Unit 11
Chapter 35
Developing a Business
Plan
Chapter 35
The Business Plan
35.1 – the Business Plan
35.2 – The Marketing Plan
35.3. – The Financial Plan
9.4.12.N.37, 9.4.12.N.39, 9.4.12.N.81,
9.4.12.N.(1).9, 9.4.12.N.(4).3 , 9.4.12.N.(4).11
9.4.12.N.41
Do Now
• Which method would be the best way to
reach a destination?
• A) using a road map?
• B) relying on your intuition?
• Explain your answer….
Business
plan
Road Map
http://www.youtube.com/watch?v=RA3TVq5rp_s
The importance of a business plan
Background information
• Did you know?
– More Americans are starting their own
businesses today than any other time in our
history.
• What do you believe is the cause for this new
trend?
–
–
–
–
Loss of jobs
Weariness with corporate life
The “graying” of the workforce
Access to technology
Why is a business plan important?
1. Helps to obtain financing
--Most potential lenders and investors will want to see a
detailed business plan before lending or investing
money
2. It serves as a guide in opening a business.
--New business owners need a guide during business
start-up to identify the legal procedures
3. It helps in business management because it lays out
the steps you must take to ensure profitable operation.
What are lenders and investors gaining from
providing start up funds to new businesses?
I. Description and analysis of the
proposed business situation
• use the graphic organizer to identify and
explain the various components of part 1
of the business plan.
• (Class work) Worksheet: trading analysis
check list
Homework
HW – write a four paragraph self-analysis.
1st paragraph include your education and
training
2nd paragraph explore your strengths
3rd paragraph describe your weaknesses
4th paragraph your plan for personal
development
II. Organization & Marketing
Plan
Do now –pair up and brainstorm a list of things that
might be included in 1)the organization plan 2)the
marketing plan
II – Organization and marketing plan
--discusses how the business will be
organized
--describes the product or service to be
offered
--details the marketing plan
Organization & Marketing Plan
A. Proposed organization
 Blueprint or foundation for the structure of your
proposed business.
 You must construct a clear, solid foundation
around which to build the rest of the business
(why is this significant?)
1. Type of ownership
The three main types of business ownership are:
sole proprietorships, partnerships, and
corporations.
Organization & Marketing Plan
2. Steps in establishing business
 Outline the steps you plan to take to establish your
business
3. Personnel needs
 Identify the people you will hire and their jobs.
 Create job descriptions for partners, employees and
yourself
 Create an organizational chart (refer to Pg 747
define it)
 Outside professionals who are helping you such as
accountants, attorneys, bankers
Why is it essential to create job descriptions?
Organization & Marketing Plan
B. Proposed good/service
 Includes the types of products and services you will
offer
 Your potential suppliers, manufacturing plans and
inventory policies
 They will also want to know the associated costs
1. Manufacturing plans & inventory policies
 How will you keep track of what you sell and
when you need to reorder
 Your inventory system depends on the size and
scope of your proposed business
What is “just in time” delivery? Why is it beneficial to an
organization?
Organization & Marketing Plan
2. Suppliers
 Who will you buy from and how much are the
supplies
C. Proposed Marketing Plan
 The way you will price, promote and distribute
your product.
1. Pricing policies

Set a price high enough to cover your costs and make
profit, BUT competitive enough to attract customers
(think about cost, demand and competition)
Organization & Marketing Plan
2. Promotional activities
 Your business plan will outline the promotional
mix that will be most effective in persuading
prospects (wholesalers, retails, and consumers)
to do business with you.

The mix will include advertising, public relations,
promotion and personal selling.
 The simplest method of promoting your business
is by providing top quality products and services
to your customers..

Satisfied customers generate word-of-mouth
advertising when they pass the news on to their friends
 See page 749 in textbook – figure 35.2
III. Financial Plan
 The purpose of a financial plan is for lenders
and investors to see what monies are
needed to start and operate the business.
 It also contains statements of projected
income and expenses for at least the first
year of operation.
 Why might lenders and investors read the
financial section of a business plan more
closely than other parts of the plan?
III. Financial Plan
A. Sources of capital
 Capital includes all goods used to produce other
goods. It may includes owned property and cash
resources
 Anything that can be converted into cash.
 Equity capital is money raised within the
organization.
List some advantages an disadvantages of using
equity capital to finance your business.
III. Financial Plan
Debt Capital
 Money that is borrowed and must be repaid later
 Advantage to borrowing money and paying on
time is establishing good credit
 Good credit allows you to borrow additional
money.


Interest must be paid on the money borrowed
Interest is a tax deductible business expense
 Disadvantage to debt capital is if you cannot pay
off your debt you could be forced into bankruptcy.

Creditors might take control of the company from the
owner.
Know the six C’s of Credit
1. Capital – how much of your own money is to be
invested
2. Collateral – something of value that a borrower
pledges to a lender to ensure repayment of a loan
3. Capability – ability to succeed
4. Character – look at your credit score and
references
5. Coverage – the amount of insurance coverage
6. Circumstances – the general circumstances of your
business.
The Business Plan
1. Why should aspiring entrepreneurs conduct a selfanalysis as part of a business plan?
2. Why is it important to know the disposable income of
potential customers?
3. What sources can an entrepreneur access to
research the competition for a proposed product or
service?
4. Why should personnel needs be identified in a
business plan?
5. What is the best way to promote a new business?
6. What is the most common method of financing a
business?
Careers Marketing
• Read page 752 – careers in marketing
• Facts and ideas review sheet