1. Unit 3.2: Creating the Business Plan
Entrepreneurship
Unit 3.2:
Creating the Business Plan

2. Creating the Business Plan
Students will be able to:
Construct a mission statement for a company
Explain rationale for starting a business by utilizing market research
Describe a business, it’s products/services, and customers
Compare types of ownership for a business, and select best option
Determine organizational structure and management skills needed to operate a business
Assess locations for a business

3. Creating the Business Plan (Organizing the structure of the business)
The Business Plan format used in this unit closely follows the “DECA Entrepreneurship Participating” event. It is a 10-page business prospectus, and can be easily completed by students. This format contains all the common components of a business plan, however some parts are combined to shorten the document.
It’s advised for teachers/students to get a copy of this format on the DECA or USOE website. (
Students, however, are not required to use this format. Other formats are available from FBLA, DECA, the USOE website, or on the internet.

4. DECA Business Plan Format
Section I: Executive Summary
Section II: Analysis of Business Situation
Rationale and marketing research, Description of Business, Self-analysis, Analysis of the business opportunity, customer and location, and Proposed organization
• Section III: Marketing and Promotional Plan
• Section IV: Financing Plan
– Income Statements, Amortization, and Return on Investment

5. Section I: Executive Summary
Summarizes the main points covered in the business plan
Even though this is the first page of the document, it is usually written last…thus the word “summary”
May contain the Mission Statement (Goals) of company

6. Section I: Constructing a Mission Statement
A mission statement expresses “specific” goals for the company
Example:
“To maintain 30 lawns on a weekly basis by the end of the first year”

7. DECA Business Plan Format
Section I: Executive Summary
Section II: Analysis of Business Situation
Rationale and marketing research, Description of Business, Self-analysis, Analysis of the business opportunity, customer and location, and Proposed organization
• Section III: Marketing and Promotional Plan
• Section IV: Financing Plan
– Income Statements, Amortization, and Return on Investment

8. The Market Analysis section:
Section II: Explain Rationale for Starting Business by Utilizing Market Research
The Market Analysis section:
Presents your market research
Features a customer demographic profile
Identifies and analyzes competitors and explains your competitive advantage
Addresses industry trends and growth

9. Section II: Description of Company, Products/Services, and Customers
Includes history and background of idea
Describes the product or service
Discusses features and benefits of the products/services offered and how it benefits the customer
Discusses target market, market segments, or market niche served
Assess locations

10. Assessing Locations for Business
Location, Location, Location
The location of a business—especially retail—is often a critical factor in its success
WHERE you will locate and WHY…Regardless of type of business, this is an important aspect of all business plans and must be explained in detail, including…
Zoning & Parking • Visibility of site
Square footage • Costs (Lease, taxes, renovations)
Traffic counts • Nearby businesses, including
Accessibility target market

11. Section II: Select a Form of Ownership
Sole Proprietorship
Partnership
Corporation
Subchapter S Corporation
C-Corporation
Other legal form of Ownership
Limited Liability Company
*See Unit 3.2A “Legal Forms of Ownership” slide presentation

12. Sole Proprietorship Owned and operated by one person Easy to create
Receives all profits, incurs any losses, and is liable for the debts of business
Most entrepreneurs often switch to another form that provides more personal financial protection as the business grows

13. Partnership A business with two or more owners
Partners do not have to share a business equally
How the partnership interests are divided are spelled out in the Partnership Agreement.

14. Corporation Registered by the state and operates apart from its owners
A corporation lives-on after the owners die or have sold interest
Ownership is represented by shares of stock, public or private

15. 2 Types of Corporations
C-Corporation
Subchapter S Corporation

16. C-Corporation
The most common corporate form for large businesses (i.e., Federal Express, Microsoft)
Can create status that may assist in getting loans
Shareholders are owners of the corporation
Required to have an elected Board of Directors to make decisions for the company
Structured to accommodate employee benefits; i.e., pensions, retirement plans, and profit sharing

17. Subchapter S Corporation
Designed for owners of smaller companies who want the liability protection of a corporation, but want to avoid double taxation
Pass-through Taxation: Profits are taxed once at shareholder’s personal tax rate
Shareholders liable to amount invested
In smaller private corporations, the founders generally hold all–or a majority–of the stock.

18. Other Forms of Ownership
Limited Liability Company
Nonprofit Corporations
IMPORTANT: Before you start your company… Check with your state, accountants, or attorneys to determine which form of legal ownership most benefits your needs, company size, financial status, and issues of liability.

19. Source:
Allen, Kathleen R., & Meyer, Earl (2006). “Entrepreneurship and Small Business Management.” New York: Glencoe, p. 143
Source: Entrepreneurship and Small Business Management, Glencoe, 2006, pg. 143.

20. Section II: Organizational Structure and Management Skills
A plan which shows how the jobs in your company relate to one another
Smaller companies may have everyone report to the owner. The larger the company, the more layers of management needed.

21. Organizational Chart
A graphic representation of the organizational structure.

22. Management Skills
The management and staffing section should provide skill sets needed–a job description–for each position
Show you and your staff have the experience, maturity, and common sense to manage your business well

23. Good Management Skills
Human Relations
Communications
Networking
Math
Problem Solving & Decision-making
Technical Skills
Time Management
Conceptual Skills

24. DECA Business Plan Format
Section I: Executive Summary
Section II: Analysis of Business Situation
Rationale and marketing research, Description of Business, Self-analysis, Analysis of the business opportunity, customer and location, and Proposed organization
• Section III: Marketing and Promotional Plan
• Section IV: Financing Plan
– Income Statements, Amortization, and Return on Investment

25. Section III: The Marketing Mix
The Marketing Mix (the 4 P’s)
Product
Price
Place
Promotion
*See Unit 3.2B “The Marketing Mix” slide presentation

26. Products/Services Answers: What are you selling?
Product brands
Ford, Dell, Kellogs
Product Mix
Used cars: Ford, GMC, Chrysler, Toyota, Kia
Ford only: Trucks, SUVs, Sedans, Hybrids
Inventory methods
Keeping track of available stock of goods

27. Pricing Strategies Answers: How much is it?
You’re in business to make profit. Know which pricing strategies to utilize.
Mark-up
Cost-based
Competition-based
Demand-based
Psychological Pricing
Discounting
Credit

28. Channels of Distribution Answers: Where can I get it?
The path a product takes from producer to final user (consumer)
Direct
Indirect (intermediaries)
Use if results in lower cost than you would charge if you were handling all the phases of distribution yourself or if middle men have a “ready-made” network for wider distribution.
Includes transportation, storage & product handling

29. Promotional Mix Answers: Why should I buy it?
Advertising:
Paid non-personal presentation of ideas directed toward a mass audience.
Publicity:
Free placement of newsworthy items about company, etc. in the media.
Personal Selling:
Giving an oral presentation to one or more potential buyers.
Promotions:
Use of incentives or interest-building activities to create demand. Be creative!!

30. Planning Organizational Structure for Business
Let’s Review:
Construct a mission statement for a company
Explain rationale for starting a business by utilizing market research
Describe a business, it’s products/services, and customers
Compare types of ownership for a business, and select best option
Determine organizational structure and management skills needed to operate a business
Assess locations for a business