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1BUSINESS PLANS - PLANNING

FIRST THINGS FIRST - STARTUP

IMPLEMENTATION

AGENDA

BUSINESS 101

Step #1 - BUSINESS PLAN• A Business plan is a document giving details

of company’s future plans. – Is used to obtain financing– Is used to recruit team members– Is used as a ‘roadmap’ a planning tool– Is the company’s reference document for creating

marketing and operations strategies and processes– Contains 12 components

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MISSION STATEMENT: Clearly state your company’s long-term mission. Try to use words that will help direct the growth of your company, but be as concise as possible.

PLANNING – Business Plan

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THE TEAM:List CEO and Key Personnel by name and number of years experience in this field. Include previous accomplishments to show the past record of success.

Market Summary:Summarize your market in the past, present, and future. Review those changes in market share, leadership, players, market shifts, costs, pricing, or competition that provide the opportunity for your company’s success.

Opportunities: Identify problems and opportunities. State consumer problems, and define the nature of product/service opportunities that are created by those problems.

5Business Concept: Summarize the key technology, concept, or strategy on which your business is based.

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Competition: Summarize the competition. Outline your company’s competitive advantage

PLANNING – Business Plan

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Goals and Objectives:List five-year goals. State specific, measurable objectives for achieving your five-year goals. List market-share objectives. List revenue/profitability objectives.

Market Summary:Summarize your market in the past, present, and future. Review those changes in market share, leadership, players, market shifts, costs, pricing, or competition that provide the opportunity for your company’s success.

Financial Plan: Outline a high-level financial plan that defines your financial model and pricing assumptions. This plan should include expected annual sales and profits for the next three years. Use several slides to cover this material appropriately.

10Resource Requirements: Personnel, Technology, Finances, Distribution, Promotion,Products, Services

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Risks and Rewards: Summarize the risks of the proposed project and how they will be addressed. Estimate expected rewards, particularly if you are seeking funding.

PLANNING – Business Plan

Key Issues:Near term

Identify key decisions and issues that need immediate or near-term resolution.State consequences of decision postponement.Long termIdentify issues needing long-term resolution.State consequences of decision postponement.

If you are seeking funding, be specific about any issues that require financial resources for

resolution.

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31Capital for startup:Cash, Equipment,

Building, & Supplies

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1) Learn your Federal Tax Obligations

2) Obtain Federal Tax Id #

Marketing

41) Business License2) Checking Account3) Insurance

a) Liabilityb) Workman’s Compc) Auto

5Company Processes1) Employee Handbook2) Processes i.e.

Accounting; workflows; etc . . .

6Hire Employees Provide Training

FIRST THINGS FIRST – OVERVIEW OF TO DO

Marketing Plan1) Branding a) Logo2) Advertising4) Customer Base

#1 Startup Capital • Startup Capital: Startup capital is the money needed to

begin your business. This would include everything essential for product development and the product launch. – Before going after startup capital make sure you know how much

money you need, and then how you will apply those funds. Being as specific as possible with the plans for the money will increase the likelihood that your business will get financed if you are seeking financing.

• Assess What You Have: • Cash, Equipment, Building, Supplies

– Compare the resources that you own with the resources required in your business plan

– Get quotes for each of the items not already owned. A general rule to get the best pricing is to get quote from 3 vendors.

Exercise #1 - Startup Capital If you want to calculate the amount of startup

capital needed for your business, you simply have to focus on two areas. The first one is the pre-operation expenses and second, the monthly operational expenses.

Exercise #1 - Startup Capital 1) Make a list for every item that you think you

need to startup your business2) Make up a list of expenses with estimated cost

that you think you will have monthly (estimate a total monthly expense then multiple this times 3)

Exercise #1 – How well did you do? Pre-Operational Expenses

These are the typical considerations for your pre-operational expenses.

• Rent plus deposit – one month’s rent• Equipment. The cost of the machinery you need for the business

such as manufacturing equipment and vehicles.• Appliances. Office equipment such as computers, fax machines,

printers and photocopiers.• Furnishings. These are the tables, cabinets, chairs and other office

furniture.• Leasehold Improvements. Remodeling costs for your desired

location such as carpentry and plumbing costs.

Exercise #1 – How well did you do? Pre-Operational Expenses• Licenses, Permits and Insurance. The fees you need to pay to

legalize or register your business. This includes the software licenses for computer applications and insurance fees.

• Subscription fees. Application and installation costs of your telephone line, internet connection and other utility bills.

• Supplies. Initial inventory of consumable items such as paper, pens, cleaning supplies, etc.

• Product Inventory. The cost of buying or manufacturing your initial stock.

• Employee Training. Expenses for the skills acquisition of your staff such as seminars they have to attend or cost of employee manuals.

Exercise #1 – How well did you do? Pre-Operational Expenses• Advertising. Expenses you’ll incur in promoting the business such as

signages, media coverage and other marketing costs.• Opening expenses. Costs during the official launching or ribbon

cutting ceremony, just in case you plan to hold one.• Miscellaneous. Always have a little extra for unexpected expenses.

Exercise #1 – How well did you do? • Monthly Operational Expenses

Always include these expenses in your startup capital:• Lease payments• Business loan payments• Costs for replenishment of supplies and other inventory materials• Advertising and marketing expenses• Staff salary, including government fees such as taxes and social security

payments• Utility bills• Depreciation costs and expense budget for repair and maintenance• Income taxes• Royalty fees• Other miscellaneous operating costs relevant to your business

Exercise #1 – How well did you do? Monthly Operational Expenses

The typical formula is to calculate your pre-operational expenses and add three months worth of your estimated monthly expenses to get your required startup capital. Take note however that depending on the nature of your business, the number of months of operational costs you need to consider could be more than just three. Other businesses may require six months to a year’s worth of monthly expenses as part of their startup costs.

• Moreover, avoid starting a business without enough capital and hoping you’ll get more funding as you go along or when the business officially launch. During startup, it’s important to avoid such unnecessary financial stress and focus more on building your business concept and ensuring that it will comply to your vision.

#2 Marketing • Marketing 101• In order to successfully grow your business, you’ll need

to attract and then work to retain a large base of satisfied customers. Marketing emphasizes the value of the customer to the business, and has two guiding principles:

• All company policies and activities should be directed toward satisfying customer needs.

• Profitable sales volume is more important than maximum sales volume.

http://www.sba.gov/content/marketing-101

Marketing Strategy – Most Effective Strategy

Customer Market Approach Strategy

• A customer market approach strategy is a sound strategy for any business. Marketers need to focus on customer needs and design products and services, pricing and communication to meet those needs.

Read more: Marketing Strategies - How To Information | eHow.com http://www.ehow.com/marketing-strategies/#ixzz1z4yfaPgZ

Exercise #2 – Marketing Strategy With your business in mind, consider some marketing

strategies. 1) How would you identify YOUR Customers?2) How would you advertise?3) How would you convince them to purchase YOUR

services or goods? How would you stand out from your competitors?

Marketing Strategy - Suggestions• Network and attend other community events

– Always carry your business cards• From a chamber of commerce business card

exchange, to a town fair—going out and directly meeting new people is hands down the most effective way to spread the word about a small business. Some business cards, a nice smile, and a confident hand shake are all you need to make it in this venue.

Marketing Strategy - Suggestions• Generate referrals from current clients• Sometimes spreading the word starts right back

at your own door. If you have a big enough client base, you can entice them to refer friends and family. With a little effort, each one of your clients could become your very own personal sales rep.

• Give a free class or presentation

Marketing Strategy - Suggestions• Schools, chambers of commerce, and many

other groups often run regular programs and presentations that are put on by local businesses and members of the community. You can usually get involved just by sending in a proposal; first look at some of the things they've run in the past.

Marketing Strategy - Suggestions• Write an article for a newspaper or magazine• While it may cost thousands to get a half-page

ad in a newspaper, you can often times secure an entire page by writing a good article. The trick to getting published is to make sure the article is of value to your customers, and not just an advertisement for your business.

Marketing Strategy - Suggestions• Host a networking event at your business• There are dozens of groups that do monthly

business card exchanges, why not invite them to your store or office? Hosting an event is a quick way to introduce your company to 50 or more people without paying a dime.

Marketing Strategy - Suggestions• Put an ad in the yellow pages• This might be the most expensive

suggestion in the bunch; but, as some small business owners will tell you, a well placed yellow pages ad can literally put dinner on the table. You might also put one in the online yellow pages too, just for good measure.

Marketing Strategy - Suggestions• Start a blog and use the power of social media• Place booklets or fliers in strategic locations• A friend of mine just told me a story about how

he typed up several pages of home repair tips and placed them around town in various hair salons. Even with only a single logo and contact number on the entire collection, he was receiving calls within hours. Sometimes a little helpful information can go a long way.

• Go to trade shows and table-top mixers• I know that trade shows can be expensive, but if

you look carefully you might be able to find a mixer at your local chamber of commerce where you can secure a booth for a few hundred dollars. I've seen these shows help skyrocket some small businesses into the limelight. Just make sure you have a plan for engaging and following-up with people at the event.

• Bonus Tip: Partner with another business• Partnering with another business is a great way

to combine and leverage the resources of two companies. You can share contact lists, split marketing costs, and give referrals back and forth. You'll want to make sure you partner with a company that shares the same target market as you.

Marketing Strategy - Suggestions• Go to trade shows and table-top mixers

– trade shows can be expensive, but if you look carefully you might be able to find a mixer at your local chamber of commerce where you can secure a booth for a few hundred dollars. Make sure you have a plan for engaging and following-up with people at the event. http://www.charlestonchamber.net/

Marketing Strategy - Suggestions• Partner with another business• Partnering with another business is

a great way to combine and leverage the resources of two companies. You can share contact lists, split marketing costs, and give referrals back and forth. You'll want to make sure you partner with a company that shares the same target market as you.

CASE STUDYhttp://www.lawnsite.com/forumdisplay.php?f=58

http://www.ocalalawns.com/lawn-clean-up.html

http://www.youtube.com/watch?v=fESagw1oQlw

CASE STUDYhttp://www.yourteacher.com/

http://www.yourteacher.com/ged-test-prep.php

#2 Marketing • Marketing1) Branding• a) Logo• 2) Advertising• 4) Customer Base

#2 Marketing Marketing 101• Determine the needs of customers through

market research• Analyze competitive advantages to develop a market

strategy • Select specific markets to serve by target marketing • Determine how to satisfy customer needs by identifying

a market mixhttp://www.sba.gov/content/marketing-101

#2 Marketing Marketing 101 – Market ResearchPrimary research is research in which you go directly to the

source to gather data or ask questions. Primary research methods can include:

• Holding in-person focus groups with members of your target market

• Interviewing members of your target market in person or by phone

• Visiting your competitors' stores or locations• Conducting surveys of your target market either online, in

writing, or through social media tools such as Facebook or Twitter

Source: http://www.allbusiness.com/marketing/market-research/2587-1.html#ixzz1z4wt1TIh

#2 Marketing Marketing 101 – Market ResearchSecondary research is data that's been gathered and published by

other researchers or sources. You can get secondary research by:• Reading articles in trade journals, industry publications, or

websites• Doing Internet searches• Visiting a reference library• Contacting industry associations or trade organizations

Source: http://www.allbusiness.com/marketing/market-research/2587-1.html#ixzz1z4xXHbHH

#2 Marketing Marketing 101 – Market ResearchSecondary research is data that's been gathered and published by

other researchers or sources. You can get secondary research by:• Reading articles in trade journals, industry publications, or

websites• Doing Internet searches• Visiting a reference library• Contacting industry associations or trade organizations

Source: http://www.allbusiness.com/marketing/market-research/2587-1.html#ixzz1z4xXHbHH

Resources

• http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/marketing-new-business