Preparing a Business Plan

Entrepreneurship

The process of

starting and

running one’s

own business.

This involves a

considerable

amount of risk

Starting a Business

Develop a Business Plan

Acquire Finances

Meet Legal Requirements

Develop a Business Plan

•A detailed proposal

that describes a new

business

•Presented to

potential investors

and lenders

•Most business

plans are 30 pages

or more.

Purposes of a business plan

•To obtain financing •Banks and potential lenders

require a business plan

•Helps organize and

analyze data critical to the

new business

•To provide a start-up

proposal •Provides an outline to follow

when starting the business

The components of a business plan

•Executive summary: brief one- to

two-page description of the key points of

each section of the business plan

•Product/service plan: presents

• Product or service being offered

• Unique features of product or service

•Management team plan: •Qualifications of the entrepreneur

•Qualifications of any partners who may

be involved in the business venture

The components of a business plan

•Industry/market analysis analyzes the:

•Customers

•Competition

•Industry

•Demographic, geographic, and

economic data

•Operational plan: includes all

processes involved in producing and/or

delivering the product or service to the

customer

The components of a business plan

•Organizational plan:

•Management philosophy of the

business

•Key management personnel

•Key employment policies

•Marketing plan: Describes

•How the business will make its

customers aware of its products or

services

•The market being served

•Marketing strategies

•Promotional plan

•Marketing budget

The components of a business plan

• Growth plan: The growth

plan presents plans for

future expansion of the

business

• Financial plan: includes

financial statements that will

help forecast the future

financial health of the

business

Finance the Business

Identify family and friends

who are potential investors.

Are there other businesses

that would be probable

investors?

Seek Employees

Finance the Business

• Contact financial agencies for

loans, grants and assistance:

• Small Business Administration

• Banks

• Credit Unions

• Insurance companies

The Legal Environment

•Permits or licenses

•Building Permits

•Cosmetology license

•First aid certification

•Contracts

•Between partners

•Between owner and clients

•Zoning laws

•Taxes

Additional legal requirements for some businesses:

The Legal Environment

(Protect Your Business)

•Trademarks: Protect

business’ name or logo

•Patents: Protect invention

of products or processes from

theft

•Copyright: Protect creative

works:

•Literary

•Musical

•Dramatic

•Artistic work

Using and Implementing The

Business Plan

The business plan is designed to guide the entrepreneur through the first year of operations.

Implementation of the strategy contain control point to ascertain progress and to initiate contingency plan if necessary.

Business plan not end up in a drawer somewhere once the financing has been attained and the business launched.

Measuring Plan Progress

Entrepreneur should check the profit and loss statement, cash flow projections, and information on inventory, production, quality, sales, collection of accounts receivable, and disbursements for the previous month. Inventory control

Production control

Quality control

Sales control

Disbursements

Updating the Plan

The most effective business plan can become out-of-date if condition change.

If the change are likely to affect the business plan, the entrepreneur should determine what revisions are needed.

In this manner, the entrepreneur can maintain reasonable targets and goals and keep the new venture on a course that will increase probability of success.

Why Some

Business Plans Fail

Goals set by the entrepreneur are unreasonable. Goals are not measurable The entrepreneur has not made a total

commitment to the business or to the family. The entrepreneur has no experience in the

planned business. The entrepreneur has no sense of potential

threats or weaknesses to the business. No customer need was established for the

proposed product or service.

The End