CREATING A BUSINESS PLAN

BUSINESS PLANS

Used to seek funding for a new e-business

Serves as a design for operating an e-business after it is funded

Forces you to think critically, objectively, and unemotionally about your idea

Helps to find hidden strengths and fix hidden weaknesses

BUSINESS PLAN CONTENTS

A cover sheet and title page A table of contents An executive summary A description of the e-business idea Information on products or services to be

offered Analyses of the overall industry, target

market and competition Identification of critical risks An exit strategy

COVER SHEET

Identify the e-business The title of the document The preparer’s name The plan copy number The word “CONFIDENTIAL”

TITLE PAGE

Repeat the information from the cover sheet Add contact information for the preparer and

any associates May include the name of the person to whom

the copy is assigned

TABLE OF CONTENTS

List all the major sections and subsections of the e-business plan

Be sure it is neat, and avoid missing sections, and incorrect page numbers

EXECUTIVE SUMMARY

A miniature version of the complete e-business plan

Allows readers (investors, bankers, managers) to quickly understand the opportunity and build interest

Should generate excitement and interest Should be limited to 1-3 pages Highlight the reasons why the concept will be

successful Is usually easiest to write after the rest of the

plan

EXECUTIVE SUMMARY

Can include brief information on: The staff and management team A definable market Any competitive advantages Financial projections

BUSINESS DESCRIPTION

An outline of the background and concept Include information about the

legal form of the business, when & where it was formed history current status future goals

PRODUCTS AND SERVICES

Provide a description of the products and/or services offered sales that each product/service group is expected

to generate Provide enough information for a reader to

understand the business Do not provide too much detailed information

as to confuse readers

PRODUCTS

Describe products from customer’s perspective

Describe what the products do Highlight customer benefits Give information about the compete product

line In appendices, add high-quality photos of a

few of the major products In appendices, also add supporting

documents such as patents, trademarks and copyrights

SERVICES

Describe what service(s) you are providing How does the service work What marketplace need does the service

address What is the customer benefit for using the

service What makes it different What materials/equipment are needed to use

the service

INDUSTRY ANALYSIS

Industry: businesses that make/sell similar, complementary, or supplemental products/services

Examples: Travel Industry: airlines, hotels, travel agencies Auto Industry: auto, tire, and auto maintenance Computer Industry: hardware manufacturers,

software developers, chip manufacturers Theme Park Industry: theme park operators, ride

manufacturers, software developers, food vendors

INDUSTRY ANALYSIS

Describes: industry size characteristics trends growth factors distribution systems competitors effects of technology other relevant topics

INDUSTRY ANALYSIS

Based on verifiable data gathered from recognized sources government agencies industry trade associations studies from reliable organizations

Changes in customer preferences, shifts in customer demographics, new technologies

Product pricing trends, pricing advantages/disadvantages of the e-business

Trends you can exploit to attract new customers

INDUSTRY ANALYSIS

Should address supplier issues labor shortages legal, technical, personnel issues affecting the e-

business’s ability to deliver products/services Major competitors should be identified

including their market share (i.e. eBay owns about 80% of market share of online auctions)

Charts and graphs help with understanding and readability – but do not make them too large

MARKETING PLAN

Information about the target market Demographics: age, gender, income level, population

density Geographic: country/region, state city/town, climate,

population Psychographic: beliefs, hopes, fears, prejudices, needs,

desires Customer characteristics

Frequency of use / Method of use Frequency of purchase of products similar to those you

offer Marketing objectives

clearly stated and measurable have a time frame lead to sales

MARKETING PLAN

Marketing strategies Marketing budget Action plan

describe specific promotional tasks when they start / end

OPERATIONS PLAN

Business location Warehouses, branch offices, manufacturing space

Equipment needs Vehicles, computer, office equipment

Manufacturing needs Labor needs Order and Fulfillment Shipping

MANAGEMENT PLAN

Management team 3-5 people involved in day-to-day operations Important to investors! Include description of each team member,

responsibilities, previous experience and success, education

Board of advisors Individuals with industry / business experience If the board is impressive, adds credibility to the

business venture Outsourcing

Attorneys, accountants, insurance agents

RISK ANALYSIS

Identifies threats to the e-business success impending product innovations environmental issues barriers to entry into market government regulations staffing concerns management experience

Include a page with plans to resolve the issues

EXIT STRATEGY

How will an investor get their money back? Tell the investors how they will recover their

money Identify long-term plans for the business and

principals Possible exit strategies:

Payment plan / percentage of profits IPO – initial public offering Selling the company to other individuals or a business Joining with an existing company to form a new

company Stockholder buyout

LEGAL FORMS FOR E-BUSINESS

Model Description

Sole Proprietorship

Started & operated by an individualThe individual is responsible for tax and legal claims

Partnership Two or more ownersRequires a written partnership agreementPartners are responsible for tax and legal claims

Limited Partnership

General partners / limited partnersGeneral: manage / unlimited liabilityLimited: no management / liable for capital + accepted debt

C corporation Separate individual unitTaxed twice: corporate income & shareholder dividendsNo liability past the corporate unit

LLC Limited Liability CompanySimilar to partnership for tax purposesSimilar to a corporation for liability purposes