TOMAHAWK MAIN STREET &
UW-EXTENSION, LINCOLN COUNTY
AFTER HOURS SEMINAR
How to Develop an Effective
Business Plan
Art Lersch
University of Wisconsin – Extension, Lincoln County
February 24, 2010
Tomahawk, WI
LEARNING OBJECTIVES
 Business
plan outline
 What
your focus should be in each
section.
 How
to thrive? (What does the market
want?)
 Defining
uniqueness/niche.
FIRST, THE RULES

Focus on the business, not the dollars.

Don’t try to do all of it yourself!

Don’t try to do too many things at once.

Don’t over think things, but do the
homework.
BREAK THE RULES, END UP LIKE THIS
WHAT IS A BUSINESS PLAN?

Business goals, milestones and
priorities.

Can I do this?

Am I at the right stage of my life to do
this?

What can I sell? (Should that change?)

What do I want to sell? (Should that
change?)

More importantly, what does the
market need!
WHAT IS A BUSINESS PLAN?
(CONTINUED)
 Flexible
 Plan
document
for the entire life of the business
 Required
if you are seeking a loan/other
financing.
 Helps
track!
keep you focused, on the right
ELEMENTS OF A GOOD BUSINESS PLAN
 Uniqueness
 Target
market
 Location
 Competition
ELEMENTS OF A GOOD BUSINESS PLAN
 Organization/structure
 Marketing
 Cost,
price & cash flow
BUSINESS PLAN OUTLINE
Cover Page
Table of Contents
Section I.
Executive Summary
Section II.
Business Description/Goals &
Objectives
Section III.
Background Information
Section IV.
Organizational Matters
Section V.
Market Description/Assessment
Section VI.
Marketing Plan
Section VII.
The Financial Plan
Appendix Section
EXECUTIVE SUMMARY

Highlights

Written last

One page

Arouse curiosity
“Introduce your unique business to the world!”
What is in a question?
EXECUTIVE SUMMARY
 Where
is the business located?
 What is its structure?
 What product or service is being sold?
 What makes the business unique? (Why
come to you rather than the person down
the street?)
 What is the primary target market?
 What are the capital requirements and sources
of funding?
 What will the funds be used for?
EXECUTIVE SUMMARY

Merely a brief summary.

Make it tight.

Entice the reader.
EXECUTIVE SUMMARY = ELEVATOR SPEECH
Make it as lofty
as possible!
INTERACTIVE EXERCISE
Tell your table mates in less
than a minute why they
should come to your business
rather than the competitor
down the street or in the
next town over.
BUSINESS DESCRIPTION/GOALS
& OBJECTIVES
 Describe
the business in detail (expanding
on what was said in the Executive Summary)
 History
 Goals
of the business (if applicable)
& Objectives (what, when, who)
 Mission
(a succinct statement of purpose the
business actually follows. Ask customers!)
UNIVERSITY OF WISCONSIN-EXTENSION
LINCOLN COUNTY
Mission Statement
“University of Wisconsin – Extension
Lincoln County provides knowledge and
resources to offer people opportunities
for positive change where they live and
work.”
“An EEO/AA employer, University of Wisconsin Extension provides equal
opportunities in employment and programming, including Title IX and American
with Disabilities (ADA) requirements. Please make requests for reasonable
accommodations to ensure equal access to educational programs as early as
possible preceding the scheduled program, service or activity.”
BACKGROUND INFORMATION
 Analyze
the industry (current)
 Analyze
the industry (future)
 The
business “fit” in the industry
Focus the story on the local situation, but
also add current and projected regional
and/or national trends!
BACKGROUND INFORMATION

Trade shows

Trade publications

Semi-local competition

Company financial reports/summaries

Internet research

NAICS (North American Industry Classification
System)
BACKGROUND INFORMATION
Are there enough local suppliers? If so, who are
they?
 What similar services/products are out there in
the industry?
 How difficult will it be to start a business in this
industry (barriers and support system)?
 What changes are currently taking place in the
industry?
 What changes may take place in the industry?
 How might your business be affected by
changes in the local economy and or global
economy?
 How will your business be affected by changes in
the industry?

INTERACTIVE EXERCISE
What are the current trends,
both favorable and unfavorable,
in the industry under which
your business is classified?
ORGANIZATIONAL MATTERS

Legal structure

Management and their qualifications

Employees

Professional services and advice

Volunteers (family or otherwise)

Operating controls
ORGANIZATIONAL MATTERS










What is the business’ legal structure?
What are the advantages and drawbacks of the legal structure?
Who is doing what in the business?
What are the managers’/owners qualifications (experience and
education)?
How many full and part-time employees will be needed (does the
business have)?
What functions do/will employees perform?
What are manager/employee pay rates?
What professionals does the business employ and what are
their functions?
What trainings and/or certifications will be needed by managers
and employees?
How will/do you foster business accountability (record – keeping,
etc.)?
MARKET ASSESSMENT

Customer characteristics

Competition

Uniqueness

Market share
YOUR TARGET MARKET
How do you know that the demand is really
there?
Determine what market you want to serve,
and then provide something it wants!
What does the market you are already serving
want the most?
WHERE IS YOUR TARGET MARKET?
It looks great, but is anyone really there?
TARGET MARKET RESEARCH
(EXAMPLE/SUGGESTED METHOD)





Market area (How close to the business do the majority
of potential customers based on age live?)
Population estimates (will market based on age grow?)
Demographic characteristics (What are the
projections?)
Buying patterns. (What are their likes and dislikes?)
Number and characteristics of competitors within
the radius (Are they selling exactly what you are in the
same way you are?)
TARGET MARKET RESEARCH
(EXAMPLE/SUGGESTED METHOD)

Income levels (How many people in the radius that are
the right age can afford to buy currently and in the future?)

Traffic counts (in the location)

Commuting patterns

Questionnaires/informal conversations (What do they
want or need that is not being supplied?)

Educated guess of market share based on industry
standards.

Zip code tracking (or some other means).

Are there other techniques, pieces of information
that you have used?
RURAL RESORT DWELLERS



56% of population is classified as rural resort
dwellers using ACORN classification data.
“Rural Resort Dwellers” are usually older. Their
median age is 41.7 years but they are concentrated
in the 45-plus age groups. More than four of ten are
aged 45 years and older. Families are predominantly
married couples, many recently retired to the area.
This group has moderate income and are heavily
oriented toward outdoor interests, spend on
household improvements and home-centered
activities.
Source: Tomahawk Comprehensive Plan, 2006
RURAL RESORT DWELLERS – BUYING
HABITS




Rural Resort Dwellers live the great outdoors. Fourwheel drive vehicles, camping equipment and
domestic trips reflect their lifestyle.
Top-ranked for owning gardening equipment and
like to garden, mail/phone order from magazines and
catalogues, order videotapes/DVDs and needlework.
Ranked among the highest to own large dogs, cats
and taking vitamins.
Spending – household furnishings and home
improvements, small and large appliances, cameras,
women’s apparel, jewelry and auto aftermarket
products.
Source: Tomahawk Comprehensive Plan, 2006; Business District Market Overview, UW Extension,
1999
Map courtesy of Bill Ryan, UW-Extension Center for Community & Economic Development
INTERACTIVE EXERCISE
Take a few minutes to
describe to your table
partners in as great detail as
possible your business target
market.
MARKETING PLAN

Advertising (cost/benefit)

Packaging

Pricing

Distribution

Forms of payment
MARKETING PLAN

How will you package the service/product?

What price will you charge?

How was the price determined?

What form (s) of advertising will be the most
effective and why?

What is your advertising budget?

How will the service or product be distributed?

What forms of payment will you accept?
FINANCIAL PLAN
 Budgets
 Statements
 Tax
Returns
FINANCIAL PLAN
 What
is the current financial situation of the
business?
 How
much capital do you need to start or
expand the business?
 How
will the money be spent?
 How
did you (or do you plan to) obtain the
funding?
 What
is your break-even point for various
points in the business?
 What
will be the terms of loans?
THE ESSENTIALS
 Operating
 Profit
 Cash
and advertising budgets
and loss statement
flow projections (three years)
 Income
statement
 Balance
sheet
 Personal
budgets
financial information including

Who will take over?

Do you want someone to take over?

Will you continue to have a role?

Will the business just close? (What if it is
fulfilling a crucial community need?)
APPENDIX SECTION
 Resumes
 Testimonials
 Photos
 Anything
to help you persuade people that
your business/business idea is viable.
 Anything
that can show your and your
employees’ dedication and experience.
HOW DO I BEGIN?
 Target
market (their needs)
 Define
your business needs
(resources)
 Financials
(personal and business)
FREE RESOURCES AVAILABLE

Art Lersch, University of Wisconsin – Extension; 539-1075

Jack Sroka, Lincoln County Economic Development
Corporation; 539-1024

UWSP Small Business Development Center (SBDC); 1-800487-7389 or 715-346-4704

Central Wisconsin SCORE; 715-384-3454

Wisconsin Entrepreneur’s Network (WEN);
http://www.wenportal.org/

Wisconsin Business Wizard;
http://ww2.wisconsin.gov/state/wizard/app/LoadIntro