Small Business Management What Is Business Plan: Dr. Asmaa Abo Alkomsan

SMALL BUSINESS MANAGEMENT
WHAT IS BUSINESS PLAN
DR. ASMAA ABO ALKOMSAN
PowerPoint Presentation by Charlie

Cook
The University of West Alabama
Copyright © 2006 Thomson Business & Professional Publishing.
All rights reserved.
Copyright © 2006 Thomson Business & Professional Publishing. All rights
reserved.
WHAT IS A BUSINESS PLAN?
• A document that sets out the basic idea underlying a

business and related startup considerations
• Identifies the nature and context of the business
opportunity
BUSINESS PLAN (CONT.)
• Presents the entrepreneur’s approach to

exploiting the opportunity
• Identifies factors affecting the venture’s success
• Serves as the entrepreneur’s tool for raising
capital
reserved.
THE NEED FOR A BUSINESS PLAN
• Primary Functions
• To provide a clearly articulated statement of
goals and strategies for internal use
• Imposes discipline on the entrepreneur and
management team
reserved.
THE NEED FOR A BUSINESS

PLAN (CONT.)
• To serve as a selling document to be shared with

outsiders
• Provides a credible overview for prospective
customers, suppliers, and investors
• Helps secure favorable credit terms from suppliers
• Opens approaches to lenders and other sources of
financing
reserved.
USERS OF BUSINESS PLANS
Exhibit 6.1
reserved.
TYPES OF BUSINESS PLANS
• Summary Plan
• A short form of a business plan that presents only the most
important issues and projections for the business
• Comprehensive Plan
• A full business plan that provides
an in-depth analysis of the critical
factors that will determine a firm’s
success or failure, along with all the
underlying assumptions
reserved.
FACTORS AFFECTING THE EXTENT

OF A BUSINESS PLAN:
• Cost in time and money to prepare the plan
• Management style and ability
• Preferences of the management team
• Complexity of the business
• Competitive environment
• Level of uncertainty
reserved.
FEATURES OF A SUCCESSFUL BUSINESS

PLAN
• It must be arranged appropriately, with an executive

summary, a table of contents, and chapters in the right order.
• It must be the right length and have the right appearance—
not too long and not too short, not too fancy and not too
plain.
• It must give a sense of what the founders and the company
expect to accomplish three to seven years into the future.
reserved.

PLAN
• It must explain in quantitative and qualitative terms the benefit
to the user of the company’s products or services.
• It must justify financially the means chosen to sell the products
or services.
• It must explain and justify the level of product development
which has been achieved and describe in appropriate detail the
manufacturing process and associated costs.
reserved.

PLAN (CONT.)
• It must suggest as high an overall “rating” as possible

of the venture’s product development and team
development.
• It must contain believable financial projections, with
the key data explained and documented.
reserved.
FEATURES OF A SUCCESSFUL
BUSINESS PLAN (CONT’D.)
• It must show how investors can cash out in three to
seven years, with appropriate capital appreciation.
• It must be easily explainable in a well-orchestrated
oral presentation.
Exhibit 6.2
(cont’d)
-2
DEVELOPING BUSINESS PLAN
PowerPoint Presentation by Charlie

Cook
The University of West Alabama
Copyright © 2006 Thomson Business & Professional Publishing.
All rights reserved.
reserved.
PREPARING A BUSINESS PLAN
• Two issues critical in preparing a business plan:

• The basic format and effectiveness of the written presentation
• Clear writing that effectively communicates
• The content of the plan
• Factual support for the concept
in the form of strong supporting
evidence
reserved.
DECIDING ON THE CONTENT OF

A BUSINESS PLAN
• Factors that help determine the content of a business plan for

a startup:
• The entrepreneurial team
• The opportunity
• The resources
• The deal structure
• The big picture
reserved.
CONTENTS OF A BUSINESS
PLAN
• Title Page • Products and/or
• Table of Contents Services Plan
• Executive Summary • Marketing Plan
• Vision and Mission • Operating Plan

Statement • Financial Plan
• Company Overview • Appendix of
Supporting Documents
reserved.
SPECIALIZED PLANS WITHIN

THE BUSINESS PLAN
• Products and/or Services Plan

• Describes the product and/or service to be provided and explains its merits
• Marketing Plan
• Describes the user benefits of the product or service and the type of market
that exists
• Management Plan
• Describes the new firm’s organizational structure and the backgrounds of its
key players
reserved.
SPECIALIZED PLANS… (CONT.)
• Operating Plan
• Offers information on how the product will be produced or a service provided,
including descriptions of the new firm’s facilities, labor, raw materials, and
processing requirements
• Financial Plan
• Provides an account of the new firm’s financial needs and sources of financing and a
projection of its revenues, costs, and profits
• Pro forma statements—Reports that project a firm’s financial condition
reserved.
WHAT NOT TO DO
• Mistakes to avoid in preparing a business plan:

• Failing to provide solid data
• Failing to describe the product in lay terms
• Failing to thoroughly analyze the market
• Including financial statements that are overly
detailed or incomplete
WHAT NOT TO DO (CONT.)
• Hiding weaknesses
• Overlooking the fatal flaw
• Making the overall plan too long

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SMALL BUSINESS MANAGEMENT

WHAT IS BUSINESS PLAN

DR. ASMAA ABO ALKOMSAN

PowerPoint Presentation by Charlie

WHAT IS A BUSINESS PLAN?

• A document that sets out the basic idea underlying a

• Presents the entrepreneur’s approach to

THE NEED FOR A BUSINESS PLAN

THE NEED FOR A BUSINESS

• To serve as a selling document to be shared with

USERS OF BUSINESS PLANS

TYPES OF BUSINESS PLANS

FACTORS AFFECTING THE EXTENT

FEATURES OF A SUCCESSFUL BUSINESS

• It must be arranged appropriately, with an executive

FEATURES OF A SUCCESSFUL BUSINESS

FEATURES OF A SUCCESSFUL BUSINESS

• It must suggest as high an overall “rating” as possible

DEVELOPING BUSINESS PLAN

PowerPoint Presentation by Charlie

PREPARING A BUSINESS PLAN

• Two issues critical in preparing a business plan:

DECIDING ON THE CONTENT OF

• Factors that help determine the content of a business plan for

• Executive Summary • Marketing Plan

• Vision and Mission • Operating Plan

SPECIALIZED PLANS WITHIN

• Products and/or Services Plan

SPECIALIZED PLANS… (CONT.)

• Mistakes to avoid in preparing a business plan:

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