Entrepreneurship Ideas In Action Chapter 3

statement of purpose

a brief explanation of why you are asking for a loan and what you plan to do with the money. Should be no more than two paragraphs.

pro forma financial statement

a financial statement based on projected revenues and expenses

cover letter

a letter that introduces and explains an accompanying document or set of documents

executive summary

a short restatement of the report portion of a business plan

SBA (Small Business Administration)

an independent agency of the federal government that was created to provide support to entrepreneurs and small businesses

business plan (What is it?)

A written document that describes all the steps necessary for opening and operating a successful business. It makes you think about all aspects of the business and it must convince readers that you have come up with a practical business idea. Required by lenders and investors before they will consider financing a business. Once the business is up and running, it serves as a tool for managing your business.

Financial Management elements of business plan

Determines financial needs. Consists of 1) identification of risks, 2) financial statements, and 3) funding request and return on investment

business plan (basic elements)

Introduction, Marketing, Financial Management, Operations, Concluding Statement

trade associations

organizations made up of professionals in a specific industry

community, government, & professional resources

organizations that may help you with your business plan. Available resources include SBA, local SBDC, SCORE, local chamber of commerce, trade associations, professional business consultants, and financial institutions.

Concluding Statement element of business plan

summarizes goals and objectives of the business and emphasizes your commitment to the success of the business

exit (harvest) strategy

the way an entrepreneur intends to extract, or harvest, his or her money from a business after it is operating successfully

common mistakes in business planning

unrealistic financial projections, an undefined target market, poor research, ignored competition, inconsistencies and omissions in the business plan

Introduction elements of business plan

contains a detailed description of the nature and goals of business, the ownership and legal structure, the skills and experience brought, and the advantages you or your business have over the competition

Marketing elements of business plan

contains description of products and services offered, the market, the industry and the location of the business.

Operations elements of business plan

contains how business will be managed day-to-day, hiring and personnel procedures, insurance/lease/rental agreements, equipment needs, and how product/service will be produced and delivered

title page

includes name, address & phone number of company, the date, and the name and title of owner

appendix

includes supporting documents that provide additional information and back up statements made in the body of the report