THE

CREATING AND STARTING THE VENTURE

• To define what the business plan is, who prepares it, who reads it, and how

it is evaluated.• To understand the scope and value of the business plan to investors, lenders, employees, suppliers and customers.

• To identify information needs and sources for each critical section of the business plan.

• To enhance awareness of the value of the internet as an information resource and marketing tool.

• To present examples and a step-by-step explanation of the business plan.

• To present helpful questions for the entrepreneur at each stage of the planning process.

• To understand how to monitor the business plan.

Owner and president, GC Micro…Belinda Guadarrama waged and won a one-woman legal battle against the goliath Defense Logistics Agency (DLA) to ensure proper apportionment of government defense subcontracts to small disadvantaged businesses .Guadarrama’s company, GC Micro, sells computer software and hardware, principally to the defense and aerospace industries.

• Understand the different types of plans that may be part of any business operation

• Planning is the process that never ends for a business.• The finalized plan for entrepreneur has a better the market, the product and services to be marketed.• Possible to find financial plans, marketing plans, human resource plan, production

plans and sales plan.• Plans may be long-term or short-term, or they may be strategic or operational.

• It is a written document prepared by the entrepreneur.

• It describes all the relevant all the external and internal elements involved in starting a new venture.

• It is often an integration of functional plans such as marketing, finance, manufacturing and human resources.

• The business plan should be prepared by the entrepreneur;

• He or She may consult with many other sources in its preparation.

• Lawyers, Accountants, marketing consultants and engineers are useful fofr preparation of plan.

1. Introductory Page.A. Name and Address of a business.B. Name(s) and Address(es) of Principal(s)C. Nature of business.D. Statement of financing needed.E. Statement of confidentiality of report.

2. Executive Summary – Two to three pages summarizing the complete business plan.

3. Industry Analysis.A. Future outlook and trends.B. Analysis of competitors.C. Market Segmentation.D. Industry and market forecasts.

4. Description of venture..A. Product(s)B. Service(s)C. Size of businessD. Office equipment and personnel.E. Background of entrepreneur(s).

5. Production Plan.A. Manufacturing process (amount subcontracted)B. Physical Plant.C. Machinery and equipment.D. Names of suppliers of raw materials.

6. Operational Plan.A. Description of company’s operation.B. Flow of orders for goods and/or services.C. Technology utilization.

7. Marketing PlanA. PricingB. DistributionC. PromotionD. Product forecastsE. Controls

8. Organizational Plan.A. Form of ownership.B. Identification of partners or principal shareholders.C. Authority of principals.D. Management-team background.E. Roles and responsibilities of member of organization.

9. Assessment of Risk.A. Evaluate weakness(es) of businessB. New technologies.C. Contingency plans.

10. Financial PlanA. AssumptionsB. Pro forma income statement.C. Cash flow projectionsD. Pro forma balance sheetE. Break-even analysisF. Sources and applications of funds.

11. Appendix (contain backup material).A. LettersB. Market Research DataC. Leases or contractsD. Price lists from suppliers.

Economy: The entrepreneur should consider trends in the GNP, unemployment by geographic area, disposable income, and so on.

Culture: Evaluation of cultural changes may consider shifts in the population. Such as Shift in attitude “ Buy American”.

Technology: Advances in technology are difficult to predict. Should make careful short-term marketing decisions.

Legal Concern: The entrepreneur should be prepared for any future legislation strategy. The deregulation of prices, restrictions on media advertising and safety regulations.

1. What are the major economic, technological, legal and political trends on a national and an international level?

2. What are total industry sales over the past five years?3. What is anticipated growth in this industry?4. How many new firms have entered this industry in the past three

years?5. What new products have been recently introduced in this

industry?6. Who are the nearest competitors?7. How will your business operation be better than this?8. Are the sales of each of your major competitors growing,

declining or steady?9. What are the strengths and weaknesses of each of your

competitors?10. What trends are occurring in your specific market area?11. What is the profile of your customers?12. How does your customer profile differ from that of your

competition?

1. What is the mission of the new venture?2. What are your reasons for going into business?3. Why will you be successful in this venture?4. What development work has been completed to date?5. What is your product(s) and/or service(s)?6. Describe the product(s) and services including patent, copyright

or trademark status.7. Where will the business be located?8. Is your building new? Old? In need of renovations?9. Is the building leased or owned?10. Why is this building and location right for your business?11. What office equipment will be needed?12. Will equipment be purchased or leased?13. What experience do you have and/or will you need to

successfully implement the business plan?

• It helps determine the viability of the venture in a designed market.• It provides guidance to the entrepreneur in organizing his or her planning activities. • It serves as an important tool in helping to obtain financing.

Entrepreneur should do a quick feasibility study of the business concept to see whether there are any possible barriers to success.

The information, obtainable from many sources, should focus on marketing, finance and production.

The internet, can be a valuable resource for the entrepreneur.

If the new venture is a manufacturing operation, a production plan is necessary. This plan should describe the complete manufacturing process.

If manufacturing process is to be subcontracted, the plan should describe the subcontractors, including location, reasons for selection, costs and any contracts that have been completed.

All business manufacturing or nonmanufacturing should include an operations plan as part of the business plan.

It might include inventory or storage of manufactured products, shipping, inventory control procesures and customer support services.

It is an important part of the business plan since it describes how the products or services will be distributed and promoted.

The Organizational plan is the part of the business plan that describes the venture’s form of ownership- that is, proprietorship, partnership or corporation.

Every new venture will be faced with some potential hazards, given its particular industry and competitive environment.

First entrepreneur should indicate potential risks to the new venture.

Next should be a discussion of what might happen if these risks become reality.

Finally, the entrepreneur should discuss the strategy that will be employed to either prevent, minimize or respond to the risks should they occur.

Like other plans it is also important part of the business plan.

It determines the potential investment commitment needed for the new venture and indicates whether the business plan is economically feasible..

During the introductory phases of the start-up, the entrepreneur should determine the points at which decisions should be made as to whether the goals or objectives are on schedule. 1. Inventory Control: By controlling inventory, ensure maximum service to customer.2. Production Control: Compare the cost estimated in the plan with day-to-day operation plan.3. Quality Control: Depend on the type of production system and making sure that

the product performs satisfactory.4. Sales Control: Information on units, dollars, specific product sold, price of sales.5. Disbursement: Venture should control the amount of money paid out.6. Web site Control: More and more sales being supported from a company’s website.

• Goals set by the entrepreneur are unreasonable.

• Goals are not measurable.• The entrepreneur has not made a total commitment to the business or to the family.• The entrepreneur has no experience in the planned business.

• The entrepreneur has no sense of potential threats or weakness to the business.

• No customer need was established for the proposed product or service.