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Great tips, resources, best practices and strategies for entrepreneurs, start-ups, professionals and small business owners.to plan launch and grow successful businesses.
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Chapter 8
The The MechanicsMechanics of of Writing an Writing an
Effective Business Effective Business PlanPlan
This Week’s KEY This Week’s KEY ResourcesResources
Resources
Resources
Resources
• The understanding you get from the planning process required to write the plan is invaluable
• Details every major characteristic of the business
• Critical for TWO TWO reasons:– External legitimacyExternal legitimacy: when somebody requires it– Internal understandingInternal understanding: getting everything clear
in your mind
• Telling a story about your future business
The Planning Process
• Vision (10 words)• Mission (25-50 words)• Elevator Pitch (60-100 words)• Executive Summary (250-500 words)• Business Plan (40 pages)
Levels of Involvement
• Expresses the fundamental idea or goal of the business.
• It tells everyone where your organization wants to go to.
• Tagline, slogan or mantra:– Our Vision is to…“Help You Achieve Your
Dream Job”
Vision Statement
cesces
• Related to the vision statement• Adds competitive advantage information• Written from the perspective of what
will make a difference for a customer– Our mission is to: “Help you to find your life’s Help you to find your life’s
passion, and make it your careerpassion, and make it your career.”
• Keep it Simple, short, and direct
Mission Statement
• “Sell” your firm in the time it takes to make a ride in an elevator, around 30 seconds.
• Approximately 100 words.• Provide memorable information about
your business.• The “HOOK”… your business purpose -
the what and where, and the delivery.
Elevator Pitch
• One to two pages (250-500 words minimum) overview of the business.
• Describes the business, market, expectations, and goals.
• The #1 item to send to anyone who enquires about your business.
Executive Summary
Resources
• Mantra: 3-6 words (Quality is Job 1.)• Mission: co. name, product/service,
customer, and market.• Measures: business goals given as
measurable results.• Method: the activities that will turn your
business into a success.• Mechanics: the tasks that are required
to accomplish what’s listed in the method.
5-M Model
• 1st paragraph: Introduce yourself and your business.
• 2nd paragraph: Explain your company in greater detail.
• 3rd paragraph: describe the current situation of your business and explain what you are looking for from the recipient.
• 4th paragraph: Close and thank them for their consideration.
Cover Letter
• Co. Name• Contact information• Date the version was completed• Proprietary statement to protect your
ideas
Title Page
• T.O.C• Executive Summary• The Company
– Co. Description: 1-2 pages– Product/Service & Industry: 1-8 pages
Other Stuff
The MarketThe Market
• It’s all about your customers – who they are, where they are, how to find them and keep them
• The total population of people or businesses you aim to serve, defined by size and scope (where they are)
• Target customer: the ideal customer to buy your product or service
• Competition and Competitive Advantage: who are they, what do they offer, how much do they charge, what makes them unique
The Market
• Focus on 1) overall business strategy to pursue your market 2) sales plan, and 3) longer term plan to protect your company against competitors:– Business Strategy discusses your general strategy
with respect to differentiation, cost, and focus– Sales plan: Addresses how you are going to generate
sales. Show how you will convert the value benefits your clients are looking for into your pricing, promotional activities, advertising, etc.
– Long term plans to protect against competitors using R&D to develop new offerings, key partnerships, superior service, intellectual property, etc.
Your Marketing Strategy
• The legal form of the business (LLC, sole proprietorship)
• Use org charts for larger firms• Key personnel: owners, managers, salespeople,
influential outsiders, service providers• Location: home-based business?
The Organization
FinancialsFinancials
$ $ $$ $ $
• Be CONSERVATIVE• Income Statement (Profit & Loss) and
assumptions• Cash flow and assumptions• Balance sheet and assumptions• Past two years of actuals (for existing
businesses) and 3 years worth of projections
• New businesses require 1.5-2 years of projections
Financials
JAN FEB MAR APR
Revenue $2,630 $1,898 $0 $0
Variable Expenses $164 $1,667 $400 $0
Gross Profit $2,466 $231 -$400 $0
Expenses/Fixed Costs $0 $0 $0 $0
Owner Salary $0 $0 $0 $0
Net Profit $2,466 $231 -$400 $0
Equity Inflow $0 $0 $0 $0
Cash Position $2,466 $231 -$400 $0
• Product pictures• Industry reports• Price lists• Floor plans• Marketing collateral: logos, ad copy, DMs,
websites, blogs, PR, case studies• Testimonials
Appendices
• AKA Screening Plan.• Used to send to professional funders like
private banks, angels, VC firms, investment clubs
• Include your price lists.• Very brief overview of the firm and the
financials.• Includes cover letter, title page,
executive summary & your financials• Informational plan: include everything
EXCEPT the financials.
The Mini Business Plan