Operate and Grow Business - Business Plan


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Operate and Grow Business - Business Plan

  1. 1. Effectively Operate and Grow Your Business The Business Plan
  2. 2. The Business Plan <ul><li>Business Plan – Why? </li></ul><ul><ul><li>A plan raises your odds of success. The process forces you to take an objective, critical, unemotional look at your project. </li></ul></ul><ul><ul><li>The plan communicates your ideas to others and provides the basis for your financial proposal. </li></ul></ul><ul><ul><li>The finished plan becomes your operating tool and benchmark of progress. (Are you working the plan and is it working?) </li></ul></ul><ul><li>Business Plan - What? </li></ul><ul><li>The business plan is a written document that describes your business and your plan for running it…. This becomes your management blueprint, with frequent updating, throughout your business life. </li></ul>
  3. 3. How is the Business Plan Used? <ul><ul><li>The plan answers questions such as: </li></ul></ul><ul><ul><ul><li>Why do I want to be in business? </li></ul></ul></ul><ul><ul><ul><li>What business am I in? </li></ul></ul></ul><ul><ul><ul><li>Who are my customers? </li></ul></ul></ul><ul><ul><ul><li>What is the market condition? </li></ul></ul></ul><ul><ul><ul><li>How will I manage this business? </li></ul></ul></ul><ul><ul><ul><li>What are my financial needs? </li></ul></ul></ul><ul><ul><li>These are key strategic issues </li></ul></ul>
  4. 4. BP Format and Composition <ul><li>ESSENTIAL COMPONENTS </li></ul><ul><ul><li>Executive Summary </li></ul></ul><ul><ul><li>Description of Products and Services </li></ul></ul><ul><ul><li>The Market </li></ul></ul><ul><ul><li>Marketing Strategy </li></ul></ul><ul><ul><li>Competition </li></ul></ul><ul><ul><li>Organization and Operations </li></ul></ul><ul><ul><li>The Management Team </li></ul></ul><ul><ul><li>Personnel </li></ul></ul><ul><ul><li>Financial Information </li></ul></ul><ul><ul><li>Timetables & Benchmarks </li></ul></ul><ul><ul><li>Supporting Documentation </li></ul></ul>
  5. 5. Executive Summary <ul><li>An overview of your business </li></ul><ul><ul><li>Business Description </li></ul></ul><ul><ul><li>Market Niche </li></ul></ul><ul><ul><li>Management Expertise </li></ul></ul><ul><ul><li>Sales and Profit Forecast – 3 to 5 years </li></ul></ul><ul><ul><li>Request for financing </li></ul></ul><ul><ul><li>Use of funds and repayment </li></ul></ul>
  6. 6. Business Description <ul><li>Product or Services </li></ul><ul><li>“ Niche?” </li></ul><ul><li>Customer Benefits </li></ul><ul><li>Management Organization Strengths and Weaknesses </li></ul>
  7. 7. Elements of the Marketing Plan <ul><li>Target Market </li></ul><ul><li>Competition </li></ul><ul><li>Promotion / Advertising Set budget, evaluate use of various media, measure </li></ul><ul><li>Market Research </li></ul>
  8. 8. Marketing Strategy <ul><li>Target Customers </li></ul><ul><li>Who are they, where are they, what are they buying, from whom? </li></ul><ul><li>Marketing Mix, the Four Ps: Price, Product, Place, Promotion </li></ul><ul><li>Competitive Analysis </li></ul><ul><li>Market Research: Market Trends Sales / Profitability Economic Interests Population Shifts </li></ul>
  9. 9. Competitive Analysis <ul><li>Who are your major competitors? </li></ul><ul><li>What are their strengths and weaknesses? </li></ul><ul><li>What are their marketing strategies? </li></ul><ul><li>What are the major trends affecting the competitive environment? </li></ul><ul><li>Industry, Economic, Social </li></ul>
  10. 10. Public Relations <ul><li>Network! </li></ul><ul><li>Community Involvement </li></ul><ul><li>Volunteer Involvement </li></ul><ul><li>Event Sponsorships </li></ul><ul><li>Send out press releases about newsworthy events </li></ul><ul><li>(be creative about what’s newsworthy) </li></ul><ul><li>Give a seminar or presentation to relevant business groups </li></ul><ul><li>Submit articles to local media and to trade publications </li></ul>
  11. 11. Low-Cost Promotion <ul><li>Use every outgoing piece of paper, and every electronic document as business promotion (include company slogan, web address etc., email signature) </li></ul><ul><li>Offer a newsletter on your website to collect email addresses and stay in touch with customers and prospects </li></ul><ul><li>Use social media to advantage </li></ul><ul><li>Measure success of the various approaches, where feasible </li></ul>
  12. 12. Management Team <ul><ul><li>Experience and Quality </li></ul></ul><ul><ul><li>Personal history of the principals </li></ul></ul><ul><ul><li>Work experience </li></ul></ul><ul><ul><li>Management experience </li></ul></ul><ul><ul><li>Responsibilities </li></ul></ul>
  13. 13. Personnel <ul><ul><li>Current personnel needs </li></ul></ul><ul><ul><li>Future needs </li></ul></ul><ul><ul><li>Skill requirements </li></ul></ul><ul><ul><li>Job descriptions </li></ul></ul><ul><ul><li>Available labor pool </li></ul></ul><ul><ul><li>Salaries and benefit s </li></ul></ul>
  14. 14. Financial Information <ul><ul><li>Financial Requirements How much do you need? How will you get it? </li></ul></ul><ul><ul><li>Sources of Capital </li></ul></ul><ul><ul><li>Income Statement </li></ul></ul><ul><ul><li>Break-even analysis </li></ul></ul><ul><ul><li>Balance Sheet </li></ul></ul><ul><ul><li>Cash Flow </li></ul></ul>
  15. 15. Supporting Documentation <ul><ul><li>Resumes </li></ul></ul><ul><ul><li>Credit Information </li></ul></ul><ul><ul><li>Quotes or estimates </li></ul></ul><ul><ul><li>Letters of intent from prospective customers </li></ul></ul><ul><ul><li>Personal references </li></ul></ul><ul><ul><li>Leases or buy/sell agreements </li></ul></ul><ul><ul><li>Legal documents relevant to the business </li></ul></ul>
  16. 16. Work the Plan <ul><li>To beat the odds… </li></ul><ul><li>Select the right business [the one you know and have a passion for] </li></ul><ul><li>Know [research, learn] the market, customers and competition </li></ul><ul><li>Choose a viable market niche [avoid me-too and price cutting businesses] </li></ul><ul><li>Define your marketing strategy </li></ul><ul><li>Run a “back-of-the-envelope” break even assessment early in the game </li></ul><ul><li>DEVELOP A BUSINESS PLAN (A good business plan helps set you apart from the crowd) </li></ul><ul><li>Develop credible [realistic and substantiated] financial projections and a financial model </li></ul><ul><li>Define the right legal business structure </li></ul><ul><li>Adequately capitalize the company [equity and debt financing] </li></ul><ul><li>Keep records and establish and accounting system from day 1 </li></ul><ul><li>Hire develop & TRAIN good employees </li></ul><ul><li>Manage risk [insurance] </li></ul><ul><li>Effectively use cyberspace and conventional advertising </li></ul><ul><li>Attract and retain customers </li></ul><ul><li>Manage cash flow, manage cash flow, manage cash flow…daily! </li></ul>
  17. 17. Learn to Make Adjustments <ul><li>SCORE Counseling </li></ul><ul><ul><li>CONFIDENTIAL </li></ul></ul><ul><ul><ul><li>Counselors abide by a code of ethics and honor confidentiality. </li></ul></ul></ul><ul><ul><li>FAST </li></ul></ul><ul><ul><ul><li>Receive advice directly from an experienced executive. </li></ul></ul></ul><ul><ul><ul><li>Variety of Expertise available </li></ul></ul></ul><ul><ul><li>FREE </li></ul></ul><ul><ul><ul><li>Offered free-of-charge, as a public service. </li></ul></ul></ul><ul><ul><ul><li>No limit on number of sessions </li></ul></ul></ul><ul><ul><ul><li>Available to all U.S. citizens & green card holders </li></ul></ul></ul><ul><ul><li>At downtown or satellite offices. Field counseling at your business' site. </li></ul></ul><ul><ul><li>SCORE advice helps businesses succeed. </li></ul></ul><ul><ul><li>An application for personal counseling be found on the web @ www.scoreworks.org </li></ul></ul>
  18. 18. Step 8: Work the Plan and learn to make Adjustments <ul><li>Seek counseling, use mentors or sounding boards [leave pride at the door] </li></ul><ul><li>Stay up-to-date, research, learn from your customers and competitors, continuously improve, develop an edge… </li></ul><ul><li>Work on your business rather than just in your business </li></ul>
  19. 19. Develop an Elevator Pitch <ul><li>Elevator Pitch Objective: </li></ul><ul><li>Someone who does not know your product would understand in the time it takes to ride an elevator up to the second floor (30-45 seconds) </li></ul><ul><ul><li>State your business concept </li></ul></ul><ul><ul><li>What is it you do for customers? </li></ul></ul><ul><ul><li>How does the customer benefit? </li></ul></ul><ul><ul><li>Who is in your target market? </li></ul></ul><ul><ul><li>How can prospects be identified? </li></ul></ul>