Preparing Effective Business Plans: An Entrepreneurial Approach

Preparing Effective Business Plans An Entrepreneurial

Ąpproach

Uhr:l l)' ~Ir C~'" g.n·»_~ C:.lld~,gin 1!. ill.l'lIhlk:lli~lu Ih l:. Ba rrinf'c r. Brllcc R. Pl' ~' raring dke li v

Feasibiłit y

Int rodu cto l"Y

I ndusIr)'

Ma rke t

A na lysis

Mat e ria !. Execulive SummaJ) '.

Ana lysis

Ana lysis

a nd

Descriplio n Clmptcr l

a f th e

Chapler 2: C hapler 3

Bus in ess C haptcr4 C halltcr S Chapter 6

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PK'parillg:m EfTt·(,tin' llusilll'SS Plan Ma rke ting

Plal1

Man ageme nt Team and C o mpan y

Slruc ture

Ope rations

Plan a nd

f->

I'rcscnting filc Business l'lan

Fina nc ial

Presenting

Projections

the Plan wilh

Produet (ar Se rvice) Dcs ign and D evelop rne nt Pla n

Confide nce

Chlipter 7 Ch"I)tcr 8 Ch:lptcr 9 Chllplcr 10 Chapter 11

WHAT T O D o BEFO RE TH E BUSI NE SS PLAN Is WRITTEN (CHAPTE RS 2 TO 3) As me nti oned in t he introd uctioll to th e chapter. writing a business pla n is pm1

of fi co mprchens ive process 1hat includes ( l) ielenl ifying 1,,,,

S"I"/;,.,,

C""'P''''J' Mai IIn"I,,"

Arlene Harri,

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Many ccU phon", are 100 oomrUcalcd and th e bUHon, are loo,mall for ,eniors to use casil~·.

Dcsign a ce li rhone for ",nion that i, ea,y 10 me. ha, larg" bUHo~.nd ha, a single butlon that when rushcd eonncet, to an op p-eople with computer probloms at home.

Crcate an orgonizalion that makes "oouse calls" and holJ>S people sol,·c computcr problems in their homes.

Goc k, On Cali (htt p:/łI",v.,ee ksoncall .oom)

l'ul"'I""U'·""'·

(hl1p:/łI",,::.fru41 I.com)

provid~r.

•

David

B"t~man

200?

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Li,. Dru.m an

,'"

Rkhard Cole

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• 30

PART II

W h al to Do Befo re Ihe Bu siness Pl an Is W ritt en

localio n Ol' aren'l ava il able at a lI. Pa rt o f Ihe probl e m is crcnled by large rcw ilers. slIch as Wn l· Mnrt lIl"IS oJ Firsl SerC('1I

Cvsl/A m i/flfJilily

SOl/ree

IJcseriplioll

Ame ri can Faclfinde r (hltp:/Iwww. fact finder. census.gov)

An easy-to-use portal fo r oblaining censlls data. One quick way to retrieve data is lo ge t " "Fact Sheet"' on a geographic mea (by cily. county. or ZIP code). which provides popubtion. medium household income. demogmphic breakdown ("ge. gender. 1"copl e who Ihink il isn 'l feasible. and an y additiona l commenls Ihal were made • Other cornrnellts and s uggestio ns

. 70 .

CHAPTER 3

Feasi bility An alys is

71 .

Bll ying Intclltiuns Sun'c)' •

Distribute the conce pt stateme nt to 15 to 30 prospective custol11e rs (do not inc1ude ; wi ll walk in da>;),c..; I hwughIIU I Cc nlral Fluriua nd ghhorhllllds, Selll il/(lI)' III/d lI'orksllOps. Sc minars wid workshops will be o ffered on nll l rili on. slecp. ncurllhics ( brain c xerciscs) . a \"Oidi ng back and neck pi lin. aging wilh Jignily. and olher II)pi cs.

Alrl,\'Jt/g 111111 Owncrship Prime AdllH Filncss is a Li milCd Liabilily Corpl.1 ralion ineor po nll eJ in I he slal c or Floridll. II is curr..:! nll y owncd by il s m anagcmenl ICrl scJ ub Associalion ( IH RSA ).l he nllmbe r of filn ess clubs (in Ihe Uniled SIales) grew by 1 -ł.O pe rcl:! nt fro m 2003 lo 2004 and 8.3 perce ni rro m 2004 lo 2005. lllC' Filness and Rccrealio na l Spo rls Ccnle rs in uuslry is ~rowi nga l a fa sle r rille I.han threc inJuslries Ihal co mpe le fo r ils cllslo lller's doJl ars - Spo rling a nd Alhlct ic GooJs Manufacluring (which makes homc fi lncss eqllipmenl ). Go lr COll TSe ilnd Co unlr y Clubs.and r.,'larinas'

CHAPTER 5 TABlE

5· '

Indu stry Ana lysis

107 .

Women's Clothing Industry Breakdown

Sekli/ellI

Tops (incl llding t-shi rts. s hirts. biolIses. and swea le rs) Pa nls. jea ns. sharts. and s kirts D rcsscs Coats..jackets. and s uits Sports apparel ( includi ng swill1\\'enl'. sweat tops. ele.) O lhe r folll)w~:

10 a il-purptlSC large ce n h..:rs. indwJ ing !luce Yr..,ICAs. o ne Bil lly To ta] ntness Ce nt er. Iwo Gold's G yms.. mu] Iwo LA Filncss Cenl c rs 11-\ smallc r. mor.;: lighlly foc usct.l ce nIe r-;. indudill:,! 9 Cur \'C~ filn e~!'> ce nlas -I

~ m;lllc r ce nl c ~

111ere are no fi ln e~~ cc nl er~ in Sc minolc count }' Ih al focus slrktl)' o n th ~ 5U+ de mograph ic. 111e re ne fit s o f Ihis dc mog raphic. howcvc r. arc app..rcll I lo a ll ce nle rs. which a re slarling lo llffu nhHC pnlgr
Bast' Com IW/lW/ł iO/l

Jeremy Ryan

Cofollnder and CEO

$68500

20.0%

$1 00.000

Elizabct h Sims

Co- folln der cr" isc rClro llll ing o r b uildin,g Mak..: fin a l dccisio Jls 0 11 rilnc~s e qllip mc lll colll pkt e plan ning t)f inilial cI ..."s..:). and pw gnum

Nove mbc r - Decc lll h..: r. 2u(~~

Bcgiu hi rin g a ud Ira in iug staff a nd c mpluyce .. III ope n h u ~ in e~s

• Ramp u p ma rketin g a nd p uhli c rda lio ns initia li \'cs Begin o ffering "pil ol " c xc rcisc- cJasscs lo solk il fccd back 1-10' 1 th rce " pe n h ll ll :o.t.'~ Ja nuary 1. 2009*

Havc grand ul)Cniug a nd bcgin o pc rat illllS

RClm fittin g nf Ił llildin g llle 21 .600 squa re fool hllilding Prime A dult ntncss will occupy will rcq llirc ap proxim at cly $ ł milJiun o l' retrol'ill ing lu ma k..: suilabk fur Ihe cumpany's p urposcs. Primc A dult Fi ln ..:~s will pily fo r 75% ll f Ihe rdrofiu ing. '

1. Accul11ul:l1io n o r accounl s reeeiva hle is comisle nl wilh industry norms. 2. n 1C re lro ritling or lhe building .md lhe k:asing o r litncss equipmc nl are "on lhe halan ce sheel " l ransactio ns consistc nl wilh no rma i ilccOllllling pracl ices.

sta rte d. Pl acin g
2561.2W 704.350

G nl'<s Pront

1.856.940

['\;pt.' n"i.'.' - ( ;t'lIt'ra l :md I\ dmlnl_tt:uh t· Of1iC\: r~ COlllpCllsal io n Sal:lri cs :lnd Wages ~ yro ll Taxes Employee Be ndils I'JOfessio na l Serviccs Building Re nt Ulililics Tdephone. lnt c rne 1. and Web Sile Filn css Equipme nl L.ease

3preciation

FI",,- S t"t Jngc mi. C lu blillc.. 27- 21}. 1,1\

J

R

Joos. Bill. 9

K K;lg k:. BI)I>. 17\'

Kame r. Dcan . 12 Ka w'ł ~lki. Gu)'. -I. LI. x7. \1 15 K..:tl.:r. L vrna. ] (1 Kl'Hlse. Sh:lrdlc. 5:-;

KliF": !'. Scult. 2.., Kot kr. Ph il ip. 27

D DiR ..:~ I ;I . Di 'II1':.2JH Druxm:lll. Lisa. 2lJ, 15"":

Ku rlz nwll. Jod. 124. lóS Ku' hncr. l\ l:i tcolm . 2~x

O wig hl .fI,'l ik..:.l"l

M

G

Mu, lanckr. fo.hry. -ł-5. 12 l\'lu llill! o l' funds ... talc lllc nl ikm ... a~ i nilbl :l ~~ h ;l lld

liahi li ties.2 11 ,h.:cl. 2 12-2 1J a llo rn cys !"L.nn \l f husin..:, ... \lwn..: rship. rc te mio n fo r. 45 man :l ~e nl "; l1l kams Illc m bcrs. 1 7~ pale nI ap pliealions. rc le mio n fo r. 20.4 alo~ umrli ll nl>

hs o fboard. 173 guid ;m co.:. 1 7 .ł

insidc dircclo rs. 173 k gili macy. 174-1 7f> o uls idc dircclo rs. I D BOn. 1.)'« l BI/sim'ss P/mrs Tlurt lViII ( Rkh a nd Gumpe rt ). 2U/ l B/lsim'ss Pltms TI/{II lVork ( R ic h and G um pe rt ). 22IJ husine ss t rcnds t: nviro nme nla!. 23-27 indusl ry.II;;- II),« la r~d marke t. 12'1-1 3 1 Ilu s ine~~ t y pc~ 13-- 14 nnmil1g.4ń-Y7

0\\ no.: r:.h ip t ypcs. IJ5 buye r be ha vio l'. 133- 134 buying inlcnlio ns s ur"cys.. 59 bu:t..z .15IJ

• 260

SlIbj ect Index

c C CLll'llOr:llio n .... 1ł5 C lrlridF.c Wu rld . (.,2

c:l'h. ~ I :I nur. 55. łlS

221-2.' I fl o\\' ~ Ia l c m c nls. 222

cunsul l:HlI:.. 1..... 0 :u.hIXlr) hua nh.. 1 7ń- 1 7 ..... cu nh:nt of hu..inc ...' plan I'rc ...... nt a tio n .231J-2--łH c\. nl e llt uf CXcclIll\ c ~ umlll :.ry.

. . . 7-ł\X

C:I\ h fI,I\\'. c ,, ~ h

fillI· hilscd pricing. 151-151 c,1).1 nf gHL>lh w id

'tr yices.. 11.\-1'-,

CUIlI!,:!II)' 1.k"c l,'plll\.' nl .

dCh: lopmclll u f cumpan y COIIl,,:lIl)' h b ll) l") in ~u, in c,~ plan . tJI

co\'..: r ]1, 9ft cu ~ l um e "- I clalt.'d b.l> lI o.:~ and Fir:-.I Se n· o.: n . ~:',-~II

St'!'

com r :m}' !> lru c lure.l~ I-- \l';l cump:H:łhk' hu"nc'~~

financia l p.,Tfu rrnance.óf>.-ń7 ... ,.h.:sc'li m al..:::s..I-ł1 c'Jmrll."II\.. 23-25 l'Ic\'ill u r ~I"ccc h t.',. 10 Elle n T rac.:y. 2-ł ~· ml' l l.)et." an u bu,ill":"s

1'1 :111:-' (.......7 c rwir'onm c nlallrc nd ~

t.'co rlomic Ir.:nds.. 23-25 inJu:-tr y ;1Il:ll r~c).. 111....... 1 t.'I nc\\ c{l l1lpani l.'~. 2-ł r o litic:ll :lIId regulatory changcl>.. 2ń-27 'i(>Cia l trc nds. 25-2" IcC" hnu lugical ad va nc..·... 2ft ~·lluipn1l' nl. u ...... criplill rl in (l 1-...: r;lIi on ~ rl:1ns. I ll-ł- IY 5

t.' \IUII ) ............ "5 ,'WI1 ..·I'\· C(I"i ly. 22 1 c~ l i lll al..::\ o f annual ~ak).. Ux.-I -ł2

D D :li \}' Rock .:>O DilyJcI . II J (.k ht rall l'.221 dcli"c ry (. f hu~i n e'iS pl:ln rrc~ lIlaliu n. 23ł1-2Jt.,I

D d l. Ine.. Ij(,. III!. Iftl-Ift] D ..:: mo C,.łlk ....·llct.'.237 d l'~c .. il'lio n o f c(l rnpan y. Ser cullll'any ucsc ripli um. dC" d ,'prn"'l1t ,,1' cl. ml'Cs ddinili o n.5 3

S ubj ect In dex rinancial fcas ibilily conlp:lrabl c pcrfo rmallCCs, (
11",\\ 1)'

p pAS (II o m... n·s c lOlhing bo utique).341 Pllrc rHW;llch. ' ń-7 ma n;lg.c me nt teams.. \71l- 171 ph\)IO ~ h al'ing sile.'> . ! 52- 153 1"lI., litic;ł l cha ngcs a nd n.:w hu sincss ideas. 2ó-'17 POpC;t p Garncs. 30- 31. 131 posilio n o f prOO ucts and ~ rviccs. Y3-IJ-I lX>l>ilio ning. !!olmtegy. 1-1\,1 Po\\.::r I'o int prc:>Cnt ati o n. 241 1-25.1 PI'(' P:II'ib ili t )' a n alys is.. 5'ł-ót1 p ruduc l d.:~ irabili ly and fc;lsibil il y anal ysis.. Sń-5Y producl-dI'i\'.1W--2UO ~ Ia g~'s o f J c\'elo pmc nl. 21Hl-201 us.1 hilil }' Icsling. 21 H. See lIlso dc\'clo pl11c nl o f co m ra n)' p roduc t~ a nd se r\'iccs kas ibi lil)' an a Jyscs. 5ń-(.I . position . Y3-9-1 Sl.'ction o f busi n.::ss pla n. tJ3-W profita bil il )' ra lios.. 2.1 1-232 PI u llIc lh.:u, L;lho r;il l' l i~', 121' pro lll ul i o n ~ a nd l11ark c tin ~ 1'1:l1l s..IS~ 151)

])I\ >llhll j(' Il ~ mi,\;. I Sh-I SI) I' I'\'I'.:.-I y Sulutiu ll:\. 2\) prUl'rk'l u rshir">. '15

• 264

SlJb ject

Index

P r"Ou e~ 1. ~ ..1.7 pru J .:~ ti o n

uf a ~.-.c t :,. 27

pro tot yr.:s. I"")- 21M) provisi\. mllp:ll': lIt app licatio ns. 2114 S('('fI{SO p;lt l'nt~

puhl ic

r\' l atio n~

and mark.: tin!! IS7-I:;X purc h:I'':s. high - a nd 1( '11 involn: mc nl. IJ-ł r lan~

R rai io ,1Il:ll ySl'!Vl r:11 1 fin a llc i:11 :-1;lhilit y ralio:.. 232 profilabi lil y ralios. D l -Dl ROS. 2 1'J. St.'t' rati u analys..::. Rc ·j\·lission.131 r':; I~ () n, roI' husiness pl:lns. 2--ó R.:d Hull .l:;X r.:d fl:l~ in busi ncss plans. 1 L 171-172 rc g ul 31u ry cha ng.:s a nd ne w husi n,-,!'iS iJ,-, as. 2h-27 rC''::lrch indus II')' data .."X inl ~ rn': l n:MIUI' C'-' lah k.-lX-SI li blar)' a nd inll.'rn.:1. 3+-35 prim:lry. :;5 ~e cun d;II"}'.

:;5

reso urce s ufficic ncy anu k; 1 ~i hilil y ;Ul:II}',i, M--ó5 re lurn o n a ~sd~ ( ROA ). 231-~32

I..... lurn I'n ~ak ~ ( ROS). 21