8/14/2019 How to Write a Perfect Business Plan? http://slidepdf.com/reader/full/how-to-write-a-perfect-business-plan 1/22 Entrepreneurship Entrepreneurship Types of ownership Types of ownership • Sole proprietorship Sole proprietorship • Partnership Partnership • Corporation, or limited liability Corporation, or limited liability company (LLC). company (LLC). There's no one choice that fits every business; your job is to pick the There's no one choice that fits every business; your job is to pick the form that best meets your needs form that best meets your needs • The potential risks and liabilities of your business The potential risks and liabilities of your business • The formalities and expenses involved in establishing and The formalities and expenses involved in establishing and maintaining the various business structures maintaining the various business structures • Your income tax situation, and your investment needs Your income tax situation, and your investment needs • Risks and Liabilities Risks and Liabilities
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• Sole proprietorshipSole proprietorship• PartnershipPartnership• Corporation, or limited liabilityCorporation, or limited liability
company (LLC).company (LLC).
There's no one choice that fits every business; your job is to pick theThere's no one choice that fits every business; your job is to pick the
form that best meets your needsform that best meets your needs
• The potential risks and liabilities of your businessThe potential risks and liabilities of your business• The formalities and expenses involved in establishing andThe formalities and expenses involved in establishing and
maintaining the various business structuresmaintaining the various business structures• Your income tax situation, and your investment needs Your income tax situation, and your investment needs• Risks and LiabilitiesRisks and Liabilities
What’s a winning business name?What’s a winning business name?
A business name that draws A business name that draws
business in itself.business in itself.
• Memorable – but easy to spell.Memorable – but easy to spell.• Needs a visual elementNeeds a visual element• Has to have positive connotationHas to have positive connotation• Needs to include information about what your business does.Needs to include information about what your business does.
These days, cheery talk of IPO riches doesn't cut it. What investors seek areThese days, cheery talk of IPO riches doesn't cut it. What investors seek arestartups likely to be acquired by the major players.startups likely to be acquired by the major players.
When entrepreneurs go searching for venture capital, one of the firstWhen entrepreneurs go searching for venture capital, one of the firstquestions they must be prepared to answer is howquestions they must be prepared to answer is how
prospective investors will recoup their investments.prospective investors will recoup their investments.THINKI NG THI NG S THR OUG H.HINKI NG THI NG S THR OUG H.
To assure today's VC's that they will be able to exit with their investments andTo assure today's VC's that they will be able to exit with their investments andprofits, the correct answer -- or part of it -- is that the business theyprofits, the correct answer -- or part of it -- is that the business theyare being asked to back will be acquired by another, usually larger,are being asked to back will be acquired by another, usually larger,
entity. Unfortunately, it's not enough to simply talk about beingentity. Unfortunately, it's not enough to simply talk about being
acquired. An entrepreneur needs to envision the scenario in detail:acquired. An entrepreneur needs to envision the scenario in detail:
• How will it happen?How will it happen?
• What kind of acquirer will it be?What kind of acquirer will it be?
• How will valuations be determined?How will valuations be determined?
• What is the likely timetable?What is the likely timetable?
Evaluating Financing OptionsEvaluating Financing OptionsPersonal Personal PotentialControl Risk Reward
Personal Resources H H H
Financial Institutions(Debt Financing) L - M L L – MVenture Capitalists(Equity-Debt Financing) L – M L L – MAngel Investors(Equity Financing) L – M L L – M
Public OfferingsEquity Financing) L L L – HBusiness Development
An overview of the industry sector that your business will be a part An overview of the industry sector that your business will be a part
of, including industry trends, major players in the industry, andof, including industry trends, major players in the industry, and
estimated industry sales. This section of the business plan will alsoestimated industry sales. This section of the business plan will also
include a summary of your business's place within the industry.include a summary of your business's place within the industry. • Industry OverviewIndustry Overview• What is the size of your industry?What is the size of your industry?• What sectors does this industry include?What sectors does this industry include?• Who are the major players in this industry?Who are the major players in this industry?
• What are the markets and customers for this industry?What are the markets and customers for this industry?• What are the industry's estimated sales this year? Last year?What are the industry's estimated sales this year? Last year?
The year before?The year before?• What national/economic trends have affected this industry andWhat national/economic trends have affected this industry and
how?how?• What national/economic trends might affect it in the futureWhat national/economic trends might affect it in the future
An outline of your business' legal structure and management resources, An outline of your business' legal structure and management resources,
including your internal management team, external managementincluding your internal management team, external management
resources, and human resources needs.resources, and human resources needs.
The Management Plan section describes your management team andThe Management Plan section describes your management team and
staff and how your business ownership is structured. People reading yourstaff and how your business ownership is structured. People reading your
business plan will be looking to see not only who's on your managementbusiness plan will be looking to see not only who's on your managementteam but also how the skills of your management and staff willteam but also how the skills of your management and staff will
contribute to the bottom line.contribute to the bottom line.
This is an examination of the primary target market for your product orThis is an examination of the primary target market for your product or
service, including geographic location, demographics, your targetservice, including geographic location, demographics, your target
market's needs and how these needs are being met currently.market's needs and how these needs are being met currently.
The competitive analysis section can be the most difficult section toThe competitive analysis section can be the most difficult section to
compile when writing a business plan. Before you can analyze yourcompile when writing a business plan. Before you can analyze your
competitors, you have to investigate them.competitors, you have to investigate them.
You need to know: You need to know:• What markets or market segments your competitors serve;What markets or market segments your competitors serve;• What benefits your competition offers;What benefits your competition offers;• Why customers buy from them;Why customers buy from them;• And as much as possible about their products and/or services, And as much as possible about their products and/or services,
This is a detailed explanation of your sales strategy, pricing plan,This is a detailed explanation of your sales strategy, pricing plan,
proposed advertising and promotion activities, and product or service'sproposed advertising and promotion activities, and product or service's
benefits.benefits.
The Marketing Plan section explains how you're going to get yourThe Marketing Plan section explains how you're going to get your
customers to buy your products and/or services.customers to buy your products and/or services.
The marketing plan, then, will include sections detailing your:The marketing plan, then, will include sections detailing your:
• Products and/or Services and your Unique Selling PropositionProducts and/or Services and your Unique Selling Proposition• Pricing StrategyPricing Strategy• Sales/Distribution PlanSales/Distribution Plan• Advertising and Promotions Plan Advertising and Promotions Plan
A description of your business' physical location, facilities and equipment, A description of your business' physical location, facilities and equipment,
kinds of employees needed, inventory requirements and suppliers, andkinds of employees needed, inventory requirements and suppliers, and
any other applicable operating details, such as a description of theany other applicable operating details, such as a description of the
manufacturing process.manufacturing process.
Keeping focused on the bottom line will help you organize this part of Keeping focused on the bottom line will help you organize this part of
the business plan; think of the operating plan as an outline of thethe business plan; think of the operating plan as an outline of the
capital and expense requirements your business will need to operatecapital and expense requirements your business will need to operate
from day to day.from day to day. You need to do two things for your readers in the operating section of You need to do two things for your readers in the operating section of
the business plan: show what you've done so far to get your businessthe business plan: show what you've done so far to get your business
off the ground (and that you know what else needs to be done) andoff the ground (and that you know what else needs to be done) and
demonstrate that you understand the manufacturing or delivery processdemonstrate that you understand the manufacturing or delivery process
of producing your product or service.of producing your product or service.
Basically, the financial plan section of the business plan consists of threeBasically, the financial plan section of the business plan consists of three
Once again, this is just a partial list to get you going. Once you haveOnce again, this is just a partial list to get you going. Once you have
your operating expenses list complete, the total will show you what ityour operating expenses list complete, the total will show you what it
will cost you to keep your business running each month.will cost you to keep your business running each month.
Multiply this number by 6, and you have a six-month estimate of yourMultiply this number by 6, and you have a six-month estimate of your
operating expenses. Then add this to the total of your start upoperating expenses. Then add this to the total of your start up
expenses list, and you'll have a ballpark figure for your complete startexpenses list, and you'll have a ballpark figure for your complete startup costs.up costs.
Any additional information that will help establish the credibility of your Any additional information that will help establish the credibility of your
business idea, such as marketing studies, photographs of your product,business idea, such as marketing studies, photographs of your product,
and/or contracts or other legal agreements pertinent to your business.and/or contracts or other legal agreements pertinent to your business.
The executive summary will end with a summary statement, a
“last kick at the can” sentence or two designed to persuade thereaders of your business plan with a clinching closing sentence ortwo that answers the reader’s question “Why is this a winningbusiness?”
Tip s for Writi ng th e Busin ess Plan’s Ex ecuti veSumm ary
Focus on providing a summary. The business plan itself willprovide the details and whether bank managers or investors,the readers of your business plan don’t want to have theirtime wasted.
Keep your language strong and positive. Don’t weaken the
executive summary of your business plan with weak language.Instead of writing, “…might be in an excellent position to wingovernment contracts”, write “…will be in an excellent
The executive summary should be no more than two pages long.Resist the temptation to pad your business plan’s executivesummary with details (or pleas). The job of the executive
summary is to present the facts and entice your reader to readthe rest of the business plan, not tell him everything.
The Executive Summary of the Business Plan
Polish your executive summary. Read it aloud. Does it flow or doesit sound choppy? Is it clear and succinct? Once it sounds good to
you, have someone else who knows nothing about your businessread it and make suggestions for improvement.
Tailor the executive summary of your business plan to youraudience. If the purpose of your business plan is to enticeinvestors, for instance, your executive summary should focus onthe opportunity your business provides investors and why theopportunity is special.
The Executive Summary of the Business Plan
Put yourself in your readers’ place... and read your executivesummary again. Does this executive summary generate interest orexcitement in the reader? If not, why?
Remember, the executive summary of the business plan will bethe first thing the readers of the business plan read. If yourbusiness plan’s executive summary is poorly written, it will also bethe last, as they set the rest of your business plan aside unread!