ArticlesBlog

Dr.Collins – Unit 12 Business Plan Content

Dr.Collins – Unit 12 Business Plan Content


OK, students, today what I want
to talk to you just a little bit about, two things
here in this little short presentation. I want to talk about the
business plan, both as general content and then I want to talk
a little bit about the executive summary part
of the business plan. The executive summary, some
people will tell you is probably the most important part
of your business plan. So we’ll get into that
in just a moment. But first, let’s look at the
general content of the business plan. The textbook is really good
about how they’ve structured the business plan, and we’re
going to look at the textbook’s outlined on the
left hand column here. That would be Longnecker and all
of his authors, and then there’s some business plan
software, called Bizplan Express, that shows their
online, and then there’s an old appendix that I have
called the Killer Apps Appendix that has information
about contents of a business plan as well. Now, let me kind of qualify
all this by saying, the textbook outline is current
and it’s one that I like, in general. The Bizplan Express and
the Killer Apps Appendix outline are old. I think they still apply pretty
well, but I need really to update those to more
contemporary outlines. But to the best of my knowledge,
they still apply pretty well. I’m just showing you
a comparison. Now, let me also say too, that
the outline you end up with, as far as your business plan
is concerned, is to some extent, flexible, and it’s
dependent upon your business and your market and your product
and/or your service and all of those characteristics of your business. So be sure and tailor your
business plan as needed in order to present the message
that your best– best you’re trying to present. So let’s go down and
look at this then. You’ll see on Longnecker, that
on the textbook, that he calls for a title page. Bizplan Express calls
for a title page. You should have a title page
on your business plan. You should also have a
table of contents. The table of contents comes
right behind the title page, and will show the reader
everything that’s in that business plan. And you’ll also organize
it by page number, so that means two things. You’ve got to put page numbers
on your business plan, and you’ve got to make sure the
table of contents is accurate in its references or its page
numbers or call outs. So put a table of contents, and
the Bizplan Express calls for that as well. And then put an executive
summary. And an executive summary is
probably the most important component of the business plan,
and we’ll look at the details of its content here
in just a little bit. But these other three– I’m sorry, the other two
references call for an executive summary as well. Almost every business plan needs
an executive summary. Without the executive summary,
you’re going to lose a lot of potential readers. In fact, people who are
evaluating business plans oftentimes will read only the
executive summary of a plan. If that executive summary
doesn’t grab, they lay it down and read no further. And the people who are doing– reviewing business plans,
typically have lots of business plans to view and so
they don’t spend a lot of time reading the nitty gritty
details, they look at executive summaries and if the
executive summary grabs them, then they’ll go further
into it. OK, both the Bizplan Express and
Longnecker, the textbook, suggest they would
put in a mission and a vision statement. I think those are important, but
let me also qualify that by saying it’s not important
that they be long. It’s important that they be
short and focused, so that your employees and the people
you work with can remember what your mission statement
is, and what your vision statement is. So you want to make those
statements concise and to the point, something that
people can remember. And I would challenge everybody
listening to this lecture to tell me the mission
statement of the company you work for, and 95% of the time,
employees cannot tell me what their mission statement
is for their company. And the reason why is, that
typically, they’re too long, too rambling, they’re not
focused, and they’re difficult to remember. So you want to make sure that
you take your mission and vision statements and get them
tightly written, tightly focused, and not real long. Then all three of these sources
call for a company overview or a company summary. Now, I’m not going into the
details of these sections, but every section, like company
overview, there’s an explanation in our textbook, the
Longnecker textbook, as to what goes into company
overview. The same thing for a products
or services plan. The other two sources call for
a product strategy or a products or services. So here, in section– this section, company overview,
you want to make sure that you describe your
products or your services or both that you’re offering. Then you go to your
marketing plan. I’m going to point out
some things here. You see across the chart here,
along the bottom, some different terminology. In Longnecker, the marketing
plan includes the market analysis as well as the
marketing plan, how you’re going to market your
product or service. If you go over to this column
right here, you’ll see that they call for a market analysis
and a marketing plan. Well, these are the
two elements of this item right here. The marketing plan in Longnecker
consists of a market analysis and
a marketing plan. This is your distribution,
your marketing channels. This is the way you’re
going to sell it, all those types of things. This is the data, the hard data,
that you’ve been able to get on your market,
understanding your market. You’ll see over here too, that
the third, the Killer App, has a market analysis and a market
strategy, so they’re also saying there’s really
two parts here. You’ve got a market analysis,
which is a pretty detailed technical analysis, and then you
have a market strategy or a marketing plan, which is the
sales and distribution type plan to get the product into
the customer’s hands. Now, on Longnecker, they call
for a management plan, an operating plan, a financial
plan, and then any appendixes that we’re needed. And in every one of these, if
you go to the textbook, you’ll see a typical or a planned
outline for each one of these sections. So if you’re wondering about
what goes into these sections, go to the textbook and it’ll
explain to you what goes into those sections, recognizing that
you have some flexibility to structure it as you see fit
or as you see what’s best for your particular business plan. Then you can see over here on
the other side, the other two resources have a financial plan,
which could encompass all these things here. It has a management summary
and financial plan on the right hand side, which could
encompass all those things. But as I said earlier, I like
this plan that Longnecker has put together– or our textbook is put together
on how we structure a business plan. And then following the main
body of the plan, you incorporate appendixes
as needed. The appendixes are designed to
provide additional information to the reviewer of the plan or
to the reader of the plan. So in your appendixes, you want
to be careful as to what you provide, but you want to
provide sometimes some technical details there that
you’re not able to include in the main body of your
business plan. So this is a good way to include
that detailed data that only an analyst would
want to pick up later on. Now, let’s look at
the overview of the executive summary. The executive summary conveys
an accurate understanding of the business. It compels the reader
to know more. This is the primary purpose
of the executive summary. We want the executive summary
to compel the readers to know more. This may be the only section
that some evaluators read. This is what I was trying to
explain to your a moment ago. Some evaluators are so caught up
in their review process and their reviewing of business
plans, that they only read the executive summary. If that doesn’t catch them,
they go no further. It should be brief, one
to three pages. I would say three pages max. Occasionally, you can go to four
for the right reason, but one to three pages. In my graduate class, I require
the students generate a one page executive summary. It’s a very difficult
problem to tackle. The executive summary summarizes
the key points of each section of the business
plan, so you want to think about that ant think about
what that means. But it provides a summarized
version of all of the key points that go into
the business plan. Now, on the mission and our
vision statement, when we talk about that a little bit. There’s some explanation of
that in the text as well. This goes in your executive
summary. The company overview goes into
the executive summary, except what I would recommend you do
here is you shorten in as much as possible, make it as
brief as possible in the executive summary. And so in that, you include
background, objectives, your capital requirements, if any,
your management team, and this would be some resumes included
in the business plan. And then you would address
your management team– I’m sorry, your outside support,
if any, that you’re going to have. So you want to do a product or
service strategy, and this is also explained for you
in your textbook. And then the market analysis. This is a big deal right here. This includes a market
definition and competition that you’re facing. And I say it’s a really key
part of what you do in a business plan. And you want to assess
the risk. You want to do an honest
assessment of risk. What are the risks that you
have, and what’s the cost of those risks? That later, will help you
define the strategy for handling those risks. Then after you’ve done your
market analysis where you identified the customers, you’ve
identified who’s going to buy your particular product
or service, now, you’re ready to go to the marketing plan
where you’re going to discuss your whole sales strategy, how
you’re going to distribute your product or service, and any
advertising and promo that goes with that, including public
relations tasks that you might have. Then you want to include lastly,
but not leastly, a financial plan and project in
there when the investors will be paid back, and then any
concluding remarks that you might want to make. So this is the content, the
general content, of your executive summary. Now, here’s a checklist you can
write to take a look at after you’ve written your
executive summary. Have you written all of the
components of the plan? Some people are really
insistent on this. I’m not hard over insistent, but
I would say you’ve got to have the majority of your plan
written in order to began putting together your
executive summary. Does it convey an accurate
understanding of the business? Stand back and ask yourself
that question. If I come in cold turkey and
read this stuff that I have here, will that convey to
the reader an accurate understanding of what
we’re doing? Does it compel the reader to
continue to learn more? Does it grab the reader in the
process of going through this and want the reader to hang
around to learn more? So does it cover the most
important points of the plan? That’s one of the things that
is a requirement of the executive summary. That it do cover or that it does
cover the most important points of the plan. Does it contain highlights
of the company, products, markets, and financial position
slash performance, both current and projected? So you want to have an executive
summary that really presents a good story
financially. Does it include information
about your industry, management team, the company’s
financial report? You want to include that. Sometimes, I’m not sure you’d
put that into a number one section of the report, but you
might include it in an appendix or some other
type of supporting information like that. And the major sections, which
I called the number one sections a moment ago, in the
major sections, you want to include the basic minimum or the
basic data that you feel like is really necessary to
support your business plan. And then put into the appendixes
a lot of the accounting details or market
analysis details that you might not normally include
in the book. Does it include a payback
plan for investors? Does it include– let’s go back to this one. Does it include information
about your industry, management, and the company’s
financial report? So you want to make sure that
you’ve got all of that summarized in your executive
summary. Is it one to three
pages in length? And so this is what our textbook
is saying, that the executive summary should
be no more than three pages in length. I agree with that. If you absolutely have to have
an additional page, I could swallow that. But I really believe, in most
cases, you can do it quite easily with a three page
executive summary. And for my graduate course, I
would ask you to write a one page executive summary, which
is very challenging to do. OK, that concludes
this little short presentation, only 10 charts. It’s uploaded to dock sharing,
so you can pull it and take a look at it, if you want to. But take a close look at this
and let this influence how you’re putting together the
final organization of your semester project
in this course.

Comment here