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Business Plan |
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| Just as a trip is unlikely to succeed without a map, your
business is unlikely to succeed without a plan. A business plan is a map,
your company's written guide into the future. Not only does a good one let
you know where you are and where you're headed, it provides potential
lenders and investors with a portrait of your company. |
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| Contents of your plan
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First, you must define your market niche and identify the
competition. How does your product or service differ from theirs? |
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Will you need new equipment or skills to compete? |
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What is your marketing scheme, and how will you arrange for
capital? |
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Don't forget to refine your key operating ratios, and
project when you will become profitable. |
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| Benefits to Your Business |
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| Most business plans fail because they lack detail. A
well-developed business plan gives your small or new company immediate
respect in the eye of lenders, not only because it shows you to be
thorough and farsighted, but also because lenders rarely see good business
plans. |
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| Many owners find that as they struggle to define the essence
of their companies, strengths and weaknesses surface, making the process
more important than the plan itself. But don't belabor the plan; the key
is to get it on paper, distribute it, and start testing and refining the
original. |
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| When you have your plan on paper, invite suggestions from
key employees. This not only gives you a more realistic look at your
company, it creates in the eyes of the employee a sense of responsibility
and loyalty. |
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| Business Plan Outline |
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1)
Executive Summary (should be completed last) |
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a)
Your company's activities, management, and objectives |
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b)
Distinguishing features of your products/services |
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c)
Attractiveness of your target markets |
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d)
Summary of financial projections |
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e)
Amount of money you seek, in what form, and for what purpose |
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2)
Description of Your Business and Industry |
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a)
Your business |
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b)
The industry, its history, current state, and any recognized
forecast |
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3)
Features and Advantages of Your Products/Services |
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a)
Description |
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b)
Competitive advantage |
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c)
Proprietary position |
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d)
Future potential (e.g. "spin-offs") |
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4)
Market Research and Analysis |
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a)
Definition of your customers and markets |
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b)
Market size and trends |
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c)
Competition |
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5)
Estimated Market Shares and Sales |
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a)
Marketing plan |
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b)
Marketing strategy |
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c)
Pricing |
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d)
Sales tactics |
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e)
Services and warranty policies |
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f)
Advertising, public relations, and promotion |
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6)
Design and Development Plans |
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a)
Development status and tasks |
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b)
Difficulties and risks |
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c)
Costs |
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7)
Operations Plans |
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a)
Geographic location |
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b)
Facilities and improvements |
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c)
Strategy and plans |
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d)
Labor force |
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8)
Management |
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a)
Team Organization |
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b)
Key management personnel (credentials and/or resumes) |
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c)
Management compensation and ownership |
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d)
Board of directors |
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e)
Management assistance and training needs |
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9)
Overall Schedule |
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a)
Timing of critical activities before opening (e.g. company
incorporation, select location, order supplies, hire employees, start
production) |
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b)
Timing of critical activities after opening (e.g. expansion,
product/service |
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extension, delivery and
receiving schedules) |
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10)
Critical Risks and Problems (and Anticipated Responses) |
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a)
Price cutting by competitors |
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b)
Unfavorable industry wide trends |
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c)
Design/operating costs over estimates |
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d)
Low sales |
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e)
Difficulty obtaining supplies, raw materials |
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f)
Difficultly in obtaining credit |
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g)
Inflation above estimate |
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h)
Lack of trained labor |
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11)
Financial Plan |
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a)
Profit and loss forecast for the first three years (first year
monthly) |
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b)
Cash flow projections for three years (first year monthly) |
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c)
Pro forma balance sheet at start-up, semi-annually in first year,
and at end of first three years |
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12)
Ownership Structure |
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a)
Owners and how much they invest |
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b)
Present liabilities or verbal agreements |
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c)
Stock options |
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d)
Which owners making personal guarantees |
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13)
Proposed Company Offering |
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a)
Desired financing |
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b)
Capitalization |
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Use of funds, scheduling |
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