week 5 entrepreneurship business plan i (concept)

7/31/2019 Week 5 Entrepreneurship Business Plan I (Concept)

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BUSINESS PLAN

DEVELOPMENT I

Overview of Concept & ExecutiveSummary


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Basic Questions a Plan Answers

What is the business of your firm?

What is your business really?

What will your business become?

What is your firm trying toaccomplish?

What do your customers think yourfirm is trying to accomplish?

Do you know how you are doing?


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Identifying Opportunities

Analyzing the Product- (Service-) Market Scope

improve marketpenetration; gain

market share

develop new products;

product diversification

market diversification;

extend market scope

(e.g. go international)

simultaneous product-

and marketdiversification

existing(developed) new

Market

existing

new

Product

(Service)


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Key Business Concepts

What is the basic principle behindthe business?

How do you plan to make money?What are your sources of income?

How do you plan create value?

What is the commercial proposition?What is the customer going to pay for?

Businessmodel

Revenuemodel

Valueproposition


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Key Business Concepts: Ikea Example

Ikea is a low-cost retail serviceprovider

Sells home furnishing items at retaildirectly to the public

Provides low-cost, easy-to-assembleitems in a pleasant shopping

environment

Businessmodel

Revenuemodel

Value

proposition


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Drivers of New Venture Success

SUCCESS

COMPETITION ORGANIZATIONALSTRUCTURE

PSYCHOLOGICALCHARACTERISTICS

OF EMPLOYEES

FACILITIES &LOCATION

MARKETINGSTRATEGY


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Developing The Concept Statement

What customer needs and wants arepresently going unsatisfied?

How will the requirements of present

customers change?What new end-use applications arelikely to emerge?

What new technologies will be usedto meet which needs of customergroups?


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Purpose of a Mission Statement

as part of the Business Concept

A mission statement will help a company to

make consistent decisions, to motivate, to build

organizational unity, to integrate short-term objectives

with long-term goals, and to enhance communication.


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Developing The Concept

What will competitors do and whatdifference will this make?

What customer needs, wants, andfears are being addressed

What customer groups should theorganization be getting in position toserve?


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Setting The Firms Vision

If you could wave a magic wandand create anything or everything,what would you create and what

would your organization be like afterimplementing that creation?

Where do you see your concept and

firm one year, three years, and fiveyears from now?


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Characteristics of a Mission

Describes the principal product or service areas and

the primary customer needs being satisfied

Reveals the image the company seeks to project

Identifies the scope of its operations in product and

market terms

Distinguishes the company from other firms of its type

An enduring statement of purpose


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THE CONCEPTCHECKLIST


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Checklist For The Concept Statement

1. Define the important and distinctfunctions of the product / service.

Dominos distinct feature was its

delivery not its pizza.

2. What are the unique or proprietaryaspects of the product / service?

patents, formula, brand name,copyright, trademark, etc.


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Checklist For The Concept

3. Describe any innovative technologyinvolved with the product / service.

Whats new or different! (i.e., electric

toothbrush, unique organizationalstructure, new production techniques)

4. Describe the position the conceptplays in the industry.

Manufacturing, Distributor /Wholesaler, Retailer, etc.


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5. Who is the intended customer orcustomer group?

Who will pay for the products orservices?

Who will use the products orservices?

6. What benefits will be delivered to

the customer?What problems are you solving foryour customer? (i.e., people buy

1/4 holes, not 1/4 drill bits)


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7. How will the product / service besold to the customer?

Retail stores, direct sales,

manufacturers representatives,telemarketing, distributors,franchising

8. Who will make the product ordesign the service?

Subcontractor, in-house, home basedcontractors, etc.


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THE

EXECUTIVE SUMMARY


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Purpose of an Executive

Summary(a) To give the reader a succinct summary of the

crucial information about the business plan that

follows

(b) To supply the information the reader needs to

quickly determine whether continued reading iswarranted


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What to Include in an Executive

Summary

A short description of the product or service offering

A brief background on founders and management

A short description of the market opportunity

Key financial data, including the amount

of money needed and how it will be used

A concise statement of the corporate mission &concept


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Tips on Preparing an Executive

SummaryWrite it first, continually, and last

Keep the main theme in mind

More risk means more proof

Avoid hype and jargon

Consider a topical rather than a narrative summary

Keep it as short as possible


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THE

EXECUTIVE SUMMARYCHECKLIST


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Checklist For The Executive Summary

1. State the purpose of the business.

Retail, manufacturing, distributor,service, etc.

2. Describe the current stage ofdevelopment for the venture.

Start-up, initial operations,

expansion, rapid growth, stableoperations, turnaround, new product


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Executive Summary Checklist

3. Describe what is unique about theproduct / service.List any proprietary rights thebusiness has (patents, licenses,

royalties, distribution rights,franchise agreements, etc.)

4. What form of organization will thebusiness operate under?

Proprietorship, partnership, LLC,limited partnership, S-corporation,

or corporation


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Checklist: Executive Summary

5. Define and highlight the keymanagement personnel.

What are their skills that will help

the new venture?List existing and potentialmanagement team members.

Complete resumes of existingmanagement team members shouldbe placed in the appendix.


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6. Describe and highlight the keysupport groups for yourmanagement team.

AccountantsAttorneys

Consultants

Board of DirectorsAdvisory Councils


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7. Describe briefly the following:Industry

Customer

Customer Needs

Product Benefits

Target Markets

Market Penetration Plan

Give the reader on overview ofthe marketing plan


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8. Describe your major competitors.Who is your direct competition

Who is your indirect competition

Their strengths and weaknesses

9. How much money does the ventureneed?

For product development, marketing,

and operations

Highlight how much money is neededto get started

How it will be spent?


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10. How long will it take for thebusiness to break-even?

Explain how long it will take this

venture to turn a profit.

Break-even is the level of sales atwhich total revenue equals total

costs incurred and number of unitssold

Profit is not a bad work.


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11. What kind of financing will thecompany need?

From where will it come from

What type of financing -- debt orequity

12. How will the money that thecompany needs be paid back

Stocks, warrants, loan paymentschedules, etc.


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13. How much money has beeninvested in the business to dateand where did it come from?

Indicate monetary investment

to date14. What potential innovation of the

product / service will ensurelong-range growth?

Specifically identify what makesit difficult for competitors toenter


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15. Describe any unusualcontracts or relationshipswhich the company is or may

become involved in.Include employee contracts,

non-compete agreements,

buy / sell agreements,off-shore relationships, etc.


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QUESTIONS?

week 5 entrepreneurship business plan i (concept)

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