How to Start a Business and Write a Business Plan John C. Kelly, PhD.

How to Start a Business How to Start a Business and and

Write a Business PlanWrite a Business Plan

John C. Kelly, PhDJohn C. Kelly, PhD

CourseCourseMission StatementMission Statement

Each student to write a Each student to write a

business planbusiness plan

Topics by WeekTopics by Week

►What is a business?What is a business?► FinancialFinancial► FinancialFinancial

►MarketingMarketing►OperationsOperations►Wrap UpWrap Up

Instructor ProfileInstructor Profile

►Owned a computer software company for 17 Owned a computer software company for 17 yearsyears

► Served on company boardsServed on company boards► Business consultantBusiness consultant► SCORE VolunteerSCORE Volunteer► Angel investorAngel investor►Degrees in math, computer science, Degrees in math, computer science,

industrial engineering, business industrial engineering, business administrationadministration

Student ProfilesStudent Profiles

►NameName►EducationEducation►Work ExperienceWork Experience►Computer ExperienceComputer Experience►Business ExperienceBusiness Experience►Business IdeaBusiness Idea►Main concerns/questionsMain concerns/questions►Business description if existingBusiness description if existing

Discussion QuestionDiscussion Question

What is a business?What is a business?

What a Business is What a Business is not?not?

Something to keep you Something to keep you BUSYBUSY

What a Business is?What a Business is?

An organization created to An organization created to MAKE MONEY!MAKE MONEY!

Fundamental Business Fundamental Business FormulaFormula

Profit = Revenue – ExpensesProfit = Revenue – Expenses

TerminologyTerminology

►Profit ~ Earnings ~ IncomeProfit ~ Earnings ~ Income►Revenue ~ Sales ~ IncomeRevenue ~ Sales ~ Income

Classification of BusinessesClassification of Businesses

► Service versus productService versus product► Product: retail / wholesale / manufacturingProduct: retail / wholesale / manufacturing► Consumer versus B-to-BConsumer versus B-to-B► Vision: independence/wealth/life style/impactVision: independence/wealth/life style/impact► Growth: fast versus slow Growth: fast versus slow ► Size: large versus smallSize: large versus small► Capitalization: cash vs debt vs investorsCapitalization: cash vs debt vs investors► Risk: high versus lowRisk: high versus low► Legal Structure: proprietorship / partnership / Legal Structure: proprietorship / partnership /

corporationcorporation► Ownership: single vs multiple - public vs privateOwnership: single vs multiple - public vs private► Tax Structure: separate or individualTax Structure: separate or individual

Consumer versus B-T-BConsumer versus B-T-B

AttributeAttribute ConsumerConsumer BTBBTB

Work hoursWork hours Erratic: nights, WEErratic: nights, WE Normal: 8-5Normal: 8-5

Profit MarginProfit Margin LowLow HighHigh

BuyerBuyer EmotionalEmotional RationalRational

DistributionDistribution ExpensiveExpensive CheapCheap

Marketing Marketing CostCost HighHigh LowLow

Discussion Question:Discussion Question:

What core skills should a What core skills should a

business owner have?business owner have?

Core SkillsCore Skills

►Professional/Technical (product/service Professional/Technical (product/service knowledge)knowledge)

►PersonalPersonal►BusinessBusiness►OperationalOperational

Personal SkillsPersonal Skills

►AttitudeAttitude►Time ManagementTime Management►Money ManagementMoney Management►Communication Skills Communication Skills

(speaking/writing)(speaking/writing)►Quantitative thinkingQuantitative thinking

Business SkillsBusiness Skills

►Accounting/FinancialAccounting/Financial►SalesSales►MarketingMarketing►Personnel ManagementPersonnel Management►AdministrativeAdministrative

Operational SkillsOperational Skills

►OrganizationalOrganizational►AdministrativeAdministrative►ManagerialManagerial►ComputerComputer►Project ManagementProject Management

Reasons Businesses FailReasons Businesses Fail

►Lack of skillsLack of skills►Lack of planningLack of planning►Lack of commitmentLack of commitment►Lack of focusLack of focus►Lack of moneyLack of money

What is a Business What is a Business Plan?Plan?

Explanation of how Explanation of how you will make you will make

moneymoney

SWOT AnalysisSWOT Analysis

PositivePositive NegativeNegative

InternalInternal StrengthsStrengths WeaknessesWeaknesses

ExternalExternal OpportunitiesOpportunities ThreatsThreats

Discussion QuestionDiscussion Question

What makes a good What makes a good

mission statement?mission statement?

Mission StatementsMission Statements

►ShortShort►MemorableMemorable►MotivationalMotivational►FocusedFocused►RealisticRealistic

Mission Statement ExamplesMission Statement Examples► To enrich women’s lives through an unequalled business To enrich women’s lives through an unequalled business

opportunity opportunity ► To organize the world’s information and make it universally To organize the world’s information and make it universally

accessible and usefulaccessible and useful► To discover, develop, and deliver novel medicines and To discover, develop, and deliver novel medicines and

vaccines that can make a difference in people's lives. vaccines that can make a difference in people's lives. ► To be the most essential global internet service for consumers To be the most essential global internet service for consumers

and businessand business► To provide innovative, customized promotional products for To provide innovative, customized promotional products for

corporate America, delivering the highest quality product on corporate America, delivering the highest quality product on time – every time.time – every time.

► To help people and businesses throughout the world realize To help people and businesses throughout the world realize their potentialtheir potential

► To maximize the performance of computer systemsTo maximize the performance of computer systems

Mission StatementsMission Statements► To enrich women’s lives through an To enrich women’s lives through an

unequalled business opportunity unequalled business opportunity ► To organize the world’s information To organize the world’s information

and make it universally accessible and make it universally accessible and usefuland useful

► To discover, develop, and deliver To discover, develop, and deliver novel medicines and vaccines that novel medicines and vaccines that can make a difference in people's can make a difference in people's lives. lives.

► To be the most essential global To be the most essential global internet service for consumers and internet service for consumers and businessbusiness

► To provide innovative, customized To provide innovative, customized promotional products for corporate promotional products for corporate America, delivering the highest America, delivering the highest quality product on time – every quality product on time – every time.time.

► To help people and businesses To help people and businesses throughout the world realize their throughout the world realize their potentialpotential

► To maximize the performance of To maximize the performance of computer systemscomputer systems

► Mary KayMary Kay► GoogleGoogle► MerckMerck► YahooYahoo► G&G OutfilltersG&G Outfillters► MicrosoftMicrosoft► DatametricsDatametrics

HomeworkHomework

►Business DescriptionBusiness Description►SWOT AnalysisSWOT Analysis►Find an example of a company like Find an example of a company like

yours and analyze its web site yours and analyze its web site ►Write a mission statementWrite a mission statement►Be prepared to share with classBe prepared to share with class