Creating a Winning E-Business Second Edition

Creating an E-Business Plan Chapter 3

Learning Objectives

 Organize a business plan  Prepare an executive summary  Write a mission statement  Prepare a marketplace analysis  Create operational, financial, and management plans Creating a Winning E-Business Second Edition, Chapter 3 2

Learning Objectives (continued)

 Understand legal forms of businesses  Describe e-business partnerships Creating a Winning E-Business Second Edition, Chapter 3 3

Business Plan Organization

 Business plan – Formal business planning document • Identifies the business and its mission • Names the key management team members • Describes the products or services to be offered • Provides a marketplace analysis • Identifies customers and competitors • Determines resources for profitable operations • Sets a timetable for profitability Creating a Winning E-Business Second Edition, Chapter 3 4

Business Plan Organization (continued)

 Government and for-profit sources for business planning information and templates – SCORE – SBA – BizPlanIt – Bplans.com

– E-Future Centre Creating a Winning E-Business Second Edition, Chapter 3 5

Business Plan Organization (continued)

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Business Plan Organization (continued)

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Business Plan Organization (continued)

 Business plan components – Cover sheet and title page – Table of contents – Executive summary – Business description – Vision/mission statement Creating a Winning E-Business Second Edition, Chapter 3 8

Business Plan Organization (continued)

 Business plan components (continued) – Information on products/services – Industry, customer, competitor analyses – Operational, financial, and managerial plans – Identification of critical risks – Exit strategy Creating a Winning E-Business Second Edition, Chapter 3 9

Business Plan Organization (continued)

 Cover sheet – Title of document and preparer’s name – Plan copy number – “Confidential” notation  Title page – Cover sheet information and • Contact numbers • Key team members’ names • Name of person receiving the plan Creating a Winning E-Business Second Edition, Chapter 3 10

Business Plan Organization (continued)

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Business Plan Organization (continued)

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Business Plan Organization (continued)

 Table of contents – Lists all the major sections and subsections of the plan – Prepared after rest of plan is complete – Carefully checked for omissions and page number errors Creating a Winning E-Business Second Edition, Chapter 3 13

Business Plan Organization (continued)

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Business Plan Organization (continued)

 Executive summary – A condensed version of the complete plan – Used by interested parties to quickly assess the business idea and weed out plans – Keep it short (one to three pages) – Use clear and concise language and action words – Create last after plan details are developed Creating a Winning E-Business Second Edition, Chapter 3 15

Business Plan Organization (continued)

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Business Plan Organization (continued)

 Vision statement – A formal statement of a business’s hopes and desires – Written to guide and inspire employees  Mission statement – A formal statement that explains a business’s reason for existing Creating a Winning E-Business Second Edition, Chapter 3 17

Business Plan Organization (continued)

 Business description – Summary of business’s background – Information about legal form of business – Business’s history to date – Key personnel – Future goals Creating a Winning E-Business Second Edition, Chapter 3 18

Business Plan Organization (continued)

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Business Plan Organization (continued)

 Products or services section – Description of products or services offered – Anticipated sales for each product or service – Describes benefits of product or service to customers Creating a Winning E-Business Second Edition, Chapter 3 20

Business Plan Organization (continued)

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Business Plan Organization (continued)

 Marketplace analysis – Information about the specific industry of which business is a part – Description of targeted customers – Description of major competitors – Overview of marketing and sales strategies Creating a Winning E-Business Second Edition, Chapter 3 22

Business Plan Organization (continued)

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Business Plan Organization (continued)

 Operational plan – Describes a business’s physical location and equipment – Notes the manufacturing or service actions needed to get products/services to market – Summarizes Web site operations Creating a Winning E-Business Second Edition, Chapter 3 24

Business Plan Organization (continued)

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Business Plan Organization (continued)

 Financial plan – Explains how your e-business idea, goals, and strategies translate into profits – Provides standard financial statements for income, expense, and cash flow data • Pro forma balance sheet • Projected income statement • Planned cash flow statement – May include “deal plan,” break-even analysis, ratio analysis Creating a Winning E-Business Second Edition, Chapter 3 26

Business Plan Organization (continued)

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Business Plan Organization (continued)

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Business Plan Organization (continued)

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Business Plan Organization (continued)

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Business Plan Organization (continued)

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Business Plan Organization (continued)

 Management plan – Organizational structure of business – Information on • Key members of management team • Outside advisors • Mentors • Consultants Creating a Winning E-Business Second Edition, Chapter 3 32

Business Plan Organization (continued)

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Business Plan Organization (continued)

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Business Plan Organization (continued)

 Appendices – Resumes – Pictures of products – Explanation of services – Legal documents – Other supporting documentation Creating a Winning E-Business Second Edition, Chapter 3 35

Legal Forms of Organization

 Sole proprietorship – Business started by an individual – Owner and business are one in the same for tax and legal liability issues Creating a Winning E-Business Second Edition, Chapter 3 36

Legal Forms of Organization (continued)

 Partnership – Legal business entity with two or more co-owners – Follows a partnership agreement – General partnership: Tax and legal liabilities flow through to individual partners – Limited partnership • General partner manages and assumes unlimited liability • Limited partners have liability for amount of their capital contribution and their accepted debt Creating a Winning E-Business Second Edition, Chapter 3 37

Legal Forms of Organization (continued)

 Corporation – Separate legal and taxable entity from its owners – “C” corporation owners are it shareholders – Liability is limited to investment in business – Profits are taxed twice: once for the corporation and again when distributed to owners as stock dividends Creating a Winning E-Business Second Edition, Chapter 3 38

Legal Forms of Organization (continued)

 Corporation (continued) – “S” corporation gives owners partnership status and corporate liability protection  Limited liability company (LLC) – Tax status of sole proprietorship or partnership – Liability status of a corporation Creating a Winning E-Business Second Edition, Chapter 3 39

E-Business Partnerships

 Strong positive relationships with strategic partners are critical – Partnerships that help build market awareness • Public relations firms • Marketing consultants – Partnerships that assist in operations • Suppliers • Distributors • Web hosting companies Creating a Winning E-Business Second Edition, Chapter 3 40

Chapter Summary

 A business plan is used to – Check feasibility of business – Seek funding – Guide operations  A business plan includes – Cover sheet and title page – Table of contents and executive summary – Marketplace analyses – Operational, financial, and marketing plans Creating a Winning E-Business Second Edition, Chapter 3 41

Chapter Summary (continued)

 Business plan appendices can include – Resumes – Pictures of products and information on services – Legal documents – Other supporting details for the overall plan Creating a Winning E-Business Second Edition, Chapter 3 42

Chapter Summary (continued)

 Business description should include legal form of business  Business plan should note key strategic partnerships Creating a Winning E-Business Second Edition, Chapter 3 43