developing your business plan

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© 2012 CAPBuilder Network Group All rights reserved WRITING YOUR BUSINESS PLAN

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Page 1: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

WRITING YOUR BUSINESS PLAN

Page 2: Developing your business plan

2© 2012 CAPBuilder Network Group All rights reserved

Marc Parham, Radio Show Host, MC/Speaker, Infopreneur

Page 3: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

The 6 basic steps to business plan developmentAnswering the basic questionsDeveloping the business ideaTools for writing the planHow to research for the planThe business plan outlineDeveloping business plan contentHow to develop basic financial budgets and projectionsSummary

Workshop Agenda

Page 4: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

1. Answer the basic questions (Who, What, When, Where, Why)2. Research the type of business3. Research the demographics of the service area4. Research for other similar businesses and business plans5. Develop the business plan outline6. Write the business plan

THE 6 BASIC STEPS

Page 5: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

• WHO • Who are you and the name of your business

• WHAT• What type of business and what are you selling?

• WHEN• When are you selling it?

• WHERE• Where are you going to sell it?

•WHY•And Why are you in business?

The Basic Questions

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© 2012 CAPBuilder Network Group All rights reserved

Developing The Business Idea

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Develop Your Business Idea Template Business Name:

6-What are the cost to make and deliver 1 unit of your product?Labor - Materials -Total -

7 The Price– What are you going to charge for 1 unit of your product?Price - Cost - Net -

1 - The Problem - Top 3 problems your business will solve 1. - People need business plans2. -3. -

3 - The Solution - Top 3 products to solve the problems1. -2. -3. -

4 Unique Selling Proposition –A compelling message that states why you are different and why buy from you1. -

5 Marketing - How will you market and sell your products?

2 - Your Customers-Who are the people that have the problem1. -2. -3. -

www.capbuildernetwork.com

Internet Social Media Advertising Direct Sales Flyers Inbound Mkt TV/Radio

Marketing Company ________________ ________________

8 Revenue Projections- What will be the gross revenue target per monthQty Per Wk - X 4 Wks = x Price = Gross Monthly Revenue

Page 8: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

Tools for writing the plan

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© 2012 CAPBuilder Network Group All rights reserved

• There are many tools for helping to write a business plan• You may find tools online by using a search engine (i.e.

google, bing, etc) to find tools by entering “write a business plan”

• You will find many websites offering different tools and programs to help write the plan

• Some are templates and others actually write the plan• The next slide lists a few popular sites

Tools For Writing The Plan

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© 2012 CAPBuilder Network Group All rights reserved

• Business Plan Software• www.bplans.com

• Business Plan Templates• Do a search online for business plan templates

• SBA Online Business Plan Template• www.sba.gov

• Wells Fargo Works• www.wellsfargoworks.com

• CAPBuilder Network• www.capbuildernetwork.com

Tools For Writing The Plan

Page 11: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

• It is recommend that you do research before you start writing your plan

• Unless you have a very unique business idea there are existing businesses that you can research to learn more about your business idea

• You can find out information about your potential customers

• The there areas of research on the next slide will help you answer some important questions.

Research For The Plan

Page 12: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

• Demographic Research• Use Google/Bing to search the zip code area

• Competition Research• Use Google/Bing to search the zip code by

businesses of the same type• Go to the websites of similar businesses

• Business Plan Research• Go to www.bplans.com to find a similar plan• Review it to get ideas on what to put into yours

Research For The Plan

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© 2012 CAPBuilder Network Group All rights reserved

• The information on the next slides covers what is contained in the basic business plan

• You will start with the business plan outline• The outline contains the headings for each

important section in the business plan• The actual plan is developed by working on

developing the content for each section of the plan

• The following slides will show you what information is contained in each section

The Business Plan Outline

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© 2012 CAPBuilder Network Group All rights reserved

• Executive Summary • Business Description and Vision • Definition of the Market • Description of the Products and Services • Organization and Management • Marketing and Sales Strategy • Financial Management

The Business Plan Outline

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© 2012 CAPBuilder Network Group All rights reserved

• Start writing your plan one heading at a time. Use your own words. • It is you that is selling the idea. You will have someone read it later to

see how well it reads. • Research, Research! Yes I said it! • You will have to do some research to fully develop your plan. Use the

internet to do this research.

Writing the Plan

Page 16: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

DEVELOPING THE BUSINESS PLAN CONTENT

Page 17: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

• The information for the following slides come directly from the SBA website on how to write a business plan

• It is recommend that you use the SBA.gov website to help you develop your plan

• The site has many tools, articles, templates and assessment to help you write the plan

• The next slides will tell you what information should be in each section and what the reader of the plan should come away with.

Developing The Business Plan Content

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© 2012 CAPBuilder Network Group All rights reserved

• This section should: • Be written last.• Provide an enthusiastic snapshot of your company,

explaining who you are, what you do and why.• Be less than 2 pages in length.

• After reviewing this section the reader should: • Want to learn more about your business.• Have a basic understanding about your company.

Executive Summary

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© 2012 CAPBuilder Network Group All rights reserved

• This section should include: • Mission statement (business purpose).• Company vision (statement about company growth).• Business goals and objectives.• Brief history of the business.• List of key company principals.

• After reviewing this section the reader should know: • Who the business is and what it stands for.• Your perception of the company’s growth & potential.• Specific goals and objectives of the business.• Background information about the company.

Business Description and Vision

Page 20: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

•What will be the objective of your business? For example if you are starting a restaurant, what will be the main reason people will come to you. The best wings, great food at a good price, a place where I can bring my family.

Business Objectives

Page 21: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

• This section should: • Describe your business industry and outlook.• Define the critical needs of your perceived or existing market.• Identify your target market.• Provide a general profile of your targeted clients.• Describe what share of the market you currently have and/or anticipate.

• After reviewing this section the reader should know: • Basic information about the industry you operate in and the customer needs

you are fulfilling.• The scope and share of your business market, as well as who your target

customers are.

Definition of the Market

Page 22: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

• This section should: • Specifically describe all of your products and services.• Explain how your products and services are competitive.• If applicable, reference a picture or brochure of your products,

which would be included in the plan’s appendix.• After reviewing this section the reader should know: Why you are in

business.• What your products and services are and how much they sell for.• How and why your products & services are competitive.

Description of Products and Services

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© 2012 CAPBuilder Network Group All rights reserved

• This section should: • Provide a description of how your company is organized as well as an

organization chart, if available.• Describe the legal structure of your business (proprietorship, partnership,

corporation, etc.).• Identify necessary or special licenses and/or permits your business operates

with.• Provide a brief bio description of key managers within the company.

• After reviewing this section the reader should know: • The legal form of ownership for your business.• Who the leaders are in your business as well as their roles.• The general flow of operations within the firm.

Organization and Management

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© 2012 CAPBuilder Network Group All rights reserved

• What type of legal business structure do you plan on using? A Sole-proprietorship, an LLC or a corporation.

• Is it going to be a retail business where people come to you to buy your product or service (i.e. store, restaurant, cleaners, etc) or will you take your product or service to the customer? (Lawn care, handyman, house painter, etc.).

Organizational Structure

Page 25: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

Why can you be successful in this particular business? What is your or your key person’s background and experience in this

area of business? ◦Using the home painting business as an example, maybe you have been

working painting homes for other companies for 15 years and you learned from your grandfather who has been doing it all of his life.

Who will do the bookkeeping, ordering of supplies, and invoicing. This might be you, but you will need to show that you are aware that

this is important and someone will be doing it.

Management Team

Page 26: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

• This section should: • Identify and describe your market – who your

customers are and what the demand is for your products & services.

• Describe your channels of distribution.• Explain your sales strategy, specific to pricing,

promotion, products and place (4Ps).• After reviewing this section the reader should know:

• Who your market is and how you will reach it.• How your company will apply pricing, promotion,

product diversification and channel distribution to sell your products and services competitively.

Marketing and Sales Strategy

Page 27: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

• How will you market your business? • The internet, local newspapers, flyers,

coupons, etc. • How will you get the message out?

• You might attend neighborhood meetings to announce your company.

• If you are a restaurant you might even supply the food for a neighborhood meeting.

Marketing Plan

Page 28: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

You will need to do research for similar companies in your area that area.

This will also help you create differences in how you will sell your product.

A simple internet search will give you loads of information. For example, you want to start a take -out wings restaurant.

Use Google or another search engine and search for “take-out wings in 30303(your zip code)”.

The Competition

Page 29: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

Using Google again just enter the zip code for the area you want to service and you will find a report in the return hits that contains the demographic information for this area.

There will be different reports. Find the one that has the information you need to support your idea. ◦Using the Take-out Wings restaurant, you might find

that there is a college, sports stadium, or park in the area. You might also find that there are a lot of young people that live in the area and we know who eats a lot of wings….

The Customer

Page 30: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

• This section should include: • For a New Business

• Estimate of start-up costs.• Projected balance sheet (1 year forward).• Projected income statement (1 year forward).• Projected cash flow statement (12 months forward).

• For an Existing Business• Balance sheets (last 3 years).• Income statements (last 3 years).• Cash flow statement (12 months).

• If Applying for a Loan (in addition to the above)• Current personal financial statement on each principal.• Federal tax return for prior year.

Financial Management

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© 2012 CAPBuilder Network Group All rights reserved

• After reviewing this section the reader should: • Have a good understanding regarding the financial capacity and/or

projections for your company.

Financial Management

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© 2012 CAPBuilder Network Group All rights reserved

Develop basic financial budgets and projections

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© 2012 CAPBuilder Network Group All rights reserved

What will it cost to start and run your business for at least the next two years.

There will be fixed cost or cost that will pretty much stay the same (i.e. rent, utilities, equipment, insurance, etc).

There also will be variable cost that will change as your business changes.

For example if you are starting a home painting business you might create a cost sheet for how much it will cost to paint a average 3 bedroom house. (I.e. paint, labor, supplies).

Financial Plan

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© 2012 CAPBuilder Network Group All rights reserved

• Enter the est. cost• Use other plans• Research• Research• Research

STARTUPBUDGET

Startup BudgetJune 8, 2010

Cash Neededto Start

Monthly CostsSalary of owner-manager $6,000All other salaries and wages 7,000Rent 1,000Advertising 2,000Delivery expense 400Supplies 500Telephone 500Other utilities 500Insurance 600Taxes, including social security 1,000Interest 500Maintenance 300Legal and other professional fees 3,000Miscellaneous 500 Subtotal $23,800

One-Time CostsFixtures and Equipment $10,000Decorating and remodeling 1,000Installation charges 500Starting inventory 5,000Deposits with public utilities 1,000Legal and other professional fees 500Licenses and permits 500Advertising and promotion for opening 500Cash 750Other 200 Subtotal $19,950

Totals $43,750

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© 2012 CAPBuilder Network Group All rights reserved

• Use this worksheet to project business cash flow.

CASH FLOW PROJECTIONS

Starting date May-10Cash balance alert minimum 0 0 0 0 0 0 0 0 0 0 0 0

Beginning May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 TotalCash on hand (beginning of month) 0 787 4,334 7,881 11,428 14,975 18,522 22,069 25,616 29,163 32,710 36,257

CASH RECEIPTSContract Service 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 28,800Call out fees 800 800 800 800 800 800 800 800 800 800 800 8,800Service Calls 2,560 2,560 2,560 2,560 2,560 2,560 2,560 2,560 2,560 2,560 2,560 28,160Misc Parts 0Product/Service 5 0Misc Revenue 0TOTAL CASH RECEIPTS 2,400 5,760 5,760 5,760 5,760 5,760 5,760 5,760 5,760 5,760 5,760 5,760 65,760Total cash available 0 2,400 6,547 10,094 13,641 17,188 20,735 24,282 27,829 31,376 34,923 38,470 42,017

CASH PAID OUTAdvertising 100 100 100 100 100 100 100 100 100 100 100 100 1,200Commissions and fees 0Contract labor 0Employee benefit programs 0Insurance (other than health) 250 250 250 250 250 250 250 250 250 250 250 250 3,000Interest expense 0Materials and supplies (in COGS) 0Meals and entertainment 0Mortgage interest 0

PCA Small Business Cash Flow Projection

Page 36: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

• The plan is a living document. It will change as you and your business changes

• Start writing your plan one heading at a time. Use your own words. It is you that is selling the idea.

• Research, Research! • Use all available resources• Have someone read it later to see how well it reads.

Summary

Page 37: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

• Use spell check and other tools to help correct the basic errors in your plan.

• Remember they will not catch everything. • You must read it yourself and have other read it as well. • Don’t get all sensitive if they come back with changes and

corrections. • You would rather have them find them then your potential

investor or bank.

Review the Plan

Page 38: Developing your business plan

© 2012 CAPBuilder Network Group All rights reserved

• Google / Bing• www.google.com• www.bing.com

• Bplans.com – Sample Business Plans• http://www.bplans.com/

• Small Business Administration• www.sba.gov

• http://web.sba.gov/busplantemplate/BizPlanStart.cfm• Internal Revenue Service

• www.irs.gov• http://www.irs.gov/businesses/index.html?navmenu=menu1

• CAPBuilder Network Group• www.capbuildernetwork.com

Useful Resources

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[email protected]

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