Business Plan Basics

Presented by: Tim Garrison, CPA From: The Controllership Group

Who Needs A Business Plan?

• Individuals starting a new business • Managers that are responsible for a business, product lines or profit centers • Anyone trying to buy an existing business

Why Do a Business Plan

• Start up of a business • Acquisitions • Major change in an existing business • Investigate a business opportunity • Bankers and investors

New Ventures Business Type Is Critical

• Sole proprietor • Partnership • Single Member Partnership (LLC • LLC, LLP • Corporation • Sub S Corporation

What Is A Business Plan

• It is an opportunity to work on your business rather than in it. • Properly done it provides you direction on where you are going. Not unlike a roadmap!

• Forces you to investigate and research everything that is or will be part of your business.

Plan Outline

• Executive Summary (compelling 2-3 pages it actually is written last) – What is unique about your offering – What stage are you in 3-5 year vision – Market opportunity – Management – who is the complete team – Summarize financial highlights – Summary money invested and money needed, how it will be used and terms of deal you are offering

Plan Outline

• The Company • Background on company where organized • Is it an LLC, LP, INC • What are the revenues and profits if business exists at this point • Key players in directing company

Plan Outline

• Product/Industry – Describe your product – Where are you at (being researched, in production) – What makes your service or product unique – Where is industry going – Competition

Plan Outline

• Market research, competitors and analysis – Overview of market and your positioning – Statistics on market (verifiable independent resources increase credibility) – Honest assessment of competitors – What this means upside and downside

Plan Outline

• Marketing And Sales Approach – Overview of your approach to the market – How is your product priced?

– Promotion of product/service – How is product or service sold?

Plan Outline

– Who Manages And Owns The Company • Describe the management • Who owns the business • How are these people paid and perks • Support team

Plan Outline

• Organization And Operating Plan – What your organization looks like – Short version of business processes – Short version of systems in place

Plan Outline

• The financial Plan (below is typical for equipment financing) – 3 year projected balance sheet, cash flows and income statements – Assumptions on how $$$$ were arrived at

Plan Outline

• Proposed Company Offering – If equity - what do you need and what are you offering for it.

– If debt what do you need, interest rate and repayment terms you are asking for.

– Uses of cash should be provided also

The Business Plan Team

• Your teams strengths will determine who you need to add to your team to balance it.

• Few people should attempt this alone!!

• The team – CPA or qualified business advisor – Attorney – Banker – Insurance agent – Your internal management team