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Instructor Guide
COPYRIGHT
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agreements. No part of this document can be reproduced, stored in a retrieval system,
or transmitted in any form or by any means, electronic, mechanical, photocopying,
recording, or otherwise without the prior written permission of Velsoft Training
Materials, Inc.
Courseware Version: 3.0
TABLE OF CONTENTS
Preface ..................................................................................................... 1
Understanding Your Training Package ......................................................................................1
Preparing for Training .............................................................................................................2
Our Top 10 Training Tips .........................................................................................................3
Materials Required ..................................................................................................................4
Related Courses ......................................................................................................................4
Additional Resources ...............................................................................................................4
Agenda: Day One ..................................................................................... 5
Icebreaker: Breaking It In .......................................................................................................6
Session One: Course Overview ................................................................................................7
Session Two: What is a Business Plan For? ............................................................................. 10
Session Three: A General Business Plan Framework ................................................................ 12
Creating a Framework ......................................................................................................................... 12
Pre-Assignment Review ...................................................................................................................... 14
Break ................................................................................................................................... 17
Session Four: Identifying Your Audience ................................................................................. 18
Who Are You Writing For? .................................................................................................................. 18
The Rules of Writing ............................................................................................................................ 21
Debrief ................................................................................................................................................ 23
Session Five: Gathering and Analyzing Information ................................................................. 24
GO-PARSE ............................................................................................................................................ 24
PARSE in Action ................................................................................................................................... 29
Debrief ................................................................................................................................................ 32
Morning Wrap-Up.................................................................................................................. 32
Lunch ................................................................................................................................... 32
Energizer: Unscramble .......................................................................................................... 33
Session Six: Defining Your Company ...................................................................................... 34
Identifying Your USP ........................................................................................................................... 34
Debrief ................................................................................................................................................ 34
Writing Your Company Description .................................................................................................... 35
Break ................................................................................................................................................... 35
Describing Your Products and Services ............................................................................................... 36
Performing a Market Analysis ............................................................................................................. 37
Developing an Operations Plan ........................................................................................................... 38
Types of Operations ............................................................................................................................ 41
Session Seven: Getting to Work ............................................................................................. 43
Day One Wrap-Up ................................................................................................................. 44
Agenda: Day Two ...................................................................................45
Re-Connect: Turning Things Around ....................................................................................... 46
Session Eight: Creating a Marketing Strategy .......................................................................... 47
Introduction to Marketing .................................................................................................................. 47
Analyzing the Competition and Yourself ............................................................................................. 51
Analyzing Distribution Channels ......................................................................................................... 52
Creating a Marketing Plan................................................................................................................... 53
Break ................................................................................................................................................... 55
Sketching Out the Plan ........................................................................................................................ 55
Evaluate, Review, and Revise .............................................................................................................. 56
Leveraging Social Media ..................................................................................................................... 57
Session Nine: Creating the Sales Plan ..................................................................................... 59
Building Your Sales Force .................................................................................................................... 59
The Sales Cycle .................................................................................................................................... 61
Morning Wrap-Up.................................................................................................................. 64
Lunch ................................................................................................................................... 64
Energizer: Work the Plan ....................................................................................................... 65
Session Ten: Developing Financial Projections ........................................................................ 66
Accounting Terminology ..................................................................................................................... 66
General Accepted Accounting Principles (GAAP) ................................................................................ 69
Key Reports ......................................................................................................................................... 71
Break ................................................................................................................................................... 76
Financial Projections ........................................................................................................................... 77
Session Eleven: Putting It All Together ................................................................................... 79
Writing the Executive Summary ......................................................................................................... 79
Making a Strong Presentation ............................................................................................................ 80
Debrief ................................................................................................................................................ 80
The Finishing Touches ......................................................................................................................... 81
Reviewing and Revising ....................................................................................................................... 82
Workshop Wrap-Up ............................................................................................................... 83
Writing a Business Plan
PREFACE
Understanding Your Training Package
Your Velsoft training package contains the following items:
o Instructor Guide: Contains all textbook information plus this preface, icebreakers,
activities, delivery tips, and more!
o Student Manual: Contains textbook information as well as areas to take notes. Each
manual also includes an evaluation form, action plan, and recommended reading
list.
o Handouts: Contains pre- and post-class answer keys as well as any additional
information or activity resources.
o Pre-Assignment: Task for participants to complete before the workshop to get them
thinking about the learning that will take place.
o PowerPoint Slides: PowerPoint presentation highlighting talking points in the
course.
o Quick Reference Guide: Two-page cheat sheet of tips and facts covered in the
course.
o Outline: Word document that outlines the overview and objectives of the course
and summarizes each session to be covered.
o Advertorial: Pre-made flyer that you can customize and distribute.
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Preparing for Training
To begin, read through this Instructor Guide. This is intended to be a guide and not a bible! Be
guided by your experience, the needs of the participants, and your own common sense, as well
as the information in here. Most of the suggestions and all of the information have been
developed through research and hands-on, classroom experience, but you will want to
customize the material for your particular audience.
Practice writing on flip chart paper before the workshop. You may want to draw lines on the
paper (lightly, in pencil) to help you. As well, many of the flip charts suggested in this course can
be prepared ahead of time. The first page should be set up like this:
o Name of Workshop
o Facilitated by < Your Name>
o Your Organization’s Name
For an extra touch, include sheets with the words Courtesy, Participation, and Confidentiality
written on them and post them around the room. You might also want to add the words
Exercises, Role Play, Learning, and Fun.
Have an emergency kit ready with the following items:
o Extra markers
o Tape and sticky putty
o Adhesive bandages
o An extension cord
o Safety pins
o Tissues
o A bottle of water
o A fuzzy toy (which can be used for many activities and to spice up any lecture)
Arrive at least one hour before the start of the session to ensure that:
o Signs are placed directing trainees to your room.
o The classroom is set up as desired.
o You know where washrooms, break facilities, smoking areas, and fire exits are
located.
o You have all necessary resources for the day.
o Materials for the morning are laid out, particularly for the icebreaker.
o Pens, sticky notes, and scrap paper are placed at every table.
o If you are using a laptop, it should be connected to the projector and both items
should be turned on.
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Our Top 10 Training Tips
Although we will provide advice throughout the workshop, there are a few tips that we think
every trainer should know.
1. I always shake hands with each participant and introduce myself as they come into the
classroom. I find that it breaks the ice and sets the type of friendly atmosphere that is
conducive to learning.
2. I always practice before the big day, even if I have delivered the course beforehand.
3. Bring extra activities with you. I have a list of children’s games that I’ve adjusted for
adults.
4. Always have a backup plan! For example, if you plan to use PowerPoint slides, make
sure you have a copy of the Instructor Guide, which includes the information to be
covered.
5. I like to print my instructor guide and place it in a three-ring binder. I put any
customized information in here, plus during the workshop I make notes about what
worked and what didn’t. This will be a resource that you can build on in the future too!
6. Things will go wrong during your workshop. If you are well prepared and confident, you
should be able to resolve most situations quickly and easily. Try not to let participants
see you stressed!
7. Involve participants as much as you can. Have them help you set the agenda, guide
activities (by passing out or collecting forms, for example), lead discussions, and
improve the course. The more participants put into it, the more they will get out of it.
8. Be ready to learn. I have not yet taught a workshop where I didn’t learn something.
Challenge yourself!
9. Tie everything back to the workplace. It’s no good knowing information unless
participants know how to use it.
10. And finally… don’t be afraid to have fun! I always bring a few fuzzy toys with me. I use
them as a speaking hat during discussions – whoever is speaking has the toy. Plus, it
sparks creativity and keeps participants interested.
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Materials Required
o
o
o
o
o
o
o
Flip chart paper
Markers
Soft ball or object
One index card per participant (Day One Icebreaker)
Painter’s tape (Day One Icebreaker)
Small prizes, if desired (Day One Energizer)
Assortment of pens, sticky notes, highlighters, scrap paper, etc., if desired (Session
Five and Session Eleven)
o Websites and materials pertinent to the local region, such as journals, articles,
business texts, annual reports, information about labor market reports, white
papers about your industry, chamber of commerce reports, etc. (Session Seven and
Session Eleven)
o Timer (Day Two Re-Connect)
Related Courses
o
o
o
o
o
Basic Business Management – Boot Camp for Business Owners
Basic Internet Marketing
Marketing and Sales
Marketing with Social Media
Strategic Planning
Additional Resources
If you would like more information on training, Velsoft offers Train-the-Trainer courses at
several different levels. We also like the following books:
o The Trainer’s Tool Kit, by Cy Charney and Kathy Conway
o Diversity Training, by Cris Wildermuth
o Games that Teach, by Steve Sugar
o Sivasailam Thiagarajan’s books on games and activities
If you have a favorite resource, please share it with us!
 2005-2013, Velsoft Training Materials Inc.
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5
AGENDA: DAY ONE
8:30-8:45
Icebreaker: Breaking It In
8:45-9:00
Session One: Course Overview
9:00-9:15
Session Two: What is a Business Plan For?
9:15-10:00
Session Three: A General Business Plan Framework
10:00-10:15
Break
10:15-11:00
Session Four: Identifying Your Audience
11:00-11:45
Session Five: Gathering and Analyzing Information
11:45-12:00
Morning Wrap-Up
12:00-1:00
Lunch
1:00-1:15
Energizer: Unscramble
1:15-3:15
Session Six: Defining Your Company
3:15-4:15
Session Seven: Getting to Work
4:15-4:30
Day One Wrap-Up
 2005-2013, Velsoft Training Materials Inc.
Writing a Business Plan
Icebreaker: Breaking It In
(8:30-8:45)
Preparation
As each participant arrives, give them an index card.
Activity
Since this workshop is for business owners, or people at the stage where they are thinking of
starting a business, this activity is designed for them to share what their business is all about.
Give everyone a few moments to think of a sentence with no more than 20 words to describe
their business (or business idea) and write it on their index card.
Debrief
Have a few participants share their sentences. Discuss how being able to clearly describe your
business is essential so that you can focus your intentions and activities on launching, growing,
and succeeding.
Then, tape all cards to the wall. (You can also tape them to a sheet of flip chart paper and hang
that on the wall.) Remind participants that keeping our ideas in view (literally and figuratively)
can help us stay focused on our goal.
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Session One: Course Overview
(8:45-9:00)
Setting the Stage
Introductions
Introduce yourself. Establish credibility by giving examples of training experience, and your own
experiences with today’s topic, including some war stories if you have them.
Give the participants a chance to introduce themselves to you. You will probably want to know
their name, their department, their position title, and what their interest is in today’s topic.
Ground Rules
Ask participants for some ground rules that should be followed during the course. Record ideas
on flip chart paper. After the activity, create a final version and post them where everyone can
see.
Some common ground rules include:
o What we say in this room will stay in this room.
o We can disagree with one another and provide feedback as long as we do so
constructively and respectfully.
o We will all put on our listening hats when someone else is speaking.
o Everyone will participate to the extent that he or she feels comfortable. You get out
of a workshop what you put into it.
o We agree that this is the place to make mistakes and to learn.
o We agree to each be responsible for our own behavior.
Housekeeping Items
Let participants know:
o When the workshop will end
o When breaks and lunch will be
o Where they can find break and restroom facilities
o Where fire exits are and what will happen if there is an emergency
o What the building’s smoking policy is
o How you would like cell phones to be handled, although this should be agreed upon
by all participants
o What the classroom food and drink policy is
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Agenda Review
Present the agenda as a handout, PowerPoint slide, or on flip chart. Review the topics and the
timeline.
Here is how our in-house trainer handles some common concerns.
This looks like a lot of information. Will we be able to cover it all?
Reassure participants that today’s timeline is indeed feasible. If issues arise, promise that you
will involve participants in solving the problem, rather than cutting out topics or breaks
autocratically.
We’d rather spend more time on x rather than y. Is that possible?
If it is at all possible, accept suggestions like these. For example, you may be able to move an
activity (particularly discussion activities) from one topic to another. Make a few minutes
before the session to prepare.
I was expecting to discuss _______. Is it included in today’s course?
If it is included, reassure participants and let them know when it will be covered. If it’s not
included, suggest resources or provide additional information. If you don’t have the answers,
promise participants that you will track the information down and get it to them as soon as
possible. (Give a timeline if you can.)
I didn’t realize that this course covered_______. Why is it included in today’s course?
This can be a tough one! Usually, I briefly explain the connection and let participants know
more information will be provided when the topic is covered.
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Course Overview
Ask students to turn to Session One in their workbooks. Read the introduction below.
 Workbook Material
This two day course is designed for business owners and entrepreneurs who are ready to
create a business plan. All the essential steps are covered, including drafting the original
document; identifying the audience; gathering information; researching; describing product
plans; and marketing, sales, and accounting terms. Students will come away from the course
energized and prepared to write their business plan.
Learning Objectives
At the end of this workshop, you will be able to:
o Research and analyze the individual components needed for a business plan
o Apply skills to create a business plan for different audiences, including investors,
banks, and other stakeholders
o Explain the purpose and future of your business in easy to understand terms
o Use accounting terms to describe the future for your business
o Describe your marketing, sales, and planning strategies
Give participants a moment to write down their own learning objectives in their workbook.
Action Plans and Evaluations
Next, pass out evaluations and action plans. (Both of these items are in the Handouts folder and
the Student Manual.) Ask participants to work on these throughout the day. They will also have
a few minutes at the end of the workshop to finalize their ideas.
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Session Two: What is a Business Plan For?
(9:00-9:15)
Some people are planners, and some are not. Some businesses start when there is a great idea,
a moment to capitalize upon, and action has to be taken quickly. Others are launched only after
a carefully laid-out plan has been enacted. Very shortly within the launch and evolution of a
business, it will become apparent that a business plan is needed. The plan helps you to stay
focused on priorities and to move the business forward. When you need to apply for or solicit
funding, it will also substantiate the need for money and demonstrate the value of the
business.
 Discussion Points
Ask participants who currently has a business plan. For people who do, ask them a few
questions, such as how they created their plan (on their own or with help) and what benefits
they have had from it (does it help them stay on track?). You may want to comment on how
the business plan is an underlying structure and guide to aid in the growth and development
of the company.
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Getting Down to Business
There are lots of components that make up a business plan and that support the business, its
growth, and its viability.
 Activity Ideas
 Slide Material
Organize participants in groups of three to five. Ask them what kinds of plans they know of
that can support their business, in addition to the overall business plan they are working on
in this course. Give them about five minutes to create the list. After about five minutes,
bring the group back together and compile their ideas on a flip chart.
Possible answers include:
o Strategic plan
o Succession plan
o Marketing plan
o Social media marketing plan
o Succession plan
o Budget
o Onboarding plan
 Workbook Material
There is room in the workbook for participants to record their ideas.
 Discussion Points
Ask the group if they have ever put off (procrastinated about) writing their business plan.
Sometimes this happens when they have competing priorities, frustration over not knowing
how to start, or not enough information about creating a plan. This course will help them
work through all these issues and to create a strong, workable plan.
Staying Flexible
A business plan is just that – a plan. Your business plan will guide and direct you, but it won’t
prepare for everything. It also isn’t written in stone. Make sure you pull your plan out and look
at it at least once a quarter to make sure you are on track in your business and meeting the
goals that you set out there. If things aren’t working as anticipated, you have to consider taking
the necessary action to reach those goals, or making changes that make sense given the
information and resources you have.
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Writing a Business Plan
Session Three: A General Business Plan Framework
(9:15-10:00)
Creating a Framework
(15 minutes)
All business plans contain similar elements, but they vary in scope and tone depending on the
type of business and who will read the plan. Whether you create your plan primarily for your
bank (as a financial backer), investors, or you are starting on your own, there are some
elements that are more fully developed than others. However, the core elements are the same
in all plans.
Some people procrastinate about committing their plan to paper, but having a framework, and
acknowledging that the plan is going to help you out, makes creating the business plan an
easier task. In fact, the business plan should not be an intimidating exercise at all.
If you look at any written or Internet resources, they will describe the following elements, in
similar order:
o Executive summary (written last but presented first in the plan)
o Table of contents
o Company description
o List of products and services
o Market analysis
o Organizational structure
o Operations plan
o Marketing and sales strategy
o Financial projections
Other optional and helpful elements can include:
o SWOT Analysis (Strengths, weaknesses, opportunities and threats about several
aspects of the plan)
o Glossary (helpful if your audience is not familiar with industry jargon)
o Supporting details (logos, graphic representations, charts)
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 Discussion Points
Ask participants if they have additional elements they would like to add to their business
plan that are pertinent to their audience or environment.
You can also ask for their input on the ideal way to present their business plan. Ideas can
include:
o A traditional paper report
o Electronically (as a Microsoft Word or PDF document, for example)
o Digitally (as a website or interactive document, for example; useful for creative
businesses such as advertising or web design)
 Workbook Material
There is room in the workbook for participants to record their ideas.
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Pre-Assignment Review
(30 minutes)
Defining Our Values
Creating a business plan will help you get very clear about what your business is going to do.
You might have more ideas about what you could do than you can possibly deliver in your first
few years in business. In order to succeed, business leaders and successful business owners
recommend that you get very clear on what you do and that you don’t offer too much all at
once.
In order to determine the purpose of your business, you need to define what’s important to
you, and what you will stand for. This means you need to be able to talk about your values,
mission, and vision, which were the focus of your Pre-Assignment.
 Discussion Points
Ask participants to pull out their pre-assignment. Ask the group if their current values are
being lived out within their company. For example, if honesty is a core value, do the people
working with them demonstrate honesty in their day-to-day activities?
Then, ask for them to share their thoughts and feelings about the values statements of their
organizations (whether they have been explicitly stated or not). If the statements are being
exemplified in the work that is done, celebrate that with them. If they aren’t, what would
they suggest take place? There would seem to be two choices:
o The statements need to be updated to reflect the current environment, or
o The work being done needs to be refocused so that it reflects what we believe in.
How do they feel about all of this?
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Vision Statements
 Activity Ideas
 Slide and Workbook Material
Next, have participants share some of their vision statements for their company. This can be
difficult for a business owner or a leader to define. If they struggled with this in the preassignment, discuss the examples in the workbook.
A vision statement helps everyone working with the organization know where you wish to go. It
should be clear, understandable, attainable, and worthwhile.
Medavie Blue Cross
To be an innovative health solutions organization.
(https://www.medavie.bluecross.ca/cs/ContentServer?c=ContentPage_P&pagename=MedavieC
orporate%2FContentPage_P%2FOneColumnFull&cid=1181930223704)
British Broadcasting Corporation (BBC)
To be the most creative organization in the world.
(http://www.bbc.co.uk/aboutthebbc/insidethebbc/whoweare/mission_and_values/)
Canada Post
Canada Post will be a world leader in providing innovative physical and electronic delivery
solutions, creating value for our customers, employees, and all Canadians.
(http://www.canadapost.ca/cpo/mc/aboutus/corporate/visionvalues.jsf)
Goodyear
Become a market-focused tire company providing superior products and services to end-users
and to our channel partners, leading to superior returns for our shareholders.
(http://www.goodyear.com.jm/comp_info/mision_vision_values/)
Microsoft’s Global Diversity and Inclusion Vision Statement
To be led by a globally diverse workforce that consistently delivers outstanding business results,
understands the various cultural demands of a global marketplace, is passionate about
technology and the promise it holds to tap human potential, and thrives in a corporate culture
where inclusive behaviors are valued.
(http://www.microsoft.com/about/diversity/en/us/vision.aspx#Our%20Global%20Diversity%20
&%20Inclusion%20Vision%20Statement)
NOTE: This information and the related Internet links were accurate at the time of printing.
Velsoft takes no responsibility for the content of these sites, whether by inclusion or omission.
Velsoft is not affiliated with nor endorses any organization mentioned in its courseware.
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 Activity Ideas
After the discussion, give participants a few moments to review their own vision statements
and make adjustments. Then, have volunteers share their updated vision statements with
the group.
 Workbook Material
There is room in the workbook for participants to record their ideas.
Mission Statements
The mission statement is a public, bold, and motivating statement about what your company
does. It can also help people see what you don’t do. Here are some examples that we thought
might help you as you design your mission statement.
McDonald’s
Our mission is to be our customers’ favorite place and way to eat.
(http://www.aboutmcdonalds.com/mcd/our_company/mission_and_values.html)
Nike
To bring inspiration and innovation to every athlete in the world.
(http://nikeinc.com/pages/about-nike-inc)
Bristol-Myers Squibb Company
To discover, develop, and deliver innovative medicines that help patients prevail over serious
diseases. (http://www.bmscanada.ca/en/company/mission)
Darden Restaurants
To nourish and delight everyone we serve.
(http://www.darden.com/commitment/diversity.asp)
The Dow Chemical Company
To passionately innovate what is essential to human progress by providing sustainable solutions
to our customers. (http://www.dow.com/latinamerica/la/en/about/mission.htm)
NOTE: This information and the related Internet links were accurate at the time of printing.
Velsoft takes no responsibility for the content of these sites, whether by inclusion or omission.
Velsoft is not affiliated with nor endorses any organization mentioned in its courseware.
 2005-2013, Velsoft Training Materials Inc.
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 Discussion Points
Have participants discuss and share their mission statements. Encourage them to revise and
update their mission.
 Workbook Material
There is room in the workbook for participants to record their ideas.
Break
(10:00-10:15)
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Session Four: Identifying Your Audience
(10:15-11:00)
Who Are You Writing For?
(15 minutes)
Defining Yourself
Whether you are writing a proposal, a business case, or a novel, every writer considers their
audience. What are their preferences, likes, and frustrations? Identifying the audience for your
business plan is just as important as what you put into it, since you want something from the
reader (such as money, moral support, resources, etc.).
Most business plans are created with a certain reader in mind, and some of them want very
different things. So who will read your business plan? A banker, venture capitalist, board
member, job seeker? All of the above?
The first step in determining your audience is determining who you are. Ask yourself what kind
of business structure you are setting up. Is it….
o A sole proprietorship?
o A partnership?
o A limited company?
o A corporation?
o A joint venture?
Then, ask yourself whether you are:
o A business owner?
o An entrepreneur?
o A freelancer?
o Or something else?
Defining the Terms
When we speak about business owners as opposed to an entrepreneur, the business owner is
someone who owns a small or medium-sized business. The owner makes the decisions. In most
cases, the plan is for the business to end when the owner retires, or be inherited by someone in
the immediate family. An independent bookseller who has one or two staff is a business owner.
A hairstylist who rents a stall in a big shop is a business owner, too.
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An entrepreneur generally takes bigger risks than a business owner does, although they may
look like a business owner when the company is brand new. The entrepreneur invests money
from their own resources, investors, the bank, and wherever they can find the people they
need. The entrepreneur has a long-term view that is focused on systematizing, growing, and
then selling the business for a profit. A hairstylist who opens her own shop, and then creates a
system for hair and beauty related services that meet several needs within her community and
across the region, is an entrepreneur.
If you want to be a freelancer because you are a great writer, editor, artist, consultant,
accountant, etc., then be a freelancer. Working as a freelancer is a great way to operate as a
business, and to keep the freedom that freelancing and self-employment promise.
Lots of people start out as a freelancer, but then try to hire a few freelancers to work under
them. Growth through hiring more freelancers can makes things tricky, especially if you still
want to work as a freelancer, because someone has to also be a manager. You run a good risk
of frustrating and pushing out the other freelancers, especially if they see that you selectively
pick from the job jar and keep the best assignments for yourself. Instead, decide if the nature of
the business is such that you are actually an owner rather than a freelancer.
You get to choose what you are: freelancer or owner or entrepreneur.
Words of Wisdom
As Michael Gerber has taught for many years with his seminal books on The E-Myth, if you’re
an entrepreneur, you cannot grow and succeed in business by doing all the work yourself.
You’ve got to step back and see the larger picture of the business in order to create the
circumstances to move forward. If you are doing all the work, you’re not systematizing a
business and making it bigger; you are simply hiring yourself to do the work. If you’re happy
with doing the work (which Gerber refers to as working in the business and not on the
business), then you need to hire a manager to run the business, and take your direction from
the manager. If you want to continue in the role of entrepreneur, then you need to assume the
role of manager and create a company where the people you hire do the work.
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 Activity Ideas
 Slide and Workbook Material
Ask participants to complete the following mini-activity:
Check the term which describes you the best and completes this statement: I am
__________.
o An owner
o An entrepreneur
o A freelancer
Now that you know which role you have within the company, let’s move on and figure out
who the audience is for your business plan.
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The Rules of Writing
(15 minutes)
In writing your business plan, you may have to set aside statements that you want to make in
order that your plan follows some basic writing rules, and so that your readers will read and
understand it easily. Those rules of writing are as follows.
Concise
Get to the point quickly and remove any unnecessary words while providing a complete picture
of what you intend to do.
Correct
Use proper grammar, spelling, and formatting. As well, make sure your facts and references are
valid and verifiable.
Complete
Have someone you trust and who will give you good feedback read it over to see if there are
gaps, vague statements, or missing tables, charts, or references.
Compelling
It’s not enough to lay it all out. Your business plan has to engage, intrigue, and convince the
reader to support your business. This is why it’s important to understand your audience.
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 Activity Ideas
 Slide Material
Ask participants to answer the following questions.
o Who will read your business plan?
o What do you want readers to do after they read your business plan?
o How will you get them to take action?
o Who is the reader you are most concerned about?
o What can you do to appeal to them?
 Workbook Material
There is room in the workbook for participants to record their ideas.
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Debrief
(15 minutes)
 Discussion Points
After participants have deliberated about the questions, bring them back together and ask
them to share their answers with you. Record their answers on flip chart paper.
If they start out by saying that no one will read business plan, or that they do not have a
particular person they are worried about, challenge them to consider the following points:
o If you are not going to the bank or an investor for money, you still have to make
sure your finances are in order, and that the business is profitable quickly. Who
will be watching your profits and losses? (If not the bank, could there be an
accountant or a spouse involved who will not support not having an income?)
o What will those individuals think when they read the plan? Does it remain
compelling enough to elicit their support?
Another aspect to consider when they review the plan is to ask themselves if they are
compelled to move forward with it. Does it look reasonable? Would they buy their own
products or services?
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Writing a Business Plan
Session Five: Gathering and Analyzing Information
(11:00-11:45)
GO-PARSE
(15 minutes)
In the information gathering portion of creating your business plan, your research skills will be
important. The kind of reading you are about to undertake here is different from reading for
leisure. You need to first identify what it is you need to read, and then process the information
effectively and efficiently.
There are many models available for effective reading, but they are all similar. Here is our
recommended model, which you can easily remember with the acronym GO-PARSE.
Get Organized
Gather all the tools you need before you begin reading. Collect pens, highlighters, and sticky
notes. If you are doing your reading digitally, you’ll need the electronic equivalents so that you
can capture, clip, and save important information. If you cannot mark up the information to be
able to refer to it later, we recommend that you print it off or scan it into your computer. Make
sure that you keep track of where any information originates (such as website URLs, article
sources, etc.) and follow any copyright or reprinting rules.
Preview
Take a few minutes to preview the book or article you wish to read. Flip (or scroll) through it to
see how it is organized. Pay attention to titles, sub-titles, and graphics. Introductions,
summaries, and test activities can be helpful signposts.
If the book covers more information than you need, identify the sections or sub-sections that
you will want to read. Don’t go any deeper than that. Otherwise, you risk reading out of
context, or getting distracted on things you do not need to read right now.
Ask
Make a list of questions that you are looking to answer. If you are stuck for ideas, turn each
section heading (for the sections that you will read) into a sub-heading.
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Use the five W’s and How to help you:
o Who
o What
o When
o Where
o Why
o How
Read
Go ahead and read your text and mark it up. Break the text into sections if it’s not broken up for
you; five to eight pages is usually a good range at one time. Read each section, one at a time,
while keeping your focus questions in mind.
Here are some tips for effective reading:
o Read difficult passages several times.
o Do not try to speed read or skip over words.
o If you are having trouble understanding a passage, read it out loud or move your lips
as you go.
o If you get stuck on a section, mark it and come back to it later.
Once you have read a section, go back through it and underline the main points with a
highlighter. Just highlight the main points or keywords – there is no point in marking up entire
pages of text because you lose the attention-grabbing effects of your highlights.
In addition to highlighting, you can:
o Add numbers
o Draw shapes and arrows
o Draw vertical lines in the margin to highlight large areas of importance (like
summaries)
o Use symbols to mark key points (for example: *for a definition, $ for statistics, ? for
things you want to look into further or don’t agree with)
o Use acronyms to mark key points (“def” for definition, for example)
o Use different colored highlighters or pens to mark different categories of items
o Write notes in the margins or on sticky notes attached to the page
Make sure you are consistent with your markings, and don’t overdo it. Remember that markup
is intended to help you find important points later, so don’t mark up the whole page, just the
key points.
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Summarize
Now it’s time for a third pass on the document and to take notes on what you have read, either
by hand or with a computer.
At the beginning of your notes, include full reference information, in case you want to refer
back to something or need to attach them to your business plan. Bibliographical information
includes:
o Document title
o Full name of authors
o Publisher and publication date
o Editor (if applicable)
o Copyright date(s)
o Volume number(s)
o Edition number
o Translator (if applicable)
o ISBN number
o URL and date accessed
Make a note of which page your information came from (the margin can be a handy spot for
this.) If you are conducting a lot of research, separate your notes into the same sections as the
document, and use the same underlining/markup system.
Try to avoid copying text word for word. If you do this, clearly mark it as a quote in your notes
and indicate what page it came from. Do, however, include your thoughts, analysis, and
questions. Again, be sure to mark them as such, perhaps using a different colored pen or
highlighter.
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27
Here are some common shorthand symbols, helpful when you are making notes:
Shorthand Symbol
Meaning
<
Decrease
>
Increase
=
Is the same as, means
≠
Is not the same as, does not mean
~
Is similar to

Causes, leads to

Correct
C
Incorrect
i.e.
That is
e.g.
Example
vs.
Versus
More tips:
o Remove vowels to shorten words. For example, “shorthand” becomes “shrthnd.”
o Write compound words as their initials with slashes. “Because” becomes “b/c.”
Without becomes “w/o.” Individual becomes “i/d” or “i/v.”
o Over time, you will create your own shorthand. Be consistent and use what works
for you.
 Activity Ideas
Ask for shorthand suggestions from participants. Encourage them to add to the list above.
If you are taking notes by hand, make sure they are legible, leave lots of white space on your
page, and number your pages. If this is a big project (which some business plans are, while
others are quite brief), keep your pages in a file folder or binder for easy organization.
If you are taking notes electronically, there are programs you can use to help organize,
categorize, and highlight information. Just make sure that you are focused on getting your work
done rather than getting lost within the programs themselves.
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Evaluate
For the final step, read through your notes with your books, web pages, etc. handy. Add any
extra notes or markup as necessary. As the final pages to your notes, write out the questions
that you developed in the Ask stages and write the answers that you found in your research.
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PARSE in Action
(30 minutes)
 Activity Ideas
 Workbook Material
Ask participants to read the article called “Ace Building Celebrates Five Years of Success” in
their workbook. This is a brief excerpt of what could be in a business textbook. You may
want to have an assortment of pens, sticky notes, highlighters, scrap paper, etc. available for
participants to use.
The assignment is to apply the techniques that they have learned to the article to identify
information that will apply to their business planning research.
 Slide and Workbook Material
We have included the following summary in the slides and the workbook to help participants
as they work through the article.
Preview
Take about five minutes to preview the article. How is it organized? What sections or subsections will you want to read?
Ask
Make a list of questions that you are looking to answer.
Read
Read the identified sections. Then, do a second pass to highlight and markup the text.
Summarize
Next, start your notes with bibliographical information, followed by article information
(organized by section, subsection, and page). Use the same underlining markup system that
you used on the document.
Evaluate
Do a final read-through, adding any extra notes or markup as necessary. As the final stage,
write out the questions that you developed in the Ask stage and write the answers that you
received.
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ACE Building Celebrates Five Years of Success
Background
Ace Building was founded in 1992 after several friends gathered for their monthly breakfast
meeting and decided their city was ready for a bigger, one-stop service provider that brought
the best of home renovation services under one roof. These five founders were David Boss
(electrical), Michael Steel (plumbing), Bill Robins (construction), Milo Friesen (banking,
insurance), and Jacques Michel (HVAC). The founders spent about three months planning to
combine their expertise so they could offer a robust, complete suite of services. They launched
five years ago in the midst of a soft economy.
Growth
Ace Building started out just as cable television channels started airing reality shows about
home and commercial building projects gone bad. They made a conscious decision to get
involved with not-for-profit projects as a way to share the strength of collective expertise
available in one place, show the ease of scheduling different trades when they were all working
together, and build their name quickly in a competitive community. These projects included
two Habitat for Humanity homes, an extension to a local seniors’ residence, and a kitchen
renovation to a local fire hall.
Initially the company worked within their specialties and contracted out services they didn’t
have, including painting, roofing, windows, and real estate. In the first 24 months they worked
actively to recruit the additional services needed, went through growing pains with some hires
that were not a good fit, and yet still managed to create a company that attracted people to
come work and learn with them, and allowed them to market a full suite of services.
Commitment to Learning
The founders are all business people with a commitment to learning. Does that sound strange?
It shouldn’t! They actually met while taking professional development courses in leadership,
and all of them report having respect for three particular programs of study which they
continue to model and demonstrate in their work. This includes Peter Senge’s work in The Fifth
Discipline, James Kouzes and Larry Posner’s The Leadership Challenge, and the FISH Philosophy,
which is about being present for one another, making someone’s day, choosing your attitude,
and play.
Accounting
Since they started in the midst of a recession, the founders were cautious with spending and
made a commitment to start lean in order to effectively grow the business. During the first
year, their offices were located in a garage bay on one of the commercial properties owned by
Bill Robins. This worked, in part because with fewer building projects at the time, Robins’
construction company did not need as much room to store their building supplies.
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In the first year, receivables were $875,000 and expenses were $870,000, so there was not
much of a profit, but the company was solvent. In the second year, the company contracted
with a professional fundraiser so that they were not donating as much of their operating costs
to not-for-profit projects. The fundraiser assisted in raising $500,000 for projects in each of the
second through fifth years of operations. Those funds supported charity projects without
impacting operating revenues, and were in large part responsible for the growth of Ace
Foundation.
Foundation
Ace Foundation is managed by a volunteer board of directors (including two of the founders).
Their goal is to raise money and complete projects designed to modify living spaces for senior
citizens who want to stay in their homes but could not afford the entire cost of renovations on
their own. Projects are rated on a sliding scale depending on senior’s incomes. The recipient
contributes anywhere from one percent to 50 percent of the renovation costs. Projects that
have been recipients of foundation funding include easy-to-access cupboards; stair lifts; fully
integrated air conditioning/heating systems; upgrades to plumbing, electrical, and insulation;
assistive devices in bathrooms (including walk-in bath stalls); and building additions where a
live-in, full-time care support worker can stay, and more.
Bill Robins, the Ace Foundation spokesperson and one of the original founders, says, “The
creation of the foundation was a stroke of genius, and I no longer remember who came up with
the idea. It allows us to work in areas that we are really good at (as each of us have a different
background) while giving back to our community in a meaningful, tangible way. We’ve
benefited as much and more than anyone we have helped, because what we are doing feels so
good. We’re really looking at growing the foundation to help with the rapidly increasing
demographic that is over age 55 and would like to live in their homes.”
Private Company
Ace Building remains a privately held company but they have shared their annual accounting
reports to demonstrate their solid position in the business community. From a meager $5000
profit in year one, they have documented profits of $1.2 million in each of the past two years.
Some of this money is channeled into Ace Foundation, and some of it has gone to fund the
beginnings of a pension plan for full-time staff who meet the terms of the program. This
pension plan (a registered retirement savings plan) allows employees to match the employer
contributions.
Founder Milo Friesen has a background in banking and insurance. He says, “We are interested
in sustainability for our employees, and also in retaining people that are good for the company.
One of our distinguishing factors is the pension and benefits plan. Lots of people who work in
the trades have some kind of pension and benefits if they work unionized positions, but this
isn’t always the case and we see apprentices getting laid off frequently when the economy
slows down. We want to make sure we have everything that our employees need in order to
sustain themselves and their families, and we also want to make sure that they know how
much we appreciate the hard work they do. These plans are essential for us.”
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Bill Robins goes on to say that 90 percent of staff they hire as apprentices stay on full time to
work with them after they complete their trade certifications. Most of them are now working
on additional trades training so that they can specialize in more than one area.
The Future
The economy has grown tremendously since Ace Building got started. The founders have
created an environment where their lean start-up has quickly grown into a profitable, smart
company with the talent on hand to continue to flourish. They will be interesting to watch, and
remain on our list of top regional organizations to keep an eye on.
Debrief
(15 minutes)
 Discussion Points
Bring the group back together and discuss the exercise. Talking points can include:
o What resonated with you about the document?
o What didn’t you like?
o What did you learn from the exercise?
o What could the author have done to make your research easier?
o What can you take away from this to apply to your own business plan?
Morning Wrap-Up
(11:45-12:00)
Use the last 15 minutes to answer remaining questions. Key points of the morning included:
o What a business plan is
o Creating a framework for a business plan
o Identifying your audience
o Gathering information and conducting research
Lunch
(12:00-1:00)
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Energizer: Unscramble
(1:00-1:15)
Activity
This light exercise is intended to stimulate some thought and infuse the group with some
energy. Arrange participants in groups of six and provide them with a sheet of flip chart paper
and markers. Put the following letters on a flip chart, whiteboard, or PowerPoint slide. Watch
your spelling! Groups will want to work quietly to avoid giving answers to other groups.
Word Scramble:
siebsusn aniglnpn unciedls a otl rome htna kgmian spaln – ktea ctoian dan tge rsuetls!
Solution:
Business planning includes a lot more than making plans – take action and get results!
Debrief
The first group to figure out the answer can receive a prize if you choose.
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Session Six: Defining Your Company
(1:15-3:15)
Identifying Your USP
(15 minutes)
When you create your proposal, you are also defining what makes your business distinct from
similar businesses. This helps people understand what differentiates you from the competition.
This unique attribute is called your USP or Unique Selling Proposition. Your USP may or may not
be something that you have thought a lot about just yet, but it is an integral part of your
business plan. (It’s also what will help your sales team describe and sell your products or
services.) Make sure that you can answer your stakeholders’ questions about your USP when
they ask why you are in the best position to provide this solution.
 Activity Ideas
Give participants about ten minutes to define their USP. They must be able to write it
concisely and deliver it easily, so it is best if they can do it within about two sentences. Give
them time to work on this individually.
 Workbook Material
There is room in the workbook for participants to record their USP.
Debrief
(15 minutes)
 Discussion Points
Have participants share their USP statements. Provide them with constructive feedback to
help them create statements that are clear, concise, and accurate.
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Writing Your Company Description
(15 minutes)
Now that you have succinctly described your USP, you are ready to describe your company.
What’s your purpose? If you are starting a technology company and developing the next
generation of video games, you need to explain your research and development plans, where
your developers will come from, and how you will manage intellectual property. If you are
starting a storefront retail operation you need to describe pricing, inventory, staffing, and
location. Make sure that your description addresses the elements that are pertinent to your
industry. You also need to include a few statements addressing how your background in this
type of business or industry can be leveraged to help the business be successful.
To help you write your company description, answer the following questions. Use simple
language so that anyone who reads the plan knows what you are planning to launch.
o What is the purpose of your company?
o Briefly introduce the product(s) or service(s) you are selling.
o What will the impact of this business be on the customer?
o What other components are needed to easily describe your company to someone
else?
 Activity Ideas
Give participants about ten minutes to start generating answers to these questions. They
will have additional time later on in the afternoon; this is just to get them started.
 Workbook Material
There is room in the workbook for participants to record their ideas.
Break
(15 minutes)
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Writing a Business Plan
Describing Your Products and Services
(15 minutes)
In this section, you will provide a detailed description of your main products and services. This
description will provide your stakeholders with a clear understanding of each product and
service that is going to be available. If you have patents for certain products or copyright
requirements, are creating licensed material, or have ideas about how you will package and
present your material, those elements can all be detailed here.
Example: The Acme Vacuum 1000
The Acme Vacuum 1000 is designed to reduce vacuuming time by at least 50%. With its dirt
sensors, unique swivel head design, and 500 PSI suction capability, it is the most powerful
vacuum currently on the market. It is also available in four different colors to appeal to the
style-conscious homeowner.
A patent is pending on this design and a copyright registration form has been submitted to the
appropriate organizations in the Americas and the United Kingdom.
 Activity Ideas
Ask participants for creative ideas about product or service descriptions they have heard
before. This might help stimulate some thinking and ideas that people are struggling with a
little.
 Trainer’s Tip
There will be participants who discuss their products and services openly, and others who
decline. Sometimes the nature of a business is launching it before the competition, so it’s OK
if people do not want to share a lot of details about their products or services.
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Writing a Business Plan
Performing a Market Analysis
(15 minutes)
The market analysis is an essential part of your business plan. It includes exactly what is
happening in your region and industry, what is going on in the areas you want to conduct
business, and the potential influence (or interference!) from other businesses. This section
should include attention to creating a competitive business profile, contingency plans, and a
measurement of the risk you are undertaking, as well as what you and the business will be able
to tolerate. While our description here is short, make sure you do not take any shortcuts with
this part of your business plan, and that your market analysis – including a careful and through
look at the competition, is robust.
 Discussion Points
Provide participants with local resources for starting their market analysis. Depending on
your area and industry, this could include journals, articles, business texts, annual reports,
information about labor market reports, white papers about your industry, chamber of
commerce reports, etc. Also ask participants for resources they have found helpful.
As an aside, let people know that before approaching a community resource or expert (a
human being as opposed to research on paper or online), they need to find out everything
they can and not waste one moment of that person’s time.
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Writing a Business Plan
Developing an Operations Plan
(15 minutes)
Defining Operations
Operations management is about how you do what you do every day to make sure that the
business is running efficiently. The nature of your company will decide some of these things,
naturally, but the actual functions don’t differ at all. An operations manager may look after
other elements of the business as well as operations, depending on the size and complexity of
the operation.
Operational functions include:
o Designing
o Planning
o Organizing
o Directing
o Controlling
This means that we:
o Gather resources (ideas, people, space, and money)
o Design products and/or services and decide how to deliver them
o Sell, distribute, and service those products and/or services
o Learn and improve the operation based on feedback
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The Operations Process
Operations is called a transformational process, because we take an undeveloped product (or
service), make it into something that we can sell, and then sell it. While this transformation
takes place, we apply our operations strategy to it.
If we drew the process, it might look something like this:
Operations and Your Business Plan
In the operations management section of your business plan, you are going to define how you
will look after all of these elements. You’ll need to carefully determine the type of operation
you run so that you can remain flexible to changing markets and meet licensing and regulatory
requirements.
In Canada, for example, anyone can set up a sole proprietorship and work from home.
However, that same person might have to get a business license from their town or city to be
allowed to have customers visit, and the tax department has rules about how income is treated
and what items you can write off against that income. In addition, while some businesses have
to abide by regional rules (such as a company that manufacturers car parts), transportation
companies like airlines and trucking companies have to abide by federal regulations. As your
company scope grows, and you wish to do business across regions or in other countries, you
have to follow those rules, too.
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 Discussion Points
Ask participants what elements of operations management have to be incorporated in their
business plan. What are the essentials? Are there items some that are optional?
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Writing a Business Plan
Types of Operations
(15 minutes)
When you consider your operations plan, you may want to categorize the business in the
following ways (with plenty of overlap just to keep things interesting!):
o Manufacturing
o Transportation
o Supplies
o Service
Manufacturing
This is about things that we physically make, such as picnic tables, computer components,
rakes, and tractors. It also includes the way that we run factories, manage inventory, and
perform related activities.
Transportation
This is how we get our materials to our customers. It can include a fleet of delivery vans, large
tractor-trailer units, taxis, and aircraft.
Supplies
These are products that someone purchases from the company. Retail stores, grocery stores,
and equipment for dentists are all supplies where the ownership starts out with your company
and then changes over to a purchaser.
Service
Service can refer to customer service that the company provides. For example, a server in a
restaurant provides a service, as does the chef who prepares the meal. Service can also be
provided by someone in a call center who answers the phone when customers call with
questions. Perhaps we need to rent a car for two weeks, in which case we are using a rental
service. Part of the service application can also include the way in which the company collects
feedback (customer surveys, for example) or the way they process purchases (in person with
cash or a credit card, on a smartphone, or online).
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Overlaps
Naturally, there are companies who provide products or services that come from more than
one area. This adds complexity to the operations management function, but is of the business
world. For example, a company like Ikea Furniture has operations around the world. They
manufacture and distribute furniture and accessories to their stores, and then sell, deliver, and
in some instances assemble or install those purchases. They are involved in business as a
manufacturer, a transportation provider, supplier, and service.
Buffers
You will also see businesses who build buffers into their operations system. For example, a
company that makes computers needs a steady supply of equipment and components in order
to produce a complete unit. If a particular component is unavailable, the company cannot meet
their manufacturing demands, and their customers will look elsewhere for their computers. As
a result, the company may stockpile critical components in order to meet their targets. They
also may arrange for backup suppliers or, to minimize the risk of a supply shortage, they’ll also
use several different suppliers.
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Writing a Business Plan
Session Seven: Getting to Work
(3:15-4:15)
We have not completed all the elements of the business plan yet, but this is the ideal time to
start pulling everything together and doing some of the writing that is needed that will take you
into the next steps.
While no template is really perfect for a business plan, we are going to provide some space
here (and valuable time) to help you gather your research and build your plan. Here are the first
elements that you should work on in the time provided:
o Company description
o List of products and services
o Market analysis
o Organizational structure
o Operations plan
Please note that the following areas are also part of your business plan, but we will be working
on them later:
o Marketing and sales strategy
o Financial projections
Don’t forget the optional and helpful elements that you may want to add after the workshop:
o SWOT analysis (Strengths, weaknesses, opportunities and threats about several
aspects of the plan)
o Glossary (helpful if your audience is not familiar with industry jargon)
o Supporting details (logos, graphic representations, charts)
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 Trainer’s Tip
If you have Internet access in your training room, it may be helpful to provide access to
websites and materials pertinent to the local region. Otherwise, written materials will be
helpful. As an added element to this section, you could also invite a small business coach or
a banker to provide support and assistance while people get to work writing their plans.
They can offer excellent support if this is not an area of strength for you. They can also add
some depth to what you are offering.
Toward the end of the session, you can arrange participants in small groups and have them
share information that they want to work through verbally, obtain feedback from one
another, and bounce ideas back and forth.
 Workbook Material
There is a worksheet in the workbook to help participants structure their ideas.
Day One Wrap-Up
(4:15-4:30)
Take the last 15 minutes for a quick review and to answer any questions the class may have.
We will complete the rest of the business plan tomorrow, including the marketing and financial
aspects of the plan, adding extra pieces, setting up the format, and final finishing touches.
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45
AGENDA: DAY TWO
8:30-8:45
Re-Connect: Turning Things Around
8:45-11:15
Session Eight: Creating a Marketing Strategy
11:15-11:45
Session Nine: Creating the Sales Plan
11:45-12:00
Morning Wrap-Up
12:00-1:00
Lunch
1:00-1:15
Energizer: Work the Plan
1:15-2:45
Session Ten: Developing Financial Projections
2:45-4:15
Session Eleven: Putting It All Together
4:15-4:30
Workshop Wrap-Up
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Writing a Business Plan
Re-Connect: Turning Things Around
(8:30-8:45)
Purpose
Participants will benefit from some fresh ideas while they undertake this exercise.
Activity
Organize participants into groups of three or four. Each person in the group should share two
things that they want to implement in their business. (These might be ideas from yesterday or
something else.) Give them just 60 seconds to share their ideas (use a timer).
Next, the other people in the group will give them two rounds of feedback. In the first round
(60 seconds) they are to give all the positive feedback they can about the idea, even if it seems
silly. Then, after the timer goes off, they should provide everything negative they can foresee
about the idea. The net result is that the individual now has a list of pros and cons about their
ideas.
Debrief
Participants should thank their group members for helping them out, and can later consider the
ideas that are on their list.
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Session Eight: Creating a Marketing Strategy
(8:45-11:15)
Introduction to Marketing
(30 minutes)
The Purpose of the Plan
Marketing processes may vary in terminology or process depending on the material you read.
They may include more or fewer steps than this session will cover. What is common, however,
is that marketing is a cyclical process, and it uses very particular terms. We will also use those
terms here so that you can plan, speak to, and perform these functions within your business.
A marketing plan can be so complex (as a reflection of the business, your environment, your
staff, or a blend of all of these) that it is created separately from the business plan and then
incorporated later, but it is still an essential function of the business planning process.
Your marketing plan may undergo many revisions until all stages work effectively. This
frustrates people who do not like working in a fluid state, or have trouble dealing with change.
As a result, you need to recruit marketing professionals who love their work and have a strong
track record.
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Cycle Overview
Marketing uses the following steps:
Consumer and Market Analysis
This is the research segment of the process, as you carefully consider your customer and what
they need. You have to be honest with yourself and look at their needs in direct contrast to
what you may think of as your ideal customer. People don’t all have the same needs and wants.
Your goal is to identify groups of people (called segments) who have related or similar needs so
your marketing dollars can be directly pointed at them. There are several questions to ask
yourself as you work on this portion of your business plan:
o What do they need?
o Who is buying our product? Who is using our product?
o What is the buying process?
o How can I leverage segmentation?
What do they need?
The answer to this question may seem simple to you, but we want you to take a deep look so
that you get the real answer. When answering this question, you can potentially uncover a
segment of the marketplace that has been overlooked or underserved until you arrived. IKEA
has a tremendous market presence for furniture and home furnishings, which has led to
businesses who now concentrate on recovering and upholstering IKEA’s old furniture. How did
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the aftermarket business get started? They knew that people don’t like to get rid of their IKEA
furniture and were able to capitalize on their consumers’ energy for repurposing.
Who is buying our product? Who is using our product?
Babies don’t buy diapers, their parents do. Dogs don’t really care what their food looks or
tastes like, but their owners do. Who does most of the purchasing in the market segment you
will serve? There is no point marketing an item in a men’s magazine if the item is normally
purchased by women and given to men; you need to market to the women in their own spaces.
What is the buying process?
Grocery and corner stores place candy and chocolate bars at the cash register because so many
people purchase those items on impulse. Staple items such as bread and milk are often located
at the back of the store to force shoppers to walk past and view all of the other items on
display.
Large items like a car or truck take more time to consider. They are a significant investment of
money, and are an item that the buyer wants to have for a long period of time. As a result,
people may do some research on the internet and they will visit a car lot to see the features of
the vehicle for themselves. Then, they will take it for a test drive (or two or three test drives)
before they make the decision to purchase. The buying process generally follows the steps
below:
 Activity Ideas
Ask participants to write out the buying process for one of their major products. We’ve
included a lighthearted example below.
If I am nearly ready to purchase toilet paper, the buying process will look like this:
o Last roll of toilet paper is pulled out of the packaging.
o I check online to see if my favorite store has some on sale (or read a flyer if there
is one in the mailbox today).
o I see that my favorite store has no sales this week, but a different store is selling a
different brand for a good price.
o I purchase the cheaper toilet paper.
o After using it a few times, I decide whether I will use this paper again or not.
 Workbook Material
There is space in the workbook for participants to record their ideas.
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How can I leverage segmentation?
Once you know which segment of the marketplace is interested in your products, how will you
make the most of their interest in buying from you? Will you offer supplementary services or
products? If you own a training business and teach people how to use computers, can you also
offer them soft skills training?
In considering market segments, you need to evaluate the following:
o Measure: Can you gauge the size of your segment?
o Access: Can you reach the segment through advertising and then distribution?
o Growth: Is the group growing, shrinking, or maturing? Are they sizeable enough to
bother with?
o Profit: Is the profit potential enough to make it worth going after?
o Retention: Are you capable of servicing and retaining these customers?
o Defend: Can you defend yourself and stand out from the competition?
The segment of the market that wants your product can be identified through research, so that
you know exactly who you are targeting. For example, if you are selling a new organic dog food,
your sample demographic could look like this:
o 35 to 60 years old
o College educated
o Full-time employment
o Childless households
o Household income is more than $65,000 per year
There are plenty of dog food companies out there, so you’ve got to make sure that there
enough people in the demographic to support your company and to meet your goals for profit
and growth. You will have to review the idea of your market segment several times to
determine the number of people within the group who have dogs, who prefer to purchase
organic foods for themselves, and for those who have the disposable income to apply to your
products.
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Analyzing the Competition and Yourself
(30 minutes)
You must have a plan that sees you exceed the competition, and you will need to take an
honest look at your operation in order to do this. We can hide all kinds of things in an analysis
to make things look better than they are. Be honest with yourself to protect the integrity of
your business.
Some of the questions you will want to ask include:
o What are your advantages?
o What are your core competencies (the things you do well)?
o What are your weaknesses?
o Where are your shortcomings?
o What can you do to capitalize on your strengths?
o What can you do to exploit the competition’s weaknesses and shortcomings?
SWOT Analysis
We recommend that you use a SWOT analysis to address each question in the list above. SWOT
stands for strengths, weaknesses, opportunities, and threats. It is a method of analyzing
external factors (opportunities and threats) and internal factors (strengths and weaknesses) in a
methodical way.
In addition to using SWOT analysis to answer the questions about your company, you will
repeat the process to consider your competition.
Next Steps
Once you have gathered your information, there are several ideas that you can use to help
lessen the impact of the competition. For example, perhaps you have eliminated barriers that
the competition has not been able to minimize for themselves. If you have partnered with a
great distributor and the competition is struggling to get their product out to stores, you have
eliminated a barrier.
As you decide what makes your product stand out from the competition (your unique selling
proposition, image, or brand), you can decide how to position your product. You also need to
create a name for what you have, because names stick in people’s minds. For example, when
Apple Computers was ready to evolve, their product was called a Macintosh. They have moved
from fruit branding to making their items personal through their “i” branding and products like
the iPod, iPhone, and iPad.
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Analyzing Distribution Channels
(15 minutes)
There are plenty of options for getting your product to your customer. Deciding which ones to
use will have an impact on pricing, profit margins, servicing, and timing. There are plenty of
options available, and in choosing yours you may need to consider what your goals are and how
many layers of people are involved.
In a product that is typically used by an individual purchasing in a retail store, the product can
go from your production facility to a wholesaler, and then to smaller distributors to be sold to a
retailer. Each step in the process has to produce a profit, just as it does when you sell a service.
In a complex system, you may be surprised at how many people are involved. The flow below is
common:
At each stop on the chain, the participant does something that adds value to the product
(packages, labels, or advertises, for example) and earns a profit.
 Activity Ideas
Give participants a few moments to reflect on distribution channels and to share their
thoughts.
o Where does their product or service start within the process?
o Where does their involvement end?
o Is the method that they are using the most efficient one, or are there other
possibilities?
 Slide and Workbook Material
There is space in the workbook for participants to record their ideas. The questions are also
included in the PowerPoint slides.
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Creating a Marketing Plan
(15 minutes)
Your marketing research gets applied in a marketing plan based on the P’s of marketing:
product, price, place, promotion, and packaging. All of these P’s influence the positioning of
your product (how your product compares to similar products from other companies).
Product
Marketing your product includes differentiating it from other products in the market place.
There are lots of ways to do this, and you will want to pick a few that make sense. Some ideas:
o Capabilities
o Style
o Warranties/guarantees
o Service
o Labeling
o Size
Here is an example. When Lululemon was first established, they were looking for a name that
was attention-grabbing and that people would remember. They also wanted something that
had appeal around the globe. Their made-up word, with three l’s, helped them to stand out.
Price
Even a non-profit or not-for-profit company has to make a certain amount of money in order to
continue. If you own a for-profit company, you’ve got to be making money. This means that no
matter who you are, you need to understand every aspect of your business when establishing
price. If you forget to allow for certain costs and sell the product at a loss, your stakeholders
won’t stand for it.
On the other hand, some products are deliberately priced at a “deal” price (also known as a loss
leader) to draw people in to the store where they will be sold other products. A car can be
priced below cost, but by the time that the extended warranty, roadside service, fabric
protection, and chrome package are added, there is no loss for the company any longer.
Psychological pricing is what has stores using prices that end in 95 or 99 cents. The idea is that
people will pay $39.99 for a product they won’t pay $40.00 for.
In a competitive market, you will see marketing strategies that will meet or beat a competitor’s
price in order to gain (or regain) market share. If you pick up a flyer and see the phrase, “We
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will match any competitor’s advertised price and beat it by 5% on all our products,” you are
witnessing meet or beat competition in action.
Price and quality are things that must always be considered in pricing services and non-tangible
products. If you have a service and price it very cheaply, people may not value what you offer in
terms of the knowledge and expertise that is required to develop that service.
Penetration refers to introductory pricing that is deliberately low in order to gain market share.
The idea is to price products at a low per unit amount and then sell a high number of units with
the objective of gaining recognition in the market.
Place
This is all about how you will distribute and provide your product. Your analysis of distribution
channels will help you flesh out this part of your plan. Will you be a wholesaler, distribute
products through a franchise, have brick and mortar retail outlets, or be an online-only store?
You can also choose several methods to create a big presence.
Promotion
Promotion refers to the way that the market sees your product. It is very difficult to get shelf
space in a retail store, so you have to decide how you will draw your potential purchasers’
attention. Pizza shops might send staff members to stand on the corner with a sandwich board
describing this week’s deal. Cupcake stores might have someone dressed in a giant cupcake
costume waving to passersby. Coupons, flyers, newsletters, and special deals are also part of a
promotion strategy.
Public relations campaigns are another form of promotion. Internet marketing is another form
of promotion that can use programming and keyword techniques to ensure that a search for
products like yours will lead to your company’s website.
Packaging
The esthetic value of your packaging can draw a customer’s eye or can turn them away.
Designers and marketing firms aim to create the best packaging possible to attract consumers
or at least create some kind of reaction. In addition, items must also be packaged in a way that
protects the contents. Cardboard boxes, protective materials (like Styrofoam), labeling, color,
and appeal must all be considered to present your product appropriately and protect it from
damage.
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Break
(15 minutes)
Sketching Out the Plan
(15 minutes)
 Activity Ideas
Give participants time to sketch out their ideas for a marketing plan that incorporates what
they are learning and uses the 5 P’s.
 Workbook Material
There is space in the workbook for participants to record their ideas.
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Evaluate, Review, and Revise
(15 minutes)
You may recall that earlier we said that marketing is a cyclical process. At any time in the cycle,
the marketer can be forced to return to an earlier stage to remedy some kind of problem. If you
are in the midst of pricing and determine that the product as it exists is not going to be
affordable to your market segment, then you’ve got to step back and see what can be done.
In other instances, the product will be launched and will sell in greater volume than you could
have imagined. Then, you will need to consult with production to make sure they can keep up
with the demand. Then the competition may launch a generic version of your own masterfully
created and marketed product, underpricing you and even taking a loss in order to gain part of
your hard-won marketplace. It’s back to the marketing drawing board, and possibly even a
review of the company’s strategic plan.
 Discussion Points
Review the marketing cycle with participants and ask if there are any additional questions.
They should now have the beginnings of a marketing plan that they can take away and
expand upon to help them get started.
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Leveraging Social Media
(15 minutes)
Lots of companies will say that they have a social media strategy. Will you be one of them? Will
your business need one to be successful and widen your exposure?
There is plenty of debate about the value of social media in order to widen the exposure of
your products and services. People around the world have embraced social media, and it has
become a very popular and even a normal way of doing business. However, we don’t want you
to be fooled into thinking that spending all your time on social media is the best way to market
your product. Social media is simply another way to get your message out. It’s not the only way,
or the best way, nor the worst. You probably need to include social media as a part of your
marketing strategy (although it depends on where you live and what products and services you
sell), but we have a few guidelines for you so that it works for you and your message gets
heard.
Here are seven strategies for using social media in your business.
Stretch
Work with people who have a deep digital reach. Traditional marketers focus on what they
know in order to help you establish a niche in the marketplace. They rely on tried and true
methods for design and marketing campaigns. (Think about flyers, brochures, contest entries,
or contact forms on a website.) If your usual marketing is not getting you the results that you
need, make sure you increase your bench strength by bringing on expertise that gets you what
you need.
Build a Community
What you really need is to get people talking about you in a way that they promote your brand
independently of you. Seth Godin has written about this as tribes. The Grateful Dead, a wildly
successful band for more than 40 years, focused on providing their fans with experiences at
their concerts rather than selling albums. Fans (called Deadheads) went to the concerts
because they knew that each one was different from the last. Think of the things that you can
do for your customers that are different than what everyone else is doing.
Watch Out for Social Media Experts
Social media is constantly evolving, and it is one aspect of marketing, but it is not all there is to
marketing. Marketing consultants who are also specialists in social media understand its
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fluidity. They can help you navigate and establish your brand in the social stream as one aspect
of your marketing plan. However, make sure that they can do what they say they can do. Ask
for references and look at what they’ve done in the past.
Be There
Whichever social channels that you use (and there are more coming out all the time), make
sure that you participate with your community. Don’t ask a question on Twitter, for example,
and then not be around or available to reply to people’s answers, or you will turn them off.
Better still, give them something they have not even thought to ask for yet.
Find Your Customers
When you conduct your market analysis, be very clear about where your customers are. Make
sure you reach them and their friends so that they are able to talk about you. This doesn’t
mean that you need to sign up on every social platform there is, because you won’t have time.
Focus on methods of reach that work for your customers.
Be a Person
There is a lot of artificiality in social media. While systematizing and pre-planning updates
makes sense, you look like a robot if you come off like something that has been automated.
Make sure that some of your personality and character shines through the things that you say.
Follow Others
It’s not appropriate to be a one way machine in social media. For example, if you are on Twitter
and have 2500 followers, and you only follow 20 people, you will not be able to reply to people
who are speaking with and about you. We know you cannot read comments from 2500 people
a day, but we also know that you can organize people into categories and lists and that you can
participate in that community you are trying hard to build, instead of being a sandwich board
on the street corner that simply makes an announcement. If you are blogging, make sure that
you reply to people’s comments on your blog posts and that those posts provide people with
information they can use, rather than just writing them as a billboard for your products.
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Session Nine: Creating the Sales Plan
(11:15-11:45)
Building Your Sales Force
(15 minutes)
When it comes to your sales force, you have the same things to consider as with each other
area of your business. Do you hire specialists (people with a proven track record in sales), or
people who have product knowledge, but less sales experience? Are you currently the manager
and sales leader, or do you need someone in that role?
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 Activity Ideas
Organize participants in groups of four. Ask them to discuss the pros and cons to hiring
people with sales experience versus those without sales experience, and what the results
might be.
 Workbook Material
There is space in the workbook for participants to record their ideas.
 Slide Material
 Discussion Points
This varies a lot from one company to another, but it must be considered. Here are some
talking points:
o If you sell a highly technical product (like a car or computer, for example), can
you sell more of them if the sales person has no sales experience but has great
product knowledge?
o If you sell a service, will your results be better or worse with someone who can
build a relationship with the customer but is unable to close the sale?
o If you are starting a business and you want to rely on family and friends who are
great people but have no sales experience, will you be able to fire them when the
time comes?
Usually the answer is that you need to hire sales people who have a proven track record in
developing relationships and closing sales. If your product or service is unique, then you will
need to teach them all about the product. However, do not do yourself a disservice by
expecting that your products sell themselves or that a subject matter expert can sell for you,
because this is not always the case.
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The Sales Cycle
(15 minutes)
We speak about sales in terms of cycles to help us organize our activities and keep focused.
Here is a look at the basic sales cycle:
Initiate
The first stage of the cycling is finding new opportunities and establishing relationships that
focus on identifying and solving client needs. These relationships can evolve in many ways.
The easiest sales are with customers that you already know or have already bought from you. In
order to keep your pipeline full, however, it’s important to attract a variety of customers from
different industries or types of businesses. That way, if there is an economic slowdown, a
business shutdown, or a natural disaster, your potential to sell is not so strongly affected.
These days, it is common for salespeople to get involved in a range of networking activities
that may not seem directly related to one particular sale, but they are a help in getting
established within a network or community.
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 Discussion Points
 Workbook Material
What kinds of activities, networking, or connecting are you doing? How do these activities
support your plans for sales and growth in your business?
Many top salespeople learned a tremendous amount about sales by cold calling, and there are
lots of salespeople who make all of their sales strictly over the phone. Phone sales often mean
that the salesperson is taking incoming calls from inquiring clients. This means that they do not
have to find clients, but they do have to qualify those clients within a phone call.
Build
This is where you convert opportunities into clients by building trust and credibility.
Once you meet your client, you begin building your relationship with them. These relationships
are based on trust. As you build the relationship, you will investigate your potential client’s
problems, get a solid understanding of their situation, pre-qualify them as a buyer, and consider
how you will make your presentation to them in a dynamic way. Remember that your
presentation has to appeal to them from their point of view, and that customer focused selling
is a consultative process.
 Activity Idea
Have small groups discuss optimal ways to build these relationships. Answers will depend on
the type of sales that this company uses. For example, telephone based sales people must
build the relationship very quickly. Visiting sales people may have a lot more time to
investigate a particular company and their needs by using the Internet, business reports, or
trade and industry information to contribute to their understanding. However, this will take
a lot more resources. What’s best for your company? What needs to be detailed in your
business plan?
 Workbook Material
There is space in the workbook for participants to record their ideas.
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Manage
The next stage is managing the relationship and focusing on serving your customers by offering
solutions, resolving problems, meeting their needs, and getting their agreement to buy.
In this part of the sales cycle, you will make your presentation, considering all aspect of your
client’s needs and the benefits of your solution. You will also ask them to make a buying
decision and work through any objections that they have.
 Extra Information
We have an entire workshop on managing objections. See Overcoming Objections to Nail the
Sale for more information.
Another thing that a sales professional must work with is what makes their company, product,
and/or service unique. This is called your Unique Selling Point (or Position) – the USP for short.
Make sure that you can answer your prospects when they ask why you are in the best position
to provide this solution.
Our customers are experiencing information overload much of the time, so the amount of
attention that they will give you is limited. If you send them a written proposal, expect that
they will scan it very quickly. This means that your headings and text need to be short and to
the point. During an in person or telephone presentation, watch and listen for cues that you
have their attention and are answering their questions. Adjust your approach as necessary to
keep them engaged.
Optimize
In the last phase of the cycle, we grow the relationship with consistent results and problem
solving. This is the time to set up long term relationships through additional problem solving,
business building, and referrals.
This is also the aspect of the sales cycle that you will use to help top up your pipeline. Even if
your prospect says “no,” that does not mean that they will never do business with you, or that
they don’t trust you. Sometimes it means that they need more time to consider your offer, or
that there is some very real barrier they have to deal with. Instead of thinking that “no” is the
end of your relationship, you can continue to build the relationship. For example, you can ask
the client for referrals.
The other aspect to consider at this stage of the sales cycle is whether there are other
opportunities to work with the same organization. Can you build on the relationship that you
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have developed and help other departments, locations, and people within the same company?
If you have not been introduced to those opportunities through the sales cycle, ask.
The final phase of optimizing is to evaluate what you have done throughout this sale. What
have you learned? What can you do better or differently next time in order to reach a more
successful result?
 Discussion Points
When it comes to working in sales and doing well, professional sales people get comfortable
doing things that other people may find very awkward. They ask for business, they ask for
referrals, and they act on the information that they receive.
How do participants feel about these aspects of the sales cycle?
Morning Wrap-Up
(11:45-12:00)
Use the last 15 minutes to answer remaining questions. Key points of the morning included:
o The marketing plan
o Leveraging social media
o The sales cycle
Lunch
(12:00-1:00)
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Energizer: Work the Plan
(1:00-1:15)
We typically don’t give ourselves the gift of time when it comes to planning for our businesses
or for our lives. When we take time away from work to sit and think, it looks like we aren’t
doing much at all. For some people, that is a problem as they may feel people think they are
being lazy. But taking time to think and plan is important for the viability of our businesses.
Arrange participants in groups of four or five. Provide each group with a sheet of flip chart
paper and a marker. Ask them to create a list of things they can do in their environments to
give them the time and space they need to think and plan.
Some ideas include:
o Scheduling a meeting room where others cannot see us, and having some
uninterrupted time to think.
o Taking a walk and recording thoughts on a digital recorder (since walking and writing
at the same time are difficult!).
o Going to the local library and finding a quiet corner.
o Planning a retreat (a few hours to a few days) somewhere away from interruptions.
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Session Ten: Developing Financial Projections
(1:15-2:45)
Accounting Terminology
(15 minutes)
The Importance of Financial Planning
Financial planning for your business plan is another essential step, and one that you must learn
to do well. Often in business we say that we should delegate the things that we are not good at,
but as the owner you must have a basic understanding of financial management to make sure
that your business is viable and that you know where you stand financially at all times.
When it comes to writing the financial projections for your business plan, you will need to work
with an accountant. The person you choose should understand your industry, the challenges of
new business, tax planning, and the needs of the audience you are preparing your business plan
for (whether you are applying for funding through a bank, a grant, etc.).
If your financial projections are too optimistic, they won’t hold credibility to your investors or
banker. Gather some average industry ratios and work with your accountant to make sure your
projections are realistic. You’ll need to include and be familiar with terms like profit and loss,
cash flow, balance sheet, and break-even. We’ll explore those terms and key financial reports
throughout this session.
Depending on the purpose of your business plan, you may need to create one, three, and five
year projections. This will be the focus of the final part of this session.
What is Finance?
The Encarta Dictionary defines finance as, “the business or art of managing the monetary
resources of an organization, country, or person.” Bookkeeping, banking, and accounting are all
separate processes with their own definitions.
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Seth Godin describes finance as a three-cycle process that continues endlessly:
 Discussion Points
Ask the class to discuss some of the obstacles and pitfalls faced by large corporations and by
small businesses. How are these different? How are they the same?
Recording Financial Transactions
Bookkeeping is the exercise of identifying, categorizing, and recording all the transactions that
take place in a business. In general, everything a company does results in a bookkeeping
transaction, including things that take place between the business and:
o Customers, who buy products and services sold by the business
o Employees, who are paid wages and provided benefits
o Vendors, who sell services, equipment, and supplies to the business
o Government agencies, who collect taxes from the business
o Sources of equity capital (investors or owners who put money in and take it out of
the business)
o Sources of debt capital (banks and lending institutions)
Accounting, on the other hand, is the methodology used to record the transactions and prepare
financial statements and reports. Accounting guidelines govern how businesses record
transactions. They also dictate the design of the recordkeeping system that a business uses and
how reports are prepared, based on the information gathered and put into the system.
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 Discussion Points
This brings us to another question. Often, we hear the terms “financial statements” and
“financial reports” used interchangeably. Is there a difference?
Yes, there is a major difference. A financial report is a document prepared for internal use. It
can come in many forms and be used for many purposes as it is usually company specific. A
financial statement is a more widely requested formal document that is prepared in a
specific format as outlined by your region’s Generally Accepted Accounting Principles (which
we will discuss in a moment) or another governing organization (such as your tax legislation).
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General Accepted Accounting Principles (GAAP)
(15 minutes)
Accounting is simply a measurement. Measurements allow for consistency. Just like everyone
knows what one foot (or 30 centimeters) of distance is, the business owner (or CEO) and all
stakeholders should be confident that they know what a company’s assets are. The accounting
concepts and standards that govern consistency are called generally accepted accounting
principles (GAAP).
There can be slight differences between regions, but GAAP typically includes the following
principles:
o Comparability among different companies.
o Reliability of information.
o The business entity concept: A business is a separate distinct entity from its
owner/owners.
o The matching principle: Earnings and expenses must be recorded in the same
accounting period that they relate to each other.
o The cost principle: Assets and service, and the resulting liability, are taken into the
accounting records at cost.
o The consistency principle: A company’s accounting procedures need to remain
consistent over time. If they are changed, the reasons for the change and the
financial impact of the change must be documented in detail.
o The time period principle: The operating period of the business is divided into equal
periods of time, such as a month or a quarter.
o The going-concern principle: The business will continue to operate, using its assets
to carry on its operations and, with the exception of merchandise, not offering the
assets for sale that are necessary to run the business.
o The objectivity principle: Whenever possible, the amounts used in recording
transactions are based upon objective evidence rather than on subjective
judgments.
o The stable currency assumption: The idea that the purchasing power of the unit of
measure used in accounting (such as the dollar or the euro) does not change. (In
other words, a dollar bill will not become worthless overnight.)
o The realization principle: This principle defines revenue as an inflow of assets (not
necessarily cash) in exchange for goods or services. It requires the revenue to be
recognized at the time, but not before it is earned.
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Writing a Business Plan
 Activity Ideas
Ask the class to identify which areas they need to learn more about. If they have no
experience or knowledge of accounting and finance, they can easily lose sight of what is
happening in their business. Create a list on the flip chart, as well as suggestions for how
they plan to protect their assets (taking additional courses, hiring an accountant right away,
etc.).
 Extra Information
Velsoft offers an excellent introductory program on accounting called Accounting Skills for
New Supervisors.
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Writing a Business Plan
Key Reports
(30 minutes)
The Income Statement
The income statement can also be called a profit and loss statement or operating statement.
This is a summary of the income and expenses of a business during a certain period: monthly,
quarterly, or annually. If the company has more income than expenses for a certain period it
has net income (a profit). If the expenses exceed income, the company has a net loss.
Income can be broken into two broad categories: service income and sales income. The
difference between the two lies in the need to consider inventory costs. Service income is
derived from performing a service while sales income is derived from selling a product. In
general, service companies have staff that perform a service for a customer, while sales
companies have product that they sell.
With service income, the profit can be determined simply by deducting expenses associated
with performing the service. With sales income, however, you must consider the cost of
creating the product (raw materials, labor, overhead, etc.). This inventory cost is referred to as
the cost of goods sold.
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Writing a Business Plan
Income Statement Equation
The income statement equation typically looks like this:
o Revenue is what the business earned from the sale of goods and services during this
period.
o Expenses are bills (phone and Internet bill, insurance, payroll, advertising, etc.)
incurred during this period.
o Net income or loss is the net financial result of the business efforts during that
period. It must be added to the Equity portion of the balance sheet, which we will
discuss in a moment.
Some examples of the types of accounts that influence net income and are reported on the
income statement include:
o Revenue
o Advertising expenses
o Repair expenses
o Utilities expenses
o Wage expenses
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Writing a Business Plan
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Sample Income Statement
 Activity Ideas
Review this sample income statement with the class.
Acme Widgets Inc.
Income Statement
For the Month Ended February 28, 20xx
REVENUE
Widget Sales
$20,000
Widget Installation
$1,500
Interest Income
$500
Total Revenue
$22,000
EXPENSES
Rent
$4,500
Utilities
$1,200
Advertising
$8,000
Wages
$5,000
Total Expenses
NET INCOME (LOSS)
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$18,700
$3,300
Writing a Business Plan
The Balance Sheet
The purpose of a balance sheet is to show what a company owns and owes as of a specific date.
Income statements are prepared “for the period ending” and balance sheets are prepared “as
at” a certain date.
The balance sheet summarizes what the business owns and compares it to what the business
owes. It does so in a standard format to make it easy to see what kind of financial shape the
business is in. If a business has more assets than liabilities, that’s a good sign. On the other
hand, if a company has more liabilities than assets, it might be a sign of trouble.
Balance Sheet Equation
o Assets are anything that the business owns. Some examples: cash, office equipment,
vehicles, tools, real estate, buildings, and land. Bills that are prepaid (such as
monthly insurance premiums) are also considered an asset, as are accounts
receivable (money that others owe to you).
o Liabilities are anything the business owes to others, including banks and suppliers.
Money which a company owes as a result of its ongoing trading are generally called
accounts payable.
o Equity is often a measure of what the business is worth. It is the combination of
profits and money invested in or withdrawn from the company by its owners.
This is what people refer to as balancing the books: ensuring that this equation is always in
balance.
Accounts typically reported on the balance sheet include:
o Accounts receivable (money owed to the company but not collected)
o Cash
o Equipment
o Accounts and notes payable
o Prepaid items
o Unearned revenue
o Vehicles, land, and buildings, and their accumulated, individual depreciation
(decrease in value)
The term consolidated balance sheet refers to the “consolidation,” or adding together, of
individual balance sheets of various related companies into one balance sheet which shows the
financial position of the entire group of companies.
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Current vs. Fixed Assets
On a balance sheet, the assets of a business are generally broken down into two groups:
current assets and fixed assets.
Current assets are generally considered to be anything that will be converted into cash within
one year, such as cash, accounts receivable, and inventory. Current assets continually turn over
through the company.
Fixed assets are more permanent in nature. This includes vehicles, equipment, machinery, land,
and buildings. They represent an investment in items that are necessary to carry on its normal
operations. Fixed assets can also revolve (to purchase new equipment or update technology,
for example) but usually they revolve very slowly.
Liquidity measures how quickly a company can convert its assets into cash. An ample cash
balance provides security that the company can meet its obligations. The easier the conversion
is, the more liquid the asset. Here is a list of current assets in order from most to least liquid:
o Accounts receivable
o Inventory
o Fixed assets
Cash Flow Statement
This shows the flow of cash for an accounting period. This statement is a bridge between the
cash accounting method and the accrual accounting method in that it analyzes what
transactions impacted cash and what were accruals.
The cash flow statement is usually divided into three sections.
Operating
o Cash flow for day-to-day operations
o Examples: Customer revenue, tax payments, interest, supplies purchased
Investing
o Cash flow generated from or consumed by assets
o Examples: Sale of a vehicle or purchase of a building
Financing
o Cash flow in from selling stocks or bonds or borrowing
o Cash flow out from purchasing stock back, paying out dividends, and repaying
borrowed money
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76
Statement of Retained Earnings
This statement shows how much of the company’s profits were kept inside the company, and
not paid out in dividends.
Sample Statement of Retained Earnings
Statement of Retained Earnings for Acme Widgets Inc.
As At February 28, 20xx
Opening retained earnings
0
Add net income for the period
$3,300
Total Retained Earnings
$3,300
Minus dividends paid
Retained earnings
(300)
$3,000
 Trainer’s Tip
This was an intense section and some learners will be feeling overwhelmed with how much
they need to learn about accounting and finance. If time permits, give them a chance to
stretch, move about the room, and prepare for the next section, which is all about people.
Break
(15 minutes)
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Writing a Business Plan
Financial Projections
(15 minutes)
What Do Projections Include?
Investors need to see your projections, even though they can be very difficult to figure out. You
might be tempted to skip this part of the business plan if you are not looking for investment
help. However, this is good information for you if you are funding your own business. This can
help you see where you need to make adjustments, and whether your plan as it currently exists
is even realistic.
The income statement is the standard measurement tool used to report your projected
revenues and expenses. Your financial projection has to include how much money you plan to
borrow, the interest charges, and money you will invest from your savings. While you create
this plan, you need to use the financial terms covered previously. Since financial projections and
reporting are new undertakings for most of us, make sure you work with an accountant on
these projections.
At a minimum, your projection needs to include:
o Short-term projection, by month, for the first year
o Mid-term projection, typically two to three years, broken down by year
o Long-term projection, typically five years, broken down by year
This is not an easy task, so remember:
o Compare your numbers with similar companies in your industry to keep things
realistic.
o If your projections are too optimistic, you can lose credibility with investors and
banks.
o Startup costs, like licenses, permits, and equipment costs, go into your short-term
projection.
o Allow for variation in things, including the price you are planning to sell your
products or services at, future funding requirements, changes in raw material or
staffing costs, and anything else you can reasonably think of.
o Investors need to see a best-case scenario and a worst-case scenario. Avoid the
temptation to create all kinds of in-between cases, which will take up space in the
business plan without adding a lot of value to your reader.
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Use the Writing Rules
Remember that writing rules are important, so you need to use them in this section just as you
do in other areas of your business plan. Make any assumptions in your plan clear. You can
articulate how you will collect on delinquent accounts and what your billing cycle looks like, but
if your industry is softening and you are projecting huge growth in revenues, your credibility
falters in the eyes of your reader.
Financial statements are prepared and written in tables and spreadsheets, often in a program
like Microsoft Excel. Learn how to read this information, to work with it, and to use
spreadsheets as effectively as you use programs such as your word processor and your e-mail.
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Writing a Business Plan
Session Eleven: Putting It All Together
(2:45-4:15)
Writing the Executive Summary
(15 minutes)
Although you write this part of the business plan last (once you have finished all your research
and writing), you place it at the beginning of the business plan. The executive summary gives a
reader a quick, clear idea of what is coming within the plan. You don’t have to hint at big ideas
or surprises: you state in very brief terms exactly what the body of the business plan says.
To create the first draft of the executive summary, simply read through your business plan and
pull out the first and/or last sentences from each section. You should capture key words and
phrases as well. If you have written the rest of your business plan using correct paragraph
structure, those selected pieces will contain the main ideas of your entire business plan. If you
are missing something, locate it within the business plan, summarize it briefly, and add it to
your executive summary. Once you have the elements you need, simply shape and re-write
them so that the text flows well together, and then do a second draft. Before you know it, your
executive summary is ready to go!
Hint: If your business plan is in the 20-30 page range, your executive summary will likely be in
the 350-500 word range.
Remember: Write the executive summary last, and then place it at the beginning of your
business plan.
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Writing a Business Plan
Making a Strong Presentation
(15 minutes)
Ask yourself that question again: who is your audience? Your answer is going to help you
determine how best to present your information and solicit support for your business plan.
If your business is of a technical nature, should your business plan be written as a document? If
you are in the computer or design business, should it be created as a subdomain on your
website with restricted views? If you are an author, will you bind it as if it were a book? If you
are a trainer, would you set it up as a PowerPoint presentation? How can you take your plan
and fit it into the electronic forms that some banks, governments, or grant application systems
want?
 Activity Ideas
Arrange participants in groups of four. Have them discuss as many different ideas as they
can think of to present their business plan. What are the pros and cons of each idea? Which
ideas are a good way to present their plan in today’s environment? Have them record their
ideas on flip chart paper.
 Workbook Material
There is also room in the workbook for participants to record their ideas.
Debrief
(15 minutes)
 Discussion Points
Bring the groups back together and appoint a spokesperson for each group so that they can
share their ideas.
What creative ideas are people presenting? While many groups will want to use the
traditional paper document approach, challenge them to think about how some different
approaches could help accelerate a business.
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Writing a Business Plan
The Finishing Touches
(15 minutes)
You’ve put a lot of effort into your business plan, and now is not the time to abandon details.
The final stretch is about making sure your plan has the impact and gets the results that you
have designed.
The essential closing skills of a fine piece of work bring us to fact-checking, reviewing, and
editing. You’ve put considerable resources into developing your business plan. Whether the
goal of your plan is to secure support from stakeholders, fully flesh out your ideas and test their
viability, or acquire grant and operational funding, the plan itself is a huge undertaking with
serious consequences. As a result, you want to make sure that it is the absolute best product
you can create.
When you check your business plan thoroughly, you must also look at the viability of your plan.
If the numbers don’t make sense, the product cannot be distributed as you originally planned,
or there are legal issues around patents, these are signs that your plan needs some continued
work.
A lot of business owners want to protect their ideas so they are not stolen, or they want to
launch their product or service before the competition does, so they will complete the business
plan on their own. You have to weigh this out, because we do support you wanting to protect
your information. However, if you have your spouse proofread the plan and they aren’t good at
spelling, your plan is not going to have the impact you are looking for.
We recommend that you consider your options carefully and then complete the following steps
in order.
o Read through your plan completely. Highlight every fact that you report and any
website or external reference you make. Then, validate that they continue to be
accurate, valid, and correct.
o Depending on your audience (such as a board of directors, a bank, or grant panel),
you could hire an editor to conduct a line edit for spelling and grammar and to
complete a content edit to make sure things flow smoothly and make sense to
someone outside the business.
o Complete changes highlighted by your editor.
o Have the document edited one final time to make it as complete as possible.
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Writing a Business Plan
Reviewing and Revising
(30 minutes)
 Activity Ideas
There has been a lot of information to take in and process throughout this course. Provide
this time for participants to make notes and additions to their existing business plan. Provide
markers, sticky notes, and access to resources for participants. As well, circulate and answer
questions as participants do the work.
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Workshop Wrap-Up
(4:15-4:30)
Take the last 15 minutes for a quick review and to answer any questions the class may have.
In closing:
o The creation of your business plan is just a step on your journey as a business owner
or entrepreneur. There is a lot more to do! As you start, you will see the value of
moving on to strategic planning, human resources planning, and carrying on your
business operation. We wish you all the best and hope that your business is a great
success.
o “Business opportunities are like buses: there is always another one coming.”
(Richard Branson)
o “The entrepreneur always searches for change, responds to it, and exploits it as an
opportunity.” (Peter F. Drucker)
This is also a good time to help participants wrap up their action plans, collect evaluations, and
to pass out certificates.
 Trainer’s Tip
If you haven’t provided students with the Student Manual, print out the Recommended
Reading List and give it to participants as a bonus.
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