This training course discusses the creation of a business plan. It explains the importance of business planning, defines and describes the business plan outline and its components thus enabling you to develop a very good business plan.
Duration of the course: 00:30:00
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Slide 1 How to Write a Business Plan
Welcome to SBA’s online training course, How to Write a Business a Business Plan.
This course is a product of the agency’s Small Business Training Network and is championed by the
Office of Entrepreneurial Development.
Slide 2 Introduction
This is a self-paced training program designed to provide an overview of business planning. The course is easy to follow and the subject matter is indexed for quick reference and easy access. It will take about
30 minutes to complete the training program. Additional time will be needed to review included resource materials and to complete the suggested next steps at the end of the course. The “next steps” outlined at the conclusion of this course are probably the most important part of this training program. The reason ---- they will help you apply what you have learned and engage you in the business planning process. When you complete the course, you will have the option of receiving a printed Certificate of Completion from the SBA.
Slide 3 Course Objectives
The course has three key objectives:
• Explain the importance of business planning;
• Define and describe the components of a business plan; and,
• Provide access to sample plans and resources that can help you develop a very good business plan.
Slide 4 Course Outline
There are eight topic sections within this course. Each section covers a different aspect of business planning. However, woven together they tell a story that will help you understand why planning is important and, most importantly, how to prepare a winning business plan.
Slide 5 Course Outline (Cont.)
You will notice a button in the top right section of each slide that says Course Outline. Clicking on that button will bring you to this page – which will give you quick access to any section of the course. Let’s get started………
Slide 6 Why Planning is Important
Planning is important…
Suppose you lived in New Hampshire and wanted to drive to Texas, would you use a map? Of course you would.
Starting or running a business without proper planning is like taking a 2000 mile trip, without a map. Planning will help shape your destination and provide the best road to get you there.
Slide 7 Why Planning is Important
Planning gives you a blueprint to follow.
It is a communications tool for investors, suppliers, employees and others interested in your business. If you don’t plan for the success of your business, you will likely fail. It is that simple.
Slide 8 Why Planning is Important
Before you begin writing your business plan, consider four core questions:
1. What service or product does your business provide and what needs does it fill?
2. Who are the potential customers for your product or service and why will they purchase it from you?
3. How will you reach your potential customers? And,
4. Where will you get the financial resources to start your business.
Slide 9 The Big Picture
A good business plan is a compelling storyboard about your business. It explains:
Who you are; why you’re in business; what you do; how you do it; where you operate; how you will generate profits; who your customers are; and, why your business is important.
Slide 10 Snapshot of a Business Plan
A typical business plan includes the following components: Table of Contents
Business Description & Vision
Definition of the Market
Description of Products and Services Organization & Management Marketing and Sales Strategy Financial Management
Each of these components is explained in detail within this section of the course. Review these components carefully. Together, they represent your business plan. Also, available to assist you in a later section of this course, is a business plan template. The template follows the outline in this course and includes automated financial statements.
Slide 11 Table of Contents
The first section of your business plan is the table of contents. It lists key sections within the plan. Importantly, it assists the reader in finding specific topics and areas of interest in your plan. It also brings organization and structure to the document.
Slide 12 Executive Summary
Some would argue that the Executive Summary is the most important section of the business plan. Although it is typically the first section reviewed by a reader, it should be written last – after the details of your plan have been flushed out. The Executive Summary should provide an enthusiastic snapshot of your company, explaining who you are, what you do and why. It should be less than 2 pages in length and easy to read. After reviewing this section, the reader should have a good basic understanding about your company, but most importantly, want to learn more about your business.
Slide 13 Business Description & Vision
The Business Description & Vision component of the plan is pretty basic. It describes the business. In this section, you should include a crisp mission statement; a focused statement about the company’s vision; specific business goals and objectives for a prescribed time-period; and, background information about the company. You should also identify the key principals or owners of the business.
The mission and vision statements set the tone for your business and are very important. They are further described in the next two slides. However, before we move on to the mission statement, a couple of quick notes.
First, your business goals and objectives should be specific and attainable. Remember, goals that are not specific will probably not be achieved. Specificity regarding the details of your goals and objectives is very important.
Second, the history of the company should be just that. It should describe when and why the business was started and who the founders are. It should also explain how the company has evolved.
Now, let’s take a look at the mission statement.
Slide 14 Business Description & Vision
The mission statement is a brief statement about who the company is and what it stands for. Some companies use the mission statement as a marketing slogan. However, the real intent of a mission statement should be to succinctly describe the purpose of the business. For example: Google’s mission statement is: “Organize the world’s information and make it universally accessible and useful.” Starbuck’s mission statement is: “Establish Starbucks as the premier purveyor of the finest coffee in the world, while maintaining our uncompromising principles while
Don’t just write down a mission statement….. Think about it, get input from others and carefully develop a statement that is an expression of your business.
Slide 15 Business Description & Vision
The company’s vision statement is about the future. It is a statement that outlines what a company wants to be.
Simply put, a company’s vision statement should be a memorable and engaging expression of hope and inspiration. It should guide the mission and business plan of the company. A business without a vision is a company that is focused on the past.
Slide 16 Definition of the Market
Defining your market is an important part of the business plan. Let’s face it, before you can sell something, you have to know who might buy it. The first step in defining you market should be to describe the industry you operate in, as well as the potential or prospects for your business within that industry. Your industry knowledge as well as the prospects for your business should be clearly illustrated in the plan. For instance, if you are a retail store selling bicycles, describe the general outlook for bicycle sales, as well as your potential for capturing a growing segment of the bicycle market. The second step should be to describe your customers’ needs, including information about the degree to which those needs are (or are not) currently being met. Again, if you are selling bicycles, explain why customers will buy your products. Specifically, what needs are you satisfying with your products.
Slide 17 Definition of the Market
The third step in this section of your plan is to identify your target market and profile your customers. You can do this by answering several questions:
•Who are your current or prospective customers?
•What do they buy and why?
•And, what market segments or groups are more likely to buy your products?
A market segment or targeted group of customers is a grouping of people sharing one or more characteristics that cause them to have similar product needs.
Market segmentation or target marketing is the process of dividing a market into distinct segments that
behave the same way or have similar needs. Because each segment is somewhat similar in their needs and attitudes, they will likely respond similarly to a specific marketing strategy. This is an important point and we will discuss marketing to targeted groups later on in this course. However, it is critical that you understand the value of defining your market.
When identifying characteristics of your target market you should also determine the size of your potential market. You can determine the size of your market by examining the number of potential customers in a particular area; reviewing the geographic area they live in; analyzing prior annualized sales and considering market growth.
If you don’t know who your customers are, you can’t develop a strategy to reach them. And, if you can’t
reach them, you will likely not be effective in selling your products and services.
Slide 18 Description of Products
This component of the business plan is the easiest to complete. However, don’t let the simplicity fool you.
In this section you will identify and describe all of the products and services your business sells or provides. You should also explain how the items you sell are priced. In addition, and perhaps most importantly, this section should explain how your products and services are competitive.
The real value this section brings to the plan is providing the reader with a crystal clear understanding of why you are in business, what you sell and how you compete. Keep this section focused, easy to follow and emphasize your competitiveness. It is easy to list your products. But, it is far more worthwhile to explain how you are competitive.
Finally, if you have pictures or brochures describing your products, reference them in this section and include them in the appendix of the business plan.
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