SMALL%20BUSINESS%20MANAGEMENT

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SMALL BUSINESS MANAGEMENT

• Chapter Four
• The Business Plan

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Getting StartedEstablishing the Business

• Advantages of Organizing a Business from Scratch
• Disadvantages of Organizing a Business from
  Scratch

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Components of the Business Plan

• There are ten components in a plan.
• 1. Prepare a Table of Contents
• 2. Executive Summary and background
• 3. Describe the Management Team
• 4. Describe the Business Objective
• 5. Plan the Marketing Approach

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Components of the Business Plan

• 6. Describe the Selection of the Location
• 7. Determine the Physical Facilities
• 8. Plan the Financing
• 9. Plan the Personnel
• 10. Investigate the Legal Requirements

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Components of the Plan

• 1. Prepare a Table of Contents
• overview of the plan
• quick access to the various parts of the plan

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Components of the Plan

• 2. Executive Summary and Background Statement
• Completed at the end of the complete plan
• history of the project to date
• statement of the intended mission of the venture

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Components of the Plan

• 3. Describe the Management Team
• resume and background of those making the
  decisions for the organization

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Components of the Plan

• 4. Establish the Business Objective
• Business Size
• Production Levels
• Performance Levels

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Components of the Plan

• 5. Plan the Marketing Approach
• Have a clear concept of the target market.
• Understand the target markets needs, wants and
  purchasing habits
• answer the following questions
• where, when, what, how much, why
• Be aware of any uncontrollable factors that might
  affect the marketing of the product or service

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Components of the Plan

• Be aware of any uncontrollable factors that might
  affect the marketing of the product or service
  such as
• existing or pending legislation relevant to the
  business
• state of the economy in the market
• extent and strategies of the competition
• cultural norms of the market
• new technologies that might offset the business

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Components of the Plan

• Plan the Marketing Program
• the Product or Service
• the Distribution System
• the Promotion Plan
• the Pricing Plan

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Components of the Plan

• 6. Describe the Selection of the Location
• the Trading Area
• the Economic Base
• Attitude of the Trading Area towards New
  Businesses
• Competition
• Costs

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Components of the Plan

• The Site
• accessibility, site costs, restrictions, site
  history, proximity to other businesses, physical
  characteristics
• the Buy-or-Lease Decision
• cost of the lease, length of the lease,
  restrictions, repairs and lease hold
  improvements, insurance coverage
• Running the Business from Ones Home

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Components of the Plan

• 7. Determine the Physical Facilities
• insurance types
• loss or damage to the property
• business interruption
• liability and disability
• life insurance
• insurance decisions
• what kind to purchase, how much to purchase, from
  whom to purchase the insurance

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Components of the Plan

• 8. Plan the Financing
• establish capital requirements
• make feasibility projections
• determine the sources of funding
• plan the accounting, bookkeeping and computer
  systems
• determine the financial evaluation measures

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Components of the Plan

• 9. Plan the Personnel
• Administrative structure
• Employee recruitment and training
• Personnel Policies

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Components of the Plan

• 10. Investigate the Legal Requirements
• Legal Structure (four styles)
• 1.Sole Proprietorship
• advantages and disadvantages
• 2. Partnership
• Limited, General
• advantages and disadvantages
• 3. Cooperative
• one member-one vote vs each share a vote

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Components of the Plan

• 4. Corporation
• advantages and disadvantages of a corporation
• steps in incorporation
• selection of the business name
• development of the share structure, directors,
  restrictions on share transfers, etc.
• description of the company operations
• acquiring the necessary supports

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Components of the Plan

• Joint Ventures
• Licenses and Taxes
• Federal Government
• income tax, goods and services taxes, excise tax
• Provincial Government
• income tax, licenses, sales tax
• Municipal Governments
• licenses, property taxes, business taxes
• Patents
• registration, search, application

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Appendices

• Appendix A - Checklist for a Small Business Plan
• Appendix B - Sample Business Plans (2)
• The Sock Hop, Quality Cuts
• Appendix C - Incorporation of Companies and
  Associations
• Appendix D - Jurisdiction of Licenses and Taxes

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CONCEPT CHECKS

• 1. What are the advantages and disadvantages of
  owning a small business?
• 2. What steps are involved in preparing a
  business plan?
• 3. What criteria must be evaluated before
  choosing a trading area?
• 4. When is it advantageous to lease instead of
  owning?

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CONCEPT CHECKS

• 5. What information should be investigated before
  construction starts and purchasing equipment?
• 6. Why is insurance purchased? What are some
  small business insurance types?
• 7. What major financial aspects should be planned
  in advance of business operation?
• 8. What are four legal structures that an owner
  can utilize?

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CONCEPT CHECKS

• 9. What are the advantages and disadvantages of
  Incorporation?
• 10. What level of government issues business
  licenses?
• 11. What taxes are levied by the Federal
  Government?
• 12. What are the steps required to register a
  patent?