business plan
maomaoice
the_plan.pptThe Industry
- Name and describe the market or industry that you will work within—in other words, the chosen “sandbox” where you will play.
- For market or industry descriptions see the North American Industry Classification System (NAICS) at www.census.gov/naics or industries at a glance at http://www.bls.gov/bls/industry.htm
- Talk about any trends and changes in the industry.
- Talk about whether the industry is growing and, if so, by how much.
The Product
- Talk about the product or service that you will sell.
- Talk about what sets the product or service apart from what is currently being sold to customers.
- Talk about any ways you can protect the product or service from being easily copied by the competition.
- Present any product pictures, drawings, or renderings you might have (on additional slides if necessary).
The Market
- The idea for a market study is to tell the “story of the market” in numbers starting with the big picture and then narrowing down the data to a more detailed view. Use as many slides as you need and don’t clutter the information.
- Talk specifically about where your customers are located. Are they within a city, county, state, region, nation, or international place? Maps are good to use here if it makes sense.
- Talk about the numbers of customers in the market and possibly even what they spend on your kind of products and services.
- Present any community profiles for these places. The Census Bureau is a great place to find such information at www.census.gov
- If you are targeting business customers look at the Economic Census at http://www.census.gov/econ/census02/ for help.
The Targeted Customers
- Talk about your targeted customers. Remember, you can segment customers by type, buying behavior, location, and so on.
- Describe who they are by discussing some of the following things: (use multiple slides if needed)
- Demographics (characteristics they share in common)
- Buying Behavior (how and why they buy the product)
- Size (numbers of them / dollars they spend)
- Projected Sales
- Trends (growth / opportunities)
Target Market Strategy
- For your targeted customers, talk about how you will customize your marketing efforts to fit their needs.
- Remember, if this group of customers is really unique then something about your strategy must be different.
- Talk about…
- The Message: What slogan or positioning statement will you use for this target market?
- The Pricing: Will the pricing have to be different for this type of customer? If so, what price will you charge?
- Product Customization: Will the product or service have to be customized for this customer?
- Distribution: Will the product get to this customer?
Target Market Sales Approach
- Talk about your specific sales and promotional ideas for this target market which might include:
- Contact Sphere: What other businesses or professions might naturally refer this group of customers to your business?
- Advertising: What specific types of media will you use and at what cost?
- Public Relations: What kinds of media relations, press releases, and events might you use to reach this group of customers?
- Personal Selling: Do you require a sales force to reach this group of customers? If so, how many and at what cost?
- Sales Promotions: What kinds of sales tools might you use? Discounts, coupons, loyalty programs?
Target Market Descriptions
| Description | Target Market #1 | Target Market #2 | Target Market #3 |
| Name | Local Market | Commuting Workers & Tourists | Commercial Events |
| Description | People and households within 7 miles of the restaurant | People migrating into Bartholomew County for work or tourism | Commercial business in Bartholomew County that need catering event services |
| Demographics | Consumers ages 21 to 54 / $54,000 average household income | Workers and Tourists ages 21 to 54 | Businesses from 20 to 300 employees |
| Buying Behavior | Frequent but small purchases (5 times per year at about $9.00 per patron) | Infrequent but larger purchases (1 time but spends upward of $12.00 per patron) | Infrequent but very large purchases (2 events per year spending $600.00 per event) |
| Size (numbers/dollars) | 58,600 residents / 20,000 households / $58 million local market for restaurant sales | 9,000 daily commuters / 28,000 annual tourists | 400 businesses |
| Projected Sales | $400,000 | $150,000 | $100,000 |
| Trends | slow to moderate growth / spending less on meals away from home on average | Good growth / new arts theatre nearby should improve traffic | Excellent growth in company numbers and employment trends |
Target Market Strategies
| Strategy | Target Market #1 | Target Market #2 | Target Market #3 |
| Positioning Message | The Gourmet Restaurant Where You Eat With Your Hands | Gourmet Burritos…Fast | Big Burritos For Big Crowds |
| Pricing | Entrees between $4 and $6 | Entrees between $4 and $16 | Per head range from $8 to $12 |
| Product Customization | Lunch time speed is largest consideration | Banquet style service | |
| Distribution | At retail location | At retail location | On-site catering set-up and service |
| Contact Sphere | Visitors center, community development, tourism bureau, hotel concierges | Chamber of commerce, HR managers, event planners, public relations managers | |
| Advertising | Newspaper, yellow pages, specialty publications, website | Hotel brochures, tourism directory, billboards, restaurant guide | Direct mail, business section of newspaper |
| Public Relations | Annual 5K charity run for diabetes assn. | ||
| Personal Selling | Part-time banquet sales coordinator | ||
| Sales Promotions | Discount coupons, samples | Hotel referral fees | 15% off first event promotion |
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Competitive Analysis
| COMPANY | WE CAN DO, THEY CAN’T | WE CAN’T DO, THEY CAN |
| Competitor X | ||
| Competitor Y | ||
| Competitor Z |
The Marketing Schedule
| Media | Annual Cost |
| Yellow Pages (South Central Edition) | |
| Category: Restaurants, Restaurant Guide | $3,600.00 |
| Newspaper (The Republic: Circulation 28,000) | |
| Ad Design Costs | $800.00 |
| Media Costs (24 ads @ $328) | $7800.00 |
| Direct Mail (Brochures and Special Occasions) | |
| Distribution (5,000 @ $.50 per piece @ $.27 postage) | $3,850.00 |
| Radio (QMIX 103 / Adult Contemporary & WTIU/NPR) | |
| Media Costs (600 :30 second ads @ $6.20 per spot) | $3,720.00 |
| Total Annual Advertising and Media Costs | $19,770.00 |
The Location
- Talk about where you will be located. If you are a retailer or a service business where access and visibility is important to the customer, talk about your proposed location. Provide the address and talk about the accessibility, the visibility, and the costs.
- Talk about the numbers and types of customers that are located near your location. These numbers are called “ring studies” because they detail the number of customers in 1,3 and 5 mile rings from your location. See www.easidemographics.com for free ring reports of your location.
- Talk about any commuting and traffic patterns around the location. Check with your state’s department of transportation for these statistics.
Legal Structure Comparison
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| Characteristics | Sole Proprietorship | General Partnership | C Corporation | S Corporation | Limited Liability Company |
| Formation | No state filing required | Agreement between two or more parties. No state filing required | State filing required | State filing required | State filing required |
| Duration of Existence | Dissolved if sole proprietor ceases doing business or dies | Dissolves upon death or withdrawal of a partner unless safeguards are specified in a partnership agreement | Perpetual | Perpetual | Dependent on the requirements imposed by the state of formation |
| Liability | Sole proprietor has unlimited liability | Partners have unlimited liability | Shareholders are typically not personably liable for the debts of the corporation | Shareholders are typically not personally liable for the debts of the corporation | Members are not typically liable for the debts of the LLC |
| Operational Requirements | Relatively few legal requirements | Relatively few legal requirements | Board of directors, officers, annual meetings, and annual reporting required | Board of directors, officers, annual meetings, and annual reporting required | Some formal requirements but less formal than corporations |
| Management | Sole proprietor has full control of management and operations | Typically each partner has an equal voice, unless otherwise arranged | Managed by the directors, who are elected by the shareholders | Managed by the directors, who are elected by the shareholders | Members have an operating agreement that outlines management |
| Taxation | Not a taxable entity. Sole proprietor pays all taxes | Not a taxable entity. Each partner pays tax on his/her share of income and can deduct losses against other sources of income | Taxed at the entity level. If dividends are distributed to shareholders, dividends are also taxed at the individual level | No tax at the entity level. Income/loss is passed through to the shareholders | If properly structured there is no tax at the entity level. Income/loss is passed through to members |
| Pass Through Income/Loss | Yes | Yes | No | Yes | Yes |
| Double Taxation | No | No | Yes, if income is distributed to shareholders in the form of dividends | No | No |
| Cost of Creation | None | None | State filing fee required | State filing fee required | State filing fee required |
| Raising Capital | Often difficult unless individual contributes funds | Contributions can be made from partners, and more partners can be added | Shares of stock are sold to raise capital | Shares of stock are sold to raise capital | Possible to sell interests, though subject to operating agreement restrictions |
| Transferability of Interest | No | No | Shares of stock are easily transferred | Yes, but must observe IRS regulations on who can own stock | Possibly, depending on restrictions outlined in the operating agreement |
The Legal Structure
- Talk about the legal structure you have chosen for the business. See the preceding chart for help.
- Talk about why the structure was chosen—in other words, what advantages does the structure provide?
- A sample chart like the one below might be helpful to show the ownership structure of the business:
Owner Shares Percent Owned
Jack Smith 1,000 50%
Loretta Johnson 500 25%
Equity Investors 500 25%
Risk Management
- Talk about the different kinds of insurance you will need and what the cost of such coverage will be.
- In general there are three basic categories of insurance:
- Property: covers building and content losses
- Liability: gives you legal protection
- People: provides health, worker’s comp, and lost income protection
The Core Scores
- Talk about what things you need to measure to be successful.
- These measures might be leading indicators of such things as customers, growth, innovation, internal operations, or financial performance.
- Example: “The Chamber of Commerce will measure five metrics in determining our success: annual member engagement, member retention, net member growth, market penetration, and employee engagement.
- Example: “For our restaurant to be successful, we must closely measure four activities: reservations and table turns, food costs, staff turn-over rates, and total staffing costs.”
Required Start-Up Funds
| Item | Amount |
| Fixed Assets | |
| -Building | $1,000 |
| -Land | $1,000 |
| -Initial Inventory | $1,000 |
| -Equipment | $1,000 |
| -Furniture and Fixtures | $1,000 |
| -Vehicles | $1,000 |
| Working Capital | |
| -Salaries and Wages | $1,000 |
| -Insurance Premiums | $1,000 |
| -Leasehold Improvements | $1,000 |
| -Rent and Utility Deposits | $1,000 |
| -Advertising and Promotions | $1,000 |
| -Legal and Accounting Fees | $1,000 |
| -Supplies | $1,000 |
| -Cash on Hand | $1,000 |
| Totals | $15,000 |
Capital Strategy
| Total Amount Required | $907,900 |
| -4 Investors ($50,000 each will get 25% share of company) | $200,000 |
| -Commercial Bank Loan (Real Estate & 80% Building) | $684,000 |
| -Owners | $23,900 |
| Loan Payment Amounts | |
| -Principal Amount Borrowed | $684,000 |
| -Projected Interest Rate | 7.25% |
| -Term In Months | 240 |
| Total Monthly Loan Payment | $5,406.17 |
Competitive Value Curve
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