1. Lesson 5.2 What goes into a business plan?
Mrs. Leonard
Entrepreneurship

2. Seven Basic Elements of a Business Plan
Although business plans differ, all should include some basic information in the following areas:
History and __________________ of your idea
______________ and Objectives for your company
Products or services you will offer
Form of _________________
Management and Staffing
_______________________
Current and Projected Financial Statements

3. 1st Element: History and Background
Something must have sparked an ____________ for your business…
Describing how you came up with your idea can help lenders, investors, and others understand how your business will ____________________________
EX. Child care worker who worked at day care center for many years… center turned away children because it did not have proper staff or room – you decide to open a center of your own
Your business plan could explain the high-demand for quality day-care services and you are well positioned to meet this need

4. Summarize your Business Idea Assignment
Directions: Answer the following questions about your business on another sheet of paper.
Summarize your business idea in 50 words or less.
Where did your idea originate from? (examples: specific experience, observations, inspiration)
If your idea is for a new product or service, describe how you expect to get it accepted into the market.
If your idea is for an improvement or variation of an existing product or service, describe why consumers will use it instead of what is already available

5. Goals and Objectives
Your business plan should outline your _______________ (now – 1 year), medium-term (2-5 years), and long-term goals(5 years – beyond)
Describes _________ you want your company to be in the future
Could be short-term or very clear what you want to do with your business
EX. Childcare Center –
Short term goals – want to get financing that will allow you to lease or buy a facility, equip the facility, and staff it with eight employees
______________________goals – invest in more equipment and possibly expand their facility to accommodate more children
Long-term goal – expand to a regional chain of centers

6. Goals Assignment What are your goals for your business?
Short Term –
Medium Term –
Long Term –
What steps do you need to take to achieve each of these goals?

7. Products or Services
This part of your business plan should describe the ___________________ or services you company plans to produce and sell
Explain how these products or services _______________ from those already on the market
Highlight unique features of your products or services
Explain the ____________ customers will receive by purchasing from your company
Two parts:
Industry
Locations

8. Products and Services: Industry
This section describes the industry you will operate in
Include:
External factors affecting your business, such as high _________________ or a lack of certain suppliers
Growth potential of the industry
______________________________ of the industry
Technology trends that may affect the industry
Forecasts for industry __________________
You will need to research government documents, articles and books on industry leaders, the Internet, or other reliable sources to find what you need to include
________________ (makes the business plan more convincing)

9. Products and Services: Location
This section should describe the _____________ of your business
Lenders what to know exactly where your business will be because the location of a business is critical to its __________________
Ex. Child care center
Industry – included population data to show demand for service will grow over time (cite sources)
Location – in the heart of the community where most families have children and both parents work outside the home

10. Form of Ownership
This section details your form of ownership (ex. Sole proprietorship, partnership, or corporation)
Provide information relevant to your form of business:
Ex. Who are your __________________?
How many shareholders do you have?
This section is important because the _______________ of business has an effect on how the business works and makes profit
Banks are interested in this information

11. Management and Staffing
This section should show that you and the people who will be working for you have the ____________, maturity, and common sense to manage your business well
People who manage your company are critical to its success
Ex. Child care center –
You and your partner have master’s degree’s in childhood education
Together you have more than 35 years of experience
Include copies of resumes and letters of recommendations from satisfied parents

12. Marketing
In this section explain who your prospective customers are, how large the market is for your product or service, how you plan to enter that market, and how you plan to deal with ____________________
List your companies _____________ over the competition
Performance, Quality, Price, Promotion, Reliability, Distribution, Public image or reputation
Ex. Child care center
Customers – parents of the 1,00 to 1,500 children between the ages of 2 -5 who live in the area
Determine that 90% of the families would be able to afford their center
Advertise in local newspapers and send fliers out to families in target market
Offer a discounted rate for 2 months for new customers

13. Current and Projected Financial Statements
The __________________ of your plan consists of three elements:
1. Identification of risks
Prospective lenders and investors will want to know what ____________ your business faces and how you plan to deal with them
Lenders will be reassured to see that you have clearly thought through the potential problems and will not be caught by surprise without a plan for dealing with them
Examples of risks that you could include are competitors cutting prices, costs exceeding projections, and demand for your product or service __________________________

14. Current and Projected Financial Statements
A new business must include __________________
__________________ in its business plan
An existing business must include current as well as projected statements
________________ financial statement - a financial statement based on projected revenues and expenses

15. Current and Projected Financial Statements
Funding request and return on investment
You also must indicate how much you need to _____________ and how you plan to use the money
You should give investors an idea of how much money they could expect to earn on their investment in your business
You should also include how much money you are __________________ in the business

16. Current and Projected Financial Statements
Ex. – Child care center
Main risk – parents considering center unsafe
Prepare a pamphlet entitled “Safety and your Child”
Will be used as a part of _____________________ (included in business plan)
Projected financial statements
$140,000 to start business
Each partner is contributing $85,000
Bank will need to loan them $55,000

17. Additional Elements of the Business Plan
Some businesses need to provide additional information in their business plan
A business that has _________________________ or must meet legal restrictions and regulations would include a legal issues section in the business plan
To identify any special sections that you should include, ask yourself what you would want to know about a business before you would ____________ it money
Ex. Child-care center
Devote a section of business plan to health and safety issues
Describe procedures for dealing with allergies, illnesses, and injuries, and emergencies (fire)

18. 5.2 Assessment List the seven elements of a business plan.
Directions: Answer the following assessment questions about Chapter 5.2 with your Chapter 5 Assessment questions. Save your Assessment. Make sure to write the questions and the answers. Next, answer the 5.2 TF/MC worksheet. Put your completed worksheet in your notebook.
List the seven elements of a business plan.
Why should some businesses include additional information in their business plan
Why should you include management and staffing issues in your business plan?
5.2 TF/MC worksheet