1. THE BUSINESS PLANNING PROCESS How to Develop a Business Plan

2. What is a Business Plan? 2 A Venture Plan is:  A road map for running a business venture  A written summary of what the business venture can accomplish and how  A tool you can use to communicate with potential investors, bankers, partners, and employees

3. Why Prepare a Business Plan? 3  Planning and Organization are vital to the success of any venture  Preparing a venture plan helps you assess potential risks and problems  Venture Planning provides a framework to measure success

4. Why Prepare a Business Plan? 4  A plan forces you to take a realistic view of your idea and logically assess your goals  Introduces you to others as a careful planner (First impressions are important)  A plan identifies benchmarks that help you evaluate and improve the performance of the venture

5. Why Prepare a Business Plan? 5  Putting your plan in writing provides a record of what has been decided  A written plan makes day-to-day management easier as procedures can be reviewed and adjusted as necessary  Helps identify your market, understand your customers, choose the best pricing strategy, and get to know the competition

6. Business Plan Contents 6  Executive Summary  Market Analysis  Resource Analysis  Operating Strategy  Financial Strategy

7. Business Plan Contents 7  A Mission Statement that describes your vision for the venture, including your aims and objectives  The Marketing Research you have done, and s detailed description of your target market  A list of the Financial, Material and Human Resources you need to make your plan work  An explanation of How the Business will Operate  A Plan for Raising the Money you need to start the venture

8. An executive summary:  Is a one- or two page summary of the most important points in your plan.  Is intended to introduce the venture and capture the attention of the reader  Should be flawless and to the point to create a good first impression!  Cannot be written until all other sections of the plan are complete 8 Executive Summary

9. 9  Opens with a Mission Statement  Includes an accurate description of the business  Includes the names of the contact person and management team members and how these people can be reached  The name of the venture and a description of its nature and objectives  Information about the goods and services offered, what makes this venture unique  The location of the business, and the proposed timelines for its development Executive Summary

10.  Information about security that can be offered to investors in exchange for the investment  Information about business loans required  Key highlights of the Business plan 10

11. Registering a Company Name 11  First determine the type of ownership: sole proprietorship, partnership, or corporation  If you use your own name as a company name and you are a sole proprietor, you are not required to register (Dan Sider’s)  If you add any words to the name (Dan Sider’s Café) it is necessary to register the business name and pay a fee before you use it  Registering your business name ensures that only you can use this name for advertising and legal purposes in the province of registration

12. Market Analysis  The Marketing Analysis section describes the marketing research conducted and the conclusions you drew from the research  A Market Analysis (Needs Assessment) can help you identify potential customers, analyze competition, set prices, and plan ways to advertise the venture  Show your marketing mix of product, place, price, and promotion 12

13. Market Analysis 13 A market analysis should include:  Demographics of potential customers (age, gender, location, buying habits, etc.)  The types of Products or Services you think your customers will buy and how you know  Description of trends that suggest this is the right time to introduce your product or service  Who your competitors are, where they are, and how successful they are

14. Market Analysis 14 Product  How you plan to make your product or service better than or different from your competitors’  How much you will charge for your product or service  How you plan to advertise your product or service to your target market

15. Market Analysis 15 Place  Show your channel of distribution  Where will your business be located?  What is the potential for your customers to be aware of your business at the ‘location?’

16. Market Analysis Price  Pricing is an important part of the market analysis that can make or break a new venture.  Price too high may discourage sales  Price too low, customers may perceive product or service as low quality  How can my price be competitive and still provide a suitable profit margin? 16

17. Market Analysis Promotion  An assessment of the various forms of advertising available  The types of customers you hope to reach  The costs involved  Registration of the venture name 17

18. Resource Analysis  All good venture ideas need resources to make them work  All business plans must have a resource analysis section  The entrepreneur needs to consider the following types of resources needed for the venture:  Material Resources  Human Resources  Financial Resources 18

19. Resource Analysis 19 The resource section of a business plan must consider:  What tools and equipment is needed and where you will get them  What human resources you will need  Where your venture will be located  How much space you will require  Whether you plan to buy or rent your facility or whether your business can be operated without a bricks-and-mortar site

20. Resource Analysis 20  Whether you will manufacture your products yourself or hire a contract organization to do it for you  Which sources of raw materials you intend to use and how much these will cost  How often your suppliers will deliver materials and what return and refund policies they offer on their products  The total cost of all resources you need to start and operate your business

21. Resource Analysis Material Resources  Includes all materials needed to operate the venture, both raw materials and finished products (equipment such as: storage bins, paper, computers, delivery trucks, etc.)  Some of theses are consumable resources while others are fixed resources which can be used over and over 21

22. Resource Analysis Human Resources  The people needed to operate the venture  Look for people whose skills complement your own and fill in the gaps  How many people will you need to start your business? to help it grow? 22

23. Resource Analysis Financial Resources  The money needed to start and operate your venture  This includes money to buy equipment, materials, pay staff, rent, electricity, advertising costs, etc. 23

24. Operating Strategy  The Operating Strategy tells you how you will manage the material and human resources in the day- to-day operation of the business 24

25. 25 ACCOUNTING: Jeff MacKinnon  budgeting  accounts payable  accounts receivable  payroll and benefits  tax ASSISTANT MANAGER: Janis Richardson  recruiting/hiring  staff training  staff scheduling/  sales supervision SHIPPING/ RECEIVING Matt Hardiman  customer service  scheduling pickups and deliveries  order checking  parts inventory  maintenance OWNER / MANAGER: Mr. D. Sider ORGANIZATIONAL CHART: Human resources

26. Operating Strategy 26  An organizational chart is a good way to present a visual plan for Human Resources  Operating Strategy also deals with the production process and how necessary supplies will be obtained  It describes how the facility will be set up, including its size, location(s), special needs, the ownership terms, or the lease terms  The plan also describes the facility’s present and potential production capacity, minimum levels of production needed to sustain the operation, and any overhead operating costs.  This section includes inventory needs, record keeping and contingency plans if regular suppliers cannot fill your orders

27. Operating Strategy  Who will do each job and how the work will be supervised  How the people will work together  What the operating facility will be like  How the production process will be organized  Where the supplies will come from and who will be in charge of ordering them  What records must be kept and who will keep them  How the venture can keep its cost to a minimum  What rules and regulations, including environmental ones apply to the venture 27 The Operating Strategy should include:

28. Financial Strategy  A Financial Strategy is based on projected results  The financial plan involves research  Possible sources of capital for a venture include: bankers, government agencies, credit unions, friends, family 28

29. Financial Strategy 29 The Financial Strategy will explain:  How much it will cost to start the venture  How much it will cost to keep the venture going after startup  The expected costs and revenue for the venture (give best and worst-case scenarios)- give high and low estimate for the future  How much capital will be required and when it will be needed  What sources of capital are available

30. Financial Strategy Financial Details to include:  Detailed cash-flow projections  Sales forecasts  Anticipated selling costs  Expected gross profits  Administrative costs 30

31. Financial Strategy Financial plans also include:  Expected pretax profit  Balance sheet  Rate of return on investment  Working capital  Repayment proposal  Collateral 31

32. Mentorship  Mentorship occurs whenever an experienced person, the mentor, offers advice and support to a less experienced person  In the business world, mentorship can be an invaluable help to an entrepreneur in early stages of a venture 32