Creating an E-Business Plan

Chapter 4

E-Business Plan Organization

• A e-business plan is used to seek funding for an new or existing e-business.

• It serves as a “Blueprint” for operations after the business is founded.

• Developing a plan takes time effort and thought.

• Many sources of help for the e-entrepreneur.

Business Plan Help Sources

• Small Business Administration (SBA)

• Service Corps of Retired Executives (SCORE)

• Small Business Advancement National Center (UC Arkansas)

• Others….

• Commercial Sources i.e.. BisPlanit.com

Small Business Administration

Startup Help

Elements of a Plan

• Coversheet

• TOC

• Executive Summary

• Description of Idea

• Information about products or services offered

Elements of a Plan 2

• Industry analysis

• Operating, marketing, financial and management plans

• Identification of critical risks

• Exit strategy

Cover Sheet and Title Page

• Identifies the name of the business and author.

• May identify the addressee of proposal

Table of Contents

• Lists all sections and subsections by page number.

• Must be well organized and accurate

Executive Summary

• An overall view of the entire plan

• May be used to screen plans by bankers and investors.

• Should highlight key points including the idea, the competitive situation, the financials and the “players”.

Vision and Mission Statements

• An overall statement of the business's goals and philosophy.

• Define your purpose

• Know your intended audience

A Vision Statement

A Mission Statement

Products and Services

• A description of each product or service you plan on offering.

• Level of detail is important.

• Enough for the reader to understand and not to be confused

Industry Analysis

• An analysis of the business environment.

• Focus on the basic industry segment

• Based on verifiable data and market research.

Marketing Plan

• A critical element of the plan.

• Target market description

• Demographic, geographic, and psychographic characteristics of market

• Competitive analysis

• Objectives, tactics, and strategies

• Budget and timeframe

Marketing Plan

• Marketing Objectives should be clearly stated, measurable, and lead to sales.

• Marketing Strategies describe the features of the products, and services offered, and pricing strategies.

• Marketing Budget is an estimate of the costs for all the activities described in the marketing strategies portion of the plan

Operations Plan

• Description of the business:– Location, equipment needs– Labor needs– Manufacturing – Logistics – Integration of Internet services

Financial Plan

• Shows the reader how all the ideas, concepts and strategies described elsewhere come together in a profitable way.

• The plan should include pro forma– Balance sheet– Income statement– Cash flow statement

Management Plan

• A strong management team is critical as many investors base their decision on this factor.

• The plan should list and describe the experience base and background of the key indivduals who will be involved in the day-to-day operation of the firm

• The Plan should detail those areas that will be outsourced.

Issues analysis and Critical Risks

• Identifies threats or opportunities faced from outside influences.

• These include economic outlook, innovations, environmental and governmental factors.

Exit Strategies

• How will investors get their money back?

• Describe long term plans….– Public Offering (IPO)– Acquisition/merger– Sale to others….

• Discussion of these issues adds credibility.

Legal Forms of Organization

• There are three basic forms of legal organization for a firm– Sole Proprietorship

– Partnership

– Corporation

• Complex legal and tax issues are involved; form chosen is highly contingent on individual circumstances. Seek counsel from attorney and accountant.

E-Business Partnerships

• Many e-businesses establish partnerships with firms in their value chain.

• Potential partnerships should be detailed in the business plan.