business plan writing workshop
TRANSCRIPT
Business Plan Writing WorkshopBusiness Plan Writing Workshop
This presentation was created and compiled by staff at the Farmingdale State Small Business Development Center.This presentation was created and compiled by staff at the Farmingdale State Small Business Development Center.
Presented By:Presented By:Small Business Development CenterSmall Business Development Center
IntroductionIntroductionFarmingdale Small Business Farmingdale Small Business Development CenterDevelopment CenterSmall Business AdministrationSmall Business Administration
AgendaAgenda9am – 4pm9am – 4pm
Welcome and IntroductionsWelcome and IntroductionsIce Breaker Ice Breaker Business Plan OutlineBusiness Plan OutlineWriting WorkshopWriting WorkshopLunch BreakLunch BreakWriting Workshop Writing Workshop Questions and AppointmentsQuestions and Appointments
Business PlanBusiness PlanWhat?What?– RoadmapRoadmap– Self-checking toolSelf-checking tool– Funding toolFunding tool– Operating guideOperating guideWhy?Why?– 1,000,001 questions1,000,001 questions– Infinite number of Infinite number of
possibilitiespossibilities– Distractions galoreDistractions galoreHow Long?How Long?– 6-9 pages for the 6-9 pages for the
narrative, plus financials/ narrative, plus financials/ appendicesappendices
General RulesGeneral RulesMake it an interesting read!Make it an interesting read!– Bullet pointsBullet points– Balance creativity while still getting your point Balance creativity while still getting your point
acrossacross– Use short (1-3 sentence) paragraphsUse short (1-3 sentence) paragraphs– Be careful with using industry jargonBe careful with using industry jargonWrite with objectivityWrite with objectivity– Consider using the third-personConsider using the third-personFocus more on initial future (1-2 years), Focus more on initial future (1-2 years), less on later yearsless on later years
Outline of a Business PlanOutline of a Business PlanCover SheetCover SheetExecutive SummaryExecutive SummaryTable of ContentsTable of Contents
1)1) Statement of PurposeStatement of Purpose2)2) Company HistoryCompany History3)3) Business DescriptionBusiness Description4)4) Products and ServicesProducts and Services
Outline of a Business PlanOutline of a Business Plan5)5) Market AnalysisMarket Analysis
a.a. CustomersCustomersb.b. CompetitionCompetitionc.c. Marketing StrategyMarketing Strategy
6)6) ManagementManagement7)7) OperationsOperations8)8) Financial PlanFinancial Plan9)9) Appendices Appendices
Cover SheetCover SheetIdentity informationIdentity information– The words “Business Plan”The words “Business Plan”– Your name and business nameYour name and business name– Company logoCompany logo– AddressAddress– Telephone numberTelephone number– Fax NumberFax Number– Email AddressEmail Address– Web Address (URL)Web Address (URL)Submission dateSubmission dateLooks vs. contentLooks vs. content
Executive SummaryExecutive SummaryMost important part of the planMost important part of the plan30-second test30-second testConcise explanationConcise explanation– Venture objectivesVenture objectives– Market prospectsMarket prospects– Financial forecastsFinancial forecasts– Sources and usesSources and usesWRITTEN LASTWRITTEN LAST
Table of ContentsTable of ContentsInclude page numbersInclude page numbersList of headingsList of headings– MajorMajor– SubsectionsSubsectionsSame font!Same font!
Statement of PurposeStatement of PurposeThe business plan’s objectives: financing or The business plan’s objectives: financing or operating guide operating guide FinancingFinancing– How much money is needed?How much money is needed?– What will the money be used for?What will the money be used for?– How will the funds benefit the business?How will the funds benefit the business?– Why does this loan or investment make business sense?Why does this loan or investment make business sense?– How will the funds be repaid?How will the funds be repaid?Operating guideOperating guide– Who will use it?Who will use it?– Will it layout strategy plans?Will it layout strategy plans?– How will it be updated?How will it be updated?Becoming self-sufficientBecoming self-sufficient
Sample: Statement of PurposeSample: Statement of PurposeThis business plan is written to secure financing This business plan is written to secure financing
in the amount of $24,000, which will cover the in the amount of $24,000, which will cover the following costs:following costs:
• $10,000 in equipment$10,000 in equipment• $14,000 in operating capital$14,000 in operating capital
The loan will supplement the owner’s equity The loan will supplement the owner’s equity investment of $20,000, and will be repaid beginning investment of $20,000, and will be repaid beginning the month after disbursement according to lender the month after disbursement according to lender terms. Funds will play a crucial role in sustaining the terms. Funds will play a crucial role in sustaining the business as the client base grows, and will allow the business as the client base grows, and will allow the business to become self-sufficient by the beginning of business to become self-sufficient by the beginning of year two.year two.
Company HistoryCompany HistoryMission Statement Mission Statement Basic product descriptionBasic product descriptionNames of principals and brief background on eachNames of principals and brief background on eachLegalities: business typeLegalities: business typeCompany locationCompany locationNumber of employeesNumber of employeesCustomer highlightsCustomer highlightsYour niche and unique qualitiesYour niche and unique qualitiesStrategic alliancesStrategic alliancesAwards and meritsAwards and meritsCompany milestones (business formation, opening date, hiring Company milestones (business formation, opening date, hiring employees, revenue levels/ growth) employees, revenue levels/ growth) 1-3 year plan – future milestones to reach (sales goals, hiring 1-3 year plan – future milestones to reach (sales goals, hiring employees)employees)
Sample: Company History (1 of 2)Sample: Company History (1 of 2)ABC Child Care strives to become the most-ABC Child Care strives to become the most-
well known and reputable service provider in the XYZ well known and reputable service provider in the XYZ area, with a targeted focus on safety, enrichment, area, with a targeted focus on safety, enrichment, and comfort. The Company was founded based on a and comfort. The Company was founded based on a growing trend: quality child care is a key issue for growing trend: quality child care is a key issue for working parents, and has now become a top priority working parents, and has now become a top priority for New York State. for New York State.
The business is owned and operated by its co-The business is owned and operated by its co-founders, John and Jane Doe. Each has had extensive founders, John and Jane Doe. Each has had extensive experience working with children prior to opening experience working with children prior to opening ABC, in both a teaching and managing capacity. ABC, in both a teaching and managing capacity. Since opening in March of XXXX, ABC Building Blocks Since opening in March of XXXX, ABC Building Blocks Child Care has reached the following milestones: Child Care has reached the following milestones:
Sample: Company History (2 of 2)Sample: Company History (2 of 2)• Incorporated as a New York State S-Corporation and Incorporated as a New York State S-Corporation and
became licensed in March, XXXXbecame licensed in March, XXXX• Renovated owned residence of principal to operate, at 123 Renovated owned residence of principal to operate, at 123
Main Street, Anytown, NY in March XXXXMain Street, Anytown, NY in March XXXX• Enlisted first 6 full-time clients in April XXXXEnlisted first 6 full-time clients in April XXXX• Reached monthly break even with 8 full-time clients in Reached monthly break even with 8 full-time clients in
June XXXXJune XXXX• Hired full-time staff teacher June XXXXHired full-time staff teacher June XXXX• $50,000 in revenue by September XXXX$50,000 in revenue by September XXXX
ABC plans to reach its capacity of 12 children by the end of ABC plans to reach its capacity of 12 children by the end of December XXXX, where projected monthly income will be December XXXX, where projected monthly income will be $10,000. By June of the following year, the ABC will look to $10,000. By June of the following year, the ABC will look to expand to a center-based day care, with a capacity of up to 60 expand to a center-based day care, with a capacity of up to 60 children. Existing clients and waiting list will be transferred and children. Existing clients and waiting list will be transferred and housed in new facility. Please see appendix for projections and housed in new facility. Please see appendix for projections and growth chart. growth chart.
Business DescriptionBusiness DescriptionMission statementMission statementLegalities: business typeLegalities: business typeBasic product or service descriptionBasic product or service descriptionNew, takeover, expansion, franchiseNew, takeover, expansion, franchiseGeneral strategy planGeneral strategy plan– List of planned milestones (business formation, List of planned milestones (business formation,
opening date, hiring employees, reaching certain opening date, hiring employees, reaching certain revenue goals)revenue goals)
Planned strategic alliancesPlanned strategic alliancesWork already doneWork already doneExperience in the businessExperience in the business
Sample: Business Description (1 of 3)Sample: Business Description (1 of 3)JavaNet will provide customers with a unique and innovative JavaNet will provide customers with a unique and innovative environment for enjoying great coffee, specialty beverages, environment for enjoying great coffee, specialty beverages, and bakery items. JavaNet, soon to be located in downtown and bakery items. JavaNet, soon to be located in downtown Eugene on 10th and Oak, will offer the community easy and Eugene on 10th and Oak, will offer the community easy and affordable access to the Internet. JavaNet will provide full affordable access to the Internet. JavaNet will provide full access to email, WWW, FTP, Usenet and other Internet access to email, WWW, FTP, Usenet and other Internet applications such as Telnet and Gopher.applications such as Telnet and Gopher.JavaNet will appeal to individuals of all ages and backgrounds. JavaNet will appeal to individuals of all ages and backgrounds. The instructional Internet classes, and the helpful staff that The instructional Internet classes, and the helpful staff that JavaNet provides, will appeal to the audience that does not JavaNet provides, will appeal to the audience that does not associate themselves with the computer age. This educational associate themselves with the computer age. This educational aspect will attract younger and elderly members of the aspect will attract younger and elderly members of the community who are rapidly gaining interest in the unique community who are rapidly gaining interest in the unique resources that online communications have to offer. The resources that online communications have to offer. The downtown location will provide business people with downtown location will provide business people with convenient access to their morning coffee and online needs.convenient access to their morning coffee and online needs.
Sample: Business Description (2 of 3)Sample: Business Description (2 of 3)JavaNet is a privately held Oregon Limited Liability JavaNet is a privately held Oregon Limited Liability
Corporation. Cale Bruckner, the founder of JavaNet, is Corporation. Cale Bruckner, the founder of JavaNet, is the majority owner. Luke Walsh, Doug Wilson, and John the majority owner. Luke Walsh, Doug Wilson, and John Underwood, all hold minority stock positions as private Underwood, all hold minority stock positions as private investors.investors.
JavaNet's start-up costs will cover coffee making JavaNet's start-up costs will cover coffee making equipment, site renovation and modification, capital to equipment, site renovation and modification, capital to cover losses in the first year, and the communications cover losses in the first year, and the communications equipment necessary to get its customers online.equipment necessary to get its customers online.
The communications equipment necessary to The communications equipment necessary to provide JavaNet's customers with a high-speed provide JavaNet's customers with a high-speed connection to the Internet and the services it has to connection to the Internet and the services it has to offer make up a large portion of the start-up costs. offer make up a large portion of the start-up costs. These costs will include the computer terminals and all These costs will include the computer terminals and all costs associated with their set-up. Costs will also be costs associated with their set-up. Costs will also be designated for the purchase of two laser printers and a designated for the purchase of two laser printers and a scanner.scanner.
In addition, costs will be allocated for the purchase of In addition, costs will be allocated for the purchase of coffee making equipment. One espresso machine, an coffee making equipment. One espresso machine, an automatic coffee grinder, and minor additional automatic coffee grinder, and minor additional equipment will be purchased from Allann Brothers.equipment will be purchased from Allann Brothers.The site at 10th and Oak will require funds for The site at 10th and Oak will require funds for renovation and modification. A single estimated figure renovation and modification. A single estimated figure will be allocated for this purpose. The will be allocated for this purpose. The renovation/modification cost estimate will include the renovation/modification cost estimate will include the costs associated with preparing the site for opening costs associated with preparing the site for opening business.business.Please refer to the attached appendix for strategic goals Please refer to the attached appendix for strategic goals and measures during the first 24 months.and measures during the first 24 months.
Sample: Business Description (3 of 3)Sample: Business Description (3 of 3)
Products and ServicesProducts and ServicesDetailed description of products or Detailed description of products or services services Indicate stage of development: in-Indicate stage of development: in-process, prototypes, samplesprocess, prototypes, samplesPatents or trademarks, legal Patents or trademarks, legal contracts, licensing agreements, contracts, licensing agreements, regulations, certificationsregulations, certifications““The Brochure Section”The Brochure Section”
Sample: Products and Services (1 of 3)Sample: Products and Services (1 of 3)At ABC Building Blocks Child Care, we At ABC Building Blocks Child Care, we
continually work to provide the most well-balanced continually work to provide the most well-balanced day care schedule possible for the children. Every day day care schedule possible for the children. Every day is a mix of lesson time and free play with a weekly is a mix of lesson time and free play with a weekly theme, generally a number or letter. Most children theme, generally a number or letter. Most children arrive between 7:30 and 9:30am. The early arrivals arrive between 7:30 and 9:30am. The early arrivals eat breakfast at the facility and then engage in free eat breakfast at the facility and then engage in free play as the other children arrive and join them. At play as the other children arrive and join them. At 9:30, all of the children sit down for a snack. All food 9:30, all of the children sit down for a snack. All food served meets the guidelines set forth by the New York served meets the guidelines set forth by the New York State Child and Adult Care Food Program. After snack, State Child and Adult Care Food Program. After snack, there is a lesson. Each day, the program begins with there is a lesson. Each day, the program begins with the pledge of allegiance and then moves to activities the pledge of allegiance and then moves to activities related to the calendar.related to the calendar.
Sample: Products and Services (2 of 3)Sample: Products and Services (2 of 3)The program includes discussion of the months of The program includes discussion of the months of
the year, days of the week, seasons, holidays, and the the year, days of the week, seasons, holidays, and the weather. During the lesson, two-to-four worksheets weather. During the lesson, two-to-four worksheets (made up in advance) on the topic of the week are used. (made up in advance) on the topic of the week are used.
The sheets include tracing of the letter or number The sheets include tracing of the letter or number the children are learning, coloring pictures of the related the children are learning, coloring pictures of the related objects, matching games, etc. At least once each week, objects, matching games, etc. At least once each week, the children use paints, glue, and scissors to complete a the children use paints, glue, and scissors to complete a project or craft pertaining to the scheduled theme.project or craft pertaining to the scheduled theme.
After lessons, the children read a book, or are After lessons, the children read a book, or are taught a new song. This is followed by free play prior to taught a new song. This is followed by free play prior to lunch. It is a goal of the center to bring the children lunch. It is a goal of the center to bring the children outdoors, weather permitting, each day. At noon, lunch outdoors, weather permitting, each day. At noon, lunch is served, and is generally a hot meal, consisting of a is served, and is generally a hot meal, consisting of a meat, vegetable, fruit, and grain (such as pasta, rice, or meat, vegetable, fruit, and grain (such as pasta, rice, or bread) as per the New York State guidelines.bread) as per the New York State guidelines.
After lunch, the morning program is repeated and After lunch, the morning program is repeated and expanded. This is followed by afternoon snack at expanded. This is followed by afternoon snack at 2:30pm. Since parents begin pickups at 3:30pm, the 2:30pm. Since parents begin pickups at 3:30pm, the children are allowed free play with developmental children are allowed free play with developmental toys such as puzzles, blocks, and Legos, all of which toys such as puzzles, blocks, and Legos, all of which are kept within their reach.are kept within their reach.Diapers are changed as needed throughout the day Diapers are changed as needed throughout the day and records are kept of the changes. The younger and records are kept of the changes. The younger children are put down to nap either in porta-cribs or children are put down to nap either in porta-cribs or on mats during the morning or afternoon hours as on mats during the morning or afternoon hours as dictated by their individual schedules and the dictated by their individual schedules and the parent’s wishes. Hands-on computer training is parent’s wishes. Hands-on computer training is planned once the center moves to its new location planned once the center moves to its new location and space permits a computer center.and space permits a computer center.
Sample Products and Services (3 of 3)Sample Products and Services (3 of 3)
Additional Sample: Additional Sample: Products and Services (1 of 3)Products and Services (1 of 3)JavaNet will provide full access to email, WWW, JavaNet will provide full access to email, WWW,
FTP, Usenet and other Internet applications such as FTP, Usenet and other Internet applications such as Telnet and Gopher. Printing, scanning, and introductory Telnet and Gopher. Printing, scanning, and introductory courses to the Internet will also be available to the courses to the Internet will also be available to the customer. JavaNet will also provide customers with a customer. JavaNet will also provide customers with a unique and innovative environment for enjoying great unique and innovative environment for enjoying great coffee, specialty beverages, and bakery items.coffee, specialty beverages, and bakery items.
JavaNet will provide its customers with full access JavaNet will provide its customers with full access to the Internet and common computer software and to the Internet and common computer software and hardware. Some of the Internet and computing services hardware. Some of the Internet and computing services available to JavaNet customers are listed below:available to JavaNet customers are listed below:
• Access to external POP3 email accounts.Access to external POP3 email accounts.• Customers can sign up for a JavaNet email Customers can sign up for a JavaNet email
account. This account will be managed by JavaNet account. This account will be managed by JavaNet servers and accessible from computer systems servers and accessible from computer systems outside the JavaNet network. outside the JavaNet network.
Additional Sample: Additional Sample: Products and Services (2 of 3)Products and Services (2 of 3)
• FTP, Telnet, Gopher, and other popular Internet utilities FTP, Telnet, Gopher, and other popular Internet utilities will be available.will be available.
• Access to Netscape or Internet Explorer browser.Access to Netscape or Internet Explorer browser.• Access to laser and color printing. Access to laser and color printing. • Access to popular software applications like Adobe Access to popular software applications like Adobe
Photoshop and Microsoft Word. Photoshop and Microsoft Word. JavaNet will also provide its customers with access to JavaNet will also provide its customers with access to introductory Internet and email classes. These classes will be introductory Internet and email classes. These classes will be held in the afternoon and late in the evening. By providing held in the afternoon and late in the evening. By providing these classes, JavaNet will build a client base familiar with its these classes, JavaNet will build a client base familiar with its services. The computers, Internet access, and classes wouldn't services. The computers, Internet access, and classes wouldn't mean half as much if taken out of the environment JavaNet will mean half as much if taken out of the environment JavaNet will provide. Good coffee, specialty drinks, bakery goods, and a provide. Good coffee, specialty drinks, bakery goods, and a comfortable environment will provide JavaNet customers with comfortable environment will provide JavaNet customers with a home away from home. A place to enjoy the benefits of a home away from home. A place to enjoy the benefits of computing in a comfortable and well-kept environment.computing in a comfortable and well-kept environment.
Additional Sample: Additional Sample: Products and Services (3 of 3)Products and Services (3 of 3)
JavaNet will obtain computer support and Internet access JavaNet will obtain computer support and Internet access from Bellevue Computers located in Eugene. Bellevue will from Bellevue Computers located in Eugene. Bellevue will provide the Internet connections, network consulting, and provide the Internet connections, network consulting, and the hardware required to run the JavaNetwork. Allann the hardware required to run the JavaNetwork. Allann Brothers will provide JavaNet with coffee equipment, bulk Brothers will provide JavaNet with coffee equipment, bulk coffee, and paper supplies. At this time, a contract for the coffee, and paper supplies. At this time, a contract for the bakery items has not been completed. JavaNet is currently bakery items has not been completed. JavaNet is currently negotiating with Humble Bagel and the French Horn to negotiating with Humble Bagel and the French Horn to fulfill the requirement.fulfill the requirement.JavaNet will invest in high-speed computers to provide its JavaNet will invest in high-speed computers to provide its customers with a fast and efficient connection to the customers with a fast and efficient connection to the Internet. The computers will be reliable and fun to work Internet. The computers will be reliable and fun to work with. JavaNet will continue to upgrade and modify the with. JavaNet will continue to upgrade and modify the systems to stay current with communications technology. systems to stay current with communications technology. One of the main attractions associated with Internet cafes, One of the main attractions associated with Internet cafes, is the state of the art equipment available for use. Not is the state of the art equipment available for use. Not everyone has a Pentium PC in their home or office.everyone has a Pentium PC in their home or office.
Market AnalysisMarket AnalysisIndustry analysis Industry analysis Customers: individual, businessCustomers: individual, businessCompetitionCompetitionMarketing StrategyMarketing StrategyCite Sources!Cite Sources!
Market Analysis: Industry AnalysisMarket Analysis: Industry AnalysisMarket backgroundMarket backgroundIndustry-wide information, trendsIndustry-wide information, trendsLocal industry information, trendsLocal industry information, trendsMarket capture and expectations Market capture and expectations Social, economic, legal, technological Social, economic, legal, technological issuesissues
Market Analysis: CustomersMarket Analysis: CustomersCustomer definition, consistencyCustomer definition, consistencyIndividual customer demographicsIndividual customer demographics– Location, age, gender, occupationLocation, age, gender, occupation– Ethnic group, lifestyle, education, income Ethnic group, lifestyle, education, income Business customer demographicsBusiness customer demographics– Sector, location, structureSector, location, structure– Sales level, distribution classification, Sales level, distribution classification,
number of employeesnumber of employees
Sample: Market AnalysisSample: Market AnalysisThe child care industry is an ever expanding segment of today’s The child care industry is an ever expanding segment of today’s business world necessitated by the increase in families who have business world necessitated by the increase in families who have two working parents. In Anytown and the surrounding areas, these two working parents. In Anytown and the surrounding areas, these individuals are predominantly between the ages of 30 and 45 years individuals are predominantly between the ages of 30 and 45 years old with a median age of 36.6. The majority have completed high old with a median age of 36.6. The majority have completed high school and many have varying degrees of college education. While school and many have varying degrees of college education. While the dual incomes (most families earn between $65,000 and the dual incomes (most families earn between $65,000 and $100,000) provide some disposable income, approximately 65% $100,000) provide some disposable income, approximately 65% have at least two children under the age of sixteen. These people have at least two children under the age of sixteen. These people are wealthy enough to be able to afford day care, but unlikely to are wealthy enough to be able to afford day care, but unlikely to have live-in help. have live-in help. Demographic research conducted uncovered the following:Demographic research conducted uncovered the following:
• the population of children under the age of six years old is the population of children under the age of six years old is 5,307 within the surrounding three-mile radius5,307 within the surrounding three-mile radius
• parents of these children seek quality daycare with extended parents of these children seek quality daycare with extended hours to accommodate long work days and scheduleshours to accommodate long work days and schedules
ABC Building Blocks will serve children under six years old, and ABC Building Blocks will serve children under six years old, and open at 7:00am and remain open until 7:00pm. Parents can open at 7:00am and remain open until 7:00pm. Parents can conveniently drop their children off on their way to work and pick conveniently drop their children off on their way to work and pick them up on their way home.them up on their way home.
CompetitionCompetitionRule of Three for Competitive StudyRule of Three for Competitive Study– Why your company is superiorWhy your company is superior– Trends in competitive companiesTrends in competitive companies– Similar and dissimilarSimilar and dissimilar– SWOT (strengths, weaknesses, opportunities, SWOT (strengths, weaknesses, opportunities,
threats)threats)– Lessons learnedLessons learned– AdvertisingAdvertising– Eye on the futureEye on the futureCompetitive grid and explanationCompetitive grid and explanation
Sample: Competition (1 of 2)Sample: Competition (1 of 2)The main competitors in the retail coffee segment are The main competitors in the retail coffee segment are Cafe Paradisio, Full City, Coffee Corner and Allann Cafe Paradisio, Full City, Coffee Corner and Allann Bros. These businesses are located in or near the Bros. These businesses are located in or near the downtown area, and target a similar segment to downtown area, and target a similar segment to JavaNet's (i.e. educated, upwardly-mobile students and JavaNet's (i.e. educated, upwardly-mobile students and business people).business people).Competition from online service providers comes from Competition from online service providers comes from locally-owned businesses as well as national firms. locally-owned businesses as well as national firms. There are approximately eight, local, online service There are approximately eight, local, online service providers in Eugene. This number is expected to grow providers in Eugene. This number is expected to grow with the increasing demand for Internet access. Larger, with the increasing demand for Internet access. Larger, online service providers, such as AOL and CompuServe online service providers, such as AOL and CompuServe are also a competitive threat to JavaNet. Due to the are also a competitive threat to JavaNet. Due to the nature of the Internet, there are no geographical nature of the Internet, there are no geographical boundaries restricting competition.boundaries restricting competition.
Due to intense competition, cafe owners must Due to intense competition, cafe owners must look for ways to differentiate their place of look for ways to differentiate their place of business from others in order to achieve and business from others in order to achieve and maintain a competitive advantage. The founder of maintain a competitive advantage. The founder of JavaNet realizes the need for differentiation and JavaNet realizes the need for differentiation and strongly believes that combining a cafe with strongly believes that combining a cafe with complete Internet service is the key to success. complete Internet service is the key to success. The fact that no cyber-cafes are established in The fact that no cyber-cafes are established in Eugene, presents JavaNet with a chance to enter Eugene, presents JavaNet with a chance to enter the window of opportunity and enter into a the window of opportunity and enter into a profitable niche in the market.profitable niche in the market.JavaNet will be the first Internet cafe in Eugene. JavaNet will be the first Internet cafe in Eugene. JavaNet will differentiate itself from the strictly-JavaNet will differentiate itself from the strictly-coffee cafes in Eugene by providing its customers coffee cafes in Eugene by providing its customers with Internet and computing services.with Internet and computing services.
Sample: Competition (2 of 2)Sample: Competition (2 of 2)
Competitive GridCompetitive GridCompetitorCompetitor Bobo Salon and Bobo Salon and
StylingStyling Johnny’s HairJohnny’s Hair BEST CUTSBEST CUTS
OfferingsOfferings Men’s/women's Men’s/women's cut/styles/color permscut/styles/color perms
Men’s cuts onlyMen’s cuts only Men’s/ women’s Men’s/ women’s cut/ style/ color/ cut/ style/ color/ perms perms
Service PricesService Prices Starts at $38Starts at $38 Starts at $50Starts at $50 Starts at $30Starts at $30
Retail PricesRetail Prices 100% markup 100% markup 100% markup100% markup 75% markup75% markup
LocationLocation High traffic, highly High traffic, highly visiblevisible
Moderate traffic, Moderate traffic, highly visiblehighly visible
High traffic,High traffic,not visiblenot visible
ExpertiseExpertise 20+years, up-to-date 20+years, up-to-date trendstrends
15+ years, 15+ years, young hairstylistsyoung hairstylists
13+ years, up-to-13+ years, up-to-date trendsdate trends
ServiceService Set hours, little Set hours, little schedule flexibilityschedule flexibility
Manager never Manager never therethere
Custom hours to Custom hours to suit clients needssuit clients needs
TurnoverTurnover LowLow HighHigh Sole stylistSole stylist
CapacityCapacity 11 active chairs11 active chairs 8 active chairs8 active chairs 1 active chair1 active chair
Client BaseClient Base Over 4000Over 4000 ?? Over 300Over 300
Marketing StrategyMarketing StrategyObtaining a profitable share of the Obtaining a profitable share of the entire marketplaceentire marketplace– Product: sellable aspects, brand imageProduct: sellable aspects, brand image– Pricing: cost-plus or economic valuePricing: cost-plus or economic value– Placement Placement – PromotionPromotion
Sample: Marketing StrategySample: Marketing StrategyJavaNet will position itself as an upscale coffee JavaNet will position itself as an upscale coffee house and Internet service provider. It will serve house and Internet service provider. It will serve high-quality coffee and espresso specialty drinks at high-quality coffee and espresso specialty drinks at a competitive price. Due to the number of cafes in a competitive price. Due to the number of cafes in Eugene, it is important that JavaNet sets fair prices Eugene, it is important that JavaNet sets fair prices for its coffee. JavaNet will use advertising as its main for its coffee. JavaNet will use advertising as its main source of promotion. Ads placed in The Register source of promotion. Ads placed in The Register Guard, Eugene Weekly, and the Emerald will help Guard, Eugene Weekly, and the Emerald will help build customer awareness. Accompanying the ad will build customer awareness. Accompanying the ad will be a coupon for a free hour of Internet travel. be a coupon for a free hour of Internet travel. Furthermore, JavaNet will give away three free hours Furthermore, JavaNet will give away three free hours of Internet use to beginners who sign up for an of Internet use to beginners who sign up for an introduction to the Internet workshop provided by introduction to the Internet workshop provided by JavaNet.JavaNet.
ManagementManagementJob descriptions of the decision Job descriptions of the decision makersmakers““I do everything!”I do everything!”Compensation, benefitsCompensation, benefitsContribution and background as Contribution and background as leverage to performleverage to performAdvisory boardAdvisory board
Sample: Management (1 of 2)Sample: Management (1 of 2)Mr. Jarvis was born in Anytown, USA, and has lived there Mr. Jarvis was born in Anytown, USA, and has lived there all his life. After graduating from local schools and serving all his life. After graduating from local schools and serving in the US Navy for three years, he became a self-in the US Navy for three years, he became a self-employed carpenter, taking night courses in small employed carpenter, taking night courses in small business management and sales at the University of business management and sales at the University of California, with the aim of owning and managing a retail California, with the aim of owning and managing a retail store. He currently serves on the local zoning board. He store. He currently serves on the local zoning board. He and his wife (a medical secretary) live in Anytown with and his wife (a medical secretary) live in Anytown with their two children.their two children.Mr. Bo was born in Utah, attended schools in Texas, Mr. Bo was born in Utah, attended schools in Texas, Nebraska, and New York, and served four years in the Nebraska, and New York, and served four years in the Marines (rank upon separation: E-3). He test-drove Marines (rank upon separation: E-3). He test-drove motorcycles for a year, then served as parts manager for motorcycles for a year, then served as parts manager for Wheely Cycles, Inc. before joining the Fatback Fish Wheely Cycles, Inc. before joining the Fatback Fish Division of Tasty Foods as a packer in March 1989 in their Division of Tasty Foods as a packer in March 1989 in their East Machias, Maine, plant. In June 1996, he resigned as East Machias, Maine, plant. In June 1996, he resigned as line foreman of the Frozen Food Filleting Department to line foreman of the Frozen Food Filleting Department to join Mr. Jarvis in Finestkind. He is unmarried and lives in join Mr. Jarvis in Finestkind. He is unmarried and lives in Anytown.Anytown.
Sample: Management (2 of 2)Sample: Management (2 of 2)Both men are healthy and energetic. They believe their energies Both men are healthy and energetic. They believe their energies complement each other and help make Finestkind a success. In complement each other and help make Finestkind a success. In particular, Mr. Bo knows all of the fishermen while Mr. Jarvis is a particular, Mr. Bo knows all of the fishermen while Mr. Jarvis is a well-known member of the community. Because Mr. Bo has had well-known member of the community. Because Mr. Bo has had experience in cost control and line management, he will be experience in cost control and line management, he will be responsible for the store and inventory control. Mr. Jarvis will be responsible for the store and inventory control. Mr. Jarvis will be primarily responsible for developing the wholesale business. They primarily responsible for developing the wholesale business. They will set policies together. Personnel decisions will be made jointly.will set policies together. Personnel decisions will be made jointly.Salaries will be $1,500/ month for the first year to enable the Salaries will be $1,500/ month for the first year to enable the business to pay off start-up costs. Mr. Jarvis’ wife earns enough to business to pay off start-up costs. Mr. Jarvis’ wife earns enough to support their family; Mr. Bo’s personal expenditures are low support their family; Mr. Bo’s personal expenditures are low because he shares a house with five other men. In the second year because he shares a house with five other men. In the second year they will earn $2,000/ month; in the third year $2,500/ month with they will earn $2,000/ month; in the third year $2,500/ month with any profits returned to the business.any profits returned to the business.In order to augment their skills, they have enlisted the help of In order to augment their skills, they have enlisted the help of Harris and Wakeman (CPAs), James, Garvey, and Kippers Harris and Wakeman (CPAs), James, Garvey, and Kippers (attorneys), and Jake Stemmer, a retired banker who will be on (attorneys), and Jake Stemmer, a retired banker who will be on their advisor board. Other advisory board members are Steven their advisor board. Other advisory board members are Steven Tessus, business consultant; the University of California’s Venture Tessus, business consultant; the University of California’s Venture Incubator Center’s John Lawrence; and Peter Shortt of FFFR (First Incubator Center’s John Lawrence; and Peter Shortt of FFFR (First For Fish Retailers). This board will provide ongoing management.For Fish Retailers). This board will provide ongoing management.
Production/ OperationsProduction/ OperationsLogisticsLogistics– plant location, facilities needed, space plant location, facilities needed, space
requirements, capital equipment needed, labor requirements, capital equipment needed, labor requirements requirements
– If applicable: purchasing policy, quality control If applicable: purchasing policy, quality control program, inventory control system, production program, inventory control system, production cost breakdown, subcontractscost breakdown, subcontracts
Environmental and other issuesEnvironmental and other issuesFurther research and developmentFurther research and developmentWhat is done vs. what is TO BE doneWhat is done vs. what is TO BE done
Sample: Production/ Operations (1 of 3)Sample: Production/ Operations (1 of 3)The Company’s facilities will include a 120-foot live-The Company’s facilities will include a 120-foot live-
aboard vessel designed specifically for diving. This vessel will aboard vessel designed specifically for diving. This vessel will include private rooms, restaurant-like meals, a photo lab, and a include private rooms, restaurant-like meals, a photo lab, and a dive classroom for divers who want to brush up on dive dive classroom for divers who want to brush up on dive techniques, and a medical room for treatment of any injuries that techniques, and a medical room for treatment of any injuries that might be incurred. Also aboard is a jacuzzi and unlimited dry air might be incurred. Also aboard is a jacuzzi and unlimited dry air supply for air tanks. supply for air tanks.
The land-based office will sit along the beach and have its The land-based office will sit along the beach and have its own covered port for maintaining the vessel and keeping it in own covered port for maintaining the vessel and keeping it in good condition when not underway. The office will be easily good condition when not underway. The office will be easily accessible on a paved road. The Company will carry thirty air accessible on a paved road. The Company will carry thirty air tanks, thirty pairs of masks, fins, and snorkels, thirty weight tanks, thirty pairs of masks, fins, and snorkels, thirty weight belts, thirty BCU’s, thirty regulators, and fifty pounds of weights. belts, thirty BCU’s, thirty regulators, and fifty pounds of weights. A number of different accessories will be for rent by the dive. A number of different accessories will be for rent by the dive. Such accessories include underwater cameras, dive knives, Such accessories include underwater cameras, dive knives, underwater lights, and gloves, dive computers, and torpedos.underwater lights, and gloves, dive computers, and torpedos.
In order to maintain the quality of equipment, all of it, In order to maintain the quality of equipment, all of it, from the snorkel to the boat engine is inspected monthly by from the snorkel to the boat engine is inspected monthly by owners. Defective items will be returned to suppliers for a new owners. Defective items will be returned to suppliers for a new product replacement. The air tanks will be checked yearly as product replacement. The air tanks will be checked yearly as required by law by a licensed technician. required by law by a licensed technician.
Sample: Production/ Operations (2 of 3)Sample: Production/ Operations (2 of 3)All equipment will be hosed down with fresh All equipment will be hosed down with fresh
water extensively after every dive to maintain its water extensively after every dive to maintain its quality. Salt water will not remain on any equipment quality. Salt water will not remain on any equipment to be stored. The restaurant will maintain above to be stored. The restaurant will maintain above standard health code regulations with an extensive standard health code regulations with an extensive cleaning of the all-aluminum kitchen.cleaning of the all-aluminum kitchen.
To keep track of equipment, a weekly count will To keep track of equipment, a weekly count will be taken of all equipment aboard the vessel. There be taken of all equipment aboard the vessel. There will be a count before passengers board and before will be a count before passengers board and before passengers leave.passengers leave.
Operations will be handled by the owners, by Operations will be handled by the owners, by which a handout will be given to all hands daily as to which a handout will be given to all hands daily as to what their assigned jobs will be. The assignments will what their assigned jobs will be. The assignments will be fairly routine from day to day. Before each dive, all be fairly routine from day to day. Before each dive, all divers will be surveyed, and given a thorough and divers will be surveyed, and given a thorough and illustrated briefing to clear up any confusion. illustrated briefing to clear up any confusion.
Sample: Production/ Operations (3 of 3)Sample: Production/ Operations (3 of 3)Four part-time hands will be hired at $15/ hour, Four part-time hands will be hired at $15/ hour,
for 20 hours per week each. Owners will cover the for 20 hours per week each. Owners will cover the employee payroll requirements: medicare, social employee payroll requirements: medicare, social security, worker’s compensation, unemployment, security, worker’s compensation, unemployment, which will amount to an additional $4 per each which will amount to an additional $4 per each employee hour worked. No medical benefits will be employee hour worked. No medical benefits will be offered.offered.
Sources of supply include: Jamison Scuba and Sources of supply include: Jamison Scuba and Water Lung (scuba equipment), Nighthawk Solutions Water Lung (scuba equipment), Nighthawk Solutions (lighting equipment), Bahamas Boats (live-aboard (lighting equipment), Bahamas Boats (live-aboard vessel), and Harvey Foods (food).vessel), and Harvey Foods (food).
The Company will purchase supplies in bulk to The Company will purchase supplies in bulk to receive a discount on the merchandise. Bills will be receive a discount on the merchandise. Bills will be paid off within ten days of arrival to take advantage of paid off within ten days of arrival to take advantage of the 2% discount. All orders and payments are the 2% discount. All orders and payments are approved by owners.approved by owners.
““Suppose one of you wants to Suppose one of you wants to build a tower. Will he not first sit build a tower. Will he not first sit down and estimate the cost to down and estimate the cost to see if he has enough money to see if he has enough money to
complete?” complete?” - Luke 14:28- Luke 14:28
Maximum sway at top caused by metal dilation: 18 cm (7 inches).
Pressure on foundation: 4.1 to 4.5 kg per square centimeter
15,000 iron pieces (excluding rivets).
2.5 million rivets.
40 tons of paint.
1671 steps to the top.
Maximum sway at top caused by wind: 12 cm (4.75 inches).
Maximum sway at top caused by metal dilation: 18 cm (7 inches).
Weight of elevator systems: 946,000 kg (1042.8 tons).
Total weight: 8.56 million kg (9441 tons).
Weight of foundations: 277,602 kg (306 tons).
Size of base area: 10,281.96 square meters (2.54 acres).
Cost of construction: 7.8 million francs ($1.5 million).
How Much $$$ Do I Need?How Much $$$ Do I Need?Determine start up Determine start up costs and estimate costs and estimate monthly operating monthly operating costs to determine costs to determine your working capital your working capital needsneeds
Financial PlanFinancial PlanTHE PRIMARY EVALUATING TOOLTHE PRIMARY EVALUATING TOOL– Support all informationSupport all information– Make conservative projectionsMake conservative projectionsStart-up Budget: amount needed to Start-up Budget: amount needed to openopenOperating Budget: ongoing expenses Operating Budget: ongoing expenses once openonce openSources and Uses SheetSources and Uses Sheet
Financing Your New BusinessFinancing Your New Business
Start up loans are very Start up loans are very difficult to obtaindifficult to obtainChances are you have Chances are you have to rely on the funds you to rely on the funds you can personally raisecan personally raiseGrants?! Sidebar hereGrants?! Sidebar here– Matthew Lesko, NGCMatthew Lesko, NGC
Methods of FinancingMethods of FinancingPersonal fundsPersonal fundsFamily/ friend loans and giftsFamily/ friend loans and giftsAngel investorAngel investorVenture capitalVenture capitalGrantsGrantsPersonal loanPersonal loanBusiness loanBusiness loan
What is an SBA Guaranteed Loan?What is an SBA Guaranteed Loan?Loan obtained from a financial Loan obtained from a financial institution, guaranteed by the SBAinstitution, guaranteed by the SBALoans of various sizesLoans of various sizes
What are the Requirements?What are the Requirements?An excellent personal and business An excellent personal and business credit record credit record Adequate collateralAdequate collateralCash investment: generally 20-30% Cash investment: generally 20-30% of total projectof total projectExperience in the business you are Experience in the business you are startingstartingA solid business planA solid business plan
Financial Plan: Startup BudgetFinancial Plan: Startup BudgetPersonnel (costs prior to opening)Personnel (costs prior to opening)Occupancy (lease, rent, or mortgage)Occupancy (lease, rent, or mortgage)Legal/ Professional FeesLegal/ Professional FeesEquipmentEquipmentSuppliesSuppliesSalary/ WagesSalary/ WagesUtilitiesUtilitiesPayroll ExpensesPayroll ExpensesInternetInternetLicenses/ PermitsLicenses/ PermitsInsuranceInsuranceAdvertising/ PromotionsAdvertising/ Promotions
Financial Plan: Operating BudgetFinancial Plan: Operating BudgetPersonnelPersonnelLease/ Rent/ MortgageLease/ Rent/ MortgageLoan PaymentsLoan PaymentsLegal FeesLegal FeesAccountingAccountingSuppliesSuppliesSalaries/ WagesSalaries/ WagesDues/ Subscriptions/ Dues/ Subscriptions/ FeesFeesRepairs/ MaintenanceRepairs/ Maintenance
InsuranceInsuranceAdvertising/ Advertising/ PromotionsPromotionsDepreciationDepreciationPayroll ExpensesPayroll ExpensesInternetInternetPayroll TaxesPayroll TaxesTravel/ EntertainmentTravel/ EntertainmentMiscellaneousMiscellaneous3-6 Months of 3-6 Months of Operating CapitalOperating Capital
Financial Plan: Sources and UsesFinancial Plan: Sources and UsesSources of fundsSources of fundsDetails of requested financingDetails of requested financing– AmountAmount– Use Use – TermsTerms
SOURCES & USES OF FUNDS
SOURCES OF FUNDS
INVESTMENT CAPITALCash on HandInvestment by FounderInvestment by OthersIncentives and Grants
DEBT CAPITALBank Business LoanBank Personal LoanSBA Guaranteed LoanOther Loans
TOTAL
APPLICATION OF FUNDSRent & Security DepositsEquipment/ FixturesLeasehold ImprovementsInitial InventoryWorking CapitalInsuranceProfessional FeesAdvertisingSignageContingency Reserve
TOTAL
CASH FLOW PROJECTION Year OneMonth 1 2 3 4 5 6 7 8 9 10 11 12 Total
Cash In-FlowsSalesOther Income
Total In-Flows
Cash Out-FlowsCost of Goods SoldRent/ MortgageOwner's SalaryOther SalariesAdvertising/ PromotionUtilitiesLoan Payments (current)Loan Payments (previous)TelephoneOffice ExpenseDues/ SubscriptionsAccountingInsuranceProfessional FeesInternetRepairs/ MaintenanceLicenses/ PermitsTravel/ EntertainmentLegal FeesBank ChargesMiscellaneous
Total Out-Flows
Beginning Cash Balance
Ending Cash Balance
Pro-Forma Income Statement
Year 1 2 3
SalesLess: Cost of Goods Sold
Gross Profit
Operating ExpensesRent/ MortgageOwner's SalaryOther SalariesPayroll TaxesAdvertising & PromotionTelephoneOffice ExpenseDues and SubscriptionsAccountingInsuranceProfessional FeesInternetRepairs & MaintenanceLicenses & PermitsTravel & EntertainmentLegal FeesBank ChargesMiscellaneousDepreciationAmortizationInterest
Total Operating Expenses
Net Profit Before Taxes
Pro-Forma Balance Sheet(Opening Day of Business)
CURRENT ASSETSCash Accounts ReceivableInventoriesPrepaid ExpensesOther Current Assets
TOTAL CURRENT ASSETS
FIXED ASSETSLandLeasehold ImprovementsEquipmentVehiclesOther Fixed Assets
Subtotal Fixed Assets
Less: Accumulated Depreciation
TOTAL FIXED ASSETS
TOTAL ASSETS
CURRENT LIABILITIESAccounts PayableShort-Term DebtAccrued ExpensesOther Current Liabilities
TOTAL CURRENT LIABILITIES
LONG-TERM DEBT
OWNER'S EQUITYPaid-In CapitalRetained Earnings
TOTAL OWNER'S EQUITY
TOTAL LIABILITIES & OWNER'S EQUITY
AppendicesAppendicesSupplemental materialsSupplemental materials– Resumes of management teamResumes of management team– Past three years of tax returnsPast three years of tax returns– Current bank statementsCurrent bank statements– Copies of existing loans or notesCopies of existing loans or notes– Interim income statement and balance sheetInterim income statement and balance sheet– Personal financial statementPersonal financial statement– Copies of legal documentsCopies of legal documents– Copies of potential contractsCopies of potential contracts– Letters of referenceLetters of referenceTOTAL PACKAGE FOR A LOAN APPLICATIONTOTAL PACKAGE FOR A LOAN APPLICATION
Sample: Executive Summary (1 of 2)Sample: Executive Summary (1 of 2)JavaNet, unlike a typical cafe, will provide a unique JavaNet, unlike a typical cafe, will provide a unique
forum for communication and entertainment through the forum for communication and entertainment through the medium of the Internet. JavaNet is the answer to an medium of the Internet. JavaNet is the answer to an increasing demand. The public wants: (1) access to the increasing demand. The public wants: (1) access to the methods of communication and volumes of information now methods of communication and volumes of information now available on the Internet, and (2) access at a cost they can available on the Internet, and (2) access at a cost they can afford and in such a way that they aren't socially, afford and in such a way that they aren't socially, economically, or politically isolated. JavaNet's goal is to economically, or politically isolated. JavaNet's goal is to provide the community with a social, educational, provide the community with a social, educational, entertaining, atmosphere for worldwide communication.entertaining, atmosphere for worldwide communication.
This business plan is prepared to obtain financing in This business plan is prepared to obtain financing in the amount of $24,000. The supplemental financing is the amount of $24,000. The supplemental financing is required to begin work on site preparation and modifications, required to begin work on site preparation and modifications, equipment purchases, and to cover expenses in the first year equipment purchases, and to cover expenses in the first year of operations. Additional financing has already been secured of operations. Additional financing has already been secured in the form of: (1) $24,000 from the Oregon Economic in the form of: (1) $24,000 from the Oregon Economic Development Fund (2) $19,000 of personal savings from Development Fund (2) $19,000 of personal savings from owner Cale Bruckner (3) $36,000 from three investors (4) owner Cale Bruckner (3) $36,000 from three investors (4) and $9,290 in the form of short-term loans.and $9,290 in the form of short-term loans.
Sample: Executive Summary (2 of 2)Sample: Executive Summary (2 of 2)JavaNet will be incorporated as an LLC corporation. JavaNet will be incorporated as an LLC corporation.
This will shield the owner Cale Bruckner, and the three This will shield the owner Cale Bruckner, and the three outside investors, Luke Walsh, Doug Wilson, and John outside investors, Luke Walsh, Doug Wilson, and John Underwood, from issues of personal liability and double Underwood, from issues of personal liability and double taxation. The investors will be treated as shareholders and taxation. The investors will be treated as shareholders and therefore will not be liable for more than their individual therefore will not be liable for more than their individual personal investment of $12,000 each.personal investment of $12,000 each.
The financing, in addition to the capital The financing, in addition to the capital contributions from the owner, shareholders and the contributions from the owner, shareholders and the Oregon Economic Development Fund, will allow JavaNet to Oregon Economic Development Fund, will allow JavaNet to successfully open and maintain operations through year successfully open and maintain operations through year one. The large initial capital investment will allow JavaNet one. The large initial capital investment will allow JavaNet to provide its customers with a full featured Internet cafe. to provide its customers with a full featured Internet cafe. A unique, upscale, and innovative environment is required A unique, upscale, and innovative environment is required to provide the customers with an atmosphere that will to provide the customers with an atmosphere that will spawn socialization. Successful operation in year one will spawn socialization. Successful operation in year one will provide JavaNet with a customer base that will allow it to provide JavaNet with a customer base that will allow it to be self sufficient in year two.be self sufficient in year two.
planning
Summary Slide
ResourcesResourcesFree One-on-One Counseling:Free One-on-One Counseling:– SBDC Farmingdale, Hempstead, CW Post, SBDC Farmingdale, Hempstead, CW Post,
Stony Brook: call 631.420.2765 for Stony Brook: call 631.420.2765 for appointmentappointment
www.sba.gov (small business resources)www.sba.gov (small business resources)www.incorporate.com, www.incorporatenow.com, www.incorporate.com, www.incorporatenow.com, www.mycorporation.com (information on www.mycorporation.com (information on incorporating, LLC’s, sole proprietorships)incorporating, LLC’s, sole proprietorships)www.census.gov (Market research)www.census.gov (Market research)www.bplan.com (to browse sample plans for free)www.bplan.com (to browse sample plans for free)www.farmingdale.edu/sbdcwww.farmingdale.edu/sbdc
ResourcesResourcesDmnews.com (statistics on direct marketing, Dmnews.com (statistics on direct marketing, trends, consumer behavior)trends, consumer behavior)Clickz.com (online behavior stats)Clickz.com (online behavior stats)Competia.com/express/index.html (trade Competia.com/express/index.html (trade association database)association database)Hoovers.com (info on industries, specific Hoovers.com (info on industries, specific companies)companies)Proquest.com (article search)Proquest.com (article search)Findarticles.com (article search)Findarticles.com (article search)http://sbdcnet.utsa.edu (marketing research)http://sbdcnet.utsa.edu (marketing research)NY Department of Labor StatisticsNY Department of Labor Statisticswww.score.orgwww.score.org (Service Corps of Retired (Service Corps of Retired Executives)Executives)
