SMALL BUSINESS MANAGEMENT - CHAPTER 5 - DEVELOPING AN EFFECTIVE BUSINESS PLAN
OFFER PRACTICAL ADVICE ON WRITING A BUSINESS PLAN
Have appropriately detailed financial forecasts, Do not hide weaknesses & identify potential fatal flaws, Pay attention to the details.
LIST PRACTICAL SUGGESTIONS TO FOLLOW IN RESEARCHING & PREPARING BUSINESS PLAN, & OUTLINE KEY SECTIONS OF BUSINESS PLAN: To maximize the effectiveness of business plan, (1) provide table of contents & section tabs for easy reference, (2) package plan in a loose-leaf binder to facilitate revisions,
(3) use charts, graphs, diagrams, tabular summaries, & other visual aids to create interest and make the presentation easy to follow, (4) consider withholding highly sensitive specifics, & (5) ask carefully chosen third parties to give their assessment of the quality of the plan.
ANSWER THE QUESTION: WHAT IS A BUSINESS PLAN?
A business plan identifies the nature and context of the business opportunity and describes why the opportunity exists. The business plan presents the approach the entrepreneur will take to exploit the opportunity.
IDENTIFY AVAILABLE SOURCES OF ASSISTANCE IN PREPARING A BUSINESS PLAN
A variety of books and computer software packages are available to assist in the preparation of a business plan. Professional with planning expertise, such as lawyers, accountants, and other entrepreneurs, can provide useful suggestions and assistance in the preparation of a business plan.
LIST PRACTICAL SUGGESTIONS TO FOLLOW IN RESEARCHING AND PREPARING A BUSINESS PLAN, & OUTLINE THE KEY SECTIONS OF A BUSINESS PLAN
Key sections of a business plan are (1) title page, (2) table of contents, (3) executive summary, (4) mission statement and goals, (5) company overview, (6) products and/or services plan, (7) marketing plan, (8) management plan, (10) financial plan, & (11) appendix of supporting documents.
OFFER PRACTICAL ADVICE ON WRITING A BUSINESS PLAN
Maintain confidentiality when appropriate, Make sure you back up every claim & conclusion with evidence & facts, Emphasize the qualifications of the management team, Know your competition,
LIST PRACTICAL SUGGESTIONS TO FOLLOW IN RESEARCHING AND PREPARING A BUSINESS PLAN, & OUTLINE THE KEY SECTIONS OF A BUSINESS PLAN
Marketing research is the gathering, processing, reporting, & interpreting marketing information. The cost of marketing research should be evaluated against its benefits.
DESCRIBE WHAT DETERMINES HOW MUCH PLANNING AN ENTREPRENEUR & A MANAGEMENT TEAM ARE LIKELY TO DO: The allocation of time and money, two scarce resources, affect how much planning will be done.
Other factors that affect the extent of planning include: (1) the entrepreneur's management style & ability, (2) management team preferences, (3) complexity of the business, (4) competitive environment, & (5) level of uncertainty in the environment.
EXPLAIN THE NEED FOR A BUSINESS PLAN FROM THE PERSPECTIVES OF THE ENTREPRENEUR, THE INVESTOR & THE LENDERS
The business plan provides a clearly articulated statement of the firm's goals and strategies, helping the entrepreneur focus on important issues. The business plan helps identify the important variables that will determine the success or failure of the firm.
EXPLAIN THE NEED FOR A BUSINESS PLAN FROM THE PERSPECTIVES OF THE ENTREPRENEUR, THE INVESTOR & THE LENDERS: The business plan is used as a selling document to outsiders.
The business plan tells a prospective investor how the business will help achieve the investor's personal goals: to maximize potential return on investment through cash flows received from the investment, while minimizing personal risk exposure
LIST PRACTICAL SUGGESTIONS TO FOLLOW IN RESEARCHING AND PREPARING A BUSINESS PLAN, & OUTLINE THE KEY SECTIONS OF A BUSINESS PLAN
The steps in marketing research are identifying the informational need, searching for secondary and primary data, and interpreting the data. You should understand the overall process of researching & writing a business plan.