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Business Plan Guide
Summary
This outline is intended to assist an entrepreneur in writing a business
plan for setting up an establishment, the purchase or the expansion of
an existing business.
What Is a Business Plan?
A business plan is a recognized management tool used by successful
and/or prospective businesses of all sizes to document business
objectives and to propose how these objectives will be attained within a
specific period of time. It is a written document which describes ;
who you are,
what is your business type,
what you plan to achieve,
how you plan to achieve the objective,
where your business will be located,
when you expect to get under way,
how you will overcome the risks involved and
how will you earn the returns anticipated.
Why Do You Need a Business
Plan?
A business plan will provide information of your proposed venture to
lenders, investors, and suppliers to demonstrate how you plan to use
their money, and to establish a basis for credibility of your project.
When Should a Business
Plan Be Prepared?
The sooner you develop your business plan, the better. You will find
that the final copy of your business plan will differ largely from the
original draft, as you will be updating, revising and refining it as you
go farther. It is important that you examine all the relevant factors
before you start your venture. It will make you able to anticipate many
surprises in store for you, which may occur after your business
commences.
Who Should Prepare a
Business Plan?
The business plan should be prepared by those persons responsible
for implementing it.
Outside assistance from
consultants, accountants, bookkeepers, and experienced business people
will definitely help, but you must draft the initial plan yourself.
After all, you are the one who is going to run the business, once it
commences.
Think through each element of
your business plan thoroughly so you have a good understanding of the
overall picture and of all the details.
Present your plan to others
for constructive criticism and advice and try to refine it from their
experience. Modify your plan if necessary.
What's in this for Me?
If you have never drawn up a business plan before, you may never
ascertain beforehand as to what will be the overall capital expenditure
you will require for your business and what will be the earnings out of
it. Once it has been prepared by you, your plan will give you a guide to
follow. It will give an insight of your business therefore positively
affecting the decisions being taken by lenders , investors or suppliers
. The business plan will help you in the whole decision making process
about the business by giving you an idea about competitive conditions,
promotional opportunities, sources of finance etc. Your goal will be to
put the plan into action.
1. Executive
Summary/Business Description
Briefly describe:
-
if this is a new business
venture, expansion of an existing business or the purchase of an
existing business;
-
the type of business
activity in which you are engaged (manufacturing, wholesale, retail,
processing, service, high end technology, etc.);
-
your product or service and
its uniqueness;
-
the target market segment
to be served;
-
likely competitors in your
field;
-
advantage over the
competitors;
-
main objectives of your
organization;
-
your management background;
-
the project time frames
involved.
(Preferably this should be
not more than a one page summary )
In addition, briefly describe
what form of business structure you have chosen:
-
sole proprietorship;
-
partnership (enclose
agreement);
-
corporation (enclose
shareholders agreement);
-
co-operative (enclose
membership agreement).
Also include:
-
date the business was
registered/incorporated;
-
the business name and
address;
-
the business phone number;
-
the principal(s) name(s)
and telephone number(s);
-
the percentage of business
or number of shares held by each promoter (in partnership or
corporation);
-
the Web site address and
relevant e-mail addresses.
2. Project Costs and
Project Funding
Identify the costs of the proposed business venture and the sources of
the project funding.
Project Cost Summary
Land and Buildings ____________________
Leasehold Improvements (renovations) ____________________
Equipment/Furniture ____________________
Other Fixed Assets ____________________
Intangible assets(goodwill, franchise etc) ____________________
Vehicles (if used in the business) ____________________
Other Start Up Expenses ____________________
Contingencies ____________________
Interest during construction period ____________________
(In case of term loan)
Working Capital ____________________
Total Project Cost ____________________
Project Funding
Equity
- cash ____________________
- contributed assets ____________________
Land and Building Mortgage loan ____________________
Equipment Loan ____________________
Other Loan ____________________
Working capital finance ____________________
Grant/Subsidy ____________________
Total Project Funding ____________________
*Total Project Costs and Project Funding must be Equal
3. Product/Service
-
Describe the products to be
produced or the services to be provided.
-
What makes your
product/service unique, or, how is your business different from others
in the industry?
-
What are the
features/advantages that will entice customers to buy from you (i.e.,
convenience, service, performance)?
-
Will you offer any product
or service guarantees/warranties?
-
Provide information on any
patents, trade secrets, or other technical advantages over the
competitors.
4. Marketing
-
Identify the total market
for your product or service.
-
Identify your target
customer for your product or service?
-
Identify your competition
detailing their strengths and weaknesses and your opportunities and
threats relative to them.
-
How will your competitors
react to you entering the market?
-
What are your past sales
(if applicable) and future projections?
-
What price (manufacture,
wholesale, retail, etc.) do you intend to charge for you
product/service and how does it compare to the competitor?
-
What are your selling terms
(cash or credit)?
-
Identify promotional
campaigns that will be used.
5. Operating Requirements
-
Identify your facility
requirements as to the size, location, and type of premises. Include
drawings of the proposed building layout. Attach the most recent real
estate appraisal, offers to purchase or lease agreement, supplier
quotations, etc.
-
Indicate locational
advantages of your site .
-
Provide details relating to
special requirements as to water, power, compressed air, ventilation,
heat, air conditioning, drainage, disposal, Department of Health
requirements, etc. Attach most recent approvals from Public Health,
Liquor Licensing, City zoning, Pollution etc.
-
Provide a detailed listing
(including legal descriptions) of the land and building(s), leasehold
improvements, plant & machinery , equipment and furniture, vehicles,
inventory and other assets. The listing should include the proposed
purchase price, brand and supplier of each asset.
-
Provide a general
description of the day-to-day operations of the business (include
hours of business, days open, seasonality of business, suppliers and
their credit terms, etc.).
-
Provide estimates of the
each element attributing towards the cost of the product/manufactured
and its sale price (if applicable).
6. Management
-
What is the proposed
organization chart of the company (i.e. who does what)? Include a
brief job description for each position.
-
Provide brief management
biographies of the key personnel (include their ages and backgrounds
in this type of business).
-
State the compensation
package (salary, bonus, profit sharing, etc.) for each member of
management.
7. Personnel
-
List employees (not owner
or manager) using the following headings:
o position: full-time, part-time, seasonal, temporary; and
o method of payment: hourly, monthly, commission, etc.
-
Provide a job description
for each position, identifying the responsibilities and duties
involved. Include what skill level is needed.
-
If job training is
required, identify the duration and the cost of the training.
8. Financial Projections
Provide a projected (pro-forma) Three Year Cash Flow, Balance Sheet and
Profit or Loss Statement.
9. Additional Information
It is common for a financial institution to request that the principal(s)
submit, with a loan application, a statement of personal net worth. This
form is usually provided by the financial institution. If applicable,
historical financial statements on the business venture may also be
requested. Other supplementary and supporting documents for your
business plan should be included in appendices. |
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