Download Developing a Business Plan - Southern Rural Development Center

Developing a Business Plan
Presented by:
Alan Barefield
Associate Director, Southern Rural Development Center
Jim McConnon
Business & Economics Specialist and
Associate Professor, University of Maine
Business Skills Training
San Antonio, Texas
September 5, 2003
Ca$hing in on Business Opportunities Curriculum
Chapter 6: Writing a Business Plan
Prepared by:
Beth Duncan, Ph.D.
Small Business Specialist & Extension Professor
Mississippi State University
Session Overview
I.
Session Goal and Objectives
II.
Business Planning Basics
III.
Key Components of a Business Plan:
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Industry, Company, and the Products
Market Research & Analysis
Marketing Plan
IV.
Break
V.
Key Components of a Business Plan (con’t):
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VI.
Operating Plan
Management Team
Financial Plan
Wrap-up and Evaluation
Developing a Business Plan
Goal: You will learn how to develop a business plan
Objectives: As a result of this session,
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You will learn the reasons for developing a business plan
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You will learn the key components of a business plan
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You will learn the format of a business plan
What is a Business Plan?
A business plan is a written description of the goals and objectives of
the business and how they are going to be achieved. It includes the
mission of the business along with the production, organizing,
marketing, and financing intentions:
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Is it feasible to operate my own business?
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Is my business idea feasible?
“If you don’t know where you’re
going, it doesn’t matter which
road you take.”
. . .anonymous
Why Develop a Business Plan?
A business plan is a very important tool if you are starting a new
business or expanding an existing one.
 The business plan communicates to others how successful you
are going to be.
 Lending institutions require them to support loan applications.
 Experience shows that successful businesses have a plan; the
majority that fail do not.
 A good business plan is your road map to success!
Key Components of a Business Plan
The business plan covers six key areas:

The Industry, the Company, and the Products

Market Research and Analysis

Marketing Plan

Operating Plan

Management Team

Financial Plan
The Industry, the Company, and the Products
This section of the business plan describes the business venture in a
detailed but concise manner. You must clearly describe:
 The nature of the industry
 The proposed business
 The product the business
plans to offer
The Industry
Present the current status and outlook for the industry in which the
business will operate.
 New products and developments
 New markets and customers
 General trends affecting the business
 Identify sources of information used to describe trends
The Company
Write a detailed description of the proposed business venture, the
products and services it will offer, and the principal customers.
 Mission statement with goals and objectives
 Ownership and legal form of the company
 Reasons why the business will be successful
The Products or Services
Describe in detail the products or services to be sold, as well as the
application of the product or service.
 Benefits to the customers
 Competitive advantages
 Unique features
 Current state of development
Market Research and Analysis
This section of the business plan presents enough facts obtained
through market research and analysis to determine if the product
or service has a substantial market in a growing industry despite
a competitive market.
 Customers
 Market Size and Trends
 Competition
 Market Share and Sales
Types of Market Research
PRIMARY RESEARCH = DO IT YOURSELF:
 Observation
 Surveys
 Interviews
SECONDARY RESEARCH = USE EXISTING DATA:
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Public Library
College or Universities
Chamber of Commerce
Business Publications
Trade Shows
The Internet
Census Information
Sales Tax Data
Types of Market Analyses
The information obtained through primary and secondary research
techniques can be analyzed in a variety of ways.
 Economic Trend Analysis
 Political and Social Analysis
 Customer Analysis
 Market Potential Analysis
 Competitive Analysis
Customers
Identify your target market and develop a customer profile.
 Demographic profile
 Lifestyle patterns
 Expectations
Customer Profile
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Age
Income
Education
Gender
Stage of business
Type of business
Size of business
Location
Behavior patterns
Customer expectations
Other ???
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Who is your target audience?
How will you reach this audience?
Market Size and Trends
Describe the primary market for the product, both geographically and
in terms of sales volume.
 Describe seasonal fluctuations
 Discuss potential for growth
 Discuss factors affecting growth
Competition
List the strengths and weaknesses of competitive products and
services and list the companies that supply them.
 Identify and list current and future competitors
 Assess the competition on the basis of price, quality,
performance, service, etc.
 Discuss advantages and disadvantages of competing
products or services
Market Share and Sales
Summarize what it is about your product or service that will make it sell
in the face of current and future competition.
 Identify and list major customers and estimate potential sales
 Estimate share of the market
 Estimate sales in units and dollars for the next two to five years
Marketing Plan
This section of the business plan describes the company’s marketing
goals and objectives and how they will be achieved.
 Overall Market Strategy
 Pricing
 Sales Tactics
 Advertising and Promotion
 Packaging
 Marketing Plan Outline
Overall Market Strategy
Describe the general marketing philosophy and strategy of the
company.
 Derived from market research and analysis results
 Include discussion of markets targeted for sales promotions
 List short-term and long-term marketing objectives
 Discuss specific marketing tactics
Pricing
The pricing strategy selected can mean the difference between
success and failure.
 Provide a detailed description of the pricing strategy for each
product or service
 Outline factors considered in developing pricing strategies
 Discuss wholesale vs. retail pricing strategies
 Discuss price levels, geographic terms, discount policies, etc.
Sales Tactics
Describe specific actions that will be taken to generate sales and
distribute the product or service to customers.
 Analyze effectiveness of everything available within the sales
system
 List channels such as salespeople, agents, dealers, and
direct mail services
 Describe methods that will be used to distribute products
to customers
 Describe merchandising techniques
Advertising and Promotion
Describe approaches the company will use to bring the product or
service to the attention of the target market.
 List advertising methods along with benefits and costs
 Discuss promotional efforts and strategies
 Publicity
Packaging
Describe how the product will be packaged for the target market.
 Package design
 Package labeling
 Packaging materials
Marketing Plan Outline
A marketing plan outline is a useful tool for pulling together information
related to the marketing plan. The marketing plan outline should include
information on the following:
 Marketing situation
 Marketing objectives
 Marketing Strategies
 Budget
 Action plan
 Evaluation
Questions???