| Business Plan |
A Common Dilemma
"WINNER!" That's the good news, but additional funding will be needed to get this start-up on a solid footing. A strong, comprehensive business plan is necessary to capture the financing interest of venture capitalists or loan officers.
hundred dollars, possibly several thousand. The expense will cut into the entrepreneur's immediately available resources at the worst possible time, while the new venture is still in its embryonic stage.
entrepreneur to prepare an outline with the essential information, or even to complete a rough draft of the entire business plan. Your writer can then be contracted to rewrite and edit your draft, rather than to create the plan in its entirety. You will have an effective, professionally polished and finished business plan, but at a considerable savings.
yet familiar with business-plan mechanics, a generic plan outline is available below. Please feel free to copy or print the plan outline if you would like to use it as a guide for your project. |
1. Cover sheet 2. Executive summary 3. Statement of purpose 4. Table of contents 5. THE BUSINESS A Description of business B Marketing C Competition D Operations E Personnel F Business insurance 6. FINANCIAL DATA A Loan applications B Capital equipment and supply list C Balance sheet D Break-even analysis E Income projections — P & L statements (1) Three-year summary (A) First year, monthly detail (B) Second and third years, quarterly details (C} Assumptions projections were based on F Cash flow 7. SUPPORTING DOCUMENTS A Most recent 3 years’ tax returns of principals and their Personal Financial Statements B If a franchise arrangement is involved, copies of the contract and all supporting documentation C Copy of proposed lease or purchase agreement for building space D Copy of licenses and any other legal documents E Résumé of each principal Explanation and Rationale The plan fully and completely defines the services or products the business provides and the needs it addresses. It identifies the potential customer base, and factors that will make this business more attractive than the competition. It describes marketing strategies and identifies sources of start-up financing. It identifies management and personnel, and the qualifications and experience they bring to the venture. Cover Sheet: A cover letter, which is standard business protocol and should be enclosed with any item or document being mailed or delivered to a reviewer. The letter should inform the recipient what items or documents are enclosed, why it has been sent to the addressee, and the result the sender hopes for when the recipient has reviewed and considered the enclosures. Failure to include a cover letter can be viewed as indicating the sender lacks business savvy, is inattentive to detail, or both. Conversely, inclusion of the cover letter provides an opportunity to add additional weight to the plan, proposal, or whatever the letter is introducing. Executive Summary: The executive summary should be a brief but powerful recap of the information presented in the plan itself. The summary should identify the type of business, what products and services it offers, why it is better than its competition, what background and strength the manager or management team provides, how much money is required in what stages or periods, and what the money will be used for. Ideally, the executive summary will generate interest, and persuade a reviewer of the company’s potential and merit. At the same time, it must be straightforward and factual, without hyperbole or overt sales pitching. A dynamic executive summary may be particularly important if the business plan is to be submitted to venture capitalists who, according to some experts, are apt to reject a plan without reading past the summary. Statement of Purpose An up-beat Mission Statement that explains and defines the company goal of providing the best product or service, and/or to fulfill a need or lack in the community, region, or general society. The statement should express conviction and commitment in straightforward terms, without exaggeration or too much sugar. It should indicate who and what the company is and does, what products or services it provides, who its ideal customer is, what needs it meets and what benefits it provides, what geographic area it serves, and what sets this company apart from other enterprises. Table of Contents If feasible, fit the Table of Contents onto one page. Description of Business The description should stipulate the legal description of the business, whether it is a sole proprietorship, a partnership, a corporation, LLC, and/or franchise. Corporations should include the state if domestic, or host nation if incorporated in a foreign land. If it is an expansion of an existing business, the Description should provide a full history with an honest, factual account of the company and its origins. It should explain how the business was started, how much it has grown, what strategies and methods fostered that growth. It should explain the history of sales, gross and net profits, and the current credit rating and status. It should also project where the company will be in one, five, and ten years, and exactly how it will get there. If the business is a start-up with no track record to base a history on, a general history of the type of business may be used, describing how this company plans to improve on currently available products or services, how it will expand the customer base, and how it will address or resolve deficiencies evident in similar enterprises. A full description of the company’s products and services should be included, along with how much and what type of equipment is needed, and whether there is patent protection, area non-compete protection, or any other atypical factor. Marketing: Analysis, Plan & Strategy ANALYSIS Marketing Analysis covers industry trends and characteristics; total dollar value, and dollar value at both wholesale and consumer levels. It includes existing market, and projected growth, who the primary customer is (age, gender, geographic area), and anticipated customer behavior. It indicates where advertising will be directed, at who, and a method of identifying ideal customers (surveys, focus groups). It also indicates what similar products or services are already available, difficulties of breaking into the market area, and the strategy for doing so. It includes what new opportunities will appear through technological advances, what the distribution arrangements are, and whether there are specific government regulations and license or certification requirements. PLAN & STRATEGY Marketing Plan and Strategy fully details how potential customers will learn about the products and services, how customers will be persuaded that they will prefer this over other available items, how product information will be communicated to them, and how they will be convinced to buy the products. It should cover several different avenues and tactics, such as print ads and what specific publications or types of periodicals are to be used, radio/tv commercial ads or Info-mercials, Internet exposure with specifics, brochures and fliers, any cooperative arrangement with other companies or businesses, and any other marketing avenues to be used. Competition Competitive analysis includes who or what the existing competition is, the approximate number of competing companies in the area, and the number offering comparable products or services. It explains what strengths and advantages this company has over the competition; how successful similar enterprises are or have been, what difficulties are evidenced in similar enterprises, and how they will be avoided or resolved. It depicts how and why this company’s product or service is superior to competition, and what customer benefits this company provides that are not available from competitors. Discuss the amount of money customers expect to pay and/or are willing to pay for the products or services, whether they are likely to anticipate a better value for a same or lower price from this company, and any other benefit or advantage not available from competitors. Operations Explain exactly how the business will be managed to attain and retain smooth operational continuity, including precise depictions of what is involved. Describe in detail the primary location and any satellite or branch operations. Identify all equipment needed, including any special conversions, modifications or adaptations of standard items or resources (such as for exceptional voltage requirements, handling of hazardous materials or waste, etc.). Enumerate and describe labor and personnel requirements, any special employee training needed, and whether training will take place in-house, at an educational facility, or through other outside arrangements. PERSONNEL Management, Management Team, and Key Personnel: Fully describe qualifications, credentials, background, experience, and exceptional strengths of each member of management. Show in the strongest light possible, without exaggeration, prior business or entrepreneurial successes for any type of business, and any track record(s) for trouble-shooting, problem resolution and, if applicable, cost containment and/or generating profit. Employees Detail how many full time and how many part-time employees are needed; what positions employees are needed for; what duties and responsibilities will be assigned; what types of skills and what skill level(s) are needed for the various positions. . Salaries and benefits: Include cost factors for health insurance, disability, unemployment compensation contributions, sick leave and vacation provisions. Business Insurance Include all types of business insurance, whether coverage for property, liability, equipment, and any miscellaneous coverage. Financial Data Loan Applications, details and copies of all documents. Capital Equipment, list all equipment needed, everything owned or rented Balance Sheet: charts Break Even Analysis: charts Income Projections: charts First year, monthly detail Second and third years, quarterly detail Assumptions: What projections are based on Cash Flow: charts
independent assessments. Note: There is a difference between a business plan for a brick and mortar company and a plan for an e-business enterprise. One distinction is overall length — plans for traditional businesses typically run approximately 100 pages or more, while e-business plans may be about 30 or 40, preferably no more than 50 pages. |
Merry J. Whitney & Associates |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |