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  1. 1. Creating an E-Business Plan Chapter 3 Creating a Winning E-Business Second Edition MIS/ENTR 375 Global E-Commerce
  2. 2. Learning Objectives <ul><li>Organize a business plan </li></ul><ul><li>Prepare an executive summary </li></ul><ul><li>Write a mission statement </li></ul><ul><li>Prepare a marketplace analysis </li></ul><ul><li>Create operational, financial, and management plans </li></ul><ul><li>Understand legal forms of businesses </li></ul><ul><li>Describe e-business partnerships </li></ul>
  3. 3. Business Plan Organization <ul><li>Business plan </li></ul><ul><ul><li>Formal business planning document </li></ul></ul><ul><ul><ul><li>Identifies the business and its mission </li></ul></ul></ul><ul><ul><ul><li>Names the key management team members </li></ul></ul></ul><ul><ul><ul><li>Describes the products or services to be offered </li></ul></ul></ul><ul><ul><ul><li>Provides a marketplace analysis </li></ul></ul></ul><ul><ul><ul><li>Identifies customers and competitors </li></ul></ul></ul><ul><ul><ul><li>Determines resources for profitable operations </li></ul></ul></ul><ul><ul><ul><li>Sets a timetable for profitability </li></ul></ul></ul>
  4. 4. Business Plan Organization (continued) <ul><li>Government and for-profit sources for business planning information and templates </li></ul><ul><ul><li>SCORE </li></ul></ul><ul><ul><li>SBA </li></ul></ul><ul><ul><li>BizPlanIt </li></ul></ul><ul><ul><li>Bplans.com </li></ul></ul><ul><ul><li>E-Future Centre </li></ul></ul>
  5. 5. Business Plan Organization (continued) <ul><li>Business plan components </li></ul><ul><ul><li>Cover sheet and title page </li></ul></ul><ul><ul><li>Table of contents </li></ul></ul><ul><ul><li>Executive summary </li></ul></ul><ul><ul><li>Business description </li></ul></ul><ul><ul><li>Vision/mission statement </li></ul></ul>
  6. 6. Business Plan Organization (continued) <ul><li>Business plan components (continued) </li></ul><ul><ul><li>Information on products/services </li></ul></ul><ul><ul><li>Industry, customer, competitor analyses </li></ul></ul><ul><ul><li>Operational, financial, and managerial plans </li></ul></ul><ul><ul><li>Identification of critical risks </li></ul></ul><ul><ul><li>Exit strategy </li></ul></ul>
  7. 7. Business Plan Organization (continued) <ul><li>Cover sheet </li></ul><ul><ul><li>Title of document and preparer’s name </li></ul></ul><ul><ul><li>Plan copy number </li></ul></ul><ul><ul><li>“Confidential” notation </li></ul></ul><ul><li>Title page </li></ul><ul><ul><li>Cover sheet information and </li></ul></ul><ul><ul><ul><li>Contact numbers </li></ul></ul></ul><ul><ul><ul><li>Key team members’ names </li></ul></ul></ul><ul><ul><ul><li>Name of person receiving the plan </li></ul></ul></ul>
  8. 8. Business Plan Organization (continued) <ul><li>Table of contents </li></ul><ul><ul><li>Lists all the major sections and subsections of the plan </li></ul></ul><ul><ul><li>Prepared after rest of plan is complete </li></ul></ul><ul><ul><li>Carefully checked for omissions and page number errors </li></ul></ul>
  9. 9. Business Plan Organization (continued) <ul><li>Executive summary </li></ul><ul><ul><li>A condensed version of the complete plan </li></ul></ul><ul><ul><li>Used by interested parties to quickly assess the business idea and weed out plans </li></ul></ul><ul><ul><li>Keep it short (one to three pages) </li></ul></ul><ul><ul><li>Use clear and concise language and action words </li></ul></ul><ul><ul><li>Create last after plan details are developed </li></ul></ul>
  10. 10. Business Plan Organization (continued)
  11. 11. Business Plan Organization (continued) <ul><li>Vision statement </li></ul><ul><ul><li>A formal statement of a business’s hopes and desires </li></ul></ul><ul><ul><li>Written to guide and inspire employees </li></ul></ul><ul><li>Mission statement </li></ul><ul><ul><li>A formal statement that explains a business’s reason for existing </li></ul></ul>
  12. 12. Business Plan Organization (continued) <ul><li>Business description </li></ul><ul><ul><li>Summary of business’s background </li></ul></ul><ul><ul><li>Information about legal form of business </li></ul></ul><ul><ul><li>Business’s history to date </li></ul></ul><ul><ul><li>Key personnel </li></ul></ul><ul><ul><li>Future goals </li></ul></ul>
  13. 13. Business Plan Organization (continued) <ul><li>Products or services section </li></ul><ul><ul><li>Description of products or services offered </li></ul></ul><ul><ul><li>Anticipated sales for each product or service </li></ul></ul><ul><ul><li>Describes benefits of product or service to customers </li></ul></ul>
  14. 14. Business Plan Organization (continued) <ul><li>Marketplace analysis </li></ul><ul><ul><li>Information about the specific industry of which business is a part </li></ul></ul><ul><ul><li>Description of targeted customers </li></ul></ul><ul><ul><li>Description of major competitors </li></ul></ul><ul><ul><li>Overview of marketing and sales strategies </li></ul></ul>
  15. 15. Business Plan Organization (continued) <ul><li>Operational plan </li></ul><ul><ul><li>Describes a business’s physical location and equipment </li></ul></ul><ul><ul><li>Notes the manufacturing or service actions needed to get products/services to market </li></ul></ul><ul><ul><li>Summarizes Web site operations </li></ul></ul>
  16. 16. Business Plan Organization (continued) <ul><li>Financial plan </li></ul><ul><ul><li>Explains how your e-business idea, goals, and strategies translate into profits </li></ul></ul><ul><ul><li>Provides standard financial statements for income, expense, and cash flow data </li></ul></ul><ul><ul><ul><li>Pro forma balance sheet </li></ul></ul></ul><ul><ul><ul><li>Projected income statement </li></ul></ul></ul><ul><ul><ul><li>Planned cash flow statement </li></ul></ul></ul><ul><ul><li>May include “deal plan,” break-even analysis, ratio analysis </li></ul></ul>
  17. 17. Business Plan Organization (continued)
  18. 18. Business Plan Organization (continued)
  19. 19. Business Plan Organization (continued) <ul><li>Management plan </li></ul><ul><ul><li>Organizational structure of business </li></ul></ul><ul><ul><li>Information on </li></ul></ul><ul><ul><ul><li>Key members of management team </li></ul></ul></ul><ul><ul><ul><li>Outside advisors </li></ul></ul></ul><ul><ul><ul><li>Mentors </li></ul></ul></ul><ul><ul><ul><li>Consultants </li></ul></ul></ul>
  20. 20. Business Plan Organization (continued) <ul><li>Appendices </li></ul><ul><ul><li>Resumes </li></ul></ul><ul><ul><li>Pictures of products </li></ul></ul><ul><ul><li>Explanation of services </li></ul></ul><ul><ul><li>Legal documents </li></ul></ul><ul><ul><li>Other supporting documentation </li></ul></ul>
  21. 21. Legal Forms of Organization <ul><li>Sole proprietorship </li></ul><ul><ul><li>Business started by an individual </li></ul></ul><ul><ul><li>Owner and business are one in the same for tax and legal liability issues </li></ul></ul>
  22. 22. Legal Forms of Organization (continued) <ul><li>Partnership </li></ul><ul><ul><li>Legal business entity with two or more co-owners </li></ul></ul><ul><ul><li>Follows a partnership agreement </li></ul></ul><ul><ul><li>General partnership: Tax and legal liabilities flow through to individual partners </li></ul></ul><ul><ul><li>Limited partnership </li></ul></ul><ul><ul><ul><li>General partner manages and assumes unlimited liability </li></ul></ul></ul><ul><ul><ul><li>Limited partners have liability for amount of their capital contribution and their accepted debt </li></ul></ul></ul>
  23. 23. Legal Forms of Organization (continued) <ul><li>Corporation </li></ul><ul><ul><li>Separate legal and taxable entity from its owners </li></ul></ul><ul><ul><li>“C” corporation owners are it shareholders </li></ul></ul><ul><ul><li>Liability is limited to investment in business </li></ul></ul><ul><ul><li>Profits are taxed twice: once for the corporation and again when distributed to owners as stock dividends </li></ul></ul>
  24. 24. Legal Forms of Organization (continued) <ul><li>Corporation (continued) </li></ul><ul><ul><li>“S” corporation gives owners partnership status and corporate liability protection </li></ul></ul><ul><li>Limited liability company (LLC) </li></ul><ul><ul><li>Tax status of sole proprietorship or partnership </li></ul></ul><ul><ul><li>Liability status of a corporation </li></ul></ul>
  25. 25. E-Business Partnerships <ul><li>Strong positive relationships with strategic partners are critical </li></ul><ul><ul><li>Partnerships that help build market awareness </li></ul></ul><ul><ul><ul><li>Public relations firms </li></ul></ul></ul><ul><ul><ul><li>Marketing consultants </li></ul></ul></ul><ul><ul><li>Partnerships that assist in operations </li></ul></ul><ul><ul><ul><li>Suppliers </li></ul></ul></ul><ul><ul><ul><li>Distributors </li></ul></ul></ul><ul><ul><ul><li>Web hosting companies </li></ul></ul></ul>