1. Planning A Business Organization of a Business
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2. Learning Goals Identify key business stakeholders.
Describe key business functions.
Explain how to develop a business plan.
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3. Business Defined
A business is an enterprise that provides products or services desired by customers.
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4. Key Business Decisions
Product
What type of product should be produced?
Production
How should the product be produced?
Promotion
How should the product be promoted?
Financing
How should the company obtain funds to finance the cost of producing the product?
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5. Business Decisions
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6. Key Stakeholders Owners Creditors Employees Suppliers Customers
Entrepreneurs
Co-owners
Stockholders
Creditors
Employees
Managers
Suppliers
Customers
Entrepreneurs
Organize, manage and assume the risk of starting a business
Owners
Share ownership by issuing stock to investors
Creditors
Provide loans and charge interest
Employees
Suppliers
Provide materials used to produce products and services
Customers
Buy products that meet their needs and are priced fairly
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7. Interaction among Owners, Employees, Customers, Suppliers, and Creditors
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Exhibit 1.1

8. Creating a Business Idea
Identify a competitive advantage.
Differentiate the product or service from competitors.
Determine necessary resources.
Assess feasibility of the idea.
Identify a competitive advantage
Recognize entrepreneur’s skills and experience
Differentiate the product or service from competitors
Find ways to distinguish offering from others
Determine necessary resources
Employees, workspace, machinery
Assess feasibility of the idea
Consider possible revenues, expenses, and profitability
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9. business online
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10. Success Stories Domino’s Pizza Managhans bought bankrupt pizza parlor
Started with little funding
Now generates sales of $1 billion per year
Jeremy’s Micro Batch Ice Cream
Applied microbrewery concept to ice cream
Makes ice cream in small batches, sold in limited editions
Glow Dog, Inc.
Sells light-reflective clothing for pets
After two years, average annual sales of $1 million
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11. Lessons to Remember
Successful businesses do not require a great invention.
Many focus on making life more convenient for customers.
Some business ideas will fail—but entrepreneurs can learn from failures and make revisions.
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12. Impact of Technology Technology defined Information technology
Knowledge or tools used to produce products and services
Information technology
Represents over 1/3 of the growth in U.S. output
Reduces cost of producing products
Workers in technology industries earn more than workers in other industries.
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13. Impact of Technology E-business or e-commerce
Use electronic communications to produce or sell products and services
Sales to individual customers
B2B e-business: transactions between a business and its suppliers
Generates $301 billion in revenue and creates 1.2 million jobs each year
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14. Successful E-Businesses
Started out small
Created to sell a product or service that was not offered by competitors
Transformed how traditional firms conducted business
Improved communication with customers
Improved information flow
Improved efficiency
Complemented traditional business operations
KPMG study found that 87 percent of firms are using e-business to improve their efficiency
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15. E-Business Examples Amazon Yahoo! eBay
Online seller of books, music and other products
Low overhead costs allow price discounting
Yahoo!
Internet search engine and the most visited site on the Web
Offers variety of services - free , web page hosting, custom-designed start-up pages
Generates revenue by selling advertising
eBay
Online auction service
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16. Key Functions of Business
Management
Means by which employees and other resources are used by the firm
Marketing
Means by which products and services are developed, priced, distributed, and promoted to customers
Finance
Means by which firms obtain and use funds for their business operations
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17. Key Functions of Business
Accounting
Summary and analysis of the firm’s financial condition
Used to make various business decisions
Information systems
Information technology, people, and procedures that provide appropriate information to make effective decisions
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18. How Business Decisions Affect a Firm’s Earnings
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Exhibit 1.4

19. Common Business Decisions
Management Decisions
What equipment is needed?
How many employees should be hired?
How can employees be motivated to perform well?
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20. Common Business Decisions
Marketing Decisions
What price should be charged?
Should the product be changed to be more appealing to customers?
Should the firm use advertising or some other strategy to promote its product?
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21. Common Business Decisions
Finance Decisions
Should financial support come from the sale of stock or from borrowing money or some combination?
Should the firm attempt to obtain borrowed funds for a short-term or long-term period?
Should the firm invest funds in a new business project?
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22. A Business Plan Detailed description of the proposed business
Description of the product or service
Types of customers the business would attract
Competition
Facilities needed for production
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23. Developing a Business Plan
Assess the Business Environment
Economic environment
Industry environment
Global environment
Develop Management Plan
Organizational Structure
Production
Human Resources
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24. Developing a Business Plan
Marketing Plan
Target Market
Product Characteristics
Pricing
Distribution
Promotion
Financial Plan
Financing
Feasibility
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25. Online Resources Advice and basic information Financing Options
Yahoo’s Small Business site
American Express
Small Business Administration
Financing Options
Quicken Small Business
Garage.com
The Elevator
Business Planning Software
Business Planning Software
Outlines
Text generation
Forecasting
Graphics
Supplementary resources
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26. Assessing a Business Plan
Potential revenue
Potential demand for product or service
Potential expenses
Profit potential
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27. Expected Monthly Expenses of CHC
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Exhibit 1.6

28. Expected Performance of CHC in the First Year
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Exhibit 1.7