Be an Entrepreneur

Chap 05

The Entrepreneur

The Business Plan

The Enterprise•Epilogue

Be an Entrepreneur

CHAPTER 05

The Business Plan

Remember our learning objectives

a. Gain useful knowledge• how to conceptualize a business idea• how to build and run the small business

b. Learn good Work Attitudes• To display good work attitudes via class Activities &

homework• To emulate the winning attitudes and skills of successful

entrepreneurs.

c. Gain wisdom and benefits from the course,• in terms of positive learning and management abilities, • they will serve the student well, even if he does not pursue

an entrepreneurial career.

Chapter 5 overview

The previous chapters gave a bird’s eye view of creating a business.

They encouraged you to study the market or customer, identify unmet needs or gaps, develop a product or service to address those needs, and build your competitive advantage.

Chapter 5 overview

We go into ever greater detail in the next four chapters to flesh out the business plan.

Chapter 5 overview

Chapter 5 will define the business plan; explain:

why entrepreneurs need one, who will read it, and how to go about writing the plan.

Chapter 5 overview

We highlight the: executive summary, company summary, management profile, and risk-and-reward profile.

Chapter 5 overview

Those sections highlight the main points of your plan. Details of the plan will follow in the next three chapters.

Coverage of the Chapter

• What is a Business Plan?• How to write the Business Plan• Writing style for a Business Plan• Characteristics of a good plan

Coverage of the Chapter

• Contents of the Plan• The Executive Summary• Company Summary• Management Profile• Risk-and-reward profile • Tip: think of the reader

Learning Objectives

• Define a “business plan"• List the readers of a business plan • List the characteristics of a good business

plan• List the components of a business plan

Learning Objectives

• Define the following sections: executive summary, company summary management profile, risk-and-reward profile

• Know what readers look for in the executive summary

• Know why he should write a business plan from the point of view of the investor

Activities

Icebreaker

Glossary. Video.

Parts of a

business plan

Executive

summary

Discussion

characteristics of

good business

plan Management

profile

Risk-reward profile

Summary

Story from Real Life

Thomas D., 38, was tired of his predictable life. After 12 years as a management consultant for a computer company, the native Belgian was faced with a choice.

Should he continue the next 20 years in a predictable career or follow his entrepreneurial dream of sharing his favorite childhood treat: authentic Belgian waffles.

Story from Real Life

Now, instead of traveling the country in a suit and tie, he travels the streets of New York City in an apron, selling freshly made waffles out of a yellow van.

Story from Real Life

"I was looking for a business that would have meaning. My version of meaning is bringing a happy moment—a moment of indulgence or a smile—to people's days. A waffle definitely does that," Thomas says.

Story from Real Life

Thomas spent a year perfecting his recipes while still employed at IBM.

He eventually took a leave of absence when he started “Waffles and Dinges” in October 2007.

He prepared a business plan. He calculated the expenses and projected the

sales.

Story from Real Life

Then he resigned from his computer company job to start serving waffles.

Now, DeGeest is happy that he has finally found the unpredictable life he was craving for.

Central Idea

Writing the business plan

Glossary

Business plan: A detailed statement of what your

business is going to do in the future.

Glossary

Executive summary: The first section of a business plan

covering the main points of the document.

Its purpose is to convince readers that your business has merit. It encourages them to read the remaining sections.

Glossary

Company summary: The section of the business plan that

tells the readers what the company is, who is behind it and where it is going.

It provides a brief account of business operations, history, purpose and organization.

Glossary

Management profile: The section of the business plan that

details the backgrounds of the company’s management team.

Points to Remember

• The business plan is your means of communicating your vision to the world to help you attract talent and money to the business.

• It is a detailed statement of what your business is going to do in the future.

Points to Remember

• The readers of your business plan are: banks, venture capitalists, and private investors. Also your management team and business partners.

Ask Yourself

• Am I ready to explain clearly and concisely what my objectives are in starting this business?

• Am I able to explain my objectives in a way that the potential investors can appreciate?

Points to Remember

• The characteristics of a good business plan:• short and simple• interesting• easy to understand• contains no typing errors• contains visuals and graphs.

Ask Yourself

• Am I confident about the prospects of the business?

• Does my confidence show in the way I describe the details that go into the plan?

Ask Yourself

• Am I able to do a complete work, without leaving out important parts of the plan?

• Do I make the effort to dig out information that will enrich the analysis, even if it is difficult to find this information?

Points to Remember

The major sections in the business plan are: • executive summary, • company summary, • management profile, • risk-and-reward profile.

Points to Remember

• The executive summary covers the highlights of your business plan.

• The purpose of the summary is to convince readers that your business has merit.

Points to Remember

• The company summary tells the readers what the company is, who is behind it, and where it is going.

• The company summary should include: names, background, history, and goals.

Points to Remember

• The management profile includes: organizational chart of managers, resumes, and professionals.

• Businesses have opportunities as well as risks. A good business plan does not skip the risks. Risk is unavoidable. Your business plan must unflinchingly confront risk in terms of potential problems and threats

Points to Remember

The executive summary should explain: • Purpose: intent of your business plan. • Opportunity: market potential of the

business. • Benefits: unique selling proposition • Financial requirements: much is needed• Growth: how your company will grow in the

next few years.

Points to Remember

Write the plan from the point of view of the reader. It will help enormously to put yourself in the place

of your prospective investor. It will help you to respond to the reader's concerns,

rather than letting yourself write what interests you, the entrepreneur.

Ask Yourself

• Am I ready to rewrite and revise the draft of the plan until it reads like a professional document?

• Am I willing to be corrected in my grammar and style to be able to prepare an excellent business plan?

Ask Yourself

• Am I going to be able to write honestly and fairly about:

• the strengths and weaknesses of my business.

• my first few employees and managers• my prospects for success or failure.

Ask Yourself

• Will I be able to speak honestly about the risks confronting the business?

• Will I mention all the risks?

Ask Yourself

• Can I develop the skills of seeing things from the point of view of my reader?

• Can I train myself to empathize with the perspective of the person I am dealing with?

NEXT CHAPTER: 06

The Marketing Plan

Chapter 6 overview

In Chapter 5, we discussed the sections that highlight the main points of the business plan. These sections are the executive summary, the company summary, the management profile, and the risk and reward profile.

Chapter 6 overview

The aim of these sections is to give a strong impression to the investor that the opportunity is compelling and that you and your team are the best people to run it.

Chapter 6 overview

Of course, the investor will need more than just the main points to be convinced and support your business idea with funds. Chapter 6 to 8 provide the needed detail to achieve your goal.

Chapter 6 overview

We start with the marketing plan in Chapter 6. You might want to take a moment to review your notes on your customers and competitors. Your insights on your customers will guide the marketing effort.