AB209, SMALL BUSINESS MANAGEMENT Unit 3 Seminar

 Review 2 Content  Unit 3  UNIT overview  Marketing Plan  Final Project- Defining the market

Identifying Startup Ideas © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 3–3  Opportunity Recognition  Identification of potential new products or services that may lead to promising businesses  Entrepreneurial Alertness  Readiness to act on existing, but unnoticed, business opportunities  Good Investment Qualities  Products that serve clear and important needs  Products that customers know about  Products that customers can afford  A good idea is not the same as a good opportunity.

© 2010 South-Western, Cengage Learng, Inc. All rights reserved. 3–4 Exhibit 3.2Common Sources of Startup Ideas Source: Data developed and provided by the National Federation of Independent Business and sponsored by the American Express Travel Related Services Company, Inc.

Franchising © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 4–5  Franchising  A marketing system involving a legal agreement, whereby the franchisee conducts business according to the terms specified by the franchisor.  Franchisor  Party in franchise contract that specifies methods to be followed and terms to be met by the other party.  Franchisee  An entrepreneur whose power is limited by a contractual agreement with a franchisor.

The Pros and Cons of Franchising  Advantages  Road Map provided  Training  Financial assistance  Operating Support  Limitations  Franchise costs Initial franchise fee Investment costs Royalty payments Advertising costs  Franchisor has control 4–6 © 2010 South-Western, Cengage Learning, Inc. All rights reserved.

Unit 3 Check-In

Unit 3 Information Unit 3 The Business & Marketing Plan Reading Discussion Assignment Final Project – Describe and Define your market Seminar Discussion Posts Assignment: Video Questions

© 2010 South-Western, Cengage Learning, Inc. All rights reserved. 6–9 An Overview of the Business Plan  Business Plan  A document that sets out the basic idea underlying a business and related startup considerations  The Purpose of a Business Plan  Identifies the nature and context of the business opportunity  Presents the entrepreneur’s approach to exploiting the opportunity  Identifies factors affecting the venture’s success  Serves as the entrepreneur’s tool for raising capital

© 2010 South-Western, Cengage Learning, Inc. All rights reserved. 6–10 Exhibit 6.1Users of Business Plans

© 2010 South-Western, Cengage Learning, Inc. All rights reserved. 6–11 The Need for a Business Plan  Primary Functions  To provide a clearly articulated statement of goals and strategies for internal use Imposes discipline on the entrepreneur and management team  To serve as a selling document to be shared with outsiders Provides a credible overview for prospective customers, suppliers, and investors Helps secure favorable credit terms from suppliers Opens approaches to lenders and other sources of financing

© 2010 South-Western, Cengage Learning, Inc. All rights reserved. 6–12 How Much Business Planning is Needed?  Factors affecting the extent of a business plan:  Cost in time and money to prepare the plan  Management style and ability  Preferences of the management team  Complexity of the business  Competitive environment  Level of uncertainty

© 2010 South-Western, Cengage Learning, Inc. All rights reserved. 6–13 Types of Business Plans  Mini-Plan  A short form of a business plan that presents only the most important issues and projections.  Comprehensive Plan  A full business plan that provides an in-depth analysis of the critical factors that will determine a firm’s success or failure, along with all the underlying assumptions.

© 2010 South-Western, Cengage Learning, Inc. All rights reserved. 6–14 Exhibit 6.3Abbreviated Business Plan Outline Section Heading Cover Page Table of Contents Executive Summary Industry, Target Customer, and Competitor Analysis Company Description Product/Service Plan Marketing Plan Operations and Development Plan Management Team Critical Risks Offering Financial Plan Appendix of Supporting Documents

The Marketing Plans typically include: Step 1:  Current Marketing Situation- Strengths, Weaknesses, Opportunities, Threats (SWOT) SWOT should include: Analysis of Internal and External factors both positive and negative Make sure to include segmentation, target market and position in the market

Your Assignment for the Final Project  In Unit 3 you will work on:  Define your market: So you would look at the segmentation Then you would select your target market and your position in that market

Unit 4 Preview

Unit 4 Information  Theme: The Human Resources and Location Plans  Readings: Longenecker – Chapters 8 & 9  Discussion Board: The HR Plan – Biosite, Inc (page 200) (40 points)  Case Study #2: Le Travel Store (page 641) (50 points)  No Seminar

Unit 3 Seminar Wrap-Up If you need assistance: o Contact instructor at their KU address o Post message to “Instructor’s Office” o Meet with instructor during Virtual Office Hours o KU Tech Support: o Academic Advisor: If you have any challenges that prevent you from succeeding this term or at KU in general o Other KU Resources: Writing Center, etc. Our next “live” seminar: Unit 5 Questions? o Course Website or Content? o Assignments? o Other issues?