3920-c5 - New Venture and Small Business Management UNIT 5...

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Unformatted text preview: New Venture and Small Business Management UNIT 5 MODULE 1 The Business Plan "FAIL TO PLAN, PLAN TO FAIL !" Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved ENTREPRENEURSHIP MEANS DOING, THROUGH... Why do many entrepreneurs fail to plan adequately ? Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved l creating organizations opportunities l recognizing l innovating l risk taking Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved "Given the highly competitive nature of the business world, it is understandable that entrepreneurs feel some sense of urgency regarding their undertakings" Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved BUT... Planning should not be sacrificed in the interest of a need for action Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 1 New Venture and Small Business Management THE KEY TO PLANNING IS BALANCE BETWEEN... UNDUE HASTE MAKES WASTE ! Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved ENTREPRENEUR'S NEED FOR ACTION ADEQUATE PLANNING OF THE VENTURE Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved PLANNING SHOULD... l be MARKETING PLAN multi-faceted in all functional areas OPERATIONAL PLAN l occur l occur BUSINESS PLAN throughout the life of the venture FINANCIAL PLAN Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved INTERNAL ENVIRONMENT EXTERNAL ENVIRONMENT ABSTRACT IDEA BUSINESS PLAN PHYSICAL REALITY BUSINESS PLAN REVISION Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 2 New Venture and Small Business Management IN AN EXISTING BUSINESS, THE BUSINESS PLAN CAN BE USED TO... l l l FOR THE ENTREPRENEUR, THE BUSINESS PLAN CAN HELP IN... l l l identifying the goals of the venture identifying success / failure factors providing management solutions to common problems testing ideas managing stress motivating the entrepreneur and his employees Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved secure additional capital define and promote new activities support continued growth l l Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved l THE BUSINESS PLAN... HELPS SELL THE BUSINESS CONCEPT TO INVESTORS THE BUSINESS PLAN... HELPS SELL THE BUSINESS CONCEPT TO INVESTORS AND PROVIDES A MANAGEMENT TOOL FOR THE ENTREPRENEUR Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved TO PLAN OR NOT TO PLAN ? MOST ENTREPRENEURS DO NOT !! WHY DO ENTREPRENEURS NOT PLAN ? THEY SAY BUSINESS PLANS... l l l l l quickly become outdated stifle flexibility fail to address unpredictability are very expensive and time-consuming take away from pressing operational issues Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 3 New Venture and Small Business Management FORMAL BUSINESS PLANNING BUSINESS PLANNING IS A MATTER OF DEGREE THAT IS DICTATED BY THE UNIQUE NATURE OF THE INDIVIDUAL VENTURE Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved SUCCESS DEGREE OF FORMALITY DEPENDS ON THE... l l l l l l COMPLEXITY UNCERTAINTY COMPETITION Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved availability of time and money style and ability of the management team preferences of the management team complexity of the venture competitive environment level of uncertainty Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved NEED FOR FORMAL PLANNING INGREDIENTS OF THE SUCCESSFUL BUSINESS PLAN specific, measurable, attainable goals priorities established l potential problems and obstacles identified l essential tasks specified l market research methodology l performance milestones l environmental risks l required sources of outside assistance l periodic Jon Kerr and Captus Press Inc. All right reserved review and revision Copyright 1999 l l COMMON FLAWS IN BUSINESS PLAN PREPARATION INCLUDE... l l l l l l stressing the product rather than the process establishing poorly-defined goals and objectives producing an inflexible plan misunderstanding the process of raising capital failing to produce management team commitment establishing inappropriate milestones and review processes Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 4 New Venture and Small Business Management PRINCIPALLY, THE BUSINESS PLAN ACTS AS... UNIT 5 MODULE 2 Attracting Investors With the Business Plan lA SELLING DOCUMENT TO INVESTORS ON-GOING MANAGEMENT TOOL TO THE ENTREPRENEUR Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved l AN Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved THE FINANCIAL VIABILITY OF A VENTURE LIES WITH ITS ACCEPTANCE AND SUPPORT BY CUSTOMERS AND INVESTORS ALIKE Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved ENTREPRENEURS FOCUS ON PRODUCTION AND GOAL-ORIENTED FACTORS SUCH AS... l l l l l attractiveness of the product / service strength of the management team technology involved desired sales and profit etc... Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved ENTREPRENEUR'S PERSPECTIVE INVESTORS' & CUSTOMERS' PERSPECTIVE THE BUSINESS PLAN SHOULD REFLECT THE... l l l realities of the market concerns of investors objectives and expectations of the entrepreneur INVESTORS ARE MARKET-ORIENTED AND WILL BASE THEIR DECISION TO INVEST ON THE EXISTENCE OF AN IDENTIFIABLE AND SIGNIFICANT POTENTIAL MARKET Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 1 New Venture and Small Business Management BARRIERS TO ENTRY l A CASE FOR PENETRATING THE MARKET INCLUDES... demonstrating product / service benefits identifying interest in the marketplace providing evidence to support market claims EXISTING MARKET l l THE ENTREPRENEUR PENETRATION ? Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved FAILURE TO UNDERSTAND THE CUSTOMERS' NEEDS MAY BE THE MOST FREQUENT SOURCE OF MARKET FAILURE Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved CLIENT LOYALTY FLOWS FROM... QUALITIES OF THE PRODUCT AND, PRICE Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved THE PRICE-PRODUCT MATRIX LOW THE PRICE-PRODUCT MATRIX LOW PRODUCT A PRICE PRICE PRODUCT PRODUCT B C LOW HIGH LOW Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved HIGH QUALITY HIGH Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved QUALITY HIGH 2 New Venture and Small Business Management MARKET RESEARCH DURING BUSINESS PLANNING UNDERSTANDING CUSTOMERS' NEEDS FAVOURABLE POSITIONING Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved WHEN MARKET RESEARCH IS MOST APPROPRIATE MANY ENTREPRENEURS DO NOT HAVE A TANGIBLE PRODUCT OR SERVICE TO SHOW THEIR CUSTOMERS ! Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved HOW DOES AN ENTREPRENEUR WITH ONLY AN IDEA OR A PROTOTYPE APPROPRIATELY MEASURE MARKET INTEREST ? Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved THE ENTREPRENEUR CAN... OFFER A PRICE DISCOUNT TO CERTAIN CUSTOMERS IF THEY PAY PART OF THE PRICE IN ADVANCE TO COVER THE COST OF PRODUCTION Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved THE ENTREPRENEUR CAN... OFFER A PRICE DISCOUNT TO CERTAIN CUSTOMERS IF THEY PAY PART OF THE PRICE IN ADVANCE TO COVER THE COST OF PRODUCTION OR, OFFER FREE USE OF THE PROTOTYPE TO CERTAIN CUSTOMERS IN RETURN FOR THEIR EVALUATION OF THE PRODUCT Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved THE INVESTOR ALSO WANTS TO KNOW THAT THE PREDICTED REVENUE AND PROFIT CAN BE ACHIEVED FOLLOWING THE PROPOSED COURSE OF ACTION Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 3 New Venture and Small Business Management WHEN CONSIDERING OPPORTUNITIES, INVESTORS SEEK TO... l MINIMIZE HIGH MARKET INTEREST LOW RISK LOW PERCEIVED RISK HIGH l MAXIMIZE RETURN ON INVESTMENT Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved HIGH MARKET INTEREST LOW LOW PERCEIVED RISK ABILITY OF THE MANAGEMENT TEAM HIGH LOW PERCEIVED RISK EXPECTED RETURN ON INVESTMENT HIGH HIGH LOW HIGH LOW Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved AN ENTREPRENEUR'S ABILITY TO APPROPRIATELY ADDRESS THE ISSUES OF RISK AND RETURN IN THE BUSINESS PLAN HAS A POSITIVE INFLUENCE ON HIS ABILITY TO SELL THE BUSINESS CONCEPT TO INVESTORS Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved IN CONTRAST TO THE LONG-TERM OUTLOOK OF THE ENTREPRENEUR, INVESTORS ARE SHORT-TERM THINKERS Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 4 New Venture and Small Business Management THE INVESTORS ARE... WHO TYPICALLY INVESTS IN THE NEW VENTURE ? Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved l l l l l venture capitalists wealthy individuals shareholders friends and family the entrepreneur himself Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 5 New Venture and Small Business Management PRINCIPALLY, THE BUSINESS PLAN ACTS AS... UNIT 5 MODULE 3 The Business Plan as a Management Tool l A SELLING DOCUMENT TO INVESTORS and l AN ON-GOING MANAGEMENT TOOL TO THE ENTREPRENEUR Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved THE LEARNING REQUIRED BY AN EFFECTIVE BUSINESS PLAN DOES NOT END WHEN THE WRITTEN DOCUMENT IS COMPLETED Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved "WRITING A BUSINESS PLAN IS PRIMARILY AN ON-GOING PROCESS AND ONLY SECONDARILY A PRODUCT OR OUTCOME" Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved BUSINESS PLANS CAN BE VIEWED AS A SET OF ASSUMPTIONS, and THE ENTREPRENEUR AS A STUDENT OF THE FIRM'S ENVIRONMENT. Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved ENTREPRENEURS ARE NOT ALWAYS `TRUTH-SEEKERS' ! Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 1 New Venture and Small Business Management IF NO VENTURE MEETS ALL OF ITS OBJECTIVES THEN... ALL VENTURES "FAIL" IN SOME REGARD ! Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved FAILURE TO PROVE AN ASSUMPTION IS ONLY A FAILURE IF THE OPPORTUNITY IS NOT USED BY THE ENTREPRENEUR Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved A NEW VENTURE HAS NO HISTORY TO REFER TO Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved RESULTS OF TESTING ASSUMPTIONS APPROPRIATE COURSE OF ACTION Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved HOW DOES VIEWING THE BUSINESS PLAN AS A SET OF ASSUMPTIONS ALLOW FOR ITS USE AS A MANAGEMENT TOOL ? Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved IN "CRITICAL ASSUMPTION PLANNING"... l PRIMARY ASSUMPTIONS - are the major uncertainties faced by the new venture Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 2 New Venture and Small Business Management INCEPTION OF THE NEW VENTURE IN "CRITICAL ASSUMPTION PLANNING"... l PRIMARY ASSUMPTIONS l DERIVATIVE ASSUMPTIONS - flow from the primary assumptions RESEARCH MILESTONE: PRIMARY ASSUMPTION #1 RESEARCH MILESTONE: PRIMARY ASSUMPTION #2 RESEARCH MILESTONE: PRIMARY ASSUMPTION #3 Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved INCEPTION OF THE NEW VENTURE RESEARCH INCEPTION OF THE NEW VENTURE RESEARCH MILESTONE: A MARKET DOES EXIST RESEARCH MILESTONE: A MARKET DOES EXIST RESEARCH MILESTONE: PRIMARY ASSUMPTION #2 RESEARCH MILESTONE: PRODUCT SATISFIES A REAL NEED RESEARCH MILESTONE: PRIMARY ASSUMPTION #3 MILESTONE: PRIMARY ASSUMPTION #3 Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved INCEPTION OF THE NEW VENTURE RESEARCH INCEPTION OF THE NEW VENTURE RESEARCH MILESTONE: A MARKET DOES EXIST RESEARCH MILESTONE: A MARKET DOES EXIST RESEARCH MILESTONE: PRODUCT SATISFIES A REAL NEED RESEARCH MILESTONE: PRODUCT SATISFIES A REAL NEED RESEARCH MILESTONE: CONSUMER VALUES THE PRODUCT MILESTONE: CONSUMER VALUES THE PRODUCT Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 3 New Venture and Small Business Management INCEPTION OF THE NEW VENTURE RESEARCH INCEPTION OF THE NEW VENTURE RESEARCH MILESTONE: A MARKET DOES EXIST DISCONTINUE ? PRIMARY ASSUMPTION #1 REDIRECT ? CONTINUE ? RESEARCH DISCONTINUE ? REDIRECT ? PRIMARY ASSUMPTION #2 DISCONTINUE ? CONTINUE ? REDIRECT ? Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved THE BUSINESS PLAN SHOULD ALSO... l detail how assumptions are to be tested l identify risks to the critical assumptions l specify methods of resolving `non-continue' decisions Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved PRIMARY ASSUMPTION CONTINUE ? REDIRECT ? DISCONTINUE ? REVISION OF THE BUSINESS PLAN Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved LOWER VALUE TO CONSUMERS PRICING POLICY CHANGE LOWER PRICE "ULTIMATELY SUCCESSFUL PRODUCTS OFTEN BEAR LITTLE RESEMBLANCE TO THE ORIGINAL CONCEPT" LOWER REVENUES Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 4 New Venture and Small Business Management MILESTONES EXIST THROUGHOUT A VENTURE'S LIFECYCLE AND MIGHT RELATE TO... l redesigning products / services l changing pricing policies l establishing new advertising campaigns l etc... Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved FOR THE NEW VENTURE MANAGER, THE LEARNING PROCESS LASTS THROUGHOUT THE LIFETIME OF THE VENTURE Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved IN CONCLUSION, AN EFFECTIVE BUSINESS PLAN... l identifies critical assumptions l details how assumptions will be tested l outlines possible courses of action l and so on... Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved EFFECTIVE NEW VENTURE MANAGERS RECOGNIZE THE ON-GOING PROCESS OF TESTING ASSUMPTIONS, LEARNING AND REALIGNING THE VENTURE 5 New Venture and Small Business Management UNIT 5 MODULE 4 Writing the Business Plan AS SURE AS CARRYING OUT A BUSINESS PLAN IS A SCIENCE, WRITING THE BUSINESS PLAN IS AN ART ! Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved WHAT IS INVOLVED IN THE PROCESS OF PREPARING AND WRITING A BUSINESS PLAN ? Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved REASONS FOR PREPARING A FORMAL BUSINESS PLAN INCLUDE... l documenting l testing the objectives of the venture product / service ideas solutions to common problems l providing l etc... Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved REMEMBER, THE BUSINESS PLAN IS PRINCIPALLY WRITTEN TO HELP... l THE A SUCCESSFUL BUSINESS PLAN IDENTIFIES THE... l goals of the venture ENTREPRENEUR MANAGE THE VENTURE AND, l SELL THE CONCEPT TO INVESTORS Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 1 New Venture and Small Business Management A SUCCESSFUL BUSINESS PLAN IDENTIFIES THE... l l l l A SUCCESSFUL BUSINESS PLAN IDENTIFIES THE... l l l l goals of the venture obstacles to success necessary task sequence issues to be researched and testing methodologies goals of the venture obstacles to success necessary task sequence issues to be researched and testing methodologies l performance milestones l required resources Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved THE `STEP-BY-STEP' APPROACH TO WRITING A BUSINESS PLAN THE `STEP-BY-STEP' APPROACH TO WRITING A BUSINESS PLAN 1) establish business objectives Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved THE `STEP-BY-STEP' APPROACH TO WRITING A BUSINESS PLAN 1) 2) establish business objectives plan a marketing approach THE `STEP-BY-STEP' APPROACH TO WRITING A BUSINESS PLAN 1) 2) 3) establish business objectives plan a marketing approach select a business location Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 2 New Venture and Small Business Management THE `STEP-BY-STEP' APPROACH TO WRITING A BUSINESS PLAN 1) 2) 3) 4) establish business objectives plan a marketing approach select a business location determine the required physical facilities THE `STEP-BY-STEP' APPROACH TO WRITING A BUSINESS PLAN 1) 2) 3) 4) 5) establish business objectives plan a marketing approach select a business location determine the required physical facilities plan the financing Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved THE `STEP-BY-STEP' APPROACH TO WRITING A BUSINESS PLAN 1) 2) 3) 4) 5) 6) establish business objectives plan a marketing approach select a business location determine the required physical facilities plan the financing establish personnel requirements and administrative structure Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved THE `STEP-BY-STEP' APPROACH TO WRITING A BUSINESS PLAN 1) 2) 3) 4) 5) 6) 7) establish business objectives plan a marketing approach select a business location determine the required physical facilities plan the financing establish personnel requirements and administrative structure determine organizational form and legal requirements Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved AN EFFECTIVE BUSINESS PLAN... ORGANIZED BUSINESS PLAN PREPARATION l CONVINCES INVESTORS THAT THE... w opportunity exists w entrepreneurial team is capable w operational plan is realistic EFFECTIVE BUSINESS PLAN Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 3 New Venture and Small Business Management AN EFFECTIVE BUSINESS PLAN... l CONVINCES INVESTORS THAT THE... w opportunity exists w entrepreneurial team is capable w operational plan is realistic l HELPS INVESTORS UNDERSTAND THE... w business concept w nature of the product / service w proposed market w qualifications of the entrepreneurial team Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved THE REALITY IS MOST VENTURE CAPITALISTS DO NOT HAVE THE OPPORTUNITY TO ANALYZE EACH VENTURE THOROUGHLY Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved THE BUSINESS PLAN PRESENTATION SHOULD BE... l succinct l relevant l attractive Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved TWO BASIC WRITING ISSUES ARE... l FORMAT l CONTENT Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved TWO FORMAT ISSUES ARE... l APPEARANCE THE TYPICAL BUSINESS PLAN INCLUDES... a cover page an executive summary l a general company description l a product and/or services plan l a marketing plan l operational plan l a human resources plan l a financial plan l an appendix l l Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved l LENGTH Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 4 New Venture and Small Business Management OTHER APPEARANCE CONSIDERATIONS l OTHER APPEARANCE CONSIDERATIONS the business plan should be typed on 81/2 x 11 inch paper, placed in a threering binder with tabs for each section Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved OTHER APPEARANCE CONSIDERATIONS l THE LENGTH OF THE PLAN DEPENDS ON THE... l complexity l uncertainty l extent l etc... Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved the business plan should be typed on 81/2 x 11 inch paper, placed in a threering binder with tabs for each section the text should be punctuated with diagrams, graphs, charts, etc... Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved of the venture of the market l of competition "A PLAN ISN'T SUPPOSED TO SHOWCASE HOW MUCH YOU KNOW - IT'S MEANT TO GET THE VENTURE CAPITALIST SALIVATING !" Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved A BUSINESS PLAN OF 20-40 PAGES IS SUGGESTED Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 5 New Venture and Small Business Management THE TYPICAL BUSINESS PLAN INCLUDES... a cover page l an executive summary l a general company description l a product and/or services plan l a marketing plan l an operational plan l a human resources plan l a financial plan l an appendix l Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Cover Page l l l l l l COMPANY NAME COMPANY ADDRESS TELEPHONE NUMBER LOGO AUTHOR OF THE PLAN COPY NUMBER Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Executive Summary A SYNOPSIS OF THE ENTIRE BUSINESS PLAN MEANT TO CAPTURE THE ATTENTION OF THE READER. Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved General Company Description l l l l l l l FIRM'S HISTORY THE KEY PLAYERS LOCATION ORGANIZATIONAL FORM LEGAL ISSUES MARKET FOCUS ETC... Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Product and/or Services Plan l Marketing Plan l USER BENEFITS THE COMPETITION MARKETING STRATEGY STATISTICAL EVIDENCE PRODUCT / SERVICE DESCRIPTION UNIQUE FEATURES PHOTOGRAPH OF PRODUCT PRODUCT / SERVICE TESTING INFORMATION l l l l l l Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 6 New Venture and Small Business Management Operational Plan l l l l Human Resource Plan l FACILITIES MATERIALS EQUIPMENT PERSONNEL l ORGANIZATIONAL STRUCTURE MANAGEMENT TEAM QUALIFICATIONS KEY TECHNICAL POSITIONS l Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Financial Plan l l Appendix l l FINANCIAL NEEDS SOURCES OF FINANCING AND REVENUE COST AND PROFIT PROJECTIONS BALANCE SHEETS, INCOME AND CASHFLOW STATEMENTS KEY PLAYER RESUMES PRODUCT/FACILITIES PHOTOGRAPHS RESEARCH RESULTS CONTRACTS ETC... l l l l l Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved SOME VENTURES DO NOT HAVE FORMAL WRITTEN BUSINESS PLANS, BUT... THEY DO CONTRIBUTE TO SUCCESS ! Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 7 New Venture and Small Business Management UNIT 5 MODULE 5 Assistance in Writing the Plan TO PRACTICE THE ART OF BUSINESS PLAN WRITING THE ENTREPRENEUR MUST HAVE... l the requisite skills and experience time and money l adequate Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved MOST ENTREPRENEURS LACK THE SKILL, EXPERIENCE, TIME AND MONEY, BUT... FORMS OF ASSISTANCE INCLUDE... l business l business plan consultants plan writers software packages l computer l government THERE IS HELP ! Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved business development organizations l incubator organizations l investors Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved THE BUSINESS PLAN CONSULTANT CAN PROVIDE VALUABLE INSIGHT INTO WHAT MAKES FOR AN EFFECTIVE BUSINESS PLAN AND CAN DRAW ATTENTION TO ISSUES THAT ARE COMMONLY OVERLOOKED THE BUSINESS PLAN WRITER ACTUALLY WRITES THE PLAN FOR THE ENTREPRENEUR ! Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 1 New Venture and Small Business Management WHY NOT TO USE A BUSINESS PLAN WRITER l pivotal WHY NOT TO USE A BUSINESS PLAN WRITER l pivotal issues may be overlooked and remain undetected until it is too late issues may be overlooked and remain undetected until it is too late entrepreneur can become too detached from the process and unable to address the concerns of would-be investors Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved l the Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved COMPUTER SOFTWARE PACKAGES WALK THE ENTREPRENEUR THROUGH THE PROCESS BY IDENTIFYING IMPORTANT ISSUES AND HELPING ORGANIZE THE ENTREPRENEUR'S THOUGHTS. MANY ALSO CONTAIN SPREADSHEET PROGRAMS. BUT, SOFTWARE PACKAGES... l produce generic plans that can be unappealing to investors l may stifle creativity and flexibility Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved GOVERNMENT BUSINESS DEVELOPMENT ORGANIZATIONS ARE FREQUENTLY ABLE TO REFER THE ENTREPRENEUR TO AGENCIES OR RESOURCES THAT CAN ADDRESS HIS NEEDS APPROPRIATELY BUSINESS INCUBATORS OFTEN PROVIDE RELEVANT ADVICE AND GUIDANCE TO THE ENTREPRENEUR AT A PRICE THAT IS SIGNIFICANTLY LOWER THAN THAT OF BUSINESS PLAN CONSULTANTS. Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 2 New Venture and Small Business Management AS THE MAJOR AUDIENCE FOR WHICH BUSINESS PLANS ARE WRITTEN, INVESTORS TOO CAN SERVE AS VALUABLE SOURCES OF INFORMATION. WHO WOULD KNOW BETTER WHAT MAKES FOR AN EFFECTIVE BUSINESS PLAN ? OTHER SOURCES OF ASSISTANCE INCLUDE... l accountants l lawyers l marketing specialists l engineering and production experts Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved THE ENTREPRENEUR'S INPUT IS ESSENTIAL IF THE VENTURE IS TO REMAIN TRUE TO HIS OBJECTIVES AND IDEALS Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved IN WRITING THE BUSINESS PLAN, THE ENTREPRENEUR SHOULD SEEK OBJECTIVE AND CONSTRUCTIVE INPUT Copyright 1999 Jon Kerr and Captus Press Inc. All right reserved 3 ...
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This note was uploaded on 06/02/2011 for the course AK 3920 taught by Professor Jonkerr during the Winter '10 term at York University.

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