Business PlansBusiness Plans

For The Real World

Why a Business Plan?Why a Business Plan?

Strategic Guide

Lenders

Investors

Strategic GuideStrategic Guide

Where Do You Want To Go? How Are You Going to Get There? What Market Niches? How Much is it Going to Cost? Greatest Profit Opportunity?

Lender ExpectationsLender Expectations

Good Business Track Record Ability to Repay Staying Power Collateral

Investor ExpectationsInvestor Expectations

Competitive Advantage Huge Market Strong Management Team Strong Marketing and Sales Plan Some Skin in the Game Obscene Return Exit Strategy

Entrepreneurs Start Businesses:Entrepreneurs Start Businesses:

To Capitalize on an Invention To Pursue a Passion To Be Their Own Boss To Get Rich

---All Need an Exit Strategy

Exit StrategiesExit Strategies

Selling the Business Transferring the Business to a Family Member Taking the Company Public Being Acquired by a Larger Company

Funding Sources:Funding Sources:

Savings Friends and Family Financial Institutions / Banks Angel Investors Venture Capital

Business Plan ContentBusiness Plan Content

Executive Summary Company Description Product/Services Description Industry Overview Market Analysis Competitors

Business Plan ContentBusiness Plan Content

Customers Marketing and Sales Plans Development Operations Management

Business Plan ContentBusiness Plan Content

Personnel Financial Summary Financials Offering Appendices

Executive SummaryExecutive Summary

A mini-business plan in one or two pages Highlights the most important points of your

business plan It is NOT an introduction to the plan It must grab your reader, and entice him/her to

read further

Executive SummaryExecutive Summary

Identify the company, its background, structure and location

Describe what the company does, and the market it serves

Describe the market potential for the company’s products and services, market trends, etc.

Executive SummaryExecutive Summary

Outline the backgrounds and experience of the top management team

Describe the funding required, the purposes for which it will be used, the collateral available (if for a lender), and the expected outcomes

Company OverviewCompany Overview

Brief Company Introduction– Mission statement– Location, size, history– Market and products– Overview of company capabilities– Objectives

Products/ServicesProducts/Services

Products / Services– What does it do?– Uniqueness– Competitive Advantage

Technology– Brief description– Applications

Commercialization Status– Brief overview

Industry OverviewIndustry Overview

Set The Stage Industry Definition and Description

– Major players within the industry– Factors driving dynamics– New products and developments

Legislation and Policies Driving the Industry Historical and Future Trends

Market AnalysisMarket Analysis

Market Definition– Primary Market– Secondary Markets

Market Size and Trends– Current total revenues– Predicted annual growth rate

CompetitorsCompetitors

Direct Competitors– Who are they?– Size and product breadth– Revenues and profitability– Strengths and weaknesses– Market shares

Indirect Competitors

CustomersCustomers

Customer Characteristics– Who are they?– Why do they buy?– Need satisfied by the product/service– How is the need currently filled?– What are the alternatives?– Who makes the decision to buy?– How frequently do they purchase?

Marketing and Sales PlansMarketing and Sales Plans

Statement of Opportunity Marketing and Sales Objectives Existing Customers Potential Customers

– Prospects targeted– How prospects will be targeted and qualified

Marketing StrategiesMarketing Strategies

Product/Service Strategy Pricing Strategy Distribution Strategy Advertising and Promotion Strategy Sales Strategy Marketing and Sales Forecasts

Marketing and Sales PlansMarketing and Sales Plans

Marketing Programs– Direct Mail– Trade Shows– Advertising– Internet– Publicity/Public Relations– Marketing Budget

Pricing– Basis for targeted price point– Margins and profitability by volume levels

Marketing and Sales PlansMarketing and Sales Plans

Sales Plan– Sales force structure – (direct or reps)– Sales expectations/quotas– Margins given to intermediaries– Service and warranties– Sales Budget– Organizational chart indicating planned growth

DevelopmentDevelopment

R & D Plan– Objectives– Milestones and current status– Difficulties and risks– Staffing– R & D Budget and assumptions

OperationsOperations

Manufacturing/Production Plan– Objectives– Facilities– Staffing– Subcontractors– Quality Control– Budget / Operating Expenses

ManagementManagement

Company Organization Management Team Administrative Expenses

Management TeamManagement Team

President VP Finance VP Sales VP Marketing VP Manufacturing Board of Advisors

PersonnelPersonnel

Human Resource Plan– Staffing Objectives– Organizational Structure– 3-5 year growth plan– Budget

Summary of FinancialsSummary of Financials

Financial Objectives– Time to Cash Flow Positive– Time to profitability

Financial Assumptions Capital Requirements Exit Scenario

FinancialsFinancials

Pro-forma Cash Flow Projections Pro-forma Profit & Loss Statements Pro-forma Balance Sheet

A pro forma financial statement is defined as "a financial statement prepared on the basis of some assumed events and transactions that have not yet occurred." Historical financial statements are used to measure an organization's past financial performance and condition. Without historical financial statements, financial analysis and evaluation would not be possible and management, board members, investors, and customers would be largely in the dark about how well an organization has done.

Pro forma financial statements are similar to historical financial statements in appearance and use, except that they focus on the future instead of the past and are based upon assumptions rather than hard fact. Historical statements should be real, solid, and scientific, while pro forma statements allow management to exercise a certain amount of creativity and flexibility. Pro forma statements reflect a dynamic environment in which change is still possible and a variety of different alternatives can be followed. They take the same forms as historical statements, the most common being the income statement, the balance sheet, and the statement of changes in financial position.

OfferingOffering

Investment Requirements Pro-forma Valuation of Business Offer

AppendicesAppendices

Resumes of Key Management Patent Information Customer List Testimonials Supplemental Financial Spreadsheets References

http://www.sba.gov/category/navigation-structure/counseling-training

http://www.sba.gov/content/starting-business http://www.score.org/resources/business-plans-financial-st

atements-template-gallery http://www.dothan.com http://www.sba.gov/content/why-do-you-need-one

Questions?Questions?