Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
by Rhonda Abrams
Fourth Edition
Published by
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Business Concepts
Something new Something better Underserved or new market New delivery system or distribution channel Increased integration
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Sociological change
-- market changes due to demographic, lifestyle, or trend changes
Competitive changes
-- competitive landscape changes due to new entrants, lower prices, more aggressive marketing
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Information Sources
US Census Bureau
www.census.gov:
Economic Census County Business Patterns Current Industrial Reports
Trade associations
www.asaenet.org (Gateway to Associations)
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Evaluating Data
Recent data is more likely to be more reliable than older data Translate into units (or constant dollars) to account for inflation Give most reliable source the most weight when making decisions Use the most conservative figures for your projections
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Executive Summary
The most important part of your plan People read this section first and then go to the Financials You may be asked to send just the Summary and Financials to some investors Write it last when youve done the work
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Narrative:
tells a story good for businesses with one or two dominant elements
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Mission Statement
Nature of products/services Commitment to quality Service & customer relationship Price positioning Management style & work environment Goals for growth & profit goals Social, environmental goals
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Legal Issues
Legal form
corporation, LLC, sole proprietorship, partnership?
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Industry Analysis
Which industry (industries) are you in? What is its size and growth rate? How mature is the industry? How sensitive is it to economic cycles? How affected is it by seasonal factors? How affected is it by technological change?
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Industry GDP
5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Year Year Year Year Year 1 2 3 4 5
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Industry GDP
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Financial Characteristics
What financial patterns characterize your industry?
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Characteristics:
Demographic Geographic Lifestyle/business-style Psychographic/company culture Purchasing patterns Buying sensitivities
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Demographic
Basic, objective aspects of customer base Specific, factual traits Examples:
consumers: age, gender, income level, ethnic group businesses: industry, revenues, number of employees
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Geographic
Area served Density/type (suburban, urban, rural, etc.) Nature of location (regional mall, industrial park, near transportation, etc.) Climate
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Lifestyle/Business Style
Concerns and interests Life stage or business stage Issues theyre facing How they spend their time Examples: magazines, where they shop, cars they drive
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Psychographic
Self-image Values and attitudes Examples: early adopter, fiscally prudent, religious, socially responsible
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Purchasing Patterns
Where they buy When they buy How they make their purchases How often they buy
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Buying Sensitivities
Price Convenience Service Reliability Brand name Credit terms Ratings, recommendations
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Market Size
Too small: possible lack of sufficient customers or unsustainable demand Too big: market is very expensive to market to, probably lots of competition
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Market Trends
Is your market growing or shrinking in size? Are customers changing their need/use of your product/service? Is the market changing in demographic or lifestyle make-up? Are social values (e.g., the environment, health concerns) changing market values/demand? Is technology changing market behavior?
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Questions:
Who are your competitors? On what basis do you compete? How do you compare? Who are potential future competitors? What barriers to entry make it difficult for new competitors?
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Internal/Operational Factors
Examples: Financial resources Marketing Efficiencies Strategic partnerships Company morale
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Barriers to Entry
Intellectual property/patents High start-up costs Substantial expertise Licensing, regulation
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Strategic Position:
What unique role will your company hold in the marketplace, giving it a defensible competitive position?
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Customer Perception
Factors that make customers choose your products/services over competitors: Better, faster, cheaper
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Market Segment
Geography/location Age Income level Gender Specific needs
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Market Share
Establishing and maintaining market dominance, thus intimidating the competition
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Other Strategies
Operational/technological advantages
improving profit margins through operational/technological innovation/productivity
Proprietary products
develop or secure exclusive assets
Sales channels
develop and maintain unique or improved sales channels
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Types of Risk
Market risk Competitive risk Technology risk Product risk Execution risk Capitalization risk
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SWOT Chart
Illustrates balance between companys: Strengths Weaknesses Opportunities Threats
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Four Ps of Marketing
Product Price Place Promotion
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Five Fs of Marketing
Functions what it does Finances what it costs Freedom convenience Feelings self-image, intangibles Future durability, long-term costs
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Marketing Vehicles
examples: Brochures Companys website Ads: print, TV/radio, online Advertising specialties Direct mail: print or email Trade shows
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Sales Activities
examples: On-site: sales personnel, point-ofpurchase displays, etc. Mail order, catalog Telemarketing, incoming call center Online sales, e-commerce Off-site: sales calls, trade shows Third-party: distributors, retailers
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Operations Include:
Facilities Production planning Inventory management Supply Distribution Order fulfillment Research & development Financial control
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Facilities
Location(s) Lease Improvements Utilities/maintenance
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Production Planning
Labor/variable labor Productivity Capacity Quality control Equipment and furniture
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Supply/Materials Considerations
Cost of goods Reliability of suppliers More than one supplier? Additional costs Terms
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Distribution Considerations
How does product get to consumer? Names and numbers of distribution companies Effectiveness and reputation of distributors Terms Alternative distribution methods
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Start-Up Costs
Not included in Income Statement but affect the amount of money needed to be raised to start your business IRS treatment some costs must be depreciated over a number of years rather than expensed in the first year of business
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Choosing Technology
Functions Ease-of-use Cost Security Ability to upgrade and expand Integration with existing data, technology
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Management Team
Principals Key employees Board of Directors Advisory Committee Consultants
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Compensation
Salary Bonuses Commissions Profit sharing Equity Stock options
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Key Employees
President/CEO Chief Operating Officer COO Chief Financial Officer CFO Marketing/Sales Director Production Manager Human Resources Director Chief Technology Officer CTO
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Management Style
Clear policies Communication Employee recognition Employees ability to affect change Fairness
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Company Benefits
Visibility Positive corporate image Recruitment tool Stronger team Greater employee satisfaction Connect with other companies
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Corporate Citizenship
Obey the law Act ethically Treat employees fairly Honesty and fairness in dealings Environmentally aware Community involvement
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Company Development
Goals Strategies Priorities Milestones
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Growth Priorities
Add employees Add product lines Increase marketing Add locations Add capacity Increase profits Retire debts Acquire other companies
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Milestones
examples: Incorporation Product design completed Trademarks/patents secured Product shipped Partnerships/distribution secured Sales level reached Profit levels reached Financing secured
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GROSS SALES (Commissions) Net Sales (Cost of Goods) GROSS PROFIT (Expenses) Net Income Before Taxes (Provision for Taxes) NET PROFIT
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General Considerations
An Appendix is not necessary Use the Appendix to keep the size of the Business Plan itself from getting too large Put informative but not essential details in Appendix Bind the Appendix separately if very lengthy
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Cover Sheet
Business Plan Name of company Date Copy number Disclaimer Company contact information Company logo
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Computer Presentation
Many investors require PowerPoint presentations of your Business Plan. Include: Business concept Size and nature of market Competition Team Growth projections Financial highlights amount to be raised, revenue projections, profit margins
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Funding Sources
Venture capitalists Angel investors (private investors) Government (SBIC/SBA) Friends and family Yourself Sales
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Advantages
No sharing of profits; professional
Disadvantages
Difficult to obtain
Easier to secure Complicated relationships Easy to secure High interest rates; risk personal credit
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Advantages
Disadvantages
Large amounts; Pressure to professional exit; difficult to secure Available for May be smaller unprofessional amounts Easier to Complicated secure relationships
Elevator Pitch
Describes company very concisely one or two sentences: Company name: Does: Serves which market: Makes money by: Is like other companies: Will succeed because: Aims to achieve:
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Team Process
Choose your team Devise decision-making process Select the business Identify key issues Assign tasks Re-evaluate assumptions Integrate the work Prepare & present the plan
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Decision Making
Will decisions be made by vote or consensus? What areas, if any, will individual team members have control over? What happens if you cannot reach agreement? Will one person have greater/final decision-making authority?
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Assign Tasks
Functional division relates to job responsibilities (e.g., marketing, operations) Shared tasks each team member works on entire plan
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Next Steps
Re-evaluate assumptions Identify any missing/insufficient information Integrate the plan Complete the written document and slide presentation Decide on which team members will present plan
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Front-End Issues
Site design, look-and-feel Usability Site map, navigation Features and functionality Sticky-ness, ability to retain visitors Personalization Merchandising
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Back-End Issues
Which platform? Customer service, order fulfillment, inventory management Database Software:
In-house? Off-the-shelf? Customized?
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Trends in Manufacturing
Technological changes Improved information systems Re-organized production Quality management
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Manufacturing Strategies
Just-in-time manufacturing; low inventory Subcontracting/out-sourcing Joint venturing Increased perceived value
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Common Factors
Intangible product Subjective judgment of quality Few barriers to entry Perishable product Significant time lap between use Quality dependent on employee/provider
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