The document discusses the importance of a business plan for entrepreneurs. It outlines the initial steps in setting up a business plan, which includes completing market research to determine demand. The main parts of a business plan are then described in detail, including the executive summary, management team plan, company description, product/service plan, vision/mission statements, industry/market analysis, competitive analysis, marketing plan, operational plan, organizational plan, financial plan, growth plan, and contingency plan. The business plan gives entrepreneurs a way to focus their vision and determine feasibility, and helps investors understand how the business intends to be profitable.

1. Chapter 5
Entrepreneurship
Section 5.2
The Business Plan

2. Read to Learn
Describe how to prepare for your own business.
Discuss the parts of a business plan.

3. The Main Idea
Once an entrepreneur discovers a good business
opportunity, the next step is to do market
research. Market research helps to determine
whether there will be a demand for a new product
or service. It can also uncover issues to address
in a business plan.

4. Key Concepts
Initial Steps in Setting up a Business Plan
Parts of a Business Plan

5. Key Term
business
plan
a written description of a new
business venture that describes all
aspects of the business
executive
summary
a brief account of the key points
contained in a business plan

6. Key Term
vision
statement
establishes the scope and purpose
of a company and reflects its values
and beliefs
mission
statement
expresses the specific aspiration of
a company, the major goals it will try
to reach

7. Initial Steps in Setting up a Business
• Complete Market
Research to determine
there is demand for your
product or service
• Write a business plan
business plan
a written description of a
new business venture that
describes all aspects of
the business

8. Why write a business plan?
Entrepreneur/
Business Owner
• Helps focus on:
– what they want to
do
– how they will do it
– what they expect to
accomplish
Investors/
Finance Agencies
• Helps them determine
how the business
intends to make their
venture profitable in
order to get a return on
their investment or pay
back their loan.

9. What will I produce?
Who are my main competitors?
Why is my product or service needed?
How much will my product or service cost to produce?
How many people will I need to run the business?
What physical facilities will I need?
What licenses, permits, or other legal documents do I need?
How much money will I need to get started?
Checklist for Starting a Venture

10. Parts of a Business Plan
• A business plan must be well organized and
easy to read.
• There are 16 essential parts of a business
plan.

11. Executive Summary
Should:
• be short and contain the
most important information
from each section of the
business plan.
• Open with a compelling story
to persuade the reader that
the business is going to
succeed
• have support gathered
through market research
executive summary
a brief account of the key
points contained in a
business plan.

12. Management Team Plan
• presents your qualifications and those of any
partners you might have.
• discusses how you will fill gaps in expertise.
(examples: hire consultants, additional partners,
advisory board)

13. Company Description
• provides an outline of the business and
helps investors understand the size, scope,
and type of business you plan to start.
• explains why the venture is going to
succeed.

14. Product and Service Plan
• describes the product or service you want to
offer
• Describes spin-offs (additional products you
plan to offer after your company is more
established) This shows growth potential.

15. Vision and Mission Statements
• state the guiding
principles of your
business.
vision statement
establishes the scope and
purpose of a company and
reflects its values and beliefs
mission statement
expresses the specific
aspirations of a company
and the goals it will try to
reach

16. Industry Overview
• presents your research of the industry
(Industry – is defined as companies that
provide similar, complementary, or different
products or services)
• discusses trends and growth within the
industry.

17. Market Analysis
• Research about your customer’s profile.
• Helps you determine your overall market and sales strategy
• Should include the following about the target market
and business location:
• geographic (zip code, state, climate)
• economic (environment in terms of barriers to entry and
regulations)
• demographic (age, gender, income and occupation

18. Competitive Analysis
• Explains how does your business have an
advantage over your competition?
• Gather information on your competitors by
viewing their websites, talking to their
customers, vendors, suppliers, and
employees, attending trade shows

19. Marketing Plan
discusses how a
company makes its
customers aware of its
products or services.
Market
niche
Company
image
Media
plan/social
Media plan
Pricing
Marketing
tactics
Marketing
budget
Parts of the Marketing Plan

20. Operational Plan
The operational plan includes the business
processes that result in production and
delivery of the product or service.

21. Organizational Plan
• describes the people who will run the firm
as well as management’s philosophy.
• Discuss the form of the organization, such
as sole proprietorship, partnership,
corporation, etc.

22. Financial Plan
• presents forecasts for the business.
• provides proof that the new business will
be financially healthy.

23. Growth Plan
• looks at how the business will expand in
the future.
• Investors and lenders like to know that a
business plans to grow and deal with
growth.

24. Contingency Plan
• looks at likely risks to the business and
ways to minimize those risks.
• Examples: what if we have lower than
expected sales. What will we do?

25. Cover Page, Title Page, Table of Contents,
and Supporting Documents
The cover page should include:
Company name
Address
Phone number
Web site
E-mail addresses
Company logo

26. Cover Page, Title Page, Table of Contents,
and Supporting Documents
The title page should include:
Company name
Names, titles, and addresses of the owners
The date the plan was submitted
The name of the preparer

27. Cover Page, Title Page, Table of Contents,
and Supporting Documents
The table of contents details the components
of the business plan.

28. Cover Page, Title Page, Table of Contents,
and Supporting Documents
Supporting documents include exhibits and
other information relevant to the business.

29. Figure 5.2
Parts of a
Business Plan

30. 1. Why is a business plan important?
It gives important information before embarking
upon the venture and helps sell lenders and
investors on the plan.

31. 2. Why should entrepreneurs carefully study
their competitors before starting a business?
To know they are competing against, allowing
them to figure out how they will attract
customers.

32. 3. Why is a growth plan important in a business
plan?
It shows the business can grow beyond
the initial stage of development.

33. Chapter 5
Entrepreneurship
Section 5.2
The Business Plan
End of