COVER SHEET
Name of business
Names of principals
Address and phone number of business
STATEMENT OF PURPOSE
A. Executive Summary of business
1. Objectives
2. Short term and long-term
goals.
TABLE OF CONTENTS
Table of contents
outline the business plan format.
I.
THE BUSINESS
A. Description
of Business
B. Location
of Business
C. Management
D. Personnel
E.
Application
F.
Summary
II.
STRATEGIC MARKETING PLAN
A. Market
B. Competition
III.
FINANCIAL DATA
A. Application
and Sources of Funding
B. Historical
Financial Reports (existing business)
C. Pro-Forma
Cash Flow
1.
Detail by month for first year
2.
Notes of explanation
Income Projection (Profit and
Loss Statements)
3.
Three year summary
4.
Detail by month for first year
5.
Notes of explanation
D. Capital
Equipment List
E.
Pro Forma Balance Sheet
F.
Break-even Analysis
IV.
SUPPORTING DOCUMENTS
Refer to information in contents
I.
THE BUSINESS
A.
BUSINESS DESCRIPTION
-The type of business: Is your
business primarily merchandising, manufacturing,
or service?
-The status of business: Is your
business a start-up or the expansion of a going
concern?
-A take-over of an existing business?
-The business form: sole proprietorship,
partnership, and corporation? (Your attorney’s
advice is helpful on this item.)
-When will (did) your business
open?
-What hours of the day and days
of the week will you be (are you) in operation?
-If yours is a seasonal business,
or if the hours will be adjusted seasonally,
make sure that the seasonality is reflected
in your replies.
1.
FOR A NEW BUSINESS
a.
Why will you be successful in this
business?
b.
What is your experience in this business?
c. Have you spoken with other
people in this kind of business?
what was their response?
d. What will be special about
the business?
e.
Have you spoken with prospective trade suppliers
to find out what managerial and/or technical
help they will provide?
f.
Have you asked about trade credit?
g.
If you will be doing any contract work, what
are the terms?
Reference
any firm contract or letter of intents, and
include it as a supporting document.
h.
How will you offset the slow payment by the
customer?
2.
FOR A TAKE-OVER
Your Description of Business should
contain a brief history of the business you
plan to take over and include responses to the
following questions.
a.
When and by whom was the business founded?
b.
Why is the owner selling it?
c.
How did you arrive at the purchase price for
the business?
d.
What is the trend of sales?
e.
If the business is going downhill, why? How
can you turn it around?
f.
How will your management make the business
more profitable?
B.
LOCATION OF BUSINESS
1.
What is your business address?
2.
What are the physical features of your building?
3.
Is your building leased or owned? State the
terms.
4.
If renovations are needed, what are they? What
is the expected cost? Get quotes in WRITING
from more than one contractor. Include quotes
as supporting documents.
5.
What is the neighborhood like? Does the zoning
permit your kind of business?
6.
What kinds of businesses are in the area?
7.
Have you considered other areas? Why is this
one the desirable site of your business or businesses?
8.
Is this the right building and location for
your business?
9.
Is your business strategically located to attract
customers?
C. MANAGEMENT
1.
Personal history of principals
2.
Related work experience
3.
Duties and responsibilities
4.
Salaries
5.
Resources available to the business
D. PERSONNEL
1.
What are your personnel needs now? In the near
future? In five years?
2.
What skills must they have?
3.
Are the people you need available?
4.
Full or part-time?
5.
Salaries or hourly wages?
6.
Fringe benefits?
7.
Overtime?
8.
Will you have to train people? If so, at what
cost to the business (both time of more experienced
workers and money)?
E.
APPLICATION
Project Cost:
Working Capital
$_______________________
Land
$_______________________
Building
$_______________________
New Equipment
$_______________________
Renovation
$_______________________
New Construction
$_______________________
Other__________________
$______________________
Total Project Cost
$______________________
F.
SUMMARY
Describe Collateral Available
The purpose
of this section is to summarize the ideas you
have developed in the preceding sections. This
summary will help you make sure that the different
parts of the analysis make sense, that they
support each other logically and coherently,
and that they will leave the reader with a concise,
convincing statement that the project and plan
are feasible.
II.
STRATEGIC MARKETING PLAN
A.
WHO IS YOUR MARKET?
1.
What is the percent size of the market?
2.
What percent of the market will you have?
3.
What is the market’s growth potential?
4.
As the market grows, does your share increase
or decrease?
5.
How are you going to satisfy your market?
6.
How are you going to price your service,
product, or merchandise to make a fair profit
and, at the same time, be competitive?
7.
How will you attract and keep
this market?
8.
How can you expand your market?
9.
What price do you anticipate getting for your
product?
10.
Is the price competitive?
11.
Will someone pay your price?
12.
How did you arrive at the price? Is it profitable?
13.
What special advantages do you offer that may
justify higher price (you don’t necessarily
have to engage in direct price competition)?
14.
How is the market segmented? By quality? By
price? By customer size?
15.
What market segment or segments are you going
for?
B. COMPETITION
1.
Who are your five nearest competitors?
2.
How will your operation be better than theirs?
3.
How is their business: steady? Increasing?
Decreasing? Why?
4.
How are their operations similar and
dissimilar to yours?
5.
What are their strengths and/or weaknesses?
6.
What have you learned from watching their operations?
III.
FINANCIAL DATA
A.
APPLICATION AND SOURCES OF FUNDS
Project Costs:
Working Capital
$_____________________
Land
$_____________________
Building
$_____________________
New Equipment
$_____________________
Renovation
$_____________________
New Construction
$_____________________
Other
$_____________________
Total Project Cost
$_____________________
Sources
of Financing:
Bank Loan
$_____________________
Owners Investment
$_____________________
Other________________
$_____________________
Total Financing:
$_____________________
B. HISTORICAL
FIANCIAL REPORTS
An integral part of your business
plan is a record of what has happened in the
immediate past. For most business deals, balance
sheets and income statements for the past three
years are sufficient, though it may be necessary
to go further back if you are trying to raise
venture capital. The third major component
of your past financial condition report is your
tax statement. Since this must be filed on
at least an annual basis, it provides a summary
of what you earned, how you earned it, and what
your deductible expenses were. If you decided
to sell your business, these tax reports will
be the first substantiation of your asking price
that will be requested.
C. CASH
FLOW AND INCOME PROJECTIONS
CASH FLOW PROJECTION
Projected Monthly Cash Flow Statement
for the first year of operation, detailed by
month. Include notes of explanation.
The CASH FLOW attempts to budget
the cash needs of a business and shows the flow
of cash into and out of the business over a
period of time. Cash flows into the business
from sales, collection of receivables, capital
injections, etc., and flows out through cash
payments for expenses. This financial tool
emphasizes and points in the calendar when money
will be coming into and going out of the business.
The advantage of knowing when cash outlays will
be made is the ability to plan for those outlays
and not be forced to resort to unexpected borrowing
to fulfill cash needs. By constructing a cash
flow for the near to intermediate future, you
can see the effect of a loan on your business
more clearly than you can from and income statement.
Often, you can find ways to finance your business
operations or to only borrow a specific amount
that will help you to keep your interest expense
as low as possible.
A CASH FLOW deals only with actual
cash transactions. Depreciation, a non-cash
expense, does not appear on a cash flow. Loan
repayments (including interest), on the other
hand, do, since they represent a cash disbursement.
INCOME PROJECTI0NS
Projected Income Statement for
the next three years. Include notes of explanation.
The INCOME STATEMENT, also called
PROFIT & STATEMENT, is complementary to
the balance sheet. The balance sheet gives
a static picture of the company at a given point
in time. An income statement provides a moving
picture of the company during a particular
period of time. Income statements that are
cast into the future are called INCOME PROJECTIONS.
Income projections are forecasting and budgeting
tools estimating income and anticipating expenses
in the near to middle range future. For most
small businesses, income projections covering
the next three years are adequate.
SAMPLE
FORMAT
JOHN
DOE, INCORPORATED
Pro Forma
Income Statement
October
15, 19xx-October 14, 19xx
Net Sales
__________________
Less: Cost of Goods Sold
__________________
Gross Margin
__________________
OPERATING EXPENSE:
Sales & Wages
__________________
Payroll Taxes & Benefits
__________________
Rent
__________________
Utilities
__________________
Maintenance
__________________
Office Supplies
__________________
Postage
__________________
Automobile & Truck
__________________
Maintenance Delivery Equipment
__________________
Insurance
__________________
Legal & Accounting
__________________
Depreciation
__________________
*
__________________
*
__________________
OPERATING EXPENSE TOTAL
__________________
OTHER EXPENSES:
Interest payments
__________________
OTHER EXPENSE TOTAL
__________________
TOTAL EXPENSE
__________________
PROFIT (LOSS) PRE-TAX
__________________
TAXES
__________________
NET PROFIT (LOSS)
__________________
D. CAPITAL
EQUIPMENT LIST
E.
PRO FORMA BALANCE SHEET
F.
BREAK-EVEN ANALYSIS
IV.
SUPPORTING DOCUMENTS
Personal
resumes, job descriptions, personal financial
statements, letters of reference, letters of
intent, copies of leases, contracts, legal documents,
and anything else of relevance to the plan.
You will
want to include any documents, which lend support
to statements you have made in the body of the
business plan. Items included here will vary
according to the needs and stage of development
of your particular business. The following
list suggests some things, which should be included:
A. Resumes; personal financial statements
B. Quotes or Estimates
C. Letters of Intent from prospective customers
D. Leases or Buy/Sell Agreements
E. Legal Documents relevant to the
business
F. Census/Demographic Data (Important
for start-up and retail businesses)
Revised
8/01
