Business Planning for the Inspiring Entrepreneurs

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This workshop will introduce the key ideas in planning a business, and the tools to assemble a business plan. You will learn how to use the plan to clarify your own activities, to coordinate the work of your team, and to attract support from investors and lenders. In this workshop SCORE business counselor Shmuel Ferency will walk you through a manageable, step-by-step process to evaluate the business potential of your creative idea, plan your startup strategy, get your business in shape for launch, and tackle your execution check-list.
Transcript
  • 1. BUSINESS PLANNING Shmuel Ferency, SCORE Mentor
  • 2. SUCCESS What will it look like?
  • 3. WHY PLAN ? DO IT FOR YOU, NOT FOR THEM Helps you focus clearly—challenge yourself and your ideas….try to clarify a complex challenge Leads to success….less than 5% have plans but those that plan are imminently more success Building trust …your own and with others
  • 4. AUTHOR EXPERT IN PERSONAL TIME MANAGEMENT
  • 5. IMPORTANT QUESTIONS TO ASK 6 Market Money Yourself
  • 6. IT’S YOUR STORY 7 Business Plan Executive Summary Opportunity Product Competition Marketing Strategy The Company Operations Management Team Finance
  • 7. WHO SHOULD CREATE YOUR BUSINESS PLAN? • There are services that will write your plan for money –Hire one? • 1000s of archived business plans are on line –Copy one?
  • 8. HOW WILL YOU BE JUDGED • Your ideas • Your research • Your knowledge • Your presentation • If someone else does it, is it yours?
  • 9. ESSENTIAL DEFINITION A Business Plan is your Strategy Document that seeks to convey the excitement and promise of your business to others: investors, partners, employees, and customers And even to you!
  • 10. ENTREPRENEURSHIP IS LONELY Sharing your story You can’t do it alone…..no one ever has ! Power lies in asking for/getting help.
  • 11. YOUR PLAN’S PURPOSE For you and your team: – Tell the story that you expect to happen…it likely won’t…be prepared – Test alternatives, contingencies, scenarios – Determine your financial needs
  • 12. To others you demonstrate that: – You understand your business – The risk & rewards make sense – Your plan is LOGICAL, WELL THOUGHT OUT and DOABLE!
  • 13. THE TEAM YOU WILL WORK WITH GET TO KNOW THEM 14 The Team Contractors Employees Partners Customers Advisors Others
  • 14. They don’t have to be employees: Legal, accounting, and insurance-related issues Short-term needs . . . Who provides your sanity check? To whom do you listen? MAKE SURE YOUR TEAM CAN TAKE YOU ALL THE WAY 15
  • 15. WHAT IS YOUR OPPORTUNITY ? • Elevator version • What does the market need…the Shmuel and the Kharkiv Story • What do you bring
  • 16. MY PERSONAL PREFERENCE • Executive Summary (discussed last) • Describe the Company and its Mission/Vision • Opportunity • Product/Service • Competition • Marketing Strategy • Operations • Management Team • Financial Requirements and Strategy
  • 17. THE COMPANY • What do you want it to be • Ethos/Philosophy • Who are your customers • Company Structure…legal form • Core competencies • The Industry
  • 18. MISSION/VISION STATEMENT • What are you doing? • Why are you doing it? • Define Company and Purpose in 30 seconds or less MISSION/VISION STATEMENT
  • 19. Seeks to create and promote great-tasting, healthier, organic beverages. We strive to grow our business with the same honesty and integrity we use to craft our products, with sustainability and great taste for all. HONEST TEA MISSION STATEMENT:
  • 20. SINGAPORE AIRLINES is engaged in air transportation and related businesses. It operates world-wide as the flag carrier of the Republic of Singapore, aiming to provide services of the highest quality at reasonable prices for customers and a profit for the company
  • 21. MARRIOTT’S MISSION STATEMENT: We are committed to being the best lodging and food service company in the world, by treating employees in ways that create extraordinary customer service and shareholder value
  • 22. MARKETING You need to be your best, most knowledgeable representative.
  • 23. MARKET RESEARCH • Primary and secondary…find people to talk to where you won’t be a threat • Market size and future • Market opportunity for your business • Challenges….and some are out of your control • Finding your niche…don’t be a commodity
  • 24. INDUSTRY RESEARCH • Bizstats: ww.w bizstats.com • Kirstein library • Lucky you….you live in an online world • Where will you fit? Higher or lower and why
  • 25. YOUR CUSTOMERS • Target customers…never never concentrated (30% rule) • Why will they seek you • If its price, then there will be no bottom • Differentiation…product mix • What problem is being solved • Value proposition
  • 26. KNOW YOUR COMPETITION • You will have some …if not now when • How to love competition and not fear it • How will you respond to competition • Spirit Airlines….. • There may be opportunity for you through your competitors
  • 27. MARKET RESEARCH • Primary and secondary . . . find people to talk to where you won’t be a threat • Market size and future • Market opportunity for your business • Challenges . . . some are out of your control • Finding your niche . . . don’t be a commodity
  • 28. THE COMPANY OPERATES • People assets • Location • Physical assets • Tools of Production • Structure…legal • Suppliers
  • 29. EMPLOYEES • Who and how many? • Do they complement you? • What are your needs? What are their needs? • How will you get the best? • $$$ isn’t everything • Benefits
  • 30. LEGAL • Licenses, regulatory requirements and permits • Zoning • Insurance • Patents and trademarks
  • 31. OPERATIONAL FLOW • Step by step • Will you have all the pieces • If not, who will provide them
  • 32. FAMILY FRUIT EXAMPLE • Customers.. It’s about meeting their needs (not like Russia) • Taking orders • Sourcing product • Warehousing • Delivery • Billing • Collections • Assuring satisfaction
  • 33. FINANCIAL DUE DILIGENCE • Licenses, Fees and Taxes • Insurance • Rent • Accounting • Legal • CASH reporting
  • 34. HOW CAN YOU HELP OTHERS BE CONFIDENT • Personal History…personal financials • Industry Experience…you and • Proforma Statements
  • 35. IT’S ABOUT THE MONEY • Can you continue your present source of income / your spouse? • How much do you need? • Know your startup expenses and cash flow requirements • Segregate business from personal • Where is the money you will need • How do I get the money I need of our the hands of those with it.
  • 36. HOW WILL ANYONE GET REPAID Profit Collateral
  • 37. FINANCIAL PROJECTIONS • No money no future • Start up expenses • Projecting sales…you are not alone…talk to others • Cash flow analysis • Income statement
  • 38. FUNDING SOURCES • You (home equity, savings, retirement funds) • Friends and Family • Institutions • The forgotten Seller
  • 39. 1st QTR 2nd QTR Sales $ 68,250.00 $ 69,000.00 Cost of Goods (.52) $ 35,490.00 $ 35,880.00 Gross Margin (Profit)(.48) $ 32,760.00 $ 33,120.00 Expenses Salaries $ 9,600.00 $ 9,600.00 Benefits $ 2,304.00 $ 2,304.00 Rent $ 1,200.00 $ 1,200.00 Insurance $ 600.00 $ 600.00 Utilities $ 3,450.00 $ 3,450.00 Licenses & Permits $ 250.00 $ 250.00 Legal and Accounting $ 600.00 $ 600.00 Trash removal $ 210.00 $ 210.00 Total Expenses $ 18,214.00 $ 18,214.00 Profit before Taxes $ 14,546.00 $ 14,906.00 Loan Repayment $ 3,550.00 $ 3,550.00 Net Profit $ 10,996.00 $ 11,356.00
  • 40. FIXEDCOSTSAREEXPRESSEDINDOLLARS, VARIBLECOSTSAREEXPRESSEDASAPERCENTOFTOTALSALES Breakeven Sales = Fixed Costs 1 - Variable Costs
  • 41. BREAK-EVEN ANALYSIS BS = FC/(1-VC) BS = Break-even Sales FC = Fixed Costs VC = Variable Cost Percentage $18,214/(1-.52) = $37,946
  • 42. OPPORTUNITY PRODUCT COMPETITION MARKETING OPS TEAM FINANCE An urgent, and unsatisfied need exists for which specific consumers “lie awake” Product or service able to entirely satisfy need at a price consumers will pay Product or service affords decisive competitive advantages Strategy to inform target customers what, where, and especially, why to buy Assured capability to produce & deliver at promised quality, quantity, time Superbly able, experienced, with demonstrated success and character Near assurance of high returns commensurate with risk
  • 43. EXECUTIVE SUMMARY (1) EXECUTIVE SUMMARY
  • 44. EXECUTIVE SUMMARY (2)
  • 45. https://boston.score.org/ 617.565.5591
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