6. Starting a business
Make a professional business plan
Include:
An Executive Summary
Service Provided / Product Analysis
Market Strategy
(Competitor Analysis, Pricing,
Location, Barriers to entry etc)
Management & Staff
Financial Data
(Pro-forma Income statement,
Balance Sheet, & Cash flow statement)
7. Starting a business
Executive Summary:
The executive summary is often the most important part of your business plan.
Positioned at the front of the document, it is the first part to be read. However, as a
summary it makes sense to write it last.
It may be the only part that will be read. Faced with a large pile of funding requests,
venture capitalists and banks have been known to separate business plans into 'worth
considering' and 'discard' piles based on this section alone.
What is it?
The executive summary is a synopsis of the key points of your entire plan. It should
include highlights from each section of the rest of the document - from the key
features of the business opportunity through to the elements of the financial forecasts.
Its purpose is to explain the basics of your business in a way that both informs and
interests the reader. If, after reading the executive summary, an investor or manager
understands what the business is about and is keen to know more, it has done its job.
8. Starting a business
Product / Service Analysis:
Here you should explain in detail the reason for your businesses existence. What is the
economic value that your business will provide? Why would potential customers be
interested in your business and how will these product and / or services be created
and provided.
9. Starting a business
Market Analysis:
What differentiates your business from others that already exist in the marketplace?
Here you need to provide synopsis of all the market research you have done and give a
very detailed competitor analysis. Remember potential investors exist all over the
world and come from various different backgrounds – there is a good chance they
know nothing about your industry and your business plan needs to give them a more-
than—general idea. Pricing strategy is also added into this section of the plan a well as
details of the demographic you are targeting using this pricing strategy.
10. Starting a business
Management & Staff:
In reality, a business is no more than the sum of the people involved. It does not
matter how good your product or service is unless you have enough skill and talent in
your workforce to be able to execute all business operations in an efficient manner.
11. Starting a business
Financial Data, or Pro-Forma Financial Data:
Here you need a balance sheet, income statement, and a cash flow statement.
Each of these documents will provide a different angle to see the financial health of
your company. Although these pages will be at the end of your Business Plan, usually
a venture capitalist will read this immediately after reading the executive summary. If
the Executive summary looks attractive, the investor will want to see if the numbers
look like something they would like to entertain. Only after seeing the numbers would
they bother to get into the nit and gritties of your plan.
17. Starting a business
Discussion Questions:
1 – What are some common traits of an entrepreneur? Do you possess any of these?
Why do you think so?
2 – If you were to start your own company what would it be? What industry? Why?
What market analysis have you already done? Why do you think you would be
successful?
3 – Failure is the mother of success. Give an example of why this sentence is true.
4 – If you do want to start your own business, what are some of the things that are
preventing you to do so at the moment? How will you overcome these obstacles?
5 – What is the difference between wanting to do something, trying to do it, and
actually doing it? Give examples.
6 – When have you every really wanted to do something but not do it because you
were too “scared” for some reason?
