Explain the paperwork and/or software systems that you will use to control your business in terms of scheduling, inventory, billing, work progress, client records, and accounting.

LOGISTICS
3. Explain your systems for buying, ordering, and storing any supplies that your business will depend on.
4. Identify any subcontractors or suppliers that you intend to use. Explain the services or products that they will provide and the details of contracting arrangements that you will have with them. Be sure to include any professional advisers you may use, such as accountants or lawyers.

SYSTEMS
7. Explain the paperwork and/or software systems that you will use to control your business in terms of scheduling, inventory, billing, work progress, client records, and accounting.

 

Note: The Summary is prepared only after all other portions of the business plan have been completed. Start writing your business plan with the Introduction below.
 Using information from section one of the business plan, briefly state what the business will be selling, the sorts of customers it will have, why there is an opportunity for this now, and why the owners are the right people to run this business.
 Using information from section two of the business plan, briefly identify the location and site, the direct competition, the expected revenue in the first three years.
 Using information from section three of the business plan, briefly explain the firm’s image or position in terms of product and price, as well as where the company will fit in the distribution chain.
 Using information from section four of the business plan, briefly outline the capital investment required, the roles the owner(s) will play in the firm, and the roles of any other employees
 Using information from section five of the business plan, briefly outline the amount and sources of financing and collateral for the business and when the business is expected to start making a profit, as well as how much profit is expected.

INTRODUCTION
1. Describe the general nature of the business and the location, and identify any important or unusual features.

PRODUCTS AND SERVICES
2. Explain how your business will be specialized in terms of the products and/or services you will offer.
THE CUSTOMERS
3. Explain how your business will be specialized in terms of the customer groups you will be targeting.
THE OPPORTUNITY
4. Identify any circumstances or events that have led to a need that your business intends to satisfy. Be clear on why now is a good time to start a business such as this.
THE OWNER(S)
5. Name and give a brief background for each of the owners. Explain why this history is appropriate for running a business such as this one. Attach a resumé for each of the owners as an appendix.
6. Identify any entrepreneurial abilities of the owner(s), and if there is more than one owner, clarify the “complementary” nature of the relationship. Explain any personal motivation for going into business now.
7. Briefly estimate the minimum amount of money you (and any partners) will have to withdraw from the business each month in order to survive (or how long you can survive without relying on the business for income).
THE LEGAL ORGANIZATION
8 Identify legal form of the business and clearly state who owns how much of the company. Explain your reasons for this legal set-up.
9. If there is more than one owner, explain who will be actively participating in the business and how. If there is a partnership agreement, identify the major provisions and attach a copy of the agreement as an appendix.
The Business Plan, Section 2: Feasibility
LOCATION
1. Explain the general area where your business will be located, describing the surrounding population of potential customers (provide numbers).
2. Describe any other factors in your choice of location, such as your proximity to transportation, suppliers, or relevant services.
SITE
3. Describe the site of your business, including any relevant details such as parking, neighbouring firms, visibility, and traffic (provide numbers).
4. Explain why this choice of a site is appropriate for what you are selling and appropriate for the customer groups to whom you are selling.
Site Expenses
5. If you are leasing your business premises, outline the major provisions of the lease including all rental and maintenance fees and renewal terms.
Or
If your business is home-based, calculate what percentage of the home (square footage) will be used exclusively for business purposes. Explain the ownership or leasing arrangements of the home.
MARKET POTENTIAL
6. Clearly define the market potential that you will be estimating. In other words, you will be calculating the annual expenditures of which group of potential customers (who) on what product or service?
7. List all the relevant data that you have gathered, indicating the sources. (If the information is extensive, attach the list of sources as an appendix.)
8. Clearly explain any calculations or logic involved in estimating the market potential, and indicate the dollar value of your estimate.
COMPETITION
9. Name, locate, and briefly describe any direct competitors that you will have to deal with. Provide an estimate of the sales of each, explaining your sources of information.
10. Name, locate, and briefly describe any indirect competition that you will have to deal with.
11. Describe any advantages that you will have over the competition.
SALES FORECAST
12. Make as many sales forecasts of estimates as you can, using different methods. Rank the different estimates to show the range of sales you might expect.
13. From the information above, choose or calculate a single conservative estimate of sales that you will use for planning your business. Explain your choice.
PROTECTING THE BUSINESS
14. Briefly describe any business insurance you will carry, explaining the coverage, the premiums, and the payment schedule.
15. Explain any techniques that you will use for protection against theft or other dangers to which the business could be subject (for example, security systems or operating policies).
16. Describe any intellectual property of the business and how this will be protected.
17. Describe any policies or procedures you will use before extending credit, and methods you will use for collecting outstanding accounts.

The Business Plan, Section 3: Marketing
IMAGE
1. Describe the image that your company will project and explain why this is appropriate for your products/services and the expectations of the customer groups you are targeting.
BUSINESS NAME
2. Give the name that your business will be operating under and explain how this name projects the appropriate image for your products/services and customer groups.
SERVICE/PRODUCT MIX
3. Provide a detailed explanation of the products/services you will offer, comparing your range to that of your major competitors. Explain why this strategy is appropriate for your type of customers.
4. Explain any “added value” services that you will offer and why they are appropriate.
PRICING
5. Outline the pricing strategy that you will be using and explain how it fits in with the rest of your marketing mix.
6. Prepare a price list showing the specific products/services you will offer and the prices you will charge. Indicate any discounts you will offer for specific types of customers or volumes, or any ranges within which you will negotiate prices.
DISTRIBUTION
7. Explain clearly who the ultimate users of your products/services are and where your business fits into any chain of distribution. Identify your “legal” customers and the details of any contracting arrangements.
8. Explain how your product/service will physically get to your customer. If the customer is coming to you, describe in detail the set-up, décor, and tone of your site. Explain how the site design is in keeping with the image you wish to project.
PROMOTION
9. Identify any advertising medium you will use, the nature of the advertising piece, and the frequency of advertising.
10. Explain any publicity you will get and how you will arrange this exposure.
11. Describe any personal selling you will engage in, explaining how you will get your prospects, how you will approach them, and any sales aids you will use.
12. Explain any sales promotion techniques that you will use and any risks involved.
PROMOTION EVALUATION
13. Explain how you will measure the effectiveness of the promotional means you have chosen and outline any backup plans for redirecting your promotional efforts.

The Business Plan, Section 4: Operations
SPACE AND EQUIPMENT
1. Briefly list all the equipment, furniture, and vehicles you will need to run your business. (Include the items you already own and those you need to acquire.) Justify your needs.
2. If yours is a retail or consumer service business, sketch a layout of the store identifying entrances, windows, displays, cash, and so on. If there is a wholesale or manufacturing component to the business, sketch a layout of the work and storage areas, identifying all equipment and explaining the use of each area.
LOGISTICS
3. Explain your systems for buying, ordering, and storing any supplies that your business will depend on.
4. Identify any subcontractors or suppliers that you intend to use. Explain the services or products that they will provide and the details of contracting arrangements that you will have with them. Be sure to include any professional advisers you may use, such as accountants or lawyers.
METHODS AND PROCEDURES
5. Briefly explain and/or chart the process that you will use to complete a typical client or customer transaction.
6. Explain any methods or systems you will have for ensuring quality and handling customer complaints.
SYSTEMS
7. Explain the paperwork and/or software systems that you will use to control your business in terms of scheduling, inventory, billing, work progress, client records, and accounting.
ORGANIZATION
8. If more than one person will be working in the business, explain who will do what, who has what authorities, and who is whose boss. If you have one or more partners, refer to details in the partnership agreement. If you will have employees, attach an organization chart along with one-page job descriptions for each major job as appendixes.
9. Explain how and when you, any partners, and employees will be compensated (hourly, salary, drawings), and any payroll deductions or contributions you will make for taxes, benefits, and so on.
REGULATION
10. Identify any registrations, licences, or permits that you will be required to have for your business.
11. Identify any professional groups or business associations that you will belong to and explain the reason for your membership. (Note any fees.)

The Business Plan, Section 5: Finances
START-UP REQUIREMENTS
1. Complete Table 5.7, indicating all the current assets you will need to have before your business can open. This list will include things like office supplies, inventory, prepaid expenses (like insurance or licences) and the cash you will need in your bank account in order to run the business. (Attach this chart as an appendix to your plan.)

Table 5.7
MATERIAL AND OPERATING CASH NEEDS (For Start-up)
Material and Cash (Current Assets) $ Value
Already Have Need

2. Complete the equipment needs worksheet in Table 5.8 by reviewing the list you have made and establishing prices for what you need or the value of things you already have. (Attach this chart as an appendix to your plan.)

Table 5.8 EQUIPMENT NEEDS (For Start-up)
Equipment (Fixed Assets) $ Value
Already Have Need

OWNER(S)’S INVESTMENT
3. Briefly explain how much you, your partner(s), and any other investors (angels, venture capitalists) will be contributing in order to start the business. (Do not include any borrowed money.) Be sure to include the value of those things you already own (cash, equipment, or materials) that will be used exclusively for the business. Also include any expenses you have already paid.
BORROWED MONEY
4. Indicate any money your business will have to borrow. Identify the lender(s), the interest rate, and the repayment terms. (This amount may have to be estimated for a first draft, then recalculated after completing the balance sheet, and again after completing the cash flow.) Indicate any collateral that may be required.
BALANCE SHEET
5. Prepare a balance sheet for the opening day of your new business (Figure 5.6). After you have completed the rest of the financial section, prepare projected balance sheets for the end of the first, second, and third years (Figures 5.7a, 5.7b, and 5.7c, respectively) of business to indicate how the financial position of the firm will change.

Please note that you may need to change some of the categories your individual business. The summing feature of Microsoft Word Tables can be used to add columns.

Figure 5.6
Company Name:
Balance Sheet (Opening Day) (Insert Date)
ASSETS
Current Assets
Cash
Accounts Receivable
Inventory/supplies
Prepaid Expenses
Other Current Assets __________
Total Current Assets

Fixed Assets
Land and Buildings
Fixtures
Equipment
Vehicles
Other Fixed Assets ___________
Total Fixed Assets. __________
Total Assets
LIABILITIES
Current Liabilities
Accounts Payable
Short-term Loans Payable
Taxes Payable
Other Current Liabilities
Total Current Liabilities
Long-Term Liabilities
Mortgage Payable
Long-term Loans Payable
Other Long-term Liabilities ____________
Total Long-term Liabilities
SHAREHOLDERS’ EQUITY
Capital Investment
Retained Earnings ____________
Total Equity __________
Total Liabilities and Equity
Figure 5.7a
Company Name:
Balance Sheet Year End (Year 1) (Insert Date)
ASSETS
Current Assets
Cash
Accounts Receivable
Inventory/supplies
Prepaid Expenses
Other Current Assets __________
Total Current Assets

Fixed Assets
Land and Buildings
Fixtures
Equipment
Vehicles
Other Fixed Assets ___________
Total Fixed Assets. __________
Total Assets
LIABILITIES
Current Liabilities
Accounts Payable
Short-term Loans Payable
Taxes Payable
Other Current Liabilities
Total Current Liabilities
Long-Term Liabilities
Mortgage Payable
Long-term Loans Payable
Other Long-term Liabilities ____________
Total Long-term Liabilities
SHAREHOLDERS’ EQUITY
Capital Investment
Retained Earnings ____________
Total Equity __________
Total Liabilities and Equity
Figure 5.7b
Company Name:
Balance Sheet Year End (Year 2) (Insert Date)
ASSETS
Current Assets
Cash
Accounts Receivable
Inventory/supplies
Prepaid Expenses
Other Current Assets __________
Total Current Assets

Fixed Assets
Land and Buildings
Fixtures
Equipment
Vehicles
Other Fixed Assets ___________
Total Fixed Assets. __________
Total Assets
LIABILITIES
Current Liabilities
Accounts Payable
Short-term Loans Payable
Taxes Payable
Other Current Liabilities
Total Current Liabilities
Long-Term Liabilities
Mortgage Payable
Long-term Loans Payable
Other Long-term Liabilities ____________
Total Long-term Liabilities
SHAREHOLDERS’ EQUITY
Capital Investment
Retained Earnings ____________
Total Equity __________
Total Liabilities and Equity
Figure 5.7c
Company Name:
Balance Sheet Year End (Year 3) (Insert Date)
ASSETS
Current Assets
Cash
Accounts Receivable
Inventory/supplies
Prepaid Expenses
Other Current Assets __________
Total Current Assets

Fixed Assets
Land and Buildings
Fixtures
Equipment
Vehicles
Other Fixed Assets ___________
Total Fixed Assets. __________
Total Assets
LIABILITIES
Current Liabilities
Accounts Payable
Short-term Loans Payable
Taxes Payable
Other Current Liabilities
Total Current Liabilities
Long-Term Liabilities
Mortgage Payable
Long-term Loans Payable
Other Long-term Liabilities ____________
Total Long-term Liabilities
SHAREHOLDERS’ EQUITY
Capital Investment
Retained Earnings ____________
Total Equity __________
Total Liabilities and Equity

COSTS AND EXPENSES
6. Complete the ongoing costs and expenses worksheet (Table 5.9) by carefully reviewing all the earlier parts of the business plan and estimating how much you will need to pay annually, as well as on a regular monthly basis, to operate the business. For costs or expenses that are paid on an irregular basis over periods longer than monthly, provide notes to indicate approximately how much and when these items would be paid for—examples might include semi-annual licence fees or large inventory purchases. Be sure to fill in both the annual and monthly (or other period) columns. (Attach this chart as an appendix to your plan.)

Table 5.9 ON-GOING COSTS & EXPENSES (Worksheet)
Cost or Expense Annual
Amount Payment Period
(monthly or other – specify) Amount Per Period

INCOME STATEMENT
7. Using the above information and your sales forecast from Section 2, prepare projected income statements for the first, second, and third years of business (Figures 5.8a, 5.8b, and 5.8c, respectively).

Please note that individual categories of income and expenses may have to be changed to fit your particular business. The summing feature of Microsoft Word Tables can be used to total columns.

Income Statements

Company Name:
INCOME STATEMENT (PROJECTED)
For the One Year Period Ended: (Insert Year 1 end Date)
SALES
Sales
COSTS
Cost of Goods Sold ____________
GROSS PROFIT
Gross Profit
EXPENSES
Rent
Utilities
Equipment Lease
Salaries
Benefits (employer paid)
Drawings
Insurance
Depreciation expense
Interest
Maintenance
Professional Fees
Advertising
Supplies
Delivery
Travel ____________
Total Operating Expenses ____________
NET PROFIT
Net Before Income Tax
Income Tax ____________
Net Profit after Income Tax

Company Name:
INCOME STATEMENT (PROJECTED)
For the One Year Period Ended: (Insert Year 2 end Date)
SALES
Sales
COSTS
Cost of Goods Sold ____________
GROSS PROFIT
Gross Profit
EXPENSES
Rent
Utilities
Equipment Lease
Salaries
Benefits (employer paid)
Drawings
Insurance
Depreciation expense
Interest
Maintenance
Professional Fees
Advertising
Supplies
Delivery
Travel ____________
Total Operating Expenses ____________
NET PROFIT
Net Before Income Tax
Income Tax ____________
Net Profit after Income Tax

Company Name:
INCOME STATEMENT (PROJECTED)
For the One Year Period Ended: (Insert Year 3 end Date)
SALES
Sales
COSTS
Cost of Goods Sold ____________
GROSS PROFIT
Gross Profit
EXPENSES
Rent
Utilities
Equipment Lease
Salaries
Benefits (employer paid)
Drawings
Insurance
Depreciation expense
Interest
Maintenance
Professional Fees
Advertising
Supplies
Delivery
Travel ____________
Total Operating Expenses ____________
NET PROFIT
Net Before Income Tax
Income Tax ____________
Net Profit after Income Tax
SALES INCOME BY MONTH
8. Take the sales forecast from Section 2 (Feasibility) of your business plan and break it down into monthly predictions (Table 5.10). (Attach this chart as an appendix to your plan.)

Table 5.10
Projected Sales Income By Month
NAME MONTH YEAR 1 YEAR 2 YEAR 3
1 $ $ $
2
3
4
5
6
7
8
9
10
11
12
TOTAL SALES FORECAST $ $ $

9. Give logical reasons for this monthly breakdown, considering items like seasonality and growth of the business.
10. Specify any credit or payment terms you will provide to your customers and when you expect them to actually pay. Explain the pattern of when cash will actually be received for your sales.
11. Describe any credit or payment terms you will expect from your suppliers or subcontractors and note how this will affect your cash disbursements.
12. Prepare projected cash-flow statements for each of the first three years of business, broken down by month (Figures 5.9a, 5.9b, and 5.9c, respectively).
Figure 5.9a

Company Name:
PROJECTED CASH FLOW YEAR 1 OF OPERATION, Ending: (Insert Date)

MONTH 1 2 3 4 5 6 7 8 9 10 11 12

Sales

CASH IN-FLOW

Cash sales

Payments received

Total Cash In-flow (a)

OPENING Cash Balance (b)

CASH OUT-FLOW

Advertising

Inventory

Rent/maintenance

Insurance/prof. fees

Loan payments

Salaries/deductions

Supplies/equipment

Taxes

OTHER expenses

Total Cash Out-flow (c)

BALANCE
CLOSING Cash Balance (a+ b-c)

Figure 5.9b

Company Name:
PROJECTED CASH FLOW YEAR 2 OF OPERATION, Ending: (Insert Date)

MONTH 1 2 3 4 5 6 7 8 9 10 11 12

Sales

CASH IN-FLOW

Cash sales

Payments received

Total Cash In-flow (a)

OPENING Cash Balance (b)

CASH OUT-FLOW

Advertising

Inventory

Rent/maintenance

Insurance/prof. fees

Loan payments

Salaries/deductions

Supplies/equipment

Taxes

OTHER expenses

Total Cash Out-flow (c)

BALANCE
CLOSING Cash Balance (a+ b-c)

Figure 5.9c

Company Name
PROJECTED CASH FLOW YEAR 3 OF OPERATION, Ending: (Insert Date)

MONTH 1 2 3 4 5 6 7 8 9 10 11 12

Sales

CASH IN-FLOW

Cash sales

Payments received

Total Cash In-flow (a)

OPENING Cash Balance (b)

CASH OUT-FLOW

Advertising

Inventory

Rent/maintenance

Insurance/prof. fees

Loan payments

Salaries/deductions

Supplies/equipment

Taxes

OTHER expenses

Total Cash Out-flow (c)

BALANCE
CLOSING Cash Balance (a+ b-c)

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