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ENL220 Exam Prep: Business Plan

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Michael Armstrong

on 12 January 2014

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Transcript of ENL220 Exam Prep: Business Plan

The Business Plan
What is a business plan?

A business plan is a document that defines your business and identifies your operations and your aims.

It provides specific and organized information about your company.

Basically, a business plan enables a business to look ahead, allocate resources, focus on key points, and prepare for challenges and opportunities.
Why do you need a business plan?

If you are setting up a new business or want people to invest serious money in your business, you will need a business plan.
What is the Purposes of a Business Plan?

A business plan has two main purposes:
1) To provide you with a detailed plan to help you as you make your new venture grow.
2) To convince investors that you are the sort of person and that this is the sort of business in which they should invest.
Why do you need a business plan?

1) It will help you define your business and focus on your aims.
2) It can be used as a selling tool when you have to approach lenders, investors and banks.
3) Going through the process of compiling your business plan will help you uncover weaknesses or omissions in your planning processes.
4) You can use the plan to solicit opinions and advice from people, including those in your field of business, who will be able to give you advice.
The Components of a Business Plan
1) Executive Summary
2) Table of Contents
3) Company Description
4) Products / Services
5) Market Analysis
6) Marketing Plan
7) Operations Plan (Strategy and Implementation)
8) Web Plan Summary
9) Financial Plan
10) Management
11) Appendices
Source: Chapter 27, Shirley Taylor's "Model Business Letters, Emails and Other Business Documents"
Components of a Business Plan

1) Executive Summary

This is the first section of your business plan, and it is exactly what it sounds like -- a compact, concise outline of the whole plan. In this section you should state:

* the nature of the company
* the product or services you will offer
* what's special about your products or services
* who the managers are
* how much money you need ad what you will use it for

Most people only read this executive summary, so you need to show how unique your business and your team are.
Components of a Business Plan

2) Table of Contents

Try to keep this to one page, listing everything your plan includes along with page numbers.
Components of a Business Plan

3) Company Description

Questions to answer in the company description include:

* How did you get started?
* How has the company grown?
* Where are you now with the business?
* What plans do you have for the future?

You also want to provide in this section a history of sales, profits and other important information.
Components of a Business Plan

4) Products / Services

Put yourself in the investor's shoes and ask yourself what you would want to know before investing money in your business. Focus on customer benefits, and make sure it answers questions like these:

* What products or services do you offer?
* What makes them different from others?
* How does it make people's lives better?
* What kind of equipment do you need?
Components of a Business Plan

5) Market Analysis

This section shows all the research you have done, such as distribution problems, government regulations, technological opportunities, industry characteristics and trends, projected growth, customer behavior, complementary products / services, etc.
Components of a Business Plan

6) Marketing Plan

Start with a discussion of what the market is like. Where are your customers? What are their needs? How will you reach your customers and capture the market? List the steps you will take to ensure that customers know about your products or service and why they will prefer it over the competition. List all the tactics you will use, from the cheapest to the most expensive.
Components of a Business Plan

7) Operations Plan (Strategy and Implementation)

This is the nuts and bolts of your business plan. You need to give precise information about what is involved in running your business. You may break it down into sections including your value proposition, marketing strategy, positioning statements, pricing strategy, promotion strategy, distribution patterns, marketing programs, sales strategy, sales forecasts, strategic alliances, etc.
Components of a Business Plan

8) Web Plan Summary

Here you must include details of your website marketing strategy and development requirements.
Components of a Business Plan

9) Financial Plan

In this section you will need to include details of sales forecasts, profit-and-loss statements, cash flow projections, balance sheets, etc.

Caution! Make sure you have accurate and up-to-date figures in your business plan. This will be essential if you are able to obtain support.
Components of a Business Plan

10) Management

Include details of the management of your company, who is on the board, who will manage each department and why.
Components of a Business Plan

11) Appendices

There will probably be lots of appendices attached to your business plan--managers' resumes, promotional materials, product photographs and descriptions, financial details, etc.
A Business Plan Exercise
Elevator Pitch
Transcript

So they call it an elevator speech. I've heard 58 of these in the last two weeks, in my circuits in angel investment and business plan contests. What I'm talking about is, lately there's kind of a fashion of the elevator speech in business plan contests as being timed to 60 seconds. The classic idea is the elevator speech is your spiel when you're suddenly with a potential investor or buyer or partner, you're in the plane, sitting next to somebody, or you're literally in the elevator. Lately it's a lot about a 60-second speech about your business, in front of an audience. So what I recommend, and I've seen a lot of these, 60 seconds is enough time. I want you to think of it in four 15-second portions. And the first of those is 'Tell a Story.' Give a person a name, and show what problem that person has. So-and-so has had heart attacks. So-and-so lives in a village where they need clean water. Humanize it, personalize it. Generate empathy for the problem that this person has. It might be the patient, the doctor, the hospital, it might be the village, it might be the consumer; start with that problem. And then, second of four 15-second parts, 'Your Solution.' Now, because of us, the doctor can see the arteries better, or the village has this filter, or the family has this filter, or there is this group. What is the solution for the story you told in the first 15 seconds? And that of course is what you're selling, your business idea, your product. And then you move to the third 15 seconds, and it's about 'How You're Different,' and uniquely qualified to be the ones to solve this problem. We have a team of seasoned, proven entrepreneurs, and our technology is patented, and is new and different and so on, that's the third thing is how we're different. So you've got the story of the problem, your solution, how you're different, and you've still got 15 seconds left to talk about the business. "We see this as an $X billion market where we can take sales up to this many million dollars with this much money, and we feel that we'll be able to exit in three to five years by sale to X, Y, and Z." That's your final, ask: what do you want? You want an investor to be interested? Or you want to get that investor's business card, or you're in the plane and can get that card to follow up. That last 15 seconds is your 'Ask.' And that, in three minutes, is a one-minute elevator speech.
http://www.bplans.com/business_planning_resources/videos/the_elevator_pitch
A Business Plan Example: The Corner Burger Shop
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