From Backpacks to Briefcases. How to develop your own business plan. Hank Jordan, CMC www.atl.devry.edu/hjordan

1. From Backpacksto Briefcases.How to develop yourown business plan.Hank Jordan, CMCwww.atl.devry.edu/hjordan

2. Outline of a Business Plan I. Executive Summary II. Company Description A. Legal Form of Business B. Company’s Mission C. Names of Top Management D. Location and Geographic Information E. Company’s Development Stage F. Company’s Products or Services G. Specialty Business Information

3. Outline of a Business Plan continued III. The Industry Analysis A. Size and Growth Trends B. Maturity of Industry C. Vulnerability to Economic Factors D. Seasonal Factors E. Technological Factors F. Regulatory Issues G. Supply and Distribution H. Financial Considerations

4. Outline of a Business Plan continued IV. The Target Market A. Demographics/Geographics B. Lifestyles and Psychographics C. Purchasing Patterns D. Buying Sensitivities E. Size and Trends of Market

5. Outline of a Business Plan continued V. The Competition A. Competitive Position B. Market Share Distribution C. Barriers to Entry D. Future Competition

6. Outline of a Business Plan continued VI. Marketing and Sales Strategy A. Company’s Message B. Marketing Vehicles C. Strategic Partnerships D. Other Marketing Tactics E. Sales Force and Structure F. Sales Assumptions

7. Outline of a Business Plan continued VII. Operations A. Plant and Facilities B. Manufacturing/Production Plan C. Equipment and Technology D. Variable Labor Requirements E. Inventory Management F. Supply and Distribution G. Order Fulfillment and Customer Service

8. Outline of a Business Plan continued VII. Operations continued H. Research and Development I. Capacity Utilization J. Quality Control K. Safety, Health and Environmental Concerns L. Shrinkage M. Management Information Systems

9. Outline of a Business Plan continued VIII. Management and Organization A. Principals/Key Employees B. Board of Directors C. Consultants/Specialists D. Management to Be Added E. Organizational Chart F. Management Style/Corporate Culture

10. Outline of a Business Plan continued IX. Development and Exit Plans A. Long-Term Company Goals B. Growth Strategy C. Milestones D. Risk Evaluation E. Exit Plan

11. Outline of a Business Plan continued X. The Financials (grouped by year) A. Sales Plan B. Staffing Plan C. TQM Plan D. Marketing Plan E. Operations Plan F. Capital Budget G. Cash Budget

12. Outline of a Business Plan continued X. The Financials (continued) H. Income Statement I. Balance Sheet J. Cash Flow K. Break Even Analysis L. Plan Assumptions M. Use of Funds XI. Appendix

13. Financial Flow Chart Sales Plan Production Plan Staffing Plan TQM Plan Marketing Plan Operations Plan Cash Budget Capital Budget Income Statement Balance Sheet Cash Flow

15. Time Saving Tips • Develop a research plan • Prioritize the most important areas • Organize your documentation • Use technology • When stuck - get help

16. Considerations for Your Business When you sell a service, You sell yourself.

17. Common Factors of Service Businesses 1. Intangible product; 2. Subjective judgment of Quality; 3. Relatively few barriers to entry; 4. Perishable product; 5. Time lapses between use; 6. Quality depends on the actual service provider.

18. Trends in Business Faster delivery speed Branching out/franchises One stop shopping/personal banker

19. Strategies for Improving Your Business 1. Make your product more tangible; 2. Develop a distinct image; 3. Cultivate referral sources; 4. Stay in touch with your customers; 5. Encourage timely purchases; 6. Stress quality and employee education; 7. Find ways to use excess capacity.

21. Internal Planning for ExistingBusinesses & Corporations Define specific objectives such as: Total revenues Sales per employee Revenues per customer Profit margin Inventory levels and Production time Collection activity

22. Performance Objectives Measurable: objective not subjective Reasonable: reachable goal Time Specific: by a certain date Motivational: not too hard, not too easy

23. Problem Solving Plan 1. Define the problem 2. Assemble the team 3. Consider solutions 4. Recommend activities 5. Implement activities 6. Measure activities Plan - Do - Check - Act

24. Customer Analysis - current customers Products/Services purchased? Number of units purchased? Sales $ this year? Sales $ last year? Sales $ prior year?

25. Customer Analysis - new customers Reason for purchase? How was sale secured? Sales $ this year? Sales $ last year? Sales $ potential?

26. Customer Analysis - lost customers Products/Services purchased? Reason for loss? Potential for regain? Last annual purchase $? Previous $ high annual?

28. I - The Executive Summary 1. Your basic business concept makes sense; 2. Your business had been thoroughly planned; 3. That management is capable; 4. A clear-cut market exists; 5. Your business has competitive advantages; 6. Your financial projections are realistic; 7. Investors have an excellent chance to get a return.

29. I - The Executive Summary (continued) • Your executive summary is the single most important part of your business plan. • It must motivate the reader to consider your plan. • Prepare your Executive Summary last, only after your entire plan has been completed.

31. II - Company Description Names: Legal or corporate name Doing business as ... Brand or trade names Subsidiary companies

32. Company Description (continued) Legal form: Legal form of business State incorporated County for business license Owners or major stakeholders

33. Company Description (continued) Management/Leadership: Chairperson of the board President Chief Executive Officer Chief Financial Officer Chief Operating Officer Advisory board members

34. Company Description (continued) Location: Company headquarters Place of business Branches Geographic area served

35. Company Description (continued) Developmental stage: When company was founded When product or service introduced Milestones reached Significant developmental indicators

36. Company Description (continued) Financial status: Last year’s total sales Last year’s pretax profit Current number of employees Amount of funds sought Basic use for funds sought Major financial obligations

37. Company Description (continued) Products and services: General description Number and type of lines Number in each line Patents and licenses: Patents held and pending Trademarks held and pending Licenses held and pending

39. III - Industry Analysis • A description of your industry • Current trends in your industry • Strategic opportunities that exist in your industry

40. Your Economic Sector Service Manufacturing Retail Distribution Note: your business may belong to more than one

41. Size and Growth Rate Two years ago Last year This year Next year Five years out

42. Industry Maturity Introduction Growth Mature Decline

43. Sensitive to Economics Which of these will affect your business? Little business expansion Increased unemployment High interest rates High inflation Weakened dollar

44. Seasonality How many seasons does your business have? Holidays Summer Winter Spring Fall

45. Technological Change How will changes in technology affect . . . your products your services your costs your business

46. Regulation and Certification National State County What effects will they have on your business?

47. Plan Preparation Form Industry description Industry trends Strategic opportunities

49. IV - The Target Market Demographic Geographic Psychographic

50. Market Size and Trends • What is the current size? • What is the rate of growth? • Are changes occurring in your market? • Are social values affecting your market? • What else is affecting your market?