Presentation on theme: "Business Plan: Organization Name Your Name Your Title Contact Information Sunday, May 03, 2015."— Presentation transcript:
Business Plan: Organization Name Your Name Your Title Contact Information Sunday, May 03, 2015
The Idea Talk about the opportunity you have discovered and the big idea you have for the business. All good ideas share at least one of three goals: –They make life for the customer easier. (efficiency) –They make life for the customer better. (effectiveness) –They allow the customer to do new things. (innovation) Example: “If you go to five travel sites, you will be presented with five different offers. Traveling to each site is time-consuming and confusing. We are a discount travel website. We have written software that searches all the other travel sites and collates their price quotas into one report.”
The Industry Name and describe the market or industry that you will work within—in other words, the chosen “sandbox” where you will play. For market or industry descriptions see the North American Industry Classification System (NAICS) at www.census.gov/naics or industries at a glance at http://www.bls.gov/bls/industry.htmwww.census.gov/naicshttp://www.bls.gov/bls/industry.htm Talk about any trends and changes in the industry. Talk about whether the industry is growing and, if so, by how much.
The Business Model Talk about the timeless reason why your business should exist beyond just making money. Complete this sentence, “The purpose of our business is to…” Talk about how you make money and how you deliver your idea to the customer. Example: Think of eBay—“Our purpose is to provide a global trading platform where practically anyone can trade practically anything. We charge a listing fee plus a commission.” End of story.
The Product Talk about the product or service that you will sell. Talk about what sets the product or service apart from what is currently being sold to customers. Talk about any ways you can protect the product or service from being easily copied by the competition. Present any product pictures, drawings, or renderings you might have (on additional slides if necessary).
The Customer Talk about the groups of customers that will be attracted to your idea. Ask: Who do we serve? What do we know about them? Example: “Our customers are busy executives and sales persons who frequently travel more than 20 weeks a year.” Example: “Our customers are high-school students who need additional teaching help outside the traditional classroom.” Example: “We reduce the risk of fraud for regional commercial banks in their online transactions.”
The Market The idea for a market study is to tell the “story of the market” in numbers starting with the big picture and then narrowing down the data to a more detailed view. Use as many slides as you need and don’t clutter the information. Talk specifically about where your customers are located. Are they within a city, county, state, region, nation, or international place? Maps are good to use here if it makes sense. Talk about the numbers of customers in the market and possibly even what they spend on your kind of products and services. Present any community profiles for these places. The Census Bureau is a great place to find such information at www.census.gov www.census.gov If you are targeting business customers look at the Economic Census at http://www.census.gov/econ/census02/ for help.http://www.census.gov/econ/census02/
The Targeted Customers Talk about your targeted customers. Remember, you can segment customers by type, buying behavior, location, and so on. Describe who they are by discussing some of the following things: (use multiple slides if needed) –Demographics (characteristics they share in common) –Buying Behavior (how and why they buy the product) –Size (numbers of them / dollars they spend) –Projected Sales –Trends (growth / opportunities)
Target Market Strategy For your targeted customers, talk about how you will customize your marketing efforts to fit their needs. Remember, if this group of customers is really unique then something about your strategy must be different. Talk about… –The Message: What slogan or positioning statement will you use for this target market? –The Pricing: Will the pricing have to be different for this type of customer? If so, what price will you charge? –Product Customization: Will the product or service have to be customized for this customer? –Distribution: Will the product get to this customer?
Target Market Sales Approach Talk about your specific sales and promotional ideas for this target market which might include: –Contact Sphere: What other businesses or professions might naturally refer this group of customers to your business? –Advertising: What specific types of media will you use and at what cost? –Public Relations: What kinds of media relations, press releases, and events might you use to reach this group of customers? –Personal Selling: Do you require a sales force to reach this group of customers? If so, how many and at what cost? –Sales Promotions: What kinds of sales tools might you use? Discounts, coupons, loyalty programs?
Target Market Descriptions DescriptionTarget Market #1Target Market #2Target Market #3 NameLocal MarketCommuting Workers & Tourists Commercial Events DescriptionPeople and households within 7 miles of the restaurant People migrating into Bartholomew County for work or tourism Commercial business in Bartholomew County that need catering event services DemographicsConsumers ages 21 to 54 / $54,000 average household income Workers and Tourists ages 21 to 54 Businesses from 20 to 300 employees Buying BehaviorFrequent but small purchases (5 times per year at about $9.00 per patron) Infrequent but larger purchases (1 time but spends upward of $12.00 per patron) Infrequent but very large purchases (2 events per year spending $600.00 per event) Size (numbers/dollars)58,600 residents / 20,000 households / $58 million local market for restaurant sales 9,000 daily commuters / 28,000 annual tourists 400 businesses Projected Sales$400,000$150,000$100,000 Trendsslow to moderate growth / spending less on meals away from home on average Good growth / new arts theatre nearby should improve traffic Excellent growth in company numbers and employment trends
Target Market Strategies StrategyTarget Market #1Target Market #2Target Market #3 Positioning MessageThe Gourmet Restaurant Where You Eat With Your Hands Gourmet Burritos…FastBig Burritos For Big Crowds PricingEntrees between $4 and $6Entrees between $4 and $16Per head range from $8 to $12 Product CustomizationLunch time speed is largest consideration Banquet style service DistributionAt retail location On-site catering set-up and service Contact SphereVisitors center, community development, tourism bureau, hotel concierges Chamber of commerce, HR managers, event planners, public relations managers AdvertisingNewspaper, yellow pages, specialty publications, website Hotel brochures, tourism directory, billboards, restaurant guide Direct mail, business section of newspaper Public RelationsAnnual 5K charity run for diabetes assn. Personal SellingPart-time banquet sales coordinator Sales PromotionsDiscount coupons, samplesHotel referral fees15% off first event promotion
The Competition Talk about the three to four main competitors trying to win your customers. Never dismiss the competition. Everyone wants to hear why your good, not why the competition is bad. Talk about the story each competitor tells and then talk about how your story is either different or more important. Example: “McDonalds is selling fast. Burger King is selling choice. We’re telling the story of being fresh and therefore healthy.”
Competitive Analysis COMPANYWE CAN DO, THEY CAN’TWE CAN’T DO, THEY CAN Competitor X Competitor Y Competitor Z
The Message Talk about the message you will deliver to your customers. Messages that are made to stick are simple, unexpected, concrete, credible, emotional, stories. Example: “The delivery of a wine’s taste depends on the form of the glass. The secret to Reidel glasses is that there is a perfect shape for every beverage. Through ten generations of glassblowers we have discovered the timeless forms of glass to convey the wine’s message in the best manner to the human senses. Reidel—A Passion for Glass.”
The Sales Approach Talk about how you are going to reach your customers and present your message. Try to convince the audience that you have an effective go-to-market approach that won’t break the bank. Example: “ A majority of the customers for our educational software can be reached through our website, the direct mailing of promotional kits, and through two national trade shows and four primary regional shows.”
The Marketing Schedule MediaAnnual Cost Yellow Pages (South Central Edition) Category: Restaurants, Restaurant Guide$3,600.00 Newspaper (The Republic: Circulation 28,000) Ad Design Costs$800.00 Media Costs (24 ads @ $328)$7800.00 Direct Mail (Brochures and Special Occasions) Distribution (5,000 @ $.50 per piece @ $.27 postage)$3,850.00 Radio (QMIX 103 / Adult Contemporary & WTIU/NPR) Media Costs (600 :30 second ads @ $6.20 per spot)$3,720.00 Total Annual Advertising and Media Costs$19,770.00
The Inner Workings Talk about the work you do and how you make things. Talk about the people, places, things, and time you need to get the job done. Example: “Bistro On The Green will be located at 34 th Street and Delmar Avenue and will be open from the hours of 11:00am to 10:00pm Tuesday through Sunday. The location requires the addition of a full commercial kitchen. We require 28 staff members each working about 35 hours on average per week…”
The Location Talk about where you will be located. If you are a retailer or a service business where access and visibility is important to the customer, talk about your proposed location. Provide the address and talk about the accessibility, the visibility, and the costs. Talk about the numbers and types of customers that are located near your location. These numbers are called “ring studies” because they detail the number of customers in 1,3 and 5 mile rings from your location. See www.easidemographics.com for free ring reports of your location. www.easidemographics.com Talk about any commuting and traffic patterns around the location. Check with your state’s department of transportation for these statistics.
The Management Team Talk about the key players who will manage your business. Talk about how your team completes the “management trinity”: –Who will oversee the work—production expertise, –Who will oversee sales—marketing expertise, and –Who will take care of the money—financial expertise. Talk about any board of directors, advisory boards, consultants, or major investors that you may use in rounding out your management team. Talk about any professionals like lawyers, accountants, bankers, or insurance agents that will assist you in running the business.
DELETE THIS SLIDE Legal Structure Comparison Characteristics Sole Proprietorship General Partnership C Corporation S Corporation Limited Liability Company Formation No state filing requiredAgreement between two or more parties. No state filing required State filing required Duration of Existence Dissolved if sole proprietor ceases doing business or dies Dissolves upon death or withdrawal of a partner unless safeguards are specified in a partnership agreement Perpetual Dependent on the requirements imposed by the state of formation Liability Sole proprietor has unlimited liability Partners have unlimited liability Shareholders are typically not personably liable for the debts of the corporation Shareholders are typically not personally liable for the debts of the corporation Members are not typically liable for the debts of the LLC Operational Requirements Relatively few legal requirements Board of directors, officers, annual meetings, and annual reporting required Some formal requirements but less formal than corporations Management Sole proprietor has full control of management and operations Typically each partner has an equal voice, unless otherwise arranged Managed by the directors, who are elected by the shareholders Members have an operating agreement that outlines management Taxation Not a taxable entity. Sole proprietor pays all taxes Not a taxable entity. Each partner pays tax on his/her share of income and can deduct losses against other sources of income Taxed at the entity level. If dividends are distributed to shareholders, dividends are also taxed at the individual level No tax at the entity level. Income/loss is passed through to the shareholders If properly structured there is no tax at the entity level. Income/loss is passed through to members Pass Through Income/Loss Yes NoYes Double Taxation No Yes, if income is distributed to shareholders in the form of dividends No Cost of Creation None State filing fee required Raising Capital Often difficult unless individual contributes funds Contributions can be made from partners, and more partners can be added Shares of stock are sold to raise capital Possible to sell interests, though subject to operating agreement restrictions Transferability of Interest No Shares of stock are easily transferred Yes, but must observe IRS regulations on who can own stock Possibly, depending on restrictions outlined in the operating agreement
The Legal Structure Talk about the legal structure you have chosen for the business. See the preceding chart for help. Talk about why the structure was chosen—in other words, what advantages does the structure provide? A sample chart like the one below might be helpful to show the ownership structure of the business: OwnerSharesPercent Owned Jack Smith 1,00050% Loretta Johnson 50025% Equity Investors 50025%
Risk Management Talk about the different kinds of insurance you will need and what the cost of such coverage will be. In general there are three basic categories of insurance: –Property: covers building and content losses –Liability: gives you legal protection –People: provides health, worker’s comp, and lost income protection
The Money Forecast Talk about how much money you need to get started. At this stage, list the major categories of start-up costs and estimate their amount. Talk about the money you expect to take in during the first year. Show how you came up with that number (units times prices). Talk about the money you expect to spend out during the first year. Think about people, product costs, space, equipment, etc. How much is left over?
The Core Scores Talk about what things you need to measure to be successful. These measures might be leading indicators of such things as customers, growth, innovation, internal operations, or financial performance. –Example: “The Chamber of Commerce will measure five metrics in determining our success: annual member engagement, member retention, net member growth, market penetration, and employee engagement. –Example: “For our restaurant to be successful, we must closely measure four activities: reservations and table turns, food costs, staff turn-over rates, and total staffing costs.”
Required Start-Up Funds ItemAmount Fixed Assets -Building$1,000 -Land$1,000 -Initial Inventory$1,000 -Equipment$1,000 -Furniture and Fixtures$1,000 -Vehicles$1,000 Working Capital -Salaries and Wages$1,000 -Insurance Premiums$1,000 -Leasehold Improvements$1,000 -Rent and Utility Deposits$1,000 -Advertising and Promotions$1,000 -Legal and Accounting Fees$1,000 -Supplies$1,000 -Cash on Hand$1,000 Totals$15,000
Capital Strategy Total Amount Required$907,900 -4 Investors ($50,000 each will get 25% share of company)$200,000 -Commercial Bank Loan (Real Estate & 80% Building)$684,000 -Owners$23,900 Loan Payment Amounts -Principal Amount Borrowed$684,000 -Projected Interest Rate7.25% -Term In Months240 Total Monthly Loan Payment$5,406.17
Financial Summary Year One%Year Two%Year Three% Income20,000,000 Cost of Sales10,000,000 Gross Margin10,000,0005010,000,0005010,000,00050 Salary and Wages30,000,000 Fixed Expenses10,000,000 Other Expenses10,000,000 Net Income000000
The Next Steps Talk about the next five to ten steps that need to be completed in the next 90 days to consider yourself a success. Attach dates to each step. Talk about the two or three big things that you want to accomplish in the next 2-3 years to consider yourself a success.