Describe the aspects of a financial plan.

7. The Business Environment
Developing a Business Plan
Chapter 4
Section 1
A Plan for Business
The Business Environment
Businesses in the free enterprise system must compete to attract customers.
free enterprise system
an economic system in which people can choose what they buy, produce, and sell, as well as where they work

8. Developing a Business Plan
Chapter 4
Section 1
A Plan for Business
Developing a Business Plan
What Can a Business Plan Do for You?
Helps you focus on what you want to do
Helps you focus on what you expect to accomplish
Helps you set goals for the business
Helps you secure funding from investors
business plan
written proposal that describes a new business and strategies to launch that business

9. Developing a Business Plan
Chapter 4
Section 1
A Plan for Business
Developing a Business Plan

10. Developing a Business Plan
Chapter 4
Section 1
A Plan for Business
Developing a Business Plan
Be Realistic
Goals for Your Business should:
Be Specific
Have a Clear Time Frame
Help You Decide What Type of Action to Take
You will probably revise your goals as you go.

11. Developing a Business Plan
Chapter 4
Section 1
A Plan for Business
Developing a Business Plan
Short-Term Goals
Two Types of Goals
Long-Term Goals
First identify your short-term and long-term goals. Then create a plan that consists of specific steps toward each goal.

12. Developing a Business Plan
Chapter 4
Section 1
A Plan for Business
Developing a Business Plan
Steps to Prepare a Marketing Plan
Assess the competition.
Identify services offered.
Research the current pricing and advertising.
Identify potential customers.

13. Developing a Business Plan
Chapter 4
Section 1
A Plan for Business
Developing a Business Plan

14. Developing a Business Plan
Chapter 4
Section 1
A Plan for Business
Developing a Business Plan

15. 4 Developing a Business Plan Section 1 A Plan for Business
Chapter 4
Section 1
A Plan for Business
The mission statement is one component of a business plan. Determine how the mission statement is important to the marketing plan.
The mission statement will direct the goals of the business. You must know what the goal is before you can develop a marketing plan to achieve that goal.

16. Explain the importance of accounting in financial management.
Developing a Business Plan
Chapter 4
Section 2
Financial Management
Explain the importance of accounting in financial management.
Describe how investments in your business can improve productivity.
Identify the primary functions of accounting.

17. Aspects of Financial Management
Developing a Business Plan
Chapter 4
Section 2
Financial Management
Aspects of Financial Management

18. Accounting: The Backbone of Financial Management
Developing a Business Plan
Chapter 4
Section 2
Financial Management
Accounting: The Backbone of Financial Management
What Is Accounting?
accounting
systematic process of recording and reporting the financial position of a business

19. Accounting: The Backbone of Financial Management
Developing a Business Plan
Chapter 4
Section 2
Financial Management
Accounting: The Backbone of Financial Management
Examples of Transactions
Buying Supplies
Selling Merchandise
Buying a Photocopier
Paying Utility Bills
transaction
an activity that has an effect on the financial situation of a business

20. Accounting: The Backbone of Financial Management
Developing a Business Plan
Chapter 4
Section 2
Financial Management
Accounting: The Backbone of Financial Management
Who Uses GAAP?
Investors
Banks
Government Agencies
Suppliers
generally accepted accounting principles (GAAP)
a standard set of guidelines used in recording and reporting financial changes

21. Accounting: The Backbone of Financial Management
Developing a Business Plan
Chapter 4
Section 2
Financial Management
Accounting: The Backbone of Financial Management
You should regularly compare a budget with actual income and expenses.
budget
formal, written statement of expected income and expenses for a future period of time

22. Accounting: The Backbone of Financial Management
Developing a Business Plan
Chapter 4
Section 2
Financial Management
Accounting: The Backbone of Financial Management
Amount of merchandise sold
What does tracking inventory tell you about merchandise?
Merchandise that is selling well
When to reorder merchandise
Merchandise that should not be reordered
inventory
merchandise retailers have for sale
merchandise
goods retailers buy with the intent to resell to customer

23. Accounting: The Backbone of Financial Management
Developing a Business Plan
Chapter 4
Section 2
Financial Management
Accounting: The Backbone of Financial Management
Determining Number of Employees
Efficient Payroll Management Involves Two Important Activities:
Using GAAP

24. Accounting: The Backbone of Financial Management
Developing a Business Plan
Chapter 4
Section 2
Financial Management
Accounting: The Backbone of Financial Management
Positive Cash Flow
Negative Cash Flow
Vs.
cash flow
the amount of cash that is available at any given time
negative cash flow
a situation that occurs when a business spends more money than it receives

25. Accounting: The Backbone of Financial Management
Developing a Business Plan
Chapter 4
Section 2
Financial Management
Accounting: The Backbone of Financial Management
Successful businesses invest in the future.
Where Can a Business Invest?
Human Capital
Capital Goods
Technology

26. Accounting: The Backbone of Financial Management
Developing a Business Plan
Chapter 4
Section 2
Financial Management
Accounting: The Backbone of Financial Management
Why Does a Business Need Reserve Funds?
Equipment Repair
Drop in Sales
Natural Disaster

27. Accounting: The Backbone of Financial Management
Developing a Business Plan
Chapter 4
Section 2
Financial Management
Accounting: The Backbone of Financial Management

28. The Importance of Financial Management
Developing a Business Plan
Chapter 4
Section 2
Financial Management
The Importance of Financial Management
Aspects of Financial Management
Make a profit
Invest part of profit for future use
Make and monitor investments
Use accounting for sound financial management

29. 4 Developing a Business Plan Section 2 Financial Management
Chapter 4
Section 2
Financial Management
Suppose your office discovered it had a cash crunch one month. Prepare a list of three suggestions for ways to help cut office expenses.
Responses may include
Printing on both sides of paper
Using refilled ink cartridges instead of new ones
Using ceramic mugs instead of paper cups

30. Economic Indicators 4 Developing a Business Plan Chapter
Use Economic Indicators When Developing Your Business Plan
Unemployment Figures
Consumer Price Index (CPI)

31. Developing a Business Plan
Chapter 4

32. Developing a Business Plan
Chapter 4

33. End of