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2Main Menu

• Begins with answering one primary

question:

– Do I have what it takes?

• Involves planning, organization and

flexibility

• Can be costly and risky

• Brings many rewards and a sense of

accomplishment3

• Requirements include:

– self-motivation: you will ultimately be the person

responsible and accountable for project development,

time management and oversight of the creation of your

business

– tough decisions: you will need to make timely critical

business decisions, especially in the planning and start-up

phase

– organization: the key to developing and running a

business

– drive: you cannot develop a business overnight; you will

need flexibility and stamina4

• Consider the following:

– family life: how important is it to you; prepare yourself

for 12-hour workdays six to seven days a week

– finances: to make money you have to spend money

– support: do you have a good support group to

encourage you on your new endeavor; starting a

business has many challenges and you will be

challenged many times, you will need a support

system to help you

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• Is crucial for success

• Identifies your strengths and available

opportunities

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• Develops important aspects of your business

– mission statement: a clear broad statement which

describes the purpose of the organization

– goals: general statement of what needs to be

achieved and accomplished to achieve the

mission

– objectives: specific, time-sensitive

accomplishment used to measure the progress

toward achieving goals and the mission

statement7

• “To be, and be recognized as, the leader in

quality, integrity and performance for deployed

systems, engineering and mission operations for

the U.S. government.”

–Lockheed Martin

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• “To sustain profitable growth by providing the best

customer experience and dealer support.”

– Toyota Company

• “Bringing exceptional packaged entertainment to

communities by being the best retailer of new,

used and rental entertainment.”

– Hasting Entertainment

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• "Target is committed to the pursuit of profitable

and sustainable growth, consistent with our

unwavering dedication to the social,

environmental and economic well-being of the

global community in which our guests, team

members and shareholders live and work..“

–Target

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Goal Objective

To be recognized as one of the top

four companies in our industry.

To exceed the revenues of each firm

in ten years.

To bring better technology to our

customers.

To develop a new iPhone within the

next year incorporating GPS

navigation.

To increase our brand recognition. To market a new cutting-edge

commercial during each quarter of

the year.

To expand our business into the

western region of the U.S.

To open four stores in the first

quarter, three stores in the second

and third quarters and two stores in

the fourth quarter.

• Includes five key elements:

– market analysis

– organization and management

– marketing and sales

– service and/or product line

– financials

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• Cannot occur until the business plan is developed

• Are supported by the business plan

• Involve:

– naming your business

– finding a location for your business

– buying/leasing equipment

– obtaining licenses and permits

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• Involves more than creativity and marketing

• Requires you to select the form of business

– partnership

– incorporation

– corporation

– limited liability company

• Entails formal registration with the Secretary of State

• Can require obtaining a domain name on the Internet

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• Is one of the most important factors in

making your business flourish

• May result in the failure of your small

business startup, even if you planned

accordingly

• With the advice of professional consulting

site locators can increase the chance of

your business being successful

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• Requires asking the question: “Do I buy or lease my

equipment?”

• Entails the use of a popular tool known as a t-chart

• Can have major tax consequences on your business

depending on whether you lease or buy your equipment

• Needs to be a team decision, involving accountants,

attorneys (due to compliance and regulatory issues

involving specific equipment), purchaser and of course

yourself

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t-chart: a listing of the pros and cons of a situation

Pros Cons

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1. What is the first and primary question you should ask

yourself before starting a small business?A. Am I business savvy?

B. Where will I get the money?

C. Where should my business be located?

D. Do I have what it takes?

2. When starting a new business, you should be prepared

for __________.A. Six-hour workdays four to five days each week

B. Eight-hour workdays five to six days each week

C. Ten-hour workdays five to six days each week

D. Twelve-hour workdays six to seven days each week

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3. The clear, broad statement describing the purpose of a

business is known as which of the following?A. Objective statement

B. Mission statement

C. Goal statement

D. Business plan

4. Which of the following is NOT one of the key elements of

a business plan?A. Development calendar

B. Marketing and sales

C. Organization and management

D. Financials

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5. The decision to buy or lease equipment should be

__________.A. Made quickly

B. Easy to make

C. A team decision

D. Considered trivial

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21Main Menu

• Illustrates extensive knowledge of the industry

• Describes the current condition of the industry

and forecasts where the industry is moving in

the next three to five years

• Identifies a target market

• Summarizes market tests conducted

• Includes a competitive analysis

• Explains any regulatory restrictions

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Market

Analysis

• Provides background information on the

industry, such as:

– size of the industry

– growth rate (date back ten years and

project the next three to five years)

– customer base within the industry

(government, private, nonprofit)

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Market

Analysis

• Describes for whom you are providing services

• Should be narrow, focused and manageable

• May lead to failure if too many customer bases are

included

• Identifies the needs of customer base

• Assesses the size of the market and projected growth

• Evaluates the portion of the market the business will

obtain

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Market

Analysis

• Describe potential customers contacted and

their willingness to pledge their business

• Discuss any focus group feedback

• Evaluate potential customers willingness to

participate in your products at varying

prices

– which price is the best?

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Market

Analysis

• Include:

– focus groups: soliciting individuals to consume

your product and provide proactive feedback

– surveys: questionnaires asking various

questions about people’s interest in your

product

– networking: engaging with potential customers

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Market

Analysis

• Are a quick and easy way to get feedback

• Can be conducted in larger groups

• Enable the facilitator to receive emotional

feedback

• Should avoid groupthink

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Market

Analysis

• Explains the phenomenon of a dominant

individual leading the group and silencing any

opposition or other viewpoints

• Demonstrates the desire for individuals to want to

get along, avoid conflict and not critically analyze

ideas in an effort to reach a consensus

• Does not allow a representative sample

– the opinions of all members of the group are not taken

into consideration

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Market

Analysis

• Begins with an experienced facilitator

• Calls for a member of the group being assigned

the role of devil’s advocate

• Demands multiple focus group sessions

discussing one product and comparing responses

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facilitator: company representative conducting

the market analysis, the mediator; the person

who keeps the group on task

devil’s advocate: person who will critically

evaluate and disagree with each and every idea

populated during the group discussion

Market

Analysis

• Capture a large audience with risks, such as:

– online surveys capture only those who can afford

the Internet

– phone surveys capture only those who have a

home phone

• Need to exclude biased terms and include

vocabulary understood at a high school education

level

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Market

Analysis

• Should include demographics assisting in the

validation of a representative sample, for

example:

– do not have all males surveying car products

– do not have all participants from one

geographic area surveying farm equipment

– do not have people without children surveying

toys

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Market

Analysis

• Identifies potential customers

• Involves taking customers to events such as lunch, dinner

and sports games to demonstrate or discuss your product

• Engages the snowball effect, for example

– one potential client gives five names of people who

might be interested

– each of the five additional contacts gives five more

contacts

• May even find an investor to finance the small business

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Market

Analysis

• Identifies competitors

• Assesses competitors’ strengths and

weaknesses

• Demonstrates how you plan to overcome

their strengths and take their weaknesses

into account

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Market

Analysis

• Summarize related regulatory restrictions

• Explain how you plan to comply with those

restrictions

• Conclude with governing body

– those who make sure you are following

regulations

• Environment Development Administration, Office of

Comptroller, Fire Marshall, State Banking Authority,

Federal Drug Administration

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Market

Analysis

• Presents the structure of the organization,

which includes:

– organizational structure

– ownership information

– management profile

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Organization

&

Management

• Demonstrates a clear managerial structure

for each function of the business

• Has two basics types

– hierarchical

– learning-based

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learning-based: formerly known as flat or horizontal

organizational structure

Organization

&

Management

• Include business functions where one is

subordinate to the other

• Adopt the chain-of-command methodology

• Are essential for large organizations

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CEO

Vice President

(production)

Designer Writer

Vice President

(marketing)

Designer

Organization

&

Management

• Do not centralize control

• Allow each function to work together and

are not subordinate to each other

• Promote growth, innovation and increased

knowledge of how the business functions as

a whole

• Work great for small businesses

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Organization

&

Management

• Distinguishes the following:

– who has ownership of the organization

– to what degree does a person have

ownership (percentage)

– each owner’s involvement with the

company

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Organization

&

Management

• Identifies managers

• Describes their function within the organization

• Summarizes their education

• Discusses their prior employment history

• Includes any distinguishing characteristics

– industry recognition

– community involvement

• Shows their salary and additional forms of

compensation40

Organization

&

Management

• Discuss how you plan to enter the industry

• Illustrate a timeline for growing your

business

• Provide scripts for television

advertisements, fliers and newspaper

articles

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Marketing

&

Sales

• Should be the bulk of your business plan

• Describes the various products and/or

services you are selling

• Explains how the product or service will be

produced

• Provides a narrative of why your target

market would buy your product or utilize

your service

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Service

and/or

Product

Line

• Should provide estimated data, such as:– how much you plan to sell

– price

– expenses

– profit

• Compose funding sources, such as:– grant from Small Business Administration

– loans

• bank

• amount

• maturity: when you plan to pay this loan back

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Financials

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1. Which section of the business plan identifies a target market?

A. Marketing and sales

B. Organization and management

C. Market analysis

D. Service and/or product line

2. The phenomenon demonstrating individuals’ desire to get

along and avoid conflict is known as which of the following?

A. Crowd concept

B. Groupthink

C. Dissonance repression

D. Controversy avoidance

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3. Which section of the business plan should be the bulk of

the plan?A. Marketing and sales

B. Organization and management

C. Market analysis

D. Service and/or product line

4. Which type of market test engages the snowball effect?A. Focus groups

B. Surveys

C. Networking

D. Interviewing

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5. Which section of the business plan discusses how you

plan to enter the industry and grow your business?A. Marketing and sales

B. Organization and management

C. Market analysis

D. Service and/or product line

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1. Which of the following is NOT one of the considerations to determine if you “have what it takes” to start a business?

A. FinancesB. SupportC. ExperienceD. Family life

2. When conducting a market analysis, you should forecast the next __________.

A. One to three yearsB. Three to five yearsC. Five to eight yearsD. Eight to ten years

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3. What is the term for specific, time-sensitive accomplishments used to measure the short-term progress of an organization?

A. GoalsB. MissionsC. PlansD. Objectives

4. __________ business structures work great for small businesses.

A. BureaucraticB. HierarchicalC. Learning-basedD. Divisional

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5. Management profiles do NOT include which of the

following?A. A list of community relations

B. A description of managers’ functions in an organization

C. A list of industry relations

D. A description of family

6. With what office do you register your business name?A. Office of Comptroller

B. Secretary of State

C. Small Business Administration

D. Courthouse

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7. Site locators __________ your ability to promote your

business and be successful.A. Increase

B. Decrease

8. Which of the following is NOT suggested to prevent

groupthink?A. Use an experienced facilitator

B. Conduct multiple focus group sessions

C. Avoid members with dominant personalities

D. Assign one member to be devil’s advocate

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9. The statement: “To increase our brand recognition” is an

example of which of the following?A. Mission statement

B. Goal

C. Objective

D. Tactic

10. ___________ structures adopt the chain-of-command

methodology.A. Bureaucratic

B. Hierarchical

C. Learning-based

D. Divisional

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• GoHastings.Com. (1996-2004). Retrieved September 30, 2008, from

GoHastings.Com: http://www.gohastings.com/catalog/

• Hitt, Miller and Colella. Organizational Behavior: A Strategic

Approach. Wiley, 2006

• Lockheed Martin. (2008). Retrieved September 30, 2008, from

Lockheed Martin: www.lockheedmartin.com

• Toyota. (2008). Retrieved September 30, 2008, from Toyota:

www.toyota.com

• U.S. Small Business Administration. (n.d.). Retrieved September 30,

2008, from U.S. Small Business Administration: www.sba.gov/

• Verizon. (2008). Retrieved September 30, 2008, from Verizon:

www.verizon.com

• Walmart.com. (2008). Retrieved September 30, 2008, from

Walmart.com: www.walmart.com

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Brand Manager:

Megan O’Quinn

Technical Writer:

Jessica Odom

Production Manager:

Dusty Moore

Executive Producers:

Gordon Davis, Ph.D.,

Jeff Lansdell

Production Coordinator:

Aaron Carlson

Graphic Designer:

Megan O’Quinn

© MMXIV

CEV Multimedia, Ltd.