EBusiness Plan Tutorial 1 Lesson 1 Introduction to

E-Business Plan Tutorial 1

Lesson 1: Introduction to the EBusiness Plan Tutorial 2

Introduction to the E-Business Plan Tutorial l l Assignments in the course is to create a business plan for an online company A step-by-step guide to creating an e-business plan To setup a business that will have a major or entire presence on the Internet Emphasize strategy-setting activities Should be treated as a realistic business exercise 3

Strategy-Setting Activities l Writing the firm's mission statement Determining a value proposition Defining the business model Identifying target markets Conducting a competitor analysis l Finished in 4 weeks through 20 assignments l l 4

Example case in the tutorial l We illustrate key points or activities in ten lessons by referring to Purma Top Gifts. l Purma is a fictitious country, and Purma Top Gifts is a fictitious online gift shop that proposes to sell fairly expensive, high-quality products that are made in Purma. 5

Ten Lessons in this tutorial 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Introduction to the E-Business Plan Tutorial Fundamentals of E-Business Planning Writing a "Read Right" Plan Executive Summary Business Description Market Analysis Competitor Analysis Operations Financial Statements Making an Effective Business Plan Presentation 6

Lesson 2: Fundamentals of E-Business Planning 7

What Is a Business Plan? l l l A road map for the development and operation of your e-business A blueprint of your company An outline of your business idea A document that describes how your business will be profitable Formal Definition: a business plan is a written document that identifies a company's goals and outlines how the company intends to achieve those goals 8

Business Case l A business plan that explains a new initiative or project inside an existing company l l to justify a specific investment of funds to the company's board of directors and senior management Contains more operational detail and fits the project within the organizational context l justifies the initiative on the basis of the firm's mission and goals 9

Why Write a Business Plan? l l l l To acquire funding To acquire other resources To recruit senior management To make you a better business owner To make a realistic approach to your business To decide not to develop the business To keep you on track 10

When Do You Need to Write a Business Plan? l When you need to share a new business proposition with others l When you are in a strategic planning process l When the previous plan has reached its use-by date l If the original business plan set forth a three-year plan and the business just celebrated its second birthday, it is time to write a new plan . l A business plan is never done l A continuing process 11

The "E-Difference" in E-Business Planning l The Internet is unlike any other sales channel. Need to think differently, and creatively, about the opportunities and problems the Internet presents l l l The Internet is global Web storefronts never close E-commerce is conducted at Internet speed The Web allows greater opportunities for personalization of content, one-to-one marketing, and customer self-service The Internet intensifies customer relationship management 12

Lesson 3: Writing a "Read Right" Plan 13

Outline l l l The Importance of Business Plan Presentation Introductory Sections of the E-Business Plan Formatting an E-Business Plan l l l References Headers and footers Page numbers Fonts, line spacing, and margins Spelling, grammar, and punctuation Binding 14

The Importance of Business Plan Presentation l l The business plan may be the first, and only, introduction to you and your business idea that the potential investor will see An attractive and professionally presented business plan shows that you pay attention to detail and care about the idea you are presenting 15

Introductory Sections of the E-Business Plan l l Cover Letter Title Table of Contents Appendices 16

Cover Letter l Typically a cover letter includes : l l l Your name and contact details. The date at the left margin. The name and address of the recipient. A salutation (e. g. , "Dear Mr. Smith: "). A submission paragraph. A paragraph or two about the plan itself. A closing paragraph. A sign-off. Your signature and your typed name. A cover letter should be no longer than one page. Usually the cover letter is enclosed separately from the plan, but for this assignment it should be attached to, or bound within, the front of the business plan 17

Title The content of the title page includes : l l l The title. Your name, company, and contact details. Who the plan is for. The current date. Spell this out (e. g. , November 4, 2005). Don't abbreviate. A statement of confidentiality. A reminder: do not on this page, nor anywhere else in this plan, display any indication that this is a class assignment. l l For example, do not include your student identification number or the title of the e-business course 18

Table of Contents l Only required if this is a large plan. l l A guideline to follow is that if the plan exceeds 12 pages, it needs a table of contents. Other introductory sections, such as a list of tables and acknowledgments, are best used in books and other large documents l They should not appear in your e-business plan. 19

Appendices l Be very conservative in deciding whether you need an appendix. l l For example, should a reader rip away and discard an appendix, would you fear that your plan is now incomplete ? If so, that material should not be in an appendix. Some materials appropriate for an appendix are: l l Brief one-page résumés of the owner(s) and senior managers A detailed competitor analysis to support the summary analysis in the plan itself. A complete list of products and/or services to supplement the highlighted list in the plan itself. If an overview of the plan is being presented concurrent with the delivery of the business plan, you can include a copy of the Power. Point slides as an appendix. 20

Formatting an E-Business Plan l l l References Headers and footers Page numbers Fonts, line spacing, and margins Spelling, grammar, and punctuation Binding 21

References l l Fewer references than a university research assignment. Almost all the words in the plan will be your words, not quotes or ideas taken from other sources. l l l This is your plan for a unique business idea If necessary, integrate the reference into the report itself Or cite the source, in full, in a footnote 22

Headers and Footers l l l Each page should have a header that identifies that page as part of your e-business plan. The best way to do this is to put an abbreviated title (e. g. , Purma Top Gifts Business Plan) in the upper left corner. Use section breaks in your word processor to put section titles (e. g. , Executive Summary, Business Description) in the upper right corner of each page. 23

Page Numbers l l Should not begin until the plan begins. A title page never includes a page number. If page numbers are required for a Table of Contents, the Executive Summary, or other introductory material, they should be non-Arabic numbers (e. g. , i, iii). Page numbers (e. g. , 1, 2, 3) begin at the Business Description page and continue to the end, including any appendices. 24

Fonts, Line spacing, and Margins • An easy-to-read font is essential • Traditional fonts such as Times Roman and Palatino have serifs (the little extensions of the line that are especially prominent on letters such as s and I). • Serifs help guide the reader's eye across the page, and a serif font gives a traditional look and feel to your plan. • A sans serif (without serif) font, such as Arial and Helvetica, tends to look more modern and contemporary. • Use a 12 -point font size. • Because you should not assume the person reading the plan has eyes as good as yours 25

Spelling, Grammar, and Punctuation l Misspelled words are one of the biggest turnoffs an investor can see in a business plan. l l l Indicate a plan that has been hurriedly finished or a lack of care, attention, and education by the plan's author. Avoid misspelled words by using a spell checker, reading your plan carefully, and asking one or more friends to read the plan for you. Proper grammar and punctuation are also critical for making a positive impression. 26

Binding l At the top end, a professional business plan might be spiral bound with a clear plastic front cover and a hard back cover 27

Resources for Writing a Professional Business Plan l l The Business Writer's Handbook, Sixth Edition, (St Martin's Press, 2000) The Elements of Business Writing: A Guide to Writing Clear, Concise Letters, Memos, Reports, Proposals, and Other Business Documents (Longman, 1992) The Wall Street Journal Guide to Business Style and Usage (Free Press, 2002) The Publication Manual of the American Psychological Association, Fifth Edition, (American Psychological Association, 2001) 28

Lesson 4: Executive Summary 29

What Is the Executive Summary? l A synopsis of the key points of the entire ebusiness plan. l l To explain the fundamentals of the business in a way that both informs and excites the reader A miniature version of the e-business plan, the summary usually contains a key point or two from most sections of the plan 30

What is not an Executive Summary l l The executive summary is not just a brief description of the business and its products. The executive summary is not an outline of the plan. The executive summary is not hype. The executive summary is not a cut-andpaste exercise. 31

Content of the Executive Summary l Write the content of the executive summary with the intended reader in mind l One effective way to begin the executive summary is with an interesting and compelling statement that grabs the reader's attention. l This could be an interesting, very short story, a question, or a startling statistic. (check the Purma case in the tutorial) 32

Length of the Executive Summary l Only one answer to the question "how long should an executive summary be? l l The answer is “short” The executive summary should be at least one page and not more than two pages in length. 33

When to Write the Executive Summary l Start the executive summary in the middle of the plan-writing process and finish it last l If the executive summary is put off until the last minute, you are likely to write it in a hurry and not write a coherent statement of the business plan's contents. 34

Assignment 1 l l After you have written the competitor analysis, draft a one- to two-page executive summary (you will be reminded of this at the end of that lesson). Then review and finalize the executive summary at the end of the tutorial (a reminder will be included at the end of the last lesson) Postponed until you finish assignment for competitor analysis 35

Lesson 5: Business Description 36

Outline l l l What Is the Business Description? Business Concept Business Model: Products and Services 37

What Is the Business Description? l The business description describes the nature and purpose of the business l l l To objectively explain and justify your business idea in a positive and enthusiastic manner It delivers its content in a straightforward and informative manner, but with an upbeat and inspirational tone Includes two sections l l Business Concept Section l Gives the reader the big picture about what the business will do and how it will succeed Products and Services Section l A concise description of what the business will sell or deliver to the customer 38

Business Concept l l l Industry Analysis Mission Statement Business Goals Project Objectives Value Proposition 39

Industry Analysis (1) l l An industry analysis defines the industry in which the business will operate, and uses reliable and objective data to show the future prospects of the industry and, by implication, the business Sources of information for the industry analysis l Research companies l l l Dun & Bradstreet, Standard & Poor's Investor Services, and the Risk Management Association Trade and industry journals Government publications 40

Industry Analysis (2) l Don't expect to find perfect information in the time you have to complete this analysis l Be honest and don't exaggerate In most e-business plans, the industry analysis does not have to be very extensive l l One page should be enough, perhaps two pages if you include graphs or tables An extensive industry analysis may be required for the following cases l If the industry is new and unfamiliar to the reader, if the business intends to be a major player in the industry Also an opportunity to write a "company analysis" for a business case 41

Mission Statement (1) l Mission statement state the mission of your business and provide a brief justification and explanation about the importance of this mission l l l Perhaps in light of the industry analysis just presented It may change slightly as you continue to develop your business idea, but it should also be complete and accurate enough to guide the formation of goals and the value proposition that follows In the business case, mission statement explains how the e-business initiative will contribute to the fulfillment of the company's mission 42

Mission Statement (2) l l Mission statement is a declaration of what a business aspires to be It is also an important exercise because the mission statement appears early in the plan and is a starting part for defining the business and writing the plan 43

Mission Statement Lesson l Outline l What Is a Mission Statement? l l l Mission Statement Characteristics Mission Statement Examples How to Write a Mission Statement 44

What Is a Mission Statement? l Mission statement is a declaration of what a business aspires to be l l The business's reason for being, A proclamation of why it exists, A clarification of who it serves, and An expression of what it hopes to achieve in the future 45

Writing a Mission Statement l Helps clarify the following questions l l What business are we really in? What type of business do we want to be? What is our target market? What inspires us? 46

Characteristics of Mission Statement (1) l Visionary l l Broad l l Contain wording such as “to be the best” “the highest quality” Should not limit a company’s area of service. Especially in the fast-paced world (Classmates. com) Realistic l l Does it overpromise? Does it give any indication of what the e-business is about? Microsoft changed its mission statement from "To empower people through great software—any time, any place, and on any device" to "To help people and businesses throughout the world realize their full potential. " 47

Characteristics of Mission Statement (2) l Motivational l l Short and concise l l l Inspires commitment among employees, customers, partners, and funding agencies about what this company will do or produce No longer than 25 words Fit on a T-shirt (Peter Drucker) Easily understood l Use plain language that is convincing and easy to understand l Grandmother test 48

Mission Statement Examples (1) l Mc. Donalds: “ To be our customers’ favorite place and way to eat. ” l J. Sainsbury: “At Sainsbury’s we will deliver an ever improving quality shopping experience for our customers with great product at fair prices. We aim to exceed customer expectations for healthy, safe, fresh and tasty food making their lives easier every day. ” 49

Mission Statement Examples (2) l Levi-Strauss: "We will market the most appealing and widely worn casual clothing in the world. We will clothe world. " l OHCHR(聯合國人權事務高級專員公署): "The mission of the Office of the United Nations High Commissioner for Human Rights (OHCHR) is to protect and promote all human rights for all. “ l Success Networks: "Our mission is to inform, inspire, and empower people and organizations to be their best—both personally and professionally. " 50

How to Write a Mission Statement (1) l Resource l l l The Mission Statement Book: 301 Corporate Mission Statements from America's Top Companies Obtaining a Mission Statement is an inclusive task In the beginning, brainstorming l l l List 5 to 10 words or phrases that describe your business List 3 to 5 words or phrases that describe the company's ideal image from a customer's point-of-view. List 3 to 5 words or phrases that describe the company's ideal image from a management and employee point-ofview 51

How to Write a Mission Statement (2) l Temper (鍛鍊) the vision from brainstorming with a focus on the purpose of the business: l l List the market opportunities and/or customer needs that your company intends to address (value proposition) Who are your customers? List the company's primary and secondary target markets (target market) With your customers in mind, list each service or product your business will provide List 3 to 5 measures of your business' success 52

How to Write a Mission Statement (3) l Writing the statement in a group exercise can be difficult l l Each member of the group should write a draft statement to share with others If no perfect one, settle on an imperfect statement and come back later 53

Handling of Mission Statement l May produce more than one mission statement l l l Some could be used in business goals, and subsequent lessons Some could be a good motto, slogan, …. . May have two mission statements l l One for external, and One internal mission statement for employees l Example: Mc. Donald’s orientation for employee "quality, service, cleanliness, and value" 54

Assignments (4/21 報告) l l Assignment 2: Identify the industry within which your e-business will operate and write an industry analysis Assignment 3: Draft a mission statement for your e-business. Include a paragraph or two that explains or justifies the mission statement 55