Entrepreneurship Business Plan

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The business plan for this course is a shorter than a typical full business plan.   Some sections that would be included in a full business plan are not included in this version. However, the included sections are critical and are discussed during the course.

Some other recommendations include:

  • Ensure you list all team members
  • Use of a cover sheet is encouraged
  • Use the section headings to make this easier to read

 

Executive Summary

The Executive Summary should be a mini version of the full business plan. This appears at the beginning of the plan and is usually one page or less. There should be enough detail in the summary to capture the interest of the reader and make them want to read the full business plan. Normally, you will cover the most important points, briefly, from each of the sections of the business plan.

 

Company

This opening section should describe the company and set the stage for the rest of the business plan. This is the beginning of the story, so be compelling here.

Some things to consider answering or including in this section:

  • What is the company name?
  • Who are the principals of the company?
  • Why did you decide to start this business?
  • Where is the company located?
  • What type of corporate structure is this (LLC, S-Corp, C-Corp)?   When was it formed?
  • Is there anything else that is important to know about the company?

 

 

 

Opportunity

Continue the story with a description of the opportunity that you have discovered, or are creating.   Some things to consider answering or including in this section:

  • What is the need or pain you have identified or plan to create?   Describe in vivid detail the opportunity that you have identified or plan to create.
  • In general terms, who needs this, or will need this? You will be more specific in the target markets section, but you need to set it up here.
  • How big is the current need or pain if it exists? How many companies, or people have this problem?
  • How are your prospective customers getting by now without your product?

 

Products and Services

Once you have clearly described the opportunity, or need, that you have identified, you need to clearly explain how you are going to take advantage of this opportunity with your product or service. Make sure you clearly describe what it is, what is the pricing plan, and how much it costs to produce it.

Some things to consider answering or including in this section:

  • What is your product or service?
  • How are you going to produce this product?
  • What do you need to adequately provide your services?
  • Are there parts that need to be created to make your product?
  • Do you need, or have, strategic partnerships to make your product?
  • What is the price of your product or service? This area usually is too complex in very early stage ventures, so pay particular attention to the complexity of the pricing. Keeping it simple at first is a good rule. You can, and should, plan to add more features, costs, options, or pricing later and you should include these changes in this section to describe the future state of the business.

 

 

 

Target Markets

In this section, you must be very clear about the markets that you intend to target to buy your products or services. Be sure to use any data you have collected on your own, or have found in your research that supports your claims. Focus on early adopters, and the addressable part of your target market.   Not everyone that you describe as your target market will actually want to buy your products or services. Be sure to identify why those people might not buy.

Some things to consider answering or including in this section:

  • Be as specific as possible. Use data that you have either collected yourself, or data that can be validated.
  • Be sure to check your math to ensure your numbers are valid and true.
  • Why did you remove some potential customers from the total?   There will always be an entity in your target market that will not buy from you for some reason.
  • Who are your suspected early adopters and why?
  • What percentage of the market do you think you can attain through the life of the business? Remember that a very small percentage of a very large market is not a highly desirable plan.

 

Marketing Strategy

Now that you have described the market that you are targeting, you must now explain how they will know you exist. Marketing is critical to ensure that the sales strategy has a better chance to succeed.   It also reduces the sales cycle if people have heard of you, your product or service, and how it can impact their business in a positive way.

Some things to consider answering or including in this section:

  • What activities will you perform to get your first customer?
  • Be specific if you are going to advertise in magazines, or websites.   Tell the exact site, or magazine, how often, and why. This demonstrates you understand your audience and where they are likely to congregate or go for key information.
  • Be specific if you plan on attending any conference or other trade show.   What will you do there and how does this help your cause?
  • Describe your branding strategy.
  • If you are using any marketing support, tell who it is and why you chose them.
  • Explain your public relations strategies.
  • Are there any groups you will be joining, and why? This includes networking groups or other membership organizations that can help your cause.
  • What is the budget for marketing?
  • What key metrics will you try to drive with your marketing spending and how will you track this?

 

Sales Strategy

Once you explain your marketing strategy, and how potential customers will know you exist, you must explain how you will turn those prospects into revenue producing customers.

Some things to consider answering or including in this section:

  • How are you going to get your first sale? Who is it and how much will it produce?
  • How will you scale your sales force? Will you always use hired sales people, or will you outsource selling at some point?
  • What tools will you use to track your pipeline, closing ratio, and sales cycles timeframe? These are key performance indicators, so you need to track them well so you can improve over time.
  • What is the sales commission plan
  • Who is leading your sales efforts? What are their qualifications that make them perfect for this opportunity?
  • What risks to the sales process have you identified?

 

Competition

There is always competition to your new venture. If this is a creation opportunity, the competition is the fact that your potential customers can simply “do nothing”. They are fine without you now, or so they believe. You must be clear on who our direct competitors are, as well as anyone that might enter the market and compete because their product, or their customers, are closely related to your proposed target market and product.

Some things to consider answering or including in this section:

  • A matrix showing your product, your competitors, and various features is usually helpful. Be sure that you include features that are important to the customers. If this is a new product for you, remember that you are proposing features against the competitors’ known features. They could be planning features you show them missing.
  • A matrix is also a great way to identify the gaps in the market and communicate your value proposition compared to others.
  • How can you mitigate the threat of your competitors building the features that you have in your product.
  • Are any of the competitors potential acquirers? Why?
  • Be sure to explain why your product or service is really better than your competitors.
  • Don’t spend too much time praising or describing your competitors.   You want to tell enough about who they are but focus on why you are, or will be, better than them.

 

 

 

Financial Highlights

At this point you should have told a compelling story of how you came to understand that an opportunity existed, how you plan to take advantage of this opportunity and grow, and execute, the business. You should have described the vision from today until three to five years in the future. At this point, you must explain the financial concepts of this proposed business.

Some things to consider answering or including in this section:

  • What are your yearly projections for revenue, and costs?
  • Are there any other big costs that you need to account for at some point, such as capital expenditures? Personnel?
  • Make sure you are very clear on any financial assumptions you are making that impact these highlights. This could include salaries, other costs, average size of a sale, average sales cycle, or anything else that is key to making your projections a reality.
  • How much capital do you need to spend before your first sale?
  • When do you believe you will be cash flow break even (CFBE)?
  • How much investment will you need, and when do you need it?

 

References

Use APA style.

Appendices

The appendices are a great place to add in any detail that you used to create a section of the business plan.

Some things to consider answering or including in this section:

  • Letters from prospective customers, or partners.
  • Any governmental programs that you have been approved to use.
  • All of that financial detail that explains your projections.
  • Diagrams of your product.
  • Patent information.
  • Resumes of team members or advisors.

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