Transcript Entrepreneurship (570)

Foundations of
Entrepreneurship
The Business Plan
Mark T. Schenkel, Ph. D.
© 2005 Mark T. Schenkel
1
What is a Business Plan?
• Business Plan- Document Describes
Internal/External Elements/Strategies For
New Venture
• Plan (Road Map)
– Short-Term
– Long-Term
• Author = Entrepreneur
• Usually ~ 25 pages (minus appendices)
© 2005 Mark T. Schenkel
2
Business Plan Audiences (Uses)
 Employees (Internal)
 Investors/Venture
Capitalists (Equity financing)
 Lenders/Suppliers
(Debt financing)
 Customers
 Advisors/Consultants
© 2005 Mark T. Schenkel
3
Key Question from the Business Plan:
What do you need from your business?
•
•
•
•
•
•
•
Income
Wealth
Lifestyle
Passion
Fun
Built from experiences
Key “must have’s” taken care of?
© 2005 Mark T. Schenkel
4
Reasons For Plan Failure
1.
Unreasonable Goals
2.
Goals Not Measurable
3.
No Total Commitment
4.
Lack Of Experience
5.
No Understanding Of Threats Or
Weaknesses
6.
Customer Need Not Established
© 2005 Mark T. Schenkel
5
A Basic Framework
THE
VENTURE
Goals &
Values
Resources &
Capabilities
STRATEGY
STRATEGY
THE
INDUSTRY
ENVIRONMENT
Competitors
Customers
Suppliers
Structure &
Systems
© 2005 Mark T. Schenkel
6
Strategic Planning Checksheet
 Analysis
 Implementation
 SWOT
 Tasks
 Timetables
 Budgets
 Responsibilities
Strengths, Weaknesses Opportunities, Threats
 Competitive
Advantage
 Formulation
 Mission
 Objectives
 Strategies
 Policies
© 2005 Mark T. Schenkel
 Eval., Review, &
Feedback
 Performance Review
7
SAMPLE Business Plan Outline
Executive Summary
•
One page summary of the entire plan.
•
Write this last!
© 2005 Mark T. Schenkel
8
SAMPLE Business Plan Outline
The Business Concept
Vision of Company
–
–
–
© 2005 Mark T. Schenkel
Mission Statement
Core Values
Major Goals
9
What Should the Mission
Statement Include?
• Statement of who are the firm’s customers.
• Statement of firm’s basic product (or service).
• Statement of firm’s competitive market.
• Statement of firm’s basic values / beliefs.
• Statement of firm’s competitive advantage.
• Statement of who are the stakeholders and
how they will be served.
© 2005 Mark T. Schenkel
10
SAMPLE Business Plan Outline
Market Analysis: Industry
• Size
• Status (growing, mature, declining)
• Trends
• Barriers to entry
© 2005 Mark T. Schenkel
11
SAMPLE Business Plan Outline
Marketing Plan
• Description of Target Market
• Entry Strategy
• Competitive Analysis (include grid and list
of competitive advantages)
• Pricing
• Promotional Plan
• Distribution
© 2005 Mark T. Schenkel
12
SAMPLE Business Plan Outline
Operating Plan
•
•
•
•
•
•
•
Map out the flow of your business
Raw materials and supplies
Making the product or providing the service
Bookkeeping and billing
Team & Advisors
Space requirements and costs
Basic staffing plan as you grow
© 2005 Mark T. Schenkel
13
SAMPLE Business Plan Outline
Growth Plan
• Growth goals: long and short term
• Growth strategies
• Growth requirements
© 2005 Mark T. Schenkel
14
SAMPLE Business Plan Outline
• Financial Plan
– Cash flow (including break even analysis)
– Income Statement
– Balance Sheet
• Appendices
© 2005 Mark T. Schenkel
15
Do’s and Don’ts for Preparing a
Business Plan
Do’s
• Involve entire management team
• Make the plan logical, comprehensive, readable, and as
short as possible
• Articulate what the critical risks and assumptions are
and how they are tolerable
• Disclose and discuss any current or potential problems
in the venture
• Be creative, but spell out how the investors will win
• Let realistic market and sales projections drive the
assumptions underlying financials, rather than reverse
© 2005 Mark T. Schenkel
16
Do’s and Don’ts for Preparing a
Business Plan (cont.)
Don’ts
• Have unnamed, mysterious people on the management
team
• Make ambiguous, vague, or unsubstantiated statements,
such as estimating sales on what you would like to
produce
• Describe technical products or manufacturing
processes using jargon or in a way that only an expert
can understand – limits the plans usefulness
• Spend money on developing fancy brochures, elaborate
slide show presentations, and other “sizzle,” instead,
show the “beef”
© 2005 Mark T. Schenkel
17
Key Issues Associated with the
Business Plan
• Clarify Objectives
– Quantifiable
– Obtainable
– Flexible
• Obsolete at the Printer
– Pace of technological change
– Increasing degree of global dynamism
• Work in progress – Bent Knees Required
• The Plan is NOT the Business
© 2005 Mark T. Schenkel
18
Key Takeaway Points . . .
• Analysis and critical thinking are the
beginnings of a good business plan.
• Business plans should be comprehensive,
yet facilitate an ease of understanding for
ALL stakeholders in the venture.
© 2005 Mark T. Schenkel
19
Key Takeaway Points . . .
• If the reader is unclear on a point, then you
have missed something . . . redouble your
efforts accordingly.
• Utilize the full range of conceptual tools
available to aid in the development and
enhance the selling of the compelling
story.
© 2005 Mark T. Schenkel
20