Business Plan Slides.docx

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Chapter 35—Developing a Business Plan

Business Plan—proposal describing every part of your new business to potential investors & lenders (road map for success).

The business plan helps you…

 Obtain Financing —convince investors & lenders that you have a viable business venture.

 Guide the opening of the business —identifies necessary procedures (steps) to legally

establishing your business.

 Manage the business successfully —identifies month to month steps to ensure success.

4 Sections of a Business Plan: 1. Executive Summary

2. Description & Analysis of the Business Situation

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PART 1—Executive Summary (we’ll discuss & key this last)

PART 2—Description & Analysis of the Business Situation (3 page max) A. Rationale & Marketing Research—

 discuss the need for your business in the local marketplace (document/cite any

supporting research/data)

 local/regional/national trends

(demographic, psychographic, economic, etc.) that create “demand” for your

products/services (document/cite any supporting research/data)

 is there an “underserved” market?

 how well are present providers meeting current demand?

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B. Introduction—

 type of business

 business name

 brief description of the major products/services

 give business philosophy (how your

business should be run; your firm’s role in the marketplace

 something unique about your business (what sets you apart from the competition) C. Self-Analysis—

 personal education, training & experience

 strengths, weaknesses

 plan for personal development in your field (future education & training that will help you succeed in your business

venture)

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D. Analysis of the Business Opportunity, Customer & Location—

 geographic, demographic & economic

analysis of trading area (internet search— City of Fargo, FM Chamber of Commerce, West Acres, other)

 population statistics (inc. ages, disposable income) search—US Census

 competition (who, how many & where)

 trends that could affect your business (i.e. increasing # of single-parent families

indicates greater need for professional day care services)

 economic factors (growth, trends in pricing, interest rates, government development projects, seasonal fluctuations)

 target market (typical customer—age,

gender, marital status, education, income, ethnic background, lifestyle, etc.)

 proposed location of the business

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E. Proposed Organization—

 type of ownership (proprietorship, partnership, franchise / independent business)

 steps in starting your business

 personnel needs (staffing)

 organization chart

The business plan is a form of persuasive writing—remember every decision you make regarding your business must be backed by logical rationale…your business plan should constantly be telling “WHY” (i.e. when

identifying your proposed location, follow by telling the REASON for your choice):

“Our shop will be located on the corner of University & 19th Avenue North. This location is ideal for 3 reasons:

(1) it is an intersection of 2 major local traffic routes; (2) it ensures tremendous exposure to travelers attending

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PART 3—Proposed Marketing/Promotion Plan (3 page max)

A. Proposed Product/Service—

 details about products/services you will sell

 identify potential suppliers for your goods & equipment

 describe how you will manage your inventory (how much or what will you

keep on hand; how will you keep track of what is sold)

 if a service business—how, when & who will provide services to customers

B. Proposed Pricing Policy—

 explain cost to buy your product (including setup & delivery if appropriate)

 indicate your markup policy (pricing philosophy)

 show prices in relation to major competitors

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C. Personal Promotion—

 describe how the quality of your business/ products/service will attract your

customers through word of mouth

 describe the appeal of your

employees/products/store/location/image etc.

 describe the quality of personal selling & service your customers can expect

D. Nonpersonal Promotion—

 describe the advertising media you will use (tv, radio, newspaper, billboard, etc)

 describe the participation in & benefits of participation in national advertising (if

applicable)

 outline the initial promotional plan for your grand opening

 explain why & how this will work for your business

E. Place—

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 tell HOW goods will be shipped from manufacturer/wholesaler to you

 indicate procedures for receiving and storing inventory

PART 4—Proposed Financing Plan (3 page max)

A. Projected Income / Cash Flow Statement

 budget describing the income & expenses for the first year

 shows money received, paid & balance for the year

 income statement—financial statement showing income & expenses for a specific period of time

 cash flow statement—financial statement showing the amount of cash expected to be received & paid out for the year

B. Projected 3-Year Plan—

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C. Capital & Repayment Plan—

 Indicate your personal investment in the business (savings, family gifts, partner’s share/investment, other earnings sources)

 money borrowed from banks, SBA loans, credit unions

 plan to re-pay borrowed funds

 how much will you pay in interest?

 how long will your loan(s) be for?

 how much will your monthly loan payments be?

 what will be offered as collateral for your loan?

PART VI—BIBLIOGRAPHY

 Websites from which you gathered data

 Booklets/brochures, describing the

community, or business (franchise info.)

 Sources of information on industry

 Advertising/Promotional resources (rate cards)

 SBA / SBDC / any other sources of information

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PART VII—APPENDIX

 Letters sent / received

 Transcripts of interviews & questions

 Copies of surveys & questionnaires

 Copies of advertising/ promotional materials:

 Ad layouts for print media (newspaper, magazine, billboard, etc.)

 TV storyboards or radio script sheets

 Other printed/promotional items (i.e. coupons, loyalty programs, premiums, etc.)

PART 1—Executive Summary (1 page max)

 may be single or double-spaced

 briefly summarize the main aspects of your business, including:

 name; location; description/background of

the business; major products and services; need/niche you plan to serve; competitive

advantage; start-up costs; estimated 1st

-year sales & profit; external capital

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