The Business PlanThe Components of A Business Plan &

How to Get Started

Outline

• Start-up business statistics• Questions to ask!• Components of a Business Plan

Starting A Business

According to the Small Business Administration (SBA), 70% of new businesses last at least 2

years, and about half survive five years.

Source: US Dept. of Commerce, Bureau of the Census

Starting A Business

Starting A Business

Questions To Ask

• What niche or need will my business fill?• What services or products will satisfy it?• Is my idea practical?• Who is my competition?• What is my business’ uniqueness over existing

firms— our “competitive advantage”?• Can I deliver a better quality service?• Can I create a demand for my business?

Before You Start Writing

Example:Niche Product

Normal White Shoe Cheerleading Shoe

Components of A Plan

1. Executive Summary2. Business Description3. Mission Statement & Core Values4. Competitive Analysis5. Management Team Plan6. Development & Production7. Marketing Plan8. Financial Plan9. Appendices

Executive Summary

Description: Quick overview of your business plan. It gives investors/lenders a quick window to explore your business plan. Summary must be clear, concise, and attention grabbing. It appears first in a business plan, but is usually the last piece completed. Keep it at 1-2 pages.

Parts: Include a short summary of all business components, highlighting the most important and persuasive parts of each

Executive Summary

REMEMBER– more often than not, people will rely solely on your executive summary and the information written in it to determine the viability of your business.

*Add in a killer “pitch” (1-2 sentences) at the end to persuade your reader that your business will be a success

Business Description

Description: A broad overview of the business concept. It should be 1-2 paragraphs in length.

Questions: What will the business do? What type of business will it be? What goods/services will be produced? Why is it unique? Who are the customers? How will products/services be sold? Where will the organization be located?

Parts: Business description (name, product/services provided and industry), Mission, Vision and Core Values

Mission Statement

Defines the specific goals of a company and outlines what the company hopes to accomplish.

Everything the company does should align with the mission statement.

Usually 1-2 sentences in length, starting with an action verb: “To…”

“To inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.”

Example:Mission Statement

Vision Statement

If the goals of the company are stated in the mission statement, your vision statement describes what your business will ideally look like in the

future when you achieve that goals or those goals.

Usually 1-2 sentences, also beginning with an action verb: “To…”

Example:a Vision

“Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.”

Core Values

These are the ethical guidelines for an organization/company. They articulate the character

qualities a company stands for and encourages. Explains either what is or is not acceptable in a

company.

Can be a bulleted list!

Example:Core Values

Our values serve as a compass for our actions and describe how we behave in the world.

Leadership: The courage to shape a better futureCollaboration: Leverage collective geniusIntegrity: Be realAccountability: If it is to be, it's up to mePassion: Committed in heart and mindDiversity: As inclusive as our brandsQuality: What we do, we do well

Competitive Analysis

Description: Provides the reader a clear landscape in which the company is serving. Proves that there is a genuine need in the market for your companies’ products/services. Demonstrates substantial market size & shows industry trends that support your company’s strategy (but do not describe strategy until later)

Points To Cover: -Statistics & Historical data of the industry nature and growth potential-Major competitors (summarize their operations & products/services)-Nature of the industry-Forecast of the industry-Government regulations that influence the industry-Your company’s position within the industry-Potential obstacles for success

Management Team Plan

Description: Describes management team/staff members and how business ownership is structured. Your readers will be looking to see who is on staff within management and the skills of management and staff relevant to running the company.

Parts: -Ownership Structure (organizational chart)-Internal Management Teams or Departments-External Management Resources (advisory board or professional services aka banks, lawyers, IT consultants, and etc.)-Human Resources -Necessary skills and resumes of each manager-Compensation

Development & Production

Description: Describe what goods/services will be provided by your company. Expand on what needs you will be addressing in the market and how your offerings are better than a competitors. Then, explain how your product will be obtained or made. This segment will fluctuate depending on what you are offering (service/product: retail or manufacturing):

-Retail should share on where products will be purchased for resale.

-Manufacturers consider the following questions

Manufacturer Questions: How products will be designed? Technology to manufacture and/or design products? Where is production being completed (in-house or manufactured outside)? What equipment being used? Location of production? Layout of facilities? Units to be produced? Quality Control?

Marketing Plan

Description: This piece is a written strategy describing how you plan to attract customers to buy products/services.

Points to Cover:

1. Target Market: future Customers & profile,

demographics, customer description

2. Pricing: price for your product and competitor pricing

3. Distribution: explain product/service distribution to

consumers

4. Advertising & Promotion Plan: websites, media, sales,

publicity, tradeshows

Marketing Plan

List the Four Ps:

Financial Plan

Description: Detail your financial needs and repayment plan for loans/debts. Explain the cost of start-up and beginning operations. State from where funding will be acquired (grants/loans/etc).

Parts to Include:

Salaries Utilities

Location/Building Distribution

Communications Marketing

Materials/Supplies Maintenance

Appendices

• Provide supporting documents to the business plan

EX: News articles, industry data, and surveys of future customers

• Polish your paper -Cover page

-Title page-Table of contents -Cite your sources