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THE BUSINESS PLAN: ROAD MAP TO SUCCESS

THE BUSINESS PLAN: ROAD MAP TO SUCCESS. UNIT 1• ENTREPRENEURIAL PATHWAYS. Class Name Instructor Name Date, Semester. Performance Objectives After this lecture, you should be able to complete the following Performance Objectives.

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THE BUSINESS PLAN: ROAD MAP TO SUCCESS

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  1. THE BUSINESS PLAN: ROAD MAP TO SUCCESS • UNIT 1• ENTREPRENEURIAL PATHWAYS Class Name Instructor Name Date, Semester

  2. Performance Objectives After this lecture, you should be able to complete the following Performance Objectives 1. Know what a feasibility analysis is and when to create one.2. Know what a business plan is and how to describe it.3. Explain the various purposes of a business plan and the audience for each.4. Understand the components of a business plan.5. Be able to demonstrate proper development and formatting of a business plan.

  3. 2 Feasibility Analysis: Will My Idea Work? Feasibility Analysis-a study to assist in making a go/no go decision based upon a close examination of product/service, market, industry, and financial data in a sufficient degree of detail to ensure confidence in the results. The feasibility analysis essentially tests a business concept for viability in three areas • Product and/or service feasibility • Market and industry feasibility • Financial feasibility

  4. 2 Five Industry Forces by Porter: • Competitor rivalry • Barriers to entry • Threat of substitutes • Supplier power • Buyer power

  5. 2 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

  6. 2 Why Do You Need a Business Plan? Saves time & money Key to raising capital Serves as an operations guide

  7. 2 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

  8. 2 Cover Page Full legal name of organization Logo Key contact information Date Non-disclosure information

  9. 2 Executive Summary Business definition Target market Key marketing strategy Goals Ownership Financing request Use of funds & exit strategy

  10. 2 Mission, Mission Statement, Vision, & Culture Mission = concise communication of strategy with business definition & competitive advantage Mission Statement = a brief, written statement that informs customers and employees what an organization’s goal is, and describes the strategy and tactics to meet it. 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

  11. 2 Company Description Background Track record

  12. 2 Opportunity Analysis & Research: Testing Ideas Industry analysis Environmental analysis Proof of market Target market Competitive analysis

  13. 2 Marketing Strategy & Plan Marketing Mix: combination of the Four P’s  Products  Pricing  Promotion  Place

  14. 2 Promotional Plans:  Advertising  Public relations  Publicity  Direct marketing

  15. 2 Management & Operations Management team & employees Research & development Location & physical facilities & equipment Inventory & production Quality assurance

  16. 2 Financial Analysis & Projections Sources and uses of capital Cash flow projections (cash flow statements) Income statement projections (profit & loss statements) Balance sheet projections Breakeven analysis Key ratios & comparisons

  17. 2 Assets = Liabilities + Owner’s Equity Asset -any item of value Liability -a business debt Net worth -the difference between assets & liabilities Owner’s equity -net worth

  18. 2 Breakeven point –the moment when the volume of sales in a business exactly covers the fixed costs  Ratio analysis  Risks and assumptions

  19. 2 Funding Request & Exit Strategy Initial public offering (IPO) – first presentation of corporate stock to investors on the open (public) market.  Amount, type & terms for funds  Risks & barriers  Exit & harvesting strategy  Milestones

  20. 2 Appendices Rescues Detailed financial projections Product specifications, photos & the like Advertising & promotion samples Contracts Other supportive materials

  21. 2 Business Plan Suggestions Write for your audience Show that you have “skin in the game” Be clear & concise Use current data & reports for your industry Choose a “voice” Use a consistent, easy to read format Number & label throughout Present the plan professionally

  22. 2 Presenting the Plan Formal presentations Elevator pitch Venture Competitions

  23. Key Terms advertising asset balance sheet breakeven point business plan cash flow statement competitive analysis culture direct marketing elevator pitch environmental analysis feasibility analysis income statement industry analysis initial public offering (IPO) liability marketing mix marketing plan mission mission statement net worth owner’s equity profit and loss statement (P&L) proof of market public relations publicity research and development (R&D) target market vision

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