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Business Plans Kit For Dummies®, 3rd Edition

Book Description

Discover the ins and outs of constructing a great business plan

When you're establishing, expanding, or re-energizing a business, the best place to start is writing your business plan. Not only does writing out your idea force you to think more clearly about what you want to do, it will also give the people you work with a defined road map as well.

Business Plans Kit For Dummies, 3rd Edition has been updated to give you the very latest information on the changing economy and its impact on business plans; dealing with venture capitalists; getting start-up money in any economy; incorporating social and ecological responsibility issues; and developing a plan conducive to marketplace changes and advancements.

  • Refreshed examples and data sources for planning

  • Updated "ten top plans" section

  • CD includes new forms, worksheets, and resources

If you're a small business owner looking for expert guidance and friendly tips on developing and implementing a strategic plan to help your business succeed in an uncertain economy, Business Plans Kit For Dummies has you covered!

Note: CD-ROM/DVD and other supplementary materials are not included as part of eBook file.

Table of Contents

  1. Copyright
  2. About the Authors
  3. Authors' Acknowledgments
  4. Publisher's Acknowledgments
  5. Introduction
    1. About This Book
    2. Why This Book Is for You
    3. Conventions Used in This Book
    4. How This Book Is Organized
      1. Part I: Building a Strong Foundation for Your Plan
      2. Part II: Developing Your Plan's Components
      3. Part III: Tailoring a Business Plan to Fit Your Needs
      4. Part IV: Making the Most of Your Plan
      5. Part V: The Part of Tens
    5. About the CD
    6. Icons Used in This Book
    7. Where to Go from Here
  6. I. Building a Strong Foundation for Your Plan
    1. 1. Starting Your Planning Engine
      1. 1.1. Understanding Your Starting Position
        1. 1.1.1. Planning for a start-up
        2. 1.1.2. Planning to address changing conditions
        3. 1.1.3. Planning to seize growth opportunity
      2. 1.2. Committing to the Business-Planning Process
        1. 1.2.1. Defining your business-planning situation
        2. 1.2.2. Buying into the value of business planning
        3. 1.2.3. Making a wish list for your business plan
      3. 1.3. Identifying Target Audiences and Key Messages
        1. 1.3.1. Your audience
        2. 1.3.2. Your message
        3. 1.3.3. Business planning as a test drive
      4. 1.4. The Anatomy of a Business Plan
        1. 1.4.1. Business-plan contents from beginning to end
        2. 1.4.2. Frequently asked business-plan questions
      5. 1.5. Establishing Your Plan's Time Frame
        1. 1.5.1. Committing to a schedule
        2. 1.5.2. Defining milestones
      6. 1.6. Preparing for the Real World
        1. 1.6.1. Locating informative resources
        2. 1.6.2. Seeking expert advice
        3. 1.6.3. Sharing the load
        4. 1.6.4. Staying on track
      7. 1.7. Forms on the CD-ROM
    2. 2. Generating a Successful Business Idea
      1. 2.1. Brainstorming Business Ideas
        1. 2.1.1. Hatching plans for a new product or service
        2. 2.1.2. Using the do-it-yourself idea blender
        3. 2.1.3. Seeking creative solutions to tough challenges
        4. 2.1.4. Inspiring team creativity (with or without donuts or bagels)
          1. 2.1.4.1. Applying the LCS system to nurture new ideas
          2. 2.1.4.2. Assembling a brainstorming session
        5. 2.1.5. Finding business ideas within your work environment
      2. 2.2. Identifying Business Opportunities
        1. 2.2.1. Listening to what customers have to say
        2. 2.2.2. Spotting changes that open up new opportunities
        3. 2.2.3. Putting your business ideas through a first test
        4. 2.2.4. Narrowing your choices
      3. 2.3. Doing Your First Reality Check
        1. 2.3.1. Getting a second opinion
        2. 2.3.2. Conducting a self-appraisal
      4. 2.4. Forms on the CD-ROM
    3. 3. Defining Your Business Purpose
      1. 3.1. Knowing What Business You're In
        1. 3.1.1. How would I describe my business?
        2. 3.1.2. Where's the money?
      2. 3.2. Giving Your Company Its Mission
        1. 3.2.1. Asking basic questions
        2. 3.2.2. Framing your mission
        3. 3.2.3. Crafting your mission
        4. 3.2.4. Fixing a weak or ineffective mission statement
        5. 3.2.5. Putting your mission to work
      3. 3.3. Setting Goals and Objectives
        1. 3.3.1. Approach #1: Tying goals to your mission
        2. 3.3.2. Approach #2: Using goal-setting ACES
        3. 3.3.3. Approach #3: Covering all the bases
        4. 3.3.4. Making final choices
      4. 3.4. Exploring Values and Vision
        1. 3.4.1. Uncovering values you already hold
        2. 3.4.2. Writing a values statement
        3. 3.4.3. Writing a vision statement
      5. 3.5. Putting Your Principles into Practice
      6. 3.6. Forms on the CD-ROM
  7. II. Developing Your Plan's Components
    1. 4. Understanding Your Business Environment
      1. 4.1. Zooming In on Your Industry
        1. 4.1.1. Seeing your industry's big picture
        2. 4.1.2. Paying the price of admission
      2. 4.2. Defining Your Customers
        1. 4.2.1. Developing your customer profile
        2. 4.2.2. Conducting customer research
          1. 4.2.2.1. Compiling a firsthand analysis of your customer
          2. 4.2.2.2. Casting a wider net
          3. 4.2.2.3. Getting research assistance
          4. 4.2.2.4. Establishing your customer intelligence game plan
        3. 4.2.3. Sharpening your customer focus
        4. 4.2.4. Describing your ideal customer
          1. 4.2.4.1. Separating the good from the best — and the best from the worst
          2. 4.2.4.2. Defining perfection
        5. 4.2.5. Segmenting customers into buyer groups
        6. 4.2.6. Doing business with business customers
      3. 4.3. Defining and Addressing Market Shifts
        1. 4.3.1. Charting market growth patterns
        2. 4.3.2. Tracking buyer tastes and trends
      4. 4.4. Sizing Up Your Competition
        1. 4.4.1. Using cloak-and-dagger methods
        2. 4.4.2. Identifying your stealth competitors
        3. 4.4.3. Staying a step ahead
      5. 4.5. Greening Your Business
      6. 4.6. Forms on the CD-ROM
    2. 5. Charting Your Strategic Direction
      1. 5.1. Assessing Your Capabilities Against the Opportunities and Threats You Face
        1. 5.1.1. Sizing up your strengths and weaknesses
          1. 5.1.1.1. Grading your capabilities
          2. 5.1.1.2. Matching your capabilities to the task at hand
          3. 5.1.1.3. Capitalizing on strengths and overcoming weaknesses
        2. 5.1.2. Identifying opportunities and threats
        3. 5.1.3. Conducting a SWOT analysis
      2. 5.2. Defining Your Business Model
        1. 5.2.1. Staying in the black
        2. 5.2.2. Getting entrepreneurial about nonprofits
        3. 5.2.3. Timing your expenses and income
        4. 5.2.4. Generating and collecting revenue
        5. 5.2.5. Pricing yourself into the market
        6. 5.2.6. Planning to control costs
        7. 5.2.7. Creating a business model that works
      3. 5.3. Charting Your Future
        1. 5.3.1. Understanding your options
        2. 5.3.2. Planning for growth
      4. 5.4. Outlining an Exit Strategy
      5. 5.5. Forms on the CD-ROM
    3. 6. Describing Your Business and Its Capabilities
      1. 6.1. Introducing Your Business
        1. 6.1.1. What is it you're selling, anyway?
        2. 6.1.2. How do you prepare an elevator speech?
      2. 6.2. Describing Your Business Capabilities
        1. 6.2.1. Research and development
        2. 6.2.2. Operations
        3. 6.2.3. Distribution and delivery
        4. 6.2.4. Management
        5. 6.2.5. Organization
          1. 6.2.5.1. The pack
          2. 6.2.5.2. Form follows function
          3. 6.2.5.3. Divide and conquer
          4. 6.2.5.4. The matrix
      3. 6.3. Changing Your Business Focus
        1. 6.3.1. Making product changes
        2. 6.3.2. Moving your business
        3. 6.3.3. Revamping your operations and processes
        4. 6.3.4. Altering distribution channels
      4. 6.4. Staying Focused on What You Do Best
      5. 6.5. Forms on the CD-ROM
    4. 7. Crafting Your Marketing Plan
      1. 7.1. Marketing at a Glance
        1. 7.1.1. The big marketing picture
        2. 7.1.2. The nuts and bolts of a marketing plan
      2. 7.2. Analyzing Your Market Situation
        1. 7.2.1. Getting a handle on your market
        2. 7.2.2. Assessing your competition
        3. 7.2.3. Forecasting your business climate
      3. 7.3. Setting Marketing Goals and Objectives
      4. 7.4. Defining Your Position and Brand
      5. 7.5. Targeting Your Efforts
      6. 7.6. Designing Marketing Strategies
        1. 7.6.1. Your product strategy
        2. 7.6.2. Your distribution strategy
        3. 7.6.3. Your pricing strategy
        4. 7.6.4. Your promotion strategy
      7. 7.7. Planning Your Internet Footprint
      8. 7.8. Forms on the CD-ROM
    5. 8. Tallying Up Your Financial Situation
      1. 8.1. Decoding Financial Terminology
      2. 8.2. Putting Together an Income Statement
        1. 8.2.1. Reviewing a sample income statement
          1. 8.2.1.1. Section 1: Gross revenue
          2. 8.2.1.2. Section 2: Gross profit
          3. 8.2.1.3. Section 3: Operating profit
          4. 8.2.1.4. Section 4: Profit before taxes
          5. 8.2.1.5. Section 5: Net profit
        2. 8.2.2. Now it's your turn: Creating your income statement
      3. 8.3. Creating Your Balance Sheet
        1. 8.3.1. Reviewing a sample balance sheet
          1. 8.3.1.1. Section 1: Current assets
          2. 8.3.1.2. Section 2: Fixed assets
          3. 8.3.1.3. Section 3: Intangibles
          4. 8.3.1.4. Section 4: Total assets
          5. 8.3.1.5. Section 5: Current liabilities
          6. 8.3.1.6. Section 6: Long-term liabilities
          7. 8.3.1.7. Section 7: Owner's equity
          8. 8.3.1.8. Section 8: Total liabilities and equity
        2. 8.3.2. Now it's your turn: Building your balance sheet
      4. 8.4. Constructing a Cash-Flow Statement
        1. 8.4.1. Section 1: Total funds in
        2. 8.4.2. Section 2: Total funds out
        3. 8.4.3. Section 3: Net change in cash position
        4. 8.4.4. Section 4: Changes in liquid assets
        5. 8.4.5. Section 5: Net change in cash position
        6. 8.4.6. Now it's your turn: Creating your cash-flow statement
      5. 8.5. Forecasting and Budgeting
        1. 8.5.1. Your financial forecast
        2. 8.5.2. Planning for that rainy day
          1. 8.5.2.1. Pro forma income statement
          2. 8.5.2.2. Estimated balance sheet
          3. 8.5.2.3. Projected cash flow
        3. 8.5.3. The master budget
      6. 8.6. Forms on the CD-ROM
  8. III. Tailoring a Business Plan to Fit Your Needs
    1. 9. Planning for a One-Person Business
      1. 9.1. Having What it Takes to Succeed in a One-person Business
        1. 9.1.1. Planning for success
        2. 9.1.2. Avoiding legal hassles
        3. 9.1.3. Putting a price on what you do
          1. 9.1.3.1. Knowing how to charge
          2. 9.1.3.2. Figuring out how much to charge
          3. 9.1.3.3. Establishing billing policies
          4. 9.1.3.4. Getting paid
        4. 9.1.4. Treating your business like a business
      2. 9.2. Tailoring a Business Plan to Fit Your One-Person Enterprise
        1. 9.2.1. Company overview
        2. 9.2.2. Business environment
        3. 9.2.3. Company description and strategy
        4. 9.2.4. Financial review
        5. 9.2.5. Action plan
      3. 9.3. Forms on the CD-ROM
    2. 10. Planning for a Small Business
      1. 10.1. Recognizing the Importance of a Plan
      2. 10.2. Preparing Your Small Business Plan
        1. 10.2.1. Analyzing your business location and the surrounding environment
        2. 10.2.2. Defining your business and its purpose
        3. 10.2.3. Plotting your business strategy
        4. 10.2.4. Clarifying your financial situation
        5. 10.2.5. Establishing your action plan
      3. 10.3. Keeping an Eye on the Business Horizon
      4. 10.4. Growing — or Not Growing — Your Small Business
      5. 10.5. Keeping It in the Family
      6. 10.6. Forms on the CD-ROM
    3. 11. Planning for an Established Business
      1. 11.1. Purpose-Driven Planning
      2. 11.2. Planning to Raise Capital
        1. 11.2.1. Bank financing
        2. 11.2.2. Investor capital
      3. 11.3. Planning to Grow Your Business
      4. 11.4. Planning in Times of Trouble
        1. 11.4.1. Diagnosing your problems
        2. 11.4.2. Getting a second opinion
        3. 11.4.3. Analyzing your current situation
      5. 11.5. Charting a Turnaround
        1. 11.5.1. Keeping an eye on the clock
        2. 11.5.2. Focusing on what's doable
        3. 11.5.3. Getting the right people in the loop
        4. 11.5.4. Using your plan to communicate
      6. 11.6. Planning for a Merger or Sale
        1. 11.6.1. Assessing the transferability of your business
        2. 11.6.2. Planning for a change in leadership
      7. 11.7. Forms on the CD-ROM
    4. 12. Planning for a Nonprofit Organization
      1. 12.1. Running a Nonprofit Like a Business
        1. 12.1.1. Fine-tuning your mission and vision
        2. 12.1.2. Creating the appropriate structure
        3. 12.1.3. Setting goals and objectives
          1. 12.1.3.1. Sample goals and objectives
          2. 12.1.3.2. A sample solicitation based on goals and objectives
      2. 12.2. Organizing to Do Good Work
        1. 12.2.1. Operations
        2. 12.2.2. Organization
        3. 12.2.3. Management
        4. 12.2.4. Research and development (R&D)
      3. 12.3. Keeping the Books
        1. 12.3.1. Finding funding
        2. 12.3.2. Tailoring your plan to big donors
        3. 12.3.3. Managing overhead
        4. 12.3.4. Putting working cash to work
        5. 12.3.5. Staying accountable
      4. 12.4. Marketing and Promoting Your Nonprofit
      5. 12.5. Forms on the CD-ROM
    5. 13. Planning in an Online World
      1. 13.1. Avoiding the Well-Traveled Bumps on the Cyber Highway
        1. 13.1.1. Web presence isn't an all-or-nothing proposition
        2. 13.1.2. E-business planning is a continuous process
        3. 13.1.3. Successful strategy depends on a business model
      2. 13.2. Ironing Out Pressing Planning Issues
      3. 13.3. Creating an Online Customer Profile
      4. 13.4. Building an Internet Business
        1. 13.4.1. Establishing your value proposition
        2. 13.4.2. Constructing a workable e-business model
        3. 13.4.3. Getting funded
      5. 13.5. Adding an Internet Extension to Your Brick-and-Mortar Business
        1. 13.5.1. Retailing online
        2. 13.5.2. Budgeting for your online presence
        3. 13.5.3. Tapping into the power of social networks
      6. 13.6. Forms on the CD-ROM
  9. IV. Making the Most of Your Plan
    1. 14. Putting Your Plan Together
      1. 14.1. Making a List and Checking It Twice
      2. 14.2. Locating Additional Resources
        1. 14.2.1. The bookstore
        2. 14.2.2. The Web
        3. 14.2.3. Business software
        4. 14.2.4. Expert advice
        5. 14.2.5. Self-help
      3. 14.3. Assembling Your Planning Team
        1. 14.3.1. Delegating responsibilities
        2. 14.3.2. Setting the ground rules
        3. 14.3.3. Putting first things last
        4. 14.3.4. Keeping track of it all
          1. 14.3.4.1. The master tracker
          2. 14.3.4.2. The old-fashioned loose-leaf notebook
      4. 14.4. Targeting Your Plan to Key Audiences
        1. 14.4.1. Identifying your stakeholders
        2. 14.4.2. Addressing more than one audience
          1. 14.4.2.1. Table of contents
          2. 14.4.2.2. Executive summary
          3. 14.4.2.3. The appendixes
        3. 14.4.3. Creating alternate versions of your plan
      5. 14.5. Fitting the Pieces Together
      6. 14.6. Planning Ahead
      7. 14.7. Forms on the CD-ROM
    2. 15. Putting Your Plan to Work
      1. 15.1. Organizing Your Company around Your Business Plan
        1. 15.1.1. Form meets function
        2. 15.1.2. Duties and responsibilities
        3. 15.1.3. Systems and procedures
      2. 15.2. Getting Team Buy-In
        1. 15.2.1. Distributing your plan
        2. 15.2.2. Leading effectively
        3. 15.2.3. Sharing the vision
        4. 15.2.4. Encouraging pride of ownership
        5. 15.2.5. Developing employee skills
      3. 15.3. Nurturing Tomorrow's Leaders
      4. 15.4. Keeping Your Plan Current
        1. 15.4.1. Monitoring your situation
        2. 15.4.2. Encouraging feedback
        3. 15.4.3. Planning for change
      5. 15.5. Forms on the CD-ROM
  10. V. The Part of Tens
    1. 16. Ten Signs That Your Plan May Need an Overhaul
      1. 16.1. Costs Rise, Revenues Fall
      2. 16.2. Sales Figures Head South
      3. 16.3. You Don't Meet Financial Projections
      4. 16.4. Employee Morale Sags
      5. 16.5. Key Projects Fall Behind Schedule
      6. 16.6. New Competitors Appear
      7. 16.7. Technology Shakes Up Your World
      8. 16.8. Important Customers Defect
      9. 16.9. Business Strategy Does a 180
      10. 16.10. Growth Is Out of Your Control
    2. 17. Ten Ways to Fund Your Business Plan
      1. 17.1. Your Own Pocket
      2. 17.2. Friends and Family
      3. 17.3. Prospective Customers
      4. 17.4. A Bank Loan
      5. 17.5. A Commercial Line of Credit
      6. 17.6. Equipment Leasing
      7. 17.7. A Small Business Administration (SBA) Loan
      8. 17.8. Deep-Pocket Partners
      9. 17.9. Venture Capital
      10. 17.10. Angel Money
    3. 18. Ten Ways to Evaluate a New Business Idea
      1. 18.1. Is This Something I Really Want to Do?
      2. 18.2. Is This Something I'm Capable of Doing?
      3. 18.3. Does It Tap My Personal Strengths?
      4. 18.4. Can I Describe It in 25 Words or Less?
      5. 18.5. What's the Closest Thing to It in the Marketplace?
      6. 18.6. Does It Meet a Need or Solve a Problem?
      7. 18.7. Does It Take Advantage of a New Opportunity?
      8. 18.8. What's the Biggest Drawback or Limitation?
      9. 18.9. Will It Make Money — and How Fast?
      10. 18.10. Am I Willing to Remortgage My House?
    4. 19. Ten Questions to Ask Before You Finish Your Business Plan
      1. 19.1. Does the Plan Realistically Assess Your Business Idea?
      2. 19.2. Does the Plan Adequately Describe Your Customers and What They Want?
      3. 19.3. Does the Plan Establish Specific Timelines?
      4. 19.4. Do the Financials Add Up?
      5. 19.5. Does the Plan Spell Out Specific Goals and Objectives?
      6. 19.6. Will It Guide and Inspire Employees?
      7. 19.7. Is the Writing Clear and Jargon-Free?
      8. 19.8. Is the Plan Concise?
      9. 19.9. Does Your Strategy Allow for the Unexpected?
      10. 19.10. What Would Your Competitors Think?
  11. A. About the CD
    1. A.1. System Requirements
    2. A.2. Using the CD with Windows
    3. A.3. Using the CD with MacIntosh
    4. A.4. What You'll Find on the CD
      1. A.4.1. Author created material: Business plan forms
      2. A.4.2. Other software
    5. A.5. Troubleshooting