Chapter 8
TheThe MechanicsMechanics ofof
Writing an EffectiveWriting an Effective
Business PlanBusiness Plan
This Week’s KEYThis Week’s KEY
ResourcesResources
Resources
Resources
Resources
Resources
Resources
• The understanding you get from the planning
process required to write the plan is invaluable
• Details every major chara...
• Vision (10 words)
• Mission (25-50 words)
• Elevator Pitch (60-100 words)
• Executive Summary (250-500 words)
• Business...
• Expresses the fundamental idea or goal
of the business.
• It tells everyone where your organization
wants to go to.
• Ta...
cesces
• Related to the vision statement
• Adds competitive advantage information
• Written from the perspective of what
will mak...
• “Sell” your firm in the time it takes to
make a ride in an elevator, around 30
seconds.
• Approximately 100 words.
• Pro...
• One to two pages (250-500 words
minimum) overview of the business.
• Describes the business, market,
expectations, and g...
Resources
• Mantra: 3-6 words (Quality is Job 1.)
• Mission: co. name, product/service,
customer, and market.
• Measures: business g...
• 1st
paragraph: Introduce yourself and
your business.
• 2nd
paragraph: Explain your company in
greater detail.
• 3rd
para...
• Co. Name
• Contact information
• Date the version was completed
• Proprietary statement to protect your
ideas
Title Page
• T.O.C
• Executive Summary
• The Company
– Co. Description: 1-2 pages
– Product/Service & Industry: 1-8 pages
Other Stuff
The MarketThe Market
• It’s all about your customers – who they are,
where they are, how to find them and keep
them
• The total population of p...
• Focus on 1) overall business strategy to pursue
your market 2) sales plan, and 3) longer term
plan to protect your compa...
• The legal form of the business (LLC, sole
proprietorship)
• Use org charts for larger firms
• Key personnel: owners, man...
FinancialsFinancials
$ $ $$ $ $
• Be CONSERVATIVE
• Income Statement (Profit & Loss) and
assumptions
• Cash flow and assumptions
• Balance sheet and assum...
  JAN FEB MAR APR
Revenue $2,630 $1,898 $0 $0
Variable Expenses   $164 $1,667 $400 $0
Gross Profit $2,466 $231 -$400 $0
Ex...
• Product pictures
• Industry reports
• Price lists
• Floor plans
• Marketing collateral: logos, ad copy, DMs,
websites, b...
• AKA Screening Plan.
• Used to send to professional funders like
private banks, angels, VC firms,
investment clubs
• Incl...
Entrepreneurship Chapter 8 Ethan Chazin
Entrepreneurship Chapter 8 Ethan Chazin
Entrepreneurship Chapter 8 Ethan Chazin
Entrepreneurship Chapter 8 Ethan Chazin
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Entrepreneurship Chapter 8 Ethan Chazin

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Great tips, resources, best practices and strategies for entrepreneurs, start-ups, professionals and small business owners.to plan launch and grow successful businesses.

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Entrepreneurship Chapter 8 Ethan Chazin

  1. 1. Chapter 8 TheThe MechanicsMechanics ofof Writing an EffectiveWriting an Effective Business PlanBusiness Plan
  2. 2. This Week’s KEYThis Week’s KEY ResourcesResources
  3. 3. Resources
  4. 4. Resources
  5. 5. Resources
  6. 6. Resources
  7. 7. Resources
  8. 8. • The understanding you get from the planning process required to write the plan is invaluable • Details every major characteristic of the business • Critical for TWOTWO reasons: – External legitimacyExternal legitimacy: when somebody requires it – Internal understandingInternal understanding: getting everything clear in your mind • Telling a story about your future business The Planning Process
  9. 9. • Vision (10 words) • Mission (25-50 words) • Elevator Pitch (60-100 words) • Executive Summary (250-500 words) • Business Plan (40 pages) Levels of Involvement
  10. 10. • Expresses the fundamental idea or goal of the business. • It tells everyone where your organization wants to go to. • Tagline, slogan or mantra: – Our Vision is to…“Help You Achieve Your Dream Job” Vision Statement
  11. 11. cesces
  12. 12. • Related to the vision statement • Adds competitive advantage information • Written from the perspective of what will make a difference for a customer – Our mission is to: “Help you to find your life’sHelp you to find your life’s passion, and make it your careerpassion, and make it your career.” • Keep it Simple, short, and direct Mission Statement
  13. 13. • “Sell” your firm in the time it takes to make a ride in an elevator, around 30 seconds. • Approximately 100 words. • Provide memorable information about your business. • The “HOOK”… your business purpose - the what and where, and the delivery. Elevator Pitch
  14. 14. • One to two pages (250-500 words minimum) overview of the business. • Describes the business, market, expectations, and goals. • The #1 item to send to anyone who enquires about your business. Executive Summary
  15. 15. Resources
  16. 16. • Mantra: 3-6 words (Quality is Job 1.) • Mission: co. name, product/service, customer, and market. • Measures: business goals given as measurable results. • Method: the activities that will turn your business into a success. • Mechanics: the tasks that are required to accomplish what’s listed in the method. 5-M Model
  17. 17. • 1st paragraph: Introduce yourself and your business. • 2nd paragraph: Explain your company in greater detail. • 3rd paragraph: describe the current situation of your business and explain what you are looking for from the recipient. • 4th paragraph: Close and thank them for their consideration. Cover Letter
  18. 18. • Co. Name • Contact information • Date the version was completed • Proprietary statement to protect your ideas Title Page
  19. 19. • T.O.C • Executive Summary • The Company – Co. Description: 1-2 pages – Product/Service & Industry: 1-8 pages Other Stuff
  20. 20. The MarketThe Market
  21. 21. • It’s all about your customers – who they are, where they are, how to find them and keep them • The total population of people or businesses you aim to serve, defined by size and scope (where they are) • Target customer: the ideal customer to buy your product or service • Competition and Competitive Advantage: who are they, what do they offer, how much do they charge, what makes them unique The Market
  22. 22. • Focus on 1) overall business strategy to pursue your market 2) sales plan, and 3) longer term plan to protect your company against competitors: – Business Strategy discusses your general strategy with respect to differentiation, cost, and focus – Sales plan: Addresses how you are going to generate sales. Show how you will convert the value benefits your clients are looking for into your pricing, promotional activities, advertising, etc. – Long term plans to protect against competitors using R&D to develop new offerings, key partnerships, superior service, intellectual property, etc. Your Marketing Strategy
  23. 23. • The legal form of the business (LLC, sole proprietorship) • Use org charts for larger firms • Key personnel: owners, managers, salespeople, influential outsiders, service providers • Location: home-based business? The Organization
  24. 24. FinancialsFinancials $ $ $$ $ $
  25. 25. • Be CONSERVATIVE • Income Statement (Profit & Loss) and assumptions • Cash flow and assumptions • Balance sheet and assumptions • Past two years of actuals (for existing businesses) and 3 years worth of projections • New businesses require 1.5-2 years of projections Financials
  26. 26.   JAN FEB MAR APR Revenue $2,630 $1,898 $0 $0 Variable Expenses   $164 $1,667 $400 $0 Gross Profit $2,466 $231 -$400 $0 Expenses/Fixed Costs $0 $0 $0 $0 Owner Salary $0 $0 $0 $0 Net Profit $2,466 $231 -$400 $0 Equity Inflow $0 $0 $0 $0 Cash Position $2,466 $231 -$400 $0
  27. 27. • Product pictures • Industry reports • Price lists • Floor plans • Marketing collateral: logos, ad copy, DMs, websites, blogs, PR, case studies • Testimonials Appendices
  28. 28. • AKA Screening Plan. • Used to send to professional funders like private banks, angels, VC firms, investment clubs • Include your price lists. • Very brief overview of the firm and the financials. • Includes cover letter, title page, executive summary & your financials • Informational plan: include everything EXCEPT the financials. The Mini Business Plan

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