Basic Entrepreneurship (4th Quarter Exam Reviewer)

• How to Write a Business Plan Step by Step


  1. Executive Summary

  2. Description of Business

  3. Market Analysis

  4. Competitive Analysis

  5. Description of Organizational Management

  6. Description of Products or Services

  7. Marketing Plan

  8. Sales Plan

  9. Funding Details (or Request for Funding)

  10. Financial Projections
• Executive Summary


  The first section of a business plan that answers: What is the vision and mission of the company? What are the company's short- and long-term goals?
• Description of Business


  Defines the realm, scope, and intent of the venture by answering: What business are we in? What does our business do?
• Market Analysis


  Provides evidence that the business has surveyed and understands the current marketplace, and that the product or service satisfies a niche in the market by answering: Who is our customer? What does that customer value?
• Competitive Analysis


  Shows that the product or service stands to outpace competitors by answering: Who is the competition? What do they do best? What is our unique value proposition?
• Description of Organizational Management


  Provides an overview of the team members and other key personnel who are integral to success, including roles, responsibilities, and team structure.
• Description of Products or Services


  Clearly defines the product or service, as well as all the effort and resources that go into producing it, by answering: What is the product or service? How do we produce it, and what resources are necessary for production?
• Marketing Plan


  Defines the marketing strategy for the product or service by answering: Who is the target market? What channels will you use to reach your target market? What resources does your marketing strategy require, and do you have access to them? If possible, do you have a rough estimate of the timeline and budget? How will you measure success?
• Sales Plan


  Provides an overview of the sales strategy, including the priorities of each cycle, steps to achieve these goals, and metrics for success by answering: What is the sales strategy? What are the tools and tactics you will use to achieve your goals? What are the potential obstacles, and how will you overcome them? What is the timeline for sales and turning a profit? What are the metrics of success?
• Funding Details (or Request for Funding)


  Answers questions about the current and needed capital, team growth plans, and physical needs and constraints.
• Financial Projections


  Provides thought-out financial projections for the future, including: How and when will the company first generate a profit? How will the company maintain profit thereafter?
• Business Plan


  A written document that details the company's objectives, operations, competitive position in the market, marketing goals, and financial projections. Its contents can serve as a useful manual for managing the business. It may be a useful tool for attracting investors and securing financing from financial institutions.
• Why do we need a strong business plan?

  • A strong business plan helps you at every step of starting and running your company. It acts as a comprehensive strategy for how to set up, manage, and expand your new company. It's a way to consider and describe all the important aspects of how your business will function.
• How detailed should your plan be?

  • The executive summary should provide a high-level overview. The plan should focus on value proposition, target market, competitive analysis, financial projections, and operational plan. Financial projections should be based on realistic assumptions and supported by data. Overall, the plan should be clear, concise, and focused on the most important information relevant to the intended audience.
• Common mistakes in preparing a business plan

  • Lack of research
  • Overestimating financial projections
  • Ignoring risks
  • Inadequate marketing strategy
  • Poor presentation
  • Lack of flexibility
  • Focusing on the product, not the customer
  • Unrealistic timelines
• Studying the competition


  The process of researching and evaluating the advantages, disadvantages, tactics, and results of rival companies operating in the same market or industry.
• Steps to effectively analyze business competition


  1. Identify competitors

  2. Analyze competitors' strengths and weaknesses

  3. Determine competitors' strategies

  4. Monitor competitors' performance

  5. Conduct a SWOT analysis
• Criteria for selecting a business location


  • Target market
  • Demographics
  • Competition
  • Infrastructure
  • Accessibility
  • Labor market
  • Regulations
  • Cost
  • Community and culture
  • Growth potential
• Promotion


  Marketing initiatives used by companies to educate, persuade, and remind customers about their goods and services.
• Methods of promotion


  • Advertising
  • Public relations
  • Sales promotion
  • Personal selling
  • Direct marketing
  • Sponsorship
  • Word-of-mouth
• Budgeting


  An important part of financial management for businesses, as it helps to ensure resources are used efficiently and that the business can meet its financial obligations and achieve its objectives.
• Types of budgets in business


  • Operating budget
  • Capital budgets
  • Cash budgets
  • Sales budget
  • Project budget
  • Master budget
• Financial analysis


  Looking at a company's financial data to evaluate its performance and make wise decisions.
• Types of financial analysis


  • Fundamental analysis
  • Horizontal vs. Vertical analysis
  • Technical analysis
• Fundamental analysis


  Calculates a company's value using ratios derived from financial statements, such as earnings per share (EPS). It determines the security's intrinsic value by carefully analyzing economic and financial circumstances, which an investor can contrast with the current price to determine whether the security is undervalued or overvalued.
• Technical analysis


  Uses statistical trends gathered from trading activity to understand the market sentiment behind price trends. It assumes that a security's price already reflects publicly available information and instead focuses on the statistical analysis of price movements.
• Horizontal analysis


  Uses a baseline of comparable financial data to identify which accounts are growing and which are shrinking.
• Vertical analysis


  Uses a line-item benchmark to compare cost of goods sold, gross profit, operating profit, or net income as a percentage. Companies can track how the percentage changes over time. Net sales are often used as the benchmark.
• Financial projections shouldn't be based on idealistic assumptions and supported by data
• Brand Factors include...


  Marketing, Trust, Strategy
• Giving discounts, bundles, & promos like "buy one, take one" is part of the...


  Sales Plan
• Studying the competition is a business process that is effective in learning the advantages/disadvantages of rival companies
• The type of budget needed for renovation/upgrade of your business establishment is a Project Budget
• The Organizational Management and Structure part of a business plan focuses on the roles of every department and task
• The Competitive Analysis part of a business plan shows analysis about rivals' strengths/weaknesses
• The Executive Summary part of a business plan discusses short/long term goals
• SWOT is the best way to differentiate yourself from competitors
• Determining the right location involves finding out the right place to start your business
• A Technical Analysis trends from trading activity to understand the market sentiment trends
• Budgeting uses estimation & re-evaluation of expenses over a specified future period