PBMF 6.2 Business Planning

6.2
Business Planning

Develop a Business Idea

Most successful entrepreneurs start with a great idea. It must be something that appeals to a large number of people and meets a want or need. This requires extensive market research. This helps analyze if the idea is feasible. If the idea is not a good one, the business will not succeed.

Drag and Drop

To appeal to the greatest number of consumers, entrepreneurs must know their ​

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. This allows an ​

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to focus on the most ​

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way to develop, advertise, and deliver a product.

Drag these tiles and drop them in the correct blank above

market

entrepreneur

effective

• start a new business

• purchase an existing business

• buy a franchise

• service business

• retail business

• manufacturing business

Start-Up Strategies

Open Ended

Which start-up strategy would you prefer? Why?

​Business Plan

A business plan is a written statement of goals and objectivesfor a business with a strategy to achieve them. It is a roadmap to help an entrepreneur establish and grow a business.

A complete business plan is needed to apply for financing through banks and other financial institutions.

• marketing & sales

• funding request (if applicable)

• financial projections

• appendix

• executive summary

• company description

• market analysis

• organization & management

• service or line of goods

Business Plan

• A description of the business & why it will be successful.

• Includes a mission statement.

• Should be 1-2 pages that grab the attention of readers and makes them want to learn more about the business and its plans

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​Executive Summary

​Company Description

• Business Activity: Does the business provide goods or services? Will there be a physical location, online store, or both?

• Market Need: How do the goods/services meet a need in the market? Who is the customer?

• Competitive Advantages: Why will the business succeed? What advantages does this business have over its competitors?

• Basic overview of the industry & market of the business

• Presents current and projected size of the entire market

• Identifies competitors

• Estimates how much of the market the entrepreneur hopes to capture

Open Ended

Why do you think it is important to conduct a good market analysis before starting a new business?

• Biographies of company leaders

• Ownership of leaders & how much they will be involved in the business

• Business Structure: Is it a proprietorship, partnership, corporation, LLC?

• Organizational Chart showing chain of command

• Special licenses & permits held by the business

Organization & Management

Details how the company is organized & run

• What will your business sell?

• Product's life cycle

• Plan for pricing

• Competitiveness: Why your business will be successfull despite competition

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​Products

​Marketing & Sales Strategy

• Strategy for building & growing the business

• plan for reaching customers, such as promotions, advertising, and public relations

• System for selling the product, such as retail location with sales associates, direct sales representatives, or online store

• average sale amount per customer to make a profit

Financial Plans

Necessary to convince investors to participate in a new business. This section contains pro forma financial statements.

• pro forma balance sheet: reports assets, liabilities, and net worth

• pro forma income statement: projects revenues and expenses to show whether or not a business is profitable

• pro forma cash flow statement: reports anticipated sources and uses of cash from operations, investing, & financing activities

May include:

• company brochure

• copies of published articles about business

• photographs of products

• resumes of those in leadership roles

• permits & contracts
  

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Appendix

Capital brought into the business in exchange for a percent of ownership in the business.

​Equity Financing

Borrowing money that must be repaid. This may require collateral if the loan is from a financial institution.

​Debt Financing

Financing