Section 35.1 The Business Plan Marketing Essentials n Chapter 35 Developing a Business Plan Section 35.1 The Business Plan

The Business Plan SECTION 35.1 What You'll Learn The purpose and importance of a business plan The major sections of a business plan How to describe and analyze a proposed business situation

The Business Plan SECTION 35.1 Why It's Important It takes financing to start a new business. To obtain financing requires a well-developed business plan. A business plan is an invaluable tool that helps an entrepreneur to plan business goals, determine necessary resources, and clearly identify how the new business will operate and be managed.

The Business Plan SECTION 35.1 business plan business philosophy Key Terms business plan business philosophy trading area buying behavior

The Business Plan SECTION 35.1 Developing the Business Plan A business plan is a proposal that describes a new business to potential investors and lenders. A business plan should contain three main sections: description and analysis of the proposed business situation organizational and marketing plan financial plan

The Business Plan SECTION 35.1 Description and Analysis of the Proposed Business The description and analysis section introduces the proposed business concept. This section should clearly include: the products and services the business will sell your personal business philosophy a self-analysis that describes your business experience, education, and training a trading area analysis, a market segment analysis, and an analysis of potential locations

The Business Plan SECTION 35.1 Type of Business, Business Philosophy, and Type of Products The type of business you plan to open includes marketing research data or significant trends that will influence the success of your business. Your business philosophy tells how you think the business should be run and shows your understanding of your business’s role in the marketplace. The product or service you will offer should meet a consumer need and provide consumer benefits.

The Business Plan SECTION 35.1 Self-Analysis A self-analysis is a description of your personal education, training, strengths, weaknesses, and a plan for personal development in the field of marketing.

The Business Plan SECTION 35.1 Trading Area Analysis A trading area is the geographical area from which a business draws its customers. Before going into business, you must analyze the trading area with respect to geographic, demographic, and economic data, as well as competition.

The Business Plan SECTION 35.1 Geographic, Demographic, and Economic Data Geographic data includes population distribution, or how many people live in a certain area. Demographics are identifiable and measurable population statistics, such as age, gender, marital status, and race/ethnicity. Economic factors include economic growth projections, trends in employment, interest rates, business mergers, and governmental regulations. Slide 1 of 2

The Business Plan SECTION 35.1 Geographic, Demographic, and Economic Data Disposable income is the money your potential customers have after paying taxes. A buying power index helps business owners determine the buying power for a given area by factoring in disposable income, population size, and retail sales figures. Slide 2 of 2

The Business Plan SECTION 35.1 Competition For your trading area analysis, list all the competitors in your trading area, along with their types of products, prices, locations, general quality of products, and their strengths and weaknesses. You should be able to use these factors to demonstrate how your business will be superior to the competition.

The Business Plan SECTION 35.1 Market Segment Analysis A market segment analysis is a description of your target market and the buying behavior of your potential customers. Your target market represents the specific group of people you want to reach. Buying behavior is the process individuals use to decide what, from where, and from whom they will buy.

The Business Plan SECTION 35.1 Analysis of Potential Locations Location has a direct effect on your sales, which makes this a vital decision. Important things to consider are: buy, lease, or build competing and complementary businesses hours of operation visibility safety customer accessibility personal issues zoning and other regulations Slide 1 of 6

The Business Plan SECTION 35.1 Analysis of Potential Locations Buy, Lease, or Build Will you buy, lease, or build your facility? (Leasing is usually best for most new businesses.) Compare rent or payments and length of commitment as well as insurance considerations. Slide 2 of 6

The Business Plan SECTION 35.1 Analysis of Potential Locations Competing and Complementary Businesses Consider the number and size of potential competitors in the area—if your business is similar, you may want to locate near them to encourage comparison shopping. A complementary business is one that would help generate store traffic. Slide 3 of 6

The Business Plan SECTION 35.1 Analysis of Potential Locations Hours of Operation Your location will determine your hours of operation and the number of customers who will see and patronize your business. Visibility Businesses that rely on high visibility, such as restaurants, may spend the extra money to locate in a highly visible location. Slide 4 of 6

The Business Plan SECTION 35.1 Analysis of Potential Locations Safety Neighborhood safety should be a consideration when choosing a business location. Research the community's crime rate, and the location’s proximity to fire hydrants and fire stations. Customer Accessibility Identify the highways, streets, and transportation routes that lead to your business site. Slide 5 of 6

The Business Plan SECTION 35.1 Analysis of Potential Locations Personal Issues Consider personal issues such as the location’s distance from family and friends, proximity to your home, as well as its atmosphere, and character. Zoning and Other Regulations Learn about any local ordinances or laws that may affect your business or prevent you from locating in a particular commercial or residential area. Slide 6 of 6

Reviewing Key Terms and Concepts ASSESSMENT 35.1 Reviewing Key Terms and Concepts 1. What is a business plan, and why is it important? 2. What are three sections of a business plan? 3. What is a business philosophy? Why is it important? 4. Define buying behavior. Why is it important to understand customer buying behavior in your target market? 5. Identify at least three factors to consider when planning a location for a business.

ASSESSMENT Thinking Critically 35.1 What are some of the factors that a new business can control? What are some uncontrollable factors?

The Business Plan Graphic Organizer 35.1 The Business Plan I. Description and Analysis of the Proposed Business The Business Plan II. Organization and Marketing Plan III. Financial Plan

Marketing Essentials End of Section 35.1