Feasibility and Business
Planning
2.2 The Business Plan
What you will learn . . .
• The Business Plan: Your Road Map to
Entrepreneurial Success
• The Parts of the Business Plan
• Common Mistakes in Preparing
Business Plans
• Sources of Business Plan Information
• Packaging and Presenting the Business
Plan
The Business Plan: Your Road
Map to Entrepreneurial Success
• Business Plan – a document that
describes a new business and a
strategy to launch that business.
• May reveal problems
• Helps ensure that you plan for all
aspects of operations
• Investors, bankers, potential
management and strategic partners
The Parts of the Business Plan
• May differ in order and name
• MUST include a financials section
The Parts of the Business Plan
• Executive Summary
• Management Team
Plan
• Company Description
• Product and Service
Plan
• Vision and Mission
Statements
• Industry Overview
• Market Analysis
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Competitive Analysis
Marketing Plan
Operational Plan
Organizational Plan
Financial Plan
Growth Plan
Contingency Plan
Cover Page, Title Page,
Table of Contents and
Supporting Documents
Executive Summary
• A brief recounting of the key points
contained in a business plan.
• No more than two pages
• Include the most important info from
each section
• Start with a story explaining why it will
be a success
• May be the only part read
Management Team Plan
• Qualification of you and your partners
• Discuss plan to fill any gaps
– Partnerships
– Advisory boards
– Consultants
Company Description
• Outlines the company’s background
information and basic concept
• Size
• Scope
• Type of business
• Why you think it will succeed
Product and Service Plan
• Present the product or service you are
offering
• Clear and compelling concept statement
• Unique features and possible spin-offs
• Spin-offs – additional products or
services that might exist later
Vision and Mission Statements
• The guiding principles by which the
company functions.
• Vision statement – the scope and
purpose of a company and relfects its
values and beliefs
– “To bring happiness to millions.”
- Walt Disney
– “To open the world of sports to
neighborhood residents.”
Vision and Mission Statements,
cont.
• The specific aspirations of a company,
the major goals for which it strives
– “To provide equipment to 100 customers by
the end of the first year.”
Industry Overview
• Research into the industry
• Trends and growth within the industry
Market Analysis
• The more you understand your customers,
the better your chances of success.
• Customer profile (use primary and secondary
sources)
• Determines marketing and sales strategies
• Analyzes customers and competition
• Contains geographic, economic, and demo
data about the site for the business
Competitive Analysis
• Demonstrates the advantage(s) the
business has over competitors
• Talk to customers, vendors, suppliers
and employees
• Websites
• Visits
Marketing Plan
• How customers will be aware of the
products or services
• Includes market niche, pricing, company
image, marketing tactics, media plan
and marketing budget
Operational Plan
• All of the processes in the business that result
in the production and delivery of the product
or service.
• Distribution channel – how you will deliver the
product or service to the customer.
• Direct channel – you deliver directly to the
customer.
• Indirect channel – sell products to a
wholesaler.
Organizational Plan
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The people aspects
The legal form of business
The management philosophy
The role and compensation of
management personnel and important
employment policies.
Financial Plan
• Forecasts for the future of the business
• Explains the assumptions made when
the forecast figures were calculated
• Proves the business will be financially
healthy
Growth Plan
• How the business will expand in the
future
Contingency Plan
• The probable risks
– Changing economic conditions
– Lower-than-expected sales
• How to minimize the risks
Cover Page
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Company name
Address
Phone number
Web site address
Company logo
Title Page
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Company name
Names, titles and addresses of owners
Date the business plan was issued
Name of the preparer
Table of Contents & Supporting
Documents
• Table of Contents
– Headings and page numbers
• Supporting Documents
– items
– Exhibits
– Documentation relevant to the business
Common Mistakes in Preparing
Business Plans
• Projected exaggerated growth levels
• Trying to be a Jack-of-All-Trades
• Claiming performance that exceeds
industry averages
• Underestimating the need for capital
Sources of Business Plan
Information
• Small Business Administration (SBA)
• Service Crops fo Retired Executives
(SCORE)
• Small Business Development Centers
(SBDCs)
• Chambers of Commerce
• Trade Associations
Packaging and Presenting the
Plan
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Bind – spiral works
Index tabs to separate sections
Easy-to-read 12-pt. font
Bold subheadings and bullets
Logo at the top of each page
Number each copy
Statement of confidentiality for ready to sign
A statement on the cover prohibiting copying
of the plan