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  • 1. Business Plans It is about results
  • 2. Planning is a Process
  • 3. Elements Supporting Successful Plan Implementation 1. Is the plan simple , easy to understand and to act on? Does it communicate its contents easily and practically? 2. Is the plan specific ? Are its objectives concrete and measurable? Does it include specific actions and dates of completion, specific persons responsible and specific budgets?
  • 4. Elements Supporting Successful Plan Implementation (cont.) 3. Is the plan realistic ? Are the sales goals, expense budgets, and milestone dates realistic? Nothing stifles implementation like unrealistic goals. 4. Is the plan complete ? Requirements of a business plan vary, depending on the context. There is no guarantee, however, that the plan will work if it doesn't cover the main bases.
  • 5. Use of a Business Plan
    • Define and fix objectives, and programs to achieve those objectives.
    • Create regular business review and course correction.
    • Define a new business.
    • Support a loan application.
    • Define agreements between partners.
    • Set a value on a business for sale or legal purposes.
    • Evaluate a new product line, promotion, or expansion.
  • 6. No Time to Plan? A Common Misconception “ Not enough time for a plan. I can't plan. I'm too busy getting things done.” A business plan now can save time and stress later. Too many businesses make business plans only when they have to. The busier you are, the more you need to plan.
  • 7. Business Plans Don’ts
    • Don't use a business plan to show how much you know about your business.
    • Nobody reads a long-winded business plan: not bankers, bosses, nor venture capitalists.
  • 8. Elements of a Business Plan
    • Descriptions of Company
    • Product or Service
    • Market
    • Forecasts
    • Management Team
    • Financial Analysis
  • 9. Sample Business Plan Outline 1. Executive Summary : Write this last. It's just a page or two of highlights. 2. Company Description : Legal establishment, history, start-up plans, etc. 3. Product or Service : Describe what you're selling. Focus on customer benefits. 4. Market Analysis : You need to know your market, customer needs, where they are, how to reach them, etc.
  • 10. Sample Business Plan Outline 5. Strategy and Implementation : Be specific. Include management responsibilities with dates and budget 6. Management Team : backgrounds of key members of the team, personnel strategy and details. 7. Financial Plan : including profit and loss, cash flow, balance sheet, break-even analysis, assumptions, business ratios, etc.
  • 11. Use of Tables and Charts
    • Tables and charts present information in visual formats with greater impact that words alone
    • Some business tables and charts that are normally expected in a standard business plan
    • Plan should include business charts that use bar charts and pie charts to illustrate cash flow (single most important numerical analysis in a plan), sales forecast, and profit and loss statements, projected balance sheet, projected business ratios, and market analysis
  • 12. Time Frame
    • Opinions vary - A business plan should normally project sales by month for the next 12 months, and annual sales for the following two years.
    • This doesn't mean businesses shouldn't plan for a longer term than just three years. It does mean, however, that the detail of monthly forecasts doesn't pay off beyond a year, except in special cases.
  • 13. Description of the Business
    • Legalities - business form: proprietorship, partnership, corporation. The licenses or permits you will need.
    • Business type: merchandizing, manufacturing or service.
    • What your product or service is.
    • Is it a new independent business, a takeover, an expansion?
    • Why your business will be profitable. What are the growth opportunities? When your business will be open (days, hours)?
    • What you have learned about your kind of business from outside sources (trade suppliers, bankers, publications).
  • 14. Product/Service
    • What you are selling.
    • How your product or service will benefit the customer.
    • Which products/services are in demand; if there will be a steady flow of cash.
    • What is different about the product or service your business is offering.
  • 15. The Location
    • What are your location needs?
    • What kind of space will you need?
    • Why is the area desirable? The building desirable?
    • Is it easily accessible? Is public transportation available? Is street lighting adequate?
    • Are market shifts or demographic shifts occurring?
  • 16. The Marketing Plan
    • Who are your customers? Define your target market(s).
    • Are your markets growing? steady? declining?
    • Is your market share growing? steady? declining?
    • If a franchise, how is your market segmented?
    • Are your markets large enough to expand?
    • How will you attract, hold, increase your market share? how will you promote your sales?
    • What pricing strategy have you devised?
  • 17. The Competition
    • Who are your five nearest direct competitors?
    • Who are your indirect competitors?
    • How are their businesses: steady? increasing? decreasing?
    • What have you learned from their operations? from their advertising?
    • What are their strengths and weaknesses?
    • How does their product or service differ from yours?
  • 18. Pricing and Sales
    • retail cost and pricing
    • competitive position
    • service costs and pricing (for service businesses only)
  • 19. The Management Plan
    • How does your background/business experience help you in this business?
    • What are your weaknesses and how can you compensate for them?
    • Who will be on the management team and what are their strengths/weaknesses and duties?
    • Are these duties clearly defined?
    • Will this assistance be ongoing?
    • What are your current personnel needs and what are your plans for hiring and training personnel?
    • What salaries, benefits, vacations, holidays will you offer?
  • 20. Initial Business Plan Assignment
    • Mission/Objectives – what’s the true nature of your business (don’t be too narrow), how will you build customer satisfaction, what is your workplace philosophy, what value to the customer do you offer
    • Keys to success – limit to three and focus on those
    • Target Market – good educated guess
    • Competitive Advantage – what distinguishes you and your product
    • Basic Strategies – how will you develop the company and products
    • Initial break-even chart
  • 21. Simplified Business Plan Outline
    • Executive Summary
    • Company Summary
    • Product Description
    • Market Analysis Summary
    • Strategy and Implementation Summary
    • Management Summary
    • Financial Plan
  • 22. Company Summary - Legal
    • Types of Business Entities
      • Sole Proprietorship
        • Pros - simple, inexpensive up front
        • Cons - personal responsibility to creditors
        • Tax treatment is straight through to your personal return
      • Partnership
        • Pros – partnership agreement serves as legal core, defines levels of risk, buy-out agreements, etc.
        • Cons – requires good attorney, can be complex
        • Tax treatment is usually straight through to your personal return
  • 23. Company Summary - Legal
    • Types of Business Entities (Cont.)
      • C Corporation
        • Pros – used by majority of companies, best shielding from liability, best non-tax benefits, best for raising money and going public
        • Cons – profits taxed twice
        • Tax treatment – C Corporation pays its own taxes
      • S Corporation
        • Pros – used by smaller firms (25 owners maximum), profits taxed once
        • Cons – less shielding from liability than C Corp.
        • Tax treatment – S Corporation can pass profits or losses directly to owners
  • 24. Company Trademarks
    • Trademarks law protects product names, logos, trade names, slogans.
    • US Patent and Trademark Office website
  • 25. Company Names
    • Can’t reserve a name completely, but company has rights to its identity.
    • Types
      • Your own name
      • “Doing Business As” (county registration)
      • Corporation (state registration)
  • 26. Company Internet Domain Names
    • Can look in NSI Registrar database using searchers such as
    • whois
    • to find available second-level names ( or and
    • to find links to help register names
    • .
  • 27. Company Location & Facilities
    • Describe
      • Offices and locations and function of each
      • Size (square footage)
      • Lease arrangements (etc.)
      • Internet services
      • All location & facilities factors that sell your company
  • 28. Company Strategy
    • Describe
      • Value proposition
        • ex. reliability and service for a price
      • Competitive Edge
        • Proprietary technology protected by patents
        • Website name
        • Headstart in area
  • 29. Company Start-Up Costs
    • Start-Up Expenses – include only those that come before the start of the plan. Those that come after go in profit and loss table.
    • Expenses – those items that are deductible against income
  • 30. Start-Up Plan - Expenses Legal $1,000 Stationery, etc. $3,000 Brochures $5,000 Consultants $5,000 Insurance $350 Expensed Equipment $3,000 Other $1,000 Total Start-up Expense $18,350
  • 31. Start-Up Plan - Assets Cash Requirements $25,000 (cash may need to change as you get better estimates for cash flow) Other Short-Term Assets $7,000 Total Short-Term Assets $32,000 Long-Term Assets 0 Total Assets $32,000
  • 32. Total Start-Up Plan Requirements Total Start-up Expense $18,350 Total Assets $32,000 Total Start-Up Requirements $50,350
  • 33. Start-Up Funding – Investments Investor 1 $20,000 Investor 2 $20,000 Other $10,000 Total Investment $50,000
  • 34. Start-Up Funding – Liabilities Short-Term Liabilities Unpaid Expenses $350 Short-Term Loans $0 Interest-Free Short-Term Loans $0 Subtotal Short-Term Liabilities $350 Long-Term Liabilities $0 Total Liabilities $350
  • 35. Start-Up Table Summary Total Start-Up Expenses $18,350 Total Assets $32,000 Total Start-Up Requirements $50,350 Total Investment $50,000 Total Liabilities $350 Total Investment and Liabilities $50,350 Loss at Start-Up (- Start-Up Expenses) ($18,350) Total Capital (Assets – Liabilities) $31,650 Total Capital and Liabilities $32,000 Must Match
  • 36. Rule of Accounting Capital = Assets – Liabilities This is company’s Net Worth
  • 37. Product Description
    • Describe the product
      • What the product is
      • How much it cost
      • Who purchases it
    • Think about customer needs and benefits
      • Use this to as possible way of generating new ideas
    • Do competitive comparison
      • What buyer choices are available
      • How does you product line compare to other companies
    • Describe what goes into your product
      • What are the sources of vital components
  • 38. Product Description (cont.)
    • Describe how technology with affect your business
      • Is it a positive or a threat?
    • Describe future products
      • How will they be developed
      • What is the relationship to present products
      • What are the market needs
    • Include sales literature
      • Advertisements
      • Brochures
      • Tech. Specs.