2. Objectives
Why is a Business Plan important?
What are the Key Business Plan Components?
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Gain the tools you need to Write a Winning Business
Plan!
4. Why You Need a Business Plan
A Business Plan is a Roadmap
How Will You Start and/or Grow
Where Will You Obtain Funding
Marketing/Sales Strategy Clarified
Financial Planning
5. Who Will Read The Plan
– Plan Organized to Convince Funding Sources
– Resource Providers (Funders) Expect
• Consistent, Structured Format
• Professional Presentation
– Address your Audience’s Questions
• How/When Will They Benefit?
• Do They Believe You Can Make It Happen?
• What Are the Costs/Risks For Them?
6. Before You Start Writing
e o e ou S a W g
What Do You Want to Convey
Follow a Logical Progression
Refrain from Industry Jargon
Present Clear Conclusions
Emotional & Human Side Tell the Story
7. Table of Contents
• Company Summary
– Company Ownership
– Start-up Summary
• Products and Services
– Product D
P d t Description
i ti
– Service Description
– Competitive Comparison
– Technology
T h l
• Market Analysis Summary
– Market Segmentation
– Target Market Segment Strategy
– Trends
9. Table of Contents
• Financial Plan
– Important Assumptions
– Break-Even Analysis
– Projected Profit and Loss
– Projected Cash Flow
– Projected Balance Sheet
• Appendix
pp
– Assumptions
– Licenses
– Lease Info
– Contracts
– Testimonials
10. Executive Summary
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A Stand Alone Document
Objectives/ Mission/ Keys to Success
Make Sure Your Summary is:
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– Concise - 2 Pages Maximum
– Cohesive – Briefly Tells the Full Story
– Compelling – Get Them to Read the Details
– Clear- How Much Money Are You Asking For?
11. Business Description (Overview)
Your Company - Include Vision, History, Structure
Your Vision/Mission – Clear, Assertive
Overview of the Industry - Important Fact-based Trends
Your Value Proposition - What Makes Your Product or Service
Unique AND Valuable
Estimated Revenues and Profit/Cash Flow (3 Years)
12. Management
g
Leadership
The Team
Back up plan
Include Outside Advisors (L
I l d O t id Ad i (Lawyer, A Accountant,
t t
Consultants, Insurance, Banker, Etc.)
Ownership (% of Each Partner, Owner)
13. Ope a o s a
Operations Plan – How w you run the Business
ow will u e us ess
Can Be Complex and Require Special Expertise
– P d t - M t i l H dli L i ti P k i
Product Materials Handling, Logistics, Packaging,
Purchasing, Etc.
– Service - Abstract Processes
Seasonality and Other Demand Peaks
Make vs. Buy (Outsourcing)
Don’t Overlook the Details
Transportation Considerations and Costs
Labor C id
L b Considerations
i
Non-production Processes and Admin Process Flows
15. How To Develop Technology /Ops Skills?
p gy / p
Family Business – Helped or Ran
Education
Training
– Hands-on Work, Classes, Courses
– On-the-Job Training (Volunteer)
Relevant Work Experience
16. Can You Create A Difference?
Low Cost
Targeted Need
Service or Convenience
Innovation
Offer a Product/Service Solution to a Customer
Problem
17. Marketing
Market Research – Provides Information About the
Buyer/Customer, Competition, and Product/Service.
Market Planning Product/Service Introduction, Startup,
M k t Pl i – P d t/S i I t d ti St t
Product Life Cycle
Advertising and Sales Promotion -- Define Audience & $$
Prior to Committing to Print, Radio, TV, InterNet
18. Who is Your Customer?
Who Buys Your Products and Services
Wh Do They Think About You/ Your
What h h k Ab /
Competitors?
Costs Far Less to Maintain an Existing Customer
g
Than to Generate a New One
19. Ma e
Market Information
o a o
What Is the TOTAL Market for the Product/Service
Define YOUR Market for Products And/or Services
Geographic (Primary/ Tertiary) – by ZIP Code/
Countyy
Demographic – What Are Average Incomes, Ages,
etc.
Growth Trends and Changes – Who’s Going In/out
/
of Business? And why?
Potential Downside – Who What Can Replace the
Who,
Service? Cost/ Quality/ Service Aspects?
20. Ma e g d Sa es a
Marketing And Sales Plan
Who Is (and Isn’t) Your Target Customer?
Need to Locate, Communicate, and Educate Prospects
How Will You Get Them to Change Their Behavior?
Wh t Will Y E h i ?
What You Emphasize?
How Will You Overcome Perceptions of Risk (Inertia and
Performance)?)
Tools (Mail, Direct Sales, Etc.), and Why It Makes Sense?
21. Sales Plan
How Do You Sell in Your Market?
How Will You Ask for the Order?
Provide for Lead Times
Sales Structure and Compensation?
S l St t dC ti ?
22. Selling Your Products/Services
Develop A Sales Strategy – Who to Sell to, When, How, What
Products/Services
Develop a Sales Team – Start Small, Grow
Set Specific Objectives – by Month, Quarter, Year, 3 Year
Analyze Sales Results Periodically
Teach Sales Techniques - Training Is Essential for Product
and/or Service Knowledge
23. Product / Services Analysis
What Needs Does Your Product/Service Meet?
/
What Support Services Are Required?
How Can You Reduce Customer Costs? Increase Customer
Revenues?
How Does Your Product/Service Compare With Competition?
Wh t A th Possible S b tit t N A li ti ?
What Are the P ibl Substitutes, New Applications?
24. Competitive Analysis
Who Are Your Competitors?
What Are Their Strengths and Weaknesses?
Wh Is Their Market A
What h M k Approach (C h (Customer
Segmentation, Sales Focus)?
How Are They Financed?
What Is Their Reputation?
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How Are You Better?
25. Pricing
Know Break Even Point -- May Have to Walk Away
Break-Even
Pricing Strategy Vs. Competition – Ask Customers
Vs
Pricing – Cost Competition Product Uniqueness
Cost, Competition,
C id All C t – Di t Indirect
Consider Costs Direct, I di t
26. Advertising and Sales Promotion
Target Advertising
g g
Use the Most Effective Medium for Your Audience
Must Be Cost Effective
Consider A Promotion Professional
Use Free Media
28. Ma e g og a Su a y
Marketing Program Summary
Select Market Strategies
Prepare Marketing Plan
Prepare S
Supporting Sales Plan
S l l
Focus on Differentiation
Communicate Internally and Externally
Measure Performance and Adjust Plans to Meet
Market Conditions
29. Sell Yourself & Your Plan
Funding Sources Are Skeptical
– Bankers Are Risk Averse – Get to Know Them Early
in the Cycle
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– Equity Sources Are Tough to Impress, Want Proof of
Conceptp
You Are the Message – Present Yourself, Your Case,
Evidence, Backup Assertions
30. Funding
Show How You Will Create Value
Show h
Sh That You C C
Can Control Risks
l k
Why Should Someone Believe You Are
Better Equipped to Take Advantage of the
q pp g
Opportunity
31. Banks Look at 5 Cs
Character – Credit History (Have You Paid Your Bills on Time); Are
You Personally Involved and Responsible for Success?
Collateral – Do You Have a House to Put up Against a Loan? The
Greater the Bank’s Risk, the Higher Your Interest Rate
Cash Flow – Will the Business Cover Your Living and Business Expenses
for 6 Months to One Year?
Capitalization – What Does It Cost in Asset Investment to Get Started?
(Low C t St t B i
(L Cost Startup Business: Cleaning Wi d
Cl i Windows, N d S Need Squeegee and d
Soap; High Startup Cost Businesses: Restaurants, Retail Stores)
Conditions – Working Capital, Ongoing Costs, Competition, Industry
Trends, Regulations (Local, State, and National, OSHA, Handicapped)
32. What Equity Investors Look for in a Startup
q y p
Timing- Short Term, 3-5 Years?
Timing 35
Is Your Business Model Proven?
How Long Have You Been in This Type of Business?
Are You Going to Actively Work in the Business?
How Much Do You Have Invested in the Business?
What Are Your Risks?
33. Financial Plan
Well-Documented Assumptions Are Crucial
– Acknowledge Risks
– Pricing d Product Costs
P i i and P d t C t
– Sales Forecasts and Market Share
– Lead Times – Receivables, Payables, Working Capital
– Interest Costs – Loans, Family & Friends
Test for Reasonableness (You Cannot Double Sales Every Month Without
es o easo ab e ess ( ou Ca o oub e Sa es ve y Mo W ou
Serious Working Capital Problems)
Get Help If You Need It – Accountants TA
Accountants,
34. What Eats Up Cash
Accounts Receivables (A/R)
Difference Between Pay by Credit Card and Bill
Monthly
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Bill Monthly – Receive Payment Net 30 Days
or ++ More
Wait Time Affects Working Capital
Accounts Payable (A/P) – What You Owe, Loans,
etc.
35. Your Financial Plan
1. Personal Assets (What You Own to Pay for Startup)
2. Personal Li bili i (Wh Y N d to Li O )
2 P l Liabilities (What You Need Live On)
3. Business Services (Needed Before Startup)
4. Business Expenses (Ongoing)
5. Balance Sheet (Where Do You Stand?)
6. Cash Flow Statement (How Are You Doing?)
7.
7 Revenue/Expense (P&L) on a Cash Basis
36. Traps to Avoid
Confusing Description of the Business/ Vision
Unsupported Assumptions
Asking f
A k for Too Much Or Too Little M
M hO l Money
Use of Jargon and Acronyms
Hype, Overused Phrases
No Competition ; No Brainer
“No Competition”; “No Brainer”
Numbers that Do Not Look Realistic
37. Don’t forget…..
Your plan is a living
breathing document to be
modified significant
changes occur!
