From Backpacksto Briefcases.How to develop yourown business plan.Hank Jordan, CMCwww.atl.devry.edu/hjordan
Outline of a Business Plan I. Executive Summary II. Company Description A. Legal Form of Business B. Company’s Mission C. Names of Top Management D. Location and Geographic Information E. Company’s Development Stage F. Company’s Products or Services G. Specialty Business Information
Outline of a Business Plan continued III. The Industry Analysis A. Size and Growth Trends B. Maturity of Industry C. Vulnerability to Economic Factors D. Seasonal Factors E. Technological Factors F. Regulatory Issues G. Supply and Distribution H. Financial Considerations
Outline of a Business Plan continued IV. The Target Market A. Demographics/Geographics B. Lifestyles and Psychographics C. Purchasing Patterns D. Buying Sensitivities E. Size and Trends of Market
Outline of a Business Plan continued V. The Competition A. Competitive Position B. Market Share Distribution C. Barriers to Entry D. Future Competition
Outline of a Business Plan continued VI. Marketing and Sales Strategy A. Company’s Message B. Marketing Vehicles C. Strategic Partnerships D. Other Marketing Tactics E. Sales Force and Structure F. Sales Assumptions
Outline of a Business Plan continued VII. Operations A. Plant and Facilities B. Manufacturing/Production Plan C. Equipment and Technology D. Variable Labor Requirements E. Inventory Management F. Supply and Distribution G. Order Fulfillment and Customer Service
Outline of a Business Plan continued VII. Operations continued H. Research and Development I. Capacity Utilization J. Quality Control K. Safety, Health and Environmental Concerns L. Shrinkage M. Management Information Systems
Outline of a Business Plan continued VIII. Management and Organization A. Principals/Key Employees B. Board of Directors C. Consultants/Specialists D. Management to Be Added E. Organizational Chart F. Management Style/Corporate Culture
Outline of a Business Plan continued IX. Development and Exit Plans A. Long-Term Company Goals B. Growth Strategy C. Milestones D. Risk Evaluation E. Exit Plan
Outline of a Business Plan continued X. The Financials (grouped by year) A. Sales Plan B. Staffing Plan C. TQM Plan D. Marketing Plan E. Operations Plan F. Capital Budget G. Cash Budget
Outline of a Business Plan continued X. The Financials (continued) H. Income Statement I. Balance Sheet J. Cash Flow K. Break Even Analysis L. Plan Assumptions M. Use of Funds XI. Appendix
Financial Flow Chart Sales Plan Production Plan Staffing Plan TQM Plan Marketing Plan Operations Plan Cash Budget Capital Budget Income Statement Balance Sheet Cash Flow
Time Saving Tips • Develop a research plan • Prioritize the most important areas • Organize your documentation • Use technology • When stuck - get help
Considerations for Your Business When you sell a service, You sell yourself.
Common Factors of Service Businesses 1. Intangible product; 2. Subjective judgment of Quality; 3. Relatively few barriers to entry; 4. Perishable product; 5. Time lapses between use; 6. Quality depends on the actual service provider.
Trends in Business Faster delivery speed Branching out/franchises One stop shopping/personal banker
Strategies for Improving Your Business 1. Make your product more tangible; 2. Develop a distinct image; 3. Cultivate referral sources; 4. Stay in touch with your customers; 5. Encourage timely purchases; 6. Stress quality and employee education; 7. Find ways to use excess capacity.
Internal Planning for ExistingBusinesses & Corporations Define specific objectives such as: Total revenues Sales per employee Revenues per customer Profit margin Inventory levels and Production time Collection activity
Performance Objectives Measurable: objective not subjective Reasonable: reachable goal Time Specific: by a certain date Motivational: not too hard, not too easy
Problem Solving Plan 1. Define the problem 2. Assemble the team 3. Consider solutions 4. Recommend activities 5. Implement activities 6. Measure activities Plan - Do - Check - Act
Customer Analysis - current customers Products/Services purchased? Number of units purchased? Sales $ this year? Sales $ last year? Sales $ prior year?
Customer Analysis - new customers Reason for purchase? How was sale secured? Sales $ this year? Sales $ last year? Sales $ potential?
Customer Analysis - lost customers Products/Services purchased? Reason for loss? Potential for regain? Last annual purchase $? Previous $ high annual?
I - The Executive Summary 1. Your basic business concept makes sense; 2. Your business had been thoroughly planned; 3. That management is capable; 4. A clear-cut market exists; 5. Your business has competitive advantages; 6. Your financial projections are realistic; 7. Investors have an excellent chance to get a return.
I - The Executive Summary (continued) • Your executive summary is the single most important part of your business plan. • It must motivate the reader to consider your plan. • Prepare your Executive Summary last, only after your entire plan has been completed.
II - Company Description Names: Legal or corporate name Doing business as ... Brand or trade names Subsidiary companies
Company Description (continued) Legal form: Legal form of business State incorporated County for business license Owners or major stakeholders
Company Description (continued) Management/Leadership: Chairperson of the board President Chief Executive Officer Chief Financial Officer Chief Operating Officer Advisory board members
Company Description (continued) Location: Company headquarters Place of business Branches Geographic area served
Company Description (continued) Developmental stage: When company was founded When product or service introduced Milestones reached Significant developmental indicators
Company Description (continued) Financial status: Last year’s total sales Last year’s pretax profit Current number of employees Amount of funds sought Basic use for funds sought Major financial obligations
Company Description (continued) Products and services: General description Number and type of lines Number in each line Patents and licenses: Patents held and pending Trademarks held and pending Licenses held and pending
III - Industry Analysis • A description of your industry • Current trends in your industry • Strategic opportunities that exist in your industry
Your Economic Sector Service Manufacturing Retail Distribution Note: your business may belong to more than one
Size and Growth Rate Two years ago Last year This year Next year Five years out
Industry Maturity Introduction Growth Mature Decline
Sensitive to Economics Which of these will affect your business? Little business expansion Increased unemployment High interest rates High inflation Weakened dollar
Seasonality How many seasons does your business have? Holidays Summer Winter Spring Fall
Technological Change How will changes in technology affect . . . your products your services your costs your business
Regulation and Certification National State County What effects will they have on your business?
Plan Preparation Form Industry description Industry trends Strategic opportunities
IV - The Target Market Demographic Geographic Psychographic
Market Size and Trends • What is the current size? • What is the rate of growth? • Are changes occurring in your market? • Are social values affecting your market? • What else is affecting your market?