Entrepreneurship

Chapter 2
The Business Plan:
Road Map to Success
 What Is a Business Plan?
 Document that thoroughly explains a
business idea and how it will be carried
out
 Story of what the business is & will be
 All costs & a marketing plan
 Description of financing
 Estimation of earnings

Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 2 All Rights Reserved.
 Why Create a Business Plan?
 Saves time & money
 Key to raising capital
 Serves as an operations guide

Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 3 All Rights Reserved.
 Business Plan Components
 Cover page  Management &
 Executive summary operations
 Mission, vision, &  Financial analysis &
culture projections
 Company description  Funding request &
 Opportunity analysis exit strategy
& research  Appendices
 Marketing strategy &
plan
Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 4 All Rights Reserved.
 Cover Page
 Full legal name of organization
 Logo
 Key contact information
 Date
 Non-disclosure information

Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 5 All Rights Reserved.
 Executive Summary
 Business definition
 Target market
 Key marketing strategy
 Goals
 Ownership
 Financing request
 Use of funds & exit strategy
Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 6 All Rights Reserved.
 Mission, Vision, Culture
 Mission = concise communication of
strategy with business definition &
competitive advantage
 Vision = overall view of what the team
wants the organization to become
 Culture = environment including risk
tolerance & innovation, orientation with
respect to people, teams & outcomes,
attention to detail, & communication norms
Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 7 All Rights Reserved.
 Company Description
 Industry
 Type of firm (manufacturing/service/wholesale)
 Strategic advantage
 Legal structure
 Physical location & geographic reach
 Ownership structure

Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 8 All Rights Reserved.
 Opportunity Analysis
 Industry analysis
 Target market
 Environmental analysis (SWOT)
 Competitive analysis

Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 9 All Rights Reserved.
 Marketing Strategy & Plan
 Products
 Pricing
 Promotion
 Place
 Philanthropy

Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 10 All Rights Reserved.
 Economics of One Unit
Definition of one unit
Selling price per unit $
Direct labor $
Materials $
Total COGS per unit $
Other variable costs $
Total variable costs $
Gross profit per unit $
Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 11 All Rights Reserved.
 Management & Operations
 Management team & employees
 Research & development
 Location & physical facilities &
equipment
 Inventory & production
 Quality assurance

Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 12 All Rights Reserved.
 Financial Analysis & Projections
 Start-up capital requirements
 Cash flow projections
 Income statement projections
 Balance sheet projections
 Breakeven analysis
 Key ratios & comparisons

Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 13 All Rights Reserved.
 Funding Request & Exit Strategy
 Amount, type, & terms for funds
 Risks & barriers
 Exit & harvesting strategy
 Milestones

Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 14 All Rights Reserved.
 Appendices
 Resumes
 Detailed financial projections
 Product specifications, photos, & the
like
 Advertising & promotion samples
 Contracts
 Other supportive materials
Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 15 All Rights Reserved.
 Business Plan Suggestions
 Write for your audience
 Show that you have “skin in the game”
 Be clear & concise
 Use current data & reports
 Select a “voice”
 Use a consistent, easy-to-read format
 Number & label throughout
 Present the plan professionally
Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 16 All Rights Reserved.
 Presenting the Plan
 Formal presentations
 Elevator pitch
 Competitions

Entrepreneurship, 2nd Edition © 2010 Pearson Education, Upper Saddle River, NJ 07458.
Mariotti and Glackin with NFTE 17 All Rights Reserved.