Creating a Winning E-Business Second Edition Creating an E-Business Plan Chapter 3

Learning Objectives Organize a business plan Prepare an executive summary Write a mission statement Prepare a marketplace analysis Create operational, financial, and management plans Creating a Winning E-Business Second Edition, Chapter 3

Learning Objectives (continued) Understand legal forms of businesses Describe e-business partnerships Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization Formal business planning document Identifies the business and its mission Names the key management team members Describes the products or services to be offered Provides a marketplace analysis Identifies customers and competitors Determines resources for profitable operations Sets a timetable for profitability Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Government and for-profit sources for business planning information and templates SCORE SBA BizPlanIt Bplans.com E-Future Centre Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Business plan components Cover sheet and title page Table of contents Executive summary Business description Vision/mission statement Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Business plan components (continued) Information on products/services Industry, customer, competitor analyses Operational, financial, and managerial plans Identification of critical risks Exit strategy Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Cover sheet Title of document and preparer’s name Plan copy number “Confidential” notation Title page Cover sheet information and Contact numbers Key team members’ names Name of person receiving the plan Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Table of contents Lists all the major sections and subsections of the plan Prepared after rest of plan is complete Carefully checked for omissions and page number errors Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Executive summary A condensed version of the complete plan Used by interested parties to quickly assess the business idea and weed out plans Keep it short (one to three pages) Use clear and concise language and action words Create last after plan details are developed Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Vision statement A formal statement of a business’s hopes and desires Written to guide and inspire employees Mission statement A formal statement that explains a business’s reason for existing Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Business description Summary of business’s background Information about legal form of business Business’s history to date Key personnel Future goals Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Products or services section Description of products or services offered Anticipated sales for each product or service Describes benefits of product or service to customers Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Marketplace analysis Information about the specific industry of which business is a part Description of targeted customers Description of major competitors Overview of marketing and sales strategies Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Operational plan Describes a business’s physical location and equipment Notes the manufacturing or service actions needed to get products/services to market Summarizes Web site operations Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Financial plan Explains how your e-business idea, goals, and strategies translate into profits Provides standard financial statements for income, expense, and cash flow data Pro forma balance sheet Projected income statement Planned cash flow statement May include “deal plan,” break-even analysis, ratio analysis Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Management plan Organizational structure of business Information on Key members of management team Outside advisors Mentors Consultants Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Creating a Winning E-Business Second Edition, Chapter 3

Business Plan Organization (continued) Appendices Resumes Pictures of products Explanation of services Legal documents Other supporting documentation Creating a Winning E-Business Second Edition, Chapter 3

Legal Forms of Organization Sole proprietorship Business started by an individual Owner and business are one in the same for tax and legal liability issues Creating a Winning E-Business Second Edition, Chapter 3

Legal Forms of Organization (continued) Partnership Legal business entity with two or more co-owners Follows a partnership agreement General partnership: Tax and legal liabilities flow through to individual partners Limited partnership General partner manages and assumes unlimited liability Limited partners have liability for amount of their capital contribution and their accepted debt Creating a Winning E-Business Second Edition, Chapter 3

Legal Forms of Organization (continued) Corporation Separate legal and taxable entity from its owners “C” corporation owners are it shareholders Liability is limited to investment in business Profits are taxed twice: once for the corporation and again when distributed to owners as stock dividends Creating a Winning E-Business Second Edition, Chapter 3

Legal Forms of Organization (continued) Corporation (continued) “S” corporation gives owners partnership status and corporate liability protection Limited liability company (LLC) Tax status of sole proprietorship or partnership Liability status of a corporation Creating a Winning E-Business Second Edition, Chapter 3

E-Business Partnerships Strong positive relationships with strategic partners are critical Partnerships that help build market awareness Public relations firms Marketing consultants Partnerships that assist in operations Suppliers Distributors Web hosting companies Creating a Winning E-Business Second Edition, Chapter 3

Chapter Summary A business plan is used to A business plan includes Check feasibility of business Seek funding Guide operations A business plan includes Cover sheet and title page Table of contents and executive summary Marketplace analyses Operational, financial, and marketing plans Creating a Winning E-Business Second Edition, Chapter 3

Chapter Summary (continued) Business plan appendices can include Resumes Pictures of products and information on services Legal documents Other supporting details for the overall plan Creating a Winning E-Business Second Edition, Chapter 3

Chapter Summary (continued) Business description should include legal form of business Business plan should note key strategic partnerships Creating a Winning E-Business Second Edition, Chapter 3