Be an Entrepreneur The Entrepreneur The Business Plan The Enterprise • Epilogue
The Business PlanCHAPTER 05
Remember our learning objectives a. Gain useful knowledge • how to conceptualize a business idea • how to build and run the small business b. Learn good Work Attitudes • To display good work attitudes via class Activities & homework • To emulate the winning attitudes and skills of successful entrepreneurs. c. Gain wisdom and benefits from the course, • in terms of positive learning and management abilities, • they will serve the student well, even if he does not pursue an entrepreneurial career.
Chapter 5 overviewThe previous chapters gave a bird’s eye view of creating a business.They encouraged you to study the market or customer, identify unmet needs or gaps, develop a product or service to address those needs, and build your competitive advantage.
Chapter 5 overviewWe go into ever greater detail in the next four chapters to flesh out the business plan.
Chapter 5 overviewChapter 5 willdefine the business plan; explain: why entrepreneurs need one, who will read it, and how to go about writing the plan.
Chapter 5 overviewWe highlight the: executive summary, company summary, management profile, and risk-and-reward profile.
Chapter 5 overviewThose sections highlight the main points of your plan. Details of the plan will follow in the next three chapters.
Coverage of the Chapter• What is a Business Plan?• How to write the Business Plan• Writing style for a Business Plan• Characteristics of a good plan
Coverage of the Chapter• Contents of the Plan• The Executive Summary• Company Summary• Management Profile• Risk-and-reward profile• Tip: think of the reader
Learning Objectives• Define a “business plan"• List the readers of a business plan• List the characteristics of a good business plan• List the components of a business plan
Learning Objectives• Define the following sections: executive summary, company summary management profile, risk-and-reward profile• Know what readers look for in the executive summary• Know why he should write a business plan from the point of view of the investor
Activities characteristics ManagementIcebreaker of good profile business planGlossary. Risk-reward Discussion Video. profileParts of a Executivebusiness Summary summary plan
Story from Real LifeThomas D., 38, was tired of his predictable life. After 12 years as a management consultant for a computer company, the native Belgian was faced with a choice.Should he continue the next 20 years in a predictable career or follow his entrepreneurial dream of sharing his favorite childhood treat: authentic Belgian waffles.
Story from Real LifeNow, instead of traveling the country in a suit and tie, he travels the streets of New York City in an apron, selling freshly made waffles out of a yellow van.
Story from Real Life"I was looking for a business that would have meaning. My version of meaning is bringing a happy moment—a moment of indulgence or a smile—to peoples days. A waffle definitely does that," Thomas says.
Story from Real LifeThomas spent a year perfecting his recipes while still employed at IBM.He eventually took a leave of absence when he started “Waffles and Dinges” in October 2007.He prepared a business plan.He calculated the expenses and projected the sales.
Story from Real LifeThen he resigned from his computer company job to start serving waffles.Now, DeGeest is happy that he has finally found the unpredictable life he was craving for.
Central Idea Keep in mind the PurposeThink of Writing the Important the business ContentsReader plan make sure it is complete
GlossaryBusiness plan: A detailed statement of what your business is going to do in the future.
GlossaryExecutive summary: The first section of a business plan covering the main points of the document. Its purpose is to convince readers that your business has merit. It encourages them to read the remaining sections.
GlossaryCompany summary: The section of the business plan that tells the readers what the company is, who is behind it and where it is going. It provides a brief account of business operations, history, purpose and organization.
GlossaryManagement profile: The section of the business plan that details the backgrounds of the company’s management team.
Points to Remember• The business plan is your means of communicating your vision to the world to help you attract talent and money to the business.• It is a detailed statement of what your business is going to do in the future.
Points to Remember• The readers of your business plan are: banks, venture capitalists, and private investors. Also your management team and business partners.
Ask Yourself• Am I ready to explain clearly and concisely what my objectives are in starting this business?• Am I able to explain my objectives in a way that the potential investors can appreciate?
Points to Remember• The characteristics of a good business plan:• short and simple• interesting• easy to understand• contains no typing errors• contains visuals and graphs.
Ask Yourself• Am I confident about the prospects of the business?• Does my confidence show in the way I describe the details that go into the plan?
Ask Yourself• Am I able to do a complete work, without leaving out important parts of the plan?• Do I make the effort to dig out information that will enrich the analysis, even if it is difficult to find this information?
Points to RememberThe major sections in the business plan are: • executive summary, • company summary, • management profile, • risk-and-reward profile.
Points to Remember• The executive summary covers the highlights of your business plan.• The purpose of the summary is to convince readers that your business has merit.
Points to Remember• The company summary tells the readers what the company is, who is behind it, and where it is going.• The company summary should include: names, background, history, and goals.
Points to Remember• The management profile includes: organizational chart of managers, resumes, and professionals.• Businesses have opportunities as well as risks. A good business plan does not skip the risks. Risk is unavoidable. Your business plan must unflinchingly confront risk in terms of potential problems and threats
Points to RememberThe executive summary should explain:• Purpose: intent of your business plan.• Opportunity: market potential of the business.• Benefits: unique selling proposition• Financial requirements: much is needed• Growth: how your company will grow in the next few years.
Points to RememberWrite the plan from the point of view of the reader. It will help enormously to put yourself in the place of your prospective investor. It will help you to respond to the readers concerns, rather than letting yourself write what interests you, the entrepreneur.
Ask Yourself• Am I ready to rewrite and revise the draft of the plan until it reads like a professional document?• Am I willing to be corrected in my grammar and style to be able to prepare an excellent business plan?
Ask Yourself• Am I going to be able to write honestly and fairly about:• the strengths and weaknesses of my business.• my first few employees and managers• my prospects for success or failure.
Ask Yourself• Will I be able to speak honestly about the risks confronting the business?• Will I mention all the risks?
Ask Yourself• Can I develop the skills of seeing things from the point of view of my reader?• Can I train myself to empathize with the perspective of the person I am dealing with?
The Marketing PlanNEXT CHAPTER: 06
Chapter 6 overviewIn Chapter 5, we discussed the sections that highlight the main points of the business plan. These sections are the executive summary, the company summary, the management profile, and the risk and reward profile.
Chapter 6 overviewThe aim of these sections is to give a strong impression to the investor that the opportunity is compelling and that you and your team are the best people to run it.
Chapter 6 overviewOf course, the investor will need more than just the main points to be convinced and support your business idea with funds. Chapter 6 to 8 provide the needed detail to achieve your goal.
Chapter 6 overviewWe start with the marketing plan in Chapter 6. You might want to take a moment to review your notes on your customers and competitors. Your insights on your customers will guide the marketing effort.