Putting the Pieces Together Developing an Effective Business Plan

Discussion Topics Starting a Business Venture Business Planning Parts of a Business Plan Resources for Small Businesses

Becoming an Entrepreneur People become entrepreneurs for many reasons. Entrepreneurs come from all type of backgrounds and industries. There are advantages and disadvantages of owning your own business. There are many resources that can help you identify and develop business opportunities.

Starting a New Venture Determine the products or services you will sell/offer Determine what type of business you will own Franchise Buy an existing business Create a business from ground up Create a business plan

Role of Small Business Today In 2002, there were approximately 22.9 million small businesses in the United States. Small business employ 99.7% of employers. Most small businesses are service based. Women and minority-owned business are growing at a fast rate.

Planning to Own a Business “Begin with the end in mind.” --Stephen Covey, The 7 Habits of Highly Effective People

What is a Business Plan? A written document that describes all the steps necessary in opening and operating a successful business.

Purpose of Business Plan Business plan serves three primary purposes: Explains the idea behind your business and how your product or services will be produced and sold. Sets specific objectives and describes how your business expects to achieve them. Describes the backgrounds and experience of the people who will be running the business.

Importance of Business Plan Makes you think about all aspects of your business. May help you secure financing for your business. Helps communicate your ideas to others. Serve as a tool for managing your business.

Sections of a Business Plan Business plans should include some basic information in the following areas: Executive Summary History and Background of your idea Goals and Objectives Product(s) or Service(s) you will offer Form of Ownership Management and Staffing Sales and Marketing Plan Financial Plan

Section 1: The Executive Summary Usually a one page description of the business. Provides a snapshot or brief overview of the business plan.

Section 2: History & Background Describes how you came up with your business idea. May include your business philosophy or mission statement.

Section 3: Goals & Objectives Your business plan should outline your: short-term, medium-term, and long-term goals Describes your vision of where you want your company to be in the future.

Section 4: Products & Services Describes the industry you will operate in: External factors affecting your business Growth potential of the industry Economic trends of the industry Describes the location of your business Lenders want to know exactly where your business will be located because location is often a critical factor in operating a successful business.

Section 5: Forms of Ownership

Section 6: Management & Staffing People who manage your business are critical to its success. This section of the business plan should show that you and the employees of your business are highly qualified to run the business.

Section 7: Sales & Marketing Plan This part of the plan includes the following: Who are your prospective customers How large is the market for your product or service How you plan to enter the market You should list your company’s advantages over the competition.

Section 8: Financial Plan Identification of risks associated with your business. Current and projected financial statements based on projected revenues and expenses. Funding request and return on investment.

Resources for Small Business Owners Small Business Development Centers Provide one-on-one assistance in developing a business plan Chambers of Commerce Supports local business owners by hosting training workshops Small Business Administration (SBA) Governmental agency concerned with helping small U.S. firms and advocates for small businesses within the U.S. government Provides financial assistance in the form of loans Professional Organizations Young Entrepreneur’s Organization (www.yeo.org): global non-profit organization for today’s leading business owners National Federation of Independent Business (www.nfib.org): largest advocacy organization representing small and independent businesses in the US.

Creating an Effective Business Plan Research the Business Plan Use printed resources to gather information—books, magazines, etc. Access online resources using the internet. Seek assistance from resources such as Small Business Development Centers, professional organizations, etc. Put Your Plan Together Type your business plan Include introductory elements such as a cover letter, table of contents, etc.

Key Points A business plan is a written document that describes what your business will produce/sell and how it will operate. Writing a business plan will help you to think about all aspects of your business including financing and managing your business. There are many resources to help you create an effective business plan

Final Thoughts