Make a Business Plan
Today's Snack: Have a peanut butter and jelly sandwich. But first, plan how to make
it. Step by step, either write down or tell someone how you will make that
sandwich. Leave nothing to chance! Don't "jump over" steps. See how deliberate
you have to be? It's the same way with a business plan.
Print out the words and definitions listed below
on pieces of scratch paper,
folded up and dropped into a hat or jar
Scratch paper and pencil
First, get a "chairman of the board" - a responsible adult who loves
you. A board chairman is there for wisdom and advice, but the president of a
business - that would be you - is the one who does all the action.
But especially since you
are a minor, you must have an adult alongside you every step of the way. Nominate your parent or other family
member as your business consultant. That person should have input on your plan.
But you can seek advice and ideas from your friends and anyone else you'd like.
Just make sure your parent is informed, always knows where you are and how you
can be contacted, and is always in the loop, for your own protection.
your "chairman" what business you are thinking of starting. Try to think of a
catchy name that is memorable and still a little bit dignified or professional.
Now pull out these
business vocabulary words and definitions one by one from a hat or jar, and
brainstorm about them, along with your "chairman" or other students. These will
be sections of your business plan. Divide them into three piles to help you
make your plan later: finance, materials and marketing.
is anything having to do with money.
Materials is having to do with the things you are going to use to sell your
product or service.
Marketing is how you are going to position your product and service, let people
know about it, and sell it.
Once you have pulled out
all the words and put them in the proper piles, you can write the first draft
of your business plan.
Start with your mission
statement - a one-sentence description of your business. Add a paragraph of
background information about yourself and your special qualifications.
Add a paragraph each about
finance, materials and marketing - how you intend to go about operating your
business. Include a statement about how or why your product or service will
fill a need or solve a problem, and how or why you will do it better than
Also include information
about any problems or obstacles that you foresee and how you will overcome them.
For example, if you plan a carwashing business on Saturdays, what will you do
if it rains every Saturday for a month?
Include a few dates - when
you will start, why you will "break even" and start making more money than you
put into it, and when you intend to quit, if ever.
Here are the words and
definitions to cut apart, put in a jar, mix up, and read aloud:
Business equipment - computer? Phone? Color printer? Digital camera?
Promotional items - business cards, flyers, brochures, a sign, webpage,
social networking account
- numbers that show an estimate of your expenses and how much money your
business will make in profit
Cash flow - how much money will be coming into, and out of, the business
Working capital - how much money you are starting with
- a lower cost of materials that you need to buy in order to get your product
or service ready for the market, OR a lower price that you will charge for your
product or service to certain customers if they buy a lot of your products or
if you have a lot of products on hand and want to sell them cheaper to get rid
- the costs that your business will have in order to operate
if you can borrow money to start or expand your business, and afford to pay it
back, with interest, as your business grows
- a person or bank who gives you start-up money to add to your own (in this
case, probably your parents!)
- the money that comes in to your business from sales
- a written document, like a bill, that you give to a customer that shows the
cost of the goods or service that you did for them; you keep a copy, and so do
Equipment and supplies - list the items you will need in order to make your
product or perform your service; where you can buy them at the cheapest price;
where you will store them; how you will take care of them
Advertising - messages in a publication or other media outlet that you pay for, in
order to let people know about your product or service
Publicity - free media coverage that someone else gives you that helps introduce
you and your product or service to the public
Promotion - activities other than paid ads or free media coverage that help you
get the word out about your business, such as marching in a parade with a
banner, having a booth at a crafts fair, or giving a speech to a civic group
- the difference between your cost (how much money you have to spend to
accomplish each product or service) and how much you charge for the finished
item; this is often expressed as a percentage, so if your actual cost for a dog
shampoo is $1 and you charge $5, your mark-up is 400%
Net profit - how much money you have left from a sale after you have deducted
Inventory or stock - the items that you have made that are for sale
Wholesale - the cost of items when you sell them directly to others, including
stores, for them to mark-up and sell; if you do this, then your wholesale price
will be somewhere between your actual cost and a reasonable retail price that
could be charged for the item or service