Chapter 12 discusses developing an effective business plan. After reviewing the chapter and viewing the sample business plans included in the chapter, your task is to complete the first three sections of the Business Plan Outline. The sections include the following:
**Sample Business Plans are found in the textbook Appendix pgs. 312-322 and Appendix 12-A pgs. 326-360.
After completing the Business Plan you will submit in eLearn, dropbox. Please make sure you submit in the following format:
Word Document, 12 point font
The document should contain the students name and the Business name in a Header (headers appear on every page)
Document should be single spaced.
Headings should be bold and underlined for each section
Section 1: Executive Summary
The Executive Summary is typically completed last. No more the one page long, summarize the critical points of each part of your plan including:
- Company Description
- Marketing Plan
- Financial Plan
This summary should tell the bank, investors, you as the owner a short story about your business: How the company is set up, how you plan to market the company and its products to whom, and when it will become profitable and how profitable you think it might be. This is the “sales pitch” part of the plan to investors and bankers. Keep it simple.
Section II: Business Description
- General description of the business
- Industry Background
- Goals and potential of the business and milestones (if any)
- Uniqueness of product or service
Some questions to consider when completing the description:
Use the following outline to write up your Company Description. It must be in paragraph form. You can use bullet points within the paragraphs but DO NOT submit as an outline. Cite and reference your sources of information, Interview, Book, Web pages.
- Who will run it
- What will the company do (service) or make (Manufacture)
- What form of ownership? (sole proprietor, partnership, corporation)
- Where will the company be located?
- What is the company’s mission statement (and overall strategic plan)?
- What are the 3 year and 5 year goals?
- What are the initial 1-2 year objectives?
- What kind of resources are needed:
- Materials including land, building, equipment, supplies, inventory, technology or anything other materials needed to operate the company
- Human Resources – Staffing – In addition to who will run it, what other staffing needs you may or may not need. If not needed right away when? What talents if any are needed that the key people cannot or will not supply?
- Financial Start up – list of materials with costs listed. This will also be used in the financial section.
- Initial Cost of Inventory and equipment needed to operate the business
- Initial Lease costs on Building if you need to have an office.
Section III: Marketing
- Research and analysis
- Target market (customers) identified
- Market size and trends
- Marketing Plan
- Market strategy—sales and distribution
- Advertising and Promotions
Some questions to consider when completing your Marketing plan. You should provide answers to most, if not all of these questions.
- Identify your market:
- Who are your customers? Give a brief description of your target market: who will buy your products or services?
- Start with Total Number of People that live in your area.
- Target Market: Which Customers are your targeting, Young Families, Single People, Sports Fans, Exercise Fanatics, etc.
- Use this Website for Demographic Information by state/by county: US Census Bureau State/County Quick Facts: https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml#
- Guess based on the total number of people living in your market.
- For online businesses, guess what your monthly hit rate might be.
- SWOT – Strengths/Weaknesses of a company (internal) Opportunities/Threats (external)
- List at least one competitor in your market. Is that competitor already selling the same products/services you are? If so, will they be competition for your business or not? Is it a competitive market?
- Are there any Barriers to Entrance – Permits/Certifications, Do the customers know about your products and services? High Expense? Competitor that is dominate? If you will own a bar or restaurant will community groups be accepting or rejecting your project?
- Do your products/services provide a need not currently served in your market?
- If there is no competition, that is an opportunity.
- Will you provide a service that benefits your customers/communities.
- Strengths of the company
- What are the primary strengths about your company to meet your market needs?
- Think about both your company description (people, products) and the above information (market needs) that give your company a competitive advantage.
- Weaknesses of the Company
- What areas of the company are not fit (not well suited) to serve your market? You may discover that certain products or services listed in your company description may not serve your customers as well as you thought.
- Pricing is a mixture of making enough profit (marking up your price enough to cover your costs and make a decent profit), what your competitors are charging and what the market will bear for your products and services.
- Using the list of items or services you outlined in Company Description, assign a price to each item that will provide maximum profit while being competitive with your competition’s prices. If you can, get your competition’s price list. (You will need to know basic costs for your products/services).
- Calculate the average price per profit center will you charge your customers.