Preparing Effective Business Plans: An

Entrepreneurial Approach
Second Edition

Chapter 4
Introductory Material
Executive Summary and
Description of the Business
Chapter Learning Objectives
4.1 Review Cover Page and Table of Contents
4.2 Examine Executive Summary
4.3 Identify Company Description
4.4 Select the Name for a Business
Introduction
Description of Business Plan:
• Written Document that Carefully Explains Every Aspect of
a New Venture
• 25 to 35 Pages Long
• Provided to Investor or Other Interested Party
• Describes:
– Why Business is Starting
– How Business Will Make Money
Cover Page
Information to Include:
• Company Name
• Street Address
• E-mail Address
• Phone Number(s)
• Date
• Contact Person
• Website Address
• Confidentiality
Table of Contents

Follows Cover Page

Main Sections
Subsections
Appendices
Executive Summary
• Short Overview of Entire Plan
– Goal is to Capture Reader’s Attention
• Provides Everything Reader Needs to Know
• Two Pages Maximum
• Write it Last, Not First
• Content Mimics Plan Format
Overview of the Company Description
Headings
• Company History
• Mission Statement
• Products and Services
• Current Status
• Legal Status and Ownership
Company History
• Brief Explanation of Where Idea for Company Originated
• Be Interesting or Heartfelt
• How Business Meets Compelling Need
Mission Statement
• Defines why Company Exists
and What it Aspires to Become
– Acts as Financial and Moral
Compass
• Articulate Firm’s Mission or
Purpose
• Few Words as Possible
– Google: “Don’t be Evil”
Products and Services
• Explanation of Product or Service:
– How Product/Service is Unique
– Positioning in Marketplace Relative to Rivals
• Report Results of Feasibility Analysis
• Explain Proprietary Aspects and Protection of Intellectual
Property
Current Status
• Company Development Milestones
• Current Composition of Management Team
• Early Customer Reactions
• Company’s Financial Status:
– How Firm Has Been Funded to Date
– Current Debt or Equity, and Future Intentions
Legal Status and Ownership
• Owners of Business
• Ownership Split
• Founder’s Agreement Contents:
– Legal Written Document
– Split of Equity Among Founders
– Founders’ Compensation
– Time Founders Have to Remain with
Firm for Shares to be Vested
– Legal Form of Business (LLC or
Corporation)
Copyright © 2015 Pearson Education, Inc. All Rights Reserved
Selecting a Name for the Business
Facilitates How Business Brands and Differentiates Itself
• Customer-Driven
– Big and Tall Guys
• Product- or Service-Driven
– Whole Foods Market
• Industry-Driven:
– General Motors
• Personality- or Image-Driven
– Ben & Jerry’s Homemade

Copyright © 2015 Pearson Education, Inc. All Rights Reserved

It is helpful to divide companies into four categories
to discuss this issue:

• Customer-Driven Companies. If a company plans to focus on a particular

type of consumer, its name should reflect the attributes of its clientele.
• Product-or-Service Driven Companies. If a company plans to focus on a
particular product or service, its name should reflect the advantages that its
product or service provide.
• Industry-Driven Companies. If a company plans to focus on a broad range
of products or services in a particular industry, its name should reflect the
category it is participating in.
• Personality-Or-Image Driver Companies. Some companies are founded
by individuals who put such an indelible stamp on the company that it may
be smart to name the company after its founder
Legal Issues in Choosing a Name
• Name Must be Unique
• Internet Domain Name
• Adapts Well to Foreign Cultures
Did You Learn?
1. Review Cover Page and Table of Contents
2. Examine Executive Summary
3. Identify Company Description
4. Select the Name for a Business
End of lecture

Copyright © 2015 Pearson Education, Inc. All Rights Reserved