Developing an Effective Business Plan

1. Developing an Effective Business Plan Putting the Pieces Together

2. Discussion Topics • Starting a Business Venture • Business Planning • Parts of a Business Plan • Resources for Small Businesses

3. Becoming an Entrepreneur • People become entrepreneurs for many reasons. • Entrepreneurs come from all type of backgrounds and industries. • There are advantages and disadvantages of owning your own business. • There are many resources that can help you identify and develop business opportunities.

4. Starting a New Venture • Determine the products or services you will sell/offer • Determine what type of business you will own • Franchise • Buy an existing business • Create a business from ground up • Create a business plan

5. Role of Small Business Today • In 2002, there were approximately 22.9 million small businesses in the United States. • Small business employ 99.7% of employers. • Most small businesses are service based. • Women and minority-owned business are growing at a fast rate.

6. Planning to Own a Business “Begin with the end in mind.” --Stephen Covey, The 7 Habits of Highly Effective People

7. What is a Business Plan? A written document that describes all the steps necessary in opening and operating a successful business.

8. Purpose of Business Plan Business plan serves three primary purposes: • Explains the idea behind your business and how your product or services will be produced and sold. • Sets specific objectives and describes how your business expects to achieve them. • Describes the backgrounds and experience of the people who will be running the business.

9. Importance of Business Plan • Makes you think about all aspects of your business. • May help you secure financing for your business. • Helps communicate your ideas to others. • Serve as a tool for managing your business.

10. Sections of a Business Plan • Business plans should include some basic information in the following areas: • Executive Summary • History and Background of your idea • Goals and Objectives • Product(s) or Service(s) you will offer • Form of Ownership • Management and Staffing • Sales and Marketing Plan • Financial Plan

11. Section 1: The Executive Summary • Usually a one page description of the business. • Provides a snapshot or brief overview of the business plan.

12. Section 2: History & Background • Describes how you came up with your business idea. • May include your business philosophy or mission statement.

13. Section 3: Goals & Objectives • Your business plan should outline your: • short-term goals • medium-term goals • long-term goals • Describes your vision of where you want your company to be in the future.

14. Section 4: Products & Services • Describes the industry you will operate in: • External factors affecting your business • Growth potential of the industry • Economic trends of the industry • Describes the location of your business • Lenders want to know exactly where your business will be located because location is often a critical factor in operating a successful business.

15. Section 5: Forms of Ownership

16. Section 6: Management & Staffing • People who manage your business are critical to its success. • This section of the business plan should show that you and the employees of your business are highly qualified to run the business.

17. Section 7: Sales & Marketing Plan • This part of the plan includes the following: • Who are your prospective customers • How large is the market for your product or service • How you plan to enter the market • You should list your company’s advantages over the competition.

18. Section 8: Financial Plan • Identification of risks associated with your business. • Current and projected financial statements based on projected revenues and expenses. • Funding request and return on investment.

19. Resources for Small Business Owners • Small Business Development Centers • Provide one-on-one assistance in developing a business plan • Chambers of Commerce • Supports local business owners by hosting training workshops • Small Business Administration (SBA) • Governmental agency concerned with helping small U.S. firms and advocates for small businesses within the U.S. government • Provides financial assistance in the form of loans • Professional Organizations • Young Entrepreneur’s Organization (www.yeo.org): global non-profit organization for today’s leading business owners • National Federation of Independent Business (www.nfib.org): largest advocacy organization representing small and independent businesses in the US.

20. Creating an Effective Business Plan • Research the Business Plan • Use printed resources to gather information—books, magazines, etc. • Access online resources using the internet. • Seek assistance from resources such as Small Business Development Centers, professional organizations, etc. • Put Your Plan Together • Type your business plan • Include introductory elements such as a cover letter, table of contents, etc.

21. Key Points • A business plan is a written document that describes what your business will produce/sell and how it will operate. • Writing a business plan will help you to think about all aspects of your business including financing and managing your business. • There are many resources to help you create an effective business plan

22. Final Thoughts