Professional Documents
Culture Documents
Politics and Religion of China
Politics and Religion of China
Successfully Launching
New Ventures
Bruce R. Barringer
R. Duane Ireland
Chapter 4
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©2008 Prentice Hall
What Is a Business Plan?
• Business Plan
– A business plan is a written narrative, typically 25 to 35
pages long, that describes what a new business plans to
accomplish.
• Dual-Use Document
– For most new ventures, the business plan is a dual-purpose
document used both inside and outside the firm.
• Inside the firm, the plan helps the company develop a “road map”
to follow in executing its strategies and plans.
• Outside the firm, it introduces potential investors and other
stakeholders to the business opportunity the firm is pursuing and
how it plans to pursue it.
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Who Reads the Business Plan—And What
Are They Looking For?
There are two primary audiences for a firm’s business plan
A firm’s business plan must make the case that the firm is a
Investors and good use of an investor’s funds or the attention of other
Other External external stakeholders. The key is to include facts generated
Stakeholders through a properly conducted feasibility analysis. A
business plan rings hollow if it is based strictly on what an
entrepreneur or team of founders “thinks” will happen.
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Guidelines for Writing a Business Plan
(1 of 4)
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Guidelines for Writing a Business Plan
(2 of 4)
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Guidelines for Writing a Business Plan
(3 of 4)
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Guidelines for Writing a Business Plan
(4 of 4)
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Outline of Business Plan
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Exploring Each Section of the Plan
(1 of 10)
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Exploring Each Section of the Plan
(2 of 10)
• The Business
– The most effective way to introduce the business is to
describe the opportunity the entrepreneur has identified–
that is, the problem to solve or the need to be filled–and
then describe how the business plans to address the issue.
– The description of the opportunity should be followed by a
brief history of the company, along with the company’s
mission statement and objectives.
– An explanation of the company’s competitive advantage
and a brief description of the business model follow.
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Exploring Each Section of the Plan
(3 of 10)
• Management Team
– As mentioned earlier, one of the most important things
investors want to see when reviewing the viability of new
ventures is the strength of its management team.
– If the team doesn’t “pass muster,” most investors won’t
read further.
– The material in this section should include a brief summary
of the qualifications of each member of the management
team, including his or her relevant employment and
professional experiences, significant accomplishments, and
educational background.
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Exploring Each Section of the Plan
(4 of 10)
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Exploring Each Section of the Plan
(5 of 10)
• Industry Analysis
– This section should begin by discussing the major trends in
the industry in which the firm intends to compete along
with important characteristics of the industry, such as its
size, attractiveness, and profit potential.
– This section should also discuss how the firm will diminish
or sidestep the forces that suppress its industry’s
profitability.
– The firm’s target market should be discussed next, along
with an analysis of how it will compete in that market.
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Exploring Each Section of the Plan
(6 of 10)
• Marketing Plan
– This marketing plan should immediately follow the
industry analysis and should provide details about the new
firm’s products or services.
– After reading this section of the plan, an investor should be
confident that the firm’s overall approach to its target
market and its product strategy, pricing strategy, channels
of distribution, and promotional strategy are in sync with
one another and make sense.
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Exploring Each Section of the Plan
(7 of 10)
• Operations Plan
– This section of the plan deals with the day-to-day
operations of the company.
– An overview of the manufacturing plan (or service delivery
plan) should be followed by a description of the network of
suppliers, business partners, and service providers that will
be necessary to build the product or produce the service the
firm will sell.
– Any risks or regulations pertaining to the operations of the
firm should be disclosed, such as nonroutine regulations
regarding waste disposal and worker safety.
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Exploring Each Section of the Plan
(8 of 10)
• Financial Plan
– The financial section of the plan must demonstrate the
financial viability of the business. A careful reader of the
plan will scrutinize this section.
– The financial plan should begin with an explanation of the
funding that will be needed by the business during the next
three to five years along with an explanation of how the
funds will be used.
• This information is called a sources and uses of funds statement.
– The next portion of this section includes financial
projections, which are intended to further demonstrate the
financial viability of the business.
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Exploring Each Section of the Plan
(9 of 10)
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Exploring Each Section of the Plan
(10 of 10)
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Putting It All Together
(1 of 2)
Is the business just an idea, or is it an Does the firm have an exciting and
opportunity with real potential? sensible business model? Will other
firms be able to easily copy it?
Is the product or service viable? Does it Is the industry in which the product or
add significant value to the customer? service will be competing growing,
Was a feasibility analysis completed? stable, or declining?
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Putting It All Together
(2 of 2)
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Presenting the Business Plan to Investors
(2 of 3)
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Presenting the Business Plan to Investors
(3 of 3)
Ten PowerPoint Slides to Include in an Investor Presentation
1. Title slide
2. Problem
3. Solution
4. Business model
5. Management team
6. Industry and target market
7. Competition
8. Intellectual property
9. Financial projections
10.Current status, amount of money requested, and
projected use of funds
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