MGMT 3710 Entrepreneurial Foundations Chapter 9 The Business Plan
Why Create a Business Plan? For Investors and Creditors Avoidance of risk Knowing what they’re getting into For yourself and management Really thinking hard about what that company is Very hard to find time once the business gets going Figure out who should be on your team
What a Business Plan Should and Should Not Contain Should have: Contact information Information about the opportunity “Real” information! Information about resource needs and weaknesses Include ideas for solutions for these Information about how the company will run The assumptions you used to create your projections
What a Business Plan Should and Should Not Contain Should NOT have: Wild creativity or evidence of heavy spending in structure or appearance Aggregated market information Information from last funding attempt left over in cover letter or plan Several voices in the writing style
The Process of the Plan Kawasaki –Pitch then plan Design and deliver a 10 page pitch for your business around the plan outline Then create the plan afterward, filling in the holes Provide a list of customers who might vouch for your initial product or service Use diagrams and graphs Don’t use consultants to write the plan Have a credible person refer you to someone for examining
Let’s Go Through a Business Plan! Executive Summary What the Business Is About Your Management Team Structure, Ownership, and Intellectual Property Industry Analysis Risk Factors Financial Plan Appendix Marketing Plan Operational Plan
The Executive Summary Before we start, logos, logos, logos! Oh, and some contact information! Must be absolutely convincing – may be the only exposure you have to an investment team member A summary of the entire plan Needs to include the amount of money sought Write this LAST!
The Business What was your initial need that you were going to fill as an entrepreneur? Flesh that out with real information you have gathered through feasibility analysis History, mission, vision, values, and objectives Timeline for action The product or service
The Management Team Show any proven skills Management ownership interests Management’s former track record Put resumes in the appendix Board of Directors Insiders and outsiders Professionals Hired to Fill in the Gaps
Structure, Ownership and Intellectual Property Ownership Organizational Chart Legal Structure of the Organization Why that was chosen Patents, copyrights, and trademarks
External Analysis Industry and PEST How your firm will take advantage of positive trends and how it will avoid or combat negative trends Could be the short narrative explanation of a SWOT in Appendix
Marketing Plan Product information here if not before Feasibility analysis summary Market report Promotional scheme Pricing Strategy Channels of Distribution
Operations Plan How you plan on manufacturing your product or delivering your service Who will your suppliers be? Who are your partners? How will you ensure quality control? How will you handle safety? How will you go about bringing new people on board?
Financial Plan What funding will be used and how it will be used Three to five years of pro forma income statements, balance sheets, and cash flow statements When investors can plan of getting their return Assumptions either here or in an Appendix Exit strategy
Risk Factors Lets investors know that you as management are aware of the things that put your business at risk The “What-if’s” and “Worse case scenarios” Evaluate risks in all functional areas
Appendix Important information that clutters the remainder of the plan 2MBA had Internal Analysis, Risk Analysis, SWOT, Testimonials, Production Layout, Action Plan, Team Member Details (resumes), References, and Financial Analysis Worksheets in theirs
What Not to Do in a Pitch Go over allotted time Prepare too many slides Be without necessary technical equipment Come without critical info Forget to talk about the nuts and bolts of everyday business Allow too many people to talk