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Business Plans

Learn about different business entity types, including Sole Proprietorship, Corporation, & S Corporation. Understand trademarks, company names, domains, & startup costs. Essential information for setting up a new business venture.

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Business Plans

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  1. Business Plans Part 2 Taken from http://www.bplans.com/hurdleonline http://www.sba.gov/starting/indexbusplans.html

  2. Initial Business Plan Assignment • Mission/Objectives – what’s the true nature of your business (don’t be too narrow), how will you build customer satisfaction, what is your workplace philosophy, what value to the customer do you offer • Keys to success – limit to three and focus on those • Target Market – good educated guess • Competitive Advantage – what distinguishes you and your product • Basic Strategies – how will you develop the company and products • Initial break-even chart

  3. Simplified Business Plan Outline • Executive Summary • Company Summary • Product Description • Market Analysis Summary • Strategy and Implementation Summary • Management Summary • Financial Plan

  4. Company Summary - Legal • Types of Business Entities • Sole Proprietorship • Pros - simple, inexpensive up front • Cons - personal responsibility to creditors • Tax treatment is straight through to your personal return • Partnership • Pros – partnership agreement serves as legal core, defines levels of risk, buy-out agreements, etc. • Cons – requires good attorney, can be complex • Tax treatment is usually straight through to your personal return

  5. Company Summary - Legal • Types of Business Entities (Cont.) • C Corporation • Pros – used by majority of companies, best shielding from liability, best non-tax benefits, best for raising money and going public • Cons – profits taxed twice • Tax treatment – C Corporation pays its own taxes • S Corporation • Pros – used by smaller firms (25 owners maximum), profits taxed once • Cons – less shielding from liability than C Corp. • Tax treatment – S Corporation can pass profits or losses directly to owners

  6. Company Trademarks • Trademarks law protects product names, logos, trade names, slogans. • US Patent and Trademark Office website www.uspto.gov

  7. Company Names • Can’t reserve a name completely, but company has rights to its identity. • Types • Your own name • “Doing Business As” (county registration) • Corporation (state registration)

  8. Company Internet Domain Names • Can look in NSI Registrar database using searchers such as • www.networksolutions.com/cgi-bin/whois/whois • to find available second-level names (example.com or example.biz) and • to find links to help register names • .

  9. Company Location & Facilities • Describe • Offices and locations and function of each • Size (square footage) • Lease arrangements (etc.) • Internet services • All location & facilities factors that sell your company

  10. Company Strategy • Describe • Value proposition ex. reliability and service for a price • Competitive Edge • Proprietary technology protected by patents • Website name • Headstart in area

  11. Company Start-Up Costs • Start-Up Expenses – include only those that come before the start of the plan. Those that come after go in profit and loss table. • Expenses – those items that are deductible against income

  12. Start-Up Plan - Expenses Legal $1,000 Stationery, etc. $3,000 Brochures $5,000 Consultants $5,000 Insurance $350 Expensed Equipment $3,000 Other $1,000 Total Start-up Expense $18,350

  13. Start-Up Plan - Assets Cash Requirements $25,000 (cash may need to change as you get better estimates for cash flow) Other Short-Term Assets $7,000 Total Short-Term Assets $32,000 Long-Term Assets 0 Total Assets $32,000

  14. Total Start-Up Plan Requirements Total Start-up Expense $18,350 Total Assets $32,000 Total Start-Up Requirements $50,350

  15. Start-Up Funding – Investments Investor 1 $20,000 Investor 2 $20,000 Other $10,000 Total Investment $50,000

  16. Start-Up Funding – Liabilities Short-Term Liabilities Unpaid Expenses $350 Short-Term Loans $0 Interest-Free Short-Term Loans $0 Subtotal Short-Term Liabilities $350 Long-Term Liabilities $0 Total Liabilities $350

  17. Start-Up Table Summary Total Start-Up Expenses $18,350 Total Assets $32,000 Total Start-Up Requirements $50,350 Total Investment $50,000 Total Liabilities $350 Total Investment and Liabilities $50,350 Loss at Start-Up (- Start-Up Expenses) ($18,350) Total Capital (Assets – Liabilities) $31,650 Total Capital and Liabilities $32,000 Must Match

  18. Rule of Accounting Capital = Assets – Liabilities This is company’s Net Worth

  19. Product Description • Describe the product • What the product is • How much it cost • Who purchases it • Think about customer needs and benefits • Use this to as possible way of generating new ideas • Do competitive comparison • What buyer choices are available • How does you product line compare to other companies • Describe what goes into your product • What are the sources of vital components

  20. Product Description (cont.) • Describe how technology with affect your business • Is it a positive or a threat? • Describe future products • How will they be developed • What is the relationship to present products • What are the market needs • Include sales literature • Advertisements • Brochures • Tech. Specs.

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