1. Chapter 9 Writing a Business Plan
Entrepreneurship: Successfully Launching New Ventures
Modified from Barringer and Ireland (2006)

2. What is a Business Plan?
A written narrative, around pages long, that describes what a new business plans to accomplish
The Business Plan Serves Dual Purposes
The business plan is used inside and outside the firm
Inside the firm: the plan helps the company develop a “road map” for executing its strategies and plans
A clearly written business plan articulating the vision and future plans helps employees to operate in a consistent and purposeful manner
Outside the firm: the plan introduces potential investors and other stakeholders with the business opportunity the firm is pursuing and how it plans to pursue it
The plan must make the case that it’s a good use of investors’ funds
Make case by including facts of properly conducted feasibility analysis
Investors do not respond when a business plan is based strictly on what an entrepreneur “thinks” will happen

3. Guidelines to Consider when Writing a Business Plan
Structure of the Business Plan
For the best impression the plan should follow a conventional structure (see p in text for conventional business plan outline)
Investors are very busy and want to easily find critical information
Software Packages to Assist with Plan Structure
There are software packages available can assist in writing the plan
While some are very helpful, avoid a plan that looks as though it came from a “canned” source

4. Guidelines to Consider when Writing a Business Plan
Content of the Business Plan
Plan should give clear and concise information on all important aspects of the venture
It must be long enough to provide sufficient information yet short enough to maintain reader interest (25 to 35 pages is usually sufficient)
3 General Types of Business Plans
Summary Business Plan
10-15 pages
Good for firms in early stages of development that want to “test the waters” to see if investors are interested
Full Business Plan
25-35 pages
Good for firms at the point of needing funding; offers “blueprint” of firm’s operations
Operational Business Plan
pages
Mostly intended for internal audience; offers “blueprint” of operations; provides guidance to managers

5. Outline of Business Plan
A suggested outline is as follows
Most plans don’t include all elements presented in the text and discussed here
These are included for completeness
Entrepreneurs must decide which elements to include

6. Outline of Business Plan
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7. Outline of Business Plan
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8. Outline of Business Plan
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9. Outline of Business Plan
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10. Outline of Business Plan
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11. Exploring Each Section of the Plan
Cover Page and Table of Contents
Cover page: include name of the company, address, phone number, date, contact information for lead entrepreneur
The Executive Summary
Short overview of entire business plan; provides everything need to known about venture’s distinctive nature
Sometimes investors ask for executive summary and then full business plan only if executive summary is sufficiently convincing

12. Exploring Each Section of the Plan
The Business
Introduce the business by describing the opportunity, the problem/need addressed and how the business addresses the problem/need
Include a brief history of the firm, the company’s mission statement, and objectives
Explain the firm’s competitive advantage and a brief description of the business model
Management Team
Include a brief summary of the qualifications of each member of the management team
Including his/her relevant employment and professional experiences, significant accomplishments, and educational background

13. Exploring Each Section of the Plan
Company Structure, Ownership, and Intellectual Property (IP)
Describe the structure of the new venture, including the reporting relationships among the top management team members
Next, explain how the firm is legally structured
Finally, discuss IP the firm owns, including patents, trademarks, and copyrights
Very important as IP forms the foundation for the valuation and competitive advantage of many entrepreneurial companies

14. Exploring Each Section of the Plan
Industry Analysis
Discuss major trends in the industry
Important characteristics of the industry (e.g., size, attractiveness, and profit potential)
Discuss how the firm will address forces suppressing the industry’s profitability
Discuss the competition and how the firm is likely to fair relative to competitors (e.g., a competitor analysis)
Define the target market

15. Exploring Each Section of the Plan
Marketing Plan
Marketing plan follows industry analysis and it provides details about the new firm’s products or services
After reading this section one should be confident that the following are in sync with one another and make sense:
The firm’s approach to its target market (fulfillment and interface)
Its product strategy (product scope)
Pricing strategy
Channels of distribution (outbound logistics issues)
Promotional strategy (marketing, sales, advertising)

16. Exploring Each Section of the Plan
Operations Plan
This deals with day-to-day operations of the company
Includes overview of manufacturing plan (or service delivery plan)
Describe network of suppliers, business partners, and service providers needed to build/produce the product/service
Describe risks/regulations pertaining to the operations (e.g., EPA issues, OSHA issues, etc.)

17. Exploring Each Section of the Plan
Financial Plan
Demonstrate the financial viability of the business
Begin by explaining the funding needed during the next three to five years along and explain how the funds will be used
Include (realistic) financial projections (assumption sheet)
Include financial statements (e.g., income statement, statement of cash flows, balance sheets, etc.)
Discuss exit strategy

18. Presenting the Business Plan to Investors
Making a Presentation to Investors
If the business plan elicits interests of investors, next step to present the plan in person
The first meeting is generally very short (e.g., about one hour)
The investor will generally ask the firm to make a 20- to 30- minute PowerPoint presentation and then ask question
#1 rule—follow instructions given to you by investor(s)
Be sure to create PPT slides that will fit the time slot allocated (e.g., if given 30-minutes for presentation, make sure it’s no longer than 30 minutes)
Presentation should be smooth and well rehearsed
Slides should be sharp and not cluttered with material
If still interested after initial meeting/presentation, the firm will be asked back for another meeting

19. Presenting the Business Plan to Investors
Most important issues to cover in PPT presentation
The Company: 1-slide; overview of company and target market
Opportunity (problem solved/need fulfilled): 2-3 slides; this is the “heart” of the presentation
Solution: 1-2 slides; explain how problem solved/need fulfilled
Management Team Strength: 1-2 slides; briefly explain each manager’s qualifications
Intellectual Property (IP): 1-slide; what IP firm owns or that is pending
Industry, Target Market (TM), Competition: 2-3 slides; briefly review the industry, its TM, and direct/indirect competitors; explain how the firm will compete against established firms
Financials: 2-3 slides; briefly discuss the financials; stress when firm will achieve profitability; how much capital to get to profitability; when expect to break even.
Offering, Payback, and Exit Strategy: 1-slide; discuss how much money requested and anticipated exit strategy