This is a video to help brainstorm how to answer questions that need to be answered and addressed by an entrepreneur for a new venture. For small business owners seeking funding, being intentional and clear about the company’s current state and future plans is critical.
According to Kuratko and Hornsby, it’s important for entrepreneurs to invest time and effort into preparing a “formal” business plan (2021, p259).
A major reason for investing time to research is to plan for the future of the business venture objectively and holistically. The authors refer to the business plan as a roadmap.
Entrepreneurs should ask the question of what the future looks like and how to reach those goals and objectives. The research portion of preparing a business plan includes identifying potential opportunities, as well as problems that will be encountered internally and externally (p257).
Investopedia (2022) has a comprehensive SWOT analysis fundamentals that includes an example.
Understanding the competitive landscape will aid the entrepreneur in developing strategies.
Various business plan templates are available in business books, business plan DIY tutorials, and online. Most of them include all of the necessary and required sections of the business plan.
Below are the “components” of a business plan that is comprehensive and provided by Kuratko and Hornsby (p261-3):
Executive Summary - this portion is very high level and should include the overarching mission of the business and provide a snapshot of what will be presented in detail in subsequent sections.
Business Description - this section includes the current state of the business, an industry overview and the value proposition as it pertains to the future of the business.
Marketing - this is a detailed and well researched market analysis and a marketing plan that outlines how products and/or services will be marketed.
Operations - this section details all of the organizational considerations related to operating the business. A description regarding staffing needs, vendors, and any supply chain type of issues should be included here.
Management - key executives and individuals that are involved currently and in the future should be included here. If there is a board of directors, external advisors, their biographies can be included here. Also, it’s critical to include how they currently add and/or will add value in the future.
Financial models - typically a proforma income statement, balance sheet, and statement of cash flows is included. The projections should include at least three years of projections.
“Harvest” strategy - typically referred to as exit strategy, this section will provide a detail of future plans to exit, whether it will be via IPO, mergers, or “succession” planning.
Milestones - similar to project management, milestones should be clearly defined and detailed.
Appendix - any additional information and/or documents that are relevant to the business should be included here.
Kuratko, D. F. and Hornsby, J. S. (2021). New Venture Management, The Entrepreneur’s Roadmap for Development: Management, and Growth. Routledge. Third Edition. 1-355. https://doi.org/10.4324/9781003034292