Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter Chapter 3

Develop a Business Plan 3.1 Why a Business Plan is Important

3.2 What Goes into a Business Plan?

3.3 How to Create an Effective Business Plan

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3Slide 2

The Business Plan

business plan a written document that describes all the

steps necessary for opening and operating a successful business

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 1Slide 3

products manufacturing methods customers management suppliers competitive strategies how business will earn a profit future growth plans

A business plan will describe your:

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3Slide 4

Purposes of a Business Plan

A business plan: explains the idea behind your business

how your product or service will be produced and sold

sets specific objectives and how your business will achieve them

describes the experience of the people who will run the business

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Executive Summary

Define problem, solution, business model, and why your solution is better

Write it last Grab readers attention No more than 2 pages! Most important part of your plan

and usually written last5

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 1Slide 6

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Business Model

Explain how you make money Who pays you? How do you collect? What are your channels of distribution? How do you integrate suppliers?

Use examples if necessary Be complete

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Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Marketing and Sales

Define your primary, secondary, and other audiences

Show some numbers How will you find, sell, and retain

customers? Advertising and promotion budget Identify your leverage points

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Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Competition

Everyone has competitors! Provide a complete view of the

competitive landscape Direct and indirect competitors Current and anticipated

competitors Competitor strengths and

weaknesses Your competitive advantages 9

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Management Team

Describe your key players Management Team Board of Directors Board of Advisors Major Investors

Who are you missing?

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Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Financial Projections

Cash Flow Projections Income Projections Balance Sheets Assumptions

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Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3Slide 12

Lesson 3.3

How to Create an Effective Business Plan

Goals Describe resources available for

researching your business plan. Name common mistakes to avoid in

business planning.

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3Slide 13

Vocabulary Small Business Administration (SBA) Small Business Development Centers

(SBDC) Service Corps of Retired Executives

(SCORE) trade associations

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3Slide 14

Research the Business Plan

Most entrepreneurs spend 50 to 100 hours developing their business plans.

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3Slide 15

Community, Government, and Professional Resources Small Business Administration

(SBA) an independent agency of the federal

government helps Americans develop new businesses

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3Slide 16

a cooperative effort of the private sector, the educational community, and federal, state, and local governments

provides free help for businesses that cannot afford a private consultant

Small Business Development Centers (SBDC)

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3Slide 17

retired executives provide free, confidential advice to entrepreneurs either in person or over the Internet business related workshops both short-term and long-term assistance is

available

Service Corps of Retired Executives (SCORE)

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3Slide 18

provides information on local business trends Trade Associations

organizations that are made up of professionals in a specific industry

provide educational and networking opportunities

Chamber of Commerce

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3Slide 19

experts who will provide business assistance for a fee

Financial Institutions Bankers and accountants can provide

information about loans and financial statements.

Professional Consultants

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Investor Pitch Slides

1. Title2. Problem3. Solution4. Business Model5. Secrets

6. Marketing and Sales

Competition Management

Team Financials Current Status

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10/20/30 Rule

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3Slide 21

Print Resources

library magazines government documents

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3Slide 22

Online Resources

provide information similar to print information

websites targeted to entrepreneurs and small business owners

provide business plan templates

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 1Slide 23

What are some of the resources that are available to help you develop your business plan?

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3Slide 24

Mistakes in Business Planning

Avoid making the following mistakes: Unrealistic financial projections An undefined target market Poor research Ignored competition Inconsistencies in the business plan

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Internet Resources

WSSI Inventor Resources Page - http://uwadmnweb.uwyo.edu/SBIR/inventorresources.html

Innovative Products Technologies, Inc. - http://www14.inetba.com/inventonecom/

Business Plan Development Tools (online) – http://www.uwyo.edu/sbdchttp://www.sba.gov/starting_business/index.html

Sample Plans – http://www.bplans.com/samples/sba.cfm?DCMP=OTC-

sba_course

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