Presentation on theme: "The Business Plan: Creating & Starting the Venture"— Presentation transcript:
1 The Business Plan: Creating & Starting the Venture Entrepreneurship
2 Business Plan“is a written document prepared by the entrepreneur that describes all the relevant external and internal elements involved in starting a new venture.”It is a road map that integrated functional plans and answers questions such as:- Where am I now?- Where am I going?- How will I get there?
3 Scope & Value of the Business Plan Is read by employees, investors, bankers, venture capitalists, suppliers, customers, advisors & consultants.Is important because:It helps determine the viability of the venture in designated market.It provides guidance to the entrepreneur in organizing his or her planning activities.It serves as an important tool in helping to obtain financing.
4 Information NeedsEstablishing goals & objectives help in defining what kind of information is required from what sources.Market Information: such asTarget marketMarket potential for product or serviceIndustry & environmental trends (Macro & Micro environment)CompetitorsProduct/service required features
5 Information Needs Market Positioning Market Objectives General environmental & Demographic trendsNational industry trendsNational environmental & Demographic trendsLocal industry trendsLocal competition , Strengths & weaknessesMarket PositioningMarket Objectives
6 Information Needs Operations Information: such as: - Location - Manufacturing operations- Raw materials- Equipment- Labor skills- Space- Overheads
7 Information NeedsFinancial Information Needs: all the information required for budgeting such as:- Capital expenditure- direct operating expense- forecast for revenue and sales
8 Writing a Business Plan 1. Introductory PageA. Name & Address of businessB. Name(s) & Address(s) of Principal(s).C. Nature of BusinessD. Statement of financing NeededE. Statement of confidentiality of report
9 Writing a Business Plan II. Executive Summary – Two to three pages summarizing the complete business planIII. Industry AnalysisA. Future outlook & TrendsB. Analysis of competitorsC. Market SegmentationD. Industry & Market forecasts
10 Writing a Business Plan IV. Description of VentureA. Product(s)B. Service(s)C. Size of BusinessD. Office equipment & PersonnelE. Background of Entrepreneur(s)
11 Writing a Business Plan V. Production PlanA. Manufacturing Process (amount subcontracted)B. Physical PlantC. Machinery & EquipmentD. Names of suppliers of raw materials
12 Writing a Business Plan VI. Operational PlanA. Description of company’s operationsB. Flow of orders for goods and/or servicesC. Technology Utilization
13 Writing a Business Plan VII. Marketing PlanA. PricingB. DistributionC. PromotionD. Product forecastsE. Controls
14 Writing a Business Plan VIII. Organizational PlanA. Form of ownershipB. Identification of partners or principal shareholdersC. Authority of principalsD. Management – team backgroundE. Roles and responsibilities of members of organization
15 Writing a business plan IX. Assessment of RiskA. Evaluate weakness(es) of businessB. New technologiesC. Contingency Plans
16 Writing a Business Plan X. Financial PlanA. AssumptionsB. Pro forma income statementC. Cash flow projectionsD. Pro forma balance sheetE. Break even analysisF. Sources & application of funds
17 XI. Appendix (contains backup material) A. LettersB. Market research dataC. Leases or contractsD. Price lists from suppliers
18 Review & DiscussionIf a business plan is to be used to raise capital, the why would the entrepreneur want to advertise the firm’s major risks by detailing them in the business plan?