Business Plan Guide
to accompany
Small Business Management:
Entrepreneurship and Beyond
6th Edition
Timothy S. Hatten
Colorado Mesa University
Elements of the Business Plan
Suggested length
Cover Page 1 page
Table of Contents 1-2 pages
I. Executive Summary 1-2 pages
A. Mission Statement
B. Company Information
C. Market Opportunity
D. Financial Data
II. Description of Your Company and Industry 3-5 pages
A. Company Background and History
B. The Industry
III. Description of the Product or Service 3-4 pages
A. Description of the Product or Service
B. Competitive Advantages
IV. Market Research and Evaluation 2-4 pages
A. Markets
B. Market Trends
C. Competition
D. Market Share
V. Marketing Plan 12-15 pages
A. Market Strategy
B. Product
C. Pricing
D. Promotion
E. Place
F. Service Polices
VI. Manufacturing and Operations Plan 5-6 pages
A. Production
B. Geographic Location
C. Facilities
D. Make or Buy Policy
E. Control Systems
F. Labor Force
G. Training
H. Staffing Plan
Suggested length
VII. The Management Team 2-4 pages
A. Identification of Key People
B. Succession Plan
C. Management Philosophy
D. Business/Organizational Structure
E. Identification of Firms Assisting the Company
VIII. Timeline ……………………………..1 page or a table
A. Key Events
IX. Critical Risks and Assumptions 2-4 pages
A. Risk Management Strategies
X. Benefits to Community 1 + pages
A. Economic Development
B. Community Development
C. Human Development
XI. Exit Strategy 1 page
XII. Financial Plan………………………………………………………….. 3 pages of text (and appropriate spreadsheets)
A. Sources and Uses of Funds
B. Financial Practices
C. Cash Flow Statement
D. Cash Budget
E. Profit and Loss Statement
F. Breakeven Analysis
G. Financial Ratios
H. Intangibles--Intellectual Property
Appendices (as needed) ……………………………………………….Varies by appendix
A. Resumes/Biographies of Key Personnel
B. Advertising Samples
C. Organizational Chart
D. Customer Profiles
E. Competitor Profiles
F. Product Profiles
G. Site Study and Store Layout
H. Financial Statements
I. Global Issues
I EXECUTIVE SUMMARY
For help in completing this section, check SBMEB pp. 86-87.
Suggestions for writing Executive Summary section
1. Think of this one- to two-page overview as the business plan in miniature. While there are a number of sections to it, each may only be a few sentences or paragraphs long. Note the example Figure 4.1(a) on page 88 is a way to condense information.
2. Write this section of the business plan last. Some will tell you to write it first to help focus your effort to build confidence as you tackle the plan, etc. Good reasons all. But in terms of economy of effort it will take far less time if you write it last. As you write the body of the plan, try highlighting key ideas/sentences in the various sections. Use these to write your Executive Summary. Also, as a summary of the key elements, you can’t really write it before you have all the key elements, which you won’t have until you’ve done a significant amount of work on the business plan.
3. Logically, we’ve placed the Executive Summary first - that’s where it will appear in the final document- but you should really write it after you’ve written and revised the entire plan.
4. This is your opportunity to make a good first impression. Often investors decide in a few minutes, while reading the Executive Summary, whether to read on and/or invest. This is the critical element of the business plan. Therefore:
· make it concise; two pages maximum in length.
· emphasize only the important elements of the business.
· make the financial request clear. How much is needed, how will it be used in the business, and how/when will it be repaid?
· write to capture the readers’ attention, to spark enthusiasm for your business.
5. Investors want to know who your attorney and accounting firms are. If you don’t have them, establish the relationships now.
6. Are there any international considerations for your business, either as potential markets or potential competitors?
Resources needed to write your Executive Summary
Start with a draft copy of the completed business plan with spreadsheets. Writing is ALWAYS made better by going through revisions. Lacking that, you will need the following items:
1. A paragraph-long mission statement worked out in advance.
2. Historical information on the company, when it was started, by whom, etc.
3. Quantified company-level goals and objective(s).
4. Biographies or resumes of the management team with their unique strengths highlighted.
5. Product/service description materials.
6. Market research information on the potential market and target market.
7. A justified estimate of the capital you need and a plan for repaying it. How much is needed and how did you determine the amount?
8. Financial data on:
size of the market in units and dollars.
projected revenues, profits, assets, and liabilities.
Read the questions under each heading. Choose which questions will apply to your business plan. Then write any notes, your responses to the questions, etc., in the box that follows the questions.
Mission Statement
For help in completing this section, check SBM:EB pp. 66-67 (mission statement), pp. 55-56 (corporate ethical responsibilities), and pp. 222-223 (for capital requirements).
1. Why does your company exist?
To serve a customer, to make a profit (of course), but why else?
2. What are the guiding principles or values for your company?
How will you do business?
What is your position on the environment, diversity, community responsibility, etc.?
What is your responsibility to your customers, to your investors?
Company Information
For help in completing this section, check SBM:EB p. 76-78 (setting objectives) and pp. 69-75 (competitive advantage).
1. Objectives - What is it that you want to accomplish, and by when? They should be stated in such a way that their accomplishment creates a competitive advantage.
Do you have any international aspirations?
2. What is/are your competitive advantage(s)?
3. Company history – give the background of the company.
4. The management team--who are you, and who are your key people?
Market Opportunity
For help in completing this section, check SBM:EB pp. 93-95, 276-278.
1. What is the expected size and growth rate of your market?
2. What is your fundamental marketing strategy?
Cost leadership.
Differentiation.
Focus.
Or....
3. What relevant industry trends should your investors know about, early in this plan?
Financial Data
For help in completing this section, check SBM:EB pp. 97-103, 222-226.
1. The financial request
How much do you want? How will you use it?
How much debt and equity? Number of investors sought?
What are the terms of the deal you are offering investors?
What return are you offering?
2. Tables
Summary of 3 years actual, 3 years projected
Actual 20xx Projected 20xx
Revenue _____ _____
Net Income _____ _____
Assets _____ _____
Liabilities _____ _____
Net Worth _____ _____
Summary of Financing
Current Amount Amount Needed
Debt _____ _____
Debt with Warrants _____ _____
Convertible Debentures _____ _____
Stock--Preferred and Common _____ _____
II DESCRIPTION OF THE COMPANY AND INDUSTRY
For help in completing this section, check SBM:EB pp. 92-93, 91-92.
Suggestions for writing this section
1. The following sections are where you elaborate and explain the information provided in the Executive Summary. Be sure to cover in more depth everything you raise in the Executive Summary.
2. Accuracy and realism are important here.
Do you know how your company and your product/services are perceived relative to competitors? Describe the areas that are rock solid and those that are shaky.
3. Write this section of the business plan first. Use it to remind yourself of where you’ve done well and what didn’t work.
Your initial draft should be thorough, with no detail left unmentioned.
Once you’ve written this, then review and edit.
4. Emphasize the accomplishment of significant objectives.
You want the business to be attractive but not “too good to be true.”
5. Don’t forget it is also important to reveal any key negatives, problems, or failures.
Every investor knows there is a downside.
Be honest about yours. It will build trust.
It shows a realistic approach to doing business.
6. It is very important that this section shows how your company is different from others.
It is also critical that you demonstrate to your investors that you have substantial evidence to support your claims.
7. If you provide a service, be certain your reader understands what that service is and how it is used by your customers.
8. Be succinct. The industry portion provides background for later portions of the plan.
Clarify market attractiveness.
Describe key success factors.
Leave elaboration for later.
Resources needed to write this section
1. A history of your company including why and how you started. Note key events.
Show key events and dates.
Consider putting it into chart form.
2. Your charter, tax papers, or incorporation papers that show the legal form you’ve chosen.
3. Have a product specification sheet or FAB (features, advantages, benefits) sheet on the product/service.
4. Be able to state your competitive advantage in a paragraph or less. If you can do it in a sentence, that’s even better. See pages 66-68.
5. A list of your objectives, preferably in quantified terms.
6. A list of key success factors, such as: price, quality, durability, dependability, technology, etc.
Be sure to identify key factors as they pertain to your product/service. A generic list is a warning flag to investors.
7. An assessment of your intangible assets.
Your Company
1. A history of operation. (Even for a startup, you have some ‘history.’)
The legal form of the company.
Why does your company exist?
Describe in some detail what your company does and how it satisfies customer needs.
How did you choose the product or service you sell?
What significant successes have you had? What significant failures or losses have you experienced?
Concentrate on the successful accomplishment of past objectives, but be honest about the risk.
2. Highlight significant financial and operational events.
When did they happen?
Why were they significant?
3. Intangible assets.
For help in completing this section, check SBM:EB pp. 146-147.
Goodwill.
Established name/reputation.
The Industry
1. Explain the nature of the industry.
Overview of the historical development of the industry.
Note any special events, governmental action, or economic events that have altered the industry in the last ten years. Don’t make a laundry list; note the most important events only.
Provide industry data such as market size, growth trends, and competitive strength of major firms in the industry.
Are there seasonal fluctuations in demand?
Address the importance and impact of strategic issues such as: ease of entry and exit, ability to achieve economies of scale, cyclical nature of the economy or sales cycle, etc.
What are industry trends regarding the use of technology?
How does the future look for the entire industry?
Are there any international issues? Are companies moving offshore? Are international competitors coming into the industry?
2. Who could compete with you by offering either a competitive product or by offering a substitute for your product?
3. What is the current state of the art in the industry?
How does your product/service reflect this current state or exceed it?
What do you need: what will you do to succeed in your chosen market?
What are the current applications of your product/service?
What are the potential applications of your product/service?
III DESCRIPTION OF THE PRODUCT OR SERVICE
For help in completing this section, check SBM:EB pp. 291-295.
Suggestions for writing this section
1. This is what your business is all about, the product or service that you offer the market.
Describe all products or services in terms of benefits customers seek.
2. Investors want to know what makes your products different, why customers will buy from you.
Price.
Differentiation.
Quality.
3. Along with product or service differences investors want to know what gives you an edge, a competitive edge regarding your products. This topic is covered later as well, but write here how your products or product line contributes to your competitive advantage.
4. Be careful to explain how your customers use your product or service. Do not assume that it is apparent to investors.
5. While you are writing to raise capital for now, think a bit into the future.
What new applications or uses are there for your product?
6. If you provide a service, be certain your reader understands what that service is and how it is used.
Resources needed to write this section
1. Profiles and data on each of your products or service.
2. A target market description emphasizing the benefits customers want.
3. Have a product specification sheet or FAB (features, advantages, benefits) sheet on the product/service.
4. Be able to state the competitive advantage of each.
5. A new product development plan with timeline.
6. A Boston Consulting Group matrix or similar matrix depicting viability of each existing product and product line.
7. An assessment of where each product is in the product life cycle.
Description of the product/product line.
1. Reference the appropriate appendix for diagrams, photos, and/or technical data.
Describe in terms of features that distinguish the product (line) from competitors.
Identify the needs/benefits that the features meet for your target market.
2. Product growth potential.
Where is each product in terms of the product life cycle (PLC)?
How are you managing the PLC for each product?
3. Applications of the product/product line.
How is it used?
How else might it be used? How could that/those use(s) be exploited?
What potential new products might these suggest?
4. Planned new products.
What new products?
Why are you developing them?
When do you plan to bring them out?
What target market(s)?
Competitive Advantage(s)
For help in completing this section, check SBM:EB pp. 12-14, 296-7.
1. How will you build your competitive advantage?
Close relationship to customers.
Devotion to quality.
Attention to convenience.
Innovation.
Dedication to customer service.
Flexibility.
2. What is the basis of your competitive advantage?
What is the economic forecast for your geographic area for the next year, the next five years?
IV MARKET RESEARCH AND EVALUATION
For help in completing this section, check SBM:EB pp. 93-95, 281-286.
Suggestions for writing this section
1. In real estate the key is location, location, location. In a business plan the key is evidence, evidence, evidence. The content here will make or break your plan. This shows whether you know what you are writing about or not.
2. There are a number of resources available to the small businessperson that are either free or relatively inexpensive.
Trade associations and journals.
Chamber of Commerce.
Competitors’ sales literature.
People--customers and sales representatives.
3. Venture capitalists look for a well-thought-out plan. Thoroughness here demonstrates the degree of effort of thought and “homework” done on the business.
Be specific when describing the target market. Explain in detail.
Document, prove, cite evidence.
4. Write in terms of benefits sought by the customer as much as possible. Customers buy benefits.
5. Be enthusiastic and realistic when describing the potential market. No one can capture 100% of any market.
6. The market research you present here is critical. You need solid evidence to back up your business plan. While market research may be a relatively brief part of this section, it is the backbone of your plan.
Don’t hesitate to use others’ studies. There are numerous marketing publications, journals, and government/academic studies available in local libraries on almost any market segment.
Your local Chamber of Commerce may have a demographic/economic/socio-graphic study for your community or region as a service to local small business.
7. You may identify your market a number of ways. Be sure the way you choose fits your business and product/service.
Demographics--quantifiable characteristics: age, income, education, gender, etc.
Psychographics--interests, values, beliefs, etc.
Sociological--family structure, ethnic values, etc.
Geographics--location, location, location.
8. What you write here will be important to your marketing plan, your timeline, and the explanation of critical risks sections of the rest of your plan.
9. Don’t forget to do a thorough job of competitor analysis as well as looking at your markets.
10. Your responses to the competitors should be customer-focused responses.
Resources needed to write this section
1. A copy of your Executive Summary, to ensure that you now detail everything you mentioned there and that you don’t add anything that should also be referenced in the Executive Summary.
2. Any market research studies you’ve conducted or secondary market research you’ve collected about your business and market.
3. A customer profile consisting of a picture or verbal description of your target market. Advertising professionals often create a portfolio, complete with a picture of their ‘”typical customer” in order to keep focused and in tune with the customer.
4. A copy of your company goals and objectives, to ensure your marketing effort stays in line with your company strategy.
5. An outline of your competitive advantage(s).
6. A competitive profile on each important competitor which includes:
Why they are a competitor.
Sales volume in units and dollars and market share.
Their apparent market strategies.
A SWOT analysis of each competitor.
Their competitive style--aggressive, conservative, etc.
Probable future actions in your market.
7. An analysis of your competitors’ advantages over you in the following categories:
Price.
Performance.
Durability and versatility.
Speed or accuracy.
Ease of: a) use; b) maintenance; and c) installation--including cost of installation.
Product features including size or weight and styling or appearance.
8. An analysis of your advantages over your competitors in the same categories listed above.
Markets
For help in completing this section, check SBM:EB pp. 273-281.
1. What market research have you conducted or found about your customer?
Detail either the sources of your information or how you deduced it.
2. Who are the potential buyers for your products? Describe the customer according to any of the following or any combination:
demographics.
psychographics.
sociologically.
geographics.
3. How many potential customers are there?
What percentage can you realistically capture?
This is critically important to the justification of the financial forecasts that will follow.
4. Why do they buy?
What is their primary purchase criterion: price, quality, availability, convenience, or...?
Are there price tiers in the target market?
What features do they seek? What benefits do they want?
Do they have a preference as to how and where they buy? How strong is it? How will you change it?
5. What are the potential annual purchases?
How do the customers decide to buy?
How often do they buy?
What is the buying cycle? Is there seasonality to your market?
Is demand tied to any other product/service, i.e. online music sales to MP3 player sales?
6. What do they buy?
Price--how much will changes in price affect your customers’ purchases? Important to know in advance.
Quality--will they pay more for better quality?
Image-- is brand name important?
Are customers brand loyal?
7. Describe the overall market
Does the research show a profitable market for your business, product/service? (Remember size or lack of service to a market does not automatically imply opportunity. No one may be serving that market for a reason.)
Location and size, in number of customers and sales dollars. Is the market growing?
Growth rate, trends.
Provide a table of projected industry sales in this market.
Project your market share, best case, worst case, most likely case. (This is important to your financial forecasts later.)
Year Year Year Year Year
20XX 20XX 20XX 20XX 20XX
Revenues _____ _____ _____ _____ _____
Best Case Percent Growth
Revenues _____ _____ _____ _____ _____
Most Likely Case Percent Growth
Revenues _____ _____ _____ _____ _____
Worst Case Percent Growth
Projected ____ _____ _____ _____ _____
Market Share
Market Trends
For help in completing this section, check SBM:EB pp. 93, 96-97, 322-327 .
1. How might the economy affect sales of your product/service?
What is the economic forecast for your geographic area for the next year, the next five years?
2. How might government programs, policies, or legislation affect your industry, business, or product/service?
3. How might technological factors affect your product/service sales?
4. What social/cultural factors might impact your sales?
Changing demographics of market segment: aging, moving, increasing/decreasing incomes.
Changing social structure, i.e., increase in single working parents, might result in an increased need for quick, inexpensive prepared meals that can be heated and eaten.
Changing values.
5. How will you track these trends? How will you continually evaluate customer needs?
Competition
For help in completing this section, check SBM:EB pp. 63, 69-75.
1. Who are your primary existing competitors?
List the top 3 or 4, with a sentence explanation of why each is a competitor. (Region, price, similar product, etc.) to accompany Figure 3.3 in SBM:EB p. 70.
Identify the price leader, quality leader, and service leader.
2. Conduct a Strength and Weakness Analysis on each primary competitor.
How will you counter their advantages/strengths, exploit their weaknesses?
3. What distinguishes their product/service from yours?
Features and Benefits.
Price.
Product performance.
Other relevant product attributes.
4. What are their apparent strategies in developing the market? Product development.
Pricing.
Distribution.
Promotion.
5. What are your company’s comparative strengths and weaknesses?
6. Who are your potential competitors?
Why would they enter your market(s)?
When would they enter your market(s)?
How might they enter, position themselves?
7. What are the barriers to entry for new competitors? (Not all will apply: which are key?)
Economies of scale--a new company will not have the cost efficiencies of an established firm.
Product differentiation--strong brand identification or customer loyalty can be a problem.
Capital requirements--is there a significant up-front cost: physical plant, inventory, equipment, etc.?
Switching costs--to the customer. Sometimes with system-type products, the customer must change more than just one item.
Regulatory environment--are there regulations, federal, state, or local, that are difficult to meet?
Market Share
For help in completing this section, check SBM:EB p. 274-278.
1. Quantify, where possible and appropriate, i.e., amount of revenue, size of market share, etc.
2. Sales forecast
What is the nature of the sales cycle: long or short, simple or complex?
Provide, in chart form, your sales forecasts for the current year, next year, for a total of five years out.
What is the average sale?
Forecast projections in terms of best case, worst case, most likely case.
Project sales in terms of units, revenues--gross and net.
See Appendix H1 at the end of this document for templates.
Sales Forecast Table
Year Year Year Year Year
20XX 20XX 20XX 20XX 20XX
Best Case
Dollars _____ _____ _____ _____ _____
Units _____ _____ _____ _____ _____
Most Likely Case
Dollars _____ _____ _____ _____ _____
Units _____ _____ _____ _____ _____
Worst Case
Dollars _____ _____ _____ _____ _____
Units _____ _____ _____ _____ ____
V MARKETING PLAN
For help in completing this section, check SBM:EB pp. 346-351.
Suggestions for writing this section
1. This is a strategy and tactics section. You need to detail your marketing strategy for each component and then offer how you will accomplish it.
Example of a price strategy “…to be the low cost provider to our customer market through discount pricing and incentive programs.”
Example of a price-related action plan (to be detailed in a later section) “During our peak season we will under-price competitors by 10%. During the months of _____ to _____, our slow period, we will use a rebate incentive program directed to distributors to encourage their “pushing” of XYZ product line.”
2. Remember, strategy is simply explaining your company’s overall approach for achieving growth and profits.
3. Tailor this section to your business. Some sections are not relevant to a manufacturing business, others to a service business, etc.
4. Be sure to review what you have written so far so that your actions here match your earlier projections.
5. In this section, you need to deal with both marketing and selling.
Marketing is the identification of your customer.
Selling is convincing those customers to buy from you.
Resources needed to write this section
1. A copy of your mission statement, goals, and objectives.
2. A cost analysis for each product/product line.
3. Your media budget and plan.
4. If you are a manufacturer, an outline of your production plan.
5. If you are a service business, a list of your suppliers with any special qualities.
Market Strategy
For help in completing this section, check SBM:EB pp.177, 296-7.
1. Briefly review your overall marketing strategy as stated in your Executive Summary.
Cost leadership.
Differentiation.
Focus.
2. What marketing tactics will you use?
Market penetration, market development, product development, market segmentation.
Product
For help in completing this section, check SBM:EB pp. 291-297.
1. Describe the level of product satisfaction for which you are striving. See Figure 12-1 SBM:EB p. 291
Core benefit.
Generic product.
Expected product.
Augmented product.
Potential product.
2. What type of new products will you develop?
New to the world.
New product lines.
Additions to existing lines.
Improvements, revisions, or new uses of existing products.
Repositioning.
Cost reductions.
3. Packaging.
Is this an issue for your products?
How does it affect your cost structure?
Are there environmental issues to consider?
Pricing
For help in completing this section, check SBM:EB pp. 94, 346-360.
1. What is your pricing strategy?
How price sensitive is the market?
Low cost, premium pricing, . . . .?
Why this strategy?
2. How is pricing determined?
Costs plus.
ROI.
Competitive parity.
3. What are your margins? How will you make a profit?
Promotion
For help in completing this section, check SBM:EB pp. 94, 364-372.
1. How will you attract customers? What type of advertising promotion will you use?
National versus regional/local.
Print or electronic.
What promotions will be used?
Trade shows.
Direct marketing.
Public relations.
2. Advertising plan.
What media will you use? Why?
How will you use public relations in your promotion plan?
Scheduling plans.
3. Budget.
What percentage of sales will you spend on promotion?
What budgeting method will you use? Why?
Refer to detailed budget in your appendices.
4. Consider including samples in your appendices.
advertising copy
brochures
5. How will you assess the effectiveness of your promotional efforts?
Place
For help in completing this section, check SBM:EB pp. 94-5, 319-327 (location analysis), 453-459 (wages and incentive programs).
1. How will you distribute your products?
Your own sales force.
Independent sales representatives.
Agents or brokers.
2. How will you compensate the sales force?
3. How will you structure the sales force, their territories, the product lines, etc.?
4. Sales plan.
Sales budget--how did you determine your budget? Task and objective method, parity, or . . . .?
Sales philosophy--how will your sales force approach the customer?
Refer to detailed budget in your appendices.
5. Transportation.
Types.
Costs.
Means--company vehicles, rail, truck, etc.
Service Policies
For help in completing this section, check SBM:EB p. 91, 291-293.
1. What will be your customer service/product service policies?
Warranties.
Handling of customer problems.
2. How will you identify and track your most important service issues as they develop?
VI MANUFACTURING AND OPERATIONS PLAN
For help in completing this section, check SBM:EB pp. 95, 471-473.
Suggestions for writing this section
1. This portion of your plan applies to your product. If you are a service company, some sections, such as facilities, control systems, labor force, etc., apply to you, but not all.
2. Investors are looking for:
the age and condition of your facilities and equipment.
the rationale for the location of your facilities.
labor costs.
potential labor issues.
3. Investors prefer as little overhead and inventory as possible. Money tied into physical plant or inventory isn’t making money. But they will invest in equipment and facilities that make money.
4. Control systems are key to holding down costs. Be thorough and clear as to your control systems and why you chose those systems.
Resources needed to write this section
1. Description of your facilities.
2. Data on wage rates, taxes, etc., for the area and comparative data for other areas to show how effective your decisions were.
3. Maps showing locations of key markets in respect to your facilities’ locations.
4. Labor contract if your workforce is unionized.
5. Any demographic study of the local labor force.
To help you plan for any diversity issues in your workforce.
If you become a federal contractor or are seeking federal funds for your company, you may have to show how the diversity of your workforce matches the local economy.
Production
1. What is your production process?
Do you produce, or is the product produced for you?
What are your production requirements in terms of:
a. Labor.
b. Equipment.
c. Facilities.
d. Materials.
e. Transportation/shipping.
Consider offering a flow chart.
2. How will production levels be determined?
Explain your production forecasting.
Your purchasing control processes.
Geographic Location
For help in completing this section, check SBM:EB pp. 94, 317-342.
1. Where will your plant be located?
Explain the advantages and disadvantages in terms of labor costs, proximity, taxes, utilities, etc.
Stress the advantages key to your business.
Facilities
1. What are your requirements of a building – amount of square footage in office, production, storage, parts inventory, specialized area?
Make or Buy Policy
1. What will you produce, and what will you buy? Why?
2. Describe your suppliers or subcontractors here.
What are their terms?
What percentage of their business do your orders represent?
Control systems
For help in completing this section, check SBM:EB pp. 78-79, 94, 469-70, 306-311 (inventory control).
1. What is your quality control process for quality checking suppliers’ deliveries?
2. What is your inventory philosophy?
How fast can your suppliers deliver?
How much inventory will you carry, and what statistical tools will you use to manage it?
3. What is your quality control process?
For help in completing this section, check SBM:EB pp. 483-487.
Labor Force
For help in completing this section, check SBM:EB pp. 421-424 (motivating employees), pp. 249-255 (legal considerations).
1. What is the state of the labor pool?
Training
1. What kinds of employee training will you provide?
For help in completing this section, check SBM:EB pp. 434-442.
2. Training costs/budget.
Staffing Plan
For help in completing this section, check SBM:EB pp. 438-445 (recruiting and selection 453-460 (wages and benefits), 249-255 (employment law).
1. Current employees.
Number, level of experience, education, and training.
Compensation and benefit plan.
Labor relations issues.
What union representation?
If nonunion, union avoidance strategy.
2. Proposed hires.
When will you add personnel?
Identify positions in order of priority.
Where will you find these employees--local, regional, etc.?
Training programs.
Compensation and benefit plan.
Labor relations issues.
EEOC issues.
a. Is diversity likely to be an issue?
b. Does ADA impact your company? If so, how are you ensuring compliance?
VII THE MANAGEMENT TEAM
For help in completing this section, check SBM:EB pp. 406-425.
Suggestions for writing this section
1. People, not ideas or products, make a company successful. This is probably the most important section of your plan, since most small businesses fail due to poor management.
2. Show your team’s balance of technical skills, business skills, and experience.
3. Anyone with 20% or more ownership in the company needs to be included.
4. Investors prefer experienced managers who have a significant stake in the success of the business.
5. When addressing the management team’s skills and abilities, be sure to tailor your comments to address each of the major reasons small businesses fail [SBM:EB pp 17-21].
Show that the firm has the right people organized in the right way to do the job.
Resources needed to write this section
1. An organizational chart.
2. Job descriptions for key positions.
3. Resumes of key officers. Each officer’s age.
4. Financial statements on each officer detailing his/her personal finances and stake in the company.
5. The compensation plan including stock options, buyout, etc.
6. A written copy of your philosophy of management.
7. A list of the members of your board.
Names.
Current employers and titles.
Experience.
What they bring to the company or why they are on the board.
Their individual stakes in the company.
8. The names and addresses of your:
Accountant.
Attorney.
Bank.
Insurance company.
Advertising agency.
Consultants, if any.
Other non-officers who are assisting in directing your company.
9. Succession plan; critical if this is a family-owned business or if company success rests on any one officer.
Identification of Key People
For help in completing this section, check SBM:EB pp. 95-96, 442-447.
1. Include the resumes of the officers, the key directors, and anyone with 20% or more interest in the business in an appendix. Reference their location in this section of the plan. Provide summary information here.
Emphasize job experience relevant to this venture.
2. Show the strength of the team and the variety of its members’ skills.
3. How will you retain these people?
Contracts.
Compensation plan and perks.
Ownership.
4. Identify your board of directors, providing the same information as for your key officers.
Succession Plan/Exit Strategy
For help in completing this section, check SBM:EB pp. 155-156 (family business succession) pp. 412-414 (exit strategy). Exit strategy covered in more detail in a late section.
1. Who succeeds each of your key officers?
2. Do you have key employee insurance? With whom? Detail the coverage.
3. What is your plan for developing successor(s), especially if this is a family-owned business?
What are your general family policies; hiring family members, supervising family members, etc.?
4. What is your exit strategy? How do you plan to remove yourself from the business at some point in the future?
Management Philosophy
For help in completing this section, check SBM:EB pp. 95-96; 406-409.
1. What is your management philosophy?
What are the company’s responsibilities to employees?
What are the company’s responsibilities to the community?
What are the company’s responsibilities to the environment?
2. How will decisions be made? How will you keep the entrepreneurial focus as your company grows?
Business Organization/Structure
For help in completing this section, check SBM:EB pp. 39-51 (various forms of ownership and their advantages and disadvantages.)
1. Provide a complete organizational chart in an appendix, but reference it here.
Name of the individual.
Title of position.
Age of individual.
2. Form of ownership.
Sole proprietorship.
S-corporation.
Partnership.
3. Charter or licensing issues.
Where is the corporation chartered?
If licensing is required, where is the business licensed to do business?
Identification of Firms Assisting the Company
1. Name the following:
Accountant.
Attorney.
Banker.
Insurance company/agent.
Advertising agency.
VIII TIMELINE
For help in completing this section, check SBM:EB p. 96.
Suggestions for writing this section
1. This information is best presented in chart form.
2. The timing of events will change, as you respond to opportunities and threats in the marketplace. But, your investors want to see that you have thought through where you are going and when.
3. It is especially important when looking for financing. It shows why you are looking for money now, and when you will use it.
4. Remember, almost everyone tends to be optimistic and underestimate the amount of time it will take to reach goals.
Resources needed to write this section
1. A three-year calendar marked with holiday periods that impact your business.
Do you close your plant for maintenance at certain times of the year?
Are there civic or ethnic holidays that need to be accounted for?
2. Time estimates for key events. Be realistic.
Key Events
1. What are the key events for your business?
2. Time/Event Chart--you can include a chart or time line here or put it in your appendices and simply reference the key events in the body of the plan. The sample chart below appears here and in your appendices for your convenience.
For existing companies, the chart should show three years of actual operation.
For startups, the chart should show current time and a three-year projection.
The sample in the body is only two years due to space. Produce the chart as a separate file--landscape format--and insert into the body of the report or appendix.
Event
Year 20xx Year 20xx
Ql Q2 Q3 Q4 Ql Q2 Q3 Q4
Markets entered ___ ___ ___ ___ ___ ___ ___ ___
Major expenditures ___ ___ ___ ___ ___ ___ ___ ___
Media budget ___ ___ ___ ___ ___ ___ ___ ___
Key hires ___ ___ ___ ___ ___ ___ ___ ___
Production capacity ___ ___ ___ ___ ___ ___ ___ ___
Production volume ___ ___ ___ ___ ___ ___ ___ ___
Inventory highs/lows ___ ___ ___ ___ ___ ___ ___ ___
New product introductions ___ ___ ___ ___ ___ ___ ___ ___
R&D ___ ___ ___ ___ ___ ___ ___ ___
Etc.--tailor to your business.
IX CRITICAL RISKS/ASSUMPTIONS
For help in completing this section, check SBM:EB p. 96.
Suggestions for writing this section
1. All business plans are built on assumptions regarding economic conditions, your future operations, etc. This is where you make those assumptions clear to investors.
2. You need to strike a careful balance between showing your investors that you are aware of the risks and are competent to handle the risks so you don’t scare them.
3. Remember, the higher the risks, the greater the return investors will look for.
4. Investors will look for reality and completeness in your contingency plans. Can you do it, and have you considered all the important issues/problems?
5. The worst thing that can happen to you is to have investors find and/or raise risks you haven’t considered.
Resources needed to write this section
1. Economic forecasts for the previous 3-5 years and for the next 1-3 years.
2. Industry studies from sources like Standard and Poor or Valueline, referencing their predictions and what risks they see for the economy or industry.
3. Information on the experience of competitors.
4. Labor forecasts for your area and region.
5. A contingency plan for each key area of the business.
Sales forecasts.
Suppliers of your components or raw materials.
Alternative hiring plans.
Risk Management Strategies
For help in completing this section, check SBM:EB pp. 338-343, 66-76; 473-476.
1. How will you deal with unmet sales forecasts? What will you do if the market responds differently than planned?
Underdemand?
Overdemand?
2. How will you respond if competitors:
underprice you?
overcome your competitive advantage?
introduce newer/better technology?
3. What will you do if the industry takes a downturn?
4. How will you handle labor issues/problems?
Skilled labor is unavailable or insufficient to meet your needs.
Government regulation raises benefit/compensation costs.
Your workforce unionizes.
Your union workforce strikes.
5. What production/supply risks might you face? What are your contingency plans for those risks? How will you handle suppliers who:
raise prices?
become erratic in their deliveries or their quality?
6. Any distributor risks? Contingency plans?
7. Any regulatory risks? Contingency plans?
8. Capital-related risks--potential cash flow problems, notes coming due, etc.? Contingency plans?
9. What insurance coverage do you have?
On key people?
On physical plant, equipment, and inventory?
10. What other potential risks are part of your specific business?
X BENEFITS TO THE COMMUNITY
For help in completing this section, check SBM:EB p. 97.
Suggestions for writing this section
1. The importance of this section varies depending on your investors and the nature of your business. A child care business or retail establishment may be more concerned with community relations than a trucking firm.
2. Be sure this section represents who you are and the goals of your company. It is easy to over commit time and money you don’t have to benefiting the community.
3. Sometimes smaller but strategically important investments in the community will be more manageable and bring greater return than larger unfocused efforts.
4. Find out what the interests of your investors are. Can you direct your community benefits in a way compatible with and of interest to your investors?
5. This section reflects your commitment to social responsibility. Make your decisions thoughtfully.
Resources needed to write this section
1. Economic data on the local area and region.
2. Chamber of Commerce studies on the local area.
3. A source such as “Places Rated Almanac” (if you are in a metropolitan area) can provide an overview of schools, community facilities, etc.
4. Training and development plan or recommendation from your HR professional for your employees.
5. Names and addresses of local suppliers who can service your business needs.
6. Contact with the local civic organizations.
Economic Development
1. How does your proposed business positively impact your local community?
How many jobs will be created: skilled, unskilled?
What local suppliers will you use? If none, why not?
Community Development
1. How will you be a good corporate neighbor in your local community?
Do you provide products or services needed locally?
How will you contribute directly to the community? Sponsor local events, donate money or equipment to a local civic or community organization, give your time to & particular cause, or . . . ?
Human Development
For help in completing this section, check SBM:EB pp.495-498(training), 499-503 (benefits).
1. What are your training and development plans for your workforce?
How does your compensation plan compare in the local economy?
Are you offering any family-friendly benefits or plans?
XI EXIT STRATEGY
For help in completing this section, check SBM:EB pp. 97, 412-414 .
Suggestions for writing this section
This is a short but important section of your business plan. This is where you tell lenders/investors how you have thought all the way through the life of your business.
Resources needed to write this section
Inc. magazine publishes an edition each year that features business valuation. You will be well served in writing this section by finding one (or more) of these issues.
Exit options:
You could sell your business to a) a financial buyer, b) a strategic buyer), c) key employees, d) all employees via an ESOP employee stock ownership plan.
You could take your company public via an IPO initial public offering (if you meet the difficult criteria).
You could transition the business to a family member.
You could complete a planned liquidation – sell off all the pieces of your business.
XII FINANCIAL PLAN
For help in completing this section, check SBM:EB pp. 97-103 186-216.
Suggestions for writing this section
1. Remember, this is a working plan. Few, if any, companies ever meet their projected earnings, but they need targets to shoot at.
Once you’ve calculated your costs, double them.
Take your sales revenue estimates and cut them in half
2. Strive for realism be able to explain and document your numbers.
Investors want to know what your assumptions were for your forecasts. Make them clear.
Include an evaluation of the risks. There are always risks. Be sure you address them, or investors may think you aren’t properly prepared or are hiding something.
3. If this is a brand new startup, you can get budget estimates to work from through:
Robert Morris Associates’ Annual Statement Studies.
Dun & Bradstreet’s Cost of Doing Business.
4. Choose a few key ratios to present. Your text provides 12 important ratios. Choose the ones most relevant to your business, and be able to justify why you track those and not others.
Know which ratios are strong and why.
Know which ratios are weak, and be able to explain what you will do/are doing about it.
5. Be clear about how much money you want and what it will be used for.
Tie the request to your marketing and production plans.
Be realistic.
Plan on using the money to grow the business. Paying off debts, while needful at times, is not growing the business.
6. Provide audited statements on request. Be sure they support your business plan projections.
7. While this tends to be a section on the financial and tangible assets of a company, don’t forget to consider the value of intangible assets: patents, trademarks, goodwill, and contracts.
Resources needed to write this section
1. Have at least three years’ history of your financial data and three years of projections.
2. To create your cash flow statement, you need:
to determine an adequate minimum cash balance.
a forecast of your sales.
a forecast of your cash receipts.
a forecast of cash disbursements.
3. Pro forma financial statements.
4. Breakeven analysis and key ratios: liquidity, profitability, leverage, and activity.
A great deal of this section will take the form of financial statements. There are some issues that must be dealt with in narrative. The following headings cover both narrative and numerical issues. Refer to the appendices referenced for examples of the financial form.
Sources and Uses of Funds
For help in completing this section, check SBM:EB pp. 99 Fig. 4.2.
1. Where is your money coming from?
How will it be used?
Sources of Funds
Debt:
Term Loans $ __________
Refinancing of old debt $ __________
Lines of credit
Line 1 $ __________
Line 2 $ __________
Mortgage $ __________
Equity:
Investments $ __________
Uses of Funds:
Property $ __________
Inventory $ __________
Equipment (itemized)
1. $ __________
2. $ __________
Etc. $ __________
Working capital $ __________
Cash reserve $ __________
2. What will be the return for investors?
When can investors cash out?
In what form?
Financial Practices
For help in completing this section, check SBM:EB pp.189-192 (costing), 360-363 (credit and collection practices), 189, (accounting method), 209-216 (tools for managing cash flow).
1. What is your accounting method?
Cash.
Accrual.
2. What are your collection practices?
3. How will you manage your accounts receivable?
4. How will you manage your accounts payable?
5. How will you control costs?
How will you monitor and control funds?
Who has that responsibility?
Cash Flow Statement
For help in completing this section, check SBM:EB pp. 100 Fig. 4.3, 197, Fig. 8.4. See Appendix H2 at the end of this document for templates.
1. State your assumptions.
Percent of cash sales versus credit sales.
Minimum cash balance desired.
Collection pattern for credit sales.
2. Prepare three different cash flow statements based on:
a pessimistic sales forecast.
a most likely sales forecast.
an optimistic sales forecast.
See Appendix H2 - Sales Forecast, for the form for these forecasts. Triplicate the form. In this space make note of your assumptions, growth percentages, etc., for filling in those forecasts.
Cash Budget
For help in completing this section, check SBM:EB pp. 211-213.
Cash Receipts
Cash sales
Receivable collections
Interest
Owner contributions
Other receipts
Total receipts
Minus Disbursements
Cash purchases
Payment of accounts payable
Wages and salaries
Advertising
Office costs: supplies, utilities, rent/mortgage, telephone, insurance
Legal/accounting fees/costs
Taxes and licenses
Interest payments
Loan principal payments
Dues and subscriptions
Travel
Miscellaneous disbursements
Total disbursements
Ending Cash (Beginning cash + receipts - disbursements)
Balance Sheet
For help in completing this section, check SBM:EB pp. 100, 195.
1. This shows all your owned assets and what is owed against them, liabilities. The difference is your net worth. Be accurate and clear.
See Fig. 4.4, page 101 and Fig. 8.3, p. 196 for examples of balance sheets.
Record your raw numbers here but refer to Appendices H5, for the form.
Profit and Loss Statement
For help in completing this section, check SBM:EB pp. 100-102, pp. 193-194, Fig. 8.2, p. 194.
1. This document is your best approximation of your projected sales and expenses. Be reasonable, but realize your performance will vary from projections.
Project three sets of numbers, low, most likely, and high, as on Fig. 4.5, p. 101.
Record your raw numbers here, but refer to Appendix H4 for the form.
Breakeven Analysis
For help in completing this section, check SBM:EB pp. 103, pp. 352-355 Figs. 14.2 & 14.3.
1. Calculate this in terms of units and dollars.
Offer comparative data from Robert Morris Associates’ Annual Statement.
Financial ratios
(Choose the ones that make the most sense for your business.)
For help in completing this section, check SBM:EB pp. 200-208.
1. Financial ratios show investors both that you are a sophisticate in financial management and that you are staying on top of your day-to-day business operations. Some ratios from which to choose:
Liquidity.
Current ratio.
Quick ratio.
Inventory to net working capital.
Implications of liquidity ratios.
Profitability.
Gross profit margin.
Return on assets.
Return on equity.
Implications of profitability ratios.
Leverage/debt.
Debt to assets.
Debt to equity.
Long-term debt to equity.
Implications of leverage ratios.
Activity.
Inventory turnover.
Fixed-asset turnover.
Average collection period.
Implications of activity ratios.
Intangibles--Intellectual Property
For help in completing this section, check SBM:EB pp. 151-152.
1. What patents do you hold?
2. Any copyrights?
3. Any trademarks registered?
APPENDICES
Suggestions for writing this section
1. An appendix provides supporting detail for statements made in the business plan.
Be sure to reference your appendices in the body of the business plan. Tell the reader when and why to refer to the appendix.
Tab each appendix to make it easy to find.
Number the pages in the appendices. It makes reference to items much easier in your presentation and discussions.
2. Use as many appendices as necessary to make the body of the business plan as concise as possible, yet provide excellent documentation and explanation.
Investors want a short document to read, but they want to know that you’ve done your homework.
3. Once the plan is done and the appendices completed, read it one more time before copying and binding.
Double check the appendices’ references, tabs, and page numbers.
Resources needed to write this section
1. The complete draft copy of the business plan. Cross check to make sure that references in the body of the document correspond to the correct appendix and page number.
2. Copies of
resumes of key people.
organizational chart.
spreadsheets of financial statements.
diagrams, pictures, and/or description of the product.
market research on the customer.
competitor information.
In this section, each heading has categories of information and format rather than questions. You have already answered the appropriate questions in the body of the business plan. Now, document your plan with easy-to-read charts, graphs, financial statements, etc. The letter in front of each section title designates the tab this information should be behind.
Materials that could be included in appendices follow.
A. Resumes, Biographies of Key Personnel
Resume
For business plan, keep to one page.
1. Name and address.
2. Title.
3. Experience.
Chronology format shows duration and recentness of experience.
Responsibility format highlights skills and experience.
4. Education.
When--this might reveal your age range. It is necessary to verify your age range.
Where--in some cases your investors may recognize and value the institution.
What type.
List degrees and important professional development during career. You may need to offer a sentence or two of explanation if the title of the program does not reveal its content.
5. Professional.
Memberships in relevant associations.
Avoid listings that reveal gender, race, ethnicity, age, etc.
Certifications.
Awards.
Biography
Elaborates on key events. Should support the resume and flesh it out. No more them one page. Can include personal data such as family information if relevant.
B. Advertising Samples
1. Company logo.
2. Sample brochure(s).
3. Sample print ads.
4. Media budget.
C. Organizational Chart
Shows who holds what position, reports to whom, and where specific responsibilities lie.
D. Customer Profiles
1. Benefits sought--product/service features that meet benefits.
2. Consumer or business.
3. Distribution.
By industry.
By region.
By size.
By use/application.
4. Use patterns--industry.
5. Specific applications--individual customer.
6. Purchase patterns--Buying style: leader, late-adopter, etc.
7. Demographics/psychographics/geographics.
8. Media preferences.
9. Price sensitivity
Ideal price, price range.
10. Specific benefits sought.
11. Probability of purchase.
12. Percentage of market share.
By industry.
By customer--percentage of their business that is yours.
E. Competitor Profiles
For help in completing this section, check SBM:EB pp. 69-71.
1. List competitors either in order of importance or alphabetically if they are all relatively equal.
2. Include the following elements:
Name and location.
Key management people.
Product line description and differentiation.
Pricing strategy, pricing information.
Promotional strategy.
Distribution channels.
3. Categorize as aggressive, passive, etc., and why.
4. Why they are a competitor?
5. Their target markets.
6. SWOT analysis.
Strengths – positive internal factors.
Weaknesses – negative internal factors.
Opportunities - positive external factors.
Threats – negative external factors.
7. Their market share.
8. Their position in the market.
F. Product Profiles
1. Narrative description.
2. Technical description--diagrams, photographs, line art of the product.
3. Charts showing needs met by particular features.
4. Comparison/contrast with key competitive products.
Features.
Benefits for customer of each feature.
Pricing.
5. Any proprietary aspects that provide a competitive edge.
6. Differentiation from market.
Competitive advantage.
7. Positioning in the market.
8. Pricing strategy.
9. Promotion strategy.
10. Distribution strategy.
11. What target market is each product/product line directed towards?
12. New product consideration, improvements planned.
G. Site Study and Store Layout
For help in completing this section, check SBEB pp. 327-330 (site selection), 334-339 (store layout), 255-257 (licensing and zoning issues).
A. Site study.
1. How site was selected.
2. Why site was selected.
3. Zoning issues, if any.
4. Infrastructure.
Utilities, access, phone.
If plant--supplier access: rail lines, major highways, etc.
If retail--customer access: relationship to major roads, intersections, etc.
5. Parking.
6. Signage plan.
7. Location of competitors.
B. Store Layout.
1. Pictures or diagram--exterior.
2. Pictures or diagram--interior.
Explain the choice of layout.
3. Signage plan—if not covered above.
4. Remodeling costs.
5. Building costs.
6. ADA compliance.
H. Financial Statements
1. Sales forecast.
2. Cash flow statement.
3. Startup costs.
4. Current and projected profit and loss statement.
5. Current and projected balance sheet.
Financial statement templates follow: [ON SEPARATE EXCEL WORKSHEETS]
Appendix HI
Forecasts-- You need three sales forecasts: Optimistic, Most Likely, Pessimistic
Appendix H2
Cash Flow Statement- You need three cash flows: Optimistic, Most Likely, Pessimistic.
Appendix H3
Table of Startup Costs--Retail Store
Appendix H4
Current and Projected Profit and Loss Statement--Example is for three years: profit and loss should be prepared for five years, current plus four.
Appendix H5
Current and Projected Balance Sheet
I. Global Issues
For help in completing this section, check SBEB pp. 377-401.
A. Are you prepared to go global if necessary?
1. How would your business plan be modified?
B. How would you enter global markets?
1. Exporting.
2. Indirect exporting.
Agents and brokers.
Export management company.
Export trade company.
Piggybacking.
Foreign-based distributors or agents.
3. Direct exporting.
4. Licensing.
C. How will you identify potential markets?
D. International financial matters.
1. Funding.
2. Managing payment.
Letters of credit.
Methods of payment.
E. What expertise do you have in understanding other cultures?
1. Language skills amongst the management team.
2. Cross-cultural experiences.
F. What, if any, trading regions/trade agreements will affect your company?
1. NAFTA
2. European Union.
3. Andean Common Market.
G. Are you ISO 9000 qualified?
Business Plan Template
[Company Logo]
[The Company Name]
Established [date]
[Name, Address, Phone
and Fax Numbers, and e-mail address
of
Contact Person]
A Business Plan
This business plan contains proprietary information that may not be shared, copied, disclosed, or otherwise compromised without the consent of [Company Name].
Table of Contents
Cover page xxxx
Table of Contents xxxx
I. Executive Summary xxxx
A. Mission Statement xxxx
B. Company Information xxxx
C. Market Opportunity xxxx
D. Financial Data xxxx
II. Description of Your Company and Industry xxxx
A. Company Background and History xxxx
B. The Industry xxxx
III. Description of the Product or Service xxxx
A. Description of the Product or Service xxxx
B. Competitive Advantages xxxx
IV. Market Research and Evaluation xxxx
A. Markets xxxx
B. Market Trends xxxx
C. Competition xxxx
D. Market Share xxxx
V. Marketing Plan xxxx
A. Market Strategy xxxx
B. Product xxxx
C. Pricing xxxx
D. Promotion xxxx
E. Place xxxx
F. Service Policies xxxx
VI. Manufacturing and Operations Plan xxxx
A. Production xxxx
B. Geographic Location xxxx
C. Facilities xxxx
D. Make or Buy Policy xxxx
E. Control Systems xxxx
F. Labor Force xxxx
G. Training xxxx
H. Staffing Plan xxxx
VII. The Management Team xxxx
A. Identification of Key People xxxx
B. Succession Plan xxxx
C. Management Philosophy xxxx
D. Business/Organizational Structure xxxx
E. Identification of Firms Assisting the Company xxxx
VIII. Timeline xxxx
A. Key Events xxxx
IX. Critical Risks and Assumptions xxxx
A. Risk Management Strategies xxxx
X. Benefits to Community xxxx
A. Economic Development xxxx
B. Community Development xxxx
C. Human Development xxxx
XI. Exit Strategy xxxx
XII. Financial Plan xxxx
A. Sources and Uses of Funds xxxx
B. Financial Practices xxxx
C. Cash Flow Statement xxxx
D. Cash Budget xxxx
E. Profit and Loss Statement xxxx
F. Breakeven Analysis xxxx
G. Financial Ratios xxxx
H. Intangibles-Intellectual Property xxxx
Appendices (as needed) xxxx
A. Resumes/Biographies of Key Personnel xxxx
B. Advertising Samples xxxx
C. Organizational Chart xxxx
D. Customer Profiles xxxx
E. Competitor Profiles xxxx
F. Product Profiles xxxx
G. Site Study and Store Layout xxxx
H. Financial Statements xxxx
I. Global Issues xxxx
SECTION I – EXECUTIVE SUMMARY
Mission Statement
[Insert here]
Business Objective(s)
[Insert here]
Company Information
[Insert here]
Market Opportunity
[Insert here]
The Financials
Summary of 3 years actual, 3 years projected. [Insert your summary financial tables here. The data is easiest to read if in table rather than narrative format.]
Actual 20__ Projected 20__ Etc.
• Revenue
• Net Income
• Assets
• Liabilities
• Net Worth
Summary of Financing
Current Amount Amount Needed
Debt _____________ _____________
Debt with Warrants _____________ _____________
Convertible Debentures _____________ _____________
Stock--Preferred and Common _____________ _____________
SECTION II – DESCRIPTION OF THE BUSINESS AND INDUSTRY
Company Background and History
[If this is a startup, not all elements apply to you.]
The Industry
[Insert here]
SECTION III – DESCRIPTION OF THE PRODUCT OR SERVICE
Description of the Product or Service
[Insert here]
[Reference the appropriate appendix where your detailed product profile is located with accompanying diagrams, etc.]
Competitive Advantages
[Insert here]
[Frame in terms of your customers’ desire benefits. Consider referencing your customer profile in the appropriate appendix as support for your competitive advantages.]
SECTION IV – MARKET RESEARCH AND EVALUATION
Target Markets
[Insert here]
[Reference the appropriate appendix where your customer profiles are.]
Market Trends
[Insert here]
Competition
[Insert here]
Market Share
[Insert here]
[Sales Summary Forecast Table]
SECTION V – MARKETING PLAN
Market Strategy
[Insert here]
Product
[Insert here]
Pricing
[Insert here]
Promotion
[Insert here]
Place
[Insert here]
Service Policies
[Insert here]
SECTION VI – MANUFACTURING AND OPERATIONS PLAN
Production
[Insert here]
Geographic Location
[Insert here]
Facilities
[Insert here]
Make or Buy Policy
[Insert here]
Control Systems
[Insert here]
Labor Force
[Insert here]
Training
[Insert here]
Staffing Plan
[Insert here]
SECTION VII – THE MANAGEMENT TEAM
Identification of Key People
[Insert here]
[Reference the appropriate appendix where key peoples’ resumes and biographies are located.]
Succession Plan
[Insert here]
Management Philosophy
[Insert here]
Business/Organizational Structure
[Insert here]
[Include the organizational chart here or provide a narrative description and reference the appropriate appendix.]
Identification of Firms Assisting the Company
[Insert here]
SECTION VIII – TIMELINE
Key Events
[Insert here]
SECTION IX – CRITICAL RISKS AND ASSUMPTIONS
Risk Management Strategies
[Insert here]
SECTION X – BENEFITS TO THE COMMUNITY
Economic Development
[Insert here]
Community Development
[Insert here]
Human Development
[Insert here]
SECTION XI – EXIT STRATEGY
SECTION XII – FINANCIAL PLAN
Sources and Uses of Funds
[Insert here]
Financial Practices
[Insert here]
Cash Flow Statement
[Insert here]
Cash Budget
[Insert here]
Profit and Loss Statement
[Insert here]
Breakeven Analysis
[Insert here]
Financial Ratios
[Insert here]
[Refer to your textbook for the formulas to calculate these ratios.]
Intangibles-Intellectual Property
[Insert here]
Appendix A
Resumes and Biographies of Key Personnel
[Insert here]
Appendix B
Advertising Samples
[Insert here]
Appendix C
Organizational Chart
[If not included in body of the plan.]
[Insert here]
Appendix D
Customer Profiles
[Insert here]
Appendix E
Competitor Profiles
[Insert here]
Appendix F
Product Profiles
[Insert here]
Appendix G
Site Study and/or Store Layout
Site Study
[Insert here]
Store Layout
[Insert here]
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