DSM 508: ENTREPRENEURSHIP COURSE PROJECT

Identify a business of your choice small or medium and that you feel would benefit from preparing a business plan. Using the business as a case, develop a business plan for it using the guide below. The business plan should not be more than 20 pages excluding references and appendices. GUIDE: Whether your goal is to start, expand or diversify a business, a well-prepared business plan is fundamental for attracting investors and securing a loan. As a series of operational instructions, a business plan should define your basic product or service, income objectives and operating procedures. The process of creating a business plan will help put your ideas into a set of steps that outline how you plan to run your business. Clarity is necessary for investors and lenders who will want to know specific information about where your business is headed and how you plan to get there. This digest provides a synthesis of information about business plans, outlining key steps to writing one. General Guidelines Since a business plan "is a cross between a research paper and an advertisement" (Jung, 1999), it should articulate your vision and the present the details of your business. Before you begin to write, outline what you really want to accomplish. First, take time to study and conduct research. Don't try to write your plan in one or two days. Second, begin by putting everything down on paper. Once you have collected your thoughts and ideas, compile your notes into different categories. Third, organize your categories into separate chapters. A clear organization and presentation of important aspects is crucial. Seven Steps to Writing a Business Plan The following format is based on the seven-step approach to writing a business plan suggested by Stevens (1995). Ideas and recommendations from other sources are incorporated into several steps. Step One Develop a mission statement or executive summary. Developing your company's mission statement, or statement of purpose, sets the stage for the rest of the document. This statement should be a brief synopsis about the nature of your business, provocatively stated to pique the interest of lenders and investors. Think of it as an interesting introduction to your business concept. Step Two Provide a detailed description of your company. Include information about when it was founded, the products or services offered, corporate responsibilities or division of workload, and specifics about how you plan to realize your strategy. This section would include details about whether you plan to cater to existing demand or whether you are looking to create a new demand. Step Three Define your market. According to David Thornburgh, Director of the Small Business Development Center in Iowa, "The easiest way to describe your customer is to ask yourself to describe in detail the first shopper you picture walking into your store" Who are the customers that are going to be buying your products or using your service? Asking this kind of question forces you to identify who your customers will be so that you can answer demographic questions about their household income, educational levels, places of residence, and their tastes and needs. Stevens (1995) recommends doing extensive research for this section, utilizing trade publications, government studies and reports done by independent firms in order to back up your market analysis with authoritative citations. Use this section to define your market and demonstrate credibility for your ideas by showing why your product or service is unique and how it will fulfill specific needs or occupy a special niche. Step Four Describe management strategies and sales volume. First, outline the management hierarchy, including job titles and responsibilities. Be sure to answer the following questions: How many salaried employees will you have? Will your company have independent representatives or operate on a commission scheme? Will your firm take care of all of the steps in production or rely on other companies? Second, since this section informs the reader about how you plan to realize your sales volume, it is appropriate to include information about other aspects of your business that will influence demand for your product or service such as location and possible seasonal influences ("Business Plan," 1998). Potential investors should feel convinced that you understand what it will take to begin and maintain your business and how external factors might influence

sales. Step Five Describe the specifics of your product or service and compare and contrast with the competition. For this section, include specifics about product parts, or manufacturing techniques. If your product is registered under proprietary claims such as trademarks, copyrights, or patents, make it obvious that you have obtained the necessary documents or claims to protect your product or service. Such evidence can be attached to your plan as documentation. Be careful not to get sidetracked by spending too much effort to protect your ideas. Many small businesses can successfully launch without product protections and the time and cost involved in securing protections can cause a business owner to miss a market opportunity ("Business Plan," 1998). If the product you are selling is patented under someone else, make sure that you note this and provide any evidence of permission. Identify competitors and emphasize how you plan to capitalize on their weaknesses or match their strong points. This can be accomplished by talking with as many of your indirect competitors as possible (SBRC, 1991). Stevens (1995) suggests creating a matrix comparing your product to the competitors, using bold face print for each area where your product is superior. Step Six Introduce your management team, identifying the people who will be running the enterprise. List all previous experiences or related to your business, including educational background and any special accomplishments. Stevens (1995) recommends including resumes for each person or listing previous employers, references and phone numbers. Potential lenders should feel confident that these individuals have the capacity to carry out your plans for starting, maintaining and expanding your business. Step Seven Propose plans for future growth. One way to organize this section is to create a five-year projection of costs and profits, estimating the numbers on both a monthly basis for the first two years, and on a quarterly basis for the next three. You can also complete this section by breaking down your objectives down into annual milestones (SBRC, 1991). It is important that you make this section realistic and understandable. You may also want to address possibilities and alternatives for future financing, indicating that you have already considered long range plans for your enterprise. Ultimately, prospective investors should feel that they would profit by supporting your venture. Conclude your business plan with a brief, overall summary, recapping the purpose of your company, what makes it unique, how you expect to be profitable and a projection of expected future income. A good conclusion will remind potential investors and partners of the most important aspects of your plan. References Jung, H. (1999). The business plan is a road map for your journey to a successful enterprise. The Seattle Times. Retrieved from the World Wide Wed, October 16, 1999: http://www.seattletimes.com/new/business/small/bizplan/ Klein, K. (February 29, 2000). Yes, you can find good business-plan software. Business Week Online. Retrieved from the World Wide Web, March 7, 2000: http://www.businessweek.com/smallbix/0002/sa000229.htm Small Business Resource Center. (1991). How to prepare a business plan that guarantees big profits. Retrieved from the World Wide Web, March 26, 1999: http://www.webcom.com/seaquest/sbrc/busplan.html Stevens, M. ( March/April 1995). Seven steps to a well-prepared business plan. Executive Female, 18, 30-31.

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