Effectively developing a Business Plan

Lorenzo Orlando Caum

@lorenzocaum

“Know where you want the company to go and spell out a route to get there.”

-Melvin J. Gordon

Business Plan

Finances

Ideas

Research

What is the purpose of a business plan?

A business plan acts as a roadmap for establishing and developing new businesses.

A challenge!

A thorough business plan is necessary for raising capital.

What does a business plan consist of?

I. Cover PageII. Table of ContentsIII. Executive SummaryIV. General Company DescriptionV. Products and ServicesVI. Marketing PlanVII. Operational PlanVIII. Management and OrganizationIX. Personal Financial StatementX. Startup Expenses and

CapitalizationXI. Financial PlanXII. Appendices

Is a business plan necessary?

A business plan illustrates:where the owners currently arewhere the business currently

standswhere the owners and the

business want to be

Also serves as a safety net between the now, the future, for the times when the road gets bumpy.

Are there companies that have been successful with a minimal business plan or none at all?

Yes

What's the catch?These companies either had an idea that changed the world or were really lucky.

Is it worth the risk?Not unless you are independently wealthy.

A closer look at the parts of a business plan

Cover Page

Important contact information should be placed here.

Legal business name

Owners

Addresses

Telephone number

Email Address

Table of Contents

A table of contents serves as a reference for quickly identifying and finding portions of business plan.

All portions of the business plan should be listed.

Executive Summary

Should be written last.

General Company Description

Mission statementCompany goals and objectivesBusiness philosophyBrief description of products and the marketShort description of the industryLegal form of ownership

Products and Services

Briefly describe how products or services will be priced.

Describe the products or services that the business will provide.

Highlight competitive advantages/disadvantages.

Marketing Plan

Conduct intense market researchEconomics – market size, demand, trends, growth potential, barriers to entry?Describe the features and benefits of the major products or services.Who are my customers?Identify your company’s strengths and weaknesses. Do the same for the competition.

Marketing Plan (Continued…)

Identify your company’s market niche.Strategize:

PromotionPricing LocationDistributing

Sales Forecast – create two forecasts: a realistic guess (what you expect) and a worst case scenario.

Operational Plan

Production Inventory Suppliers

Location Legal Employees

Management and Organization

Organizational chart

Professional supportBoard of directors, attorney, accountant, insurance agent, mentors, etc.

Employees

Personal Financial Statement

Personal assets to finance the business.

Startup Expenses and Capitalization

Research and illustrate startup expenses.Research – talk to others who have

started similar businessesResearch – read books, get statistics

and properly interpret themResearch some more!

Always overestimate. You don’t want to be short in the midst of launching a new business!

How is ownership divided?

Financial Plan

12-month profit and loss projectionFuture profit projectionProjected Cash Flow

Businesses have to pay bills or be forced to close their doors!

Opening Day Balance Sheet – shows assets and debts (liabilities)

Break-Even Analysis – the minimum about of sales needed to cover operating costs.

AppendicesInclude in-depth studies for your business plan:

BlueprintsPhotosEquipment need/ownedAssets available as collateral for a loanBrochures and advertising materials

Does a business plan require anything else?

Yes!

Now we need to customize your business plan. How do you intend to raise capital?

Bankers or Investors?

RevisionsWhy not revise while creating the plan?

This only seeks to hinder your judgment and slow you down.

By constantly altering parts you are hurting full development of other sections. Remember that every part is equally important.

Executive SummaryExplains the fundamentals of the business.

This is your best opportunity to make the sale to the banker or investor.

Therefore, an executive summary ought to be concise, professional, and enthusiastic!

References Michaels, Nancy. “Entrepreneurship—An Alternate

Career Choice.” Reading Room. 17 March 2003. SCORE. 4 March 2008.

U.S. Small Business Administration. “Plan Your Business.” Small Business Planner. 12 February 2008. SBA. 3 March 2008. <http://www.sba.gov/smallbusinessplanner/plan/index.html>

SCORE. “Business Plan for a Startup Business.” Business Tools. 3 March 2008. < http://www.score.org/business_toolbox.html>

+ Bill Harkell – Tampa SCORE advisor (Local)

ResourcesU.S. Small Business Administration –

www.sba.gov

SCORE “Counselors to America’s Small Business” – www.score.org

Entrepreneur.com – www.entrepreneur.com

Trend Magazine – www.floridasmallbusiness.com

USF Libraries – www.lib.usf.edu

Lorenzo Orlando CaumEntrepreneur, marketer, and more…

http://lorenzocaum.com

hello@lorenzocaum.com

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