Beginning a Business Plan
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Transcript Beginning a Business Plan
Beginning a
Business Plan
Jeffrey Hyde
The Pennsylvania State University
Penn State is committed to affirmative action and the diversity of its workforce
Importance of Process & Product
Process
Forces
big-picture perspective
Leads to common mission
Product (written plan)
Communicate
internally
Communicate externally (lenders & potential
partners)
The Business Planning Cycle
Planning Process
Integrate Changes
Explain Deviation
Compare Actual vs. Plan
Take Action
Get Results
Measure & Record Results
The Business Planning Cycle
Planning Process
Integrate Changes
Explain Deviation
Take Action
Mission
Situation
Objectives & Goals
Strategies & Tactics
Compare Actual vs. Plan
Get Results
Measure & Record Results
Defining Your Mission
Your mission reflects the reason you’re in
business
Your mission statement may reflect:
Your chosen type of business
Your shared values
Desired outcomes (e.g., profit, lifestyle)
Defining Your Mission
Jeff Hyde’s Professional Mission
To provide timely education and research
results to farm managers, increasing their
knowledge and skills; thus strengthening
1. farm profitability and sustainability
2. agricultural viability in PA
3. farm families
Defining Your Mission
What’s your mission?
1.
2.
What business are you in?
What values characterize you and your
business? (e.g., local foods, work
environment, environmental concerns, trust,
integrity, hard work, profit)
Situation Analysis
Industry analysis
Market analysis
Competitive analysis
SWOT analysis
Situation Analysis
Industry analysis
Market analysis
Competitive analysis
SWOT analysis
Who are the industry players?
•Input suppliers
•Growers
•Processors
•Wholesalers
•Retailers
What are the industry trends?
Situation Analysis
Industry analysis
Market analysis
Competitive analysis
SWOT analysis
Who and where are your
customers?
What do they need?
What is their purchasing
behavior?
How can you reach them?
Situation Analysis
Industry analysis
Who are your competitors?
What are they like?
Market analysis
Competitive analysis
SWOT analysis
What products do they have?
How have they grown?
Situation Analysis
Industry analysis
Market analysis
Competitive analysis
SWOT analysis
Strengths and Weaknesses are
internal to the business
Opportunities and Threats are
external to the business
SWOT should be easy after
performing the other analyses
Group Activity
Let’s perform an OT analysis
What opportunities and threats do you see
in the cheese-making business?
Where are you in the process?
You have defined your reason for being in
business – Mission…
You know where you’re starting from –
Situation Analysis…
Now, define your destination(s) – Objectives
& Goals
Objectives & Goals
What’s the difference?
Objectives: General statement describing
intended directions; long-term or indefinite
Goals: Specific directions describing
measurable targets; short-term with
deadline
Objectives & Goals
An Example…
Objective
During your SWOT Analysis, you identified
opportunities to sell items
that you do not yet produce.
To expand your
product line
Goals
1. To develop 3 gift basket packages by
October 15, 2006
2. To begin selling Colby and Pepper Jack
cheeses by October 15, 2006
Objectives & Goals
Activity
1.
2.
Develop one objective for your business
Define at least one goal to support your
objective
One More Step…
You know…
…why you are in business – mission
…your starting point – situation analysis
…where you want to go – objective and
goals
The last step is deciding how to get to your
destination(s)
Strategies & Tactics
Strategies describe the overall plan for
achieving objectives and goals
Tactics specifically detail how to implement
strategies
Strategies & Tactics
An Example…
Objective
To expand your
product line
Goals
1. To develop 3 gift basket packages by
October 15, 2006
2. To begin selling Colby and Pepper Jack
cheeses by October 15, 2006
Let’s focus on Goal 1
What are some possible strategies?
Strategies & Tactics
Strategy 1: Do everything yourself
Make baskets
Add basket liner
Add cheese, crackers, jelly…
Seal the basket
Strategies & Tactics
Strategy 2: Outsource everything
Send cheese to contractor
Presto! A basket is sent to the customer
Strategies & Tactics
Strategy 3: Joint venture
A partner firm provides baskets
Another provides jellies
Another provides crackers
You provide everything else
Strategies & Tactics
Which strategy
is right?
Strategies & Tactics
Tactics simply correlate tasks, names, and timelines
Task
Hire gift basket designer
Assigned to Deadline
Peyton
Mar. 1
Contract with basket maker
designer
May 1
Contract with jelly company
Edgerrin
Apr. 15
Contract with cracker company Marvin
Apr. 15
The Planning Cycle Revisited
Planning Process
Integrate Changes
Explain Deviation
Take Action
Mission
Situation
Objectives & Goals
Strategies & Tactics
Compare Actual vs. Plan
Get Results
Measure & Record Results
Business Planning Skills & Tools
Information Gathering
Record
keeping
Research
Information Processing
Enterprise
& cash flow budgets
Financial statements and ratios
Beginning a
Business Plan
Jeffrey Hyde
The Pennsylvania State University
Penn State is committed to affirmative action and the diversity of its workforce