Unit 3: The Business Plan
A strong business plan is one of the foundations of a successful business. It is the tool by which a great idea becomes an opportunity. It is the creative process that allows the entrepreneur to document the project's merits and to articulate a narrative, addressing the venture's risks and rewards, to his or her potential investors, partners, and other stakeholders.
This unit will present the outline of a business plan, explain the importance of each section, and provide you with guidance as to how you can craft this information for your own ventures. We will also cover the "dos and don'ts" of preparing a business plan. Lastly, this unit will emphasize how the business plan is not the business itself; it is only a step from idea to venture, and it is imperative that you understand how to articulate the business plan succinctly, cleanly, and carefully.
Completing this unit should take you approximately 14 hours.
Upon successful completion of this unit, you will be able to:
- explain how to write a formalized business plan; and
- identify the information found in the business plan.
3.1: Business Planning
Pay close attention to this chapter. Writing a business plan is an essential skill for entrepreneurs.
3.1.1: How to Write a Great Business Plan
This lecture discusses writing a business plan. You can find the entire Yale Entrepreneurial Institute lecture series here.
3.1.2: The Do's and Don'ts of the Writing Process
Read this article. What audiences use business plans to gather valuable information about the business? Does every business, large or small, need a business plan? If so, why? How can the five dos and five don'ts outlined in this essay benefit the author of a business plan?
3.2: The Outline for a Business Plan
This essay imparts some valuable advice for building a template to create a business plan. Do all business plans contain the same topics and level of detail? Why, or why not? What type of information should you include in the eight information sections most commonly covered in a business plan? What guidelines should you follow to ensure you are successful in writing a business plan?
Keep this template handy as you write the first couple of drafts of your business plan as an entrepreneur.
3.2.1: Executive Summary
3.2.2: Company Mission and Description
This article explains the importance of the mission statement and how to create a simple mission statement.
3.2.3: Products and Services
Watch this video on how to create the product or services section of a business plan.
3.2.4: Marketing Strategy
Study this slideshow on how to create the marketing strategy section of a business plan.
3.2.5: Operations Management
Read this chapter, which covers human resource management and its potential for creating and sustaining competitive advantage.
Read this chapter, which covers operations decisions and considerations when starting a business.
3.2.6: Management and Leadership
This section outlines the key components of a business plan's management plan section.
3.2.7: Financial Statements
3.2.8: Expenses and Capitalization
As you read, consider the following questions:
- How difficult or easy is it to calculate startup costs for a business?
- Is it important to accurately calculate the startup costs for a business? Why, or why not?
- How important is it to conduct research when calculating the startup costs for a business?
- What would be the outcome if you did not conduct any research during this process?
- How difficult or easy is it to calculate startup costs for a business?
3.2.9: Financial Plan
Study this slideshow on how entrepreneurs can create a simple and effective financial plan for their business.
Download and complete the template financial model Excel spreadsheet based on data from a real or fictitious company you are interested in starting.
3.2.10: The Franchise Route
Franchising is the practice of licensing another firm's business model as an operator. By the end of this article, you will be able to explain the franchiser-franchisee relationship.
A franchise agreement can also have disadvantages for both the franchisor and the franchisee. By the end of this article, you will be able to discuss the disadvantages of participating in a franchise.
A franchise agreement can have many benefits for both the franchisor and the franchisee. By the end of this article, you will be able to discuss the advantages of participating in a franchise.
Read this article on the pros and cons of franchising. This article outlines examples of good, profitable franchising opportunities.
Unit 3 Assessment
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.