Creating a Winning E-Business

Second Edition

Creating an E-Business Plan

Chapter 3
 Learning Objectives

 Organize a business plan

 Prepare an executive summary
 Write a mission statement
 Prepare a marketplace analysis
 Create operational, financial, and management
plans

Creating a Winning E-Business 2

Second Edition, Chapter 3
 Learning Objectives
(continued)
 Understand legal forms of businesses
 Describe e-business partnerships

Creating a Winning E-Business 3

Second Edition, Chapter 3
 Business Plan Organization
 Business plan
– Formal business planning document
• Identifies the business and its mission
• Names the key management team members
• Describes the products or services to be offered
• Provides a marketplace analysis
• Identifies customers and competitors
• Determines resources for profitable operations
• Sets a timetable for profitability

Creating a Winning E-Business 4

Second Edition, Chapter 3
 Business Plan Organization
(continued)
 Government and for-profit sources for business
planning information and templates
– SCORE
– SBA
– BizPlanIt
– Bplans.com
– E-Future Centre

Creating a Winning E-Business 5

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 6

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 7

Second Edition, Chapter 3
 Business Plan Organization
(continued)
 Business plan components
– Cover sheet and title page
– Table of contents
– Executive summary
– Business description
– Vision/mission statement

Creating a Winning E-Business 8

Second Edition, Chapter 3
 Business Plan Organization
(continued)
 Business plan components (continued)
– Information on products/services
– Industry, customer, competitor analyses
– Operational, financial, and managerial plans
– Identification of critical risks
– Exit strategy

Creating a Winning E-Business 9

Second Edition, Chapter 3
 Business Plan Organization
(continued)
 Cover sheet
– Title of document and preparer’s name
– Plan copy number
– “Confidential” notation
 Title page
– Cover sheet information and
• Contact numbers
• Key team members’ names
• Name of person receiving the plan

Creating a Winning E-Business 10

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 11

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 12

Second Edition, Chapter 3
 Business Plan Organization
(continued)
 Table of contents
– Lists all the major sections and subsections of the
plan
– Prepared after rest of plan is complete
– Carefully checked for omissions and page
number errors

Creating a Winning E-Business 13

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 14

Second Edition, Chapter 3
 Business Plan Organization
(continued)
 Executive summary
– A condensed version of the complete plan
– Used by interested parties to quickly assess the
business idea and weed out plans
– Keep it short (one to three pages)
– Use clear and concise language and action words
– Create last after plan details are developed

Creating a Winning E-Business 15

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 16

Second Edition, Chapter 3
 Business Plan Organization
(continued)
 Vision statement
– A formal statement of a business’s hopes and
desires
– Written to guide and inspire employees
 Mission statement
– A formal statement that explains a business’s
reason for existing

Creating a Winning E-Business 17

Second Edition, Chapter 3
 Business Plan Organization
(continued)
 Business description
– Summary of business’s background
– Information about legal form of business
– Business’s history to date
– Key personnel
– Future goals

Creating a Winning E-Business 18

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 19

Second Edition, Chapter 3
 Business Plan Organization
(continued)
 Products or services section
– Description of products or services offered
– Anticipated sales for each product or service
– Describes benefits of product or service to
customers

Creating a Winning E-Business 20

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 21

Second Edition, Chapter 3
 Business Plan Organization
(continued)
 Marketplace analysis
– Information about the specific industry of which
business is a part
– Description of targeted customers
– Description of major competitors
– Overview of marketing and sales strategies

Creating a Winning E-Business 22

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 23

Second Edition, Chapter 3
 Business Plan Organization
(continued)
 Operational plan
– Describes a business’s physical location and
equipment
– Notes the manufacturing or service actions
needed to get products/services to market
– Summarizes Web site operations

Creating a Winning E-Business 24

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 25

Second Edition, Chapter 3
 Business Plan Organization
(continued)
 Financial plan
– Explains how your e-business idea, goals, and
strategies translate into profits
– Provides standard financial statements for
income, expense, and cash flow data
• Pro forma balance sheet
• Projected income statement
• Planned cash flow statement
– May include “deal plan,” break-even analysis,
ratio analysis
Creating a Winning E-Business 26
Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 27

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 28

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 29

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 30

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 31

Second Edition, Chapter 3
 Business Plan Organization
(continued)
 Management plan
– Organizational structure of business
– Information on
• Key members of management team
• Outside advisors
• Mentors
• Consultants

Creating a Winning E-Business 32

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 33

Second Edition, Chapter 3
 Business Plan Organization
(continued)

Creating a Winning E-Business 34

Second Edition, Chapter 3
 Business Plan Organization
(continued)
 Appendices
– Resumes
– Pictures of products
– Explanation of services
– Legal documents
– Other supporting documentation

Creating a Winning E-Business 35

Second Edition, Chapter 3
 Legal Forms of Organization
 Sole proprietorship
– Business started by an individual
– Owner and business are one in the same for tax
and legal liability issues

Creating a Winning E-Business 36

Second Edition, Chapter 3
 Legal Forms of Organization
(continued)
 Partnership
– Legal business entity with two or more co-owners
– Follows a partnership agreement
– General partnership: Tax and legal liabilities flow
through to individual partners
– Limited partnership
• General partner manages and assumes unlimited
liability
• Limited partners have liability for amount of their
capital contribution and their accepted debt
Creating a Winning E-Business 37
Second Edition, Chapter 3
 Legal Forms of Organization
(continued)
 Corporation
– Separate legal and taxable entity from its owners
– “C” corporation owners are it shareholders
– Liability is limited to investment in business
– Profits are taxed twice: once for the corporation
and again when distributed to owners as stock
dividends

Creating a Winning E-Business 38

Second Edition, Chapter 3
 Legal Forms of Organization
(continued)
 Corporation (continued)
– “S” corporation gives owners partnership status
and corporate liability protection
 Limited liability company (LLC)
– Tax status of sole proprietorship or partnership
– Liability status of a corporation

Creating a Winning E-Business 39

Second Edition, Chapter 3
 E-Business Partnerships
 Strong positive relationships with strategic
partners are critical
– Partnerships that help build market awareness
• Public relations firms
• Marketing consultants
– Partnerships that assist in operations
• Suppliers
• Distributors
• Web hosting companies

Creating a Winning E-Business 40

Second Edition, Chapter 3
 Chapter Summary
 A business plan is used to
– Check feasibility of business
– Seek funding
– Guide operations
 A business plan includes
– Cover sheet and title page
– Table of contents and executive summary
– Marketplace analyses
– Operational, financial, and marketing plans
Creating a Winning E-Business 41
Second Edition, Chapter 3
 Chapter Summary
(continued)
 Business plan appendices can include
– Resumes
– Pictures of products and information on services
– Legal documents
– Other supporting details for the overall plan

Creating a Winning E-Business 42

Second Edition, Chapter 3
 Chapter Summary
(continued)
 Business description should include legal form
of business
 Business plan should note key strategic
partnerships

Creating a Winning E-Business 43

Second Edition, Chapter 3