Entrepreneurship Chapter 8
The market: competition and competitive advantage
Major competitors Competing product or service: market share, price, competitive advantages and disadvantages What makes product or service unique
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
preselling
involves introducing your product to potential customers and taking orders for later delivery
test marketing
selling your product or service in a limited area, for a limited time
path to the business plan
1) vision 2) mission 3) elevator pitch 4) executive summary 5) business plan
the 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.
Vision Statement
A very simple 5-10 word sentence or tagline that expresses the fundamental idea or goal of the firm.
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
tagline
Memorable catchphrase that captures the key idea of a business, its service, product, or customer. also known as a slogan
Executive Summary
One- or two-page overview of the business, its business model, market, expectations, and immediate goals
The market: marketing strategy
Overall strategy your firm pursues in the market Sales plan that shows specific ways you apply strategy to secure sales from your customers Longer-term competitive plan that shows how you protect your firm from efforts of the competition to unseat you
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
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.
pitch deck
The name of a slideshow presentation that summarizes a business or more often a business plan.
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
business plan
a document designed to detail the major characteristics of a firm - its product or service, its industry, its market, its manner of operating (production, marketing, management), and its financial outcomes with an emphasis on the firm's present and future
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
cover letter
a one page document on business stationary that introduces the business plan and the business owner to the recipient and indicates why the recipient is being asked to read the plan
proof-of-concept web site
an internet-based type of business plan providing information or demonstration of a product or service designed to solicit information on customer interest
data room
an online repository for the documentation that back ups and details the specifics of your business and business plan contents of the data room are very similar to those of the three-ring binder personal edition of the plan held and used by the founder
operational plan
business plans designed to be used internally for management purposes
title page
company name contact information date this version of the plan was completed proprietary statement to protect your ideas
the appendixes
copies of signed contracts, letters of intent or commitment, or contingency contracts results of marketing studies or pilot sales efforts industry reports price lists for products or services floor plans of the location, if it is central to the business advertising copy, such as ads, logos, catalog pages, brochures, sales letters, or press releases customer or spokesperson testimonials
The Company: Product/service and industry
describe firm's product or service explain how the customer uses the product propriety technology industry descriptions
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 also called a mini-plan
the organization: legal and organization structures
legal form of the business where it is formally registered and located licenses or certifications along with the firm's intellectual property protections, like patents, trademarks and trade secrets
table of contents
lists major section headings sections underneath major sections put page numbers on every page of the business plan
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
pitch
the name given to the formal presentation of a slideshow summarizing your business plan given before judges or potential investors or partners
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
due diligence
the process of investigating a business to determine its value