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Business Plan

Business Plan. Introduction. Introduction. Includes: Mission Statement Detailed description of the business and its goals The ownership of the business and the legal structure The skills and experience you bring to the business

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Business Plan

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  1. Business Plan Introduction

  2. Introduction • Includes: • Mission Statement • Detailed description of the business and its goals • The ownership of the business and the legal structure • The skills and experience you bring to the business • The advantages you and your business have over your competition

  3. Mission Statement • Clear succinct representation of the company’s purpose • Should drive decisions made by the company • Can range from very simple to complex • Examples: • Starbucks - Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. • Microsoft – At Microsoft, our mission and values are to help people and businesses throughout the world realize their full potential. • Facebook - Facebook’s mission is to give people the power to share and make the world more open and connected.

  4. Legal Structure There are three main kinds of business entities or ownership: sole proprietorships, partnerships, and corporations

  5. Sole Proprietorship • Simplest kind of business where owned by single individual • Small business often are sole proprietorships • Individual owner has full liability for all debts occurred • Advantages: • Can be run simply with little governmental control • Owner has complete control over business • Disadvantages: • Difficult to raise money • Only one person invested in company • Owner bears all responsibility for debt and personal assets may be taken

  6. Partnership • A business owner by two or more people • Advantages: • More than one person comes up with capital • Losses will be shared • Each partner may bring a specific skill set to the business • Disadvantages: • Disagreements can occur • Partners may not share the same vision of the company or agree on the same mission

  7. Partnership Agreement • Sets down in writing the rights and responsibilities of each of the owners • Agreement identifies the following: • Name of the business partnership • Names of the partners • Type and value of the investment each partner contributes • Managerial responsibilities to be handled by each partner • Accounting methods to be used • Rights of each partner to review and/or audit accounting documents • Division of profits and losses among partners • Duration of the partnership • Conditions under which the partnership can be dissolved • Distribution of assets upon dissolution for the partnership • Procedure for dealing with the death of a partner

  8. Corporation • A business that has the legal rights of a person but is independent of its owners • Has a board of directors, who meet to make important decisions affecting the company • Advantages: • Liability – limited to the amount of money invested • Money can be raised by selling stock shares • Disadvantages: • Complicated • Need a lawyer to help file articles of corporation with state • Can be costly • Subject to more governmental regulation • Double taxation – The corporation is taxed, then the individual is taxed

  9. S Corporation • Small corporation • Not taxed as a business • Individual shareholders are taxed on profits as in a partnership • Must follow same formalities and recordkeeping procedures as regular corporations • Owners can use losses to offset personal income tax

  10. Limited Liability Company(LLC) • Legal form of business that goes further than an S Corporation in providing the benefits of partnership taxation and limited personal liability for all the owners for the business • Not subject to the rules for an S Corporation so simpler to operate • Owners are known as members and can participate in management of company

  11. Detailed Description • Describe how you came up with your business idea • What your business entails • Include short-term (up to 1 year), medium-term (2-5 years), and long-term (5 years +)

  12. Skills and experience • Share your relevant experience • Describe your skill set • Past jobs, volunteer activities, hobbies/interests, anything you believe makes you valuable • You can also include important members of your team and their experience

  13. Competitive Advantage • What gives your company an advantage over your competitors? • Performance • Quality • Reliability • Distribution • Price • Promotion • Public image or reputation • How is your solution unique? • Lowest Price, Best Service, Best Quality

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