Transcript Business Plan - Capitalschool-24

Business Plan
Brief summary of Executive
Summary and Business Plan
Chapters
INSTRUCTIONS TO PREPARE
A BUSINESS PLAN
The Business Plan is composed by three parties:
1. Executive Summary
2. Textual part
3. 5 years Financial Projections (including
Breakeven Analysis and cash flow)
For each section suggestions follow. If applying
to your Business take them in consideration
developing your own paragraphs.
Executive Summary
EXECUTIVE SUMMARY
The summary is the doorway to the rest of
the plan. Get it right or your target readers
will go no further. Keep it short.
Executive Summary
SCHEME OF EXECUTIVE
SUMMARY (max 4 pages)
1. Location of Applicant (City,
State/Province,Country) :
2. Location of Project (City,
State/Province, Country) :
3. Project Description :
4. Amount of Funding Requested :
5. Funding Structure:
6. Funding Type:
7. Business Type :
8. Financing Term Required:
9. Usage of funds:
10. Security Offered:
11. Appraised Value of Security:
12. Annualized Income Projection:
13. Guarantees Available,if Any:
14. Documents Available:
15. Full Legal Name Of Applicant:
16. Corporate Status:
17. Date and Place of Incorporation: (or
establishment of LLC;Etc.)
18. Current Assets vs. Liabilities:
19. Name, Address,Telephone,and
Telefax Numbers for
Directors/Partners/Shareholders/Etc.
20. Name,Address,Telephone,and Telefax
Numbers for Bank Reference(s):
21. Name,Address,Telephone,and Telefax
Numbers for Accountants:
22. Name, Address,Telephone,and
Telefax Numbers for Two (2)
Commercial References:
22.a. Reference 1:
22.b. Reference 2:
23. Contact Party
Business Plan
(Textual Part)
APPLICANT DATA
(COMPLETE CAREFULLY!!!)
General Data
Specify the following information regarding your actual company:
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Company Name:
Company address:
Country:
Kind of Company:
Capital (total face value):
Capital real value:
Number of shares:
Face Value of each share:
Names of shareholders
specifying how many shares are
owned by each one:
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Capital to be raised in Round 1:
Capital to be raised in Round 2:
Capital to be raised in Round 3:
Balance of capital to be raised
after Round 3:
 Number of Months before
reaching of Breakeven point:
 Annual Net (of taxes) Profit at
third year of future activity:
 Comments on data of this
section:
OBJECTIVES
General Data
 Objectives are business goals.
 Companies need to set objectives and plan
to achieve them.
 Make sure your objectives are sure and
measurable.
 State specific goals.
MISSION
General Data
 The mission statement is like a business’
charter.
 It should summarize your business goals,
your business offering, and your target
market.
 What are you selling, and to whom?
 Why?
KEY TO SUCCESS
General Data
 Every business has different keys to
success.
 These are a few key factors that make the
difference between success and failure.
 In a retail business, for example, location
and parking might be keys to success.
 Avoid listing more than three or four
elements at the most.
COMPANY SUMMARY
General Data
 Use this first paragraph to summarize the
company-related information to follow in this
chapter.
 Be brief.
 Briefly explain what your company sells, through
what channels, and to whom.
 Think of this as writing to people who will only
read this summary, not the rest of the chapter.
General Data
COMPANY OWNERSHIP
 In this paragraph, describe the ownership of
the company.
 Is it a corporation, publicly traded?
 Privately owned corporation, C or S?
 Is it a sole proprietorship, or a partnership?
General Data
START-UP SUMMARY
 Summarize your start-up plan.
 Explain an attached start-up table.
 Detail start-up costs.
COMPANY SERVICES
General Data
 Use this section to explain the services that
your company sells.
 Refer briefly to the most important needs
satisfied, key product benefits, and
important customer segments.
 Don’t worry about repeating some
information again later in the product
section.
General Data
COMPANY LOCATION
AND FACILITIES
 Briefly describe offices and locations of
your company, the nature and function of
each one, square footage, lease
arrangements, etc.
 You may want to include more detail about
facilities in your appendices.
General Data
FUNDS UTILISATION
 Briefly describe how funds are utilised.
General Data
RISKS FOR INVESTORS
Each investments has commercial, market, management,
political, supplier and infrastructural risks such as
1. Commercial Risk,
2. Market Risk,
3. Management Risk,
4. Country/Government risk,
5. Supplier risk,
6. Infrastructure Risk,
that Investors must know, please list them and explain
how your Business reduces and manages the
Investments risks.
General Data
RISKS OF THE SPECIFIC ACTIVITY
Each activity has specific risks such as
1. Completion cost
2. over-runs,
3. Start-up delays,
4. Direct competition,
5. Sales development,
6. Materials supplies,
7. Labor costs and disruptions,
Management has to face, please list them and explain
how your Business reduces and manages the Risks of
your specific activity.
Services - Products
SERVICES - PRODUCTS
 Use this first paragraph to summarize
the chapter to follow.
 Emphasize the important points, such as
1. the main service(s) or product(s)
and
2. the way that they address user
needs.
Services - Products
SERVICE – PRODUCTS DESCRIPTION
List and describe the service(s) or the
product(s) your company offers.
As you do, think in terms of customers
and customer needs.
How do you and your services fill the
customers’ needs?
Services - Products
COMPETITIVE COMPARISON
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Compare your offerings to those of your competitors.
Why do people buy yours instead of these others?
What benefits do you offer?
1. At what price?
2. To whom?
3. How does your mix compare to others.
 Make a list of
1. benefits,
2. features, and
3. market groups,
comparing each element.
Services - Products
SALES LITTERATURE
Include copies of
1. advertisements,
2. brochures,
3. direct mail pieces,
4. Catalogs, and
5. technical specifications.
This should be added to the appendices.
Services - Products
SOURCING
Explain the costs of providing the benefits you
offer, whether they be products, services, or both.
– Manufacturers and assemblers should list
components and vendors.
– Retailers or wholesalers should discuss their
product lines and margins.
– Service providers should explain the costs of
providing the service.
Services - Products
TECHNOLOGY
 If applicable, what technology do you use
to make your product or service?
 Is this technology protected?
1. patent,
2. copyright,
3. trademark,
4. etc.
Services - Products
FUTURE SERVICE - PRODUCT
 Present an outlook for future services -
products.
 Is there a long-term Strategy?
 How are new services - products
established?
 Is there a relationship between market
segments, market demand, market needs,
and service - product development?
MARKET ANALYSIS SUMMARY
Market
 This first paragraph is a simple summary.
 Describe the different groups of target customers
included in your market analysis.
 In some major markets you may be able to include
projections of the total market, in units and
dollars, plus recent market performance, and
projected market growth.
 In many smaller businesses you will simply define
the kinds of people who will be your customers.
MARKET SEGMENTATION
Market
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The market segmentation concept is crucial to market
assessment and market strategy.
 Divide the market into workable market segments—
divided by
– age,
– income,
– service - product type,
– geography,
– buying patterns,
– customer needs,
– or other classification.
INDUSTRY ANALYSIS
Market
This section sets the scene for
the market forecast that follows.
Produce industry information
that will serve as important
background material.
INDUSTRY PARTECIPANTS
Who are the players, and how many?
Market
Is this a concentrated industry in which
there are only a few major players, or a
dispersed industry in which many
small companies take part.
Who are their suppliers?
DISTRIBUTION PATTERNS
 Explain how distribution works in this industry.
Market
 Does it have regional distributors, as is the case
for computer products, or magazines, or auto
parts?
 Does it depend on direct sales to large industrial
customers?
 Do manufacturers support their own direct sales
forces?
Market
COMPETITION AND BUYING PATTERNS
Explain the nature of competition in this market.
 What are the keys to success?
 What buying factors make the most difference?
– Price?
– Product features?
– Service?
– Support?
– Training?
– Software?
– Delivery dates?
– Are brand names important?
MAIN COMPETITORS
Market
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List the main competitors.
What are the strengths and the weaknesses of each one.
Consider their
1. product,
2. price,
3. distribution channels,
4. reputation,
5. management,
6. financial position, and
7. technology.
 In what segments of the market do they operate?
Market
MARKET ANALYSIS
Use the text to describe and refer to
1. the detailed market analysis
2. that examines your total potential
market,
3. focusing on different customer
segments.
STRATEGY SUMMARY
Market
 On which segments of the market will you
focus, and why?
 How does your business offering (including
what you sell, at what price, how you sell,
and where you sell) match the customer
needs in your target segments?
 How does this offering compare to
competitors’ offerings?
PRICING STRATEGY
Market
 Include
1. present price list,
2. discount structure, and
3. credit terms.
 Compare these to
1. the needs and wants of the customer,
and
2. to the offerings of your competitors.
SALES FORECAST
Market
 Use the text to summarize and highlight the
Sales Forecast in a detailed sales forecast
table.
 Try to emphasize important points and
explain assumptions to the sales forecast.
 The monthly sales forecast chart and annual
sales forecast chart should be drafted.
STRATEGIC ALLIANCES
Market
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Explain
1. co-marketing,
2. co-development,
3. commission, and
4. cooperative arrangements.
 Is your fate tied to that of any other company?
 Can you link your promotion or distribution
strategies to another company in a way that
improves your company’s position?
MANAGEMENT SUMMARY
Management
 Use this first paragraph as a summary.
 Include
1. how many employees are in the
company, and
2. how many members are there in the
management team.
 How many are founders of the company?
ORGANIZATIONAL STRUCTURE
Management
Explain your organization
structure.
If you can, include a diagram of
the organization as an additional
illustration in the appendices.
MANAGEMENT TEAM
Management
List the most important members of
the management team.
Include summaries of their
backgrounds and experience, using
them like brief resumes.
Describe their functions with the
company.
PERSONNEL PLAN
Management
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Prepare a personnel plan, projecting
1. employees,
2. salaries, and
3. departments.
Explain
1. the plan,
2. assumptions,
3. personnel needs,
4. costs, and
5. benefits.
FINANCIAL PLAN
Financial Plan
 Use this first section to summarize the
financial plan in a few paragraphs.
 How fast is the business expected to grow,
and how do you intend to finance that
growth?
 Or are you growing slowly and producing
profits?
IMPORTANT ASSUMPTIONS
Financial Plan
Use this section to discuss
important assumptions, including
the assumptions covered in the
attached spreadsheets.
Explain how key assumptions have
affected your financial projections.
KEY FINANCIAL INDICATORS
Financial Plan
List the indicator values for the most
important financial variables,
comparing projected results to actual
and past results.
Explain the projected performance in
light of the past performance and
specific business activities planned.
FIVE YEARS FINANCIAL
PROJECTION
(Tables)
BREAK-EVEN ANALYSIS
financial projections
 Explain the break-even assumptions in the Break-even
table from the Tables menu, and the break-even chart.
 Divide your estimated annual fixed costs by your gross
profit percentage to determine the amount of sales revenue
you'll need to break even. For example, if Valerie's fixed
costs are $6,000 per month, and her expected profit margin
is 66.7%, her break-even point is $9,000 in sales revenue
per month ($6,000 divided by .667). In other words,
Valerie must make $9,000 each month just to pay her
fixed costs and her direct (product) costs. (This number
does not include any profit, or even a salary for Valerie.)
financial projections
PROJECTED CASH FLOW
 Use the text portion to explain the key elements of
the pro forma cash flow, which presents projected
changes in cash balances.
 The cash flow chart shows month-by-month cash
flow and cash balances.
 Your cash flow shows where money comes from,
how you're going to use it and when you'll need to
get your next loan or investment.
financial projections
FIVE YEARS PROJECTED
PROFIT AND LOSSES
 The profit and loss account is ‘a summary of the
results of a business’s transactions for a period
ending on the date of the balance sheet.
 Use the text portion to explain the key elements of
the pro forma income statement, which presents
projected profits and losses.
 The income statement table is called “Profit and
Loss” in your Tables menu.
financial projections
PROJECTED BALANCE SHEET
 Use the text portion to explain projected changes in assets and liabilities.
 The balance amounts are shown in the Balance sheet table.
 The balance sheet shows the position which has been arrived at after a period’s
transactions
----------------------------------------------------------------------------------------------------Assets
Liabilities
Current Assets
(what you have)
Current Liabilities
(what you owe)
Intermediate Term Assets
Intermediate Term Liabilities
Capital Assets
Long Term Debt
Equity (This is the "book
value" of what's left over
after all debts are paid)
Total Assets
Total Liabilities & Equity
financial projections
BUSINESS RATIOS
 There are two basic methods of using financial
ratios. The first is by comparing the firm's ratios
with those of other companies in the industry. The
second method is to compare the firm's present
ratios with their past performance ratios.
 Use the text portion to explain the important
business ratios calculated in a worksheet.
 Note the key changes, and highlight the most
important ratios.
financial projections
Business Ratios Samples
Profit Ratios
 Gross profit margin = Sales RevenueCost of Goods Sold/Sales Revenue
 Net profit margin = Net Income/Sales
Revenue
 Return on total assets = Net Income
Available to Common
Shareholders/Total Assets
 Return on stockholders' equity = Net
Income Available to Common
Shareholders/Stockholders' equity
Liquidity ratios
 Current ratio = Current Assets/Current
Liabilities
 Quick ratio = (Current Assets Inventory)/Current Liabilities
Activity ratios
 Inventory turnover = Cost of Goods
Sold/Inventory OR: = Beginning
Inventory Plus Ending Inventory/2
 Days sales outstanding (or Average
collection period) = Accounts
Receivable/(Total Sales/360)
Leverage ratios
 Debt to assets = Total Debt/Total Assets
 Debt to equity = Total Debt/Total Equity
 Times-covered = Profit Before Interest
and Tax/Total Interest Charges
Shareholder-return ratios
 Total shareholder returns= Stock Price (t
+ 1) - Stock Price (t) + Sum of Annual
Dividends Per Share/ Stock Price (t)
 Price-earnings ratio = Market Price Per
Share/Earnings Per Share
 Market-to-book value = Market Price
Per Share/Earnings Per Share
 Dividend yield = Dividends Per
Share/Market Price Per Share