AN ENTREPRENEURIAL APPROACH

Transcription

1 PREPARING EFFECTIVE USINESS PLANS AN ENTREPRENEURIAL APPROACH Bruce R. Barringer, Ph.D. Department of Management University of Central Florida Pearson Education International

2 CONTENTS Preface xiii About the Author xvii PART I STARTING THE PROCESS 1 CHAPTER 1 Why Plan? 1 Introduction 1 Reasons for Writing a Business Plan 2 Who Reads the Business Plan and What Are They Looking For? 6 Guidelines for Writing a Business Plan 8 Types of Businesses 13 The Plan for the Book 14 Chapter Summary 17 Review Questions 18 Application Questions 19 Endnotes 20 PART II WHAT TO DO BEFORE THE BUSINESS PLAN IS WRITTEN 21 CHAPTER 2 Developing and Screening Business Ideas 21 Introduction 21 Three Most Common Sources of New Business Ideas 22 Changing Environmental Trends 23 Technological Advances 26 Political Action and Regulatory Changes 26 Unsolved Problems 27 Gaps in the Marketplace 28 Techniques for Generating Ideas 32 Brainstorming 32 Focus Groups 33 Library and Internet Research 34 First Screen 35 Part 1: Strength of the Business Idea 36 vii

3 viii Contents Part 2: Industry-Related Issues 37 Part 3: Market- and Customer-Related Issues 38 Part 4: Founder- (or Founders-) Related Issues 39 Part 5: Financial Issues 40 Chapter Summary 41 Review Questions 42 Application Questions 42 Endnotes 43 Appendix 2.1 First Screen 44 Appendix 2.2 Internet Resource Table 48 CHAPTER 3 Feasibility Analysis 53 Introduction 53 Template for Completing a Feasibility Analysis 54 Product/Service Feasibility 56 Industry/Target Market Feasibility Analysis 60 Organizational Feasibility Analysis 63 Financial Feasibility Analysis 65 Chapter Summary 67 Review Questions 68 Application Questions 68 Endnotes 69 Appendix 3.1 Full Feasibility Analysis 70 PART III PREPARING A BUSINESS PLAN 81-7 CHAPTER 4 Introductory Material, Executive Summary, and Description of the Business 81 Introduction 81 Cover Page and Table of Contents 82 Cover Page 82 Table of Contents 83 Executive Summary 83 Format 83 Content 87 Company Description 88 Company History 91 Mission Statement 92 Products and Services 93 Current Status 94 Legal Status and Ownership 95

4 Contents ix Selecting the Name for a Business 96 Primary Consideration in Naming a Business 96 Legal Issues 97 Chapter Summary 98 Review Questions 98 Application Questions 99 Endnotes 100 CHAPTER 5 Industry Analysis 101 Introduction 101 Industry Definition 103 Industry Size, Growth Rate, and Sales Projections 104 Industry Size 105 Industry Growth Rate 107 Industry Sales Projections 109 Industry Characteristics 109 Industry Structure 109 Nature of Participants 113 Ratios 114 Key Success Factors 114 Industry Trends 115 Environmental Trends 116 Business Trends 118 Long-Term Prospects 118 How the Industry Analysis Affects and Is Affected by Other Sections of the Plan 119 Chapter Summary 120 Review Questions 120 Application Questions 121 Endnotes 122 CHAPTER 6 Market Analysis 123 Introduction 123 Market Segmentation and Target Market Selection 124 Market Segmentation 127 Selecting a Target Market 128 Target Market Size and Trends 129 Buyer Behavior 133 Competitor Analysis 134 Identification of Direct, Indirect, and Future Competitors 134 Competitive Analysis Grid 138

5 X Contents Estimate of Annual Sales and Market Share 138 Chapter Summary 142 Review Questions 143 Application Questions 144 Endnotes 144 CHAPTER 7 Marketing Plan 145 Introduction 145 Overall Marketing Strategy 148 Positioning Strategy 149 Points of Differentiation 149 Pricing Strategy 150 t Cost-Based Pricing vs. Value-Based Pricing 151 Other Pricing-Related Issues 152 Sales Process and Promotions Mix 155 Sales Process 156 Promotions Mix 156 Distribution and Sales 159 Distribution and Sales Alternatives 160 Sales Strategy and Related Issues 161 Chapter Summary 162 Review Questions 163 Application Questions 163 Endnotes 164 CHAPTER 8 Management Team and Company Structure 165 Introduction 165 Management Team 167 Management Team Personnel 170 Management Team Ownership and Compensation 171 Common Mistakes to Avoid 171 Board of Directors 173 Provide Guidance 174 Lend Legitimacy 174 Board of Advisors 176 Other Professionals 178 Company Structure 180 Chapter Summary 181 Review Questions 182 Application Questions 182 Endnotes 183

6 Contents XI CHAPTER 9 Operations Plan and Product (or Service) Development Plan 185 Introduction 185 Operations Plan 186 Operations Model and Procedure 189 Business Location 192 Facilities and Equipment 194 Operations Strategy and Plans 196 Product (or Service) Development Plan 197 Development Status and Tasks 197 Challenges and Risks 201 Costs 202 Intellectual Property 203 Chapter Summary 205 Review Questions 206 Application Questions 206 Endnotes 207 CHAPTER 10 Financial Projections 209 Introduction 209 Source and Use of Funds Statement 210 Assumptions Sheet 212 Pro Forma Financial Statements 213 Pro Forma Income Statement 214 Balance Sheet 219 Cash Flow 222 Ratio Analysis 231 Chapter Summary 232 Review Questions 233 Application Questions 233 Endnotes 234 PART IV PRESENTING THE BUSINESS PLAN 235 CHAPTER 11 Presenting the Plan with Confidence 235 Introduction 235 Preparing for and Delivering an Effective Business Plan Presentation 236 Preparing for the Presentation 236 Delivering an Effective Presentation 238

7 XII Contents Preparing the Content of an Effective Business Plan Presentation 239 Sample Business Plan Presentation 240 Chapter Summary 253 Review Questions 254 Application Questions 255 Endnotes 255 Name Index 257 Subject Index 259