1. Topic 2 :: Business Strategies Mrs. Schroeder
What Do We Plan?
Topic 2 :: Business Strategies
Mrs. Schroeder

2. The Nature of Business Plans
What is a business plan?
The business plan (or strategic plan) is the document that methodically illustrates the company’s strategic direction, its main operating and financial targets, the actions it will take to achieve those objectives, the new initiatives and investments planned, and their impact on the company’s performance

3. The Need for Business Plans
When you start a new business
Apply for a business loan
Promoting an existing business
Operational purposes

4. Components
Title page
Executive Summary - should be concise, should tell what you’re asking for
Mission statement
Date business began
Name of founders and functions they perform

5. Components Company description Products or services Market analysis
Number of employees
Locations of businesses and branches
Products or services
Describe what you’re selling; focus on customer benefits
Market analysis
Know your market, customer needs, where they are how to reach them, etc.

6. Components Strategy and implementation Management team
Include management responsibilities with dates and budgets
Management team
Describe the organization and key management team members

7. Components Financial analysis Cash flow analysis
The main aspect of your business
Cash revenues and cash outlays over a given period of time
The desirable outcome is to prove that you can maintain a positive cash flow while you pay financing and interest
Pro forma balance sheet
Pro forma statements summarize specific financial activities using a layout approved under the generally accepted accounting principles (GAAP)

8. Components Break even analysis Sales forecast Ratio analysis
profitability ratios
gross margin
return on sales
return on investment
liquidity ratios such as current ratio, debt to equity and working capital

9. Performance Activity

10. The Mission Statement Reasons for creating a mission statement:
Increases efficiency
Increases productivity
Increases profitability
Strategic and marketing plans built on the foundation provided by the mission statement

11. Mission Statement Helps to keep your company on course
Helps to define your purpose and goals
Fundamental in defining where the business is going and how it intends to get there

12. Mission Statement Characteristics
It should be feasible
It should be precise
It should be clear
It should be motivating
It should be distinctive
It should indicate major components of strategy
It should indicate how objectives are to be accomplished

13. Procedures for Defining a Mission Statement
What is the purpose of our company?
What needs or opportunities exist?
What are we doing to address these needs or opportunities?
What beliefs or values guide our work?

14. Performance Activity

15. Company Goals/Objectives
Company goals and objectives are important because:
They define your destination
They shape what your business will become
Goals and objectives are critical to the success of any business

16. Goals/Objectives Uses
Set a goal for your business first
Then set S.M.A.R.T. objectives that help to accomplish your goal
S – Smart
M – Measurable
A – Attainable
R – Realistic
T – Timely

17. Uses Areas that goals/objectives can be defined: Market standing
Productivity
Profitability
Innovation
Manager performance
Worker performance and attitude

18. How to Develop Goals/Objectives
First, develop a list of short-term, mid-term, and long-term goals
Short-term – first 6 months
Mid-term – 6 months to 1 year
Long-term – 1 year and longer
Determine what steps need to be taken to accomplish each goal and beak it into manageable sections

19. How to Develop Goals/Objectives
Determine if there is a cost associated with your goal
If there is, ensure that the amount appears in the appropriate chart in your financial section

20. Performance Activity