Introduction to

Chapter

Planning a Business

MultiMedia by Stephen M. Peters

2001 South-Western College Publishing

Learning Objectives
Identify the key stakeholders that are involved in a business. Describe the key functions of business. Explain how to develop a business plan.

MultiMedia by Stephen M. Peters

2001 South-Western College Publishing

Five Key Stakeholders in a Business

Owners: Organize, manage, and assume risk of starting a business. Creditors: Provide loans to start businesses. Employees: Hired to conduct the business operations. Suppliers: Provide the materials needed for production. Customers: Buy products which satisfy their needs.

MultiMedia by Stephen M. Peters

2001 South-Western College Publishing

Welcome to Wal-Mart
Everything we do is designed to build shareholder value over the long haul.
Wal-Mart
Business Online

MultiMedia by Stephen M. Peters

2001 South-Western College Publishing

Goal of Managers

Maximizing the firms value.

MultiMedia by Stephen M. Peters

2001 South-Western College Publishing

Five Key Functions of Business

Marketing

Management

FUNCTIONS
Finance Information Systems Accounting

MultiMedia by Stephen M. Peters

2001 South-Western College Publishing

Three Common Business Decisions

Management Decisions
Marketing Decisions

Finance Decisions

MultiMedia by Stephen M. Peters

2001 South-Western College Publishing

Steps for Creating a Business Idea

Identify Consumer Needs: Market research. Assessment of The Business Environment: Industrial, economic, and global environments.

MultiMedia by Stephen M. Peters

2001 South-Western College Publishing

Business Plan
Who is it for? For the Entrepreneur. For Investors and Creditors.

What does it provide?

Detailed description of the proposed business, including types of customers, competition, and facilities needed for production.

MultiMedia by Stephen M. Peters

2001 South-Western College Publishing

Possible Business Plan Sections

Cover Letter
Section 1 Executive Summary Section 2 Company Background Section 3 Management Team Section 4 Financial Plan Section 5 Marketing Plan
Business Online

Can be between 25 and 50 pages and take up to six months to complete.

Section 7 Location Analysis Section 8 Manufacturing Plan Section 9 Appendix

MultiMedia by Stephen M. Peters

2001 South-Western College Publishing

Business Plan: Management Section

Organizational structure Identifies roles and responsibilities of each employee in the firm. Production Decisions about production process, location, and facilities. Human resources Set up work environment that will motivate the employees to help the business succeed.
MultiMedia by Stephen M. Peters 2001 South-Western College Publishing

Business Plan: Marketing Section

Target Market: Profile of the target customer. Product Characteristics: Detailed description of product. Pricing: Proposed price of the product(s). Distribution: How products will get to the customer. Promotion: How products will be communicated to the target market.

MultiMedia by Stephen M. Peters

2001 South-Western College Publishing

Business Plan: Financial Section

Feasibility Estimate costs and benefits of the business, including sales forecasts and all expenses. Financing the Business Summary of the initial outlay needed to start the business.

MultiMedia by Stephen M. Peters

2001 South-Western College Publishing

Considerations in Assessing a Business Plan

Potential revenue. Demand for product or service. Expense of production. Overall potential for profitability.

Small Business

2000
Business Online

MultiMedia by Stephen M. Peters

2001 South-Western College Publishing