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.