Business plan
What is a business plan
is a written summary of an entrepreneur’s proposed business venture, its operational and financial details, its marketing opportunities and strategy, and its managers’ skills and abilities.
List all 5 Cs
1.Capital
2.Capacity
3.Collateral
4.Character
5.Conditions
what is a mission and vision statment
A mission statement expresses an entrepreneur’s vision for what his or her company is and what it is to become.
Name and explain the two essential functions of a business plan
1. Provides a battery of tools- mission statement, goals, objectives, budgets, financial forecasts, marketing plans, and entry strategies—to help entrepreneurs subject their ideas
2. Attract lenders and investors-A business plan must demonstrate to potential lenders and investors that a venture will be able to repay loans and produce an attractive rate of return
..... is another word for cash flow
Capacity
What should the loan or investment proposal section of a business plan state? hint there are 3 things
1.The purpose of the financing
2.The amount requested
3.The plans for repayment
What are the 5 things a business plan offers
1.A systematic, realistic evaluation of a venture’s chances for success in the market
2 A way to determine the principal risks facing the venture
3.A “game plan” for managing the business successfully during its start-up
4.A tool for comparing actual results against targeted performance
5.An important tool for attracting capital in the challenging hunt for money
Conditions have not been as favorable for bank loans since the financial crisis in 2008. According to the Conditions of 5c, how has the financial crisis in 2008 affected small businesses?
Getting business loans has become more difficult for all small businesses
What is a competitor's analysis, and give 2 question examples?
COMPETITOR ANALYSIS- An entrepreneur should describe the new venture’s competition and the ways in which its business strategy will position it effectively against key competitors.
questions
1.Who are the company’s key competitors?
2.What are their strengths and weaknesses?
Define all 3 tests of a business plan
1.REALITY TEST -The external component of the reality test involves proving that a market for the product or service really does exist
2.COMPETITIVE TEST -The external part of the competitive test evaluates the company’s relative position to its key competitors.
3.VALUE TEST To convince lenders and investors to put their money into the venture, a business plan must prove to them that it offers a high probability of repayment or an attractive rate of return.
explain the importance of each of the 5c
1.Capital- A small business must have a stable capital base before any lender will grant a loan
2. Capacity-Lenders must be convinced of a company’s ability to meet its regular financial obligations and to repay the bank loan.
3.Collateral -includes any assets an entrepreneur pledges to a lender as security for repayment of the loan.
4.Character-An evaluation of character frequently is based on intangible factors such as honesty, competence, polish, determination, knowledge, experience, and ability
5.condition-Banks consider factors relating to the business operation such as potential growth in the market, competition, location, form of ownership, and loan purpose
Which Items should a market analysis address in detail? There are 6
1.Target Market
2.Advertising and Promotion
3.Market Size and Trends
4.Location
5.Pricing
6.Distribution
A value proposition that is properly constructed answers the which 5 questions?
1.Who is our target market?
2.What options currently exist for this target market?
3.What do/will we offer the target market?
4.What is the key problem it solves?
5.Why is it better than other options from which customers can choose?
Wise entrepreneurs keep this in mind when preparing their business plans and presentations. The higher...
a small business scores on these five Cs, the greater its chance of receiving a loan
what is the executive summary and the following 5-part framework
executive summary-to understand the entire business concept, the attributes that differentiate the company from the competition, and the financing that is being requested.
framework:
1.Context. What does your company do, in easy-to-understand words?
2. Benefit. What benefit or advantage does your company offer customers?
3. Target customers. For whom does your company provide the benefit?
4. Point of differentiation. How is your company different from other companies that pro vide similar products, services, or solutions?
5. Clincher. Can you leave the listener or reader with a memorable, bottom-line sound bite about your company?