1. Chapter # 5 The Business Plan

2. All businesses should have plans But, if financing is needed, no one will loan or invest in a business without a plan. The Small Business Administration will loan a business up to $5 million with a good plan.

3. A business plan should be a “work in progress”. Businesses will evolve over time, and be influenced by outside factor such as the economy

4. Possible areas of content could be outlined ( Seen as below) Cover sheet Executive summary (statement of the business purpose) Table of contents Body of the document Business Description of business Marketing Competition Operating procedures Personnel Management and Organization / Management Team Business insurance Financial data Loan application Capital equipment and supply list Balance sheet Breakeven analysis Profit and loss statements Three-year summary Detail by month, first year Detail by quarters, second and third year Assumptions upon which projections were based Pro-forma cash flow Supporting documents Tax returns of principals (partners in the business) for last three years, personal financial statements (all banks have these forms) Copy of franchise contract and all supporting documents provided by the franchisor (for franchise businesses) Copy of proposed lease or purchase agreement for building space Copy of licenses and other legal documents Copy of resumes of all principals Copies of letters of intent from suppliers, etc.

5. Executive Summary Briefly: Date the business began Names of the founders and the functions they perform Number of employees Location of the business and any branches or subsidiaries Description of plant or facilities Products manufactured/services rendered Banking relationships and information regarding current investors Summary of company growth including financial or market highlights (for example, your company doubled its worth in a 12-month period; you became the first company in your industry to provide a certain service)

6. Within the Executive Summary Should be the organization’s Mission and Vision.

7. Organization and Management, (Management Team Plan) The management team plan section presents your qualifications and those of your partners.

8. Organization and Management could include: Names of owners Percentage ownership Extent of involvement with the company Forms of ownership (i.e., common stock, preferred stock, general partner, limited partner) Outstanding equity equivalents (i.e., options, warrants, convertible debt) Common stock (i.e., authorized or issued) Name of the managers or supervisors Position (include brief position description along with primary duties) Primary responsibilities and authority Education Unique experience and skills Prior employment Special skills Past track record Industry recognition Community involvement Number of years with company Compensation basis and levels (make sure these are reasonable -- not too high or too low)

9. Business / Company Description is The information about the nature of your business as well as list the primary factors that you believe will make your business a success.

10. Business / Company Description Success factors might include: Superior ability to satisfy your customers' needs Highly efficient methods of delivering your product or service Outstanding personnel Key location.

11. Product and Service Plan could include: A detailed description of your product or service (from your customers' perspective), including information about the specific benefits of your product or service. Information related to your product's life cycle. Any copyright, patent, trade secret information or legal information that may be relevant. Research and development (R&D) activities you are involved in or are planning to be involved in.

12. Market Analysis includes Industry Description Target Market Consumer Research Competitive Analysis Regulatory Restrictions

13. Industry Description is: The current size of the industry as well as its historic growth rate, seasonality and trends.

14. Target Markets are Customers that have the potential to buy the product. Target Markets are always spoken of in Geo-, Psycho- and Demo- graphic terms

15. Consumer Research is Information on how customers use, buy and regard a product.

16. Competitive Analysis is: The competition by product line or service as well as by market segment; assessing their strengths and weaknesses,

17. Regulatory Restrictions are: Governmental, Industry or Consumer oversight of a business.

18. Marketing Plan Marketing is how a product is sold. It is the Four Ps Product Price Promotion Place

19. Product is: either a good or a service for a customer to buy. In this section, describe it, how is it packaged and what does it do?

20. Price is How much does it cost your business, how much will your business charge and why?

21. Promotion is How a business communicates with its potential customers? Possible methods might be: Advertising Public Relations Sales People

22. Place is Either the channel of distribution or how it is presented to the potential customer in the retail outlet.

23. Fund Request Showing how the money will be used in the business. Examples might be acquisitions, working capital or debt relief.

24. Financial Plan Should include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. For the first year, you should supply monthly or quarterly projections. After that, you can stretch it to quarterly and/or yearly projections for years two through five.

25. Operational Plan is A short term plan, under a year, to achieve tactical goals. This includes rules and regulations and budgets for day to day operations.

26. Organizational Plan is Defines individual roles within the business. Examples of this might be: who reports to whom or what is a person’s job description.

27. Growth Plan Is determined from industry and economic growth. Management must make decisions how aggressive an organization might desire to become.

28. Contingency Plan Is generally a fund created in case of a economic downturn or a unforeseen problem.

29. With all reports, there should be a: Cover page Title page Table of contents

30. Lastly, there must be a place for Supporting Documents. This is a place in this plan for all the information gathered substantiating it’s validity.