ENTREPRENEURSHIP
Business Plan Guidelines
SETUP:
Margins – 1”
Spacing – double
Order – should be placed in the order as described below.
COVER LETTER (O DRIVE, MRS. BEST-PROCTOR’S CLASSES,
ENTREPRENEURSHIP, SAMPLE COVER LETTER)
This letter explains or provides more information about a document or set of documents.
It should include your name, the name of your business, the company address and the
company telephone number. It should briefly describe the business and its potential
success. It also needs to tell how much capital is needed to open and operate the
business.
COVER PAGE (PAGE 105)
Should include the company name, the company address, the company phone number, the
company Web site address, the company e-mail address and the company logo.
TITLE PAGE (PAGE 105)
Should include the company name, the owner’s names, the owner’s title and the address
of the owners, the date the business plan will be issued and the name(s) of the person who
prepared the plan.
TABLE OF CONTENTS (PAGE 105)
Includes the details of the components included in the business plan and the page
numbers where the documents can be found within the business plan. Make sure the
sections are in the correct order and that the page numbers coincide with the correct
sections.
STATEMENT OF PURPOSE
Briefly describe why you are asking for a loan and what you plan to do with the money if
it is received. Identify how the business will operate - sole proprietorship, partnership,
etc. (Pages 136 – 147). It should be no more than one or two paragraphs.
EXECUTIVE SUMMARY (PAGE 102)
This is a summary of what is written in the business plan. The executive summary is to
be written last. Be sure it includes the most persuasive points you have made. This
section should be no more than two pages. The executive summary should include:
-describe the business concept and communicate what is unique about the idea
-include the projections for sales, costs and profits
-identify the needs (inventory, land, building, equipment, etc.)
-state the amount you are interested in borrowing
Vision Statement. This section is to be included as part of the Executive Summary. The
vision statement establishes the scope and purpose of a company and reflects its values
and beliefs. The vision should be broad enough to last through changing times. (Page
102)
Mission Statement. The mission statement expresses the specific aspirations of a
company, the major goals for which it will strive. (Page 102)
GOALS AND OBJECTIVES
What do you want to achieve? What are the specific results you wish to accomplish?
Important because they provide direction and focus for your activities. Should be
insightful, realistic and concise when writing goals and objectives. Set both short-term
and long-term goals (1 year, 5 year, 10 year) concerning financial and personal interests.
Review, re-evaluate and re-establish goals and objectives at least once a year to keep the
business venture on the path to success.
MANAGEMENT TEAM PLAN (PAGES 102, 306 - 317)
Key Executives. List the qualifications of all partners. The management team plan
should highlight practical exposure to the intended business. Relevant volunteer work,
leisure pursuits, and employment may provide valuable experience that could be helpful
in running the business. Also tell what expertise each partner is missing and how this
will be overcome. Include an organization chart of all employees’ title and job
description. The chart is to be designed in PowerPoint and included in the Appendix.
The detailed description of each partner and his/her job description should be included in
the plan.
Key Advisors. Outline the advisory board/key advisors in policy decisions. The chart is
to be designed in PowerPoint and included in the Appendix. The detailed description of
each board member and his/her expertise, skill sets and personal traits.
Service Providers. Purchasing and inventory activities – who will you purchase
products/supplies from, how will you account for the inventory, supplies and equipment?
When will the inventory be conducted? Production and distribution activities – how will
the product or service be produced/distributed/sold to customers?
COMPANY DESCRIPTION (PAGE 102)
Motivations. Explain the reasons and motivation you have for starting or expanding this
business.
Entrepreneurial Opportunity. Describe the unique selling proposition your company
will have to capitalize on the opportunity.
Business Concept. Explain the products and services your company will provide and the
markets you will target to sell them. (Pages 94 – 95)
Answers the questions:
-What is the product or service being offered? - give a detailed and
specific description of the product or service being offered.
-Who is the customer?
-What is the benefit you are providing? - Point out how the product or
service is different from or better than existing products or services.
-How will you get the product or service to the customer?. Idea history.
Summary of experience.
-When, how, and why the potential entrepreneur developed the idea for the
business?
PRODUCT/SERVICE PLAN (PAGE 102)
Gives a detailed and specific description of the product or service being offered.
Products and Services. How will the products be created/produced and who will
manufacture them. Describe the process of the creation/production.
Unique Selling Proposition. Describe the features, benefits and unique selling
proposition of your products/services.
Competitive Products or Services. Describe the features, benefits and unique selling
proposition of your competitors’ products/services. Explain how your products and
services will be unique and positioned in the market.
Product Development Milestones. Explain the steps you will take to conceive, design,
text and evaluate your products and services.
INDUSTRY OVERVIEW (PAGES 103, 116 - 118)
Research of the industry and market you plan to target. It analyzes your customers,
competition and industry.
Projected Industry Sales and Profits. Explain the projected growth in sales and profits
for your industry sector.
Competitive Set. Describe your company’s competitive set including direct and indirect
competitors. (Page 98)
External Environment. Describe external factors that may impact your economic
sector.
Product Life Cycle. Describe the product life cycle for you products/services. Explain
what strategies will be taken as they go through the life cycle.
Barriers to Entry. Are there any barriers to entry – economies of scale, economics, legal
or political, regulatory, brand loyalty, proprietor technology, access to distribution
channels? Detail the strategies you will use to counteract the barriers. (Page 125)
MARKET ANALYSIS (PAGE 103)
Demographic Profile. Explain the demographic characteristics of your target market.
(Pages 118, 126 - 127)
Psychographic Profile. Name each group and describe its characteristics. (Page 118)
Customer Behaviors. Describe the behaviors of your target market and their
motivations for purchasing your product/service. (Page 118)
Target Market Opportunity. How will your business capitalize on the demographic
and psychographic characteristics of your target market? (Pages 118 – 119, 128 - 129)
COMPETITIVE ANALYSIS (PAGE 104)
Direct and Indirect Competitors. Describe your competitors.
Value Proposition. Describe for each of your competitors.
Strengths and Weaknesses. Describe for each of your competitors and the opportunities
and threats that your competitors pose to your business.
Sustainable Competitive Advantage. Describe the competitive environment in your
market and describe your company’s advantage.
MARKETING PLAN (PAGES 104, 206 - 223)
Plans that govern how the marketing mix is distributed.
Total Product Experience. Include the primary, tangible and intangible features as well
as the auxiliary dimension of your products/services.
Place Strategy. Explains why the business will be located at the given address. Explain
the building requirements or needs and what type of utilities will be needed. Describe the
distribution strategy (Pages 209 – 213).
Promotion Strategy. Write promotional goals and explain how you will implement the
goals. Describes how you will promote the product prior to the opening and after the
business is established. (Pages 254 – 264, 278 - 267)
Promotion Plan. Examples of advertising include: television (press release), radio,
newspaper, telephone directory, direct-mail, magazine, outdoor, transit, billboards, etc.
How will you monitor and evaluate the medias effectiveness. (Pages 264 – 271)
Pricing Plan. Describes how you will set prices for the product or service being offered.
Set the pricing objectives first. Examples of pricing objectives include: maximize sales,
discourage competition, maintain an image, increase profits, attract customers, etc.
Secondly, select the pricing strategy. Product pricing strategies include demand-based
pricing, cost-based pricing or competition-based pricing. Service pricing strategies
include time-based pricing, bundling pricing or breakeven point pricing. (Pages 230 –
247)
OPERATIONAL PLAN (PAGES 104 - 105)
Location Criteria. Explain the criteria used to determine the location(s) of your
business.
Facilities and Equipment. Describe the facilities and equipment required to operate the
business.
Product Development Process. What is the process you will use to design and create
your products/services? How will you obtain any materials necessary to perform your
service.
Operational Logistics. Describe the inbound and outbound logistics of your company.
Also, describe the order fulfillment process and customer service policies.
ORGANIZATIONAL PLAN (PAGE 105)
Job Descriptions. Describe the key department heads and managers positions. Provide
an organizational chart for the key people.
Human Resources. Describe the human resource policies. (Pages 382 – 395)
Legal Structure. Describe the legal structure for the business and why it was chosen
(Pages 136 – 147). Explain any legal agreements (partnership agreements) and
government regulations that will affect your business (Pages 162 – 170).
Insurance. What are the insurance needs for the company? Who will provide the
coverage?
FINANCIAL PLAN (PAGE 105)
The financial forecasts for the future of the business. Should include:
Sources and Uses of Funds. The cost of starting the business and maintaining it for a
specified period of time. List the sources and the uses of the funds required. Explanation
and reference to the initial capitalization plan (Initial Capitalization Plan - included in
the appendix). (Page 99)
Cash Flow. Summarize your cash flow projections for the firsts three years. (Cash Flow
Projection – included in the appendix.
Income Statement. How much income do you plan to generate from sales for the first
three years from the product/service? Explanation and reference to the projected
operating statement. (Projected Operating Statement – included in the appendix). How
much do you plan to spend for the first three years for expenses (cost of producing the
product/service)? Explanation and reference to the projected income statement
(Projected Income Statement - included in the appendix). How much do you plan to
generate for profitability of the operation for the first three years?
Balance Sheet. Summarize the assets, liabilities and owner’s equity of the business for
the first three years of operation. (Balance Sheet – included in the appendix).
Break-Even Analysis. Explain the point at which the operation will break even.
(Include a graph depicting this point – included in the appendix).
Financial Analysis. Summarize the key financial measures for the first three years of
operation compared to industry standards.
Product Development Costs. Describe the expenses associated with developing your
product or service before manufacturing it.
Manufacturing Costs. If applicable, describe the expenses associated with
manufacturing your product.
Sales Revenue. Explain the rationale for the sales projections for the first three years of
operation.
Cost of Goods Sold. Summarize the cost of goods sold for the first three years of
operation.
Capital Equipment. Summarize the cost of capital equipment that will be required and
explain the method for depreciation.
Salary and Wages. Summarize the cost of salaries and wages for the first three years of
operation.
Selling and Marketing Expenses. Summarize the cost of selling and marketing for the
first three years of operation.
Operating Expenses. Summarize the operating expenses for the first three years of
operation.
Other Expenses. Explain any additional expenses associated with the business.
Assumptions. List your assumptions used to create the pro forma financials.
GROWTH PLAN (PAGES 105)
Growth Strategy. What growth strategy has been selected and how it will be
implemented? What challenges will have to be overcome and how will they be handled?
Effects of Growth. What effects will the growth have on the company? What resources
are needed to fund the growth? How will this growth affect operational and strategic
issues? Explanation of how the growth will be funded.
CONTINGENCY PLAN (PAGE 105)
Risks. What are the risks associated with this business? What are the course(s) of action
you will take to minimize the risks? What will happen if your business plan does not
work out? How will you liquidate the inventory, equipment, etc.? What will be the next
plan?
APPENDIX A
The appendix should include any supporting documentation needed to better understand
the business plan. Items to include, but not limited to are:
Cash Flow Projection (O Drive, Mrs. Best-Proctor’s Classes,
Entrepreneurship, Cash Flow Statement) (Pages 441)
Contracts already negotiated (Pages 154 – 161)
Initial Capitalization Plan (O Drive, Mrs. Best-Proctor’s Classes,
Entrepreneurship, Initial Capitalization Plan)
Partnership Agreement (O Drive, Mrs. Best-Proctor’s Classes,
Entrepreneurship, General Partnership Agreement)
Projected Income Statement (O Drive, Mrs. Best-Proctor’s Classes,
Entrepreneurship, Projected Income Statement) (Pages 437 – 439)
Projected Operating Statement (O Drive, Mrs. Best-Proctor’s Classes,
Entrepreneurship, Projected Operating Statement)
References
Resume for each partner