Chapter 2 The Business Plan: Road Map to Success Entrepreneurship Chapter 2 The Business Plan: Road Map to Success
What Is a Business Plan? Document that thoroughly explains a business idea and how it will be carried out Story of what the business is & will be All costs & a marketing plan Description of financing Estimation of earnings
Why Create a Business Plan? Saves time & money Key to raising capital Serves as an operations guide
Business Plan Components Cover page Executive summary Mission, vision, & culture Company description Opportunity analysis & research Marketing strategy & plan Management & operations Financial analysis & projections Funding request & exit strategy Appendices
Cover Page Full legal name of organization Logo Key contact information Date Non-disclosure information
Executive Summary Business definition Target market Key marketing strategy Goals Ownership Financing request Use of funds & exit strategy
Mission, Vision, Culture Mission = concise communication of strategy with business definition & competitive advantage Vision = overall view of what the team wants the organization to become Culture = environment including risk tolerance & innovation, orientation with respect to people, teams & outcomes, attention to detail, & communication norms
Company Description Industry Type of firm (manufacturing/service/wholesale) Strategic advantage Legal structure Physical location & geographic reach Ownership structure
Opportunity Analysis Industry analysis Target market Environmental analysis (SWOT) Competitive analysis
Marketing Strategy & Plan Products Pricing Promotion Place Philanthropy
Economics of One Unit Definition of one unit Selling price per unit $ Direct labor Materials Total COGS per unit Other variable costs Total variable costs Gross profit per unit
Management & Operations Management team & employees Research & development Location & physical facilities & equipment Inventory & production Quality assurance
Financial Analysis & Projections Start-up capital requirements Cash flow projections Income statement projections Balance sheet projections Breakeven analysis Key ratios & comparisons
Funding Request & Exit Strategy Amount, type, & terms for funds Risks & barriers Exit & harvesting strategy Milestones
Appendices Resumes Detailed financial projections Product specifications, photos, & the like Advertising & promotion samples Contracts Other supportive materials
Business Plan Suggestions Write for your audience Show that you have “skin in the game” Be clear & concise Use current data & reports Select a “voice” Use a consistent, easy-to-read format Number & label throughout Present the plan professionally
Presenting the Plan Formal presentations Elevator pitch Competitions