Marketing Quiz 2
Summary plan
10-15 pages and works best for companies that are very early in their development and are not prepared to write a full plan. The authors may be asking for funding to conduct the analysis need to write a full plan. Works best for new ventures that want to "test the waters" to see if investors are interested in their ideas
Full business plan
25-35 pages. Works best for new ventures that are at the point where they need funding or financing; serves as a "blueprint" for the company's operations
Operational business plan
40-100 pages. Is meant primarily for an internal audience; works best as a tool for creating a blueprint for a new venture's operations and providing guidance to operational managers
Sole Proprietorship
A form of business organization involving one person, and the person and the business are essentially the same.
Code of conduct
A formal statement of an organization's values on certain ethical and social issues
Mediation
A process in which an impartial third party (usually a professional mediator) helps those involved in a dispute reach an agreement
Overall Schedule
A schedule should be prepared that shows the major events required to launch the business Should be in a format of milestones critical to the businesses' success, such as incorporating the venture, completion of prototypes, rental of facilities, obtaining the first sale, and so forth
Shareholders
An owner of shares in a company
nondisclosure agreement
Binds an employee or another party (such as a supplier) to not disclose a company's trade secrets
Mission Statement
Defines why a company exists and what it aspires to become.
Putting It All Together
Evaluating and reviewing the completed business plan The writers should put themselves in the reader's shapes to determine e of the most important questions about the viability of their business venture have been answered
Federal Employee Identification Number
It is compared to almost like the individual's social security number. It is used by the IRS to track the business for tax compliance purposes
Industry Analysis
It is the main body of the business plan and begins by describing the industry in which the firm intends to compete Should include data and information about various characteristics of the industry, such as the size, growth rate, and sales projections
Operations Plans
Outlines how your business will be run and how your product or service will be produced Keep it short and crisp The "back stage" or "behind the scenes" of what the customers sees and experience
Tagline
Phrase that a business plans to use to reinforce its position in the marketplace
Noncompete Agreement
Prevents an individual from competing against
Noncompete Agreement
Prevents an individual from competing against a former employer for a specific period of time.
Appendix
Resumes of the top management team, photos or diagrams of product or product prototypes, certain financial data, and market research projections It should include only the additional information vital to the plan but not appropriate for the body of the plan itself
Limited Partnership Agreement
Sets forth the rights and duties of the general and limited partners, along with the details of how the partnership will be managed and eventually dissolved
What are the 3 types of business plans?
Summary Plan Full Business Plan Operational Business Plan
Business Plan
A written narrative, typically 25-25 pages long, that describes what a new business intends to accomplish and how it intends to accomplish it
ethica dilemma
A situation that involves doing something that is beneficial to oneself or the organization, but may be unethical.
The Economics of the Business
The ways a business earns money If it sells a product plus a service guarantee, it has two revenue drivers, and so on
What are the two main reasons for writing a business plan?
There are two main reasons for writing a business plan. The first reason for writing a business plan is that the business plan forces a firm's founders to systematically think through each aspect of their new venture. The second reason for writing a business plan is that it communicates the merits of a new venture to outsiders, such as investors an bankers.
Limited Parnership
A modified form of a general partnership. Includes two classes of owners: general partners and limited partners
Milestone
A noteworthy or significant event
C Corporation
A separate legal entity that, in the eyes of the law, is seperated from it owners.
Corporation
A seperate legal entity organized under the authority of a state.
Fictitious business Name Permit
Any name other than the corporate name stated in its articles of incorportation. Allows the business to legally operate under a fictitious name
Management Team and Company Structure
Assess the strength of the people starting the firm Each profile must contain → title of the position, duties and responsibilities of the position, previous industry and related experience, previous successes, educational background
Nondisclosure Agreement
Blinds an employee or another party to not disclose a company's trade secrets
Market Analysis
Breaks the industry into segments and zeros in on the specific segment (or target market) to which the firm will try to appeal
Market Analysis
Breaks the industry into segments and zeros in on the specific segment to which the firm will try to appeal
partnership agreement
Details the responsibilities and the ownership shares of the partners involved with an organization
Executive summary
Is a short overview of the entire business plan; it provides a busy reader with everything he/she needs to know about the new venture's distinctive nature. Should not exceed two single-spaced pages The topics should be presented in the same order as they are presented in the business plan Two identical copies of the executive summary should be prepared-one that's part of the business plan and one that's a stand-alone document Although it is at the beginning it should be written last because the plan can change and evolve and you want to make sure that the executive summary matches and gets the overview of the plan
Buyback clause
Legally obligates departing founders to sell to the remaining founders their interest in the firm if the remaining founders are interested.
Ratio Analysis
Ratios, such as return on assets and return on sales, are computed by taking numbers out of financial statements and forming ratios with them
Ethic training program
Teaches business ethics to help employees deal with ethical dilemmas and improve their overall ethical conduct
Liquidity
The ability to sell a business or other asset quickly at a price that is close to its market value
Virtual Protype
a computer-generated 3D image of a product or service idea. It displays the idea as a 3D model that can be viewed from all sides and rotated 360 degrees
General Partnership
a form of business organization where two or more people pool their skills, abilities, and resources to run a business
Position
How it is situated relative to its rivals.
Marketing Plan
How the business will market and sell its products or service It deals with the nuts and bolts of marketing in terms of price, promotion, distribution, and sales It is finding a way to seek customers and persuade them to buy its products
Cover page and Table of Contents
Include company's name, address, and phone number; the date; the contact information for the lead entrepreneur; and the company's website address if it has one. Company's social media can be included Contact info. Should include a land-based phone number, and email address, and smart phone number
List and briefly describe three specific steps that an entrepreneurial organization can take to build a strong ethical culture.
Lead by example - Communicate ethics as a priority - Set a good example of ethical conduct - Keep commitments - Provide information about what is going on - Support following organizational standards
Describe what is meant by a "general partnership" and a "limited partnership". Describe the major difference between the two.
General Partnership A "general parntership" is a form of business organizatin where two or more people pool their skills, abilities, and resources to run a business. A general parntership is the most common type of partnership. It refers to a relationship in which all partners contribute to the day-to-day management of the business. Each parnter will have the authority to make business decisions and even legally bind the compnay in contracts. The liabilities, contributions, and responsibilities of the partners are often equal unless stated otherwise. Typically, a partnership agreement will describe which partners have certain authorities and responsibilities. Some of the advantages of a General Partnership include: Creating one is relatively easy and inexpensive compared to a corporation or limited liability compnay The skills and abilities of more than one individual are available to the firm Having more than one owner may make it easuer to raise funds Business losses can be deducted against the parnters' other sources of income It is not subjecte to double taxation Some of the diadvantages of General Partnership include: Liability on the part of each genreal parnter is unlimited The business relies on the skills and abilities of a fixed number of partners. The partners can hire employees whp have additional skills and abilities. Raising capital can be difficult Because decision making amoung the partners is shared, disagreements can occur The business ends at the death or withdrawal of one partner unless otherside stated in the partnership agreement The liquidity of each partner's investent is low Limited Partnership On the other hand, "limited partnership" is defined as a modified form of a general partnership. Limited partnerships is a partnership consisting of a gerneral parnter, who manages the business and has unlimited personal liability for the debts and obligations of the Limited Partnership, and a limited parnter, who ahs limited liability but cannot participate in management. A limited partnership is a relationship where the limited partner may not be involved in the day-to-day management of the business. This partner may have just contributed funds to the business, and often the funds that they contribute are the extent of their liability. Limited partnerships will still have at least one general partner to man the day-to-day operations of the business.The general partner may also be personally liable for the debts of the company, while the limited partner is not. A general partner's liability is not limited to their investment. Their personal assets can come into play when it comes to paying off the company's debts.A common purpose of a limited partnership is for real estate. There may be several limited partners for the purpose of raising additional funds to purchase the real estate, as long as there is at least one general partner. The benefit of being a limited partner is so your liability is limited, while the downside is that a limited partner will not have the decision-making powers that a general partner would.There have been cases where a limited partner has given up his limited liability status by being too involved in the organizations management. Often clients will work with an attorney to ensure their limited liability is protected as a limited partner.
Ethics Training Programs
Tech business ethics to help employees deal with ethical dilemmas and improve their overall ethical conduct
What is an "executive summary?" Why is the executive summary often called the most important part of a business plan?
The executive summary is a short overview of the entire business plan; it provides a busy reader with everything she/he needs to know about the new venture's distincitive nature. It is not an introduction or preface to the business plan; instead, it is meant to be a summary of the plan itself. The executive summary should not exceed two single-spaced pages. It provides and overview of the business plan on a section-by-section basis. The topics should be presented in the same order as they are presented in the business plan. Even though the executive summary is presented at the beggining, it should be written last because the plan can evolve as it is being written. The executive summary is often called the most important part of the business plan because an investor will first ask for a copy of a firm's PowerPoint deck or executive summary and will request a copy of the full business plan only if the PowerPoint deck or executive summary is sufficiently convincing. Think of the executive summary as an advance organizer for the reader. Above all else, it must be clear and concise. But it also has to entice the reader to read the rest of the business plan.
Financial Projections
The final section of the business plan A firm's pro forma financial projections Include the sources and uses of funds statements → a document that lays out specifically how much money a firm needs ( if the intention of the business plan is to raise money), where the money will come from, and how the money will be used Second , include the assumption sheet → an explanation of the most critical assumptions on which the financial statements are based The pro forma financial statements are the heart of the financial statement Pro forma financial statements → the look forward rather the track the past
Product (or Service) Design and Development Plan
The status of your development efforts Have a product prototype → the first physical manifestation of a new product, often in a crude or preliminary form. The idea is to solicit feedback and then iterate Virtual prototype → a computer-generated 3D image of a product or service idea. It displays the idea as a 3D model that can be viewed from all sides and rotated 360 degrees
preferred stock
Typically issues to conservative investors who have preferential rights over common stockholders in regard to dividends and to the assets of the corporation in the event of liquidation
product prototype
the first physical manifestation of a new product, often in a crude or preliminary form. The idea is to solicit feedback and then iterate
What is a business plan? Describe the elements of a business plan?
A business plan is a written narrative typically 25 to 35 pages long, that describes what a new business intends to accomplish and how it intends to accomplish it. For most new ventures the business plan is a dual-purpose document that is used both inside and outside the firm. Inside the firm, the plan helps the company develop a "road map" to follow to execute its strategies and plans. Outside the firm, it introduces potential investors and other stakeholders to the business opportunity the firm is pursuing and how it plans to pursue it. It is the last activity completed in the step of the entrepreneurial process titled "Developing Successful Business Ideas" It is a mistake to write a business plan early The business plan must be substantial enough and have sufficient details about the merits of the new venture in order to convince the reader that the new business is exciting and should receive support. Articulates the vision and future plans of the firm Firm's employees and investors should be the ones to read the business plan There are three types of business plans: Summary plan, full business plan, and operational business plan Summary plan → 10-15 pages and works best for companies that are very early in their development and are not prepared to write a full plan. The authors may be asking for funding to conduct the analysis need to write a full plan. Works best for new ventures that want to "test the waters" to see if investors are interested in their ideas Full business plan → 25-35 pages. Works best for new ventures that are at the point where they need funding or financing; serves as a "blueprint" for the company's operations Operational business plan → 40-100 pages. Is meant primarily for an internal audience; works best as a tool for creating a blueprint for a new venture's operations and providing guidance to operational managers The elements of a business plan include: Cover page and table of contents, executive summary, industry analysis, company description, market analysis, the economics of the business, marketing plan, product (or service) Design and Development plan, operations plans, mangement team and company structure, overall schedule, financial projections, appendix, and putting it all together.
Code of conduct
A formal statement of an organization's values on certain ethical and social issues. It provides specific guidance to entrepreneurs, managers, and emplyees regarding expectations of them in terms of ethical behavior.
What is a founders' agreements? What needs to be included in the agreement?
A founders' agreement is a written document that deals with issues such as the relative split of the equity amoung the founders firm, how individual founders will be compensated for the cash or the "sweat equity" they put into the firm, and how long the founders will have to remain with the firm for their shares to fully vest. Items that need to be included in the founders agreement are: Nature of the prospective business Identity and proposed titles of the founders Legal form of business ownership Apportionment of stock (division of ownership) Consideration paid for stock or ownership share of each of the founds Identfication of any intellectual property signed over to the business by any of the founders Description of how the founders will be compensated and how the profits of the business will be divided Basic description of how the business will be operated and who will be responsible for what Description of the outside business activities that the founders will not be allowed to enagage in an outside business that directly competed Provisions fir resolving disputes Buyback clause, which explains how a founders' shares will be disposed of if she or he dies, wants to sell, or is forced to sell by court order
Company Description
A general description of the company It may seem like the less critical than other but it is extremely important because it demonstrates to your reader that you know how to translate and idea into a business It should be brief but should explain where the idea for the company came from and the driving force behind its inception
Describe the purpose of a nondisclosure agreement. Provide an example of when a nondisclosure agreements kicks in.
A nondisclosure agreement binds an employee or another party (such as a supplier) to not disclose a company's trade secrets. You should use a nondisclosure document when employees have access to confidential and proprietary information.Think of how hard you have worked to build your business. Things like proprietary processes, supplier and manufacturing agreements, client lists, etc. all need to be protected. Make sure that your employees are prohibited from walking out and opening up a competing business using your valuable information.Make sure you have an attorney draw up a nondisclosure agreement specifically for your needs. While there are a lot of generic NDA templates available online, the cost of a NDA specific to your needs and location can save you time and money in the event it needs to be enforced down the line.
Ethical dilemma
A situation that involves doing something that is beneficial tp oneself or the organization, but may not be unethical
Founder's agreement
A written document that deals with issues such as the relative split of the equity amoung the founders of the firm, how individual founders will be compensated for the cash or the "sweat equity" they put into the firm, and how long the founders will have to remain with the firm for their shares to fully vest.