WEEK ONECHAPTER FIVE

“DEVELOP A BUSINESS

PLAN”

WHAT IS A BUSINESS PLAN? A business plan is a written document

that describes all the steps necessary in opening and operating a successful business. It’s broken into seven main sections It also includes introductory and supporting

sections/elements

PURPOSE OF A BUSINESS PLAN Business idea and how the product/service

will be produced and sold Product description Target market

Sets specific objectives and how you will achieve them Sales projections (up to 5 years – long term) Business expansion ideas

Describes the people running the business Experience

IMPORTANCE OF A BUSINESS PLAN Think of all aspects of your business

Identify problemsCreate strategies

Secure financing needed to obtain a loanYour business plan is the proposal you bring

with you

Helps communicate your ideas

A tool for managing your business

STRUCTURE OF ALL GOOD BUSINESS PLANS Introductory

ElementsCover LetterCover SheetTable of ContentsStatement of

PurposeExecutive Summary

Main Body of the Plan Mission, Goals,

Objectives Market Need Location & Setup Business Structure Management & Staff Marketing Plan Financials

Supplementary Elements Appendix and Attachments

SEVEN MAIN ELEMENTS OF YOUR BUSINESS PLAN1. Mission, Goals, Objectives2. Market Need3. Location & Setup4. Business Structure5. Management & Staff6. Marketing Plan7. Financials

MISSION, GOALS, AND OBJECTIVES History and background of your idea

Describe how you came up with the business idea

Day Care Example: Page 110

Goals and Objectives Short and long term goals

Short Term Goals: < 1 Year Intermediate Term Goals: Between 2 & 5 Years Long-Term Goals: Beyond 5 Years

What’s your vision for your company?

GOAL SETTING IS OF PRIMARY IMPORTANCE

MARKET NEED Understand Your Customer

Outline your Target Market What is your customer profile? What are your market segments?

Understand your Competition Direct and Indirect Competitors

LOCATION AND SETUP What sort of space is available?

How much will it cost? Is it near my target market? Is it near my competitors? Is it near businesses that deal in related

markets? What will my floor layout look like? What sort of starting inventory do I

need?

BUSINESS STRUCTURE How should I legally organize my

business?Sole ProprietorshipPartnershipS CorporationC Corporation

How do I financially organize my business?Buy an existing businessGo into a family businessFranchise my businessStart a brand new business

MANAGEMENT AND STAFF Create an Organizational Chart

Who reports to whom?How many employees will work at every

level?

Write the Job DescriptionsWhat is expected of each type of employee

on a daily basis?

Develop a Wages & Benefits Package What will each employee be paid? What

other perks will they receive?

MARKETING PLAN “Marketing Mix”

Product What product/service are you trying to sell? What are your product/service lines?

Place How will you get your product/service to the

market?Price

What will you decide on charging for your products?

Promotion How do you plan to advertise for each

product/product line?

FINANCIALS Preparing Financial Statements

Start Up CostsCash Flow Statements Income StatementsBalance Sheets

How do I get a loan/capital?

Should I buy insurance?

BUSINESS PLAN: INTRODUCTORY ELEMENTS Cover Letter [Example on pg. 118]

Explains or provides more information about the business plan that follows

Name Name of your business Address Telephone number/Fax Number/Website/E-mail Describe your business and its potential for success How much money you will be seeking?

Should be no more than 1 page

Cover Sheet [Examples on Google] Name of your business Date Owner of the company and title Address, phone number, contact info

BUSINESS PLAN: INTRODUCTORY ELEMENTS Table of Contents

Listing of material included in the publication Quick reference for what is covered on each page

Statement of Purpose [Example on pg. 119] Describes WHY you are asking for the loan and what you

will do with the money Should be no more than 1-2 paragraphs

Executive Summary [Example on pg. 120] Short restatement of the business plan to catch a

readers attention Written after the business plan is complete,

approximately one to two pages long.

BUSINESS PLAN: SUPPLEMENTARY ELEMENTS Appendix

Includes supporting evidence NOT included in the main body

Charts, graphs, financial statements Think of it as a section to place large elements that

are NOT text-based which would break up the reading of the main business plan

AttachmentsResumeLarge sales contracts you may have

negotiatedLetters of recommendationLegal documents