On October 23rd, 2014, we updated our
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Elements Supporting Successful Plan Implementation 1. Is the plan simple , easy to understand and to act on? Does it communicate its contents easily and practically? 2. Is the plan specific ? Are its objectives concrete and measurable? Does it include specific actions and dates of completion, specific persons responsible and specific budgets?
Elements Supporting Successful Plan Implementation (cont.) 3. Is the plan realistic ? Are the sales goals, expense budgets, and milestone dates realistic? Nothing stifles implementation like unrealistic goals. 4. Is the plan complete ? Requirements of a business plan vary, depending on the context. There is no guarantee, however, that the plan will work if it doesn't cover the main bases.
Use of a Business Plan
Define and fix objectives, and programs to achieve those objectives.
Create regular business review and course correction.
Define a new business.
Support a loan application.
Define agreements between partners.
Set a value on a business for sale or legal purposes.
Evaluate a new product line, promotion, or expansion.
No Time to Plan? A Common Misconception “ Not enough time for a plan. I can't plan. I'm too busy getting things done.” A business plan now can save time and stress later. Too many businesses make business plans only when they have to. The busier you are, the more you need to plan.
Business Plans Don’ts
Don't use a business plan to show how much you know about your business.
Nobody reads a long-winded business plan: not bankers, bosses, nor venture capitalists.
Elements of a Business Plan
Descriptions of Company
Product or Service
Sample Business Plan Outline 1. Executive Summary : Write this last. It's just a page or two of highlights. 2. Company Description : Legal establishment, history, start-up plans, etc. 3. Product or Service : Describe what you're selling. Focus on customer benefits. 4. Market Analysis : You need to know your market, customer needs, where they are, how to reach them, etc.
Sample Business Plan Outline 5. Strategy and Implementation : Be specific. Include management responsibilities with dates and budget 6. Management Team : backgrounds of key members of the team, personnel strategy and details. 7. Financial Plan : including profit and loss, cash flow, balance sheet, break-even analysis, assumptions, business ratios, etc.
Use of Tables and Charts
Tables and charts present information in visual formats with greater impact that words alone
Some business tables and charts that are normally expected in a standard business plan
Plan should include business charts that use bar charts and pie charts to illustrate cash flow (single most important numerical analysis in a plan), sales forecast, and profit and loss statements, projected balance sheet, projected business ratios, and market analysis
Opinions vary - A business plan should normally project sales by month for the next 12 months, and annual sales for the following two years.
This doesn't mean businesses shouldn't plan for a longer term than just three years. It does mean, however, that the detail of monthly forecasts doesn't pay off beyond a year, except in special cases.
Description of the Business
Legalities - business form: proprietorship, partnership, corporation. The licenses or permits you will need.
Business type: merchandizing, manufacturing or service.
What your product or service is.
Is it a new independent business, a takeover, an expansion?
Why your business will be profitable. What are the growth opportunities? When your business will be open (days, hours)?
What you have learned about your kind of business from outside sources (trade suppliers, bankers, publications).
What you are selling.
How your product or service will benefit the customer.
Which products/services are in demand; if there will be a steady flow of cash.
What is different about the product or service your business is offering.
What are your location needs?
What kind of space will you need?
Why is the area desirable? The building desirable?
Is it easily accessible? Is public transportation available? Is street lighting adequate?
Are market shifts or demographic shifts occurring?
The Marketing Plan
Who are your customers? Define your target market(s).
Are your markets growing? steady? declining?
Is your market share growing? steady? declining?
If a franchise, how is your market segmented?
Are your markets large enough to expand?
How will you attract, hold, increase your market share? how will you promote your sales?
What pricing strategy have you devised?
Who are your five nearest direct competitors?
Who are your indirect competitors?
How are their businesses: steady? increasing? decreasing?
What have you learned from their operations? from their advertising?
What are their strengths and weaknesses?
How does their product or service differ from yours?
Pricing and Sales
retail cost and pricing
service costs and pricing (for service businesses only)
The Management Plan
How does your background/business experience help you in this business?
What are your weaknesses and how can you compensate for them?
Who will be on the management team and what are their strengths/weaknesses and duties?
Are these duties clearly defined?
Will this assistance be ongoing?
What are your current personnel needs and what are your plans for hiring and training personnel?
What salaries, benefits, vacations, holidays will you offer?
Initial Business Plan Assignment
Mission/Objectives – what’s the true nature of your business (don’t be too narrow), how will you build customer satisfaction, what is your workplace philosophy, what value to the customer do you offer
Keys to success – limit to three and focus on those
Target Market – good educated guess
Competitive Advantage – what distinguishes you and your product
Basic Strategies – how will you develop the company and products
Initial break-even chart
Simplified Business Plan Outline
Market Analysis Summary
Strategy and Implementation Summary
Company Summary - Legal
Types of Business Entities
Pros - simple, inexpensive up front
Cons - personal responsibility to creditors
Tax treatment is straight through to your personal return
Pros – partnership agreement serves as legal core, defines levels of risk, buy-out agreements, etc.
Cons – requires good attorney, can be complex
Tax treatment is usually straight through to your personal return
Company Summary - Legal
Types of Business Entities (Cont.)
Pros – used by majority of companies, best shielding from liability, best non-tax benefits, best for raising money and going public
Cons – profits taxed twice
Tax treatment – C Corporation pays its own taxes
Pros – used by smaller firms (25 owners maximum), profits taxed once
Cons – less shielding from liability than C Corp.
Tax treatment – S Corporation can pass profits or losses directly to owners
Trademarks law protects product names, logos, trade names, slogans.
US Patent and Trademark Office website www.uspto.gov
Can’t reserve a name completely, but company has rights to its identity.
Your own name
“Doing Business As” (county registration)
Corporation (state registration)
Company Internet Domain Names
Can look in NSI Registrar database using searchers such as
to find available second-level names (example.com or example.biz) and
to find links to help register names
Company Location & Facilities
Offices and locations and function of each
Size (square footage)
Lease arrangements (etc.)
All location & facilities factors that sell your company
ex. reliability and service for a price
Proprietary technology protected by patents
Headstart in area
Company Start-Up Costs
Start-Up Expenses – include only those that come before the start of the plan. Those that come after go in profit and loss table.
Expenses – those items that are deductible against income
Start-Up Plan - Expenses Legal $1,000 Stationery, etc. $3,000 Brochures $5,000 Consultants $5,000 Insurance $350 Expensed Equipment $3,000 Other $1,000 Total Start-up Expense $18,350
Start-Up Plan - Assets Cash Requirements $25,000 (cash may need to change as you get better estimates for cash flow) Other Short-Term Assets $7,000 Total Short-Term Assets $32,000 Long-Term Assets 0 Total Assets $32,000
Total Start-Up Plan Requirements Total Start-up Expense $18,350 Total Assets $32,000 Total Start-Up Requirements $50,350
Start-Up Funding – Investments Investor 1 $20,000 Investor 2 $20,000 Other $10,000 Total Investment $50,000
Start-Up Table Summary Total Start-Up Expenses $18,350 Total Assets $32,000 Total Start-Up Requirements $50,350 Total Investment $50,000 Total Liabilities $350 Total Investment and Liabilities $50,350 Loss at Start-Up (- Start-Up Expenses) ($18,350) Total Capital (Assets – Liabilities) $31,650 Total Capital and Liabilities $32,000 Must Match
Rule of Accounting Capital = Assets – Liabilities This is company’s Net Worth
Describe the product
What the product is
How much it cost
Who purchases it
Think about customer needs and benefits
Use this to as possible way of generating new ideas
Do competitive comparison
What buyer choices are available
How does you product line compare to other companies