Download Unit 3 PPT

ENTREPRENEURSHIP
Unit 3.2:
Creating the Business Plan
Creating the Business Plan
• Students will be able to:
• Construct a mission statement for a company
• Explain rationale for starting a business by utilizing
market research
• Describe a business, it’s products/services, and
customers
• Compare types of ownership for a business, and select
best option
• Determine organizational structure and management
skills needed to operate a business
• Assess locations for a business
Creating the Business Plan
(Organizing the structure of the business)
The Business Plan format used in this unit closely
follows the “DECA Entrepreneurship Participating”
event. It is a 10-page business prospectus, and can be
easily completed by students. This format contains all
the common components of a business plan, however
some parts are combined to shorten the document.
It’s advised for teachers/students to get a copy of this format on the DECA or USOE
website. (http://www.deca.org/pdf/ENPI-ENPFguide.pdf)
Students, however, are not required to use this format. Other formats are available
from FBLA, DECA, the USOE website, or on the internet.
DECA Business Plan Format
• Section I: Executive Summary
• Section II: Analysis of Business Situation
• Rationale and marketing research, Description of Business,
Self-analysis, Analysis of the business opportunity,
customer and location, and Proposed organization
• Section III: Marketing and Promotional Plan
• Section IV: Financing Plan
– Income Statements, Amortization, and Return on
Investment
Section I:
Executive Summary
•Summarizes the main points covered in the
business plan
• Even though this is the first page of the document, it
is usually written last…thus the word “summary”
• May contain the Mission Statement (Goals) of
company
Section I:
Constructing a Mission Statement
•A mission statement expresses “specific”
goals for the company
•The best example of a mission statement
will define a company and its purpose in 30
seconds or less.
•Example:
“Give people the power to share and make the
world more open and connected.”
DECA Business Plan Format
• Section I: Executive Summary
• Section II: Analysis of Business Situation
•
Rationale and marketing research, Description of Business, Self-analysis,
Analysis of the business opportunity, customer and location, and Proposed
organization
• Section III: Marketing and Promotional Plan
• Section IV: Financing Plan
– Income Statements, Amortization, and Return on Investment
Section II:
Explain Rationale for Starting Business
by Utilizing Market Research
•The Market Analysis section:
• Presents your market research
• Features a customer demographic profile
• Identifies and analyzes competitors and explains
your competitive advantage
• Addresses industry trends and growth
Section II:
Description of Company, Products/Services, and
Customers
• Includes history and background of idea
• Describes the product or service
• Discusses features and benefits of the
products/services offered and how it benefits the
customer
• Discusses target market, market segments, or
market niche served
• Assess locations
Assessing Locations for Business
• Location, Location, Location
• The location of a business—especially retail—is often a
critical factor in its success
• WHERE you will locate and WHY…Regardless of type of
business, this is an important aspect of all business plans
and must be explained in detail, including…
• Zoning & Parking
• Square footage
• Traffic counts
• Accessibility
• Visibility of site
• Costs (Lease, taxes, renovations)
• Nearby businesses, including
target market
Section II:
Select a Form of Ownership
•Sole Proprietorship
•Partnership
•Corporation
• Subchapter S Corporation
• C-Corporation
•Other legal form of Ownership
• Limited Liability Company
*See Unit 3.2A “Legal Forms of Ownership” slide presentation
Sole Proprietorship
•Owned and operated by one person
•Easy to create
•Receives all profits, incurs any losses, and is
liable for the debts of business
•Most entrepreneurs often switch to another
form that provides more personal financial
protection as the business grows
Partnership
•A business with two or more owners
•Partners do not have to share a
business equally
•How the partnership interests are
divided are spelled out in the
Partnership Agreement.
Corporation
•Registered by the state and operates apart
from its owners
•A corporation lives-on after the owners die
or have sold interest
•Ownership is represented by shares of
stock, public or private
2 Types of Corporations
•C-Corporation
•Subchapter S Corporation
C-Corporation
•The most common corporate form for large
businesses (i.e., Federal Express, Microsoft)
•Can create status that may assist in getting loans
•Shareholders are owners of the corporation
•Required to have an elected Board of Directors to
make decisions for the company
•Structured to accommodate employee benefits;
i.e., pensions, retirement plans, and profit sharing
Subchapter S Corporation
•Designed for owners of smaller companies who
want the liability protection of a corporation,
but want to avoid double taxation
• Pass-through Taxation: Profits are taxed once at
shareholder’s personal tax rate
• Shareholders liable to amount invested
•In smaller private corporations, the founders
generally hold all–or a majority–of the stock.
Other Forms of Ownership
• Limited Liability Company
• Nonprofit Corporations
IMPORTANT: Before you start your company… Check with
your state, accountants, or attorneys to determine which
form of legal ownership most benefits your needs,
company size, financial status, and issues of liability.
Source: Entrepreneurship and Small Business Management, Glencoe, 2006, pg. 143.
Section II:
Organizational Structure and
Management Skills
•Organizational Structure
•A plan which shows how the jobs in your
company relate to one another
• Smaller companies may have everyone report
to the owner. The larger the company, the more
layers of management needed.
Organizational Chart
• A graphic representation of the organizational
structure.
Management Skills
• The management and staffing section should
provide skill sets needed–a job description–for
each position
• Show you and your staff have the experience,
maturity, and common sense to manage your
business well
Good Management Skills
•Human Relations
•Communications
•Networking
•Math
•Problem Solving & Decision-making
•Technical Skills
•Time Management
•Conceptual Skills
Section III: The Marketing Mix
•The Marketing Mix
(the 4 P’s)
•Product
•Price
•Place
•Promotion
*See Unit 3.2B “The Marketing Mix” slide presentation
Products/Services
Answers: What are you selling?
•Product brands
•Ford, Dell, Kellogs
•Product Mix
•Used cars:
Ford, GMC, Chrysler, Toyota,
Kia
•Ford only: Trucks, SUVs, Sedans, Hybrids
•Inventory methods
•Keeping track of available stock of goods
Pricing Strategies
Answers: How much is it?
• You’re in business to make profit. Know which
pricing strategies to utilize.
• Mark-up
• Cost-based
• Competition-based
• Demand-based
• Psychological Pricing
• Discounting
• Credit
Channels of Distribution
Answers: Where can I get it?
•The path a product takes from producer to final
user (consumer)
• Direct
• Indirect (intermediaries / middlemen)
• Includes transportation, storage & product handling
Promotional Mix
Answers: Why should I buy it?
• Advertising:
• Paid non-personal
presentation of ideas
directed toward a mass
audience.
• Publicity:
• Free placement of
newsworthy items
about company, etc. in
the media.
• Personal Selling:
• Giving an oral
presentation to one or
more potential buyers.
• Promotions:
• Use of incentives or
interest-building
activities to create
demand. Be creative!!
Planning Organizational Structure
for Business
• Let’s Review:
• Construct a mission statement for a company
• Explain rationale for starting a business by utilizing
market research
• Describe a business, it’s products/services, and
customers
• Compare types of ownership for a business, and select
best option
• Determine organizational structure and management
skills needed to operate a business
• Assess locations for a business