Objective 2.09

Develop a concept for new business venture to evaluate its success potential

Developing Personal Financial Goals

Your goals should be realistic Your goals should be specific Your goals should have a clear time frame Your goals should help you decide what type of

action to take

Make a Financial Plan

Assess your present financial situation Identify and prioritize your personal financial goals Identify alternative courses of action Evaluate your alternatives Create and maintain a budget that supports financial

goals Review and revise your plan as your financial goals

evolve

The Business Plan

A business plan is a document that decribes a new business and a strategy to launch that business

Parts of a Business Plan Executive Summary-is a brief recounting of the key points contained

in a business plan

Management Team Plan-your qualifications and any partners

Company Description-outlines the company's basic background information, business concept, and goals and objectives

Product and Service Plan-describes the features and benefits of the business's products and services

Vision and Mission Statements-sets forth the guiding principles by which a company functions

Industry overview-must address basic trends and growth within the industry

Market Analysis-presents your market research and features a customer demographic profile that defines the traits of the company's target market

Competitive Analysis-focuses on demonstrating that the proposed business has an advantage over its competitors

Market Plan-describes a company's marketing mix strategies or how it plans to market, promote, and sell its products or services

Operational Plan-includes information about all the processes that take place n the business

Organizational Plan-offers information about the business's legal structure, methods of and responsibilities for record keeping, ad legal and insurance issues

Financial Plan-presents past and current finances and financial forecasts and explains the assumptions made when calculating forecast figures

Growth Plan-looks at how the business will expand in the future

Contingency Plan-examines the assumptions in the business plan and the greatest risks to the business and suggests plans to minimize the risk

Cover Page-first page of the business plan and includes the company's name, address, phone number, web site address, e-mail address, and company logo

Title Page-follows the cover page and includes the company name; names, titles, and addresses of the owners; date the business plan was issued; and the name of the person who prepared the business plan

Table of Contents-details the components of the business plan and includes the titles of the major sections and subsections of the business plan, and the page number where each section and subsection is located

Supporting Documents-includes items, exhibits, and documentation relevant to the business Items to include: Copies of the owner's resumes, personal financial statements, and tax returns

For franchised business, a copy of franchise contract

For franchised businesses, all supporting documents provided by the franchisor

For partnerships, a copy of the partnership agreement

For corporations, a copy of the Articles of Incorporation

Photos, blueprints, and detailed specifications of products

An organizational blueprint

Photos and blueprints of the layout of the business's facilities

A map of the business location

Copy of proposed lease or purchase agreement for building space

Copy of contracts, licenses, and other legal documents

Copies of purchase orders and letters of intent from supplies

Business cards, press releases, marketing materials, market research highlights

Developing a Business Plan

Make a research Plan and Gather Data List the questions you want answered

Set up a notebook to organize your data Record your findings from your research in the

appropriate sections in the notebook Write a draft

Compile a draft of your business plan after you finish your research

Common mistakes in preparing business plans Projecting exaggerated growth levels Trying to be a Jack-of-All-Trades Claiming performance that exceeds industry

averages Underestimating the need for capital

Sources of business plan information-there are state, local, and national organizations and government agencies that offer resources to entrepreneurs

Small Business Administration (SBA)-a federal agency that provides services to small businesses and new entrepreneurs

Service Corps of Retired Executives (SCORE)-dedicated to provide free ace-to-face and e-mail counseling to small businesses

Small Business Development Centers (SBDCs)-program administered by the SBA

Chambers of Commerce-provide information about the local economy

Trade Association-offers technical and general assistance to entrepreneurs in a specific profession or industry

– Packaging and presenting the business plan-appearance of a business plan is important and several guidelines should be followed:

• Bind the plan so that it lies flat. A spiral binding works well

• Use index tabs to separate sections so readers can find information easily

• Use an easily readable 12-point type font, such as Times New Roman

• Use old subheadings and bullets to facilitate finding information

• If you have a logo for your business, include it at the top of every page

• Number each copy of the business plan and include a Statement of Confidentiality that the reader should sign. Keep tack of who has a copy of the plan.

• Place a statement on the cover page prohibiting copying of the plan

Performing Management Functions-when managers use a series of activities for managing

Planning Organizing Directing Controlling

These four functions occur in that order

Planning-is the act of setting goals, developing strategies, and outlining tasks and timelines to meet those goals

Strategic plans-long range objectives based on long-term goals

Tactical plans-midrange objectives based on long-term goals

Operational plans-short-term objectives that help achieve tactical plans

Planning purchases Planning-known as procurement, is the buying of

all the materials needed by the organization Model inventory-a target inventory of what you

think you will need to keep in-stock Vendors-businesses that sell you inventory

Two questions you should ask to achieve balance between too much and too little are:

How many months' supply should be on hand? How much of an investment would that represent?

Organizing-is the grouping of resources in combinations that will help you reach your objectives

Directing-the process of guiding and supervising employees, often one-on-one, while they work

Controlling-the process of comparing your expected results with actual performance

Quality control program-a set of measures built into the production process to make sure that products or services meet certain standards and performance requirements

Technology is used for business planning, bookkeeping, budgeting, and financial analysis.

Business plan software helps with writing a business plan which walks you through the creation of the plan step-by-step.

Laws That Affect Start-Up of a Business

Permits and Licenses Permit-is a legal document giving official

permission to run a business License-a certificate that shows you have the

necessary education and training to do a job Location – Several Law affects where you can

locate a business such as: Zoning laws and building codes Leasing

Contracts - binding legal agreement between two or more persons or parties

Agreement-happens when both parties accepts each others terms

Consideration-is what is exchanged for the promise Capacity-is the legal ability to enter into a binding

agreement Legality-final contract element

Resources

Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 5, 45, 100-109, 104-105, 158-161, 307-309, 331, 324-325). Woodland Hills, CA: Glencoe/McGraw-Hill.