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welcome back to AG Enterprise Management if you've not done so already please review the first introductory module My name is Matthew Johnson and I'll be your lecturer for the course for more information check out the course site and the syllabus for this course as well so during this module we'll be learning about the business planning process go for examples of how become used to plan out your business ideas let's discuss the class project that is due at the end of semester so yeah learning objectives learn about the business plan process and how it can be used it we're gonna do business ideas so this is really kind of the the basis of the class we're going to find a lot of the basic business principles are going to be talking throughout the different modules and then how do you apply this to your own creative ideas to create a strategy in a well-thought-out organized manner so that you can understand what the plan is as well as potential partners potential employees and even potential Buster's alright so we're gonna go through the different parts of the business plan so there is the business plan template that's listed on the course website please go ahead and download that and say that you're gonna be using this word document as your template for creating your own business plan so yeah a business plan has many names including strategic plan operational plan and even business direction document document helps to take an idea and provide detailed information on what you're going to do and how you're gonna do it what are the key elements of a business plan this includes market analysis of your company financials such as balance sheet profit and loss statements and the guide also walks you through the essential components of your plan including how to develop a funding request so yeah business plan is just it's kind of like a automatic question that especially we're going to be going to a bank or looking for outside investment or looking for partners they're going to see some kind of a business plan so in the previous module we spoke about the business model canvas and this is a great introduction to get a quick snapshot picture of your company and what you're all about but the business plan really goes into the more nuts and bolts of like we said before what is the strategy for your business and how you plan to get there so yeah as already mentioned throughout the course in addition to the business model canvas you're gonna be using the business plan template so this is a temp of filling out your own business plan remember this is a template so you're not stuck to you know use every single box that's in there this is just a standard recommendation of how to outline your ideas and yes so just be smart and how you apply the template to your specific business as I mentioned already be sure to download the template that's listed on the course website also I posted it up in the resource section in laulima yeah so there's also a lot of resources available online other than just as class if you google business plan you're gonna find a whole truckload different templates different examples and also resources one of that I like to recommend is the Small Business Administration SBA this is at and this is a government resource that provides assistance with putting together business plans but then also there's assistance for accessing government loans so yeah check it out I'd say here we're gonna list up the key components of the business plan all right so you got your executive summary you know just like if you're creating a research paper this is usually a section that you develop last this is gonna usually be one to two pages long that provides all the summary information about your project and fortunately I'm fortunate this is typically the only part of business plan that most people are actually going to read so this is real important that you hit the key information so you know people are busy people have short attention spans whatever it may be but this is very important you need to have all the backup information and the other sections but it all needs to be concise and consolidated into the executive summary so happy really summary it's a snapshot of your business plan as a whole and touches on your company profile and goals the section offers tips on how to include and how to keep it brief and succinct all right then you're gonna have the company description alright company description provides information on what you do what differentiates your business from others and the markets your business services okay so this is really the the who are you and what do you do and then you got the products and services alright and what are you so how does it benefit your customers was a product life cycle do you plan research and development activities so this is a section and thump but we can get tips on how to tell the story of your product or service alright so if we go back to the business model canvas this is the section where you're really identifying your value proposition you know what's what's in it for your various customer segments that you've identified so after that we have the market analysis alright so before large launching your business it's essential for you to research your business industry market and competitors so you don't want to go into starting a business blind so you need to know who's already out there who's doing what that's real embarrassing when you're talking to a potential partner or investor and they ask you about competition that's out there that you don't know about makes it really look like you've done what you're doing you haven't done your research and so this is a section where you identify what the overall market looks like so after that you have your management and organization so this is going to be the team so every business is structured differently find the best organization and management structure for your business okay so this is how you organize yourselves is it just you as a sole proprietor or do you have a team some technical expertise you have had someone help them with marketing some in helping with finance all those kind of things all right so continuing on different components of the business plan then we've got your marketing and sales management all right so how do you plan to market your business was your sales strategy and in this section you can read more about how to present this information in your plan then we start getting into the finances so we're not going to be required for everyone to develop this in detail for your own [Music] business plans that are due at the end of semester however it's very important to be familiar with this and understand what this all entails so startup expenses so it's important to estimate expenses accurately and a plan where you will get sufficient capital all right so to start up any kind of business you're going to need some startup funding it may not be a lot but you need to identify what that looks like so this is gonna be what its gonna take to open up the doors for business but then also include a cushion you know assuming that revenues are not going to be coming in for a certain amount of time for the business so for start-up funding you know we don't want to just have enough money to open the doors but we need to have enough money to operate and give ourselves room for some unexpected challenges or maybe money isn't coming in as quickly as we thought so we need to have space in there some time and enough funding to get through this opening first few months before really secure that we have enough money coming in from sales to cover our cost and then in addition to that we have the larger financial plant plan so if you need funding providing financial projections to back up your request is critical find out what information you need to include in your financial projections for your small business alright we're gonna be talking much more about this in future modules but this is going to include your balance sheet projected balance sheet so it's identifying what kind of assets and liabilities you anticipate to have also income and expense report or profit and loss statement so having projected idea of how much money's gonna be coming in during a certain amount of time and how much money's gonna be going out over a certain amount of time and also a cash flow budget understanding the timing of when money's gonna be coming in and when money's gonna be going out we're talking much more about that in detail in future modules and then there's typically an appendix since here it's optional but this is usually where you include information such as resumes of your management and organizational team permits leases that you may need for property or for building so this can be a variety of all their marketing information if you already have brochures maybe a logo just supplementary information that may not have already been included and the other components of the business plan all right talk a little bit more about the business plan the executive summary I remember this is considered the most important section of the business plan you said unfortunately unfortunately most of the time this is the only section of business plan that people are going to read until they start really you know moving forward whether they're gonna best in your business but this is kind of like the the resume or even the cover letter for you applying for a job but here you may be applying for funding so you really need to grab someone's attention very quickly so the section briefly tells your reader where your company is where you want to take it and why your business idea would be successful so if you are seeking finance the executive summary is also your first opportunity to grab a potential investors interest executive summary you should highlight the strengths of your overall plan and therefore the last section you write just like any other kind of research paper you may have done in the past however makes sense this is going to appear first in the business plan document alright next section is the company description so the section or business plan provides a high-level review of the different elements of your business this is similar to an extended elevator pitch and can help readers and potential investors quickly understand the goal of your business its unique proposition so this is really kind of telling your story where did you begin and where are you getting to more of a higher level description of what you're all about our next section is going to be products and services it just make sense something we want to describe in our business plan so it's includes information about the specific benefits of your product or services from your customers perspective so remember this is all about the customer so not necessarily saying why you think your products and services are the best but how are they providing you to your various customer segments you should also talk about your products or services ability to meet consumer needs and any advantages your product or services has over that of the competition okay next section we get to is the marketing plan it's a marketing as a process of creating customers the customers are lifeblood of your business in this section first we want to do is define your marketing strategy so there's no single way to approach a marketing strategy strategy should be part of an ongoing business evaluation process and unique to your company however there are common steps you can follow which you will help which will help you to think through the direction and tactics you'd like to use to drive sales and sustain customer loyalty so there's hundreds not thousands of ways to do marketing and it can be overwhelming and if you're just kind of doing things randomly you know throwing up a Facebook page or sending out an email newsletter or maybe doing a radio advertisement you know it's it's hard to really track and understand why you're doing it and what are the benefits of that so one of the things you want to do is anytime you do any kind of marketing one you know hopefully there's a plan and it ties back into the plane but then also that there's a way to measure the effectiveness of that tactic so if you do a Facebook page or if you're doing any kind of advertisement you want to have a way to be able to track and see what kind of returns you're getting on that so if you're spending a hundred dollars on an ad you know how how do you track and see if you had a return on the money that you invested that's all kind of out thinking about the marketing plan and and having a cohesive strategy so this includes everything from the branding and advertising and customer relationships alright this section is the operational plan so this just kind of really gets into the the day-to-day of how things actually get done alright so in this next section you explain the daily operations of the business location equipment people processes and surrounding environment this is the how on a day to day basis you plan to meet your goals okay then we have our management and organization section so this section should include your company's organizational structure details about the ownership of your company profiles of your management team and the qualifications of your board of directors if you haven't who does what in the business was a backronym why are you bringing them into the business as board members or employees or partners what are they're responsible for this may seem like unnecessary questions to answer in a one or two person organization but the people reading your business plan want to know who's in charge so we need to tell them we need to give them a background and give trust that hey we've got the right team in place to get this done so this is where you would give a detailed description of each division or Department and its function depending on the size of the business so now kind of going into the financial you know finances are very important for business and so far we've provided more of the qualitative information about the business and we start anymore the quantitative and getting down the numbers so one of the first things we got to figure out is to be able to get up and go and we need to know what our startup expenses are gonna be okay so this is what it's going to take to open up the doors and start operating but also as mentioned before this goes beyond just opening the doors but making sure you have enough funding in place to operate as long as you need to before revenue start coming in so you're gonna have a lot of different types of startup expenses it's pretty s m8 these expenses accurately and then the plan where you're gonna get sufficient capital this is a research project and more thorough your research efforts the less chance that you'll have that you'll leave out important expenses or underestimate them so this is real important to think through all those expenses whether it's gonna be insurance different labor costs you know there's much more to if you're gonna be hiring employees there's additional costs associated with that includes different benefit expenses payroll expenses different utilities what's your electric bill going to be looking like do we need cell phones are we going to be renting or leasing land what are all the expenses for that so this something that really need to do your homework on cuz one it's it's embarrassing if you're presenting to someone and they identify expenses that you haven't thought of but also it's could be tragic and actually could shut the business down if you do do your fundraising and you don't fundraise enough because you do not think about or you're not aware of expenses that pop up and that you are unable to cover and this leads into the overall financial plan so the financial plan consists of a 12-month profit and loss projection a four year profit and loss projection and typically a cash flow projection projected balance sheet and a break-even calculation together these all constitute a reasonable estimate of your company's financial future more important the process of thinking through the financial plan will prove your insight into the inner financial workings of your company so this is you know defnitely a little bit of trying to predict the future but it's kind of what we have to do are we thinking that we're going to be bringing in twenty fifty thousand dollars a year if so we need to have the numbers that back that up why does that make sense where did that number come from why do we think that and then how does that relate two different kinds of expenses so we're gonna be talking about in the financial module about these different types of financial documents and one necessarily be having to include these in real detail for your final projects but once again have to be very familiar with what these reports are and how you create them so we list here a list of business plan resources that we already mentioned before about the Small Business Administration SBA gov there's also the Small Business Development Center and this is a local organization that also provides assistance with putting together business plans and also connecting you with potential funding resources additional website is score org and there's also located here at seat are the agribusiness incubator program an extra work with start-up and existing farms to help them develop business plans and other business documents as well so we've been talking about this before but just to kind of reiterate so the final project assignment is going to be creating a business model that includes the business model canvas and the business plan including a 5 to 7 minute presentation it's just giving some ideas and we're gonna be talking about this especially the first few weeks of the semester so the businesses can be an existing AG business here in Hawaii or you can create your own this could be everything from produce vegetable farm ranching distribution value add AG tourism farm-to-table restaurant anything that's related to local food local agriculture so there's a lot a lot of options and I challenge you to be creative and see we can come up with and as always check out the course website for the readings and assignments and yep thank you very much that is it for this course module on business planning

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