Chapter 4

The Roadmap
Successful Business Plans

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 A detailed business plan shows the planned
activities of the company, its management
team, its projected expenses and earnings,
and its plans for repaying the loan

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 The time, effort, research, and discipline needed to
create a formal business plan force entrepreneurs to
view the venture critically, objectively, and
holistically
 The competitive, economic, and financial analyses
included in the business plan subject entrepreneurs
to close scrutiny of their assumptions about the
venture’s success
 Because all aspects of the business venture must be
addressed in the plan, entrepreneurs develop and
examine operation strategies and expected results
for outside evaluators

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 The business plan quantifies goals and objectives,
which provide measurable benchmarks for
comparing forecasts with actual results
 The completed business plan provides
entrepreneurs with a communication tool for outside
financial sources as well as an operational tool for
guiding the venture toward success

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What is a business plan?
 A business plan is the entrepreneur’s road
map for a successful enterprise

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 Executive summary
 Descriptions of the business
 Marketing
 Research, design, and development
 Operations segment
 Management
 Critical risks
 Financial forecasting
 Harvest strategy
 Milestone schedule
 Appendix

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 The plan should present a professional image
◦ Form, as well as content, is important
 The first two or three pages should contain
the executive summary
 A table of contents should follow the

executive summary

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 Is your plan organized so key facts leap out
at the reader?
 Is your product/service and business
mission clear and simple?
 Where are you really? Are you focused on the
right things?
 Who is your customer?
 Why do (or will) your customers buy?

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 Do you have an unfair advantage over your
competitors?
 Do you have a favorable cost structure?
 Can the management team build a business?
 How much money do you need?
 How does your investor get a cash return?

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 Executive summary
◦ Confine the summary to no more than 3 pages
◦ Complete this part after you have finished a
business plan
 Business description segment
◦ Provide a background of the industry along with a
history of your company
◦ Clearly describe the potential of a new venture

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 Marketing segment
◦ Use and disclose market studies
◦ Identify the target market, market position, and
market share
◦ Evaluate all competition
 Research, design, and development segment
◦ Explain carefully what already has been
accomplished (prototype, lab testing, early
development)

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 Operations segment
◦ List the production needs in terms of facilities and
equipment
◦ Provide estimates of manufacturing costs
 Management segment
◦ Supply resumes of all key people in the
management of your venture
 Critical risks segment
◦ Discuss potential risks before investors point them
out

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 Financial segment
◦ Give actual estimated statements
 Milestone schedule segment
◦ Develop a timetable

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