1 / 40

Develop a Business Plan

3. Develop a Business Plan. 3.1 Why a Business Plan is Important 3.2 What Goes into a Business Plan? 3.3 How to Create an Effective Business Plan. Ideas in Action. Turning an Idea into a Business (p.63). Passion for graffiti art turned into a business.

edward-saunders
Download Presentation

Develop a Business Plan

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 3 Develop a Business Plan 3.1 Why a Business Plan is Important 3.2 What Goes into a Business Plan? 3.3 How to Create an Effective Business Plan

  2. Ideas in Action Turning an Idea into a Business (p.63) • Passion for graffiti art turned into a business. • Prior to requesting financing from a bank, you should prepare the “five c’s.” • Character - are you honest and dependable? • Capacity - can you earn enough $ to pay back loans? • Capital - do you have enough $ on hand to pay bills? • Collateral - do you have values to back up your loans? • Conditions - do you have potential to continue earning $? Chapter 3

  3. Lesson 3.1Why a Business Plan is Important Goals • Explain the purpose of writing a good business plan. • Describe the importance of a business plan. Chapter 3

  4. The Business Plan • business plan • a written document that describes all the steps necessary for opening and operating a successful business • A business plan will: • describe your ideas to investors • serve as a guide for you as you start your business Chapter 3

  5. Purposes of a Business Plan • A business plan: • explains the idea behind your business • how your product/service will be produced & sold • sets specific objectives and how you will achieve them • describes the experience of the people who will run the business Chapter 3

  6. 3.1 Purposes of a Business Plan • A business plan helps obtain finances: • Convinces investors that your business idea is solid • Products must be newer, better, or less expensive then those previously available • Showing how you will retain customers • Short-, Medium-, & Long-terms sales projections should show profitability • Background & Experience must convince investors that you are capable for running the business. Chapter 3

  7. What are the three main purposes of a business plan? Chapter 3

  8. Importance of a Business Plan • A business plan: • makes you think about all aspects of your business • may help you secure financing • helps you communicate your ideas to others • can serve as a tool for managing your business Chapter 3

  9. Why is a business plan important to an entrepreneur? Chapter 3

  10. Lesson 3.2What Goes into a Business Plan? Goals • List and describe the basic elements of a business plan. • Describe how to pull a business plan together. Chapter 3

  11. Basic Elements of a Business Plan • The three basic components of a business plan are: • introductory materials • the main body • the appendix • All business plans will differ but should contain the same basic information. Chapter 3

  12. Business Plan Layout • Intro Elements • Title Page • Table of Contents • Cover Letter • Statement of Purpose • Executive Summary • Body Elements • Introduction • Marketing • Finances • Operations • Concluding Statements • Appendix Chapter 3

  13. 5 Elements of the Main Body • The main body of a business plan contains the bulk of the information about the business idea including: • Introduction • Marketing • Financial Management • Operations • Concluding Statement Chapter 3

  14. Main Body - Introduction • Introduction should contain following info: • A detailed description of business goals • short, medium, and long-term goals • Legal structure of business, including ownership • sole proprietor, partnership, or corporation • Your applicable skills and experience • paid, volunteer, and hobbies Chapter 3

  15. Main Body - Introduction • The competitive advantages of your business • Performance • Quality • Reliability • Distribution • Price • Promotion • Public image or reputation Chapter 3

  16. Main Body - Marketing • The marketing section of the business plan should describe: • Products/Services • Market • Industry • Location • Described on next slide Chapter 3

  17. 3.2 • Products/Services • Describe products/services • Explain how they differ from existing products • Highlight unique features • Explain the customer benefits • Market • Who is your market? • How large is the market? • How do you plan to enter the market? • How will you deal with competition? Chapter 3

  18. 3.2 • Industry • Growth potential • Economic trends • Technology impacts • Forecast for the industry growth • External factors that affect the business • High competitionor lack of suppliers • Location • Location to competition • Location to target market • Availability of parking & other shopping Chapter 3

  19. 3.2 Main Body – Financial Management • Helps determine your financial needs. • Consists of 3 elements • Identification of Risks • It is reassuring to lenders to know that you have proactively defined risks and that you have a plan for dealing with them. Chapter 3

  20. 3.2 Main Body – Financial Management • Financial Statements • pro forma financial statement: a financial statement based on projected revenues and expenses • Funding Request and Return on Investment • personal investment • loan based financing (borrowing) • plan for how the funding will be used • anticipated return on investment (ROI) Chapter 3

  21. Operations • Daily Business Management • Staffing • hiring and personnel procedures • Facilities • buy or lease • Equipment • production and delivery equipment Chapter 3

  22. Concluding Statement • Summarize goals and objectives. • Emphasize your commitment to the success of your business. Chapter 3

  23. List the elements of the main body of a business plan and explain why each one is important. Chapter 3

  24. Complete the Business Plan • Introductory elements • Title Page • cover letter • a letter that introduces and explains an accompanying document or set of documents • Table of Contents • Statement of Purpose • a brief explanation of why you are asking for a loan and what you plan to do with the money Chapter 3

  25. Chapter 3

  26. Chapter 3

  27. Complete the Business Plan • Executive Summary • A short restatement of the report • An executive summary should: • compel the reader to continue reading • describe your business concept • include financial projections • identify physical needs • state the requested loan value Chapter 3

  28. Chapter 3

  29. Complete the Business Plan • Appendix • includes supporting documents that provide additional information to support the body of the report • Put It All Together • The business plan should be: • neat • attractive • well-organized • inviting to read Chapter 3

  30. Why should you include supporting documents in your business plan? Chapter 3

  31. Lesson 3.3How to Create an Effective Business Plan Goals • Describe resources available for researching your business plan. • Name common mistakes to avoid in business planning. Chapter 3

  32. Research the Business Plan • Convince readers you have a practical business idea by including information and data from objective resources and showing solid evidence. • Most entrepreneurs spend 50 to 100 hours developing their business plan. • Process requires: Patience, Research, Thought, Great Deal of Writing and Editing Chapter 3

  33. 3.3 Community, Government, & Professional Resources • Small Business Administration (SBA) • an independent government agency • helps Americans develop new businesses • Small Business Development Centers(SBDC) • a cooperative effort of the private sector, the educational community, and federal, state, and local governments • provides free, individualized help for business plan development for those who cannot afford private consultant Chapter 3

  34. 3.3 Community, Government, & Professional Resources • Service Corps of Retired Executives (SCORE) • retired executives provide free, confidential advice to entrepreneurs • either in person or over the Internet • both short-term and long-term assistance is available • Chamber of Commerce • provides information on local business trends Chapter 3

  35. 3.3 Community, Government, &Professional Resources • Trade Associations • organizations that are comprised of professionals in a specific industry • provide educational and networking opportunities • Professional Consultants • experts who will provide business assistance for a fee • Financial Institutions • Bankers and Accountants can provide information about loans and financial statements. Chapter 3

  36. 3.3 Print Resources • library (books on business development) • magazines (trade and small business) • government documents (publications) Online Resources • Provide information similar to library information • Industry specific websites • Websites targeted to entrepreneurs and small business owners Chapter 3

  37. 3.3 People Resources • Small Business Development Centers • One-on-One Assistance • Inexpensive workshops • SCORE’s Volunteer Executives • Free confidential advice • Professional Consultants • Confidential advice at a cost Chapter 3

  38. What are some of the resources that are available to help you develop your business plan? Chapter 3

  39. Mistakes in Business Planning • Avoid making the following mistakes: • Unrealistic financial projections • An undefined target market • Poor research • Ignored competition • Inconsistencies in the Business Plan Chapter 3

  40. List some common mistakes that are made in business planning. Chapter 3

More Related