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ChapterChapter77

The Business Plan:The Business Plan:Creating And Starting Creating And Starting

The VentureThe Venture

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Planning ThePlanning The Business OperationBusiness Operation

Business Plan- Document Describes Business Plan- Document Describes Internal/External Elements/Strategies Internal/External Elements/Strategies For New VentureFor New Venture

Plan (Road Map)Plan (Road Map) Short-TermShort-Term Long-TermLong-Term

Author = EntrepreneurAuthor = EntrepreneurInternet - ResourceInternet - Resource

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Business Plan AudiencesBusiness Plan Audiences

1)1) EmployeesEmployees

2)2) Investors/Venture Investors/Venture

CapitalistsCapitalists

3)3) Lenders/SuppliersLenders/Suppliers

4)4) CustomersCustomers

5)5) Advisors/ConsultantsAdvisors/Consultants

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Plan PresentationPlan PresentationI.I. Information NeedsInformation Needs

A.A. MarketMarketB.B. OperationsOperations

1)1) LocationLocation2)2) Manufacturing OperationsManufacturing Operations3)3) Raw MaterialsRaw Materials4)4) EquipmentEquipment5)5) Labor SkillsLabor Skills6)6) SpaceSpace7)7) OverheadOverhead

II.II. Financial InformationFinancial Information

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Gathering Market InformationGathering Market Information

General Environment & Demographic TrendsGeneral Environment & Demographic Trends

National Industry TrendsNational Industry Trends

Local Environmental/Demographic TrendsLocal Environmental/Demographic Trends

Local Industry TrendsLocal Industry Trends

Competition- Strengths/WeaknessesCompetition- Strengths/Weaknesses

Market PositioningMarket Positioning

Market ObjectivesMarket Objectives

GeneralGeneral

SpecificSpecific

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Plan OutlinePlan OutlineI.I. Introductory Introductory

PagePageII.II. Executive Executive

SummarySummaryIII.III. Industry Industry

AnalysisAnalysisIV.IV. Description of Description of

VentureVentureV.V. Production PlanProduction Plan

VI.VI. Operational PlanOperational Plan

VII.VII. Marketing PlanMarketing Plan

VIII.VIII. Organizational Organizational PlanPlan

IX.IX. Assessment of Assessment of RiskRisk

X.X. Financial PlanFinancial Plan

XI.XI. AppendixAppendix

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Environmental/Industry AnalysisEnvironmental/Industry Analysis

Environmental- External & Environmental- External &

Uncontrollable VariablesUncontrollable VariablesEconomyEconomy

CultureCulture

IndustryIndustry Industry DemandIndustry Demand

CompetitionCompetition

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Description of VentureDescription of Venture

MissionMissionProduct/ServiceProduct/ServiceLocation/SizeLocation/SizePersonnelPersonnelOffice EquipmentOffice EquipmentEntrepreneur’s BackgroundEntrepreneur’s BackgroundHistory of VentureHistory of Venture

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DevelopingDeveloping Entrepreneurial StrategyEntrepreneurial Strategy

Mission StatementMission Statement

ObjectivesObjectives

Strategic PlanStrategic Plan

Business PlanBusiness Plan

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ObjectivesObjectives

1.1. QuantifiableQuantifiable

2.2. ObtainableObtainable

3.3. FlexibleFlexible

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Production PlanProduction PlanHow Product Manufactured- How Product Manufactured- Complete Process vs. Complete Process vs. SubcontractingSubcontracting

Physical Plant LayoutPhysical Plant LayoutMachinery/Equipment NeededMachinery/Equipment NeededRaw Materials/SuppliersRaw Materials/SuppliersManufacturing CostsManufacturing CostsFuture Capital NeedsFuture Capital Needs

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Operations PlanOperations PlanMarketingMarketing

Market ConditionsMarket ConditionsStrategy- Distribution, Pricing, PromotionStrategy- Distribution, Pricing, Promotion

OrganizationOrganizationOwnership StructureOwnership StructureLines of Authority/ResponsibilityLines of Authority/Responsibility

Assessment of RiskAssessment of RiskPotential HazardsPotential HazardsAlternative StrategiesAlternative Strategies

Financial PlanFinancial PlanEconomic FeasibilityEconomic FeasibilityFinancial CommitmentFinancial Commitment

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Implementation Of PlanImplementation Of Plan

•Measuring Progress- ControlsMeasuring Progress- Controls• InventoryInventory

• ProductionProduction

• QualityQuality

• SalesSales

• DisbursementsDisbursements

•UpdatingUpdating

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Reasons For Plan FailureReasons For Plan Failure

1.1. Unreasonable GoalsUnreasonable Goals

2.2. Goals Not MeasurableGoals Not Measurable

3.3. No Total CommitmentNo Total Commitment

4.4. Lack Of ExperienceLack Of Experience

5.5. No Understanding Of Threats Or No Understanding Of Threats Or WeaknessesWeaknesses

6.6. Customer Need Not EstablishedCustomer Need Not Established