Developing a Plan Chapter 2

The Business Plan Section 2.1

Goals Identify the elements of a business plan Describe the proposed business situation Explain the organizational and marketing plan Discuss the purpose of the financial plan

Elements of a Business Plan Document that describes all aspects of the business Necessary to seek investors or loans Tool for the business owner Blueprint for operating and expanding the business 3 Main Elements Proposed Business Situation Organizational and marketing plan Financial plan

Proposed Business Situation Type of business Description of the business Reasons why you want to open Include facts of statistics if you can Survey of potential customers Business Philosophy Outlines the beliefs about how the business will be operated Info about customers, employees, vendors Business role within the community (Wal-Mart low prices)

Type of Products Self-Analysis Trading Area Analysis Info about various product lines Specifics about products and reasons for choice of products Self-Analysis Outlines business owner’s education, training, work experience, strengths, and weaknesses Trading Area Analysis The geographic location of your business Geographic, demographic, and economic information about the population Info located from local or state government; census data

Market Segment Analysis Takes analysis from trading area analysis and applies it to the specific target market you are trying to reach Define target market Marketing Segmentation Analysis of Potential Location Rent or buy Proximity to competition

Organizational and Marketing Plan Organizational Plan Describes how business will be organized Form of business ownership Start-up steps Personnel needs Job descriptions Organizational Chart Marketing Plan Pricing policies Promotional plans

Organizational Plan Type of ownership Start-up steps Planned personnel Sole proprietorship, partnership, corporation Start-up steps Determine name for your business File a DBA (Doing business as) with local government Obtain necessary licenses or permits Planned personnel Job Descriptions: written statement that defines the particular requirements of the job

Marketing Plan Pricing Policies Promotional Activities Can determine success or failure Factors when considering price Cost of merchandise Operating expenses Competition Supply and demand Desired Profit Promotional Activities Advertising, Sales Promotions, Public Relations, Personal Selling CREATIVE!

Financial Plan Most business obtain financing through loans from financial institutions Must assure banks that business will be successful Elements Sources of capital (money needed to finance operations) Projected Income and Expenses Repayment Plan

Hiring Employees Section 2.2

Goals Explain the factors for determining personnel needs Describe the procedures for creating a hiring plan Identify criteria for hiring employees

Determine Personnel Needs Three factors to consider The organizational chart Hours of operation Size of the store

Organizational Chart Visually shows the various positions within the company as well as the lines of authority Example Advisor (Teacher) Manager Senior Assistant Manager Junior Assistant Manager

Hours of Operation The more hours of operation the more employees needed Meijer vs. boutique in Birmingham

Size of the Store Larger the store the more employees needed Do not want a store too crowded Customers have hard time moving around

Creating a Hiring Plan Outlines the process that will be used to hire employees for the business Includes steps when hiring new employees Questions that should be addressed Recruitment Methods Application Procedures Interview Guidelines

Recruitment Methods “Help Wanted” Advertisements Signs Checking out the Competition Word-of-mouth Online Job Banks

Application Procedures Resume Job Application Stored in a file for six months to a year

Interview Guidelines Makes hiring fair and ethical Two main reasons for guidelines Ensure that all applicants are asked the same questions Ensure that applicants are not asked illegal questions that could lead to allegations of discrimination Cannot ask how old someone is You can ask if they are of legal working age

Criteria for Hiring Employees Factors that you may want to consider Educational level Previous work experience Knowledge, skills, and abilities

Preparing for Opening Day Section 2.3

Goals Explain the importance of preparing for opening day Identify the steps needed to prepare for opening day

Importance of Opening Day Creating Order Should be spent interacting with customers Trial run First Impressions Must be positive Freshman/transfer students Friendly and build customer loyalty

Opening Day Tasks Administrative Tasks Obtaining licenses and permits Setting up a bank account Creating a filing system Filing any paperwork Creating Security guidelines

Opening Day Tasks Merchandising Tasks Arrange store in appealing manner Plan-o-gram: a map that shows where each piece of merchandise should be located within the store Divide workers into teams Clothing/gift sales Food Sales Cashiers Loss Prevention

Opening Day Tasks Promotional Tasks Advertising Public Relations Cost-effective and reach target market Public Relations Grand opening celebration Sales Promotions Personal selling Must be familiar with products!

Opening Day Tasks Personnel Tasks Recruiting job applicants Hiring employees Completing new hire paperwork as required by law Training employees Creating a work schedule Setting up a payroll system (grades)

Assignments Review Questions Put it in Action Matching Multiple Choice Short Answer Put it in Action Questions for business plan Hiring Employees Plan-o-gram Organizational Chart