Create Your Business Plan

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Create Your Business Plan
Session 1

• A SCORE Seminar
• Sponsored by Southwest Florida SCORE Chapter 219
• In cooperation with Edison College

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Instructors

• Hartley MoreyThirty years of Marketing and
  Merchandizing experience with high end fashion
  retailer (Macys), subsequently owning and
  operating up to four retail fashion stores on
  Sanibel and Captiva Islands for another 17
  years.
• Ray RandlettA part owner of a Florida firm that
  provided cable television installers for cable,
  satellite and microwave firms in the southeastern
  United States. Prior to moving to Florida, he
  spent many years working in public affairs and
  government relations for large industrial
  companies. He also worked for the U.S. Department
  of Labor and U.S. Agency For International
  Development.
• Denny WeimerRetired business executive with 33
  years experience in Engineering, Marketing,
  International Sales, Manufacturing and Senior
  Management.

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Purpose and Expectation from Seminar

• ParticipantsAttend class.Openly participate in
  class/lab work.Complete homework
  assignments.Throughout the process, you will be
  identifying COSTYou should have a
  first-pass Business Plan at the end!
• InstructorsExplain the purpose and content of a
  Business Plan.Encourage questions.Review and
  return previous assignments.

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Caveats

• While we will be progressing through the Business
  Planning Process, when done, a Business Plan must
  be complete and consistent.
• As you progress, you will develop info that
  modifies/conflicts previous work. Keep a current
  master and mark up as you proceed.
• Some will probably find this process too
  difficult.

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Agenda for the Seminar

• Session 1Broad overview of a Business
  PlanFocused coverage ofThe MarketThe
  BusinessThe Marketing Plan
• Session 2Focused coverage of The Operational
  PlanThe Management PlanSupporting Partners

• Session 3In depth coverage of The
  FinancialsThe Executive Summary
• Session 4Summarize purpose of Business
  PlanMonitoring and long-term useParticipants
  Business Plan presentations

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The Business Plan

• What is it?
• It is a roadmap. If you dont know where you
  are going, how will you know when you have
  arrived?
• A Business Plan is a document consisting of a
  narrative (part 1) and several financial
  worksheets (part 2) which allows its author to
  research and think about the business in a
  systematic way and evaluate the feasibility of
  the business venture.

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The Business Plan

• Why do it?
• To provide you, the business owner, with a
  reasonable blueprint for operating a successful
  business. With it you will understand the
  Market, the opportunity, the full cost picture
  and the feasibility of the business becoming
  profitable.
• A potential investor/lender, whether banks or
  venture capitalists, will want a complete
  Business Plan to review and evaluate the
  risk/reward of their investment.
• It may be a useful tool to share (partial or
  complete) with employees to enhance understanding
  and commitment.

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The Business Plan

• There are a variety of formats, but content is
  what matters!
• Some Sources
• www.score.org (Business Tools)
• www.sba.gov (MP-4, MP-5, MP-9, MP-11, MP-15)
• BusinessPlanPro software (gt200, )
• Library/Business School Books

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Business Plan Format

• NarrativesExecutive Summary (done last) The
  MarketThe BusinessThe Marketing PlanThe
  Operational PlanThe Management PlanThe Business
  Support Plan (legal, insurance, accounting and
  banking)

• FinancialsBalance Sheet/Net Worth Sources and
  Application of fundsCapital Equipment ListYear
  1 Income ProjectionYear 2 Income ProjectionYear
  3 Income ProjectionCash Flow ProjectionBreak
  Even Analysis

Formats do vary. Our course will use this
particular one to assure completeness and
consistency.
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• 5 Minute Break

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The Market

• The most difficult part of your Business Plan
• If you do this well, the rest of the Plan will
  seem easy.
• If you cant quantify it, then why would anyone,
  including yourself, invest in a business based on
  emotion or enthusiasm?

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The Market

• Describe the overall Market in detail and
  establish some quantifiable value for its size,
  dollars, units, etc.
• What are its segments and how big is each?
• In what segment (target market) will your company
  participate?
• What is the current demand in this segment?
• Trends in target market (client preferences,
  growth potential, product/service development,
  etc.).

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The Market

• Primary research means gathering your own data.
  Traffic count at a location. Focus-Group
  interviews of client preferences Yellow page
  research.
• Secondary research means using published
  information. Census data. Demographic
  profiles. Industry profiles. Trade
  journals. Newspapers.
• Quantify the Market using unbiased facts, not
  personal opinion.

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The Market Research Sources

• Library (ask librarian for guidance).
• The Internet.
• Trade Associations.
• Chamber of Commerce.
• Vendors who sell to the industry.
• Government agencies (Economic Development, Tax
  Collector).
• Competition.

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The Business

• What business will you be in? What will you do?
  Where will it be located?
• Legal form of ownership (Sole proprietorship,
  Partnership, Limited Liability Company, S Corp, C
  Corp and why have you selected this form). More
  later!
• Business Philosophy (What is important to you in
  business).
• Mission Statement (Handout)
• Goals Objectives (Handout)
• To whom will you market your products (State it
  briefly hereyou will do a more thorough
  explanation in the Marketing Plan section).
• Describe your most important company strengths
  and core competencies (This should introduce your
  Market Strategy) Price/cost Quality Delivery
  Speed Delivery Reliability Product
  Design Flexibility Aftermarket Service Image

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The BusinessDiscussion of Market Strategy/Order
Winners

• Price/cost
• Quality
• Delivery Speed
• Delivery Reliability

• Product Design
• Flexibility
• Aftermarket Service
• Image

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Progress Report

• Thus far, you have illustrated that you know the
  Market and the basis for your Business.
• Now you will define how you will attack that
  target Market and defeat the competition.
• This step is called the Marketing Plan.

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The Marketing Plan

• This is about knowing your clients.
• This is about knowing your competition.
• This is about knowing your products and services.
• This is about selecting a target market and
  establishing a Strategy that will succeed in that
  market.
• This is about establishing the expected market
  penetration over time, which establishes your
  Sales (revenue) Forecast.
• And finally, this is about clearly describing and
  costing how you will reach the target market
  (advertising sales promotion).

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The Marketing Plan Narrative

• Clients
• Competition
• Marketing StrategyWhy and how much you will win
  in the Market.
• Sales Forecast (3 years by month)
• Advertising Sales Promotion

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The Marketing Plan - Clients

• Depending on the Market (Retail, Service,
  Industrial), the questions/issues may diverge
  somewhat.
• Create a demographic profile for each of the
  Markets segments (clients may have differing
  preferences) identifying client preferences (why
  do they buy?).

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The Marketing Plan Retail Clients

• Age
• Gender
• Location
• Income level
• Social class and occupation
• Education
• Buying Preferences (price, quality, delivery
  speed, delivery reliability, product design,
  flexibility, aftermarket service, image)

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The Marketing Plan Service Clients

• Type of client, e.g., commercial property,
  residential, golf course.
• Locations
• Buying Preferences (price, quality, delivery
  speed, delivery reliability, product design,
  flexibility, aftermarket service, image)

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The Marketing Plan Industrial Clients

• Industry (or portion of an industry)
• Locations
• Size of firm
• Buying Preferences (price, quality, delivery
  speed, delivery reliability, product design,
  flexibility, aftermarket service, image)

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The Marketing Plan - Clients

• Some people will try to get fairly sophisticated
  in this type of analysis by putting market size
  ( volume) by segment into some form of client
  preference weighting to identify opportunity.

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The Marketing Plan - Competition

• What products and companies will compete with
  you?
• List your major competitors (Names and addresses)
• What is their market share by market segment?
• What is each ones Market Strategy?
• Will they compete with you across the board, or
  just for certain products, certain customers, or
  in certain locations?
• Will you have important indirect competitors?
  (For example, video rental stores compete with
  theaters, although they are different types of
  businesses.)
• How will your products or services compare with
  the competition?
• What can you learn from them?

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The Marketing Plan - Competition
A picture can be worth a thousand words!
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The Marketing Plan - Strategy

• Armed with this information, you should
  establish/reconfirm your Market Strategy.
• Given the selected target market(s) and the
  strategy (price/cost, quality, delivery speed,
  delivery reliability, product design,
  flexibility, aftermarket service, image), you
  should be able to project your market share
  (penetration) over time.
• This will generate your Sales Forecast.

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The Marketing Plan ASP

• Advertising Sales Promotion can be expensive.
• Choose wisely.
• Look for inexpensive/piggyback ways to get to
  your clients.
• Define where you will spend, how much and when.

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The Marketing Plan ASP Methods C

• Newspaper
• Television
• Radio
• The Internet
• Samples
• Seminars
• Sponsoring events
• Trade shows
• Company name on cars

• Circulars and brochures
• Canvassing
• Personal letters
• Telephone marketing
• Signs on bulletin boards
• Tee Shirts
• Outdoor signs
• Yellow Pages
• Loyalty Programs

Reprinted Courtesy of The Shnider Group
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Special Discussion- The Internet

• From a simple informational website presence to a
  full scope order thru delivery thru satisfaction
  survey form (e-Business).
• Online advertising trackable.
• Search engine hierarchy.
• Yellow pages.com
• Company blog.

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The Marketing Plan Final Points

• Clothes you and employees wear C
• Telephone etiquette
• Business cards C
• Stationery C
• Hours you are available
• Website C
• Personal hygiene

The Marketing Plan is all about how you and your
employees will approach the Market!
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Homework Assignment Session 1

• Prepare Business Plan Narratives The Market The
  Business The Marketing PlanAs a minimum, you
  must have a three year Sales Forecast by month!
• Turn in a copy at the next session
• Supplemental Material Lee County Demographic
  Profile Sources and Application of Funds
  Worksheet Capital Equipment Worksheet Competitio
  n Analysis Worksheet Sales Forecast Worksheet

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Session 1 Lab Time Permitting

• Break into groups of three.
• Network with each other about sources to
  investigate for input to these sections of the
  Business Plan.
• Seek clarification from instructors.