Chapter 9
Proprietary technology
A product or service or an aspect of one that is kept as a trade secret or is protected legally using Patton, copyright, trademark, or service mark.
Private placement memo
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.
Screening Plan
Also called a mini-plan
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.
Operational Plan
Business plans designed to be used internally for management purposes.
Informational Plans
Give potential customers or suppliers information about the company and its product or service.
Preselling
Involves introducing your product to potential customers and taking orders for later delivery.
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
Business Plan Strategizing Model
Mantra Mission Measurement Methods Mechanics
Tagline
Memorable catchphrase that captures the key idea of a business, its service, product, or customer. also known as a slogan
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
Test Marketing
Selling your product or service in a limited area, for a limited time.
Product & service and industry
The Company: Describe firm's product or service Explain how the customer uses the product Proprietary technology Industry descriptions
Market and target customer
The Market: 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
Location
The Organization: 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
Key personnel
The Organization: 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
Related service providers
The Organization: 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
Legal and organization structures
The Organization: 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
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.
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.
business plan documents
Vision Statement Mission Statement Elevator Pitch Executive Summary Business Plan
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
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
Screening Plan
gives the basic overview of the firm and a detailed look at the financials.
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
Mission Statement
A paragraph that describes the firm's goals and competitive advantages
Elevator Pitch
A 30-second action-oriented description of a business designed to sell the idea of the business to another
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
A document designed to detail the major characteristics of a firm
New Entrant Business
A firm whose product or service is established elsewhere, but is new to this market.
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.