Chapter 8
New Entrant Business
A firm whose product or service is established elsewhere, but is new to this market.
Proof-of-Concept Website
An Internet-based type of business plan providing information or demonstration of a product or service designed to solicit information on customer interest.
Invention Plan
A business plan that provides information to potential licensees. Invention plans focus on the details of an invention, including intellectual property rights.
Business Plan Strategizing Model
Mantra Mission Measurement Methods Mechanics
Appendices
one-page version of owner's resume Product or service pictures or specifications Copies of signed contracts Results from marketing studies or pilot sales efforts Industry reports
Tagline
Memorable catchphrase that captures the key idea of a business, its service, product, or customer. also known as a slogan
Company Background
brief description of the company, the firm's current status, and the history of the business Vision statement / mission statement Specific goals, Business' competitive advantage
Screening Plan
gives the basic overview of the firm and a detailed look at the financials.
Also called a mini-plan
Screening Plan
Elevator Pitch
A 30-second action-oriented description of a business designed to sell the idea of the business to another
Pioneering Business
A firm whose product or service is new to the industry or is itself creating a new industry.
Executive Summary
A one- to two-page (250-500 words) overview of the business, its business model, market, expectations, and immediate goals
Cover Letter
A one-page document on business stationery that introduces the business plan and the business owner to the recipient and indicates why the recipient is being asked to read the plan.
Mission Statement
A paragraph that describes the firm's goals and competitive advantages
Private placement memorandum
A specialized legal form of business plan crafted by lawyers for the purpose of soliciting formal investments.
Vision Statement
A very simple 5-10 word sentence or tagline that expresses the fundamental idea or goal of the firm.
The Company: Product/service and industry
Describe firm's product or service Explain how the customer uses the product Proprietary technology Industry descriptions
The Organization: Location
Description of the facility How it meets strategic and sales goal of the business Own, lease, or rent the property Plan to expand the facilities
Informational Plans
Give potential customers or suppliers information about the company and its product or service.
The Organization: Related service providers
Identify your bank and banker, attorney and legal firm, accountant or bookkeeper, other consultants Major relationships established with well-known suppliers or customers Board of directors / board of advisors
Preselling
Involves introducing your product to potential customers and taking orders for later delivery.
The Organization: Legal and organization structures
Legal form of the business Organizational structure of the firm Makes clear how many employees there are and whether they are full time or part time, permanent or seasonal, family or non-family
Types of Risks
Overstated numbers Uncertain sales Overlooked competition Experience deficits Inadequate cushion Inadequate payback
Key Employee/ Partner Plan
Provides information on the company, product/service, market, and critical risks to prospective business or marketing partners or to prospective key employees
The Organization: Key personnel
Sell the most important single element in the business plan - you! Who are your key personnel? Talk about accomplishments rather than just experience Do not limit yourself to business
Test Marketing
Selling your product or service in a limited area, for a limited time.
External Legitimacy
The extent to which a small business is taken for granted, accepted, or treated as viable by organizations or people outside the small business or the owner's family.
Research and Development
The part of a business that is focused on creating new products or services and preparing new technologies, ideas, products, or services for the firm's market.
The Market: Market and target customer
Total population of people or firms you plan to sell to Target customer section: focuses attention on who would buy Demographics' relation to the product, how often they buy, and past experience
What documents are contained in a business plan?
Vision Statement Mission Statement Elevator Pitch Executive Summary Business Plan
Title Page
contains introductory information Company name Contact information Date this version of the plan was completed Proprietary statement to protect your ideas
Internal Understanding
extent to which employees, investors, and family members in the business know the business's purposes and operations
Operational Plan
Business plans designed to be used internally for management purposes.
Business Plan
A document designed to detail the major characteristics of a firm
Table of Contents
Lists major section headings Boldface type Sections underneath major sections Normal type Put page numbers on every page of the business plan
Risks
The parts of a business or business plan that expose the firm to any kind of loss—profits, sales, reputation, assets, customers, and so on.