Bell Ringer Business Plan- a proposal that describes a new business to potential investors and lenders What do you think a business plan might include?

Developing A Business Plan Chapter 39 Developing A Business Plan

Objectives Identify the purpose and importance of a business plan Identify the major sections of a business plan Discuss how to describe and analyze a proposed business situation Discuss how to develop a business’s organization plan

Objectives Discuss how to provide details related to goods or services to be offered. Discuss how to develop a marketing plan. Discuss how to describe the elements found in the financial section of a business plan Discuss how to identify sources of equity capital Discuss how to identify sources of debt capital

The Business Plan Business Plan- proposal that describes a new business to potential investors and lenders Maps out course of the business Helps obtain financing Guides the opening of the business Plans the successful mgmt of the business Your business plan should convince investors and lenders that your business idea is profitable. It should identify procedures necessary to legally establish the business It should work as a management tool to identify the month-to-month steps necessary to operate a profitable business.

3 Main Sections of a Business Plan Description and analysis of the proposed business situation Organizational and marketing plan Financial plan

Description and Analysis of the Proposed Business Introduces proposed business concept Should clearly identify the products & services the business will sell Includes personal business philosophy & a self-analysis that describes your business experience, education, and training Includes a trading area analysis, a market segment analysis, and an analysis of potential locations

Type of Business, Business Philosophy, and Type of Products 1. Begin with a description of the type of business you plan to open Present marketing research data or significant trends that will influence the success of your business Explain how a current or changing situation has created an unfulfilled consumer want that your business will address.

Type of Business, Business Philosophy, and Type of Products 2. State the Business Philosophy- tells how your think the business should be run and shows your understanding of your business’s role in the marketplace. Reveals your attitude toward your customers, employees, and competitors. Your business philosophy will help you attract new customers and maintain existing customers once you start a business. Wal-Mart’s business philosophy states that the company will match the advertised sale prices of any competitor. The principal pricing policy is that Wal-Mart will not be undersold and the return policy is that customers can always return merchandise if they are dissatisfied with it. This business philosophy has earned Wal-Mart a loyal following of customers.

Type of Business, Business Philosophy, and Type of Products 3. Describe the product or service you will offer Explain potential consumer benefits & why your product or service will be successful Include as many facts as you can INCLUDE AS MANY FACTS AS YOU CAN: ---Speculation and statements of belief do not convince investors and lenders to lend you money.

Self-Analysis 4. Self-Analysis- a description of your personal education, training, strengths, weaknesses, and a plan for personal development in the field of marketing Imagine that you’re interested in apparel and accessories marketing and want to start a related business. You must be able to accurately predict current fashion trends. You must also be able to buy, display, price, and advertise your merchandise correctly. In this part of the business plan, highlight your strengths and skills in this area. Describe how you will acquire the skills you need through training or hiring a professional.

Trading Area Analysis 5. Define your Trading Area- the geographical area from which a business draws its customers Analyze with respect to geographic, demographic, and economic data, and competition. Info about the population in your trading area is available from your local chamber of commerce or state dept. of commerce. You can also consult the most recent local census data in your local library or on the internet.

Trading Area Analysis Geographic data- includes population distribution, or how many people live in a certain area Demographics- identifiable and measurable population statistics such as age, gender, marital status, and race/ethnicity

Trading Area Analysis Economic factors- include economic growth projections, trends in employment, interest rates, business mergers, and governmental regulations.

Trading Area Analysis Disposable income- personal income remaining from wages after all taxes are taken out Include how much disposable income the potential consumers in your trading area are likely to have.

Market Segment Analysis Market Segment Analysis- description of the target market and the buying behavior of the potential customers Buying behavior- process individuals use to decide what they will buy, from where they will buy it, and who they will buy it from Target market- the specific group of people you want to reach. Imagine that you’re planning to open a children’s toy store. You have used demographic information to determine how many families with children are in your target market. You also know the approximate average family income. From your earlier analysis of the competition (other toy stores serving the same target market), you have an idea of how much disposable income these families have spent on children’s toys and which toys they bought. You also know which stores in which locations did the most business. This is your target market’s buying behavior.

Analysis of Potential Locations Buy, Lease, or Build Competing and Complementary Businesses Hours of Operation Visibility Safety Customer Accessibility Personal Issues Zoning and Other Regulations Buy, Lease, or Build: Do you want to buy, leas, or build your facility? Competing and Complementary Businesses