Embed Size (px)
Citation preview
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Chapter Chapter Chapter Chapter
Develop a Business Plan 3.1 Why a Business Plan is Important3.1 Why a Business Plan is Important
3.2 What Goes into a Business Plan?3.2 What Goes into a Business Plan?
3.3 How to Create an Effective 3.3 How to Create an Effective Business PlanBusiness Plan
3
Chapter 3Slide 2
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Ideas in Action
Two young men turned a passion for graffiti art into a business.
Prior to requesting financing from a bank, you should prepare the “five c’s.” character capacity capital collateral conditions
Turning an Idea into a Business
Chapter 3Slide 3
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Lesson 3.1
Why a Business Plan is Important
Goals Explain the purpose of writing a good
business plan. Describe the importance of a business
plan.
Chapter 3Slide 4
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Terms business plan
Chapter 3Slide 5
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
The Business Plan
business plan a written document that describes all the
steps necessary for opening and operating a successful business
A business plan will: describe your ideas to investors serve as a guide for you as you start your
business
Chapter 3Slide 6
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
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 you will achieve them
describes the experience of the people who will run the business
Chapter 3Slide 7
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
What are the three main purposes of a business plan?
Chapter 3Slide 8
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Importance of a Business Plan
A business plan: makes you think about all aspects of your
business may help you secure financing helps you communicate your ideas to
others can serve as a tool for managing your
business
Chapter 3Slide 9
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Why is a business plan important to an entrepreneur?
Chapter 3Slide 10
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Lesson 3.2
What Goes into a Business Plan?
Goals List and describe the basic elements of
a business plan. Describe how to pull a business plan
together.
Chapter 3Slide 11
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Terms pro forma financial statement cover letter statement of purpose executive summary
Chapter 3Slide 12
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Basic Elements of a Business Plan The three basic components of a
business plan are: introductory materials the main body the appendix
Chapter 3Slide 13
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Introduction Marketing Financial Management Operations Concluding Statement
The main body of a business plan contains the following elements:
Chapter 3Slide 14
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Introduction
The introduction should contain the following information: A detailed description of business goals
short, medium, and long-term goals
Chapter 3Slide 15
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
sole proprietor, partnership, or corporation
Your applicable skills and experience paid, volunteer, and hobbies
The legal structure of the business, including ownership
Chapter 3Slide 16
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Performance Quality Reliability Distribution Price Promotion Public image or reputation
The competitive advantages of your business
Chapter 3Slide 17
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Marketing
The marketing section of the business plan should describe: Products and/or services Market Industry Location
Chapter 3Slide 18
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Financial Management
Identification of Risks It is reassuring to lenders to know that you
have proactively defined risks and that you have a plan for dealing with them.
Chapter 3Slide 19
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
pro forma financial statement a financial statement based on projected revenues
and expenses
Funding Request and Return on Investment personal investment loan based financing anticipated return on investment
Financial Statements
Chapter 3Slide 20
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Operations
daily business management staffing facilities
buy or lease
equipment
Chapter 3Slide 21
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Concluding Statement
Summarize goals and objectives. Emphasize your commitment to the
success of your business.
Chapter 3Slide 22
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
List the elements of the main body of a business plan and explain why each one is important.
Chapter 3Slide 23
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Complete the Business Plan
Introductory elements cover letter
a letter that introduces and explains an accompanying document or set of documents
Chapter 3Slide 24
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Chapter 3Slide 25
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Table of Contents Statement of Purpose
a brief explanation of why you are asking for a loan and what you plan to do with the money
Title Page
Chapter 3Slide 26
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Chapter 3Slide 27
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
a short restatement of the report
An executive summary should: compel the reader to continue reading describe your business concept include financial projections identify physical needs state the requested loan value
Executive Summary
Chapter 3Slide 28
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Chapter 3Slide 29
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
includes supporting documents that provide additional information to support the body of the report
Put It All Together The business plan should be:
neat attractive well organized inviting to read
Appendix
Chapter 3Slide 30
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Why should you include supporting documents in your business plan?
Chapter 3Slide 31
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
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.
Chapter 3Slide 32
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Terms Small Business Administration (SBA) Small Business Development Centers
(SBDC) Service Corps of Retired Executives
(SCORE) trade associations
Chapter 3Slide 33
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Research the Business Plan
Most entrepreneurs spend 50 to 100 hours developing their business plan.
Chapter 3Slide 34
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Community, Government, and Professional Resources Small Business Administration
(SBA) an independent government agency helps Americans develop new businesses
Chapter 3Slide 35
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
a cooperative effort of the private sector, the educational community, and federal, state, and local governments
provides free, individualized help for business plan development for those who cannot afford a private consultant
Small Business Development Centers (SBDC)
Chapter 3Slide 36
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
retired executives provide free, confidential advice to entrepreneurs either in person or over the Internet both short-term and long-term assistance is
available
Service Corps of Retired Executives (SCORE)
Chapter 3Slide 37
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
provides information on local business trends
Trade Associations organizations that are comprised of
professionals in a specific industry provide educational and networking
opportunities
Chamber of Commerce
Chapter 3Slide 38
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
experts who will provide business assistance for a fee
Financial Institutions Bankers and Accountants can provide
information about loans and financial statements.
Professional Consultants
Chapter 3Slide 39
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Print Resources
library magazines government documents
Chapter 3Slide 40
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Online Resources
Provide information similar to library information
Industry specific websites Websites targeted to entrepreneurs and
small business owners
Chapter 3Slide 41
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
What are some of the resources that are available to help you develop your business plan?
Chapter 3Slide 42
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
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
Chapter 3Slide 43
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
List some common mistakes that are made in business planning.
Chapter 3Slide 44
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
PERFORMANCE INDICATORS EVALUATED Demonstrate effective communication skills. Demonstrate skills in developing a speech
using the three basic elements.
Chapter 3Slide 45
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
Apply speaking techniques using appropriate tempo and pitch.
Secure facts and data from multiple sources, emphasizing research skills.
Utilize non-verbal gestures as needed.
Chapter 3Slide 46
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
THINK CRITICALLY
1. How can good speaking skills benefit an entrepreneur?
2. Why is research important when preparing a speech?
Chapter 3Slide 47
Entrepreneurship: Ideas in Action© Cengage Learning/South-Western
4. How do the three elements of a speech contribute to its effectiveness?
3. Why should you follow copyright laws when preparing a speech?
