The Business Planning Process Presented By
What’s Covered " SBA’s Role " DC SBDC Network " Why Write a Business Plan? " Your Business Concept " Elements of a Business Plan " Market Research and Analysis " Budgeting and Finance " Next Steps: Business Resources and Training
SBA’s Role • The U. S. Small Business Administration (SBA) aids, counsels, and assists Americans as they start, operate, and expand their businesses • Provides counseling and training • Increases federal procurement/contracting opportunities • Facilitates access to capital
The Washington, DC Small Business Development Center Network (DC SBDC) "Free Management and Technical Counseling "3 Locations in DC "Full -Time Management Counselors "63 National Networks and 6, 000 Counselors "Includes Research Center "Funded in part by SBA and Howard University Provides low cost training for all potential and existing small business owners
DC-SBDC Locations § DC -SBDC at Howard University School of Business (HU) 2600 Sixth Street, NW, Room 128, Washington, DC 20059 202. 806. 1550 § DC-SBDC at Anacostia Economic Development Corporation (AEDC) 1800 Martin Luther King, Jr. , Avenue, SE, Suite 100, Washington, DC 20020 202. 889. 5090 § DC-SBDC at the GADGET Center 2801 Georgia Ave. , NW Washington, DC 20001 202. 319. 1393
Why Plan For Your Business? " There are stages in the business planning process " The better your plan, the better your chances for success " It provides a road map for running your business " You can try your business idea out on paper first " Converts information and assumptions to outcomes " If you are seeking financing, a lender or investor will require a detailed business plan Your business plan can be your greatest tool in successfully managing your business…. refer to it often…. . update it regularly…. .
Your Business Concept The business idea should be: "Desirable "Feasible "Viable
Desirability Means… " Product or service is worth wanting, pleasing; " The idea presents that the business should produce the outcomes the owner is seeking, " Owner is prepared and understands the reality of the work environment he/she will be involved in, and " The owner is prepared for/comfortable with the business environment and the responsibilities and duties that the business will require.
Feasibility Means… " Capable of being done, possible, likely, reasonable, probable and suitable; " There is a market for the product or service; " The plan presents a structure adequate for entering and serving the market; and " The resources (money, marketing and management) exist or are accessible for entering and serving the market.
Viability Means… " The plan presents reasonable business concepts, " The plan presents opportunities for an on-going relationship with the market, " The plan presents a specific relationship with the market that depicts a profitable interaction, or " An environment exists for the business’ potential success.
The Business Planning Process The business planning process is captured by the business planning document. What goes into a business planning document? The business plan is often divided into distinct sections: " Introductory Elements " Business Description " The Market " Production and Development " Management and Organization " Financials " Addendum
The Business Planning Process Introductory Elements " Cover Page Contains the name, address, and telephone number of the business and the names of all principals. " Statement of Confidentiality " Table of Contents A quick and easy way to find particular sections. All pages should be numbered and the table of contents should reflect these page numbers " Concise Executive Summary of the Business Venture. Usually no more than two (2) pages long.
The Business Planning Process Business Description Describe what products or services you are planning to sell, where is or where will, your business be located? Is your business a sole proprietorship, partnership, or a corporation? Why did you choose this particular structure? Describe each product or service specifically and in detail. Identify the more technical aspects and benefits of the product or service. Provide focus on how and why the product/service will be used.
The Business Planning Process The Market Describe how the business will profitably serve the target customers " Identify the positive features of your product. " Have you determined a price for your product/services? " How did you arrive at the price? " Is your pricing going to make your business profitable?
The Business Planning Process The Market Discuss the market characteristics: – Describe who your customers are or will be. . . Be specific! – Describe how you determined that a market exists for your product/service. i. e. , benefits of product versus features. – Are the customers cost or quality conscious? – Under what circumstances do they buy? – What types of concerns do they have? – What are the target markets for products and/or services? – What is the planned advertising strategy and/or distribution network?
The Business Planning Process The Market Competition " Outline an understanding of the competitors, their products or services and their strengths and weaknesses " Shop the competition " Compare the current product/service with competitors’ " Where the competition is likely to develop " Perform a SWOT Analysis by assessing the: Strengths – Weaknesses – Opportunities - Threats
The Business Planning Process The Market Competition (The Four “P’s”) "Product "Price "Place "Promotion
The Business Planning Process Market Research and Analysis " It is vital for the owner to get as much information as possible about every aspect of the business to be started " Your competitors already have vast amounts of information about their business and the industry you are entering
The Business Planning Process Market Research and Analysis Cont… Secured directly by the business owner through: " Competitors " Customers " Employees " Your Network " Mail surveys or "Clipboard" surveys – research "by walking around, " “Windshield Surveys” or hire professionals
The Business Planning Process Market Research and Analysis Secured by others through: – Yellow pages – Libraries – Directories – Internet – Business publications – Government Agencies – Trade associations – Chambers of Commerce – Trade/Professional journals – U. S. Small Business Administration
The Business Planning Process Production and Development " Location " Describe the manufacturing location and reason it was chosen " Research and Development " Describe the current status of the product or service and what remains to be done to prepare for the market. " What is the month by month implementation time schedule?
The Business Planning Process " Production and Development Manufacturing Plan --Describe the product's development process. --Describe the type of facility, plant or retail location, space requirements, capital equipment and labor force needed. --What is the manufacturing processes or the retail location or the service delivery methods? --How will the product or service be made and delivered?
The Business Planning Process " Management and Organization " What are the required skills/experiences that will enable you to successfully operate this business? " What will your responsibilities be in managing the business? " Will you hire employees? " If so, what will their responsibilities be? " Will you use outside advisors, such as accountants, attorneys?
The Business Planning Process " Financials " Detail how much money is needed, how the money will be spent, (and how repayment will be guaranteed). " Historical Financial Data Provide all facts pertaining to your financial statements. " Pro-forma Financial Data Provide an analysis of your financial data.
The Business Planning Process Financials " A business financing proposal needs some basic financial documents. The process is similar to establishing a budget and then comparing "actual" with "expected" results. " " " Income Projections. Cash Flow Projections. Break Even Analysis Balance Sheet Projections Capital Equipment Lists Source and Uses- Application of Funds.
The Business Planning Process Contingency Plan " Discuss your plans in the event that you are unable to manage your business for a brief period of time …. or a long period of time. " What if your business does not meet its projections? What is your back-up plan? How will you cover your expenses?
The Business Planning Process Addendum " Include additional information and literature about the company and its products. " Include marketing and sales pieces and any ancillary industry information. " Disclosure should be made of major long term purchase or sales contracts, leases, commitments, contingent liabilities, pending lawsuits, retirement plans and life insurance on key employees.
Next Steps: Resources and Training " Business Resources, Counseling, Workshops & Training Research, Workshops & Seminars – DC SBDC Network website: www. dcsbdc. org – SBA’s website: www. sba. gov “News and Events” – Tools, Services and Franchises: www. entrepreneur. com – Running Your Business: www. businessbreakthrough. com – Business Owners Toolkit: www. toolkit. com – The Public Library - Videos, cassettes, magazines, books – DC Bar Pro Bono Legal Project
Next Steps: Resources and Training • Information Sources: – DC SBDC Network, U. S. Small Business Administration, SCORE – District of Columbia; Economic Development Departments; Department of Housing and Community Development Office of the Deputy Mayor for Planning and Economic Development, DSLBD-Great Streets Program – Community Development Corporations (CDC’s) – Local Banks, On-line Services, Lawyers and Accountants
REMEMBER Hard Work + Good Planning = Good Business
Questions? Nirav “Nick” Rajpara nirav. rajpara@howard. edu (202) 319 -1393
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