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Get Started: Business Plan Basics Sponsored by HSBCPresented By: Ed Coleman, Certified Mentor, DC SCORE

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With SCORE, You Are Not Alone on Your Journey

For over 50 years, SCORE has served as America’s premier source of free business mentoring and education.

As a resource partner of the U.S. Small Business Administration (SBA), SCORE has helped more than 11 million entrepreneurs through mentoring, workshops and educational resources since 1964.

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SCORE Can Help You Find the Way Ahead

• Free one-on-one business counseling and mentoring

• Business advisory services

• Low cost local workshops

• Free templates and recorded webinars

To meet with a mentor or learn more about SCORE’s resources, visit washingtondc.score.org

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• Introduction• Purpose of a business plan

• Content of the Business Plan• Business Description• Product/Service• Marketing Plan• Operational Plan• Management and Organization• Startup Expenses and Capitalization• Financial Statements• Executive Summary

• Sources of Research

Workshop Outline

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“If you don’t know where you’re going, any road will do.”

The White Rabbit in Alice in Wonderland, Lewis Carroll

What’s Your Plan?

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• Get organized and focused• Set SMART goals (Specific, Measurable, Attainable, Realistic, Time-bound)• Enhance market knowledge• Create measures• Set priorities• Become aware of strengths, weaknesses and risks• Serves as the Companies resume

• Informs suppliers, personnel , etc• Raise money

• Explain how money will be used or repaid

Purpose of a Business Plan

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Define Product

Identify Market

Identify Competition

Define Marketing

Plan

Project Sales

Plan Operations

Define Organization

Estimate Needed

Resources

Analyze Finances

Value Proposition

Target Market

Competition SWOT

Marketing Campaign

Sales Projection

Profit/LossCash FlowBalance SheetBreakeven PointBenchmarksStart up FundsSources of Funds

Process of Business PlanningRepeat until you’re comfortable it can be done!

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SWOT

Strengths(S)

Whatareyourkeystrengths?•Product/Service?•KeyStaff?•Funding?

Weaknesses(W)

Whereareyouweak?• Staff?• Finances?• Experience?

Opportunities(O)

Whatdoyouseeasthebestopportunityforyoutolaunchthebusiness?

Threats(T)

Whatisthemajorthreattoyoursuccess?

Positive Negative

External

Internal

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• Cover Letter – introduces the company and engages the reader• Non-Disclosure Statement • Table of Contents • Executive Summary • Company Direction – Brief vision and/or mission statements • Company Overview • Products and Services• Market Analysis• Marketing Plan • Financial Plan • Supporting Documentation

Business Plan Format

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CONTENT OF BUSINESS PLAN

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• What business am I in?• Give the context of the plan and the scope of operation

• Business Type• Merchandising• Service• Manufacturing

• Product or Service• New, Franchise, Purchased• Why Business will Grow and Be Profitable?• Source of Personal Knowledge of Business

Description of the Business

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• Description

• Solves What Need? And for Who?

• Consumer Offering and/or Business to Business (B to B) offering?

• Comparison with Competitive Offering

• What Niche

• Follow-On Offering

• Value Proposition

Product/Service

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• Define the Characteristics of the Customer

• Age

• Gender

• Income Level

• Occupation

• Education

• Location

• Other Characteristics of Target

Market Analysis – Business to Consumer (B2C)

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• Type of Business• Size of Business• Location• Product Line/Service• Who Makes Buying Decisions?• When Do They Buy?• Why Do They Buy?• Characteristics of Buying Decision• Purchase Financing Approach• Hot Buttons & Top Ten Prospects

Market Analysis – Business to Business (B2B)

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• Agency(ies) Targeted• Primary product/service needs• Preferred contract vehicles

• GWAC• GSA• Individual contracts

• Small Business• Set Asides

• Agency Annual Budget (nominal)• Location• Company/Personal Security Clearances Required?• Teaming partners available/necessary?

Market Analysis – Business-Government

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• Price

• Service

• Advertising

• Product Line/Service

• Employee Training

• Strengths/Weaknesses

Market Analysis – Investigate Key Competitors

Compare Yourself With the Competition

• Quality• Location• Image• Their Target Market• Finance: Method/Strength

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• Current Trends

• Projected Trends

• Develop Future Action

Market Analysis – Industry Trends

Relate these to your Target Market

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• Cost Your Product

• Add Profit Levels

• Compare With Competition

• Sell the Sizzle, not the process

• Test Prices Against Market Research Data

• Evaluate Volume Discounting

• Select Price

Market Strategies – Pricing

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• Channels of Distribution• Direct vs. Indirect

• Salespeople• Representatives• Distribution Systems

• Location• (‘Brick ‘n Mortar’)

• Accessibility• Visibility• Safety• Parking• Closeness to Customers• Zoning Laws

Marketing Strategies– Placement/Delivery

• Online (Web Site)• Ease of use• Optimized for Search Engines

(SEO)• Purchase & delivery process

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• Inexpensive • Word of Mouth• Door to Door Flyers• News Releases• “Social Media”• Events

Marketing Strategies – Classical Promotion Tools

• More Expensive• Brochures• Internet Web Site• Classified Ads• Yellow Pages• Radio/TV• Advertising Agency• Mailing List• Trade Shows• Educational and Social

Events

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Your Web Site is the Key

WEBSITE(SEO)

SocialMedia

E-mail campaigns

Web Advertising

Rating Sites

PartnerLinks

Internet Marketing

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Popular Social Media Technology

LinkedIn Social Networking> Target your audience by age, gender, seniority, geography, or job function> Pay per click or by impressions> Stop your ads at any time

Facebook Social Networking> Connect with more than 955 million potential customers> Choose you audience by location, age, and interests> Test simple image and text-based ads and use what works

Twitter Microblogging> Connect with customers and quickly share information > Gather market intelligence > Build relationships with people that care about your company

YouTube Billions of daily views

Online Video Community> Promote your content> Share promotional videos and

customer testimonials> Target audience by keyword

Google Places Business Finder> Be found by your customers> Stand out by engaging customers with photos, offers, etc.> Get insight on your listing to make smarter business decisions

Blogs Online Conversation> Word of mouth> Communicate promptly > Obtain feedback on products, service, trends, and industry

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Marketing Strategies – Sale Projection

Pull it all together and estimate what your sales will be.

DocumentWait for it…DocumentDocument

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• Overview of operations• Location Considerations• Staffing Plan

• Compensation Approach• Employee Handbook Highlights (if appropriate)• Training Plan Highlights• Resumes as Appendices

• Suppliers• Distribution Chain

Operational Plan

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• Forms of Organization• Sole Proprietorship• Partnership• Corporation (“C” or “S”)• Limited Liability Company

• Board of Directors (if applicable)• Officers• Organizational Chart• Key Personnel• Advisors/Consultants• Training• Define Future Needs

Management & Organization

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• Identify the initial expenses you will need to cover:• Rent deposits• Leasehold improvements• Equipment, furniture, and fixtures• Pre-opening expenses (staff, licenses, etc.)• Inventory

• Where will the money come from?• Owners cash infusion• Friends and Family• Investor funding• Commercial loans/mortgages

• Show that you understand the timelines involved

Startup Expenses & Capitalization

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• Income (Profit/Loss) Statement• Monthly for First Year & Annual for Three*-Year Projection

• Cash Flow statement• Monthly for First Year & Annual for Three-Year Projection

• Balance Sheet• Breakeven Analysis• Benchmark Comparisons

* 3-year projections ok for basic plans, VCs/Angels may want up to 5 years

Financial Statements

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• Source Depends on level of Requirement Needed• Requirement: <$25,000

• Personal Funds (Savings, Credit Cards, 401(k), etc.)• Requirement: $25,000 - $250,000

• Personal Funds• Home Equity• Friends & Family• Angel Investors

• Requirement: $250,000-$1,000,000• Angel Investors• Venture Capital Firms

• Requirement: $1M - $10M+• Venture Capital Firms

• New – e.g. Crowd Funding

Funding Sources

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• Written Last • Top Priority• Highlight Value Proposition• 1 to 2 Pages Maximum• Pitch Your Business

• Compelling Business Concept• How you Will Generate Revenue• Marketing Plan to capture Customers• Identify Market Opportunity and Size• Supply Key Assumptions for Financials• Highlight 12-month Cash Flow Projection• What do you want?

Executive Summary

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SOURCES OF RESEARCH

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• SCORE (www.score.org) 202-169-1000• SBA (www.sba.gov) 202-272-0345• Local County Economic Development • Local County Public Library (both in-house and online)

• Research USA (profiles of 10M+ companies)• Local County Employment Center• Chambers of Commerce• Banks• Market Research Firms

Sources for Research

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• Thomas Register of American Manufacturers –www.thomasregister.com

• Annual Statement Studies, RMA – http://www.rmahq.org/RMA/. (available at pubic libraries and online thru library)

• Trade Associations – Encyclopedia of Associations (available at SCORE or public libraries)

• Small Business Sourcesbook (available at SCORE or public libraries)

• State Governments – Check each jurisdiction

• Dun and Bradstreet (company profile) www.dnb.com

Sources for Research

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• Competition (advertising, web sites, annual reports)

• Suppliers

• Customers

Sources for Research

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