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Roadmap to Success: How to Write a Business Plan

Foundation Communities Community Tax Center. Roadmap to Success: How to Write a Business Plan. Introductions Overview of Course Why Develop a Business Plan? Strategic Planning – A Brief Overview Components of Your Business Plan Your Plan’s “Curb Appeal”. Part 1: LAYING THE FOUNDATION.

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Roadmap to Success: How to Write a Business Plan

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  1. Foundation Communities Community Tax Center Roadmap to Success: How to Write a Business Plan

  2. Introductions • Overview of Course • Why Develop a Business Plan? • Strategic Planning – A Brief Overview • Components of Your Business Plan • Your Plan’s “Curb Appeal” Part 1: LAYING THE FOUNDATION

  3. Summary of your business and the future you hope to create • Realistic but conveys energy and optimism • Step by step plan to achieve your goals • “A goal is a dream with a deadline” – Steve Smith What is a Business Plan ?

  4. Clarifies direction for you and your team • Foundation for raising capital • A way to track progress of your business • Protects your financial future Why Do a Business Plan?

  5. STRATEGIC PLANNING Success Occurs at the Intersection of: Goals, Constraints, and Resources

  6. Takes 40 + hours to complete, 20 – 30 pages maximum • Be concise; less is more • Appearance counts – easy to read, professional Business Plan Tips

  7. Components of Your Business Plan • Cover Sheet • Table of Contents • Executive Summary • Company Overview • Product and Service Description • Market Analysis • Marketing Sales Strategy • Internet Strategy • Management & Personnel Team • Financial Projections • APPENDIX

  8. Introduces your business to prospective funders • Keep it clean and simple • Full legal name of business • Location: Address, Street, City, State, Zip • Telephone numbers and email addresses • Main contact person(s) Cover Sheet

  9. Road map for prospective Funder or Investor • Statement about you • Organized • Visionary • Structured Table of Contents

  10. Write this section last • One section that everyone will read • Must capture and hold interest of reader • Encapsulates the entire Business Plan • Shows clarity of your goals • Who you are • What you want • Where you are going Executive Summary

  11. Who You Are • What You Do (Products & Services) • For Whom (Customers) • Why (What your Customer wants) • “It’s not what you sell, it’s what you stand for” – Roy Spence MISSION STATEMENT

  12. Satisfy our Customers by providing fresh, tasty snack products throughout all segments of our business FRITO LAY MISSION STATEMENT

  13. Provides information on your company including where you’ve been • How your company fits into your industry and marketplace • Your growth potential • Economic trends that are favorable to your company Company Overview

  14. Sole Proprietorship • General Partnership • Limited Partnership (LP) • Limited Liability Partnership (LLP) • Limited Liability Company (LLC) • Corporations • C Corporation • S Corporation Business Entities

  15. Specifics on what your business does • Service Industry • Product Sales • NIC/SIC Code (http://www.osha.gov/pls/imis/sic_manual.html) • Competitive Comparison • Pricing Strategy Product & Service Description

  16. Market Analysis • Marketing and Sales Strategy • Internet Strategy • Marketing is the process of creating and retaining customers in large enough numbers to be profitable Part 2: YOUR BUSINESS PLAN

  17. Market Segmentation –who will buy your products • Define target market strategy • How current market is underserved or not served effectively • Competition & buying patterns • Define a unique niche within the existing marketplace Market Analysis

  18. Science of planning for and executing a promotional campaign • Develop marketing strategy • Product • Price • Place • Promotion • Budget Marketing & Sales Strategy

  19. Sell products or information only • Internet sales integrated with inventory • Website • Viral Marketing / Facebook Internet Strategy

  20. Experience • Maturity • Vision • Drive • Leadership Management & Personnel Plan

  21. INTERNAL • Yourself • Partners (if Applicable) • Key Staff (If Applicable) Your Management Team

  22. EXTERNAL • CPA: with Small Business Experience • Attorney: With Small Business Experience • Financial Planner: with Small Business Experience • Board of Directors Management Team -External

  23. Start Up Costs • Break Even Analysis • Projected Profit and Loss • Projected Cash Flow – The Lifeblood of Your Business! Part 3: FINANCIAL PLAN

  24. The point at which a businesses is neither making a profit nor experiencing a loss BREAK EVEN ANALYSIS

  25. BREAK EVEN ANALYSIS: FIXED COSTS • Costs that generally remain the same month to month and are not dependent upon the number of Sales. • What you would have to pay regardless of whether you had any customers walk in.

  26. Personnel (with exceptions) • Lease/Mortgage • Utilities • Debt Financing • Insurance BREAK EVEN ANALYSIS: FIXED COSTS

  27. BREAK EVEN ANALYSIS: VARIABLE COSTS • Costs that vary directly with: • the number of units sold, or • the number of clients served

  28. Designer Bags • Fixed Costs • Variable Costs • Variable Income • Break Even • Profit BREAK EVEN ANALYSIS: FIXED COSTS SAMPLE (Class Project)

  29. Shows the effects on Cash of operating and Financing Activities • Indicator of Ability to • Generate Positive Cash Flows • Pay Liabilities • Pay Dividends • Could indicate need for additional Financing CASH FLOW STATEMENTS

  30. Provides a ‘snapshot’ of a business’s financial position at a given point in time • Assets: What a business Owns • Liabilities: What a business Owes • Net Worth (Equity) NET WORTH = ASSETS – LIABILITES BALANCE SHEET

  31. BALANCE SHEET: ASSETS • Cash • Inventory • Receivables • Prepaid Expenses • Plant & Equipment • Office Equipment • Machinery • Land & Facilities • Goodwill

  32. BALANCE SHEET: LIABILITIES • Current Liabilities • Current Debt • Payables • Credit Cards • Long Term Liabilities • Long Term Debt (Loans) • Payments to Investors • Equity • Paid in Capital • Retained Earnings

  33. Cash is King • Cash is King • Cash is King Class Test Projected Cash Flow: Three Things to Remember:

  34. Spreadsheets (2) • Start up Costs (what are the things I need to get started and how much do they cost?) • 12 Month Cash Flow (Detailed Line Item Income and Expense) • Read Sample Plan through a couple of times • highlight and make notes! FINANCIALS: PRACTICAL PLANHOW/WHERE DO I START?

  35. Keep it uncluttered! • Biographies and resumes of key team • Supporting documents • Brochures, flyers, magazine articles • References • Past lenders • Suppliers • Trade creditors APPENDIX

  36. City of Austin SBDC • Gold Book • Services available through other organizations • Silver Book • Networking Resource Guide for Small Businesses • Bronze Book • Resource directory of local women and ethnic minority professional associations Business Planning Resources

  37. Components of a Business Plan • The Planning Process • Researching Target Markets, Demographics, Competitors • Financials: Start Up Costs, Cash Flow, Break Even, Balance Sheet • Relate Business Planning Components to Own Business • Other Resources for Assistance How to Write a Business Plan RECAP

  38. Questions Comments, Ideas Suggestions or Thoughts? Thank You! Roadmap to Success: How to Write a Business Plan

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