The KEY$TONE
Business Plan Guide
For Start-Up or Existing Businesses
(C) Copyright EMB, 1996
Click here for details on how the KEY$TONE
Co. can provide confidential long distance consulting for your business at
a reasonable rate.
A business plan can be used to
determine the feasibility of your business, an invention, a project, or when it
is necessary to get financing. Your
suppliers may need certain information from your plan, and it will help keep
your banker and investors informed. But
most importantly, YOU need it to stay focused, on course and ready for the
future! It will give you an edge on
competition.
There are many business plan guides
available to assist the entrepreneur in planning a course for the future.
The KEY$TONE approach is fundamental.
As you will notice, the fundamental functions of a business are
covered. These business functions
are marketing, operations (including services, production, and
manufacturing), personnel (also called human resources), research &
development (R&D), and finance.
The fundamentals of leadership and management are covered in the Overview
section of the KEY$TONE BUSINESS PLAN GUIDE.
The format of this business plan
guide is in a check list style x
and some items may not be applicable to your business.
But you should seriously look at each item to see how it could be
applicable to you before you cross it off. As
you go through the check list, use the following inquiring words to help
you develop the plan for your needs; what, where, when, how, who, and
why. As you complete each item
use a word processor to develop the narrative portion of the business plan,
because you will need to keep revising it until you have the final draft.
Actually you will never have a perfect final draft because, as
time goes by you will need to revise the plan to allow for changes that have occurred in your
market, operations, or any other area of the business.
When you get to the Financial section, use the free
KEY$TONE software to develop the financial reports required in the
business plan. You should know by
then if your plan appears to be feasible or not.
You can order the free
KEY$TONE software by going on-line at www.wowidea.biz
and go to KEY$TONE Products. The software is up-loaded to you via e-mail for a charge of
$10 per file (you will only need a few files).
Getting Ready to Plan
Use a one inch (or larger) three ring notebook, and put in it six (6) tab dividers. Use the tabs on the last page of this business plan to label each section according to your Table of Contents. As you develop your plan, three-hole punch your printed pages and other material and place them in the appropriate section of the notebook. The copy of your business plan that you take to the banker should be 2-Hole punched (on the top of the pages) and put in a file folder, supporting documents such as Income Tax Returns could be put in a separate file folder. Make sure to put appropriate labels on the tabs of the file folders.
Not all items included in this
business plan guide will apply to your business. Some items relate to a start-up business, others to an
existing business, and some items will apply to both.
There are extra lines to add other items in the plan that the lender or
investor might have asked for, or other information that you feel necessary.
First, go through the plan and cross out the items that don't apply, and add any items that should be included in your plan. Then start working on your plan. Your business plan design will be unique according to the purpose of the plan. For example, you could use it to obtain financing, or use it as an operational and control tool, or a combination of the two. Prepare your plan in narrative form (as opposed to outline form).
Information
There are many resources when you
develop your plan: The KEY$TONE Co. public/college/university libraries,
your banker, trade associations, Chambers of Commerce, Small Business
Development Centers (SBDC), Service Corp of Retired Executives (SCORE), the
Small Business Administration (SBA), accountants, business consultants, lawyers,
the internet, and state and local economic development agencies.
Putting the Plan Together
There is no exact sequence in
putting a plan together, but it is best begin with the PURPOSE or MISSION,
whichever you choose to call it. The
reason is, "to everything there is a purpose" and you
should know what the purpose of your business is before you start planning for
it. A purpose statement should be
short. The Mission of the
KEY$TONE Co. is "To help small businesses find solutions to
problems, threats, and opportunities."
This mission provides focus, drive, and power to the
organization.
People often ask me, "how long
does it take to put a business plan together?"
To that there is no exact answer. It
depends on many things such as: how much time can you devote to putting your
plan together, how many people are involved, how complex the project is, how
much money you have to put into it, how much money you will need to get from
investors (and trying to locate investors), or how much you will need to borrow,
will it involve new construction or remodeling, and so forth.
But the main thing is that you decide on a purpose/mission and get
started. It's just one step at
a time until you get through the process. And
then if you decide to actually start the business, planning should remain a high
priority in your business.
NAME OF YOUR COMPANY
BUSINESS PLAN
TABLE OF CONTENTS
1.
SUMMARY and LOAN APPLICATION
--------------------------------------------------
1-1
2.
FINANCIAL -----------------------------------------------------------
---------------------------- 2-1
3.
OVERVIEW OF THE BUSINESS ---------------------------------------------------------
3-1
4.
MARKETING -----------------------------------------------------------------------------------------
4-1
Part A: Market Research, Analysis, and Forecast
Part B: Marketing Plan
5.
OPERATIONS and PERSONNEL
6.
APPENDIX
NOTE: Begin numbering each section with Page 1. Then you won't have to renumber the entire business plan as you develop it or change it in the future. This can be achieved with a footer using word processor software.
1. SUMMARY and LOAN APPLICATION
The Business Plan Summary is
prepared AFTER the rest of your plan is finished.
The summary should be one to three pages in length.
Your summary must be well prepared so the reader will feel that it is a
good business venture. The summary
must be convincing.
If you are presenting the
business plan to an investor or lender,
address the summary letter to the person/firm to receive it. You might include a nondisclosure agreement, however, I’ve
found that there are very few situations that would actually require it.
[ ] a) Legal form
of business.
[ ] b) Ownership
breakdown.
[ ] c)
Mission/purpose of the business.
[ ] d) Type of
industry/business, and a general description of your product (s) or service (s).
[ ] e) General
description (profile) of your customers.
[ ] f)
Management strengths and expertise.
[ ] g) Marketing
summary.
[ ] h)
Operations/Services/Manufacturing summary.
[ ] i)
Research and Development summary.
[ ] j)
Financial summary:
~ Begin by stating who is asking for the financing, the amount of money needed, and how the funds will be used.
~ State the percent of interest that you used in the plan, the period of the loan, and
the amount of monthly payments.
~ Summarize the projected sales and profits.
~ Then clearly explain why you need the financing.
[ ] ___________________________________________________
The LOAN APPLICATION
Include the forms and
exhibits as required by the lender/guarantor/investor.
2. FINANCIAL
A.
General Information
[ ] Provide a current
(within 60 days) personal financial statement.
[
] Include three years of your personal tax returns.
[ ] Who will do your
books? (In-house? Computerized? Outside?)
[ ] What are your credit
policies?
[ ] What kind of taxes
will you be required to pay?
[ ] Prepare a "Source
and Use of Funds Statement."
[ ] What collateral
are you pledging and what is its value? Is
the value based on cost,
market, or liquidation value?
[ ] Have you prepared a depreciation
schedule?
[ ] For existing
investment capital: What is the percent and dollar amount of ownership, and number of
shares?
[ ] For new investment
capital: How much is being sought, at what percent of ownership, number of shares,
etc.
[ ] Is the business
involved in any litigation?
[ ] Give the name, and
phone number of your attorney.
B. Existing Business
(The KEY$TONE free file #203- Three Year Cash Flow works well to prepare
the 3 year analysis)
1.
If you are an EXISTING BUSINESS, the financial records for the previous three
years should include:
[ ] Balance sheets [ ] Income statements
[ ] Cash flow [ ] Income tax returns
[ ] Aging of accounts payable [ ] Financial ratios
[ ] Aging of accounts receivable
[ ]
__________________________________________________________
2.
Current credit and loan financing information should Include:
[ ] Who is owed, when was it obligated, original
amount, current balance, interest rate, payment amount, when due, and state
what your current loan status is.
[ ] What is your
credit rating? You might
include a current credit report in the Appendix.
[ ]
__________________________________________________________
C. Start Up or Existing Businesses (use KEY$TONE
Software to prepare the key financial reports)
For
the First year projected, include the following financial reports:
[ ] Monthly Cash Flow
at least for one year and maybe two years
[ ] Cash Flow line item
justifications/assumptions.
For the three year projection summary and analysis include:
[ ] Three Year
Cash Flow
[ ] Three Year
Balance Sheets
[ ] Three Year
Income Statements
[ ] Three Year
financial ratios
Additional Considerations:
[ ] Pro-forma Balance
Sheet (necessary)
[ ] Source and Use of
Funds (necessary)
[ ] Collateral list and
value (necessary)
[ ] Break-even
calculations (maybe)
[ ] Allow 10% - 20% extra
money for construction, miscellaneous start-up/project costs, acquisition, and a general contingency fund
[ ] Allow 2% to 5% for
closing/loan costs
[ ] You might include
your home budget
[ ] If you are requesting
a loan, how much are you requesting, at what rate of interest
3. OVERVIEW OF THE BUSINESS
[ ] Prepare a Purpose or Mission
Statement.
[ ] Consider including the following: A creed, code of ethics, or
value statements. This means; how will you treat your employees, the environment, the community, your customers, and your suppliers.
[ ] History of the business (if you
are an existing business).
[ ] Give your Standard Industrial
Classification Number (SIC #), the title, and the basic SIC
description.
[ ] If you are a partnership, include the
"partnership agreement," or if you are/will be a corporation, include the "articles of incorporation,"
[ ] Complete applications for your Trade Name Registration,
sales taxes and other necessary licenses and permits to begin
business.
[ ] Show the major organizational
functions and the names of those who are, or will be,
responsible. An
"organizational chart" can be used to explain this.
[ ] Explain your "risk management"
program (such as: general liability, product liability, and
key-man insurance).
[ ] Discuss the strengths, weaknesses,
opportunities, and threats of your business.
Explain
how you intend to correct weaknesses, and how you will take advantage of
your strengths.
[ ] Will/do you have a business computer?
State how it will be used in the business.
[ ] State your overall progress to date (if
you are an existing business).
[ ] What kind of image do you intend
to project?
[ ] State the basic strategies of
the business (Strategy means: The
guides for making decisions in key areas of the
business, such as: your customers, competition,
suppliers and the government).
Strategies can be designed for short, medium, or long
term performance. They can
also be related to marketing, R&D, finance, personnel,
or operations.
[ ] List the business' goals/objectives.
[ ] You might want to show the schedule of
events for the year, or state the major events for
each year projected (a Gantt Chart works well to demonstrate this).
[ ]
___________________________________________________________
[ ]
___________________________________________________________
As you develop this section explain
how you gathered the data (e.g., did you run a survey and what secondary
research did you do)? Make sure to
document your sources of information.
The Marketing section of your
business is divided into two parts.
Part A. is Market Research & Analysis;
Part B. is your Marketing Plan.
A.
Market Research and Analysis (understanding the market)
[ ] Describe the product or service
market that is similar to what you offer.
[ ] What is 100% of the total market
that you serve? Use
quantitative values such as
sales dollars, number of customers, or number of sales/units.
[ ] Analyze/define your market niche
(what it includes, where it is, what % it is of the total
market, and how some needs are not met).
[ ] Define the customers/users of
products/services (what they buy, who buys, when they
buy, how much they buy, how often do they buy,
what is the age range of the buyers/users,
what is their income, and gender).
[ ] Summarize the industry life
cycle and the market outlook. What
are the industry trends?
[ ] Explain the major risks within
the industry, your market niche, and your competition.
How will you protect yourself against those risks?
[ ] What external factors affect
your market such as: availability of supplies,
the length of time it takes to get
supplies, government regulations, the international and local
economy, customer demands, and competition.
[ ] What is your competitors share of
the market?
[ ] What are your competitors strengths
and weaknesses? How will you
take advantage of this knowledge?
[ ] How do your competitors price,
promote, and distribute their products and/or services?
[ ] How will your competitors react to
competition?
[ ]
___________________________________________________________
[ ]
___________________________________________________________
B.
Marketing Plan (how you
will market your business)
[ ] Define your PRODUCT (s) and/or SERVICE
(s).
Give general descriptions, and state any
unique benefits, features, accessories, packaging, and warranties.
[ ] What makes your product/service better
than the competition?
[ ] How will you differentiate your
product/service from your competition?
[ ] Explain your product and/or service life cycles and growth rate.
[ ] Explain how you selected the location
of your business. Possibly include photos and a map
showing its location. Also,
show the location of your competitors.
[ ] What are your marketing strategies
(1st, 2nd, & 3rd years)?
[ ] How will you segment (divide up)
your targeted market?
[ ] Explain your sales projections.
This is based on your market research, analysis,
seasonality, and projected trends. You
can also refer to your KEY$TONE
sales printouts.
[ ] What will your market share be
for each year that you are projecting?
[ ] What are the unique opportunities
for new markets, products, and services?
[ ] How are you filling customer needs?
Why will they buy from you?
[ ] Explain your pricing
policies/strategies. Include
list price, discounts, terms, and method of
payment. You can also refer to your
KEY$TONE
sales printouts showing markups and discounts.
[ ] What are your biding policies
(if applicable)?
[ ] Summarize your promotion plans.
Include costs and scheduling for the different types of advertising,
personal selling, news releases, community involvement, promotional
items, direct mail, and publicity). A Gantt Chart might help illustrate
scheduling of your
promotion and You can also refer to
various KEY$TONE
worksheet printouts.
[ ] Discuss your sales force (e.g.
qualifications, strengths, and weaknesses) and how you will capitalize on
them.
[ ] Explain your distribution system
(how you will get your products/services to your customers at the right
time, at the right place, and in the right amount).
[ ] What kind of meetings, reports, and
records will you have that will help maintain control of
your marketing activities?
[ ]
___________________________________________________________
[ ]
___________________________________________________________
5. OPERATIONS and PERSONNEL
[ ] What is 100% of your operations/service
capacity?
[ ] What will the percent of operation
capacity be for each year projected?
[ ] How would you handle a surge in
product/service demand?
[ ] What are your present production
and equipment needs?
[ ] What are your future plant and
equipment needs, and when will you need them?
[ ] Explain where you get your products
and supplies, when you get them, how much you pay, special
terms, and delivery/shipping terms.
Include any special discounts/buy
backs.
Why do you buy from specific sources?
[ ] Explain your inventory system
(is it computerized, what is the inventory turnover per year,
what is your reorder policy, and so forth).
[ ] How will you maintain quality
standards and controls?
[ ] What kind of equipment do/will you
have? How will it allow you to offer quality service and
also enable you to meet customer demand?
[ ] Explain what kind of facilities
you have/will need.
[ ]
Will/do you lease, buy, remodel, or will you relocate?
Will the facilities give you a competitive
advantage?
[ ] Include plant layout and/or floor
plan.
[ ] How will you avoid/handle obsolescence
& ageing inventory
[ ] Will zoning laws permit your
kind of business in the location you have selected?
R&D is all about the future of the business. It includes
technological changes that will affect your marketing,
personnel, finance, and operations. It
is about new ways to manage better, and leadership styles of the future.
In other words, it's focusing on and being ready for change!
How will you keep up with changes and trends?
[ ] How do you plan for future growth
and expansion?
[ ] How will you stay abreast of
your professional field (ie: seminars, trade associations,
trade magazines, etc.) and are they budgeted in your cash flow?
[ ] What kind of new products/services
do you plan to introduce and when do you anticipate
including them?
[ ] What kind of technical manuals,
books, data bases, and information will you need to run
the business? How will
this give you a competitive advantage over your competition?
[ ] Will any of your products/processes
involve trade secrets?
[ ] Do/will you have any patents,
copyrights, or trademarks?
[ ] Are there any special technology
risks or environmental concerns associated with your
products/services?
Personnel
[ ] Do you have an operation and procedures
manual?
[ ] Will/does your plant meet OSHA
safety requirements?
[ ] Will/do you use subcontractors? If so, under what conditions.
[ ] How will you or do you meet the requirements of ADA?
[ ] Do you have a qualified and adequate human
resource market?
[ ] How many employees will/do you
have, and what are your planned future requirements?
[ ] How will you handle training and
safety of employees?
[ ] What kind of benefits will you
provide your employees?
[ ] Have you prepared employee policy
and benefit manuals?
[ ] Prepare job descriptions (for
line employees).
[ ] Prepare a wage and salary
structure.
[ ] How will you evaluate employee
performance?
[ ] Will you require proprietary agreements
for employees?
[ ]
___________________________________________________________
[ ]
___________________________________________________________
6. APPENDIX (Possible
items to include)
[ ] Agreements with suppliers
[ ] Market research support material and
references
[ ] Letters of support, or intent to
purchase your products or services
[ ] Charts, Graphs, and Tables
showing various items such as: Sales, Gross Profit, Operating Expenses, Net
Profit Financial Ratios and Market Share
[ ] Gantt Charts for: Start-up
period, promotion, operations, expansion plans
A Gantt Chart is basically a 13 column (including a description column) that
shows the start
and finish of a variety of activities on a monthly basis.
[ ] Photos of products and your facilities
[ ] Drawings and maps
[ ] Sample promotional material
[ ] Copies of contracts
[ ]
___________________________________________________________
[ ]
___________________________________________________________
[ ]
___________________________________________________________
[ ]
___________________________________________________________
[ ]
___________________________________________________________
[ ]
___________________________________________________________
[ ]
___________________________________________________________
[ ]
___________________________________________________________
[ ]
___________________________________________________________
Make sure to update your plan as needed.
When you combine your business plan with the
KEY$TONE software
you will have the finest tools available to help you successfully plan, operate
and manage your business.
(C) 1996 Elwin M. Boody (EMB)
KEY$TONE Co.
2480 Tower Avenue
Burlington, CO
80807
(719) 346-0328
TABS
Cut the following tab
headings out on the dotted line and at both end marks.
Then fold each one in the middle (at the middle mark) and insert them in
the index tabs of your business plan notebook.
As you develop your business plan, punch the pages and insert them in the
proper section of your business plan notebook. This procedure will help you keep your business plan
organized as you develop it or revise in the future.
---------------------------------------------------------
| 1. SUMMARY/App. | 1.SUMMARY/App. |
---------------------------------------------------------
--------------------------------------------
| 2. FINANCIAL | 2.FINANCIAL |
--------------------------------------------
---------------------------------------------
| 3. OVERVIEW | 3. OVERVIEW |
---------------------------------------------
------------------------------------------------
| 4. MARKETING | 4.MARKETING |
------------------------------------------------
----------------------------------------------------
| 5. OPERATIONS | 5. OPERATIONS |
----------------------------------------------------
-------------------------------------------
| 6. APPENDIX | 6. APPENDIX |
-------------------------------------------
>KEY$TONE bus plan July 06, 1996
|
Copyright Ó 1998, 1999, 2000, 2001, 2002, 2003 KEY$TONE Co. All Rights Reserved. No material may be reproduced in any way without express written consent. General comments may be made to webmaster@wowidea.biz. |
