1. Step 2: Buyer Behavior
1.1. Why Will Target Customers Buy? Motivation to Solve a Problem
1.2. Who Makes Decision to Purchase? Individuals or Groups?
1.3. Length of Buying Process? Steps in Approval Process Buyer’s Need for Information
1.4. Degree of Involvement in Purchasing Process
2. VI. Market Analysis
2.1. WHY Important
2.1.1. Define nature of Business
2.1.2. Affirm: Company has a Well-thought-out Target Market
2.1.3. Understand customer and generate Sales
2.2. Step 1: Market Segmentation
2.2.1. Definition: Process of dividing a market into distinct subsets which have the same needs
2.2.2. Segment market by: Geography Demographic Variables Psycho-graphic Variables Behavioral Variables Product Type
2.2.3. Selecting a target market
2.2.3.1. Best Prospects for Entry
2.2.3.1.1. Sales Growth and Profitability
2.2.3.1.2. Consistent with Founders’ Passion: Why we start up
2.2.3.1.3. Core Competencies: what we good at
2.2.3.2. Mistakes:
2.2.3.2.1. Too Broadly
2.2.3.2.2. Target More Than One Segment: Best quality or Cheap
2.2.3.3. Goal
2.2.3.3.1. Become Expert in Specialized Area
2.3. Step 3: Competitor Analysis
2.3.1. Purpose
2.3.1.1. Understand Positions of Major Competitors
2.3.1.2. Opportunities Available to Gain Competitive Advantage in One or more Areas
2.3.1.3. Tells Reader You Understand Competitive Environment
2.3.2. Define SWOT
2.3.2.1. STRENGTHS
2.3.2.2. WEAKNESSES
2.3.2.3. OPPORTURNITIES
2.3.2.4. THREATS
2.3.3. Determine Competitors
2.3.3.1. Direct
2.3.3.1.1. Similar Products or Services
2.3.3.2. Indirect
2.3.3.2.1. Close Substitutes to Yours Coke vs coffee, milk, tea
2.3.3.3. Future
2.3.3.3.1. Businesses that Could Move into Direct or Indirect Competitor Roles
2.3.4. Competitor Analysis Grid
2.3.4.1. Definition: Tool for Organizing and Presenting Information About Competitors
2.3.4.2. Lists Primary Sources of Competitive Advantage and Disadvantage
2.3.4.3. Our Firm Must Have at Least One Key Success Factor
2.3.4.4. Helps to Fine-Tune Your Product Offering
2.4. Step 4: Estimate of Annual Sales and Market Share
2.4.1. Premier Trade Association
2.4.2. Comparable Firm: The best way
2.4.3. Conduct Internet Search
2.4.4. Multiplication Method
3. I. Why Plan
3.1. Internal
3.1.1. Forces the Business’ Founders to Think Through Every Aspect of their New Venture
3.1.2. Employees
3.2. External
3.2.1. Sells the New Venture to Outsiders
3.2.1.1. Potential Investors
3.2.1.1.1. Realistic
3.2.1.1.2. Plainly Explains Business
3.2.1.1.3. Business is Viable
3.2.1.1.4. Business Has Impressive Potential
3.2.1.2. Business Accelerators/Incubators
3.2.1.3. Suppliers
3.2.1.4. Potential Partners
3.2.2. Increases Credibility of the New Venture
3.2.2.1. Win a Business Plan Competition
3.3. 4 Types of Business
3.3.1. 1. Survival
3.3.1.1. Enough money: Lawn care service Part-time childcare
3.3.2. 2. Lifestyle
3.3.2.1. Provides the owner the opportunity to pursue a certain lifestyle and make a living
3.3.2.1.1. 1. Clothing boutique
3.3.2.1.2. 2. Personal trainer
3.3.3. 3. Managed Growth
3.3.3.1. Employs 10 or more people. May have several outlets. May be introducing new products/services to the market.
3.3.3.1.1. Regional restaurant chain
3.3.4. 4. Aggressive Growth
3.3.4.1. Brings new products/services to the market and has aggressive growth plans
3.3.4.1.1. 1. Computer software
3.3.4.1.2. 2. Medical equipment
3.3.4.1.3. 3. National restaurant chain
4. II. Developing and Screening Business Ideas
4.1. 1. Changing Environment Trends
4.1.1. Economic Trends
4.1.1.1. Evaluate who are customer What area the business should start
4.1.2. Social Trends
4.1.2.1. the impact of social trends on the way people live their lives
4.1.3. Technological Advances
4.1.4. Political and Regulatory Changes
4.2. 2. Unsolved Problems
4.3. 3. Gaps in the Marketplace
4.4. 4. Techniques for Generating Ideas
4.4.1. Brainstorming
4.4.2. Focus Groups
4.4.2.1. Gathering of 5 to 10 People Selected Due to Their Knowledge of Issue
4.4.2.2. Used as Follow-Up to Brainstorming to More Thoroughly Examine Idea
4.4.2.3. Conducted by Moderator Who Keeps Everyone Focused on Topic
4.4.3. Library and Internet Research
4.5. 5. First Screen
4.5.1. a way to quickly assess the merits of the idea, before subjecting it to full feasibility and business plan.
4.5.1.1. 1. Strength of the Idea
4.5.1.2. 2. Industry-Related Issues
4.5.1.3. 3. Market- and Customer-Related Issues
4.5.1.4. 4. Founder-Related Issues
4.5.1.5. 5. Financial Issues
4.5.1.6. 6. Overall Potential
5. III. Feasibility Analysis
5.1. Process of Determining if a Business Idea is Viable: 1. Critically Assess Merits of Idea 2. Lays Foundation for a Well-Reasoned and Researched Business Plan
5.2. Primary and Secondary Research
5.2.1. 1. Primary: Provides result specifically about your company
5.2.2. 2. Secondary: Involve applying results of previous completed studies to your situation
5.3. Step 1: Product/Service Feasibility
5.3.1. Product Desirability
5.3.1.1. Affirm: product or service is desirable and serves a need in the marketplace.
5.3.1.2. Concept Test
5.3.1.2.1. Showing a preliminary description of a product or service idea, called a concept statement, to industry experts and prospective customers to solicit their feedback
5.3.2. Product/Service Demand
5.3.2.1. A buying intentions survey is a survey instrument that is used to gauge customer interest in a product or service.
5.3.2.1.1. How likely would you be to buy a product (or service) like this, if we make it?
5.4. Step 2: Industry/Target Market Feasibility
5.4.1. Industry: Group of Firms Producing Similar Product Example: Shoes
5.4.2. Target Market: Limited Portion of Industry Which the Firm Wants to Attract Example: Children’s Shoes
5.4.3. Industry Attractiveness
5.4.3.1. Large, Growing, Young, Fragmented, and Has Low Operating Margins
5.4.3.2. Structurally Attractive: Low Barriers to Enter, so is Easy to Enter and Compete
5.4.3.3. Favorable Environmental & Business Trends
5.4.3.4. Importance of Product to Customers: No Good Substitutes Available in Other Industries
5.4.4. Target Market Attractiveness
5.4.4.1. Target is Group of Customers with Similar Needs
5.4.4.2. Ideal Target Market is:
5.4.4.2.1. Large Enough: New Business -Profitable Small Enough: Avoid Head-to-Head Competition with Industry Leaders
5.4.5. Market Timliness
5.4.5.1. Is it the right time to enter the market?
5.5. Step 3: Organizational Feasibility
5.5.1. Are you have... to successful launch the business
5.5.1.1. sufficient management expertise
5.5.1.2. organizational competence
5.5.1.3. Resources
5.5.2. Management Prowess
5.5.2.1. Understand the Market
5.5.2.2. Prior Entrepreneurial Experience
5.5.2.3. Professional & Social Networks
5.5.2.4. Creativity
5.5.2.5. Experience and Education
5.5.3. Resource Sufficiency
5.5.3.1. Location Availability
5.5.3.2. Key Managers and Support Personnel
5.5.3.3. Favorable Government Regulations
5.5.3.4. Proximity to Similar Firms
5.5.3.5. Intellectual Property
5.6. Step 4: Financial Feasibility
5.6.1. Total Start-Up Cash Needed
5.6.2. Financial Performance of Similar Businesses
5.6.3. Overall Financial Attractiveness of the Proposed Venture
6. Format
6.1. Executive Summary
6.2. Company Description
6.3. Industry Analysis
6.4. Market Analysis
6.5. Marketing Plan
6.6. Management Team and Company Structure
6.7. Operation Plan
6.8. Product Design & Development Plan
6.9. Final Projections
7. IV. Introductory Material, Executive Summary
7.1. 1. Cover Page
7.1.1. Company Name Street Address E-mail Address Phone Number(s) Date Contact Person Website Address Statement of Confidentiality
7.2. 2. Table of Contents
7.3. 3. Executive Summary
7.3.1. Short Overview of Entire Plan: Goal is to Capture Reader’s Attention
7.4. 4. Overview of the Company Description
7.4.1. Company History
7.4.1.1. Where Idea for Company Originated
7.4.2. Mission Statement
7.4.2.1. Few Words as Possible Google: “Don’t be Evil”
7.4.2.2. Defines why Company Exists and What it Aspires to Become
7.4.3. Products and Services
7.4.4. Current Status
7.4.4.1. how far along your company is in its development.
7.4.5. Legal Status and Ownership
7.4.5.1. who owns the business, how the ownership is spit up if more than one individual is involved
7.4.6. Business Name
7.4.6.1. Customer-Driven: Big and Tall Guys
7.4.6.2. Product- or Service-Driven: Whole Foods Market
7.4.6.3. Industry-Driven: General Motors
7.4.6.4. Personality- or Image-Driven: Ben & Jerry’s Homemade
7.4.7. Legal Issues in Choosing a Name
7.4.7.1. 1. Name Internet Domain Name
7.4.7.2. 2. Must be Unique
7.4.7.3. 3. Adapts Well to Foreign Cultures
8. V. Industry Analysis
8.1. Section 1: Industry Definition
8.1.1. should briefly describe the firm’s industry
8.2. Section 2: Industry Size, Growth Rate, and Sales Projections
8.2.1. Make Sense of the Numbers to Build Credibility
8.2.2. Four General Rules of Thumb
8.2.2.1. Display Financial Information in Multiyear Format to Show Trends
8.2.2.2. Display Information Graphically
8.2.2.3. Produce Industry Information on a Regional or Local Basis if Appropriate
8.2.2.4. Report Both Positive and Negative information
8.2.3. Industry Growth Rate
8.2.4. Industry Sales Projections
8.2.4.1. Report Future Sales Projections for industry
8.2.4.2. Include Concrete Numbers of Anticipated Sales and Growth Rates
8.2.4.3. Discuss Own Interpretation of Published Projections
8.3. Section 3: Industry Characteristics
8.3.1. Industry Structure
8.3.1.1. Concentrated: Dominated by Few Large Firms (Example - Home Depot)
8.3.1.2. Fragmented: Large Number of Smaller Companies
8.3.2. Nature of Participants
8.3.2.1. Major Players
8.3.2.1.1. Percentage of Market Share
8.3.2.1.2. Online or Traditional?
8.3.2.1.3. Where Your Firm Fits or Fills a Gap
8.3.2.2. Industry Segmentation
8.3.2.2.1. Product Type
8.3.2.2.2. Customer Segment
8.3.3. Key Ratios
8.3.4. Key Success Factors
8.3.4.1. What Firm Must be Good At to be Successful in the Industry
8.3.4.1.1. Be Competent in All Factors
8.3.4.1.2. Excel in Two or Three Factors
8.3.4.2. Factors Vary by Industry
8.3.4.2.1. Brand Name Recognition
8.3.4.2.2. Access to Distribution Channels
8.3.4.2.3. Quality of Products
8.3.4.2.4. Ease of Use
8.3.4.2.5. Price
8.3.4.2.6. Marketing Support
8.3.4.2.7. Quality of Customer Service
8.4. Section 4: Industry Trends
8.4.1. Environmental Trends:
8.4.1.1. Economic Trends Social Trends Technological Advances Political and Regulatory
8.4.2. Business Trends:
8.5. Section 5: Long-term Prospects
8.5.1. Brief Statement of Your Beliefs Regarding Long-Term Prospect for the Industry
8.5.2. Tips
8.5.2.1. No New Information
8.5.2.2. Be Consistent with Previous Information
8.5.2.2.1. Draw Conclusions from Previous Sections but Do Not Repeat What Was Said
8.5.2.3. Be Precise in Several Sentences