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The Business Plan Ray Amtmann September, 2008 Northern Michigan University Skill Builders Program

The Business Plan Ray Amtmann September, 2008 Northern Michigan University Skill Builders Program. What Is a Business Plan?. Business Plan A business plan is a written narrative, typically 25 to 35 pages long, that describes what a new business plans to accomplish. Dual-Use Document

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The Business Plan Ray Amtmann September, 2008 Northern Michigan University Skill Builders Program

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  1. The Business Plan Ray Amtmann September, 2008 Northern Michigan University Skill Builders Program ramtmann@nmu.edu

  2. What Is a Business Plan? • Business Plan • A business plan is a written narrative, typically 25 to 35 pages long, that describes what a new business plans to accomplish. • Dual-Use Document • For most new ventures, the business plan is a dual-purpose document used both inside and outside the firm. • Inside the firm, the plan helps the company develop a “road map” to follow in executing its strategies and plans. • Outside the firm, it introduces potential investors and other stakeholders to the business opportunity the firm is pursuing and how it plans to pursue it. ramtmann@nmu.edu

  3. Does something come before the Business Plan? • YES!!!!!! ramtmann@nmu.edu

  4. FIRST QUESTION TO ANSWER • Do I have just a great idea?...... • Or a commercially VIABLE great IDEA!!! ramtmann@nmu.edu

  5. How do I know if it is viable? • Identify Startup Ideas • Market Need • Competitive Advantage • Economics • Profit Potential • Management Capability • Fatal Flaws • There should be none ramtmann@nmu.edu

  6. Analysis • Conduct Analysis • Outside in • What is the general environment • New Competitors • Substitute products • Rivalry • Suppliers • Buyers ramtmann@nmu.edu

  7. Analysis cont. • Inside Out • Identify Resources • Tangible • Intangible • Core Competencies • Provide Competitive Advantage • SWOT Analysis • Strengths • Weaknesses • Opportunities • Threats ramtmann@nmu.edu

  8. Feasibility is a go….now what? • NOW…. • DO THE BUSINESS PLAN!! ramtmann@nmu.edu

  9. Business Plan Audiences • Employees • Investors/Venture Capitalists • Lenders/Suppliers • Customers • Advisors/Consultants ramtmann@nmu.edu

  10. Plan Presentation • Information Needs • Market • Operations • Location • Manufacturing Operations • Raw Materials • Equipment • Labor Skills • Space • Overhead • Financial Information ramtmann@nmu.edu

  11. Plan Outline • Introductory Page • Executive Summary • Industry Analysis • Description of Venture • Production Plan • Operational Plan • Marketing Plan • Organizational Plan • Assessment of Risk • Financial Plan • Appendix ramtmann@nmu.edu

  12. Environmental/Industry Analysis • Environmental- External & Uncontrollable Variables • Economy • Culture • Industry • Industry Demand • Competition ramtmann@nmu.edu

  13. Description of Venture • Mission • Product/Service • Location/Size • Personnel • Office Equipment • Entrepreneur’s Background • History of Venture ramtmann@nmu.edu

  14. Objectives • Quantifiable • Obtainable • Flexible ramtmann@nmu.edu

  15. Production Plan • How Product Manufactured- Complete Process vs. Subcontracting • Physical Plant Layout • Machinery/Equipment Needed • Raw Materials/Suppliers • Manufacturing Costs • Future Capital Needs ramtmann@nmu.edu

  16. Operations Plan • Marketing • Market Conditions • Strategy- Distribution, Pricing, Promotion • Organization • Ownership Structure • Lines of Authority/Responsibility • Assessment of Risk • Potential Hazards • Alternative Strategies • Financial Plan • Economic Feasibility • Financial Commitment ramtmann@nmu.edu

  17. Implementation Of Plan • Measuring Progress- Controls • Inventory • Production • Quality • Sales • Disbursements • Cash Flow • Updating ramtmann@nmu.edu

  18. Reasons For Plan Failure • Unreasonable Goals • Goals Not Measurable • No Total Commitment • Lack Of Experience • No Understanding Of Threats Or Weaknesses • Customer Need Not Established ramtmann@nmu.edu

  19. A new venture or continued adventure? • What you have seen is not a cookie cutter answer • The path is not a straight line • It requires • Much thought • Flexibility • Integration of ideas • Updating of • Plans • Resource • Personnel skills ramtmann@nmu.edu

  20. Success Requires Ownership in the Plan • Who must be invested? • Managers • Workers • Stakeholders • Suppliers • Customers • Take anyone of those investors away and the business will fail! ramtmann@nmu.edu

  21. NMU New Venture Competition (NVC) • Due 30 Oct 2008 • Executive Summary • Must not exceed 1,000 words.  • Be prepared using 12 point pitch • One inch margin on all sides, double spaced, and with pages numbered. ramtmann@nmu.edu

  22. NVC cont. • What must be in the Executive Summary? • Name & description of proposed business • Marketing & customer details • Supply & distribution strategies • Cost of startup • Break even analysis • Business timing • Organization & personnel including experience ramtmann@nmu.edu

  23. NVC cont. • Detailed rules & timeline are available at http://webb.nmu.edu/Colleges/Business/SiteSections/Programs/NewBusinessPlan/NewBusinessPlanOverview.shtml ramtmann@nmu.edu

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