Read Microsoft Word - Sample Business Plan.doc text version

Sample Business Plan

Welcome to BizPlanBuilder®. Here is a sample of the complete business plan text used for the Angel/VC plan. (It's the most comprehensive version designed to pitch a new idea to the most sophisticated investors.) As you'll see, there is more than enough to use. If the text/concept fits your business model, use it, if not, you can discard what you don't require. The plan for the extraordinary business JIAN's philosophy is to give you ideas and content from the best business plans cross-pollinated from every industry vs. lots of industry-specific examples that you must undo (unless you are starting an ordinary business...) Investors are rarely industry-specific, but they do understand business, profits, growth, value and return on investment. Speak their language correctly and you will get funded. Variables like [Company], [Owner/Founder] are automatically replaced from the data file. [Other variables in brackets like this] include example text that give you ideas and that you will edit. Although this is a protected .pdf of the text provided within BizPlanBuilder (you cannot copy any text or print it), you can read it now and edit it using the BizPlanBuilder application.

Expert comments throughout, in green, can be turned on/off with an icon in the BizPlanBuilder application ­ in this sample, they add about 40 pages ­ it's as if we're sitting next to you all the way. When you turn these off they disappear completely and the black text rolls up. They won't print.

At the end of this narrative sample, we include a sample of the PowerPoint "investor pitch" slideshow. BizPlanBuilder also includes 54 supporting documents important for completing the process of raising money ­ you can see the list here. Investors ask a lot of questions ­ They say they want a 2-page business plan, but I think you will agree that few people will write you a check without learning more... BizPlanBuilder has it. Click these links to review the financial models provided in BizPlanBuilder Unlike other business planning software, BizPlanBuilder enables complete flexibility for a perfect fit.

· · · · · · · · Financial Models Click here for a complete description of BizPlanBuilder's forecasting system. Financial Summary Add this to your Executive Summary to provide that 2-page intro to Angels. Business Start-up Costs Use this worksheet to total everything you need to expand / get started. Financial Assumptions These few worksheets drive the entire model automatically. Investor Analysis Shows screen and introduces a few concepts. Ratio Analysis Shows screen and explains ratios.) Sensitivity Analysis Shows the screen and explains Best/Worst Case analysis. Business Valuation Model Shows the screen and how we calculate valuation.

Here is a sample cover letter to send to VCs. We also include similar letters to angels, bankers, suppliers and friends. You may want to visit our website to learn more about the latest VC sentiments. Try to keep this letter to one page. The type is initially set at 12 point for easier reading ­ we also left the right margin "ragged" so it doesn't' look so formal!

[Company Legal Name]

[Address] [City] [State] [Zip Code] [Telephone]


[Addressee] [Address Title] [Investment Company Name] [Investor Address] [Investor City, State Zip] Dear [Investor First Name], It was great talking with you today. I've enclosed a copy of the Executive Summary from our business plan for your review. I really appreciate your responding to [name of person who referred you]'s suggestion that we meet. After speaking with you, I am convinced that [Company]'s business model, objectives, market direction and approach to [xxx] match your company's criteria, as we discussed, and represent a very attractive growth and investment opportunity for your organization. As you evaluate the potential return on this investment, you will probably find these key points of considerable interest: [Company] recently [briefly discuss your company's most significant major accomplishment of the past year]. [Company] is currently positioned as the leading [xxx] in [xxx], and we anticipate [slow / steady / rapid / exponential] growth in the next [xx] [days / weeks / months / quarters / years]. This will support our [xxx] and allow us to [xxx] most effectively.

We have partnered with [xxx] to [xxx] since [Month, year], and are already seeing results that fully support our forecasts of $[xx] million in annual sales by 20[xx]. According to [name the source of the statistics you are about to quote], growth is forecast at [xxx,xxx,xxx] new [type of customers] customers in our targeted segment every year for at least the next [xx] years. As [Company]'s [xxx] solves the critical issue of [xxx] for [xx]% of customers, growth forecast at $[xx] million annually leads us to expect a significant increase in revenues by [Month / Quarter] of 20[xx]. We are on track for an [IPO / acquisition] by [month / quarter] of 20[xx]. A first-round investment of $[xxx] million will be used to [xxx], with planned second-round funding of $[xxx] million to complete [xxx] and market [xxx] in [xx] [type of market] markets. The attached Executive Summary should answer most of your questions regarding this [Company] opportunity. We are prepared to make a full presentation, at your earliest convenience. [Company] must move swiftly to take advantage of the opportunity to [xxx]. I will call early next week to arrange an appointment. Should you have questions in the meantime, please feel free to contact me on my cell phone at, [xxx-xxx-xxxx]. We look forward to meeting with you. Best regards,

[Owner/Founder] Founder & CEO [Company] [Telephone] [Founder Email]

Cover Page ­ Use this page to design a nice cover for your plan Use a photograph of your product or of someone performing your service ­ replace our logo below. This of this as a cover of your brochure ­ make it attractive to an investor or lender.

[Your Logo Here]

If you need a great new or updated logo, we recommend Logo Design Gurus who can put one together for you for as low as $99! Please visit their website for more information.

[Company Legal Name]

[Your slogan here]

Here are several title ideas to choose from or edit into what suits your business and application for your business plan:

Business Plan SBA Loan Proposal Product/Service Launch Proposal

Go confidently in the direction of your dreams. live the life you have imagined.

~ Henry David Thoreau When you publish and print your plan, these comments will be removed automatically, and the page will reflow itself correctly. You can click on the "bullhorn" icon above to turn them on and off.

[Your Logo Here]

[Company Legal Name]

Business Plan

[Month, year issued]

____ Business Plan Copy Number [Owner/Founder] Founder & Chief Executive Officer [Address] [City], [State] [Zip Code] [Telephone] [fax] fax [mobile] mobile This document contains Confidential & Proprietary Information belonging exclusively to [Company]. This is a business plan. It does not imply an offering of Securities.

This copy number is for your tracking purposes only. Before sending or giving your plan to an investor, hand write the number of the business plan in the space provided, Add all relevant information regarding the individual or company to whom you've given this copy in your Business Plan Distribution and Follow-up Sheet. It's important to know where you've distributed copies of your plan. Only number the copies given to investors. They may wonder how many people are looking at your deal--if their copy number is high, they may think that many people have seen your plan and passed (then wonder why?) You can use an alpha-numeric system for plans given to others. Use the included "Investor Tracking" spreadsheet to follow up with potential investors. Print your business plan double-sided. Leave this page blank so it doesn't show through the back of your title page... The first page your readers see will be the Table of Contents on the following page We recommend assembling your printed plan using colored, number tabs. (Most investors we've talked with admit that they like these!)

Table of Contents

AFTER you have completed your plan, choose the Assemble Plan Preview option in the File menu. BizPlanBuilder will assemble all the elements you have checked in the index into a complete plan preview. In Plan Preview, review the plan, and when you are satisfied, select Save Assembled Plan as.... Follow the on-screen instructions. Be sure to create a new folder for your plan, and remember to open the folder before you click Save. (Some word processors open the folder automatically for you.) As you save your plan, the Table of Contents updates automatically, and "Error! Bookmark not defined," will be replaced by the correct page numbers. In Word, highlight the entire contents area below, then push the F9 key to update the entire Table of Contents as well as the page numbers.

Executive Summary ....................................................................................................................... 1 Market Opportunity ...................................................................................................................... 12 Vision, Mission, Goals & Objectives .......................................................................................... 15 Company Overview...................................................................................................................... 20 Management ................................................................................................................................. 23 Market Analysis............................................................................................................................ 29 Business Strategy........................................................................................................................ 39 Demand / Revenue Model............................................................................................................ 42 Product Strategy .......................................................................................................................... 46 Competition .................................................................................................................................. 54 Internet Strategy........................................................................................................................... 61 Marketing Plan & Strategy........................................................................................................... 69 Risk................................................................................................................................................ 94 Operations .................................................................................................................................... 98 Environmental Sustainability.................................................................................................... 106 Present Situation........................................................................................................................ 110 Financial Plan ............................................................................................................................. 113 Exit / Payback Strategy.............................................................................................................. 122 Summary ..................................................................................................................................... 124 Supporting Documents ............................................................................................................. 127 Capital Requirements ................................................................................................................ 136

[Company] Business Plan

Executive Summary

For an overview of Executive Summary see the BizPlanBuilder Handbook of Business Planning or look on the JIAN website under `Solutions' / `Planning' Create a clear, compelling, detailed discussion of your value proposition to your customer (benefit cost). Every word counts and should build your case. Be sure your writing is crisp and concise. "You must communicate succinctly yet convincingly just what the business is, who will execute the strategy and how it will change people's lives." ­ Marsha VandeBerg, Entrepreneurial Edge The Executive Summary should pinpoint what your business is intended to do, who the management team is today and who those players will be in five years, plus company capabilities that will enable you to achieve your business objectives. This section is a "mini" version of your business plan. It's everything you've said in the entire business plan--summarized in one to three pages, and it's intended to generate excitement about what you're doing. State the business concept, basic financial points (such as sales projections and capital requirements) and current status of the company. Identify the owners, key personnel and what each brings to the table. You may have previous industry experience, or maybe you've hired someone with a notable track record or connections. State what your company has achieved so far. Even a start-up can list things like patents, prototypes, contracts and test-marketing results. The Executive Summary provides an overview that distills the essence of the plan's key parts and--most important--hooks the prospective investor. "The importance of the summary should not be underestimated. Unless it captures the interest of the venture investors and appears convincing, they will not bother to read further." ~ Alan Salzman & John Doerr Because the Executive Summary presents a high-level overview of your business and indicates how your business plan is organized, it should usually be written after all the other sections of your business plan are completed. At the end of the day, there is no right way to write a business plan ­ you and your business are unique and the structure just helps you tell your story in a compelling way. The opening paragraph establishes the structure you have set up, or are intending to set up to support your vision. It includes a legal description of the business, identification of the management team, Board of Directors, and significant relationships between the company and outside entities, including customers, suppliers, government agencies, etc. The first paragraph of the Executive Summary is the Executive Summary of the Executive summary

[Company Legal Name] was [formed / created] in [Year Started] to [describe the purpose of your business activities in plain English as if you were explaining it to your mother].

... to build housing for 3 world countries out of used shipping containers. produce a complete suite of business-building software tools integrated on the internet enabling entrepreneurs to collaborate on their business plans, marketing plans... ... to produce a line of hypoallergenic soaps and makeup to be sold in health spas worldwide. ... to produce a film about electing the first woman president of the United States.


Overall, our company can be characterized as a [retail merchant / computer hardware installation, service



[Company] Business Plan

and repair / wholesale deli and bakery / childcare / car rental] business specializing in [your area of specialization].


For many years people have [suffered from/paid too much for/made shoes by hand/describe the problem].

Describe the [concept / opportunity / niche] in your marketplace that you'll be able to exploit as you build your business to the next level, etc.

Today, the 2002 NAICS Title market [has grown exponentially / diminished significantly / remains relatively constant / experiences fluctuations based on the economy], creating demand for [the gap your business will fill].

A good quote from a prominent source establishing / illustrating the widespread need for your product / service would be good here. Replace this quote with something comparable for your market:

"30 million households suffer from mouse attacks every day..."

- [Prominent Industry Magazine or Resource] [Company] [is creating an / will launch an / has an established] operating infrastructure, with [wellrecognized brands / customer letters of intent / proprietary content / satisfied business communities /strategic partners / distribution channels / outsourced production]. [Company] is now transforming its products and services, as well as its fundamental business model, to take full advantage of [the newest Internet-based technologies /current market trends / recent changes in xxx]. We have just [started / completed] the [design / development / testing / introduction] of [product / service]--a novel and proprietary [soap for cleaning vinyl / retail store display system / construction tool / approach to bookkeeping / technology for xxx, etc.].

Explain choice of form. For more info, visit our website "Business FAQS ­ Business Planning "

[Company] [has been / will be] established as [a / an] [Sole Proprietorship / S Corporation, C Corporation, Limited Liability Company / Partnership / Limited Liability Partnership] based on the advice of our advisory board. This structure [will give / gives] us the greatest tax and operational advantages based on the nature of our business and our anticipated growth. [Company] [is /will be] located at [Address], with satellite offices in [City, State]. Planned expansion will [describe what you foresee regarding expansion and any additional facilities that you expect will become necessary in the next two to five years]. By [benchmark year] our operation [was / will be] producing [$x] [sales / units / products] annually, and [has operated / is expected to operate] at [financial condition--profitable, break-even, etc.] [ever since / through the xxx phase of the product life cycle]. Revenue projected for fiscal year 20[xx], without external funding, is expected to reach $[x]. Annual growth projections indicate an [increase / decrease] of [x]% per year through 20[xx]. Now, [Company] is at a point where [what you need or want to do next]. We intend to secure $[x] through [a / an] [line of credit / SBA loan / angel investor / venture funding] to [expand our product line / enhance or improve our family of proven products / acquire xxx / upgrade our production facilities, etc].



[Company] Business Plan

Market Opportunity

Market Analysis--Ideally, the market is big enough to result in an acceptable return for investors, but small enough to be defined and addressed.

The [your target market / market segment / 2002 NAICS Title industry] is [growing / shrinking / changing] [rapidly / slowly / at a steady rate]. The market for [type of product] products amounted to $[x] million in 20[xx]­representing a [x]% [growth / decline] as compared with $[x] million in 20[xx].

How big is your potentially reachable market?

[Company] has investigated the number of people likely to use or benefit from our [x] products. Based on market research / private research / industry surveys, etc.] we estimate the number of potential customers to be [xxx] and the number we are likely to reach at [xxx]. According to the [research firm / industry report / trade journal--identify your source], dated [xxx], the overall market for the 2002 NAICS Title industry [worldwide / nationwide / in this region] is projected to be $[x] [billion / million / hundreds of thousands] by the end of 20[xx]. From our research, we've determined that customers purchase [your type of product] products primarily [in supermarkets / via the Internet / from wholesalers / at street fairs, etc.]The greatest growth in the [x] market is in the area of "[x]." Currently, market distribution is shared by [number of competitors] participants, with [top competitor name (this could be you)] considered the market leader. In the next [x] to [x] years, our forecasts indicate that there will be more than [x] [thousand / million] units of [product name / product group name] distributed by [Company]. The market potential for [product name] in these quantities ­ with a current retail price of $[x] per unit ­ is approximately $[x] [thousand / million]. This translates to [Company]'s market share at [x]% of the overall market by 20[xx].


[Company]'s target market includes [list types of customers]. The typical customer for our products is someone who is [in the xxx field / uses xxx / needs xxx / wants xxx] and who currently uses [product (yours or a competitor's)] for [describe use, application or purpose]. A partial list of [Company] customers includes:

[20,000 asthma sufferers] [5,000 practitioners of ______[think about the people who influence your customers] [xxx]

Product Strategy

Describe your current product(s) / services, and how you produce and deliver them. Include a brief outline of your future development plans. Describe current and desired facilities & equipment. Include artists' renderings, blueprints, drawings, flow charts, photos, etc.

[Company] [currently offers / will soon offer] [x] products for the [consumer / B2B / wholesale] [your market] market. Our principal product, [xxx], gives customers [list customer benefits] [Company]'s [product / service name] meets customer requirements with the unique [capacity / functionality / service option] for [describe what it does / what it offers that other products don't / why it is a better value]. Other products in our product family include:



[Company] Business Plan

[List products and necessary definitions]. Xxx Xxx xxx

Overall our existing product line is in the [give status: introductory / growth / maturity / nearing the end of its life cycle] stage. With several products in the [introductory] stage, [xx] in decline, and others at their likely peak, we have multiple opportunities to [introduce new products / re-release more up-dated products / take waning products out of circulation / identify potential new markets / redirect declining products to new international markets, etc]. [Company]'s proprietary [technology / intellectual property / patented processes, tools or products] include(s):

[List proprietary assets]. [Patented product] [Copyrights on 10 books] xxx

These assets give us several options with respect to [growth / expansion / reorientation]. We have offers on the table for [OEM deals / licensing / production / repurposing--describe the opportunities for your company based on these assets.]

Business Model

How will you make money? "Give away the handle, sell the blades..." Think of FedEx, Dell Computer, a caterer who opens a deli to bring in potential catering customers...

[Company]'s business model [has evolved / is evolving]. Initially, we sold [xxx] [direct to customers / business-to-business / through major retailers / to xxx manufacturers under OEM licensing / through home shows in a multi-level marketing program / door-to-door / at sidewalk kiosks, etc]. With the rapid adoption of [xxx] in the past [xx] [months / years], we have had to rethink our business model, to include [online sales / retail distribution channels / small retail shops / airport concessions / sales directly out of our warehouses, etc.] In our current business model, we find we need to support [xxx] sales with an [informational website / online store / army of sales reps, etc.] that allows us to penetrate the market far more effectively than we could using the old business model.


What is your competitive advantage, given the fact that other companies probably make and/or sell products similar to yours?

Companies that compete in this market are Competitor 1, Competitor 2 and Competitor 3. These competitors charge [comparable / a wide range / within a $x range of] prices: [list examples and range of prices for each competitor to substantiate your statement].

Product [Company] [Competitor 1] [Competitor 2] [Competitor 3]

[Product 1] [Product 2]

[$XX-XX] [$XX-XX]

[$XX-XX] [$XX-XX]

[$XX-XX] [$XX-XX]

[$XX-XX] [$XX-XX]



[Company] Business Plan

[Product 3]





Competitive Pricing

The major strengths and weaknesses of our competitors include [example: price, location, quality]. The major competitors' objectives and strategies are [list]. The major competitors' most likely response to current [economic, social, culture, demographic, geographic, political, governmental, technological, and competitive] trends affecting our industry will be [list likely competitor responses]. Key factors, such as [Competitor 1's first-to-market leadership position / Competitor 2's recent infusion of capital from an IPO / Competitor 3's release of xxx / a widespread (downward / upward) sales trend in xxx and related products] have resulted in the present competitive position in the industry. This means the [Company] will need to [describe what you will need to do in response to these factors, such as: seize an opportunity / overcome a threat / ride the wave / stabilize / rethink your strategy / introduce xxx, etc.]. Compared to competitive products (or the closest product available today) our [product / service] [can / will] [describe your competitive advantage].

How would/do your customers compare your product with those of competitors? Advantages of your product or service--its qualities that exceed existing products or services. Describe the unique selling proposition that differentiates you or your products.

Our strategy for [meeting / supplanting / dominating] the competition is [adding value in the form of xxx in every package / offering volume discounts / securing extensive media coverage and customer commentary regarding the major improvements in xxx / reducing our prices / increasing our prices / providing personal delivery / responding to specific customer requests within xxx hours / simplifying xxx to make technical support almost unnecessary, etc.].


If you bring it up first, you demonstrate that you have thought through your challenges and are likely to be aware and experienced at what you are doing. You must eliminate as much risk (real & perceived) as possible before investors, bankers and others can even hear or think about their ROI.

Top business risks for [Company] as we [create / enter / expand in] the [x] market include [current lack of awareness / economic slowing or recession / recent losses in related industries / explosive growth that exceeds our ability to respond--whatever your top risks are].

Provide 1- to 2-line descriptions of your top 2 or 3 business risk

We face [briefly describe primary risk]. Our strategy for minimizing risk in this area includes: [describe your strategy.] Changes in [the market / the environment / legislative regulations / the economy] may also require that we make adjustments to account for [describe the next specific area of risk]. An environmental risk that may cause some concern is [your top environmental risk]. We address this by [x].

Marketing Plan

Responses from customers indicate that our [product name(s)] [is / are] enjoying an excellent reputation and we fully intend to continue this trend. Inquiries from prospective customers suggest that there is considerable demand that we are [prepared / preparing] to meet.



[Company] Business Plan

Relationships with [leading OEMs (Original Equipment Mfgs.) / retailers / Fortune 500 / 1,000 companies / major accounts / manufacturers and distributors] substantiate [Company]'s [fitness / readiness / preparation] for [considerable growth / consistent sales volumes / market expansion] and accomplishment in the 2002 NAICS Title for the [market / region / area]. [Company]'s marketing strategy is to aggressively enhance, promote and support the significant benefits of xxx--unique to our product's [functionality / variety of uses / market acceptance / favored status].

List your unique features, benefits, established market position and presence.

Sales Strategy

[Product]'s special [functionality / market requirements / seasonal or geographic appeal--as mentioned in your Market Analysis section / characteristics / usability] allows us to capitalize on xxx and as a result, our sales strategy typically results in / is expected to yield] [$xx] in [annual / quarterly] sales. We are targeting the [xxx] audience with [special promotions / a concentrated ad campaign, etc].

Examples: appealing to walk-in retail customers, reaching executives by direct mail, demonstrating your product in manufacturing facilities, etc. Briefly describe how your sales strategy will address specific market / environmental conditions.

Distribution Channels

[Company]'s marketing strategy includes [plans to sell / selling] our [product(s)] through [several channels / an exclusive distributor relationship / authorized resellers / direct to consumers, etc.]. We will be driving our [lower margin / high margin / specific / complete line of] products through [key distributors, Distributor 1 and Distributor 2] OR [xxx product line] through [our online showroom / home shows / individually-selected retailers / direct mail promoting retail channel resellers / extensive advertising with publications that provide fulfillment in exchange for ads and part of the proceeds-- whatever you're doing in available distribution channels].

Give a 1- to 2-line description of the major distribution channels for your product.

The determining factors in choosing these channels are [access to resellers / minimal receivables handling / greatest direct access to the greatest number of potential customers, etc.]. Our mix of distribution channels will give us distinct advantages over our competition, including [list advantages--faster response to market shifts / access to markets they don't reach through xxx / presence in xxx where we have an exclusive relationship / X,XXX-person sales force promoting our product(s), etc]. With [number of] sales channels, [Company]'s primary channel [is / will be] [largest distributor / largest retailers] where [x] % of our channels sales, and [x]% of our overall sales [originate / will]. Our objective is to [maintain high sales volumes / increase our sales volume / reduce our sales volume / minimize our sales volume / eliminate sales] through this channel, while [rapidly expanding / stabilizing / reducing / eliminating] sales in [xxx channel] and [growing / stabilizing / reducing] sales in our [xxx channel].

Advertising & Promotion

Be sure to position your company/product based on perceived value in the minds of your customers and prospective customers.

Our advertising and promotion strategy is to position [Company] as the leading [manufacturer / distributor] in the market.



[Company] Business Plan

We will utilize the following media and methods to drive our message home to our customers:

Give 1- to 2-line descriptions of your primary advertising tactics for promoting your company and products to your customers (classified ads, color catalog, etc.)

For the next [x] [months / years], advertising and promotion will require $[x]. We arrived at this figure based on [current advertising response rates / launch plans for xxx / consistent ROI with xxx promotions, etc.].

Figure about 10% to 50% of sales $$$ the first year, depending on your industry

On an ongoing basis we will budget our advertising investment at [x]% of total sales. By consistently tracking the results of our advertising, we [have determined / will be able to determine] the effectiveness of our ad campaigns. This will allow us to adjust this budget allocation appropriately to ensure the highest possible return on our investment in advertising and promotion.

Publicity / Public Relations (PR)

During 20[xx], [Company] will focus on the following publicity strategies: Complete at least [x] media contacts per [month / quarter]. Have our products mentioned, included in competitive round-ups, and / or the subject of full articles at least [x] times per [month / quarter / year].

Give 1- to 2-line descriptions of your top 2 or 3 publicity strategies or areas of focus

We will track, wherever possible, all revenue generated from our advertising, promotion and publicity efforts. We anticipate at least $[x] in sales to be generated directly from our promotions, and potentially an additional $[x] in retail / distribution channel sales in response to our ads.

Production, Delivery & Fulfillment

Currently, production [is / is planned to be] [outsourced / handled internally at our xx plant in xx / distributed among xx vendors / up for bid] OR of [product line] is handled [at xxx location / by x supplier]. Key considerations in terms of production and delivery include [rising cost of fuel or electricity / transportation costs / availability of raw materials / adequate personnel to meet demand / production efficiency / costs associated with raw materials storage, etc]. Due to [expected rapid growth / anticipated product introductions / a downward trend in x / sustained level sales], our production should [be expanded / exceed current production capacities / level off / drop for our declining products / stabilize near current levels] within [number of months / years]. At that point, our production facilities will need to [expand / move / be reduced / be distributed among several vendors / be rolled out to a full turnkey contractor, etc.]. Our biggest production advantage is [describe advantage you currently enjoy or expect to realize].

Management Team

Insert additional executive and management profiles as appropriate. See Executive Team Background Template in the Supporting Documents section of BizPlanBuilder. For ideas regarding management team development, see "Management Team Development" in the Resources section of BizPlanBuilder. "The investor wants to see a complete team, functional in each critical area, with sufficient experience to indicate competence. Ideally, the team has worked together before, hopefully succeeding, although failure is not absolute cause for rejection. The team must display integrity and



[Company] Business Plan

exhibit the drive to succeed--commonly referred to as `fire in the belly.'" ~ Ken Wilcox, Executive Vice President & Chief Lending Officer, Silicon Valley Bank

Our management team consists of seasoned managers and experts whose backgrounds and experience make them ideally suited to their respective roles. A brief review of the training and expertise they bring to [Company] are as follows: [Owner/Founder], Founder & CEO, [age], [degree(s) and major] started [Company] in [Year Started] after working in [x] for [x] years. [Founder First Name] has started [two / several] businesses, and acquired invaluable experience in the 2002 NAICS Title industry and with [x] that will help make [Company] successful in a relatively short time. [Company], now in its [1st / second / third / Xth] year, [has operated / will operate] on [its own revenues / owner equity / a family loan / a bank loan, etc.] without [external / other] funding [since it inception / until (month and year funding is expected)]. [COO/Business Manager name], [age], COO, [degree(s) and major] has served as [title / role / occupation] in the 2002 NAICS Title industry for [x] years, and in [field / industry] for [x] years. Additional experience in [field / industry / research / training / experience] and [xxx] give [COO first name] the necessary skills to direct the operations of [Company], with primary emphasis on streamlining operations and implementing cost-saving alternatives. [CFO/Accountant name], [age], CFO, [degree(s) and major] has served a variety of companies as CFO, giving [him/her] a broad background of experience and opportunities to create financial stability in differing environments and circumstances. [CFO first name] has taken [x] companies through the growth phases planned for [Company], and is ideally suited to direct the financial aspects of our success.

Include other key people as appropriate to your business... CTO, Architect, Chief Pilot, etc. Insert additional descriptions below for other executives in your organization whose background and experience contribute to your effectiveness as a management team. Strong company backgrounds pertinent to your management team's functions are good references to demonstrate a solid pool of talent and assure a higher probability of future success.

Outside Management Support

[hourly / project basis] [xxx], [xxx], [xxx], Accountant / CPA Corporate Attorney [Type of Consultant]

Additionally, our outside management advisors provide tremendous support for management decisions, as well as broad experience and creativity.


Near term and long term.

Projected revenues for fiscal year 20[xx], without external funding, are expected to be $[x]. Annual growth is projected to be [x]% per year through 20[xx]. We feel that within [x] years [Company] will be in a suitable position for [further expansion / an initial public offering / profitable acquisition]. At this time, our objective is to [propel the company into a prominent market position / reclaim market share / establish a new market in an emerging industry / seize an opportunity to fill a market gap created by the demise of a major competitor, etc]. To achieve our objectives, we plan to [build a distribution channel / establish strategic partnerships /



[Company] Business Plan

introduce xxx product or service, etc.]. This will require [describe what you will need to do this in terms of additional people, material, facilities, a company you'll need to acquire, etc].

Capital Requirements

It takes longer and cost more than you expect ­ ask for what you really need. It doesn't do to set out for Hawaii with enough gas to go half way! Also, remember that investors want their investment paid back first! The profit is gravy, but be sure your mantra is all about returning their investment to them asap.

Based on the opportunities identified through research and analysis, and building on [Company]'s experience and what we feel are sound business assumptions, our [initial / first-second-third year / total] capital requirements are for $[x] by [month], [financing year]. To accomplish this goal, we have developed a comprehensive plan to [what you plan to do--provide specific examples]. To implement these plans we require a [loan / line of credit] totaling $[x] for the following purposes:

Choose the activities pertinent to your goals, or create statements for your specific use of investment funds:

Build manufacturing facilities and ramp up production and inventory to meet customer demands. Maximize sales with an extensive campaign to promote our products / services. Add retail outlets, regional marketing / sales offices, print a direct-mail catalog. Reinforce Customer Support services to handle the increased demands created by the influx of new orders and broader coverage of existing accounts. Augment company staff to support and sustain prolonged growth under the new marketing plan. Increase Research and Development to create additional follow-on products as well as to further fine-tune our competitive advantages. Well-timed funding will allow us to achieve our marketing, development and sales goals for the immediate future. Our projections for post-funding sales are as follows for the next 5 years:

Fiscal Year Revenue COGS Gross Profit Gross Margin Operating Expenses Operating Income $ $ $ (000) $ 2007 4,408 889 3,519 80% 1,931 1,588 $ $ $ $ 2008 369 51 318 86% 1,774 $ (1,455) $ $ $ 2009 720 93 627 87% 2,005 $ (1,378) $ $ $ 2010 873 122 752 86% 2,136 $ (1,385) $ $ $ 2011 1,284 179 1,105 86% 2,391 (1,286)

Open the Comprehensive Financial model to the Overview page Scroll to the right and you will see a mini financial summary and a graph ­ follow the instructions there...



[Company] Business Plan

$5,000 $4,000 $3,000 $2,000 $1,000 $$(1,000) $(2,000) 2007 2008



Operating Income



To customize this bar chart for your business, double-click anywhere inside the frame. In a moment, a workbook will appear. Click on the `Data' tab to access the spreadsheet. Enter your sales projection figures. Click on the `Graph' tab. Add or modify legends. Insert a caption below the chart. For instructions for working with the chart (and other how-to's for working with Word and Excel), see the How-To section at the bottom of the BizPlanBuilder Index where you will find static Help screens.. For online help with the chart legends, double click in the chart, then pull down in the Help menu to Contents and Index. Type "legend" into the search box, and select the option you need.

We anticipate additional financing requirements of $[x] and $[x] in [x] [months / years] and [x] [months / years] to allow us to [increase production capacities / develop x new products or technologies / expand our facilities and production area / increase income-producing holdings] to [meet market demand / take advantage of the xxx emerging market / increase shareholder returns / create a new profit center or revenue stream, etc].

Exit Strategy / Return on Investment

The attached financial projections indicate that the full repayment of our [loan / line of credit] will be achievable in [x] years. With the requested financing, the results of our [use of funds--development / marketing / upgrade, etc.] will be increased profits generated by [higher sales / lower COGS / existing customers upgrading to the new product, etc.]. We anticipate repaying the loan by [Month], 20[xx].


This is your all-out pitch to investors "I have learned that communicating my unhappiness is not the same as communicating what I want or need." - Thomas Leonard

The market for [Company] [product(s) / services] is clearly [what the market is doing], giving us a prime opportunity to [what you've said you will do in your plan]. The [consistent sales volume / rapidly expanding annual sales figures / explosive growth] for this market support [Company] reaching its breakeven point by [month / quarter / year] and profitability in just [x] years. By driving [x]% of profits back



[Company] Business Plan

into the company, we expect to [accelerate loan payments / reduce our line of credit balance to zero] and be debt free by [month / quarter / year], a full [x] [months / years] ahead of schedule. Initial responses to test marketing with potential customers indicate a strong affinity for [Company] products. Test marketing also provided important insights into the customer and end-user experience, both with the purchase process, and using the beta version of the product. This plan reflects the application of suggestions from the test market. We anticipate even stronger growth than indicated in this plan, based on our most recent test market responses. Our plan is to launch product sales first from our website, generating cash flow before we move into the retail channel.

Add any personalized concluding remarks that you feel would augment the credibility of your plan, or answer a specific question that comes up as you discuss your plans with interested parties. If the same question comes up repeatedly in discussions with prospective partners, lenders or investors, you will probably do yourself a favor to incorporate the topic into your plan. Be sure you provide a clear explanation.



[Company] Business Plan

Market Opportunity

This section could be appended to the Market Analysis section; however, you may want to keep this `opportunity' section as it refers to what you can do with the previously analyzed marketplace. There is plenty of copy to work with in this section. Use what makes sense for your business situation. The idea is to demonstrate the extent of your business opportunity here. There are significant numbers of prospective customers who will buy what you sell, and ideally, they can be reached via an obvious channel or area of interest. `There are x million sailboat owners in the world. Every one of them is afraid of tearing their sails in high winds...' Your strategy, discussed further on in your plan, might include advertising in "Sailing" magazine.

[Your market or industry] is [growing exponentially / growing rapidly / holding steady / looking for new solutions to xxx / increasing each year by xxx customers, etc.] in the [local / regional / state / national / worldwide / xxx industry] market. The demand for [new products / new services / more affordable xxx / easy-to-use xxx / ready access to xxx] seems to be expanding [throughout the xxx area / in xxx-related industries / statewide / among xxx enthusiasts / everywhere, etc.]. According to [name of quoted authority], this market [insert a quote supporting your assumptions about market size and direction.]

The xxx market has maintained a steady xx% growth rate for the past xx [months / quarters / years]. We anticipate a significant spike in sales figures when xxx is introduced [early / late] [this / next / 1st / 2nd / 3rd / 4th] [quarter / year / after xxx].

- XXX Industry News, Chicago Be sure to apply the "Quote" and "Quote Source" styles to the quote you use here. You can select the sample copy and start typing to overwrite the example, or simply select any quote text you key in, and pull down to select the Quote style from the style menu above. To see detailed instructions and illustrations of this process, see "Working With Your Plan Narrative" in the Getting Started section of BizPlanBuilder or the Getting Started booklet that came in the envelope with your CD.

To effectively compete in today's markets, [identify your target customer, i.e. backhoe operator, veterinarian, florist, corporate farm, consultant, homeowner, renter, leaseholder, small business, hairdresser...]s need [xxx] that [has /have] traditionally been [cost-prohibitive / in short supply / accessible only to larger business organizations / inefficient / ineffective / available only as a customdesigned, proprietary product / unavailable at the xxx level]. According to [industry analyst or commentator name], the [your target market] market will increase spending on [your type of product] products from $xxx [million / billion] in 20[xx] to $xxx [million / billion] in 20[xx], representing a compound annual growth rate of xx%. The strong correlation between [describe related-market conditions or sales of related products / services that drive or influence your sales] and the [your target market] market bodes well for [Company]. The [market segment / local target population / related xxx market] is growing [slowly / steadily / rapidly / exponentially / by xx% annually], due to [current regional change influencing growth patterns / growth in the xxx industry / increased demand since the closure of xxx, etc]. With [x]% growth in [our market / related industry], we fully anticipate revenues from our own growth to exceed [related industry / xx%] growth by [20xx].

If you have market/industry statistics, and/or your own sales trends, you could insert a chart or graph here depicting the anticipated market over the next two to five years.



[Company] Business Plan

Seizing the Opportunity

Let your readers know that you have easy, direct access to your potential customers. Crash programs fail because they are based on the premise that, with nine women pregnant, you'll get a baby in a month. - Werner Von Braun

Many potential customers are immediately and economically accessible through popular media:

[Publication A] has xxx,xxx circulation, and xxx paid subscribers who xxx [Publication B] has xxx,xxx circulation, and xxx paid subscribers who xxx [Publication C] has xxx,xxx circulation, and xxx paid subscribers who xxx

We [currently / plan to] advertise in these publications [monthly / periodically / during the xxx season]. We can also rent mailing lists from each of these publications for $[x] per thousand, economically reaching [xxx,xxx] customers via direct mail.

-- OR --

Many potential customers are immediately and economically accessible via [local newspapers / the Internet / xxx business associations / state and local Chambers of Commerce / xxx Society events / online news or user groups / xxx clubs / viral marketing / customer referrals / concert venues / xxx fan clubs / co-marketing partners / in-store promotions / fliers posted on college campuses / related-business promotion, etc.].

Integrating the Internet

While your business may not lend itself to online sales, most businesses find it advantageous to at least have an informational website describing who you are, what you do, where you're located and how to reach you. Providing product and company information online can reduce pre-sales, price-shopping and "tirekicker" calls. It can also reduce customer service calls if you use your site to explain how you handle things like product upgrades or returns, scheduling a delivery or service, providing customer service or support, processing custom orders, etc.

Having a web presence is [very important / of no importance / somewhat important] for [Company] because [provide the reason for your stance]. The Company's website serves as an [information / marketing / sales / communication / collaboration] tool more than anything. Customers can [request services / view their account details / find or request information / order service instructions] online. We [have / have not] built in a payment transaction mechanism, as online sales represent [a significant portion / a small portion / no portion] of our business. We decided to [take advantage of the many benefits / pass on the option] of hosting a website, as it [does not fit / provides a critical element] in our business model. The most important aspect of our [online presence / lack of online presence] is that [a key function (say scheduling) can be handled by the individual customer on our / we have none of the ongoing expense or headaches associated with maintaining a] website.

If you have determined that you will not establish an Internet presence now or in the near future, you can delete the following paragraphs in this section. (But read through the copy. You may realize there is a reason to have a website that hadn't occurred to you before.)

[Company] has identified several market segments that [are / will be] best served by [introducing / enhancing] our Internet presence, and making xxx available on our website. These market segments [are / are not] our primary focus, so the website will serve [as our pre-sales information source for customers / our main sales channel / our only sales channel / a secondary sales channel / a means to provide around-



[Company] Business Plan

the-clock customer support and sales / to replace print collateral / as our interface for customer service and delivery scheduling / the fastest way for customers to buy xxx direct / to direct customers to our resellers]. Currently, [only a few / xx% / a significant number / most of] our [customers / vendors] prefer using the Internet for their interactions with [Company]. As more [people / businesses] access the Internet, we anticipate a [gradual / steady / rapid / sudden] increase in the number of [customers / vendors] likely to choose the website [to place orders / to track their accounts / for information / for sales support / for customer service / for technical assistance].

-- OR --

[Company] has determined that the Internet is the most effective means of managing [vendor / reseller / customer / regulatory / service / maintenance] accounts. We have implemented a secure, passwordprotected area of our website for [vendor materials procurement, account histories and order tracking / wholesaler and reseller purchasing / customer account histories and order tracking / agency-regulated scheduling and tracking / scheduled customer services / maintenance tracking for xxx products]. We selected [name of the online accounting / order entry / MRP / CRM or other application] for its online functionality and friendly user interface. It provides the [accounting / reporting / statistical] functions we need to stay ahead of the market. By automating these processes and making them available online, we effectively reduce administrative costs formerly associated with [order entry and processing / monthly closes / histories required for materials and resource planning / service scheduling conflicts / employing individual account managers / generating, filing and maintaining paper transaction records / transaction processing / tracking xxx costs]. At the same time, this approach positions us to most effectively track and manage our activities relative to the market opportunity, enabling a swift response to sudden shifts in demand, new market trends, and changes in customer requirements.



[Company] Business Plan

Vision, Mission, Goals & Objectives

"For I dipt into the future, As far as human eye could see, Saw the vision of the world, And all the wonder that would be."

- Alfred Lord Tennyson For an overview of company Vision and Mission, refer to the BizPlanBuilder Handbook of Business Planning, and the "Vision" and "Personal Mission Statement" resource materials in the Pre-Planning section of BizPlanBuilder. You and your staff may want to write both your Vision and Mission Statements completely from scratch. Be sure you capture the spirit and uniqueness of your business. What is the vision that drove/drives the creation of your business? This is a "big-picture" view of what your business is about, and where you see it in the future. Include what you want for the business and for yourselves (personally and financially) 5-10 years from now. Your vision should incorporate what you see as your company's role in the world and in the lives of the your stakeholders--customers, employees, vendors, investors, and the environment--everyone and everything you touch or impact. Expand your thinking on this. Allow yourself to see the biggest possible picture--from 360° .


"Nothing ages so quickly as yesterday's vision of the future." - Richard Corliss Your vision can change and be updated over time ­ you are never stuck with one picture of the future. Imagine Walt Disney waving his arms in the air pointing toward an Orange grove and describing the Matterhorn bobsled ride, "right there," Tomorrow Land, "over there," and Fantasy Land "over there," with a monorail going around the whole thing... Was he crazy? Perhaps. No more than you are. He pitched his vision to more than 600 potential investors to get the 30 who put in the money to launch Disneyland. See "Vision" in the Pre-Planning section of BizPlanBuilder.

By 20[xx] [Company] will be a highly visible company known as the best [xxx] in the [xxx] industry, serving [xxx--who you plan to serve and where, e.g. the xxx market worldwide]. We will have developed [xxx] and marketed these products in the [xxx] channel, providing a better xxx for [millions / thousands / hundreds] of xxx, becoming [a / the] leader in [xxx]. Sales will exceed $[xxx] annually, and [Company] will be actively promoting [xxx] to improve xxx for xxx.

Example from JIAN: JIAN's vision is to be a lasting, thriving company, acknowledged globally for its integrity, spirit and contribution to the prosperity and productivity of its customers, employees, stakeholders and community.



[Company] Business Plan

Mission Statement

We've provided several samples statements below. You can customize, blend or combine them; use a few of the phrases we've provided; or start from scratch. See "Personal Mission Statement" in the Pre-Planning section of BizPlanBuilder for insights into developing a mission statement. Option 1

The [Company] mission is to provide world-class [business xxx / consumer xxx] [product(s) / solution(s)] for millions of [xxx customers / xxx businesses] [in the xxx area or industry / statewide / nationwide / worldwide] to help them:

Increase their sales and reduce costs Increase their company's productivity and profitability Enjoy xxx more Quickly and easily xxx Reduce or eliminate the need for xxx Option 2

[Company]'s mission is to offer innovative, practical, top-quality products that [save time / improve the way people xxx / cost less than competing products / are more readily available than xxx / meet the needs of the xxx market]. Our first responsibility is to the [xxx] who use our products and services. Our second responsibility is to our employees and our community. In carrying out our day-to-day business we will:

Treat our employees with [xxx]. Follow the philosophy that our customers are [xxx]. Contribute to the quality of life in our community by xxx. Option 3

Through its long-term commitment to this mission, [Company] will be known as a company that [xxx]. We serve our customers, vendors, and employees by offering [tools to simplify xxx projects / products that improve the quality of life for xxx / the benefits of xxx for the xxx market / a first-class resource for xxx / products that meet all the requirements of xxx / products that produce [xxx results], faster and more easily than any other product].

Example from JIAN: JIAN's mission is to be the preferred source for comprehensive, innovative software, products, services and resources that enable business people worldwide to build, maintain and enhance their businesses successfully.

[Company] Goals

If you are writing your business plan to assist your company with its ongoing operations, be thorough and list as many major goals as necessary to address the requirements called out by your Vision and Mission Statements. If you are seeking funding with this business plan, you may want to focus on the top two or three financial or business development goals that will need to be achieved through the additional funding. Delete the goals that you do not need. From the book, Built to Last, you might consider a `Big Hairy Audacious Goal'... something farreaching like, "Put a Coke within reach of every person on Earth." Komatsu says, "Surround Caterpillar," but we believe that a negative goal, or one dependent on another entity, is less likely to reach fruition.



[Company] Business Plan

Primary goals often fall within the following categories: o o o o o o > Profits > Products > Quality > Growth > Fields of Interest > Community

In order for [Company] to attain its vision as described in our vision and mission statements, we must achieve the following primary strategic goals: Corporate: By [x], 20[xx] [Company] will [Corporate goal(s)]. We will [acquire xxx company / be acquired by a large company / be a publicly traded company] and our value will grow to $[x] per share. Products: By [x], 20[xx] [Company] will [develop new xxx products / revive, update and relaunch xxx product(s) / acquire xxx product(s) to expand our line]. We expect to replace [xx]% of [competitive / existing products or services] by 20[xx]. Market: By [Month / Quarter (Q1, Q2, Q3, Q4)], 20[xx] [Company] will reach [Customer-related goal(s)]. We will have an active customer base of over [xxx]. To reach these customers, we plan to add [retailers / distributors / service centers / sales representatives / independent contractors] at a rate of [x] per [month / year], and we will have a total of [xxx] [distributors / retailers] by 20[xx]. We will expand our marketing efforts to include the [xxx] [market / industry / region / country(s)] and generate additional revenues as much as [x]% above current levels. Sales: By [x], 20[xx] [Company] will [state your Sales-related goal(s)]. Our products will be prominently displayed in over [xxx] retail stores and influential establishments, on [xxx] websites, and knowledgeable, supportive salespeople and consultants will direct customers to our products over those of the competition.

For 20[xx] (year 2) total sales will exceed $[00,000,000]. For 20[xx] (year 3) total sales will exceed $[00,000,000]. For 20[xx] (year 4) total sales will exceed $[00,000,000]. For 20[xx] (year 5) total sales will exceed $[00,000,000].

Operations: By [month / quarter], 20[xx] [Company] will produce our defined [Operations / Productionrelated] goal(s). Compared to past performance of [product / service name, type] in the [market / industry] market, we intend to [what you will do operationally to achieve your stated goals].

Match your performance expectations to industry conditions and / or explain how and why your operations will be different from those of competitors.

Finance: By [month / quarter], 20[xx] [Company] will [state your finance-related goal(s)]. We will carefully evaluate and plan investments and budget expenses to generate a consistent [x]% pretax profit. Based on a [x]% market share for our [xxx] product by 20[xx], we estimate our return on investment to be [xx]%.

How much return will be generated and by when? Illustrate how you will ensure that lenders receive payment in full, on or before the payoff date. Based on planned activities, indicate how much the company will be worth in future years.



[Company] Business Plan

If you have other significant company goals, list them.

By [month / quarter] of 20[xx] [Company] will [list other major goals and targeted completion dates].

List other major goal(s).

These might include:

Understand customers, competition and industry, and meet specific customer requirements Product / service / channel / customer congruency Greatest possible product / service life cycle extension Achieve [xx] product turns annually Grow [Company] in [xxx new fields of interest / xxx new or emerging markets] Balance people / management / business goals Transition from single-point to distributed management Streamline business processes to operate lean, with 20 vs. 50 employees Develop company values and culture Hire the best people

We feel confident that our stated goals can be reached, based on the experience of our management team in environments where they managed [substantial growth / market or product transitions / rapid high-tech development / migration from one product platform to another, etc.] and [xxx]. Relate previous track record of managers to demonstrate feasibility of actually achieving your goals, given the experience of the people involved.


Optional: Depending on the target audience you want to reach with this business plan, you may or may not need to include this section on the specific objectives or tactics your company will employ to reach the strategic goals listed above. If you do not wish to go to this level of detail, delete this section. Otherwise, obtain the required information (from your management team, if applicable) and complete this section. Cheat me in the price, but not in the goods. - THOMAS FULLER Real discipline is when you can pick strawberries without eating any. - DOUG LARSON Where do you want to go from here? What will an investor's or lender's money buy you? Specifically? What will it look like?

Projected revenues for fiscal year 20[xx], without external funding, are expected to be $[x]. Annual growth is projected to be [x]% per year through 20[xx]. We feel that within [months / quarters / years] [Company] will be in a suitable position to [add additional stores in other parts of the city / add additional product lines to xxx / expand our existing facilities...]. At this time, our objective is to [secure a prominent market position / reclaim market share / establish a new market in an emerging industry / seize an opportunity to fill a market gap created by the demise of a major competitor, dot.bomb, etc]. Our research indicates that we should be able to meet or exceed projected revenues within [months / quarters / years]. In order to help attain our primary goal of [list first primary goal from above] during the next year, [Company] will carry out the following specific objectives:

[x] by [Month], 20[xx].



[Company] Business Plan

[x] by [Month], 20[xx]. [x] by [Month], 20[xx].

To accomplish our next primary goal of [list next goal from above], [Company] will complete the following objectives:

[x] by [Month], 20[xx]. [x] by [Month], 20[xx]. [x] by [Month], 20[xx]. If you want to outline the objectives for more than two of the goals listed, copy the above text for each goal.

Other objectives we have set for ourselves include [xxx].

Make sure these objectives fit with the goals set previously. If you want to outline the objectives for more than two of the goals listed, copy the above text for each goal.

Other objectives we have set for ourselves include [xxx].

Make sure these objectives fit with the goals set previously.

To achieve our objectives, we plan to [establish strategic partnerships / introduce xxx product or service, etc.]. This will require [describe what you will need to do this in terms of additional people, material, facilities, a company you'll need to acquire, etc]. As noted elsewhere, we have also established a goal of being debt-free by [month / year], and paying off our line of credit from cash flow.



[Company] Business Plan

Company Overview

For help with your Company Overview, refer to the BizPlanBuilder Handbook of Business Planning. In this section, provide a detailed description of your business. An excellent question to ask yourself is: "What business am I in?" In answering this question include your products, market and services, as well as a thorough description of what makes your business unique. Remember, however, that as you develop your business plan, you may have to modify or revise your assumptions and definitions. The business description section is divided into three primary sections. The first section describes your business. The second section discusses your product or service. The third section covers the location of your business, and why this location is desirable (if you have a franchise, some franchiser organizations assist in or control site selection). Discussion areas: The Company Overview establishes the structure you have set up, or are intending to set up to support your vision. It includes a legal description of the business, your product description, the type of business you're in and current status of the company, identification of the management team, Board of Directors, and significant relationships between the company and outside entities, including customers, suppliers, government agencies. It covers the licenses or permits you will need to operate your business. What you have learned about your kind of business from outside sources (trade suppliers, bankers, other franchise owners, franchiser, publications, etc).

After [x] years in [field or industry], and [x] years as [an avid] [area of interest--skier / needleworker / programmer / interior designer...], [Owner/Founder] [was living in / was working in / moved to / explored] a [city / county / state / xxx business / the xxx industry] where [he / she] found that there was no good source for [product]. Thinking that there must be other [type of enthusiasts / people working with or wanting to obtain xxx product] in the [area / field / industry], [he / she] began looking for people who [shared this interest / could provide resources for xxx]. Having found a [club / user group / society / association] in [xxx], [Owner/Founder] began [participating with the group / contacting people to find out where they obtained xxx]. They were all [frustrated with the lack of resources / unhappy with current suppliers / unwilling to drive xxx miles] to support [area of interest]. In [less than a month / a matter of months / the next year] [Owner/Founder] met [Founder 2], and began to formulate a plan to meet the [apparent / growing] demand for [product]. [Company Legal Name] founder(s) dedicated [xxx] [months / years] to highly-focused research and market analysis, drawing on forecasts and statistics from [industry analysts xxx and xxx / government statistics obtained through xxx / industry watchers such as xxx / editorial commentary covering the xxx industry]. In [Year Started], [Company] secured the proper licensing and began the process of planning the new business. [Company] [is now ready to open / opened] a [manufacturing / wholesale / retail / direct-toconsumer] company serving the [high-end / low-price / local / neglected] market for [what you sell.] Located in [city / county / region name], this company will serve the needs of [define your market segment], and provide all the conveniences of [xxx]. With [no / few / only distant / inadequate] companies available to meet the needs of 2002 NAICS Title, [Company] is poised to take a front-runner position in this market, with room to expand as the business grows to profitability. Recent growth in the [market / geographic environment / economic environment] is



[Company] Business Plan

creating a [slowly / steadily / rapidly] increasing demand for [name your type of products] that [describe applications for your product(s)]. We are excited to have this opportunity to apply our [industry / business / hobby / avocational...] interests and experience to meet a need we had experienced ourselves. At the same time, we step out of the corporate environment into a growing, high-margin business that allows us to work in the areas of our greatest [interest / passion / skills].

- OR -

[Company Legal Name] was started by [Owner/Founder] in [Year Started] and began building high quality [manufactured / hand-crafted / baked / xxx] products. Because these [product name]s were popular with [businesses / consumers / serious xxx enthusiasts], [Company] moved from a workshop [in / behind / near] [Owner/Founder]'s home, to a larger space located at [Address] in [City, State] in [Month, year]. [Company] now employs [xxx] people, including [Owner/Founder], who designs, builds, and tests each new [product]. The great majority of customers that [Company] builds [product name] products for are [business owners / IT professionals / CPAs / consumers] who require their [product type]s and [product type]s to be [top quality / light / responsive /good-looking / long-lasting / affordable / sturdy / indestructible].

Legal Business Description Company Name

The legal name of [Company] is [Company Legal Name].

Include your DBA(s) ("Doing Business As" or fictitious name) in the legal name of the company. You may have more than one. If more than one will be used for the business in this plan, list both and explain why you have multiple names. You may want to include copies of the documentation for your DBA in the Supporting Documents section of your business plan. "If you don't fail now and again, it's a sign you're playing it safe." - Woody Allen

Legal Form of Business

Explain choice of form. For more info, visit our website "Solutions ­ Business Planning ­ Answers"

Based upon competent accounting, legal and tax advice, [Company] [was / will be] established as [a / an] [Sole Proprietorship / S Corporation / C Corporation / Limited Liability Company (LLC) / Partnership / Limited Liability Partnership (LLP)] with [Owner/Founder] as [Founder 1 title]. OR [Owner/Founder] and [Founder 2] as partners in a Limited Liability Partnership (LLP), etc.]. This business structure will afford [Company] opportunities for [advantages of this structure], while protecting [note the assets protected by this structure]. Depending on actual business growth and expansion, [Company] may in the foreseeable future transition to [a / an] [foreseeable new structure] for the [type(s) of advantage(s)] advantages of that business structure.

Business Location

[Company]'s [corporate headquarters / main office] is located at [Address], [City], [State] [ZipCode], with [annex / satellite / international] [offices / production facilities] in [list locations].

The location of your business can play a decisive role in its success or failure. Your location should be built around your customers. Be sure it's readily accessible, and that it provides a sense of security. Consider these questions when addressing this section of your business plan: o o 1. What are your location needs? 2. What kind of space will you need?



[Company] Business Plan

o o o

3. What makes an area desirable? a building desirable? 4. Is the intended location easily accessible? Is public transportation available? Is street lighting adequate? 5. Are market shifts or demographic shifts occurring?

It may be a good idea to make a checklist of questions you identify while developing your business plan. Categorize your questions and, as you answer each question, remove it from your list.

[Corporate Headquarters] [Business office] [Other business locations]

Government Regulations

If major obstacles exist, discuss how you have dealt with or plan to deal with those obstacles. List licenses and permits required. Include copies in the Supporting Documents section of your business plan. How would you describe your company's relationship with the government agency? How will this agency regulate your business?

Because [Company] is operating in the [xxx] industry we are subject to regulation. Both federal and state authorities regulate the manufacture and sale of [xxx]. [Company] has obtained all necessary federal and state permits, licenses, insurance and bonds to operate its facilities. There can be no assurance that [Company]'s operation and profitability will not be subject to more restrictive regulation or increased taxation by federal, state, or local agencies in the future. Required permits, licenses and insurance include:

[xxx] License [xxx] Permit [xxx] Bond or Insurance

[Company]'s business is most affected by [regulation or licensing requirement that influences operations] requirements which, to date [have / have not] presented major obstacles to profitable operations. Should [obstacles / further obstacles] arise, we are prepared to [xxx] and [xxx] in order to remain in compliance, while protecting [profits / assets / the environment--whatever is relevant]. Regulatory involvement in businesses like ours is [minimal / typically an annual inspection / weekly interaction / on an as-needed basis, etc.]. [Company]'s relationship with each agency is [friendly / amicable / strained due to xxx / almost non-existent due to the infrequency of interactions].



[Company] Business Plan


If your business is you as a freelancer, you'll need to manage yourself. Being your own boss is one thing. Managing a business requires more. "When in charge, take charge!" ~ General George S. Patton If you're building an entrepreneurial organization, you'll also need the ability to manage people as your business grows. It's particularly important that you assess your own skills (and the tasks and functions for which you have no aptitude, patience or interest. Prepare to hire people with the skills you lack. See also, Business Black Belt. The most important way to reduce perceived risk in investors' minds is to establish the ability of your management team to actually build the company you have envisioned. Your plan describes the people who will build this magnificent business--the people behind the scenes who know what to do and how to use the proceeds of an investment or loan. For further information on building your leadership team, see "Developing Your Management Team" in the Resources section of BizPlanBuilder. Your plan should address these questions: o o o How can your team members' backgrounds/previous business experience help you in this business? Where will you need to compensate for your own lack of skills / experience? What positions on your management team still need to be filled?

Establish a clear picture of management team capabilities that contribute to the probability of future success. Be sure that the management team résumés you'll add to the supplementary documents in your plan include career highlights describing team member accomplishments in their previous positions. Actual accomplishments make all the difference--to you in the hiring process, and ultimately to the success of your business. Venture capital companies can invest as much as $100,000 in due diligence--what they look at most are your people. Are your people really who you/they say they are? Have they really accomplished what you/they say they have? Choose your team carefully! A VC friend of ours says that the deal can be washed out with just one discrepancy. (No `3 strikes' ­ just 1 strike can be enough to end your deal.)

Like Starbuck's coffee, where everyone must have "a passion for coffee and the coffee experience," at [Company], everyone we hire has a passion for [industry / [product]. Although no one has built a business exactly like [Company] before, we have assembled a team of people who have built [xxx].

List management team areas of expertise that add up to the total transferable skills and experience necessary to support your business success. Take great care in who you hire... Are they a friend who can get you by for now or are they skilled, talented and driven to find their success with you? How big are their expectations? Do you trust them--don't think; feel this in your chest. Good? OK. Feel a little sick? What do you know? Envision your future. Has this person helped you get there? Or have they used you? Did you use them? For some, it just doesn't matter. People need a job. They will do it well, take your money and go home. That's OK--you need these people and they need you. Tell them specifically what you want them to do. They want leadership. Imagine many people acting upon your direction to build what you



[Company] Business Plan

have envisioned. Not to worry, they know what to do and how it can be done. Just remember who is in charge.

To complete our team, [Company] is [hiring / preparing to hire] a new [job title] and [job title]. [This / these] executive(s) will manage our [x] and [departments / divisions] respectively, and assure that [x] is accomplished. With [this / these] position(s) filled, we will have everyone we need to effectively and efficiently execute our plan.

Executive Team

A leader knows what's best to do; a manager knows merely how best to do it. - KEN ADELMAN Provide a brief description of each person's background. Relate it to their functions in the new organization. Add other officers as appropriate. Below are examples of what to include about the people building your company--make a copy and repeat for every person on your management team. You can include their entire resume in the `Supporting Documents' of your plan or provide them later.

[Owner/Founder] - [Title] (age) [Owner/Founder] started [Company] after working in [field / industry] for [x] years, and in [field / industry] for [x] years. Coupled with extensive [research / training / experience] in [x], [Founder First Name] is ideally prepared to run [Company]. [Founder First Name] graduated from [university or college] with a [degree] in [area of major study] and addition studies in [area]. Having worked in [field / industry] for [x] years, [Founder First Name] became aware of an urgent need for [market gap], and proceeded to plan and launch [first start-up Company]. This company grew to [$xxx (insert peak revenues)] in [year], and subsequently [sold / closed / merged / restructured], garnering a [dollar amount] payoff that enabled him / her to [what you did after that.] Ultimately, [Company] has realized significant benefits from that experience, as it provided the [experience / funding / people] necessary to successfully launch [Company]. [Founder 2] - [Title] (39) [Founder 2] has served as [title / role / occupation] in the [field / industry] for [x] years, and in [field / industry] for [x] years. Additional experience in [field / industry / research / training / experience] and [xxx] give [Founder 2 First Name] the necessary skills to direct the sales of [Company], with primary emphasis on expanding the customer base and implementing customer loyalty programs alternatives. [Founder 2 First Name] holds a degree in [degree(s) and major] from [xxx] University/school. [COO name], Chief Operating Officer (39) [COO name] has served as [title / role / occupation] in the [field / industry] for [x] years, and in [field / industry] for [x] years. Additional experience in [field / industry / research / training / experience] and [xxx] give [COO first name] the necessary skills to direct the operations of [Company], and coordinate among our various divisions and departments. [COO first name] studied [major] at [university or college] and was awarded the [degree] with a major in [major], a minor in [minor field] and continued [his / her] education with ongoing studies in [area(s) of study]. First-hand experience with [area of experience, for example business ownership / international trade / offshore manufacturing] make [COO first name] an important player in [Company]'s planned [growth / expansion / redirection / evolution] into [area of growth / market / change]. [CFO name], CFO (39) [CFO name] has served several companies as CFO, among them, [list companies]. As an independent CPA, [CFO first name] also worked with a variety of clients in [list industries, particularly those related



[Company] Business Plan

to your company's industry], and brings this added perspective to the needs of [Company]. [CFO first name] earned a [Bachelor of xxx / Masters degree / Ph.D.] at [university or college], and [his / her] CPA certification in [year received]. [CFO first name] has also continued [his / her] training with ongoing coursework in [areas of study] to stay abreast of the latest developments in [area].

Duplicate and edit the Executive Team Bio Template from the Pre-Planning Documents section of BizPlanBuilder to describe each additional executive officer, vice president or director on your team.

[Company] Stock Allocation

[x] shares of [Company] common stock have been authorized by the State of [State]. At this time [000,000] shares are outstanding, and have been allocated as shown above. Stock vests over [00] years from the date of employment. In addition, we plan to allocate [000,000] shares of common stock for Employee Incentive stock options.

Management Team Ownership & Stock Allocation

Officers & Key Employees [Owner/Founder] [x] [x] [x] [Founder 2] [x] [x] [x] [x] Title Owner / Founder / President / CEO COO or Sr. Vice President CFO or VP Finance Vice President of Marketing Vice President of Sales Vice President of R&D Vice President of Operations Controller Corporate Attorney Age 44 Shares 5,000,000

[00] [000,000] [00] [000,000] [00] [000,000] [00] [000,000] [00] [000,000] [00] [000,000] [00] [000,000] [00] [000,000]

Of the [x] people who make up the corporate staff, there are [00] founders who hold the following positions: [x] [x] [x] title title title [x] [x] [x]

Each founder has been provided with [x]% of the original stock issue.

You may want to insert an Executive Team Responsibilities section here. You will find a template in the Master Supplementary Documents Section of BizPlanBuilder. Include the completed materials in the Supplementary Documents section at the end of your finished business plan. Résumés of additional key employees should be provided in the Supporting Documents.



[Company] Business Plan

Outside Support

Our outside management advisors provide tremendous support for management decisions and creativity. [xxx] Accountant / CPA [xxx] Corporate Attorney [xxx] [Type of] Consultant

Provide résumés of outside support staff in the Supporting Documents. An organizational chart describing necessary business functions and relationships may also be included in Supporting Documents. Include each person's actual résumé in the Supporting Documents.

The strength of the [Company] management team stems from combined expertise in both management and technical areas. This [has produced / is expected to produce] outstanding results over the [past / next] [x] years.

A complementary cross section of areas-of-expertise is crucial to securing a favorable response from potential investors.

The leadership and alignment characteristics of [Company]'s management team have resulted in the establishment of broad and flexible goals. Our goals are designed to meet the ever-changing demands of the swift-moving marketplace requiring our products. This is evident when the team responds to situations requiring new and innovative capabilities.

Board of Directors

A good Board of Directors can help you make good financial and high-level strategic decisions, and demonstrate to potential investors that other smart, experienced people are financially and legally involved with your company. The presence of a Board of Directors demonstrates that you are serious about financing and goes a long way to minimizing risks associated with investing in your business. Select advisors for their experience, standing in business, and enthusiasm for working with you. Advisors should be active participants you can call on any time for advice. A Board of Directors is usually comprised of no more than 5-7 people who are compensated with company stock. "Do not condemn the judgment of another because it differs from your own. You may both be wrong." ~ DANDEMIS

An outside Board of Directors, including highly qualified business and industry professionals/experts, [assists / will assist] our management team in making appropriate key decisions and taking the most effective action; however, they will not be responsible for management decisions.

Use this section to highlight the backgrounds of your Board of Directors. Include each director's name, age and position in your description. We've provided two Director and two Advisor descriptions that you can customize and modify for each of the participants on your boards. If you need additional descriptions, copy, paste and customize additional copies of any of the descriptions we've provided in either the Board of Directors or Board of Advisors section. Include each person's actual résumé in the Supporting Documents.

[Director name], [current / past Title] of [Director affiliation / company], provides extensive expertise in



[Company] Business Plan

[field / industry / area of specialization], to help [Company] take the best approach to [increasing sales / managing our operations / marketing our products...]. Additionally, [Director first name] has more than [x] years' experience working with [x]--a distinct advantage for [Company] as we [introduce new products / expand our facilities / acquire xxx / move to the global marketplace...]

- OR -

[Director name], [current / past Title] of [Director affiliation / company], [age], brings [x] years' experience working [with / in] [x]. This is important for [Company] due to our focus on [area in which this director provides expertise]. As we [what do you plan to do], [Director first name] will provide invaluable insight and direction.

Paste or key in any additional Director descriptions you need here.

Board of Directors' Stock Allocations

Director [xxx] [xxx] [xxx] [xxx] [xxx] [Director Title] [Director Title] [Director Title] [Director Title] [Director Title] Age 39 [x] [x] [x] [x] Stock 500,000 [xx] [xx] [xx] [xx]

Board of Advisors

A Board of Advisors typically provides a peer-group environment where participants brainstorm and talk through ideas, drawing on diverse experience, markets and industries. Regardless of your business type, size or industry, a good Board of Advisors can help you make better decisions, and consider alternative approaches to your business that you might not have considered otherwise. The presence and availability of a good board of advisors provides a sounding board, a source of new ideas, and feedback that could prevent an expensive or disastrous faux pas with customers. Choose advisors for their diverse experience, standing in business, and enthusiasm for working with you. They can be window dressing, but should be active participants you can call on at any time for advice and support. Although a Board of Directors is usually no more than 5-7 people, a Board of Advisors can number to 30+. "When men lack a sense of awe, there will be disaster". - LAO TSE, TAO TE CHING: 72

[Company]'s outside Board of Advisors includes business owners and managers from a variety of businesses and disciplines. Each offers a unique perspective, and a wealth of experience to draw on as we [grow / streamline / downsize / merge / branch out...]. We also get great "cross-fertilization" for each of our respective businesses as we share ideas and suggestions. Our advisory board participates in regular brainstorming sessions, and we frequently contact advisors individually to draw on their specific areas of expertise. [Advisor name], is currently the [Title] of [Advisor company]. [He / she] provides a ready source of expertise relative to [business / field / industry / area of specialization], to help [Company] [what you do with the advice]. [Advisor name], [Title] of [Advisor company], [age], brings [x] years' experience working [with / in] [business / field / industry / area of specialization]. We have identified a strong parallel between [Advisor's business or industry] and our own, and [have been / expect to be] successful implementing a similar strategy.



[Company] Business Plan

Paste or key in any additional Advisor descriptions you need here.

Board of Advisors' Stock Allocations

Advisor [xxx] [xxx] [xxx] [xxx] [xxx] [xxx] Title [Advisor Title] [Advisor Title] [Advisor Title] [Advisor Title] [Advisor Title] [Advisor Title] Age [x] [x] [x] [x] [x] [x] Stock [xx] [xx] [xx] [xx] [xx] [xx]


Discuss additional staffing requirements based on necessary talents, skills, experience or expertise.

[Company]'s development team recognizes that additional staff is required to properly support marketing, sales, research, and support functions. Currently, [Company] has [x] employees working in [x] [departments / groups]. An additional [x] employees will be required to meet projected market demand over the next [xx] years. Anticipated staffing requirements are listed below.

List projected staff needed. Delete any unnecessary positions, or replace with necessary positions not currently listed below.

Position to be Filled Management Marketing Sales Engineering Customer Relations Technical Support Administration Manufacturing Assembly Skilled Labor Repair Field Service Technicians Maintenance

# Required [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x]

Required By [month, year] [month, year] [month, year] [month, year] [month, year] [month, year] [month, year] [month, year] [month, year] [month, year] [month, year] [month, year] [month, year]

"Never carry someone longer that their mother did." ­ Jay Shelov Remember that it is up to you to determine if your people are doing what you need done.



[Company] Business Plan

Market Analysis

For an overview of Market Analysis, refer to the BizPlanBuilder Handbook of Business Planning. This section describes the existing and projected marketplace in which you will introduce / promote your company and products. "A winning plan shows direct interaction with the possible purchasers of the product or service. By involving customers in product development, utilizing beta sites, conducting indepth surveys, generating purchase orders, directing focus groups and demonstrating oneon-one contact with real customers, a plan can communicate personal connection to real customers." ­ Ray Smilor Excerpt from "How to Read a Business Plan" Only a fool tests the depth of the water with both feet. ­ African Proverb

Industry Analysis

The [x] market is growing at a rapid rate. The market for these products amounted to $[x] million in 20[xx]--representing a [xx]% growth over $[xxx] million in 20[xx]. Referenced sources agree that the major trend is for [xxx]. The trend has been pushing toward development of [xxx products] and, hence, the latest development of distributed or shared resources. Independent market research indicates that there is currently only [xxx] [product] for every [xxx] customers. The 2002 NAICS Title industry, as a whole, is looking to [manufacturers / suppliers / retailers / experts] for expansion of existing [applications / product lines / services]. The overall [xxx] market for the 2002 NAICS Title industry is projected to be $[xxx] [million / billion] by the end of 20[xx]. The overall market potential for [product category] is estimated to be $[xxx] million by 20[xx], and the [additional product types] portion of this market is estimated to be $[xxx] million. The area of greatest growth in the 2002 NAICS Title market is in the area of [xxx].

Be sure to site your sources, such as industry analysts, Census, and trade journal studies. "You can observe a lot just by watching." - YOGI BERRA

Market Segment

By product feature, by lifestyle of target consumers, by geographical location, by season, etc. Create and include charts where appropriate.

Key points in defining the market segment for [Company]'s [product name] are [xxx], [xxx], and [xxx]. Target Market 1. We will be selling primarily to (check all that apply): a. Private sector b. Wholesalers c. Retailers d. Government e. Other [define] 2. We will be targeting customers by: xx% xx% xx% xx% xx% Total Percent of Business



[Company] Business Plan

a. Product line / services We will target specific product lines b. By geographic area c. By sales patterns from the past three years d. To the xxx industry / market e. Other [define]

xx% xx% xx% xx% xx%

3. We expect our target market to spend $__________ on our type of product this coming year. Currently, the market is shared by [x] participating competitors.

How is the market distributed among major participants? What are the per-share gain and loss trends? Summarize your view of the trends and implied opportunities.

[Product type] users are looking for quality and productivity improvements. [Past / current / recent / lack of] development of [product type]s has resulted in the need to [describe necessary changes, corrections, applications of new technologies]. This innovation is called "[xxx]," and allows [product type] to [operate / be used] most [efficiently / economically / at the lowest cost of ownership / without modification / indefinitely] as [xxx].

For an existing business (your own or a recent or future acquisition) review: Sales History Market Share & Position Industry Trends Profits Marketing Methods

Based on [x] product category performance over the past two years, the stability of this market segment is [volatile / uncertain / solid, etc.]. From our own sales history and industry trend analysis, we anticipate sales to [drop / stabilize / increase gradually / increase x-fold / experience a sudden spike / exceed our production capability] by [month, year].

What do industry forecasters predict for the next two years?

The major market segments for [Company] products are:

List, by broad category, the types of customers you are likely to sell to. (Retailers, Electrical Contractors, Mail-order catalogs, etc.) [Segment 1] [Segment 2]

Products such as our [product name] generally appeal to the [xxx] segment of the market and retail in the $[xx] to $[xxx] range. The vast majority of sales in this category will be handled by [OEMs / Retailers / Manufacturer's Representatives]. Additional sales into this segment will come through direct channels. Over the past [xx] years, similar [product manufacturing / product sales] companies have proven that meaningful features can be developed for this class of product, such as [xxx], [xxx], and [xxx]. These companies have primarily focused on [manufacturing techniques / special materials / secret recipes / chemicals / machinery] to improve the quality of [xxx] in [product type] products. These products have



[Company] Business Plan

been successfully distributed throughout the industry. Competitor 1, Competitor 2, and Competitor 3 all offer products that compete closely with our own [product name(s)] in this market. Based on [industry analyst / market analyst] forecasts, and factoring in our current sales trends and market position, estimates indicate that [Company] should easily produce and distribute more than [x] [thousand / million] units of [product name] in the next [x] to [x] years. The market potential for [product name] in these quantities--with a current retail price of $[x] per unit--will yield approximately $[x] million. This translates to a [Company] market share exceeding [xx]% of the overall market. Source: Industry analysts, census, and trade journal studies.

Credit your sources appropriately.

Of the [x] [thousand / million] potential customers for [product type] products, approximately [xx]% will [buy / use / want / expect] [xxx] to help them [deliver their work / maintain xxx / expedite their production / reduce costs]. [xxx] of these [type of product] products will have a [xxx] capability, and about [xxx] of those products will require the addition of [note other necessary features] to meet customer requirements.

Repeat the above information for as many market segments as you require.

Strengths, Weaknesses, Opportunities & Threats (SWOT Analysis) Strengths

In covering your strengths, be sure to place at least as much (if not more) emphasis on marketing (as well as your management team) as on your product.

[Company] brings a considerable pool of product and marketing strengths to the [market name] marketplace. In terms of product strength, [product name] has several distinct advantages over the competition. First is its marked advancement in [xxx technology / operating efficiency / customer options / functionality].

Address these areas for each of your products. How else is the product favorably differentiated from the competition: In delivery? In actual performance? In quality and reliability? In production efficiencies? In breadth of line and / or options and enhancements?

[Company]'s greatest strength is the innovative approach it has taken to designing and building [product names]s. Being a smaller company, [Company] has greater flexibility than its larger competitors to try different materials and methods since it does not have to consult with an entire panel of engineers or obtain unanimous approval from multiple divisions to implement a viable new customer-approved solution. This means that the latest breakthroughs in design will be implemented and tested here before comparable products are even off the drawing board at competitive companies. In marketing, our most powerful assets are:

[x] [x] [x] Describe your strengths: o In segmentation



[Company] Business Plan

o o o

In distribution In pricing In brand awareness / image / recognition

In the corporate arena, [Company] is supported by [xxx].

Describe your company strengths: o o o o o Size Financial resources People Reputation Business Relationships


"What is a weed? A plant whose virtues have not yet been discovered." ~ RALPH WALDO EMERSON (1803-1882)

Because of its relatively small size, [Company] is not yet a "household" name among [customers prospective customers]. If [Company] had the resources to [produce more [product name]s / market more widely], it would be possible to increase sales revenues in the lucrative market that is made up of [businesses / consumers] who are [anxious to find a xxx product / serious about their hobby / prepared to spend whatever it takes] and want the best [product type] on the market. There [is / are] [a single / several] [minor / annoying / major] handicaps inherent in our product. The only notable marketplace disadvantages caused by this weakness are [xxx] and [xxx]. The disadvantage derives primarily from [negative communications from the few customers inconvenienced by the problem / a higher volume of returns than we would have if the problem was corrected / dealing with irate customers who've encountered the problem, etc]. This [has / has not] proven to be an issue in the marketplace itself because [the problem creates return hassles for our customers and our retailers / the problem is not evident unless you use the product in a problematic environment / the problem only occurs for customers in certain circumstances / the problem only affects 1 in xxx customers]. The greatest impact is [a somewhat less positive customer experience / in product returns / additional service expense for us / warranty repairs]. Company weaknesses, at this time, consist only of [xxx]. However, we are taking steps to [xxx]. We feel these measures should eliminate or significantly reduce the problem. Research has shown that this market annually generates total sales of $xxx million worldwide Currently, [xx] of the larger [manufacturers / product developers / resellers] in the U.S. and Europe dominate this market. [Company] has a substantial amount of work to do in order to secure a portion of the European market. [Company] is currently competing with [product type] builders who have been designing and building [product]s for [customers] since [year] and whose names are now almost synonymous with [product type]. Furthermore, with European [businesses / consumers], national loyalty is frequently a factor in the final purchasing decision. By 20[xx] we should be able to position ourselves to [xxx] and thereby reduce this weakness considerably.


"Too many people are thinking of security instead of opportunity. They seem more afraid of life than death." - James F. Byrnes



[Company] Business Plan

The upside potential for [growth / expansion / new product introductions] will support substantial revenue increases in the immediate future. Over the next two years, our current [product name], [product name] and [product type] products are expected to perform at rapidly-increasing levels in [emerging international markets / markets where until recently, likely customers lacked access to the technology required to use [Company] products / in next-generation markets with an entirely new customer profile]. Based on current and projected market conditions introduced in the Product Strategy section of this plan, it is apparent that [Company] will be able to [xxx] and [xxx], to take full advantage of [xxx]. Allowing for [unexpected / seasonal / economically or politically driven] drops in sales, market trends indicate that [Company] stands to realize a [minor / acceptable / significant / major] jump in revenues, due to [justify potential with logical rationale].

Unexploited Opportunities

"Opportunity is missed by most people because it is dressed in overalls and looks like work." - THOMAS EDISON

[Company] could create a completely new product application by entering the [xxx] market and positioning [product name] as a [xxx] rather than the [product use] use for which it was originally designed. As this is a market that neither we nor our competitors have yet tapped, we would only be competing for dollars that might otherwise be spent on [xxx] or [xxx]--unrelated purchases. Further opportunity for our product exists in [xxx] market(s).

Describe how the current line of products and technological capabilities might be leveraged effectively in other markets. Describe the estimated cost of entry, time-frame, and risk in this market.

Still another possibility for development involves [xxx]. Alternative distribution, technology licensing, creating up / down market brands, etc.


Environmental threats include [wildfires, or a moratorium on lumber harvests resulting in a shortage of raw materials for production / fuel shortages resulting in reduced or interrupted production runs / longterm drought reducing water rights required for production, etc.]. During the early nineties, a great number of [product type] [builders / manufacturers / resellers] who had not foreseen the tremendous popularity of new [product type]s suffered financial difficulties when the demand for the older [product type]s fell. As a result, many companies either merged with other [product type] companies or went out of business. [Company]'s revenues were not as dependent on [xxx customers / outdated production methods / the older product type], so the impact was not as great. However, this industry downturn did have a negative impact on most companies' plans for future expansion and development. Until recently, in fact, [Company] was one of the few American [product type] companies to aggressively pursue a share of the European market. Now, a number of [product type] companies have built their facilities to take advantage of the [new / sustained / stabilized / growing] demand for newer [product type] products and have been aggressively pursuing market share in the U.S. and abroad. Other known threats include [trade barriers or embargo / localized recession or depression in our geographic target market, etc].


Who is buying products or services in this category? Use information from industry reports, census data, trade journal studies, etc.



[Company] Business Plan

A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is a part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so.

- Mohandas Karamchand Gandhi (a.k.a. Mahatma Gandhi) "It's critical to communicate just who the customer is today, and who he or she will be five years from today. "It's appalling to see so many [businesses] with good ideas, who can't answer the question about marketplace demographics." ~ Lawrence Mohr, Founding Partner, Mohr Davidow Ventures, Silicon Valley, CA "A convincing plan effectively describes the knot in the stomach of buyers. It delineates what buyers are worried about and why they are concerned about it. It shows, through personal experience, survey data, statistics, and buyer testimonials, what keeps customers awake at night." - Ray Smilor. Excerpt from "How to Read a Business Plan" Use information from industry reports, census data, trade journal studies, etc. to define and profile your target audience. Knowing exactly who you're selling to is crucial to obtaining a favorable response from your banker--he / she knows that all the sales talent in the world is wasted unless it's directed at the right person, who has the need, the ability and the authority to purchase what you sell.

What kind of profile does your customer fit? o o o o Innovator Early Adopter Early Majority Late Majority

What current economic factors influence your customers' spending? What personal factors influence your customers' buying decisions? Who else influences the final decision to purchase? Demographics consist of the basic qualities and characteristics of your market: age, gender, culture, employment, industry, income level, marital status, location, family, occupation, education, social status, etc. We've provided a sample template below where you can list the demographic attributes of your customers. You may want to include several types of customers in your demographics, such as Business Owner, Homemaker, Teens, Dual Income No Children, Nuclear Family, Older Couple, or Young female Professional, if they are likely to constitute some portion of your target market. Psychographics consist of the emotional and behavioral qualities of your target market: lifestyle, motives, needs, interests (leisure pursuits, sports, etc.), purchase history (recent buyers of your product) emotions, rationales, psychology and thought processes behind the decision to buy your product. They may also include your customers' interests, associations to which they belong, other



[Company] Business Plan

similar or related products they've purchased, activities in which they're engaged, the length of time they remained with a particular job, etc. Demographics define the qualities of those people who may *need* your product, while psychographics are the qualities of those who may not need your product as much as they *want* your product. Technographics (Here's a new one for you) describes the relevant level of technology embraced by your customers and the role technology plays in their buying decisions for products such as yours.

The most typical customer for our product is someone in the [x] field, and who currently uses a [type of product] for [use / application / purpose]. It is likely that potential customers are going to be familiar with [similar products / existing products that our new product will replace / our type of product] and that they will readily accept our new [product name or type], provided that we [approach / educate / contact / convince or persuade them to switch]. Complementary products already in use by our customers include [list other products that work with yours]. Customer ownership of these products is a tremendous help in compelling customers to [acquire our product / use our product]. It is easy to understand why people are motivated to buy [product type] products. They really need to [xxx] and our [product name] meets that need.

What motivates people to buy your product? (Provide a practical and an emotional reason) Ask your customers--via telemarketing, warranty cards, ad inquiries, etc. How are the key competitors perceived? How do your customers (current and potential) perceive your company and your products? (This will tell you your current positioning in their minds...) How will they receive your [new / enhanced / redesigned] product? How sensitive are intended customers to pricing differences? This information is frequently available with demographic statistics.

Customer Profile

Include Titles of people who: o o o o INITIATE the inquiry for your product/service, INFLUENCE the decision(s) to buy (and how they influence it), DECIDE which product or service to buy, and PERMIT the purchase to be made (sometimes the decision maker and the permitter are the same person, but oftentimes, for example, the CFO will sign the paperwork after another manager has submitted his/her recommendation).

Our primary audience is comprised of customers between the ages of [x] and [x], who use our products [at work / on the road / during leisure time] for [data storage / collaboration / interacting with customers, associates, vendors / sports / relaxation / refreshment / renewal / leisure activities / gaming / marketing / tracking and trading stock / watching market trends / delivering educational presentations, etc.]. [Company] customers [businesses / themselves] typically have annual [revenues / incomes] of $[xx to xx]; already own xxx, and foresee expanding their [xxx] activities to include [xxx]. [Company] meets their specific needs for [your product type] with [the best / the only / the most



[Company] Business Plan

appealing / the most cost effective / our proprietary technology] solution for [xxx--what they want to do]. More than xx% of our customers fall into these parameters:

NOTE: We've included templates below for your customer profile. Edit the most suitable profile(s), or create your own to correspond with your actual customer profiles. If you customize the sample profiles, be sure to change the text color (and style, if necessary) to correspond with the rest of your plan. Be sure to credit your information sources for any materials you site, including your own research. If you have conducted extensive market surveys and analysis, you may want to include more information about the methodology you used, the size of your target population, and any pertinent discoveries that were not part of your original assumptions about your targeted market segment. This can be included in the Supplementary Documents section of your business plan.

Corporate Executive

Title: Authority: Viewpoint: Position: Emotional Influences: Practical Influences: Education: [President, VP Finance, VP Mfg, VP Sales, Office Manager] [Permitter, Decision-Maker, Influencer, Technical Advisor, Initiator] [Big Picture, Financial, Department, Personal] [Responsibilities / daily activities] [Status, power, empire building] [Saving money, efficiency] [Ph.D., MBA, Bachelor, College, Technical School, High School]

Limitations: [Geographical, Purchasing Approval] You will need to mix & match these sections to suit your business. Add the following section before the next section you add.

The other xx% fall within roughly x% of these ranges, so our market is [relatively cohesive / diversified / extremely broad], making it [easy / relatively easy / difficult / nearly impossible] to identify and reach these customers with our marketing efforts.

Young Married Couples

Age: Income: Sex: Family: Geographic: Occupation: Attitude: [35-55] [Medium to high] [Male or Female] [Married or no children] [Suburban] [White collar] [Early adapters] [35-55] [Fixed] [Female] [Full nest] [Suburban] [White collar / Blue collar family] [Early majority] [25-35]


Age: Income: Sex: Family: Geographic: Occupation: Attitude:

Young Professional




[Company] Business Plan

Income: Gender: Family: Geographic: Occupation: Attitude:

[Medium to high] [Male or Female] [Bachelor or married] [Suburban] [White collar] [Innovator] [35-55] [High] [Male or Female] [Full nest] [Rural] [White collar] [Early majority] [55-70] [High or fixed] [Male or Female] [Empty nest] [Suburban] [White collar or none] [Late majority] [70+] [Fixed] [Male or Female] [Empty nest] [Suburban] [None] [Late majority]

Wealthy Rural Families

Age: Income: Sex: Family: Geographic: Occupation: Attitude:

Older Couple

Age: Income: Sex: Family: Geographic: Occupation: Attitude:


Age: Income: Sex: Family: Geographic: Occupation: Attitude:

Case Study

Where possible, succinctly document Customer Case Histories of their selection, application and success with your company and product(s). PURPOSE: Investors and new customers will feel reassured about doing business with you. Customer Case Histories are excellent sales tools for your sales force. Don't neglect this simple and powerful asset.

Customer List

On a separate page, list your major existing customers alphabetically. If appropriate, describe their application and uses of your product(s).



[Company] Business Plan

What are the principal buying motives for your products/services (practical & emotional)? Ask your customers -- telemarketing, warranty cards, ad inquiries, etc.! How are the key competitors perceived? How do these people perceive your company and products/services? And/or how WILL they receive your (new) product/service? How sensitive are they to pricing differences?



[Company] Business Plan

Business Strategy

"Strategy is concerned with drafting the plan... shaping the individual campaigns and within these deciding on the individual engagements."

- Karl Von Clausewitz, 1796

As the idea for this business grew out of our own dissatisfaction with available resources for [product], [Company] offers customers advantages that appealed first to us, then to those we interviewed in our research. We have developed a unique approach to this business, designed to satisfy our own wishes as customers, and evolved to address other issues raised by prospective customers. We provide [exclusive, value-added service / a highly-effective customer loyalty program / customer referral credits / personal instruction / training / assembly / installation...whatever sets you apart]. To date, we have not encountered any other [product / service] combination offering similar added-value. [Company] fully intends to establish itself as the source of choice for [product type] products in the [xxx industry / xxx marketplace / city / county / region].

Growing Into the Future

[Company] is looking further into the future than just [developing and revising its current products / adding new (products / product line) / creating a web presence / offering products over the web]. [Company] has recognized a unique opportunity to [describe the unique opportunity].

Your future vision could be related to a new product, a service you will offer that will increase the desirability of your products, new technology that will enhance sales... Your strategy could be to make use of a new selling channel, such as the Internet, or a retail group that represents a related product but has never carried a product like yours. This section could be focused on a strategy to promote your product in an entirely new market where it will initially have no competition. If you have come up with a way to sell your product that would preclude or supplant competition, describe it here.

[Company] will [offer / deliver] this [product / new service related to our product(s) / functionality / capability / technology] to customers through [describe how you will get this new product or service to customers]. Based upon [Company]'s experience with [existing / proven] [products / services], this strategy will allow us to [describe your anticipated results], and market the new [product / service] as a solution to [describe the problem this new approach solves]. Customers will be able to [describe what customers will now be able to do that they couldn't before]. This way, [Company] product lines will extend rapidly and diversely, with [little added cost / minimal advertising / ready customer acceptance]. Additionally, this [product / service] will enable customers to [describe additional customer benefits].

Wants & Needs of [Customer Type] [Problem customer needs to solve]

[Company]'s Response to Customer Requirement [Customer benefit of your product / service]



[Company] Business Plan

[Problem customer needs to solve] [Problem customer needs to solve] [Problem customer needs to solve]

[Customer benefit of your product / service] [Customer benefit of your product / service] [Customer benefit of your product / service]

We have planned a carefully focused, targeted media blitz surrounding our [new product launch / grand (re)opening / relocation...] Working with the local Chamber of Commerce and a local advertising firm to create high levels of visibility, we will announce our [initial media event] and follow up with scheduled promotions to continue the momentum into 20[xx]. Working with [PR Firm or Consultant name], we have developed press releases and ads that will display on [municipal transit vehicles (buses--sides and rear, overheads on the train, etc) / billboards along major arteries / bus stop transparencies...]. We plan to add momentum with radio spots and an [on-air contest] to name [store mascot / a product category...]. We anticipate local TV coverage at our press conference and when we announce the winner of our contest. The nature of our product line lends itself nicely to [logical tie-in promotions with xxx / strategic alliances to cross-promote related industries / high-visibility promotion in xxx].

Business Strategy Snapshot

1) Leverage [Company]'s successful brands of [product / service type]. 2) Capitalize on first-to-market product momentum, in anticipation of market and technology convergence in the coming months and years. 3) Transform [Company]'s products into [describe your transformation process]. 4) Leverage [Company]'s customer-base, marketing, and current content to quickly [state what your strategy will accomplish]. 5) Enable [customers] to [what they will now be able to do...] and enjoy the benefits of [describe the solution you're providing]. 6) License 3rd party developers to [create after-market products / services] to further expand [Company]'s product line and extend [Company]'s reach. 7) Acquire [xxx] to extend the useful life of [product name] giving it wider appeal in the [market or customer group] market. 8) Aggressively [sell products and services / promote new features, benefits, applications, etc.] through [new / multiple] channels to [list customers you will aggressively target]. 9) Cross-sell [describe products / services you will promote] to [your target audience for cross-sell promotion], [locally / nationwide / worldwide]. 10) Build a community of [xxx] [thousand / million] [individual / consumer / business / corporate] customers by 20[xx]. 11) IPO or acquisition: 20[xx]-20[xx].

Summary Financial Projections

Due to some Word/Excel limitations, you may need to insert this Excel table manually... Open the Financial Model to the Summary tab (7 tab from the left.)... Look to the upper right for a green table.




[Company] Business Plan

Copy the entire table, click in front of the `x' below (for placement), then pull-down under Edit (menu bar) and click `Paste Special,' Click on `Microsoft Office Excel Worksheet Object, ' then `Paste Link'

Fiscal Year Revenue COGS Gross Profit Gross Margin Operating Expenses Operating Income

(000) $ $ $ $

2007 4,408 889 3,519 80% 1,931 1,588 $ $ $ $

2008 369 51 318 86% 1,774 $ (1,455) $ $ $

2009 720 93 627 87% 2,005 $ (1,378) $ $ $

2010 873 122 752 86% 2,136 $ (1,385) $ $ $

2011 1,284 179 1,105 86% 2,391 (1,286)

$5,000 $4,000 $3,000 $2,000 $1,000 $$(1,000) $(2,000) 2007 2008



Operating Income





[Company] Business Plan

Demand / Revenue Model

You must show multiple ways your business can and will make money. "Mathematicians are like Frenchmen: whatever you say to them they translate into their own language and forthwith it is something entirely different." - Johann Wolfgang Von Goethe (17491832)

Our revenue model has grown from [Company]'s initial focus on [your original area of focus], and will expand to encompass [new products or services / multiple revenue sources / untapped markets] supported by [this new introduction / expansion of our existing line] as follows:

Direct Purchase

All [products / services] can be [purchased/licensed] individually or in bundles/package deals. Customers will be able to purchase directly from [Company] as well as pay immediately. This reduces accounts receivables and increase cash.

Projected Product / Service Pricing

Purchase price of $xxx includes:

Product A 12 Month Warranty

Subscription of $xxx / month includes:

24x7 service, plus: Automatic Updates / Upgrades

Payment of $xxx / month includes

All of the above, plus Access to ALL content

Subscription of $xxx / month includes

(ASP Model: Minimum 12-month commitment): All of the above, plus: Enterprise multi-use subscription: up to 20 users ($499.00 / month up to 50 users)


Given the company's position in the marketplace, it is very possible that it can be lucrative to support our customers with financing (subject to certain legalities). Systems will need to be built to accommodate, control and manage such a process.



[Company] Business Plan

Retail Distribution

The Company [has / will have] [a / an] [new / established] profitable business selling its product through [your sales channel]. [Company] intends [to / to continue to] maximize revenue through this channel [indefinitely / for at least the next xx years / until xxx].

Customer Purchase Options

All [Company] [products / services] can be purchased [individually / as part of a package / as a combined product and service option]. Customers will be able to [contract for services / add other components / obtain parts / upgrade their xxx] through [their local retailer / direct from [Company] / field reps / online / by phone, fax or mail].

Strategic Alliances -- Promotion & Revenue Sharing with Related Businesses

A strategic alliance is simply a business-to-business collaboration. Alliances are formed for joint marketing, joint sales or distribution, joint production, design collaboration and countless other tasks. Alliances pool resources to reduce costs and increase revenues.

Because the [target market] marketplace is [diverse / concentrated / scattered / notoriously hard to reach / easy to reach], [Company] will [build relationships / extend existing relationships] with [affiliates / alliances] to reach more of the potential market(s) where these alliance companies and affiliates have an established presence and credibility with the [alliance customer type].

There are many ways to reach the top of an oak tree; (a) start climbing, (b) sit on an acorn, (c) make friends with a big bird... this is a list of BIG Birds.

[Company] has already formed some very important relationships with major companies in the 2002 NAICS Title industry, including:

xxx xxx xxx

OEM Relationships

Original Equipment Manufacturer (OEM) relationships [examples: a car manufacturer includes brand X tires on its SUVs; an answering machine company includes a digital display from Company Y in its answering machines; a software publisher licenses an installer software package that's included as part of the software, allowing the user to install the application; a computer hardware company obtains rights from several software publishers to combine their respective applications in a promotional software bundle] provide another source of income, selling our [your product name] as part of [the complete product sold to the end user--the car, including your tires; the software including your installer; the bundle including your software application; the answering machine including your Liquid Crystal Display (LCD)], with little or no added costs for [Company]. [This / These] relationships provide [widespread / some / little] product recognition for our [product name] brand. The major advantage of selling through OEMs is to [provide rapid market penetration / get our name in front of customers we might not reach otherwise / capture customer and market information through product registration / generate additional revenues with no effort on our part].



[Company] Business Plan

These relationships also provide [Company] [worldwide coverage through established sales forces / access to related markets / free promotion / media promotion too costly for our marketing resources]. We have signed OEM agreements with:

xxx, where our [product name ] product is part of their xxx. xxx. xxx.

We are currently negotiating OEM agreements with [xxx] and [xxx].

Joint Marketing Agreements

Joint marketing with established companies will produce revenues, credibility, and market presence. [Company] is pursuing joint marketing agreements with other organizations to increase visibility and credibility through association for [Company] products in the [x] market. Our plans include having [joint marketer name] market our [xxx] products within their product line, in their promotional materials, and on their website. We will similarly promote their products along with our own. We plan to offer [other company's product name] to augment our product line. [Company] currently has joint marketing relationships with [joint marketer name] and [joint marketer name]. We are working on agreements with [prospective joint marketer name], [prospective joint marketer name], and [prospective joint marketer name].

Third Party Supplier Agreements

To provide our customers the greatest usability, we require [additional features / components] to enhance its [attractiveness / capabilities / functionality]. This will help us meet customer requirements more effectively. Because we do not have the resources to [develop / produce / install] this [feature / functionality / component] internally, we rely on [x] manufacturers for the development of [additional features / components]. [Air conditioning / graphic equalizer / software plug-ins--whatever you have developed, manufactured or installed] is a good example of a third-party enhancements that makes our [x] product more appealing, and extends its usefulness for our customers. [Company] has established Third-Party Supplier relationships with:

[xxx], suppliers of [xxx] [xxx]

Additional Third Party Supplier agreements are being negotiated with [x]. [Company] is always looking for additional sources of revenue, and opportunities to create profit centers derived from existing revenue opportunities, alternative markets, and repositioning current products for applications in other markets. At this time, we are also considering [describe any potential new revenue sources under consideration].

Customer Value Proposition

This is a common question asked by investors ­ why would a customer buy your products or services?



[Company] Business Plan

Some of this is lifted from our own plan to give you an idea...

Many books, college courses, and seminars exist to assist business people to solve a myriad of business problems. Software applications (spreadsheet, word-processing, and database) have been created as tools to assist people to solve their own problems. Many vertical market applications (accounting, billing) have been written to solve specific problems. Many business people have the spreadsheet, word-processing, and database software, but they often do not have the knowledge to effectively handle the multitude of projects and problems facing them. Others do have the knowledge (consultants and seasoned managers), but they do not have the time necessary to work on these projects. JIAN templates combine the knowledge with the software (with a tremendous amount of typing and formatting work already completed) to provide the fastest and most efficient means for successfully completing a complex project quickly and inexpensively. For example: [Product/Service] enables [customers/entrepreneurs/business managers/consultants] using existing word-processors and spreadsheets to complete a business plan by simply filling in blanks and editing. Overwhelming customer response indicates that BizPlanBuilder and our other products enjoy a exceptional reputation. Inquiries from prospective customers suggest that there is continuing and growing demand for this type of [product/service]. The Company is constantly offered suggestions for future products.

The nature of [Company] products enjoy many advantages:

Technological non-obsolescence (lower maintenance, longer product life) Industrious customer set (more stability through tough times) Sustained sales potential per title (buyer pool continually renewed) Low tech-support requirement (capacity for more titles on same overhead) Cross-industry application (business functions are generally universal) Line-leverage with multiple titles (extending the original sale) Strong retail shelf appeal (no demo or technical ability required) Add-on sales of related, non-[Company] products (using direct marketing techniques) Difficulty of software competitor entry (more than technical acumen required) Large diversity of possible products (limited only by knowledge set) If you can find a quote from a credible source that supports your customer value proposition, add it here.

"Finding and buying the right computer system is one thing; putting it to effective use is quite another. Although many executives have the software they need to handle the multitude of projects and problems they face, they simply don't know how to make that software work for them. Those who do understand the workings of this new technology often don't have the time to start from scratch with every new project. To address this problem, JIAN created and introduced project-specific software packages that operate as templates in conjunction with popular PC and Macintosh applications like word-processors, spreadsheets and databases. Using these templates, executives in a wide variety of businesses can apply the software they already own (and are familiar with) to the full range of projects and problems that demand their attention." ~ California Business Magazine



[Company] Business Plan

Product Strategy

Principle of Elegance: Maximum strength with minimum materials.

- Ren Zaphiropoulos For an overview of Product Strategy, refer to the BizPlanBuilder Handbook of Business Planning "Investors consider whether you are focusing on a single project or a number of projects. On the other hand, investors may feel uncomfortable with a one-project company if the product that results shows no sign of leading to subsequent generations or related products." - Ken Wilcox, Executive Vice President & Chief Lending Officer, Silicon Valley Bank

Current Product

Proprietary information is available to investors upon signing of a Non-Disclosure Agreement.

What are the characteristics of your product or service? Describe how your product works or how the service is used. How has your product or service evolved over the past two years?

[Company] currently offers [product type] products for the [market segment(s)] market(s), including.

[Product name], a [product type] for [xxx] [Product name], a [product type] for [xxx] [Product name], a [product type] for [xxx]

[xxx], our principal product, consists of [xxx]. Overall our existing product line is [give status]. Development of [new products / existing product upgrades / spin-off products] is in progress and future [product type(s)] products are planned. The first product developed by [Company] is called [product 1], and was introduced in [year introduced] in order to [describe purpose]. Since then, we have introduced [product 2] in [year introduced], and then [brief history of your product line up to today]. Proprietary Technology / Intellectual Property

Most Venture Capitalists (many angel investors too) are nuts about IP (Intellectual Property) protection, leveraging IP assets, etc. "What is your IP Strategy?" What do you have that you can protect so well that an 800 pound gorilla can't come in and re-engineer everything in 6 months or less and then pound you in the market. If you have a ton of IP, but none of it is truly 'unique'. It is more a compilation of many things from many sources. While that has value, the question is, How Much and at What Cost?

Our products are protected under the following:

List any patents, copyrights, trademarks, licenses your company owns. For patent and trademark information, go to General Patent and Trademark Information: [703] 557-INFO.



[Company] Business Plan

Status Information for a Particular Trademark: [703] 557-5249. For general copyright information, call [202] 479-0700 or go to www.

For our [xxx] [technology / capability] we have [OEM / licensing / royalty] agreements with [xxx] as follows: [give general terms of agreements]. Customer Return on Investment For most customers, [product name] will pay for itself in terms of [xxx] within [xx] months, due to our [xxx]. Factors influencing rapid customer ROI include:

Fewer rejects or breakdowns Faster completion of [xxx] Reduced cost of ownership Faster inventory turns Improved efficiency Greater convenience Lower warranty costs Advantages of a better-quality end product Cost savings in other areas Regarding cost savings, [product name] will save our customers money in terms of [x]. Reduced labor costs, lowered reject rate, reduced downtime, lowered inventory costs, improved convenience and displaced employee activity

Our customers can generate more profits in terms of [heightened productivity, improved product performance, increased capacity and concentrating on their business rather than the use [or results of failure to use] our product. Our investment in [product name / product line name] has [consistently / seasonally / sporadically] produced [a / an] [outstanding / acceptable / marginal / unacceptable] return for [Company]. In the last [x] [weeks / months / quarters / years], [product / product line] has shown a [xx]% internal ROI, based on net profits divided by the total investment made for that period.

Useful Features / Benefits

How do your features and benefits differ from other similar products? What customer reactions might be anticipated due to these characteristics? Explain how you will satisfy customer needs and wants.

All [Company] products have [particular characteristics unique to your company]. The capability for [xxx] is a particularly unique feature that we alone can offer our customers. These combined capabilities provide [note specific customer benefits]. This, in turn, can be used for [note more/related customer benefits].

Benefits could include: entertainment, improved appearance, better health, overload reduction, stress relief, reduced project time.

[Product 1] provides [list features] features that give customers [list specific customer benefits]. [Product 2] provides [list features] features that provide [list specific customer benefits]. In addition, [xxx].

Note attributes that:



[Company] Business Plan

Establish the reasons customers will buy from you. Prove that sales will be made. Prove that you can convince people to buy. Quantify your claims where possible.

[Product name] is an extremely [xxx] product, requiring [xxx]. For example: one of [Product]'s features is its ability to [xxx]. [Product] allows users to [xxx] [more quickly / more easily / more cost effectively, etc.]. [xxx] is another powerful feature. This includes [xxx]. [xxx] saves a tremendous amount of time when [xxx]. Compared to traditional [xxx]s, [product name] is approximately [xxx times faster / half as expensive to own and operate / one third as likely to break down under xxx conditions / xx times as popular as [competitive product xxx]. In addition, [product name] does not require [xxx] or [xxx].

Describe the major unique value-added characteristic your product line or process provides to the customer and how this translates to a competitive advantage for your company.

The combined major benefits of all [Company] products are improved [xxx] through [xxx], and [xxx].

Product Life Cycles

Explain life cycle for your product(s). Is it in the emerging, growth, maturity or decline stage? For increased personal understanding, it is recommended that you create a simple chart covering the life cycles of your products. Where are your products on this chart? If several products are in different life cycle positions, indicate each separately. Describe the time factors influencing your ability to make money on your product sales, as well as the effects of economic cycles. Include contingencies. What conclusions do you draw from the life cycle positions? Are they up to date? Are there any early warnings of obsolescence?

The life cycle for [product line name] can best be described as follows: [describe life cycle position]. Due to our recent efforts to [xxx], [Product 1] is in a strong market position. We feel that for the next [projected period of time] it will continue to [xxx] and generate profits at or above expected levels. [Product 2] will need to be [improved / upgraded] within [xx] [months / years] in order to ensure that it does not move into the decline stage. Overall, we conclude that our products will continue to be viable in the marketplace during the next [xx] [months / years] and that [Company]'s future planning and product-related activities will ensure a strong market presence.

Product Selection / Development Criteria

Describe how your company arrives at its product development decisions. Factors that should be covered in your selection criteria include: financial benefit to company, relatively low investment requirements, positive return on investment, fit with present strategy, feasible to develop and produce, relatively low risk, time required to see intended results.

Because marketing is [our single largest / a large] expense and it is where [most / much] of our effort is applied, customer focus is a very important criteria. The idea is to keep our customers forever, by continually offering them a valuable product or service, thereby diminishing our costs of reaching and



[Company] Business Plan

appealing to them. Wise product selection is therefore critical to [Company]'s success. At [Company], we realize that development projects are growing steadily more expensive. To assure the best possible product decisions we have implemented the following criteria for evaluating and selecting projects:

Include any of the following criteria that apply to your situation, or add your own. Can you meet the needs of the customer and solve a specific problem?

[Company] provides products to assist customers with [xxx]. Our [xxx] products help reduce time, effort and expense by [x]%, and easily retail for $[x] ­ $[x] each.

Can your product be implemented using off-the-shelf parts?

[Company] can implement product or service using [list off-the-shelf parts]. Other parts are fabricated [internally / by [Supplier I] and [Supplier II] / offshore in our own facilities located in [country].

Where will you need to comply with new laws or government programs?

New laws or government programs that may impact our product include [list regulations, legislation, programs or statutes]. [Company] will comply with these regulations by [xxx].

Can we adapt to or capitalize upon needs / business concepts? Would it make sense to add the product to our catalog; to send product literature to our existing customer base?

[Company] will add new [product type(s)] to our [product line, catalog, product literature] to meet new opportunities in [xxx].

Per Sun Tzu's The Art of War, as to our product, we must choose our competitors and the playing field carefully. Go where the competitors are not. Be first. Avoid "me too" products. If a similar product exists, can our product be superior in its functionality, presentation or marketing? Look at potential sales, growth, profits, and time to payback of development costs. What barriers must be overcome for a potential new product entry? Does the existing item have an existing perceived value. What would it cost elsewhere, or what other product or means could be used to accomplish the same task? For example, using BizPlanBuilder as an example, we would ask: How much would it cost JIAN customers to write a business plan without BizPlanBuilder?

We will use outside material providers when they have [a body of knowledge / materials] useful to expedite the development of a [Company] product. Providers are selected based upon their expertise, active participation, reputation and success in their field, plus the overall quality of their [materials / workmanship]. When beneficial, we seek to blend the [materials / ideas / components] of several [suppliers / authors / inventors] to create an optimal hybrid product delivering the greatest benefits to our customers. These 3rd parties are generally compensated by [a lump sum cash purchase / an earn-out basis / royalty]. It is our philosophy that a product must be improved by at least [x]% every [xx] months in order to maintain its competitive position, market value and price point. We must maintain our ability to adapt as the environment, market demand, our customers' needs, and our capabilities change.

Planned Products

[Company] plans to continually develop new products and enhance existing products. In response to demonstrated market demand, new products or services being developed in the near future include [xxx], [xxx], and [xxx].



[Company] Business Plan

Additional concepts / plans for follow-on [next generation] products include [xxx].

Discuss plans for your next generation of products. Discuss add-on products or services for future customer needs.

[New Product 1] development [will begin / started] on [date] 20[xx]. The targeted release of [New Product 1] is for [month], [20[xx]. Development and testing will require the following resources: [list staffing, materials, tooling, capital equipment, technology, new processes]. The targeted release of [New Product 2] is for [month], [20[xx]. [New Product 2] development [will begin / started / is scheduled to begin] on [date] 20[xx], and will require the following resources [list staffing, materials, tooling, capital equipment, technology, new processes].

If you feel it would be beneficial, add details of your development plans, including milestone dates, for each of the new products mentioned above.

Research & Development

In response to demonstrated needs in our market, new [products / services to support new, existing or planned products] are being developed to include [xxx], [xxx], and [xxx]. These new [products / services] are particularly important to [describe prospective customers], as, to date, their choices have been limited to [note the alternatives to your product, or service for your product]. [Product / service] will make it possible to easily [describe what your new addition will provide for the customer]. Launches are planned for [month], 20[xx] and [month], 20[xx]. Much of the development time and effort at [Company] during the past [x] [months / years] has been spent on research and [product / process] development for [New Product x]. During 20[xx], [Company] spent approximately [x]% of sales revenues on R&D. Our plans for 20[xx] and beyond call for [a / an] [increase / decrease] in R&D spending to [x]% of sales. [Company] is regularly examining roles that new products will play in the growth of the company. In order to promote the speed and effectiveness of our future new product development efforts, [Company] management is committed to the following: [list your commitments].

New product development commitments by management could include: beefing up the R&D staff, reorganizing to empower development team(s), a dedicated customer requirements group, placing greater emphasis on training, better market research, more formal product selection criteria, providing upgraded resources, raising quality standards.

These commitments will span a period of [x] [months / years] and cost in the range of $[x]. In addition to our existing products, we [have developed / plan to introduce] [product or product-related service name] follow-on [product(s) / service(s)], with launch dates anticipated in [quarter and year]. [New Product / Service name] is a [type and nature of the product / service] and we expect [immediate / swift / global / gradual / relatively rapid / relatively slow] adoption in the [market name] market. [New Product / Service name] represents a / an [easily-implemented / quickly installed / low-cost / viable alternative] solution to the problem of [customer problem your product / service solves]. [Type of customers] prospective customers can now easily [what they can do with or because of your product]. Other [Company] products include [list products not yet discussed], which we expect to [note your expectations for these products in the immediate future].


[x] products listed in the Current Product section have been tested for ability to be manufactured and [are currently ready / by (month, 20xx) will be ready] for market To validate manufacturing feasibility for [product name], the following [tasks / operations] were tested in



[Company] Business Plan

our pilot production process:

Task / Operation (Sample) Product technology and methods Key parts and vendors Processing sequence and repeatability Capital equipment and vendors Specifications and control measures Production lead-time and volume standards Total % of Time xx% xx% xx% xx% xx% xx% 100%

Pilot testing indicates standard unit production will be [xx] hours per [xxx] units. Processes have been validated to ensure optimally cost-effective, quality output. Final tests were successful with regard to [all / most / etc.] evaluation criteria. Results are available on a need-to-know basis, as indicated for proprietary information. Testing was conducted during the period [month, year] through [month, year], at [xxx] facilities. Volume testing will be accomplished by [xxx].

How this will be accomplished and when. Use milestone chart to indicate ramp-up tasks, resources, and milestones. Specify equipment, facilities, labor, etc., required in terms of quantity, number, and cost.

The following [product / process] requires additional pilot testing prior to volume testing:

list or otherwise indicate necessary tests. Xxx Xxx xxx

These products are expected to be ready for market within [x]-[months / years], contingent upon current products generating sufficient cash flow to support additional product development.

Joint Development Efforts

[Company] [is working in / has completed] joint development efforts with [xxx] and [xxx]. Financial and technical responsibilities [are / were] also shared in a joint development project with [xxx]. A pending project may be entirely funded by [xxx], who will [hold / relinquish to us] all rights to the resulting [product / technology]. A joint development project with [xxx] has been discussed, but has not yet begun. This project will require [technical input / development efforts / research] from [xxx], [xxx], and [xxx].


If pertinent, include drawings of the product to be manufactured or a detailed description of the service to be offered. Include tests made, and the data and results, if available. Show a master Pert chart of product plans.

For additional details, the following product-related documents are included in Supporting Documents. [insert list of documents.]



[Company] Business Plan

Inventory, Production Costs & Capital Investment

Describe the proposed organizational location, make vs. buy, facilities, and logistics. Keep emphasis on the productive use of capital, labor, and material resources, manufacturing processes, vendor relations, experience and distribution requirements. Statements are needed to indicate initial volume and expansion requirements as well as product / process complexity, uniqueness, and costs.

Key factors in the [fabrication / manufacturing / assembly] process include [xxx]. Raw / prefabricated materials, components, and subassemblies required for production include [xxx].

List and describe capital equipment, material, and labor requirements. Are prices negotiable? Are the above items readily available? List Quality / Technical specifications. List Inventory requirements. Identify hazardous materials or other significant safety factors.

Our key suppliers include:

Supplier I Supplier II Plastic assembly Packaging, warehousing & fulfillment

Supplier III Computers & Equipment Are alternate sources / materials available?

Unit price

[Company] currently builds [qty] of [product name]s. The price for each [product a] is $x, the price of [product b] is $x, and the price of a [product c] is $x. The prices of these [products] are not expected to increase during the three- to five-year period reflected in the financial projections. We take advantage of economies of scale by taking advantage of [xxx].

Quantity discounts, package deals. Indicate resource capacity and expected utilization over time; any installation and maintenance costs; and vendor availability, if applicable. Describe the business by listing production rates, capacity constraints, or required quality assurance and safety programs.

In comparison to other companies, [Company]'s products are [reproduced / completed] quickly and economically by [describe how your process or production techniques accomplish this]. Comparative analysis shows these figures to be [higher than / lower than / in alignment with / significantly better than] competitor costs. This is due to the fact that [xxx], so our overall costs [are typically stable year round / fluctuate by season / rise and fall with the stock market / increase or decrease depending on market demand].

Are your products more efficiently produced than that of the competition (due to manufacturing costs, energy savings, leaner management)? Is your product of better quality? Is your quality control program more thorough? Are parts made in-house or subcontracted?



[Company] Business Plan

What new tooling is required for production and what are the estimated costs? Quality Control (Investors will want to know that warranty costs will be identified and reasonable).

Unit Cost

At [Company] we will [fabricate, assemble, subcontract, etc.] the following [key parts, components, subassemblies, etc.]:

List parts, etc., with vendors, lead-time, costs, etc.

The following breakout lists the material and labor expenses required to build a [product name]:

Computer design and drafting (x hours of labor) Creating the jig/mold/ for the [product] (x hours of labor and $x for materials) Casting/welding/assembling (x hours of labor and $x for materials) Shaping/finishing the [product] (x hours of labor and $x for materials) Painting and buffing the [product] (x hours of labor and $x for material) Packing and shipping to the customer Total cost to produce one [product] and ship it to our customer: $xx $xx $xx $xx $xx $xx $xx

Inventory costs

The fact that [Company] custom builds [product]s to each individual's specifications means that there is no inventory of [product name]s in stock. The company does maintain the necessary inventory of [xxx] materials necessary to build and ship one week's worth of orders (approximately xxx products). The cost of [quantity and number units] of the [xxx] materials is $xxx. The cost of maintaining this perpetual inventory is $xxx per month for space at a nearby storage facility.

Labor costs

[Company] has [xxx] employees, including the officers and owners of the company. The [x] [designers / assemblers / builders] [Company] has hired are each paid a salary of $xxx/year. When [Company] obtains the financing, then [xxx] additional [designers / assemblers / builders] will be hired at individual salaries of $xxx/ year. Based upon previous years, [Company] has generally given [5-10]% salary increases to non-owner employees every year. We expect to continue giving a similar percentage for the next 3-5 years.

Capital equipment purchases & maintenance costs.

The machinery used to design and build [product name] is sufficient for current production levels. However, if demand increases to our projected level, then [xxx] additional workstations will be needed for [xxx] new employees. The investment for the machinery and computer equipment for each workstation is $xxx. Upon funding, this equipment will be ordered and placed into service within [xx] [days / weeks / months].



[Company] Business Plan


Two campers are walking through the woods. They see a bear! One takes off his backpack and starts to put on his running shoes. The other asks, "Do you really think you can outrun that bear?" "No," he replied, "I just need to outrun you." Never delude yourself regarding competition. There is and always will be some form of competition for what you are doing. Competition is a way of life. We compete for jobs, promotions, scholarships, in sports--and in almost every aspect of our lives. Advances in technology can send the profit margins of a successful business into a tailspin causing them to plummet overnight or within a few hours. Because of this volatility and competitiveness, it is important to know your competitors. Competition--Having two or three competitors may help educate the market, but few investors will want to go up against companies with well-established installed bases even if you have a superior product or technology. Discuss your key competitors with regard to product or service, price, location, promotion, management, and financial position. Look in your telephone book yellow pages or in online phone and manufacturer directories. Look in the industrial directories at your local library. Search on-line databases that provide competitive profiles of other companies. Read industry magazines and look for advertisers who sell a similar product / service. False or incomplete information here translates as dishonesty, ignorance, or negligence to investors, and bankers. They presume competition in some form--you had better identify it in its variety of forms. "Pay less attention to what men say. Just watch what they do." - Dale Carnegie Survey your competitor's sales line anonymously and ask how their products are better than yours. Who are your five nearest direct competitors? Who are your indirect competitors? (you install swimming pools... perhaps your customer wants a roof, a tennis court, or a new car, so you must make a swimming pool a higher priority...) How are competitors' sales: steady? increasing? decreasing? What have you learned from their operations? from their advertising? What are their strengths and weaknesses? How does their product or service differ from yours? Start a file on each of your competitors. Keep folders of their advertising and promotional materials and their pricing strategies. Review these files often to learn when and how often they advertise, sponsor promotions and offer deals. Study the copy used in the advertising and promotional materials, and their sales strategy. Understand your competitors and how they operate their businesses.

[Company]'s product(s) offer [xxx] in [xxx] [applications / uses / situations]. Companies that compete in this market are Competitor 1, Competitor 2 and Competitor 3. These competitors charge [comparable / a wide range of / within a $x range of our] prices:

[List examples and range of prices for each competitor to substantiate your statement].



[Company] Business Plan

Our top 3 competitors are:

[Competitor 1]

President / Owner Address Years in Business Market Share Price / Strategy Product / Service Features [xxx] [xxx] [xxx] [xxx] [xxx] [xxx] [xxx]

[Competitor 2]

President / Owner Address Years in Business Market Share Price / Strategy Product / Service Features [xxx] [xxx] [xxx] [xxx] [xxx] [xxx] [xxx]

[Competitor 3]

President / Owner Address Years in Business Market Share Price / Strategy Product / Service Features [xxx] [xxx] [xxx] [xxx] [xxx] [xxx] [xxx]

Below, we have included a more complete Competitive Round-Up listing additional details on each of our competitors.

List below your strengths and weaknesses compared to your competition (consider such areas as location, size of resources, reputation, services, personnel, etc.):

Key factors, such as Competitor 1's first-to-market leadership position / Competitor 2's recent infusion of capital from an IPO / Competitor 3's release of xxx / a widespread (downward / upward) sales trend in xxx and related products] have resulted in the present competitive situation in the industry. This means that [Company] will need to [describe what you will need to do in response to these factors, such as: seize



[Company] Business Plan

an opportunity / overcome a threat / ride the wave / stabilize / rethink your strategy / introduce xxx, etc.]. Compared to competitive products (or the closest product available today) our [product type] [can / will] [describe your competitive advantage]. [Company]'s [product name] meets customer requirements with the unique [capacity / functionality / service option] for [describe what it does / what it offers that other products don't / why it is a better value]. [Company]'s key competitor's major strengths and weaknesses include [list strengths and weaknesses such as: price, location, quality, suitability]. Competitor 1's objectives and strategies are [list known strategies and objectives]. Competitor 1's most likely response to current [economic / social / culture / demographic / geographic / political / governmental / technological / competitive] trends affecting our industry will be [list likely competitor responses]. Our products and related services are positioned in the minds of prospective customers as [first, therefore best / the genericized name for this type of product (such as "Kleenex" for tissue, "Xerox" for photocopy, "FedEx" for overnight delivery, "Q-tips" for cotton swabs, and "BizPlanBuilder" for business planning software) / the industry leader / the one to buy / the one they've seen advertised / the one their friend, associate or family member uses, etc.]. This positioning in the minds of potential customers gives [Company] a decided [advantage / disadvantage] as a competitor [cannot claim / already owns] the lead position. [They / We] are then left to compete on [price, delivery, location / value] alone. New firms entering and old firms leaving this industry affect our sales of [product type] products because [describe how these changes affect your sales]. Sales and profit ranking for major competitors in the [xxx] industry have changed in recent years. The change has come about because [list reasons for ranking change]. Today, competitive threats come from [other companies / other industries / new or entrenched technologies / foreign competitors], and [xxx]. [Company]'s products perform in virtually all situations where [your features, benefits, your customers are likely to be]. Unique attributes of [Company] products and related services include [describe your differentiating attributes]. The ability to [what it can do] is unique to [product name], and our research indicates that its [performance / content / functionality / ease-of-use / intuitive nature / friendly user interface / kid-appeal / mom-appeal / color / flexibility / broad range of uses, etc.] is superior to anything else on the market today. In all comparisons, [Company]'s products provide more features and deliver superior performance compared with nearly all competitive products. In many instances, the number of differences is substantial. A complete technical comparison is available.

Put all comparisons and test results in Supporting Documents.

[Competitor x]'s competitive product does not provide the same capabilities as [your product name] in a situation where [describe circumstances]. The only way [your product name] and [competitor product name] from [Competitor x] compete is in the area of [describe competitive area]. The [competition] advertises in [xxx], [xxx], and [xxx] publications.



[Company] Business Plan

Discuss results--if they advertise consistently and continuously there, then it must be working.

[Competitor] products only operate [describe the limitations of the competing product].

- OR -

This market segment is not shared with any direct competitors. Competition does exist, however, in the [industry / countries]. Competitors in this area are

[xxx] [xxx] [xxx]. To perform an in depth analysis of your major competitors, complete the chart below. Columns have been provided to describe up to three competitors. If necessary, add more columns.

Competitive Roundup

The following chart illustrates how [Company]'s product compares to the competition in several different key areas.

Competitive Roundup--Company

Product Company Estimated 20[xx] Sales $[x] Estimated Share of Market Estimated Advertising Budget [xxx] Competitor 1 $[x] [x]% $[x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [xxx] $[x] [x]% $[x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [xxx] $[x] [x]% $[x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x]

Competitor 2Competitor 3

Rank: 1=Weak to 5=Strong

Product Line Quality Technology Advertising Effectiveness Sales Force Excellence Distribution Manufacturing Efficiency Standing in Industry Future Potential Seriousness of Competition Number of Employees Greatest Strength Key Weakness

Competitive Roundup--Product




[Company] Business Plan

Size Capacity Ease of Use Installation Range Appearance Quality Design Useful Life Trade-in Value Technology Responsiveness State-of-the-Art Best-of-Breed 24-Hour Availability / Support Technical Expertise Repair Service Efficiency Guarantee / Warranty Complete On-Time Capability Upgrades

[x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x]

[x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x]

[x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x]

Observations & Conclusions

It appears, from the above information, that [xxx].

Generally in war the best policy is to take a state intact; to ruin it is inferior to this. To win one hundred victories in one hundred battles is not the acme of skill. To subdue the enemy without fighting is the acme of skill.

- Sun-Tzu, The Art of War Are there market niche opportunities we have overlooked? Are our resources being deployed against the most serious competitors? If significant, place competitors' advertisements and brochures in the Supporting Documents section, or have them available upon request.



[Company] Business Plan

Indirect Competition

A new roof competes with a swimming pool, tennis court, new car, vacation ­ not just other roofing contractors! If you win, who loses? Tom Landry, former head coach for the Dallas Cowboys football team, talks about practicing their offensive plays against a truly determined defensive team ­ without considering who or what is working against you, you cannot develop and effective winning strategy.

Other things potential customers may spend their money on include a [swimming pool/vacation] ­ these are indirect competitors. We must convince customers that using our product/service is their top priority. Our value proposition is that we can save customers the most money quickly, leaving them cash for other projects. If they use our product/service immediately, then they can [get more benefit than building a tennis court/xxx] because [xxx]. If we win, they lose... Besides direct and indirect competition, there are forces in the world who may resist our success. If this company wins, they lose. While there are many potential partners to support the Company's success, the following companies/industries may perceive [Company] and our [products/services as a threat:

[Oil industry ­ our solar panels provide an inexpensive alternative] [Real Estate Salespeople ­ our sell-it-yourself real estate system makes them unnecessary] xxx

[Company] Competitive Advantages

A brief summary of [Company]'s competitive advantages:

Valuable Brands: established over a period of [xxx] years and through more than $[xxx] million in cumulative revenues generated to date by [Company]. Satisfied Customers: installed base of [xxx,xxx] licensees (xxx,xxx recently updated in database). Established Strategic Partners: co-marketing, reselling, etc. Proprietary Content: including [Company]'s copyrights, ®s and trademarks. [Company] is also positioned as a hosting source, especially advantageous to mobile and wireless computer users.

The distinctive competitive advantages that [Company] brings to this market are: 1) Experience in this market. [Company] has [xxx] years of hands-on experience in this industry. 2) Sophistication in finance and distribution. We are the low-cost supplier in these price sensitive markets. 3) [Company] enjoys a broader, more complete product line, enabling customers to extend their initial purchase and continue to upgrade to our more sophisticated [product type]. 4) [Company]'s pricing philosophy is to price according to the value we deliver, as well as what the market will pay. Through economies of scale, many items currently on the market can be sold with lower prices, yet a higher net profit. 5) Rather than being strictly regional, [Company] will expand into the [national / international] marketplace.



[Company] Business Plan

6) [Company] will use overseas bank accounts, monitor markets and hedge accordingly to control foreign currency exchange risks. 7) With suppliers where we have established a relationship or are known to be financially secure, [Company] will work on a pre-pay basis. This allows us to enjoy greater discounts. 8) Our capitalization will allow us to fully address our markets with comprehensive marketing and customer service. Regarding our Service, the distinctive competitive advantages [Company] offers are: 1) Experience in this market. [Company] has [xxx] years of hands-on experience in this industry. 2) Sophistication in management and finance. We are able to run an efficient and lean structure, yet still provide quality service to our clients and customers. 3) Due to the nature of this industry, we will be able to rent office space in more moderately priced buildings. 4) As a unique product and service company, we will be able to keep our margins high, allowing us to provide internal financing for growth possibilities.



[Company] Business Plan

Internet Strategy

You need little justification for developing and promoting your online presence. "It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts." ~ Sir Arthur Conan Doyle (1859-1930) Excerpt from Softmail Direct: Here are some simple examples using these basic concepts to enhance your overall marketing plan--and increase the return on your marketing efforts:

Example 1. -Objective: -Strategy: Sell products on the Internet. Create a Web site to sell products.

-Tactic: Launch an integrated order-processing Web site by end of the first quarter. Use direct mail and other traditional marketing methods to promote your site. Example 2. -Objective: -Strategy: -Tactic: an incentive; set a deadline. Example 3. -Objective: -Strategy: -Tactic: for Internet publishing. Increase company branding online. Publish company collateral on the Web. Convert company brochures to HTML or PDF and render company logo Conduct an online customer survey. Drive customers to a designated URL that contains the survey. Launch an email campaign to drive people to the survey URL--provide

Excerpted from survey: The most effective way to promote your Web site: Search engines -Banner ads -Offline advertising -Direct mail -Domain Names -31.09% 14.48% 23.27% 8.83% 22.30%

Internet Marketing & Internet Commerce via www.[Company].com

The Internet [has played / plays / will play] a [minor / major / no] role in our business, as [describe why and how the Internet will or will not impact your business].



[Company] Business Plan

The Internet provides opportunities for [sales / marketing / fulfillment / customer interaction / customer information] as well as opportunities to [reach a wider audience / sell to customers outside our local market / be located by search engines, adding millions to the potential customer pool]. As Internet access and use increase globally, so will [Company]'s market. Our products can be [located / read about / viewed / demonstrated / purchased] by customers anywhere on Earth with Internet access.


The nature of our business does not lend itself to Internet sales, however, we recognize a clear need to have an Internet presence. Our [customers / prospective customers] have told us they appreciate being able to find additional information about our [product / service / hours of operation / coming events / rates / delivery times and options, production time / availability, etc.] online. Other customers still prefer phone or walk-in access to this kind of information.


The Internet is primarily [a / an] [advertising / information / customer service] channel for us. By providing [demos / samples / photos / descriptions / system specs / system requirements / comparative charts / use specifications / regulatory data / program or service options / ways to contact us / online customer support] and other useful information, [Company]'s Web Site is becoming a useful [marketing / pre-sales / post-sales / customer service / support / public awareness / industry awareness] tool. Insert Home Page Example Here The challenge [was / is] to entice people to visit www.[Company].com and [order products / find precisely the information they want or need--easily / create an incentive for them to xxx]. In [year], www.[Company].com was created to enable customers to [purchase online / contact us / learn about our company / find directions to our store(s) / review schedules / arrange for services / secure extended warranties / register their purchases / participate in user groups / provide feedback about our product(s) and service(s) / apply for xxx / use our xxx / subscribe to xxx / read our newsletter--whatever your customers use or could use your site for]. For online sales, [Company] has established a relationship with an outside vendor, [Vendor name], ([vendor's city]), to process orders and credit card verification, and then transmit the order files to [us]-- OR--[fulfillment vendor name], our manufacturing and fulfillment vendor in [fulfillment vendor's city] for fulfillment. As [Company]'s site has evolved, [customer satisfaction / customer responses / customer awareness / industry awareness] [has / have] been [extremely positive / helpful in improving our xxx / enlightening with regard to specific customer requirements / discouraging], and sales [overall / online] have [increased steadily / increased exponentially / remained constant / declined] as a result. We attribute this [change / stabilization] primarily to [xxx]. [E-commerce Vendor name] provides [a / an] [xxx] system and services for enhanced fraud detection and scoring, as well as additional services for EDI and fulfillment messaging, tax calculation, territory management, export control, and digital certificate distribution and management.Currently, [Company]'s website can [describe what the e-commerce element of your site does for your customers]. Further, customer participation in [list services and functions available on the site] requires customer sign-in, and provides an accurate address for future [Company] mailings to them. [Company] tracks on-line sales revenue based on reference codes (Sales Source Key) to measure the effectiveness of our various promotional and advertising vehicles. Most [Company] literature and promotional materials promote the [online purchase option / information resources / company, product and service information] available on our website. Online tracking features also help us track where customers have clicked through from another site, and the areas they actually visit on our site.



[Company] Business Plan

[Company]'s Internet Future

The Internet [is / will be] an important part of [Company]'s future, and it is important for [Company] to gain in-depth experience with the medium to secure a further competitive advantage.

Internet Marketing Strategy

Our challenge is to [describe the challenge with respect to desired business results and its relation to your Internet strategy]. Meeting this challenge will involve:

Marketing Approach

We will promote [Company]'s website as if it were a product. For example: part of [Company]'s [type of advertising media--billboard / radio / magazine / newsletter / in-flight] advertisements will promote [what you'll provide on your site], available on-line. Compelling ads will offer [a free analysis to determine the most suitable product for the customer's application / online ordering / a downloadable demonstration of our product / online billing and payments / offers for free product samples, etc.]

Key-Word Search

Whenever anyone uses a popular search engine to search for `[key words relative to your product or service]' in Google, Yahoo!/Overture, Excite, AltaVista, an advertisement / link to [Company]'s website should appear.

Try this software:, you can download a free software product that enables you to enter your keywords so you can see how many times they have been searched in the past month(s). This may be the most credible and timely market research available today.

According to recent search engine statistics (using the Overture keyword analysis tools), these keywords produce the following number of inquiries over the past [xx] months: Employee Employee background check Restaurant business plan Xxx Xxx Xxx 25,091 4,441 3,309 000 000 000

You can also use this method to determine better words to use in your advertising copy. For example, `business consultant' is requested 17,772 times while `business expert' is requested 77 times. Which word would you use if you were writing an ad or direct mail piece to reach business consultants?

Hot Links & Referral Incentives

We plan to use strategically-placed hot links from other online locations such as [websites, portals, forums, where you expect to have a presence]. This does not necessarily mean a button on AT&T's site. Rather, it means providing users with a compelling reason to come from a related site where [Company] is referenced to our site. For example, from a website devoted to [topic related to your product], an enticing graphic or line of text would hot link interested users to the [Company] site. The link will emphasize [an attribute of your product that will solve a particular problem for the site visitor. Thus, the links themselves become well-thought-out advertisements, and provide relevant, compelling reasons to click on the link to [Company].com. [Company] offers an "Affiliate Program" enabling you to set up a [Company] catalog page on your site. We pay a [xx]% commission for all sales referred to [Company].com via your website. Likewise, [Company] [offers / plans to offer] [x]% commission for referrals to our site that result in sales. We have engaged with [Affiliate Management Vendor name--for example, Tracking Soft]. We will be able to positively "track the clicks" of the referring URL all the way through to order placement. This is crucial



[Company] Business Plan

for convincing referring sites to point to [Company]. So far, we have referring links from more than xxx sites.

On-line Catalog & Showroom

[Company].com will serve as a / an] [on-line store / catalog] giving [Company] customers a way to see everything they might need to see in order to make a buying decision. Including:

Answers to Commonly Asked Questions Directory of Store locations Customer quotes, success stories, case studies Product Specifications [Company].com will act as an on-line Showroom providing: Back-up for Advertising & Direct Mail Order Entry & Fulfillment Low-cost fulfillment alternative worldwide. Show examples of [Company] [product type] in action Offer specially recommended books with a few comments from [Company] experts as to why we recommend these books to our customers--[Company].com provides a link whereby a customer can order the book directly through [Company].com. [Company].com fulfills the order and pays [Company] a percentage of the sale. Offering selected products and services of Alliance Partners Opportunities for customers to post their financing efforts and success stories

Marketing Partners

Currently, [Company] has an established relationship with [ Their e-mail responder to those seeking [xxx] through their on-line database delivers a message recommending [Product 1]. The e-mail page contains a hot-link directly to a special order page on www.[Company].com. [Partner Company] receives a commission on all sales referred by them. [Company] plans to add as many other connections of this nature as possible. Future mailings and advertising will include this reference to [Company]'s site: [message that will entice recipients to respond]. Use our search engines to locate them. at www.[Company].com." When Internet users seek [xxx] resources, popular search engines will lead them to [Company]'s website.

Content -- Business Resources

[Company]'s site should DO something for its customers. This will generate repeat visits to the site. Information [Company]'s customers and prospective customers will find useful includes:

For example, most automobile manufacturers enable you to `assemble' the vehicle of your choice, including colors schemes and accessories, etc. Demonstrations of how [Company] products work Provide references to laws & regulations regarding the [industry / product usage, etc.]. Reviews of books we recommend Recent government surveys regarding 2002 NAICS Title companies and demographics Provide succinct answers to common customer questions Free sample products offers



[Company] Business Plan

[Company] Newsletter. In lieu of a printed newsletter, we plan to put the information on-line. To be sure that [Company]'s customers, prospects and others are aware, we plan to mail a significantly cheaper piece pointing them to the Web site. All literature will describe the availability and listings of the information available on [Company].com. Also, it is possible to promise and provide a downloadable store coupon as an incentive for visiting the site or for a specific product.

Strategic Marketing Alliances

In order to substantiate [Company]'s various online offerings, the Internet Marketing Manager will be tasked with developing strategic alliances that add value and revenue streams. Since [Product 1] (and then [Product 2] if [Product 1] is successful) is [Company]'s flagship product, the alliances should be in keeping with the theme of [that / those] product(s). The Internet Marketing Manager should establish relationships with 10-20 key alliances that will be included on [Company].com, and define how the model will work. In other words, [Company] simply offers a hot link (the least preferable) or sells products or services of the partner. For example,

`'. Companies / services that will help you raise money. `'. Offer site visitors a special price on the [xxx]. `'. xxx

Other sites for [Company] to link to include:

`'. because they have tremendous traffic and we can provide [products / services] to their customers which [Alliance Partner name] feels adds value to their marketing and products. `'. because they have 2,000,000 visitors every day and [Company]'s [product type]s complement [Alliance Partner name]'s products and services. Search Engines: We must continue to have [Company] products and the [Company] name effectively indexed and listed with the leading search engines: Google, AltaVista, Excite, Yahoo!, and others

Online Resellers

[Company] plans to establish reseller relationships with numerous resellers to further extend our reach into our primary market segment. To date, we have met with [Prospect 1], [Prospect 2], [Prospect 3]. Companies providing a variety of means to purchase [product type] over the Internet are emerging from every direction: [E-Commerce Vendor 1] An e-commerce vendor to providing and managing online stores for companies that prefers not to manage their own. For instance, charges a set-up fee and 15% of sales. [E-Commerce Vendor 2] A well-financed on-line distributor that handles encryption and pays distributor prices. Serves as a distributor and clearinghouse for hundreds of smaller online resellers. [Demo Vendor name] Provides a unique try-before-you-buy technology enabling customers to download software, then purchase and unlock it after they have had a chance to work with it. [Online Distributor Name] An on-line distributor who pays distributor prices. [E-commerce Vendor] maintains encrypted versions of [Company] software, serves as a clearinghouse and enables [Company] to sell through other on-line resellers as well. We plan to pursue the resellers they already have relationships with and establish them as [Company] online resellers. (Current clients include



[Company] Business Plan

the big three xxx distributors, xxx, xxx and xxx.) Currently, [Company] has established a "mirror" site featuring identical product descriptions to those on www.[Company].com--the ordering mechanism has been removed to allow our resellers to enable their customers to access [Company]'s product information, but return to the resellers' order page for purchasing. This assists resellers to provide more [Company]-related product information to their customers without risk of losing their sale.


[Company]'s pricing policy for website sales will be to offer its products / services as close to street prices as possible. [Company] wants to maintain support for its resellers and alliance partners; however, [Company]'s offer can be differentiated with free ground shipping of physical products purchased online and special bundles of products as incentives to purchase immediately from [Company].com.


The current plan is to establish [distributors / partnerships] in selected foreign countries, whereby they localize (and perhaps manufacture) [Company]'s product to suit their environment and market. Either they or we would produce the packages and they would distribute to resellers. We would be paid a royalty on sales in those countries. Option: Simplify the entire process: Partners in each country would promote [Company] products with the intention that customers could only purchase [Company] products by accessing [Company].com in the US and downloading the software directly. Customers would pay equivalent U.S. prices with no import duty No V.A.T. (V.A.T. = Value-Added Tax--it's 17.5% in the UK) Minimal or no shipping charges Customers would receive the product(s) immediately. Credit card companies handle the currency exchange and deposit cash directly to [Company]. [Company] will enjoy a competitive advantage over incumbent / local competitors who must collect taxes. This would reduce the need for developing packaging as well as the costs and risks of carrying extra inventory. [Company]'s objective would be to seek partners with expertise emphasizing marketing. (Do they need to be in the [xxx] business? Would an Ad / PR firm suffice?) We could advertise on international air carriers, etc. [Company]'s website can be localized by cloning the existing website and having the partner modify it to their requirements. [Company] would pay 20%-30% (50%?) of the sales from our website into the specific country or territory.


[Company] would need to establish methods to assure accurate accounting of pass-through sales and guaranteed payment to Affiliate Management Partner.

The Affiliate Management Partners must be confident that they will be paid. Download and installation must be impenetrable to hackers. Credit cards must be verified on-the-fly before download. To what degree must the website be localized?



[Company] Business Plan


At the end of each month, [Company] receives comprehensive reports prepared by its web service provider. These reports show how many visitors came to the site, where they came from (links from search engines or alliance partners' sites or straight to [Company].com), which company pages were hit most often (stack-ranked highest to lowest) and total sales.

Site maintenance

[Company] has recently implemented its own web server computer, hosted at [name of host]. Hosting Services are in [host location city]. www.[Company].com uses [xxx Server software, including a xxx Database with a xxx front end. It implements back-end e-commerce components from [e-commerce provider name], located in [City, State].

Costs / Budget

[Company]'s current consulting Webmaster services will cost approximately $[xxx] during 20[xx], and we plan to hire a full-time Internet Marketing Manager late in 20[xx]. This person will handle most graphical and content changes. Banner advertising is currently being tested. We intend to budget: no more than $[xxx] for 20[xx] (unless this proves profitable early on...)

Remaking [Company].com into a Destination Site

Now that [Company] has enhanced the e-commerce capabilities of its website, it is time to enhance the content and online marketing aspects of the site. The following pages present a glimpse of the direction that the "look and feel of the site will be taking.

Privacy & Security

Data security and privacy are a key element in achieving market acceptance of our new online services. Accordingly, [Company] plans to focus initially on marketing to [web-oriented, IT-centric business owners / operators such as e-commerce businesses]. These "early adapters" include a high percentage of "gazelles" (fast-growing, aggressive firms that seek high market caps and potential domination of their respective market niches). Through analysis of [Company]'s customer database, management estimates that approximately [xx]% of [Company]'s users meet this definition of [customers / high-tech "gazelles."] They will be the first group targeted to become online {Company] subscribers. By addressing privacy and security issues, [Company] assures the attraction of these customers to set an example and create buzz. The slower-moving herds of future subscribers will follow; and our online concept will gain greater acceptance globally.

[Company]'s Privacy / Security strategy includes:

If you don't have one, feel free to grab ours from our website.

Multiple firewall protection with password-protected access to partitioned sections of each subscriber's files, with 100% subscriber control of subscriber-designated access by authorized viewers / collaborators. Adherence to certain privacy standards and procedures will qualify [Company]'s website as an [Ernst & Young "Web-Trust"] site that can carry [E&Y's Web-Trust] logo. This is the privacy / security equivalent of the "Good Housekeeping Seal of Approval" and it will help to eliminate end-user concerns. Publication and promotion of [Company]'s Privacy and Security Policies, including [Company]'s positions on information collection and sharing; information security and protection; email privacy and online surveys; the use of cookies; anonymous browsing; children's online privacy protection; website



[Company] Business Plan

links; future changes to privacy policies, etc. will all be available on the site.



[Company] Business Plan

Marketing Plan & Strategy

Marketing: How you can sell more stuff, more often, to more people, at higher prices.

Sergio Zyman, Former VP of Marketing, Coca Cola

Marketing: Creating an environment where sales can occur.

Unknown (but a more feminine approach)

Strategy: The science of planning and directing large-scale operations, specifically of maneuvering forces into the most advantageous position prior to taking action.

Marketing communication strategies, whether online or off, need to account for three basic principles: objectives, strategies, and tactics. Objectives are your goals: what do you want to accomplish with your marketing plan? Strategy is how you approach achieving your goals. Tactics are the tools and actions you use to implement your strategy (Note: these are independent principles--yet they are dependent upon each other--and each needs to be addressed in your overall marketing plan). This section outlines your strategy for meeting the market challenges you define, including your approach to selling your product(s), how you will distribute your products, advertising and promotion, public relations, and image. How we will reach the market... Carefully designing this portion of your business plan will enable you to respond quickly and appropriately to changing business and market conditions and new business opportunities. For more detailed background information for the Marketing Plan section of your business plan, refer to the BizPlanBuilder Handbook of Business Planning. And check out JIAN's MarketingBuilder software package for developing a comprehensive Marketing Strategy and Plan, and the tools to develop, manage, track and analyze your ad and media campaigns, direct mail, publicity and events. MarketingBuilder picks up where BizPlanBuilder leaves off, to help ensure that you realize the greatest possible return on your investment in marketing.

Benefits vs. Features

Sales Maxim: "Unless the proposition appeals to their INTEREST, unless it satisfies their DESIRES, and unless it shows them a GAIN--they will not buy!" Qualify Customer Leads: Know your customer's level of need, ability to pay, authority to buy, accessibility, extent of their sympathetic attitude, business history

[Company]'s marketing strategy is to enhance, promote and support the fact that our products [list your unique features and benefits / established market position / market presence]. The overall marketing plan for our product(s) is based on the following fundamentals:

Discuss these topics in your strategy discussion: Type of business you [want to be / are] in. Segment of the market[s] you plan to reach. Distribution channels used to reach your market segment: direct, Internet, retail, jobbers, wholesalers, brokers, door to door, mail order, party plan, etc.



[Company] Business Plan

Share of the market you expect to capture over [xxx] [months' / years'] time.

To prove the value of [product] we can [x].

Show each application. Demonstrate effects. Add credibility with scientific reports and studies.

The lack of [product features / benefits] in everyday [specific business / professional / manufacturing / shipping / living / household situations] is demonstrated by [x]. Based on studies of [x]. Most of the country [and world] are [describe their situations / circumstances].

Describe why: [they have this particular problem / continue without your products].

Sales Strategy

[Product type] products should be treated as products with a [long-term / short-term] life expectancy.

If you produce and sell more than one product, discuss each. Important! How long before product pays for itself (for your customer)?

As such, the target market segments for [Company]'s primary focus are [specific customers or market segment]. Because of [product name]'s special market characteristics, [seasonal / geographic / etc., as mentioned in your Market Analysis] our sales strategy [includes / incorporates]:

Briefly discuss how your sales strategy will address specific market / environmental conditions].


How customers perceive your company and product, relative to competition. Product / Business / Industry leadership. Recommended Reading: Positioning, by Al Ries and Jack Trout, and The New Positioning by Jack Trout. A User Focus Group may provide product information and market feedback to determine how the market sees your current position, and to help you position your product more effectively. .

Our [product name] product is seen by the consumer as [customer's perception of your product]. Its unique [technical / quality / performance] advantages can be exploited to arrive at a winning position in the consumer's mind. In terms of market segmentation advantages, we can use [emotional / ethnic / need-based] appeal to arrive at a winning position relative to each targeted segment. Repositioning [product name] as [an investment instead of a cost / an "escape from civilization," rather than a (boring) vacation, etc.] is expected to generate interest and response among prospective customers we have not reached before. To be effective, our product must be positioned as relating to or necessary with [list any other products, services, or environments upon which your sales depend or by which they are influenced]. We can reposition our competitors by capitalizing on our own singular [first-to-market / ease-of-use / flexibility /



[Company] Business Plan

availability / simplicity] position that only we can claim.

What can be said / shown about your product that is uniquely yours, and will draw customers to your product?

The Selling Basis for our product, then, is [state your unique position in the marketplace].

This is your fundamental strategy for all of the advertising you do. Test the Unique Selling Basis on friends and potential customers to make sure that it is meaningful, believable, motivating, memorable, simple, logical, and unique.


As the story goes, a long time ago, an executive from the Marlboro cigarette marketing department asked their ad agency, "why are we paying you millions of dollars... we've been running this cowboy theme for years!?" The agency rep responded, "You pay us millions of dollars to keep you from changing it." Miss, n.: A title with which we brand unmarried women to indicate that they are in the market. - Ambrose Bierce (1842-1914?), "The Devil's Dictionary"

Our marketing will be centered around [our expertise / our value to the customer / the longevity of our products(s) / our established brand and market position / the position we intend to establish in the minds of customers].

Convert Features Into Benefits--The "...Which Means..." Transition PRODUCT FEATURE Performance Reputation Components Sizes Exclusive Ruggedness Delivery Service Price Design Availability Installation Simplicity Terms Workmanship "WHICH MEANS / =" Time Saved Prestige Reduced Cost Greater convenience Competitive advantage Continuous Output Leadership Increased Sales Economy of Use Ease of Use Reduced Inventory Low Operating Cost Reduced Upkeep Affordable Now Long Life CUSTOMER BENEFIT

[Company] customers are typically looking for [list customer benefits] in [product type]s. [Product name] meets their requirements through [note the product features that provide the benefits you just listed].

Buying Motives




[Company] Business Plan

Economy of Purchase Economy of Use Efficient Reputation / Brand Inexpensive Durability Best-selling Accurate Performance Labor-Saving Time-Saving Simple Construction Simple Operation Ease of Repair Ease of Installation New design Space-Saving Increased Production Complete Servicing Low Maintenance Thorough Research

Smart move to purchase Save money Improve current operations Desire of Prestige / Recognition Increased Profits Use for a long time Desire to Imitate Desire for perfection Get more done in same amount of time Have time for other things Easy to understand Everyone an use Inexpensive to fix / low down-time We can do this (now) Desire to Be Unique It will fit in my home/office/shop Availability Good Workmanship Reduced Waste Made the right decision

[Company] customers tend to make buying decisions for [product type]s from the [rational / emotional] perspective of [note the most significant influence in this decision]. [Product name] appeals to their sense of [genuine need for xxx / deserving xxx / business reasons for the purchase, etc.]. In most instances, the buying decision is based on [having shopped the market / an immediate impulse / authorization from a particular influencer / waiting until the purchase is unavoidable].

Pricing Look around at what your competitors are charging, and charge a little more.

- Paul Larson Your pricing strategy is another marketing technique you can use to improve your overall competitiveness. Get a feel for the pricing strategy your competitors are using. That way you can determine if your prices are in line with competitors in your market and if they are in line with industry averages.

Pricing Considerations

How do you set prices? Is there a policy? A formula? Is your pricing competitive? Is there perceived value (it costs more therefore it must be better) inherent to the product or a higher price? Are prices based on costs--standard markup?



[Company] Business Plan

Why are your prices higher or lower than those of competing products?

Some pricing factors include:

retail cost and pricing competitive position pricing below competition pricing above competition service costs and pricing (for service businesses only) material costs labor costs overhead costs

Staying on top of pricing

The key to success is to have a well-planned strategy for staying ahead of the market. You will need to monitor prices constantly, and have policies in place so that in your absence, your employees can make sound decisions. Keep an eye on operating costs as well. Sudden fluctuations in indirect costs (such as the price of gasoline, electricity, heating) can quickly consume your profits if you aren't adjusting your pricing with increases in the cost of doing business. A single month in which your utility bill doubles or triples without your noticing it could wipe out profits for months to come. Franchise operators also need to stay current with changes in their local marketplace, even if certain policies are set by the franchise corporate office. You will be able to respond quickly to local shifts in the market and adjust accordingly. Such changes can affect your competitiveness and your profit margins if you wait until you receive a directive from the home office. You may also need to alert corporate if you need to respond quickly to local circumstances. Franchise operators in other areas may never encounter a similar situation, and corporate would not make a global change How elastic (the effect of pricing on demand for product) is the market for your products? ("Elasticity" refers to the way demand for a product is influenced by a price change. Demand is elastic when a small price change significantly changes demand for the product. Computers are considered to be elastic items--when prices drop, the number of people buying computers rises. Liquor and tobacco products are considered inelastic. The number of customers buying these items does not change significantly, regardless or price changes (Changes in the economy influence these sales... more alcohol consumption during an economic downturn, for example.) How do consumer preferences affect elasticity for your product(s)? See also Break-Even Analysis under Financial Projections in the BizPlanBuilder Handbook of Business Planning.

The prices for our products are determined first and foremost by [competition / costs / suppliers / manufacturers / package deals]. It is important to know that [sliding scales / volume / regulated / competitive / perceived value], pricing is essential to our market profile. Compared to the competition, our prices are [xxx].

List examples of competitive pricing. Put copies of price comparisons and reports in the Supporting Documents.

Different seasonal aspects of our market affect our pricing because [example: selling seasons]. We feel that our customers will pay $[xxx] because [explain purchasing rationale]



[Company] Business Plan

Margin Structure Retail

Ask friends / customers in retail management about quantities that they are likely to buy. What discounts would entice them to order more? When selling to directly to retailers, "Keystone" means that the wholesale cost is 50% off SRP. In other words, the retailer will sell your product for twice what they pay you for it.

Our retailers typically expect 50% off of SRP. Their mark-up is usually 50%-100%.


Ask about quantities their customers are likely to order and their Gross Profit Margins / Percentages.

Our distributors typically expect 60% off of SRP. Their mark-up is usually 5%-10%.

Manufacturer's Representative

What percentage commissions do they make? Usually between 5 and 20%. See JIAN's AgreementBuilder for a comprehensive Sales Rep agreement you can customize for your situation. An Independent Contractor Agreement is included in BizPlanBuilder in the Manage Your Business section.

We are using 5 regional rep firms (listed below) who earn an average commission of 5%-15% on net sales (gross sales less returns and adjustments). Our agreement stipulates that they are paid 30 days after the end of the month. Any returns and adjustments reduce commissions on a pro rata basis.

Xxx Xxx Xxx Xxx Xxx Western USA Midwest East Coast Europe Asia

Direct Sales

The majority of [Company] direct sales will be handled internally by our staff. Most of our [market segment] customers tend to be [day care operators / general contractors / retail shop owners / new business owners / homeowners, etc.], it is important that [female sales staff / sales staff with construction experience / retail specialists / staff with strong business backgrounds / etc.] present our [product(s) / service(s)] to our prospective customers in this market segment. [Company] anticipates hiring [x] additional sales representatives to [cover additional territories / manage retailers and distributors / manage specific markets / sell specific products].

Include Organizational chart in Supporting Documents

We have chosen to use a direct sales force because our products require considerable customer education and post-sales support--directly from the company. Our price point, pricing structure and profits are such that our cost of sales warrants a "person-to-person" selling strategy.


We can take advantage of volume purchases by [xxx]. We then have some room in our margins to support discounted pricing for customers who [purchase in volume / are exploring competitive options where the buying decision is coming down to price / are buying multiple products at once / whose average purchase exceeds $[xx] / other].



[Company] Business Plan

Volume discount on materials is applicable if a scheduled or standing order is placed (For example; 1,200 units ordered for a year = 100 units per month.)

Are there discounts options for paying cash or within [x] days?

[Company] has several cooperative advertising arrangements in place, where other manufacturers pay 210% of purchases toward our advertising of their product. We plan to review our pricing and margins every [x] [months / years] to ensure that we remain competitive while protecting profit margins.

Should a new pricing policy be investigated? Are potential profits being lost?

Current Selling Methods

Activities selling your product(s): Methods to promote your product or service include: face-to-face visits, telephone surveys and solicitation, advertising, mail, radio, television, or other Sample brochure, advertisements, announcements, or promotional literature. If you are using this sort of collateral, be sure to include samples in the Supporting Documents section of your plan. Allow for a margin of safety in your sales forecasts. Recommended Reading: How to Master the Art of Selling, by Tom Hopkins, International Market Press.

[Company] products are being sold in [x] retail stores throughout the USA Our sales force of [x] people make direct pone calls to customers.

Distribution Channels

[Company]'s marketing and sales department leads have collaborated on a plan to sell our product(s) through several channels. The determining factors in choosing these channels are [x].

Customer profile and buying preferences Geographic factors Seasonal sales fluctuations Channel track record with similar products already on the market.

The nature of [supplier / distributor] relationships in this industry is [note how suppliers and/or distributors effect sales of your product]. Our key competition uses [the same distribution channels / a different channel / no distribution mechanism at this time]. Our mix of distribution channels will give us the advantages of [list advantages] over our competition. [Company]'s current distributors include:

xxx xxx xxx

Our distribution channels include:



[Company] Business Plan

[xxx] [xxx] [xxx] distribution.

Wholesale Distributors Authorized Resellers General Resellers who purchase [Company] products through

Executive Sales

This type of selling is usually most appropriate for very expensive products or services [executive jets, yachts and large estates come to mind] where it is important to deal principal to principal when negotiating the sale.

Because our customers tend to be [top corporate managers / IT leads, etc.], it is important that [our company president and senior managers / executive sales, etc.] present our [product(s) / service(s)] to our prospective customers in this market segment.

Manufacturer Representatives

Because manufacturers' representatives carry several product lines that are compatible with ours, we feel that it is appropriate to select manufacturers' representatives carrying [x], and [complementary and compatible products--automotive products to parts stores, marine supplies to boat dealerships, etc.].


One of the key elements designed into the [Company] marketing plan is the targeting of our distributors. We will select distribution channels already in existence and staffed with professionals possessing appropriate backgrounds and clientele. [Company] products are highly consistent with the nature of [distributor name]'s business and the wellbeing of their customer base. Also, it is significantly less difficult for us to reach these people and educate them about the benefits in using [product name(s)]. This strategic marketing approach takes full advantage of the fact that these professionals are already involved with parallel products and services. They already have a track record of experience. By operating within these distribution channels in this manner, we can maintain control of our market. In addition, we can generate growth at a reasonable pace and obtain excellent sales results.

Distributors must mark up your prices 15-30% to their retailers. Your sales revenue will have to be reduced in order to accommodate distributor profit margins.


Our Dealers look for these attributes to effectively sell [Company] products::

Price Point--attractive and reasonable Profit Margin--worthy of sales emphasis Technical Support--accurate and immediate response Quality--design, construction and packaging Advertising and Public Relations--customer awareness and demand Effective Sales Materials--ease and expedite sales process Competitive Advantages--features and benefits Stocking and Delivery--available when needed Market Stability--maintain profit margins and market position

[Possible / Current] Retail and Wholesale Outlets include:

The North American Industry Classification System (NAICS) has replaced the U.S. Standard Industrial Classification (SIC) system.



[Company] Business Plan

Store type Department Stores Garden Supply Stores Hardware Stores Giftware Wholesalers Electrical Equipment Wholesaler Total

Identifying potential resellers:

Total 23,275 16,496 40,140 3,524 41,313 124,748

NAICS Code 5311 5261 5251 5199 5063

Collect mailing list catalogs--look at all the possible outlets for your product or service. Look in your Telephone Directory's Classified Advertising under Mailing Lists. Complete the chart above--the list may prove to be a valuable resource for resellers. List any national or regional chains or independent stores that currently carry or could carry your product.


With Original Equipment Manufacturers (OEMs) we can incorporate our [product name or type] into their product line by [explain how your product can be included within theirs--they sell your outboards with their boats, your windshield wipers with their cars, etc.]. For manufacturers of [OEM biggest system / product] we can sell [product name or type] as part of their [xxx]. We can also provide a private-label line as an additional product for [xxx] distributors.


As we build our customer database, we will gather email addresses with opt-in permission to contact our customers and prospective customers via email and other electronic means, extending our reach and visibility with minimal resource allocation. Our email campaigns will include:

Offers to existing customers for additional [purchase opportunities]. Add-on services promotion. e-Newsletter offering advice relevant to our [customers / clients / prospective customers / partners / affiliates]. Offer [product enhancements / after-market products / latest models or releases / services scheduling / extended warranties / related products or services from our partners, etc.] directly from the website. Emphasis will be on customer convenience, ready access, and quick response times.

Direct Response Mail

We will be exploring the benefits of incremental, coordinated direct mail programs in the [1st / 2nd / 3rd / 4th / last two, 3] [quarters / months] of 20[xx]. We anticipate a strong profit potential as we strengthen our direct response capabilities. We will be approaching this scientifically, as we improve our customer targeting ability. We propose [two 50,000-piece campaigns / four 10,000-piece mailings, etc.], each preceded by a [1,000 / 2,500 / 5,000]-piece test. All direct mail activities this year will be directed to [our existing customer base / tightly targeted mailing



[Company] Business Plan

lists / mailing lists acquired from [xxx] that have proven profitable in the past]. In addition, we will [test external lists / test marketing partner lists / test bingo card lists, etc.].


[Company] plans to produce a [single / series of] infomercials intended to air in the [which time slot-- prime time, late night, morning] time slot on a [major network channel / minor network channel / premium channel / local channel / specialty channel] channel. Our research indicates that the [which segment] of our target market is [extremely / reasonably / somewhat] receptive to the infomercial delivery style, and we anticipate response rates to [more than cover our costs / put us at break-even / create lift in other channels]. Our primary reason(s) for this approach, include [anticipated increase in direct sales / greater visibility / publicity generated as a result of the infomercial promotion / driving a significant increase in channel sales].


Look in your telephone directory under Direct Mail for mailing houses. Some also provide telemarketing services including handling inquiries, orders, fulfillment and an 800 number with live operators and data capture to build your own mailing lists from caller responses.

We will use [in-house / contract] telemarketing to perform the following functions:

Outside Sales Support

[Company] provides support for outside sales with:

Literature mailing Follow-up calls Order entry Respond to inquiries Order entry Literature mailing 800# Order / Support Hotline Marketing research

New Business

We have [xx] dedicated account managers who proactively pursue new business. Their activities include contacting [distributors / retailers / customers], scheduling appointments for field reps and processing new orders. Our marketing team [has provided / is preparing and directing] the following sales support activities: 1) A comprehensive telephone script that everyone can use when answering phones and responding to inquiries. 2) Responses for frequently asked questions for our website 3) Role plays with selling staff 4) Distribution opportunities. 5) Preparing a chart of CDI / BDI (Category Development Indices / Brand Development Index) performance.



[Company] Business Plan

6) Tracking our ACV (All Commodity Volume) distribution, and that of the competition 7) Exploring worldwide opportunities and preparing a list of target countries in order of priority


Our primary means of distribution will be [xxx].

How your products are (can be) distributed. Make a chart to show how they get to the end-user consumer.

Additional planned channels include [xxx]. An important advantage to these alternate channels is flexibility. By using more than one distribution method, [Company] will have more control and also greater ability to respond to special [distributor / reseller / customer] needs and circumstances. Other features of our secondary channels are low cost, quick start-up, and increased capacity.


Regional target areas are defined as [identify each region]. Reports indicate that these areas generate the highest level of consumer interest. Because our distribution network is [already set up or in use / easy to implement / cost-effective, etc.] we can enjoy [national / international] delivery immediately. This, in turn, will reduce shipping time and increase customer satisfaction. To date, [many of, [x] of, none of] our competitors are able to achieve this.

Product Roll-out Program

We have selected from [xxx] key market areas. Areas based on proximity--easy to sell into, contact, deliver to, have customers come to.

Manufacturers' Representatives we have chosen:

Name [ABC Sales] [xxx] Territory [Western U.S.A.] [xxx] Type [Marine Supplies] [xxx]

Distributors we have chosen are:

Name [DEF Distribution] Customer Base [4,500] Type [Sailboat Dealers]

Retailers we have chosen are:

Name [GHI Stores] [xxx] Number of Outlets [31] [xxx] Type [Sailboat Dealer] [xxx]

There are [xxx] dealers in each region.

See Advertising and Promotion section under Direct Mail for ideas on locating dealers, wholesalers. List regions in order of roll-out sequence. List key distributors, retailers, etc. in each as top priority.



[Company] Business Plan

Advertising & Promotion

How you advertise and promote your goods and services could make or break your business. You can have a great product or service--but if you fail to advertise or promote, you may find yourself not having a business at all. Many inventors and business owners make the mistake of assuming that the product will sell itself--that's a rare (albeit possible) situation. Advertising and promotion are the lifeline of a business and should be treated as such. Take advantage of networking opportunities as a means to promote your business. Develop short, concise, descriptive copy (text material) that clearly identifies what you sell, where to buy it, and what it costs. Capture the attention of prospective customers with catchy phrases and a message that appeals to a specific need or desire in those customers. Make sure the ads you create are consistent with the image you are trying to project for both your product and your company. Care and attention to, and tracking of your marketing program will increase the likelihood of success for your business. To develop a comprehensive marketing strategy and plan, get a copy of JIAN's MarketingBuilderTM software. It includes tools to help you manage every aspect of your marketing activities, track and analyze your effectiveness, develop promotional campaigns, budgets, media schedules and more... Develop tools and methods to increase your customers' awareness of your product(s) / service(s). The purpose of your marketing activities is to enhance, promote, and support the idea (in the minds of prospective customers) that your product meets their specific needs better than competing products or other alternatives. Remember: advertising and promotion are an investment, not a cost. Recommended Reading: Ogilvy On Advertising, by David Ogilvy.

[Company] recognizes that the key to success at this time is aggressive, widespread promotion. To accomplish our sales goals, we require an extremely capable advertising agency and public relations firm. [Company] [plans to advertise / advertises] in [major trade magazines / consumer media / entertainment media / local or special-interest-group publications] such as [xxx]. Upon funding, an agency will be selected and, with their assistance, a comprehensive advertising and promotion plan will be drafted. Advertising will be done independently and cooperatively with Distributors, OEM's, retailers and companies with whom [Company] [has / plans to establish] joint marketing / sales relationships.

Objectives We grew up founding our dreams on the infinite promise of American advertising. I still believe that one can learn to play the piano by mail and that mud will give you a perfect complexion.

- Zelda Fitzgerald (1900-1948) Writer, Wife of F. Scott Fitzgerald Position [Company] as the leading [producer / service provider] in the market. Position [product / service / brand] as the [first / best / only] [product type / service type] in the minds of prospective customers and the world at large. Create high levels of visibility in each of our target markets, the [list target markets] markets. Increase company awareness and brand name recognition among business managers and [x] retailers, buyers, customers. Generate qualified sales leads and potential new distributors for field sales organization. Through market research, develop significant, relevant data resources to create immediate and longterm marketing plans.



[Company] Business Plan

Create product advertising programs supporting the [better taste / lower fat / more fun] position. Coordinate sales literature, demonstration materials, telemarketing programs, and direct response promotions in order to [xxx]. Describe how your advertising/promotion objectives fit together to maximize the impact of your overall promotional campaign.

Direct & Indirect Marketing Campaigns

[Company] will [initiate measured / continue its time-tested] marketing programs (email, direct mail, etc.). At the same time, we will test then introduce new marketing campaigns:

Drive web traffic with high-appeal offers, free [xxx] and other innovative incentives that allow us to capture contact information and tailor individualized promotions based on what the customer or prospective customer has responded to previously. Promote high-visibility, high-demand partner products with [Company] [product / service] as the secondary (and complementary) purchase-of-choice. Develop a compelling referral incentive program.


[Company]'s primary strategy, while profitably selling tools to business owners, is to build a viable database and destination website for business managers everywhere. Historically, [Company] has a [xx]% follow-on buy rate of customers returning to purchase additional [Company] products. This rate is currently increasing with email campaigns and website-based sales. [Company] will build the dominant solutions-oriented business website for [your target customer], where customers can find answers and access information for [xxx]. [Company] will build traffic and collect customer demographic, psychographic, and technographic information, in support of selling ads as well as selling 3rd party products and services to [customers].

See also the entire section devoted to our Internet Strategy.

Media Objectives

Create and promote awareness of [Company] among editors, industry analysts and groups, engineers, buyers, customers and owners. Establish an image of [Company] as a professional, completely reliable organization that is highly positioned in the market. Maximize efficiency in selection and scheduling of published ads in publications to cover [xxx] and [xxx] markets. Street Date: Product/service launch to be coordinated for [Date]. Setting a "street date" enables you to coordinate all media promotion for a set launch date as well as assuring availability on the store shelves, in stock in your warehouse, debugged and downloadable from your website, etc. This maximizes your launch impact and marketing efficiency.

We consider the media we have chosen to be the most effective because it:

consistently reaches [xx]% of our target market has proven highly effective and profitable in the past has been effective for our business partners



[Company] Business Plan

is where [all / none] of our competitors advertise

We will develop an advertising campaign built around [product innovation / high-performance / competitive advantages], beginning with a "who we are" statement and supporting it with ads that reinforce our [xxx] message. Additionally, we will develop consistent reach and frequency in our advertising throughout the [month / quarter / season / year]. Due to the nature of our product, it is necessary to run [full-page 4-color ads / 1/4 page B&W ads / classified ads in xx publications / 30-second radio spots, etc.]. The best way to reach our potential customers is to develop a focused advertising campaign promoting our basic premise--"[your selling basis / theme / position in market]."

For example: "The fastest, easiest way to write a business plan to attract investment capital"

To maintain / establish our [x] company image, the delivery and tone of our statements will be [understated elegance / hard-driving excitement / excellence / glamour / reality / slice-of-life]. Ads will convey the look and feel of a [describe your image] company. Research indicates that [direct mail / direct response / TV / radio] advertising has not yet been used by any of our competitors. The consumer mindset, as described in Marketing Strategies is [x].

See also Customer section.

Ideally, after becoming familiar with our product(s), the consumer will [state the action you want the customer to take]. Specify actual consumer action--call our toll-free 800 number and place your order using your credit card / call for a brochure / visit our tradeshow booth, website, etc.

Being specific here will set the stage for developing appropriate ads.

To eliminate the biggest objections to immediate action, our advertisements must address [known / anticipated] [objections / difficulties] with [product acceptance / how to own or use] [product name] immediately. Because [product name] is so [innovative / unique / etc.], it is important to develop a promotional campaign that is consistent and easy to understand. Accordingly, [Company] has created a system of research and response to ensure maximum return from on our advertising dollars.

Develop an ad history: One way to measure publication effectiveness is to count the number of responses / inquiries and / or purchases per 1,000 readers [paid circulation]--given a particular ad. Vary your ads (by size, message, etc.--one variable at a time) and measure the differences. Now you can calculate the number of responses per your investment in advertising.

Media Strategy

Our plan is to maximize ad life with monthly and weekly publications. To get the most out of our promotional budget, our media coverage will focus on the [type of audience your media coverage targets] audience. Recap your customer profile from the Market Analysis section.

Select a specific group that buys your product or service.



[Company] Business Plan

We will use the following advertising / promotion sources:

Proven in-flight media Mass-mailed catalogs [Fingerhut / MicroWarehouse / Land's End / Eddie Bauer / Sharper Image / Lillian Vernon / Nightingale-Conant / Career Track, etc.] backed by [in-house / third party / 1-800 order acceptance / online electronic] ordering and fulfillment. Selected business publications Selected publications read by (influencers): Business Experts, CPAs, Bankers, Attorneys Selected publications read by (influencers): Technical Consultants, ship builders, and architects. Business-talk radio in select markets; PBS in select markets. Strategic and contextual banner advertisements. Search engine search-results banner ads for keywords: "business," "capital," "manage," etc. Select primary business publications with high specific-market penetration. Schedule adequate frequency of ads to create recognition and impact market with corporate image and product messages.

Where possible, position advertising in or near [articles on industry / product reviews / front cover / center spread] and appropriate editorials. Utilize U.S. editions of [consumer / trade / specialty publications].

Take advantage of special high-interest issues of major publications when possible.


Our first major billboard promotion will appear at the intersection of Highway 101 and the 380 off-ramp ­ where it can be seen by most the San Francisco airport traffic.

Billboards are often most effective for promoting a local business (i.e. your business is located within 10 miles of the billboard.) During the era many billboards listed the web address... how dumb is that? Do you have a computer in your car to go online? Are you going to write it down at 60mph? You're not likely to remember it after another 20 miles of driving... What if they listed their 800# (perceived as a free call ­ easy. No-brainer) and the offer was for a free brochure... you get their address and email address, then you send them an inexpensive postcard with your web address.

Conferences, Seminars & Trade Shows

Our first major conference promotion will be at [xxx] where we will introduce our [product/service]. [xxx,000] [customer types/computer buyers, golfers] are expected to attend. The Company will have a 10 x 10 booth for 3 days and be offering [product samples/free CDs/free estimates/] and demonstrating our newest [xxx].


Our first major magazine promotion will be full page ads in [magazine], [magazine], and [magazine] magazines. The expected circulation exceeds [xxx] and is highly concentrated to reach [boat owners/ranchers/etc.]. All issues will include a unique "Sales Source Key' enabling us to positively track the sources of our sales in order to measure our return on investment and make media adjustments accordingly.


Our first major newspaper promotion will be a 1/3 page ad in the [Wall Street Journal] starting [date] and running for [xx] consecutive days. We will track and measure sales

Personal contacts

Our [Founder/CEO/VP Sales] has many high-level contacts in the 2002 NAICS Title industry. We plan to



[Company] Business Plan

make special trail offers to these key players in order establish prominent customer accounts to showcase our [products/services]. Radio Our first major radio promotion will be on KXXX radio in the greater San Francisco bay area. According to their demographic data, their audience consists of [middle aged male] listeners likely interested in a solution for [squeaking fan belts].

You though we were going to say baldness or something like that didn't you? Shame on you!) For example, if you want, you can have Howard Stern rave about your product, service or company for a full 60 seconds to the entire nation for $30,000. Call Liz, at KROCK in New York, 212-3149271.


Our first major TV promotion will be [Kxxx] TV serving the greater San Francisco bay area. According to their demographic data, their audience consists of [teenage] viewers likely interested in new [webbased games].

Trade Associations, User Groups, Clubs

Our first major trade association will be at [xxx] where we will introduce our [product/service]. [xxx,000] [customer types/computer buyers, golfers] are expected to attend. The Company will have a 10 x 10 booth for 3 days and be offering [product samples/free CDs/free estimates/] and demonstrating our newest [xxx].

Yellow Pages

Many of our customers are local and often "let their fingers do the walking." The Company will develop and maintain a prominent position in our local phone book classified advertising directory.


In addition to the above mentioned advertising and promotion, we also intend to [send direct mail (see below)/provide free samples/].

Preliminary Media Schedule

Media [Magazine, TV, Radio]50,000 [xxx] [xxx] Total $1,500 450,000 [xxx] 500,000 Circulation 1/4 Pg $4,400 [xxx] $5,900 Budget Ad Size $30.00 1/2 Pg [xxx] 3/4 Pg $9.78 [xxx] $11.80 CPM

Anticipated Response [ex: 1 / 1,000] 500 responses at [$11.80] each.

CPM = Cost per Thousand. This is a common measure to compare the costs of different media based upon is reach. You would also need to compensate for page size, TV / radio spot length, etc. Editorial dates--when they will run special issues. (Special Issue: Office Automation, etc.) that will enhance your ads. Obtain a copy of the "rate card" from the publications you consider. Visit Standard Rate & Data online. They have data on every media on Earth.

We expect to achieve a reach of [total circulation / audience], and to maintain that for a period of at least [months].



[Company] Business Plan

Due to the [seasonal / geographical, etc.] nature of our audience, we plan to [how you will counter these issues]. In response to competitor's advertising, it is necessary to [xxx].

Explain how your message will contrast with theirs. What if they run similar ads?


In addition to standard advertising practices, we will gain considerable recognition through [xxx]. Trade programs (trade advertising for product) Press releases (if product is justifiably new and innovative).

Include budget and rationale. See Public Relations section as well.

[Product name] has already been [installed / put in service] at more than [xxx] [companies / customers / stores / government agencies]. Our products will be placed / offered in additional [xxx]'s at substantial discounts. The number of trade shows attended will be increased from [xxx] to [xxx] each year. These shows will be attended independently and with the companies with which [Company] has joint marketing / sales or OEM agreements. Reports and papers will be published for trade journals and technical conferences. [Product name(s)] will be displayed as a service in a [retail store / manufacturing / professional] environment--a showcase for [Company]'s products and an ongoing [test / market test / product development / promotional] environment. Consumer will be encouraged to [call the 800# / clip the coupon / come to store / call for a demo or to order].

Direct Marketing: Direct Mail

Target selected business categories Describe any activities or plans you have for direct mail promotions. Go to your local Post Office and request copies of The Mailer's Guide. It contains abridged information on bulk mailing permits, size, thickness and folding restrictions, mail classification items, customer service programs, and useful information. Collect mailing list catalogs--look at all the possible outlets for your product.

Mail to selected 2002 NAICS Title experts, 2002 NAICS Title consultants, 2002 NAICS Title investors, 2002 NAICS Title attorneys, etc., depending on your target market and the people who influence your target market.

Look in your Telephone Directory's Classified Advertising under Mailing Lists.

[Company] will expand direct marketing to potential customers using inexpensive mailing pieces (postcards) designed to create awareness. The direct mail piece will drive them to [Company]'s website for the full presentation and fulfillment. [Company] will offer [free xxx and xxx] to capture customers' email addresses and permission to contact them in the future with additional product offers, news and articles of interest.



[Company] Business Plan

Based on our research, there is significant sales potential in direct marketing to [target customers / influencers / resellers.] Statistics support this position: [xxx,xxx (number of)] [businesses / consumers / corporate libraries / safety managers / school teachers...] purchase [what they buy, that you sell] every year. To reach this entire market annually, we will need to send out [xx,xxx] mailers every month. As we mail to purchased lists, we will refine and scale regular mailings to the [xx thousand / million] [U.S. businesses / teachers / hobbyists / homemakers / chefs...] ultimately sending [xxx] [thousand / million] pieces every month. In addition to using direct mail to distribute our products, we will communicate directly with our customers through [product upgrade offers / information updates / product announcements], and [creation of a quarterly newsletter / other incentive to say yes to contact]. The direct mail objective is fully for profit.

List Management

Given the growing potential of [example: channel alternatives to the retail store], we are building our capabilities in database marketing. We have brought our customer list in house for this first phase as we develop our database sophistication. Our registration cards and periodic customer surveys will help us understand our customer, and measure the success of our marketing, sales and product activities. Profile overlays or other lists that we buy will fill in our awareness gaps. This in-house presence will provide our sales and tech support teams with tools that streamline their operations, while they update our customer knowledge on a daily basis. We plan to develop a customer information system that will help us make sound decisions by providing historical answers to the marketing questions we pose.


Describe any activities or plans for sales incentives. Consider the appropriate use of advertising specialties like coffee mugs, t-shirts, imprinted gifts and gadgets. Look in your Telephone Directory's Classifieds under Advertising Specialties and request some catalogs for ideas.

Some lasting and economical incentive ideas that fit our company and customers include:

Coffee mugs (our customers have office jobs) Tape measures (for customers like interior designers and construction foreman) Floating key chains (since our customers are boat owners)

Indirect Marketing ­ Strategic Partners, Affiliates, & Associations

Part of [Company]'s strategy is to reach business owners through everyone surrounding them. These are the people business owners trust and respond to, and who can be easily located and reached. [Company] will market to these "influencers" through direct mail, conferences, special promotions, targeted advertising, as well as special incentives. [Company] has a long history of strategic relationships, including Microsoft, IBM, Apple, AT&T, PacBell, Intuit, Wells Fargo, Travelers, VISA and others.



[Company] Business Plan

Affiliate Marketing ­ Strategic Alliances & Influencers

The following key points summarize [Company]'s marketing strategy for affiliate marketing:

Provide products through the 2002 NAICS Title web portals (xxx, xxx, and xxx) that sell products to their visitors. Leverage relationships with respected 2002 NAICS Title experts in closest alignment to [customers]: 2002 NAICS Title consultants, 2002 NAICS Title attorneys, investors. Expand on [Company]'s relationships with Fortune 500 partners and leverage their resources. Link websites to [Company] with an "Associates Program" to build traffic, on a pay-per-sale basis. Market to and through organizations strongly influencing business owners and entrepreneurs: trade associations, NBIA (incubators), NAFE, NAWBO, NFIB, and others. [Company] currently donates the [book / materials] to High School / Elementary School classes. Sponsor 2002 NAICS Title clubs.

Sales channels will include hiring representatives to focus on [customer segment], [customer segment], and [customer segment] customers. From experience, [Company] has gained in the [market segment] market, it will be better prepared to market effectively in [market segment] and throughout [market segment / the USA / South America / Europe / xxx].

International Markets

In addition to Internet-based international sales, [Company] plans to establish distributors / partnerships in selected foreign countries, whereby they will localize [Company]'s products and text to suit specific markets. [Company] is currently in discussion with a "virtual international marketing department" company to provide this as an out-sourced service. Partners in each country will promote [Company] products and services such that customers can purchase [Company] products / services by accessing a localized, native-language version of the [Company] site.

Online service / products sales have no import duty or V.A.T. (17.5% in the UK) Online service users face no international shipping rates, which typically are exorbitant Credit card companies handle the currency exchange and deposit cash directly to [Company] [Company] will enjoy a competitive advantage over incumbent competitors that must collect taxes.

Advertising Budget

What is the optimum spending level for advertising and promotion? How does this compare with industry averages?

For the next [xx] [months / quarters / years], advertising and promotion will require $[figure about 10 to 50% of sales the first year]. On an ongoing basis we will budget our advertising investment as [xx]% of total sales. We arrived at this figure based upon [our competitive research / market and industry-analyst forecasts / marketing results for the past [xx] [months / quarters / years]. We have determined that advertising [in / on] [industry publications / consumer magazines / newspapers / buses / billboards / the Internet / stadium walls / reseller publications...] is necessary to [reach the right market / achieve forecast sales goals / create or claim mindshare / reinforce our company or product identity / drive traffic to our website / generate more repeat sales / retain customers and customer awareness...].



[Company] Business Plan

Our Spending vs. Industry Averages

If you have this information, it may be useful to include it ­ if not, don't sweat it... Investors want to see that you are promoting your products / services within reason for your industry, but you may have reasons or circumstances requiring more or less promotion (like starting up)...

Advertising Sales Promotion Trade Consumer Other [specify] Compared to industry average we are investing [more / less] in [Trade / Consumer / Industry, etc.] promotion because [explain rationale].

Do the "heavy spenders" perform better? What are your conclusions on spending for advertising in this category?

Outside Advertising Suppliers

Include some of the following references:

Advertising Agency Public Relations Agency Direct Mail Mailing House Direct Response Firm Fulfillment House Graphic Designer Display Designer Packaging Supplier Demonstrations--Guides, Literature Market Research Focus Groups Sales Literature, Tools Marketing / Planning Consultant Premiums Suppliers Telemarketers Direct Response Advertising Firm Printers

Publicity / Public Relations

This section can assist tremendously as you prepare to introduce your venture to its various public segments. See also PublicityBuilder described in the back of the BizPlanBuilder Handbook of Business Planning.



[Company] Business Plan

The most powerful force in the universe is gossip.

Our publicity efforts are intended to accomplish the following:

Position [Company] at the leading edge in providing [type of product for xxx industry or xxx market segment]. Increase [Company] reputation and name / brand recognition among [managers / buyers / customers] in [xxx] [prospective companies / industries / markets]. Communicate on a regular basis with three target audiences: Editors of major trade, business, market, industry and local publications Key management personnel in existing customer companies Organizations of employees and sales representatives

Publicity Strategy

During 20[xx] [Company] will focus on the following publicity strategies: Develop a sustained public relations effort, with ongoing contact between key editors and top-level personnel. Develop a regular and consistent product update program for the major target media, keeping key editors abreast of enhancements and new product introductions. Develop an internal newsletter to cover key sales successes, significant marketing and manufacturing events, technical support and product development stories. Internally, the newsletter will target all company personnel and sales representatives; externally, the piece will target key customers and prospects. Develop a minimum of four technical articles written by key executives or engineers to be placed in [list publications] within the next [x] months. Establish contact with editorial staff for the purpose of being included in product "round-ups"-- product comparisons in [publications such as Consumer Reports, PC Magazine, Working Woman, etc], where competing products are compared. This exposure builds credibility and market acceptance. See Bacon's Publicity Checker at your local library for a directory of publications and editors covering your industry.

Produce a complete company backgrounder on [Company] to be used as the primary public relations tool for all target media and editorial contacts. This will also be effective for inclusion in press kits, dealer kits and sales packages. The backgrounder will include sections on the following broad subjects:

Overview of the Market: size; characteristics. The Market in [years] present and future. The Company History Management Philosophy Brief sketches of Top Executives The Products Market Niches

Major Sales Announcement

Major contract agreements representing sales volumes of over $[x] will be written up and released to selected media, editors and analysts as soon as practical after agreements are signed. Ideally, these will be joint announcements. Concurrently, a shortened version of the release will be mailed to all internal and



[Company] Business Plan

external sales organizations, and post to the Press section of our website.

Press Release

[Company] [is developing / has developed / will develop] a series of press releases on the entire [product line / service area]. We will prepare press releases for each new product introduction, technical development, participation in major events, [awards / recognition] for [product / personnel excellence / performance, etc.].

Include an 8x10 black-and-white glossy photo of your product or of an interesting demo of your service--editors are likely to pick up your news release faster with a photo.

Editorial Visitation

Over the next [xx] months we will [host / invite] the most influential reporters and editors from [publication and / or broadcast media names] for a visit to [Company]. During the visit, each of the editors will receive a complete facility tour, product briefing(s), and an opportunity to interview the chairman, president, product designer and marketing manager. If logistics or timing is a problem, individual appointments can be arranged, or meetings will be scheduled during major trade shows.

Trade Show

[Company] typically participates in three kinds of trade shows: 1) [xxx], 2) [xxx] and 3) [xxx]. In the past, we have concentrated on shows geared to [xxx]. Now that [xxx], it's time to expand our horizons to shows that [xxx]. In 20[xx], instead of [xxx], [Company] will concentrate on [xxx]. In deciding on the [Company] plan for trade shows, the following factors have been taken into consideration:

Target audience of the show--[will this get the message to our target market]. Geographic location-- [a good mix of shows around the country]. Time frame--[preferably no more than one show per month]. Past experience--[if any with the show]. Participation in someone else's booth. Keep our 'influencer' shows going.

Based on the above considerations, these shows have been chosen for 20[xx]:

[xxx] [xxx]

Internal / External Newsletter

We [currently / plan to] produce [a four-page, black-and-white / 2-color / 4-color] newsletter to serve as an informational piece for internal personnel, the sales force, and key customers. It [will include / includes] sections covering each major department or organization within [Company] and a message from the executive staff. It also highlights major developments, such as [key sales stories / successful customer applications, uses, installations / significant marketing events / product development news].

Publicity Revenues

We anticipate at least $[x] in gross sales will be generated directly from our publicity, and possibly an additional $[xxx] of indirect increase in sales throughout our various channels.



[Company] Business Plan

Literature Corporate Capabilities Brochure

To portray [Company] as the leading supplier of state-of-the-art dynamic [xxx] we have developed a company brochure included in Supporting Documents.

Recommended contents for brochure noted above. Introduction / background Importantly, a distinction between the "new" [xxx] and other products. Statement of business philosophy. Statement on technology and list of "firsts." Facilities A photographic tour. Company Profile Sales--portray full selling team, including Representatives and Distributors as a savvy, dedicated support group with one overriding mission: customer satisfaction. Marketing--emphasize expertise and drive of marketing team in their role of market research, product development, new product management, etc., providing improved product ideas to the user. High-Tech Companies:

Manufacturing--In-depth view of sophisticated manufacturing with special emphasis on performance, inspection, advanced methods, capacity. Technical Support / Quality Assurance--Portray the QA and technical support staff as a highly competent and dedicated group of individuals concerned with customer satisfaction, and with elimination and / or improvement of substandard [xxx]'s. Product Development--Present super high-tech image of the R&D group and their facilities. State-of-theart image is critical. Product innovation is critical. Use photos of "secret" products undergoing tests, etc.

Sales Support Collateral Materials

[Company] has developed a variety of collateral materials to support our sales efforts. These items include:

Sell [Product name] Audio / Video Introductory Tape News Releases--List appropriate ones. Brochures

Attract & Support Distributors

Letter of Introduction Business Plan--Brief outline describing objectives, strategy, tactics to align resellers with you. Questions and Answers--Address common questions. Some Ideas--Other thoughts to be planted in reseller's minds--align their thinking with yours (collect their input from successful experiences).



[Company] Business Plan

Samples of these materials are included in the Supporting Documents. Help Distributors Sell [xxx] Presentation Binder Data Sheets, Price Lists

Trade Incentives

Allowances, Co-op Accruals, Warehouse Flushing Promotions, etc.

Marketing Responsibilities

Define who will be make these decisions:

New business development Dealer support and OEM support Sales-producing tools Corporate graphics standards Brand-name recognition Direct response promotions Telemarketing--scripts / training Product positioning and identification

Next Steps

Based on the strategic plan, decisions that must be made now include [xxx]. The information needed to make these decisions is [xxx]. Data, research results, sales results, etc. Key decisions to be made in the near term [next six months] are [xxx]. Include decisions to be made after six months, but before the next fiscal budgeting process. The information needed to make both of these decisions with confidence includes [xxx]. Primary research projects (topic, time frame, budget). Secondary research studies (topic, vendor, time frame, cost). The most sensible research recommendations are to [xxx]. List questions you need immediate answers to. Use data collected from a focus group. Before proceeding further, review the marketing strategy statements you have made so far against the following tests: Are the strategies consistent with your evaluation of the marketplace and your capabilities? Is the return on marketing investment sufficient to justify the risks? What are the chances of a competitor executing a similar strategy? What would happen? Are the strategies consistent with the political environment within the company? Have you made sure your strategies are based on facts, not assumptions? Does the overall strategy leave you critically vulnerable to a shift in market behavior? Are all your eggs in one basket?



[Company] Business Plan

Is your appraisal of the competition open-minded and honest? Is your strategy legal? (Businesses have karma too.) Is the success of your strategy based on your ability? What are the chances of failure? Have you thoroughly examined alternative strategies? Do you have a sound, logical rationale for your recommendations?



[Company] Business Plan


Progress always involves risk; you can't steal second base and keep your foot on first.

- Frederick Wilcox Before you get anywhere close to discussing ROI with your investors, you must minimize, eliminate, dissect... ALL risks. Until you remove as much risk as possible, your investors cannot even begin to think about the upside. You may sell them initially in the blue-sky possibilities of your deal, but they will likely wake up in a day or two with fear, uncertainty and doubt (FUD). The FUD-factor. Address these concerns up front and you will have been on the offensive--wait until challenged and you will forever be on the defensive. Also think about how you will use invested/borrowed capital to further eliminate or reduce risk. "I keep a list of the 10 most serious threats to the company. The lawyers hate this. It's actually called `Ten reasons we're going to go out of business.' It definitely focuses the mind as much as the prospect of imminent hanging. So we ask ourselves, If we end up failing, what will be the reason? And we go through the list. You're starting to build in what seems like paranoia, but it's really just clear-eyed objectivity. I always enjoyed it. In fact, working on the risk-factor section is my favorite part of drafting prospectuses. It lets you look at your company and say, Okay, what might go wrong? You have an obligation to be as complete as you can, so it liberates your mind." ~ Marc Andreesen, excerpted from an interview in Fast Company.

Like any operation, there is always some risk associated with operating a business. For [Company], we see our greatest exposure in the [current absence of competition / willingness of some customers to drive great distances / possibility of a sudden, drastic change in the local economy, etc.] in this area. A significant threat to our business would most likely derive from a sudden influx of competing [companies], backed by a major corporation or conglomerate, setting up multiple locations within the [city / county / region name] area. In the event of a major change in the [related market] market, we might also expect to see [some reduction in sales / some increase in sales / a shift to a different related market that would still drive sales our way...]. We feel that we are sufficiently aware of potential risks and have contingency plans in place to either minimize or eliminate them.

Business Risk Cost Structure

[Company] opened a [xxx] in [month / year]. This new [facility / division] doubled our capacity and increased our potential capacity by a factor of [x]. In conjunction with this expansion, we significantly increased our marketing expense and overhead. Although [Company]'s [product name] and [product name] products were well accepted in the market at former levels of production, there is no assurance that we will be able to continue successfully marketing our increased production. If market acceptance of our increased production slows, margins and profitability may suffer. While we operated profitably in the first [x] months opening this facility, with the period ended [Month, year] (unaudited), [Company] is unable to predict whether its operating results for the full fiscal year ending [date] will be profitable.



[Company] Business Plan

[Company] had planned to add equipment to further increase production capacity from cash flow over a period of time. However, market opportunities for [Company] products have encouraged us to accelerate our expansion plans. We believe the net proceeds from a [line of credit / loan] and cash flow from operations will be sufficient to allow [Company] to meet the expected growth in demand for our products. However, there is no minimum financing amount that must be raised. There can be no assurance that sufficient capital will be raised or that future product sales will meet our growth expectations. Should either scenario fail to occur, [Company] may elect to a) reduce the expansion to a level consistent with our former slower growth plan, or b) pursue other financing alternatives. Implementation of either of the foregoing options could delay or diminish [Company]'s ability to respond swiftly to market demand. It could also limit our growth and adversely affect our profitability.


[Company] competes with national [product type] companies, several of whom dominate the [product] market, and are based primarily in [list states]. [Competitor x] and [Competitor xx] have higher sales, and greater [financial / production / distribution / marketing] resources than [Company]. Although we believe that in [State(s)] most of the our market share has come from displacement of the brands produced by local competitive companies, there can be no assurance that competition in the future will not increase from the national brands or from present or new regionally-based [product type] companies, many of them, like [Company], [having recently completed / currently planning] significant [facility / capacity] expansions. Furthermore, if the market for [product type] continues to grow, the major national [product type] companies will likely devote greater resources to this segment.

Industry Growth

The sale and consumption of [product type] has increased dramatically over the past [xx] years and [Company] and other competing producers are increasing their production capacities in order to meet this growth. There can be no assurance, however, that the growth will continue at the present rate, or at all, and the demand for [product type] may not keep up with increases in supply. In this case [Company] may face heightened competition and be unable to sell sufficient quantities of our product(s) to maintain our revenue volume and profit margin.

Product Liability

[Company] has [xxx] Liability Insurance and will continue such coverage as long as it is available at a reasonable cost. However, future increases in premium rates could make it prohibitive for us to maintain adequate insurance coverage. A large damage award against [Company], not adequately covered by insurance, would adversely affect our financial position. Other risks that may affect your business include profit margin, seasonality, volatility of industry, product elasticity, substitution, limited suppliers, dependence on major customer(s) and the performance of your management team. To evaluate the risk factors for your business, see Elements of Risk on the following page.

Environmental Risk Economic

The economic risks affecting [Company] are [xxx]. The best strategy for [Company] is [diversification / offering numerous products or services to multiple market segments].


[Company] has secured [planning / good management / xxx insurance coverage] to protect against catastrophic events such as fire, floods or drought. Despite these precautions, a major natural disaster could affect our business by causing [xxx].



[Company] Business Plan

Legal & Government

The State and Local ordinances or zoning laws that may impact our product or production processes include [describe legal considerations that could influence your operations]. [Company] is staying abreast of legal issues facing 2002 NAICS Title through [industry publications] and [xxx].

Elements of Risk

This table shows an example of how risk may be evaluated, where it stems from, and which areas are most vulnerable. It allows you to compare your exposure, given various assumptions. This is a suggested list of risks. Add other risk elements specific to your product or organization. The total for Overall Risk should always equal 100%. Assign degrees of risk to each area; low=1, medium=5 or high=10. Next, assign a risk percentage to each area; 0% ­ 100%. The total risk percentage of all areas must not exceed 100%. Finally, multiply the element of risk factor by the weight percentage to calculate the degree of risk. The elements of risk that receive the highest totals should receive the most explanation in your business plan. You might want to insert a page break just before the heading of this section to keep your Elements of Risk Chart (below) all on one page.

Below is a table depicting a subjective set of potential risks. We acknowledge the degree of each risk on a scale from 1 to 10, its weight as a percentage of all of the potential risks, then we multiply to arrive at a total risk factor to give you an idea of the magnitude and affect each risk has on our business: Degree of Risk (1-10) Weight (%) 15% [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] 100% Total Risk Factor 45 [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x]

Business Risk

Cost Structure Competition Industry Growth Product Liability Profit Margin Seasonality Complementary Industry Substitution Suppliers Customers Personnel & Management 5 [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x] [x]

Environmental Risk

Economic Weather Legal & Government Overall Risk



[Company] Business Plan


As you can see, the greatest risk [Company] faces is in the area of [xxx], [xxx] and [xxx]. What we have / plan to put in place to offset/eliminate/reduce these risks is [xxx].

OK, the risks are out of the bag, talk about what you can do about it. This proves that you have the guts to look at them , you are honest enough to acknowledge them to your investors, and if another potential risk is thrown on the pile, perhaps by an investor, you have already demonstrated your ability to be realistic which may convince that you can also adeptly handle the [email protected]#$%& they just threw at you... List information to support your risk assumptions.



[Company] Business Plan


Headquarters / Office Location

While gathering our research with [xxx--type of business] businesses nationwide, we discovered that [note special customer requirements], and that an easy way to address this issue was locating our facilities and sales staff in [technology centers / major cities / outlying areas / the financial district / industrial parks / an area with a high concentration of youthful, web-savvy gamers, etc.], where [business customers / consumers / online gaming enthusiasts] can [meet face to face to discuss contracts / drop in for a tour and demo / connect by phone with live support staff / come in and test our technology with their own applications to ensure compatibility prior to final negotiations / be drawn on for support and development positions, etc.]. We also found that other items were of great importance to our customers and prospective customers as well, including:

Customer requirement 1 Customer requirement 2 Customer requirement 3

With [Company] headquarters located [in / near / away from] the [downtown / business district / xxx] we can [provide ready access / keep overhead down / include extra, affordable space for xxx servers / accommodate anticipated growth / ensure optimal environmental conditions / incorporate the necessary space for xxx / provide easy freeway exit and return for customers arriving from the airport...]. This is important to our customers because [xxx]. Future office locations will also have to provide this [convenience / access / low overhead / space] to meet growing demand and continue to provide the [xxx] customers will have come to expect. Our building is [a new structure / an older building, recently retrofitted to support xxx / in the high-tech xxx Business Center] meeting our requirements for [system expansion / broadband connection and availability / 24/7 guaranteed environmental control / proximity to other businesses / telecommunications connectivity through xxx / xxx]. This is important to our customers, as they count on us for [high availability / scalability / always-on access / xxx]. This setting meets our criteria for xxx, xxx and xxx, and appeals to our customers because xxx. Our choice of an area where we would have [a free-standing building / plenty of space / no shared-space constraints / lower overhead...] allows us to [take advantage of customers drawn by marketing from other businesses in the complex / keep unique business hours responsive to customer requirements / contain our own advertising costs / participate in cooperative advertising and promotions...] Since our building is very much a part of what we offer our customers, we have carefully shaped our overall presentation to the community. By working with a designer familiar with both the markets we serve and the clientele we want to attract and hold, we have created an environment that appeals strongly to our customers. It gives both new and returning customers a feeling of [being part of our xxx community / comfort and relaxation to conduct their business with us / their specific business needs being recognized, acknowledged and addressed / being happy to refer friends and associates or to bring friends and associates with them to our offices]. By taking the attributes of our building and location fully into account, we have created a comfort level for our customers (and employees) that encourages [a short, smooth sales cycle / long-term relationships /



[Company] Business Plan

service and relationship expansion as their businesses grow / them to refer us to friends, associates and colleagues].

Information Technology

"Technology Stack" We want you to be aware of this techno BS/jargon and not look like a cow staring at a new gate if/when an investor asks, "So, what is your technology stack?" A company's "technology stack" runs from storage devices to databases (for example, OS 390 databases like IBM's DB2 or distributed systems databases from Oracle, Informix, Sybase, or Microsoft) to application servers (like the Windows application server and systems for ERP, ecommerce, e-mail, and back-office services). Analyst Susan Aldridge of The Patricia Seybold Group uses the metaphor of a relay race to describe the functioning of the technology stack. The point of the race is to pass the baton smoothly from runner to runner -- that is, from storage device to database to application server. Describing your company's "technology stack" can be akin to bragging about your stereo/sound system... "We use an xyz CD player into an abc pre-amp with an xyz power amp out to four JBL monster speakers and a CV sub-woofer..." "IT infrastructure" is another beauty ­ Information Technology infrastructure can be a bit much for most businesses who use a couple of PCs or Macs to manage their accounting, inventory, customer database, and maybe your website and graphics development...

[Company] provides services that rely [relatively little / somewhat / significantly] on technology. Our primary technology focus is [the computers on which we keep our records and host our website, at [Web Address] / the xxx that we use to carry out our service / state-of-the-art xxx to maintain a front-runner position among competing services]. The company plans to utilize open source technology to build its ecommerce system and IT infrastructure. We [are using/plan to use] a LAN of Macintosh/HP/Compaq/IBM/Dell desktop PCs connected through a Airport/Cisco/Linksys wireless router system. We back-up our data daily to our network server as well as to iBackup online storage systems. The website serves as an [information / marketing / sales / communication / collaboration] tool more than anything. Customers can [request services / view their account details / request information / order service instructions] online. We [have / have not] built in a payment transaction mechanism, as online sales represent [a significant portion / a small portion / no portion] of our business. We decided to [take advantage / pass on the option] of hosting a website, as it [does not fit / provides a critical element] in our business model. The most important aspect of our [online presence / lack of online presence] is that [a key function (say scheduling) can be handled by the individual customer on our / we have no ongoing expense or the headaches associated with maintaining a] website. We believe having a web presence is [very important / of no importance / somewhat important] because [provide the reason for your stance].

iBackup is a secure, online storage/ backup, remote access and sharing solution for consumers and businesses with a unique combination of backup and storage functions. It's a pretty good deal for just few dollars/month. Learn more about iBackup here. Google's technology stack, the distributed file system Google uses to drive its services (think 300TB on 1,000 machines). Google uses clusters of low-end PC hardware and lots of high-end network hardware to achieve the high availability and responsiveness that we have all come to expect. The Google philosophy can be expressed in five general principles: Work on things that matter, affect everyone in the world, solve problems with algorithms if possible, hire bright people and give them lots of freedom, and don't be afraid to try new things. As a general practice, Google also



[Company] Business Plan

requires that its engineers spend 20 percent of their time working on personal technology projects unrelated to their primary projects. Running through the five principles, "work on things that matter" and "affect everyone in the world" go hand in hand. In a corporate IT environment, applying these lessons means staying focused on issues that need to be solved and solving the issues that have the broadest impact on your employees and customers, which is "the world" being served by corporate IT. These are common sense principles, perhaps, but worth stating explicitly. The most intriguing principle might just be the one about solving problems using algorithms. Expressed more generally, this tenet suggests that repeatable problems should be solved with defined and repeatable processes; put more simply, automate what you can. From a corporate IT perspective, this means constantly evaluating business processes to see where you can apply IT strategically to make your organization more efficient, accurate, or just plain nimble -- take critical but mundane tasks and automating them so employees can concentrate on tougher issues requiring focused human thought. ­ [the last 4 paragraphs were] excerpted from an article written by Chad Dickerson, CTO of InfoWorld.


As much as I want to promote and support America, I must advise you that most investors and lenders expect you to be outsourcing your manufacturing to China. (..hate to say this, but we must do what we can to assure our success and return to our investors.) It's just cheaper and getting cheaper every day. There will be more for Americans to do--we just need to rethink, rekindle and reconnect... American jobs are created everyday as a result of doing business with China. More and more entrepreneurs are able to set up their own businesses because of the great pricing overseas. We have just made an evolution from the factories to the office.

The Company has numerous sources for product manufacturing--Including both domestic as well as offshore sources in China. (We [must/are] set up this way to both minimize our costs and allow for the flexibility of rapid production without the long shipping lead time from overseas if/when needed... The factory monthly production capacity is [xxx] units per day, [xxx] units per month. Production can be ramped up within 6 months to [xxx] units per month if needed. We have audited our production lines in China and have verified that they are capable of manufacturing the product to our standard, and we are only using ISO 9002 approved factories to assure consistency. The factory we which we have our alliance has all of the necessary approvals for our products: UL, FDA, CE, ISO, Child Labor Compliant, etc. They are located near the Shanghai/Ningbo/Hong Kong port for convenient exportation. We have completed our engineering phase and have finalized our specification drawings. We have submitted our AUTOCAD specifications to three factories for mass production prices and leadtime estimates. Our prototype of the [product] has been shipped to [ChingTao] for assuring sample production accuracy and estimating price and lead time for tooling, production, and shipping. Our product does/does not require new tooling to create custom molds. We have a contract with the factory states that we own all right, title and interest to the molds, and they are only to be used for our products on our orders and we have the right to retrieve or relocate these molds at any time that we see fit. The lead time to open the mold tooling is 35 days, then we will see the first sample and make any needed modifications.

This is standard lead time for Injection molding tools, simpler tooling can be completed in 5-10 days



[Company] Business Plan

Three plants with 735 workers [will be/ are available to / are busy] working to produce [xxx] units by [date]. Our samples are being built in our main China facility--the completion date is set for [date]. Once samples have been evaluated and approved we will authorize full production to begin. The standard production time after a confirmed purchase order is 2 weeks to procure the raw materials, 1 week to schedule in the production, 1 week of actual production time. 4-6 weeks total. To minimize shipping costs we will ship by Ocean freight in either 20ft or 40ft containers. Shipping time from the factory completion date is 30 days by Ocean or 5-10 days by air freight. Payment terms have been negotiated as Net 30. (Which means 30 days from invoice issue date)

Payment terms for Asian manufacturing are generally 30%-50% paid up-front at time of purchase order and the balance payable at time of/before shipping. Better terms of Net 15, 30, and 60 days can be negotiated as you build up the relationship of trust. Most factories also welcome a Letter of Credit payable at sight or 30, 60, 90 or 120 days. Ralph Thompson, CEO, Novus Technologies in Salk Lake City, UT, manages product development and offshore manufacturing through relationships with more than 29 factories in Taiwan and mainland China. (We're building karma points with Ralph!) [email protected]


The manufacturing facility [is / will be] located in [xxx]. This location [provides / will provide] necessary space for [initial / current] production and expansion to meet projected demand over the next [xxx] [weeks / months / quarters / years]. Our current production capacity, including internal and external production, is [xxx] units per [day / week / month / year]. Due to anticipated increased demand for up to [xxx] units per [week / month / year], additional facilities will be needed by [month], 20[xx]. Selection of the future site includes the following considerations: 1) Sufficient available space, at a reasonable rate, plus the costs associated with moving / expansion Land and construction costs Transportation cost and route access: common carrier, company owned, pooling agreement with [x] freight forwarders Risks and insurance Packaging and material costs and availability of / proximity to (suppliers / customers / resellers) Labor pool availability, skills, costs Local ordinances, licensing, and permit requirements Government assistance (roads, training, exemptions, etc.) Government restrictions and requirements (OSHA, NLRB, etc.) Community attitudes toward business and manufacturing Continued operating costs (utilities, communications, etc.)

Additional Space Requirements

The new equipment to be purchased will require additional [office / production floor / materials storage] space. To meet this requirement, management is considering:



[Company] Business Plan

leasing additional space in a unit adjacent to the present facility moving the entire facility to a larger facility moving the administrative offices out of the current facility and leasing office space elsewhere for management and administrative staff .

The best option for [Company] is to move our offices [down the street / to [City] / upstairs]. The new office space is approximately xxx square feet. The terms of the new lease are $[xxx] per month for [xx] months, and should meet our needs for at least the next [xxx] months..

Before you talk about buying real estate, either be sure you are getting an extraordinary deal on it or consider that you are not in the real estate business and demonstrate to investors or lenders that you can make a shrewd deal on a lease.

The acquisition cost for land and improvements is $[xxx], which will be allocated in [xxx] increments over a period of [xxx] years. [Company] already owns / has access to / requires [xxx] of additional [land / storage space / assembly space / shipping and receiving ] and supporting staff. Within our facility, an efficient production process hinges on proper layout of [xxx].

It may be helpful to include a layout of the proposed plant and manufacturing flow chart in Supporting Documents.

Equipment will be deployed as follows:

List equipment, number, capacity, space requirements cost, etc. Provide rough illustrations of equipment layout and process flow diagrams.

This equipment is used in the processes as described and configured above to ensure that yields, leadtimes, and costs stay on track to provide projected gross margins.

Additional questions: Where will distribution centers be located? What packaging and handling equipment will be used and who will supply it? What special equipment, if any, will be needed? i.e. trucks, tractors, etc. Will warehouses be used? If so, where and what size? What inventory levels will be carried? Equipment? Labor? Competition?


Line employees include [xxx] specialists and [xxx] general production labor. Staff employees include [x].

List current and required number of people and their skills.

How and when will they be trained? Who will hire and manage them? Discuss procedures and measures of effectiveness and productivity. To protect proprietary interests and information, the following policies will be enforced (work with your attorney to develop this section).

See AgreementBuilder for a Non-disclosure and Non-Compete Agreement.

Packaging & Transportation

These last steps in the manufacturing process are important in establishing the desired image for the consumer. Of the standard packaging treatments available, the best choice for [Company]'s needs will be [custom boxes / bubble pack / shrink wrap / poly bags...]. Since this is a readily available form of packaging and a simple packaging process, considerable savings can be realized.



[Company] Business Plan

[Type of packaging] is more widely used, but in order to convey [a unique selling image / strong market position] we [are considering / will begin / have begun] using [describe the type of packaging]. Our competitors use [type of packaging] as well, but by using distinctive graphics, [photos included in Supporting Documents] we maintain our unique identity.


Fulfillment is an important part of customer satisfaction. [Company] utilizes [our xxx group / an external resource, xxx] to monitor and manage the delivery, billing, warranty service and repair of our products. This helps to ensure customer satisfaction and repeat sales. To improve operating efficiencies, we plan to use [fulfillment company name] as our fulfillment company. Their facility is "state-of-the-art" and their customer record is excellent. By outsourcing this function, we can avoid hiring additional internal employees, or expanding our telephone and computer systems. We will also save on shipping costs due to the higher volume discounts [fulfillment company name] earns serving multiple businesses from one location. During the past [xxx] [months / years] this [group / vendor] has demonstrated outstanding ability to [xxx]. Their capacity is sufficient to handle our anticipated fulfillment needs for the next [xxx] years. Transportation will be via [truck / train / air cargo].

How does your product ultimately reach your customer? How many steps are involved? What is the weakest link in your transportation / delivery chain, and how will you address that? If using your own fleets, will the vehicles carry the same quality graphics as the product itself? Is this the method your competitors use?

Comparative costs show that [xxx].

How do your packaging and transportation costs look in comparison to the competition?

Shipping Terms

F.O.B. Origin (Freight On Board) means that customer takes ownership the moment the product is put on the truck (origin), and pays for shipping and insurance, etc. F.O.B. Destination means that customer takes ownership after the product has been delivered. (at the destination) The shipper pays for shipping and insurance, etc. and is liable for the product until it has been delivered and signed for. Since 20[xx], [Company] has managed its shipping department as a profit center. [Company] products are shipped to our [distributors / end-users] via [F.O.B. Origin / F.O.B Destination / F.O.B. Buyers Factory / Other]. We use the following as our primary carriers:

Ground: Second Day: Overnight: [x] [x] [x]

During the last [period of time] we have taken advantage of several discount programs, including [xxx] to lower our average shipping costs by [xx]%. Future volume increases will allow us to take advantage of the following discounts, [list potential discounts], thus further lowering our average shipping costs. Our shipping department provides other unique services, including:



[Company] Business Plan

[List services] Xxx Xxx xxx

Customer Service

Our customers emphasize that service and support are among their major concerns. They are constantly impressed with the support we provide. Hot-line service is currently available to all registered customers enrolled in a maintenance / support program. We intend to provide free pickup and delivery for customers in the [xxx] areas by using [our own trucks / couriers]. The purpose for this service is to assure customer satisfaction and loyalty, allowing us to increase sales and maintain a high profile within our service area. Another value-added service is providing customer inventory warehousing. This allows us to book larger orders and provide faster order response. Support to manufacturers' representatives will allow them to perform efficiently as a sales force. We intend to treat the manufacturers' representatives as an extension of the [Company] direct sales force, and they will be given the same support as [Company] internal sales staff. Technical backup to OEM support groups is currently supplemented by [Company]. The OEM staffs respond to the needs of their customers, and when they encounter a support issue that requires more information, they direct their customer to [Company] or they may contact [Company] to obtain the necessary information. Technical support to marketing and sales functions will be strengthened. Pre- and post-sales situations involving the application, presentation, and demonstration of [Company] products will be supported by staff.

Returns & Adjustments Policy

Customer satisfaction is a high priority for [Company]. One of our goals is to make our product(s) so good that there are few, if any, returns. Still, we recognize the fact that however good our product is, there will be times when it simply does not meet the needs of some customers. To ensure a positive experience and image in the minds of these customers, we offer a money-back guarantee. Our objective is to make our customer service so good that even if a customer decides to return a product, we will retain that person as a loyal customer, who will refer friends and associates, and make other purchases from [Company] in the future. At this time, general trade customs for handling returns are [describe how returns are generally handled]. We will use the following policies: "If for some reason [product name] is not right for [you / your business] you may return it for a full refund within 30 days of receipt of product. You must call [customer service phone number] for a Return Merchandise Authorization number [RMA#]. Refunds are made only on the price of the product, plus applicable taxes we collected at the time of purchase. Shipping costs are not refunded." "Credit card refunds are credited directly to the credit card you used to make your purchase. Refunds for cash / check payments are made by check within 30 days of receipt of returned merchandise in saleable condition, accompanied by the assigned RMA#." We intend to [follow / depart from] industry custom by implementing a returns and adjustments policy that will [explain your plan and how it will work]. Our reasons for [following / departing from] customary



[Company] Business Plan

procedures are [give reasons--advantages, benefits for you and your customers].

Here is an optional section you may want to include with your business plan--either directly as part of the main document or as an addendum. Many investors, lenders and grant resources are looking for companies taking an active part in environmental sustainability.



[Company] Business Plan

Environmental Sustainability

Zero Waste & Greening Benefits

Many leading businesses are realizing that waste is really lost productivity and the reduction of waste can have considerable impact on the bottom line. We at [Company] are conscious of our ability to create business value by pursuing the sustainable management of materials and processes. We view waste of all kinds as an opportunity to improve efficiency and become more competitive. Sustainability takes into account the waste stream, greening, as well as economic sustainability. The Cost of Waste In all kinds of businesses, there are two types of cost associated with waste:

waste disposal costs `hidden costs' associated with the generation of waste

Hidden costs include staff time from unproductive waste management work, storage and cleaning up costs as well as the materials bought that are written off as waste. Putting a dollar value to these costs can often produce quite surprising figures. Research indicates that waste disposal commonly only represents 10% of the total cost of producing waste, when all these extra 'hidden' costs are included. Since waste is a sign of inefficiency, the reduction of waste usually reduces costs.

Hewlett Packard in Roseville, CA reduced its waste by 95% and saved $870,564 in 1998. Epson in Portland, OR has reduced its waste to zero and has saved $300,000. Interface, Inc. in Atlanta, GA has eliminated over $90M in waste. Xerox Corp., Rochester, NY has had a Waste-Free Factory environmental performance goal since the early 1990s. The criteria include reductions in solid and hazardous waste, emissions, energy consumption, and increased recycling. Savings were $45M in 1998.


[Company] supports all three of the generally accepted goals of sustainability - economic well-being, environmental protection, and social well being. Economic well-being is improved by enabling organizations to identify inefficiencies in processes, products and services and thereby to find cost-saving solutions to them.

Waste Reduction = Improved efficiency and lowers costs Costs of compliance with regulations is reduced

Environmental protection is enhanced by reducing (ideally to zero) hazardous and solid wastes to nature and by reducing the need for energy generation and hydrocarbon extraction.

Reduces demand for resources and energy from nature Reduces wastes to nature

Social well-being is enhanced through efficiency improvements that allow more resources to be available



[Company] Business Plan

for all. In addition, more complete use of "wastes" will create jobs in return logistics and reprocessing activities.

Waste managers become resource managers Opportunities in return logistics New products from recovered materials

The International Standards Organization (ISO),, has created the standard ISO 14001 to measure Environmental Management Systems (EMS) of an organization, which takes into account the environmental impact of manufacturing processes. Some companies have added an SMS module to the ISO 14001 standard to establish an international standard to measure Sustainability Management Systems (SMS) of an organization, which addresses amount of waste generated, economic sustainability, recycle material use and impact of product and packaging on landfills. The main considerations for EMS and SMS standards are:

Materials ­ non-hazardous to employees and consumers Packaging ­ recyclable and minimal Manufacturing processing chemicals ­ non-hazardous to employees and to environment Energy ­ efficiency, decrease reliance on petroleum generated energy Economic sustainability ­ includes organization providing livelihood to employees and associates, as well as community in which organization thrives. The LEED Green Building Rating System® ( is a voluntary, consensus-based national standard for developing high-performance, sustainable buildings. Members of the U.S. Green Building Council representing all segments of the building industry developed LEED and continue to contribute to its evolution.

While the above standards deal with manufacturing systems, the LEED (Leadership in Energy and Environmental Design) standard was created by the US Green Building Council to certify the use of recycled and non-toxic out-gassing materials in buildings, as well as building energy efficiency and accommodation of solar passive or alternative energy generating systems in the design.

Design for Environment

Up to 70% of a product's environmental footprint can be influenced at the design stage. Design for Environment (DFE) is the process of designing products and product systems to minimize environmental impacts over the total product life cycle. Most environmental impacts are "locked-in" at the design stage, which is when key decisions are made on materials, manufacturing methods and how the product will be used and operated. Addressing environmental impacts at the design stage can produce solutions that are likely to be environmentally positive and cost effective. Four strategies for designing innovative products with minimal environmental impact are:

Efficient Design - Keep resource consumption & input to a minimum Safe Design - Avoid toxic substances in materials or processes Cyclic Design - Design so materials can be continuously cycled through industrial or natural systems Communication Design - provide accurate, relevant, informative and verifiable communications

Presenting design solutions that address sustainability in production and consumption both today and in the future is a realistic and achievable goal. Industry, the community and government need to continually work together to initiate change and to motivate us to rethink the way we produce and consume products, so that we tread more lightly on our planet. Through innovation in product design we can avoid waste and



[Company] Business Plan

can avoid toxicity going into landfill, as well as drive manufacturing efficiencies and improve the quality of products. Efficient Design Keep the consumption, or input, of resources (materials, energy and water) to a minimum by doing more with less. Design products which:

Avoid unnecessary components Use the minimal amount of material necessary e.g. through light-weighting Use minimal energy in production and use Use renewable energy wherever possible Use minimal water in production and use Do not require disposable consumables during use (e.g. filters, cartridges, batteries)

Safe Design Avoid toxic or hazardous substances in materials or production processes. These can be a risk to the health of workers who make the product, to the consumer who uses it, and to the natural environment that must deal with airborne, waterborne or solid wastes during the lifetime of the product.

Avoid pigments, inks and dyes that utilize heavy metals (e.g. cadmium, chrome) Avoid processes that generate emissions of volatile organic compounds (e.g. solvent based printing) Avoid finishing processes that produce toxic wastes in production (e.g. chrome plating)

Cyclic Design Design products so materials can be continuously cycled through industrial or natural systems. This avoids waste.

Design products which can be reused for their original purpose or an alternative use Design products which can be remanufactured (e.g. electrical and electronic goods, furniture) Specify recyclable materials for which there are readily available collection systems Keep to a minimum the number of different materials and components to assist recycling Allow for different materials to be easily separated for recycling Where appropriate use a biodegradable material (e.g. paper or starch-based polymer)

Communication Design Ensure that product-related environmental communication is accurate, relevant, informative and verifiable. Encourage responsible purchasing and consumer behavior by:

Designing the consumer interface on appliances to encourage the selection of efficient options Providing information on appropriate disposal, reuse or recycling options Using appropriate logos and labels (e.g. polymer identification codes, recycling logos)

Because of its visionary endpoint, Zero Waste and Greening strategies lead to breakthrough improvements as opposed to small step-by-step actions. This not only results in significant cost savings, greater competitiveness and reduced environmental impact, but also will move us more quickly toward environmental sustainability.




[Company] Business Plan The Green Alliance assists businesses to reduce waste as well as costs through improving materials efficiency. Maintaining a level of production while reducing waste involves rethinking production systems, relationships in supply chains and how industrial raw materials are packaged and transported as well as introducing recycling systems. Green Alliance: Indigo Green Bioneer:

Green-Mary: GreenHome:



[Company] Business Plan

Present Situation

Describe the current condition of the business--a present-day "snapshot." If you are in the concept stage, tell what you are doing now to build the foundation of the business. Here is where you tell investors and lenders what you have accomplished so far. Clearly describe the one current, dominant driving force behind your business: Product / service offered? Satisfying a market need? Manufacturing? Profit and income? Technology? Client / customer base? Briefly take stock of your present situation regarding all of the following areas--one to two pages should be sufficient.

This section provides a snapshot of [Company], as of [your plan date--month and year].


[Company] was founded in [Year Started] and is presently in its [start-up / R&D / growth / maturity / decline] stage. [Company] can best be described as a [product-based / manufacturing / xxx technology / retail / sales and service] business, serving the [identify the market your business serves]. At this time, our greatest strengths are our [market-leading product(s) / first-class customer service / state-of-the-art technology / strong management team / innovative marketing / explosive sales--list your top three strengths].

Take a couple of additional lines to elaborate on this description if you feel it is necessary. There are some people who live in a dream world, and there are some who face reality; and then there are those who turn one into the other. ~ Douglas Everett ~

Market Environment

The marketplace [has been undergoing rapid changes / has maintained consistent growth / has been stagnant] for [x] years. We are now poised to [describe what you plan to do in response to this market environment].

Be sure to describe time factors influencing your ability to make money with current products.

Products & Services

At present our [product] is in the [design / early development / test market / introductory / established / mature] stage. Our current [product line / related service] needs [expansion / reorganization / upgrades / paring down / an infusion of capital to xxx].



[Company] Business Plan

Pricing & Profitability

Current prices are [stable / eroding / increasing / fluctuating significantly among competitors] and profits are [holding / eroding / increasing]. As we [anticipate / have traditionally enjoyed] a [xx]% gross margin, and costs are [expected to remain stable / skyrocketing due to xxx / plummeting due to a glut of xxx in the supply chain].


Current customers are using our [x] for [uses / applications]. They are requesting that we [make improvements / add specific features / add safety mechanisms / provide simpler, easier-to-use models / introduce a new model].


We have [x] distribution center(s), and [wholesale distributors / retailers, manufacturer's representatives, sales people] working out of [x] offices, with [storefronts / superstores / territories] in [x] [cities / counties / regions / states / countries]. Our primary distribution channel includes the industry's top distributor(s), [Distributor 1], [Distributor 2] and [Distributor 3], and approximately [x] retail stores. [Company]'s marketing strategy includes [plans to sell / selling] our [product(s)] through several channels. We will be driving our [lower margin / high margin / specific product name / complete line of] products through [key distributors, Distributor 1 and Distributor 2] OR [xxx product line] through [our online showroom / home shows / individually-selected retailers / direct mail promoting retail channel resellers / extensive advertising with publications that provide fulfillment in exchange for ads and part of the proceeds--whatever you're doing in available distribution channels].


Most of our management team is in place, however, we [require / will need to hire] a [Finance / Production / Marketing / Sales, etc.] [executive / manager] to complete our team [immediately / by (month / year) / prior to obtaining financing / upon securing financing] and support our strategy moving forward. Additionally, we are currently seeking [xxx employees] to fill openings in [list areas where new hires will work].


[Company]'s technology is [up to date / nearing obsolescence / old and needs replacement]. The Company operates and maintains its own Web site and Web server, co-located at [xxx] in [City], [State]. The Company recently switched to the [osCommerce/ecommerce software] shopping cart now hosted on the [Company] server and integrated through [Trust Commerce/credit card processing company] for credit card transaction management, as well as electronic fulfillment and integration with [Company]'s physical fulfillment house (Gung-Ho). We reduced costs from $xxx/mo (@xx% of all direct transactions) to flat cost of $xx and restricted future transaction costs to [2.35]% + $.20 / transaction, dramatically improving profits as the Company ramps sales.



[Company] Business Plan

Financial Status

Working Capital is generally current assets minus current liabilities. "Quick capital" is cash plus receivables minus accounts payable. Summary data from your financial statements should be entered below. Please refer to the Financial Model or Statements you are using for this project.

Our complete financial status is provided in detail in the financial statements that accompany this plan. For easy reference, we have included financial highlights here: Current cash available is $[x]. Our Current Ratio is: Assets / Liabilities = [x]. Our Quick Ratio is: xx

(Cash and Equivalents + Accounts Receivable + Notes Receivable) divided by Total Current Liabilities = [x].



[Company] Business Plan

Capital Requirements

"Experience is wonderful ­ it enables you to recognize a mistake when you make it again." Remember what we said earlier ­ ask for enough! Respect the money. No one is so rich that `they don't care about money..."it's nothing to them..." The more wealthy people become, the tighter they seem to be. You must respect their $$$ more than they do if you want them to invest in your project. Remember that investors want their investment paid back first! The profit is gravy, but be sure your mantra is all about returning their initial investment to them asap.

Capital Structure

[Company] is a [State] [sole proprietorship/LLC/LLP/C-Corp/S-Corp]. The largest shareholder is CEO [Owner/Founder], who contributed his/her intellectual property ownership of [product/patents/sole proprietorship] and currently owns x% of the Company. The other largest shareholder is co-founder [Founder 2] who currently owns x% of [Company]. The Company will be structured to enable a generous Incentive Stock Option Plan for employees, contractors, advisers and directors. The Company has been operating with limited staff and financial resources. With funds generated from operations it has successfully funded [initial/partial/extensive] product development and related patent filings, established manufacturing relationships and has cultivated a blue chip customer list and accelerating sales pipeline. Revenue projections for 2007 and beyond reflect the leveraging of this [beginning/strong] foundation.

Financing Plan

Through 2004 [Company] has funded itself from [internally generated cash / borrowings from the founder's personal credit lines]. Commencing in 2007 the Company has arranged for accounts receivable and inventory financing from two [State] banking institutions that, combined, will be adequate to fund the working capital needs of the Company for 2007 and into 2008. [Company] is seeking an initial equity investment of up to $x00,000 at this time. This equity investment will allow the company to build its management team, expand its operations and accelerate its sales and marketing activities. The Company anticipates an additional professional Venture Round of between $x,000,000 and $x,000,000 in early 2006 to allow for further market expansion.

Financing Requirements

The [initial / first year / total] capital required is $[x]. We require additional investments of $[x], $[x], $[x] and $[x] in [years / months], [years / months], [years / months] and [years / months] respectively, to enable us to increase our production capacities and meet market demand.

Describe the operating requirements for the five years you have projected in your financial statements. Your operating working capital is defined as your cash in the bank, plus accounts receivable, plus your inventory, minus your accounts payable; this can be calculated for each of the five years from the values on your Balance Sheet for years 1 - 5.



[Company] Business Plan

For more information on estimating working capital, see the Working Capital and Operating Working Capital discussion in the BizPlanBuilder Handbook of Business Planning or on the JIAN website.

After analyzing our working capital, we estimate our operating working capital requirements to be $[x], $[x], $[x], $[x] and $[x] for years one through five, respectively. We will need to borrow $[x] to finance working capital for a period of [months / years], with the remainder to be financed through cash from operations.

Recap the total short-term and long-term loan requirements for the five-year period, and for each of the five years.

In order to purchase [additional facilities / equipment / inventory], an estimated total of $[x] loan financing is required for the five-year period ending [month / year]. The annual requirements for each year are estimated at $[x], $[x], $[x], $[x] and $[x] respectively.

Discuss the level of safety for this loan or investment.

The level of safety is [normal / low / high] for this [industry / type of investment]. Our confidence in achieving the attached financial projections within [x]% is [high / average / 90%]. In addition to the operation of the business, additional protection is provided by [x] as collateral. In a [worst case / liquidation / unforeseen] situation, the realizable value of the collateral would be $[x], reducing the amount "at risk" to $[x]. With a projected return of $[x], this represents a return of [x]% of the amount `at risk'.

Use of Proceeds

Describe specifically how the loan and / or line of credit funds will be used. Where will the money get you? Investors want to see their money build a complete phase of a business ­ get the drug to clinical trials, the airplane to FAA certification, restaurant up and running for 6 months... the idea is that by achieving a certain milestone, your company now has a new story to tell the next level of investors, or it could be sold at a significant increase in valuation ­ the pump is primed and the business can continue. This is an important concept to understand and be able to sell investors.

The [loan / equity investment] proceeds will be used to [purchase / buy / build / develop / gain / acquire / finance] [equipment / facilities / property / working capital]. This will enable the Company [complete the prototype, file our patent / launch the product into the retail channel / complete the integration of all of our products onto the web]. Use of Proceeds Product Development Inventory Direct Marketing Campaign & Publicity Administrative Expenses Working Capital TOTAL Minimum $300,000 1,200,000 1,500,000 250,000 500,000 $3,750,000 Maximum $600,000 2,000,000 5,000,000 400,000 2,000,000 $ 10,000,000

These expenditures are best estimates and may be subject to change if management determines that it is in the best interests of the Company to reallocate its resources.

List your actual uses for the money in priority order.



[Company] Business Plan

Another way of presenting your Use of Proceeds is to use the table below (it is linked to the Comprehensive Financial model on the Use of Proceeds tab, at the bottom.) If investors were to put more in, they would finance the further depth and breadth of development. They should be set at stages of evolution (prototype, roll-out, expansion) ­ each level brings the company a higher valuation. The farther you go, the more value you will build -- where is the optimum investment point for you and your investor(s)? "Fund our operation for X months. This is what we can do..."

Use of Investment Proceeds Start-Up / Expansion Costs Product/Service Development Production & Inventory Marketing & Sales Additional G & A Capital Equipment Working Capital Total $ $

9 months

12 months

18 months

24 months

- $ 843 250 1,093 $

- $ 843 300 1,143 $

- $ 843 500 1,343 $

843 500 1,343

Detailed Use of Funds

1) Hire key management to oversee product development. 2) Eliminate / minimize potential risks if possible. 3) Buy top ranking in search engines (Google & Overture) for select key words/phrases. 4) Fix minor software problems causing unnecessary technical support calls. 5) Begin extensive PR campaign $x-$xk/month. 6) Conduct detailed focus group research to determine additional product requirements. 7) Technology phase 1 development of the [xxx] ­ (Prioritized specifications available upon request.) 8) Expand capability for seamless integration of the entire `suite' of tools. 9) Integrate [product/service] into new system. 10) xxx

Insert your summary financials behind this page in your printed plan. Find the financial model you want to use in the lower left of the navigation menu ­ click to open the folder, then RIGHT-click to open and add the model to your plan.

Financial Models

Financial models for [Company] follow this page, demonstrating the viability and expected profitability of this business. We feel strongly that these numbers are a [conservative / representative / very optimistic]



[Company] Business Plan

assessment, and intend to re-evaluate [monthly / quarterly] until we have established clear trends upon which we can base future projections.

The amount of money you need in a Series A round basically gets you to the next point on your Roadmap. Basically, how much do you need to reach a certain set of pre-established milestones, whether those are product, sales, growth, or whatever based. Then you look at the Series B and C rounds. Also, is your exit strategy IPO or Acquisition? Who is buying other companies like yours in this space, and while you're at it, EXACTLY what space are you in. VC's are generally 'Pigeon Holers', and if they can't figure out what you do in about 15 seconds, they will typically lump you in with something they think is close, but more often than not, they're way off. Nevertheless, that's your challenge to address! OK, this is where the case you've been building counts ­ the story you've told, the data and evidence you have collected, your business model and strategies all build to the crescendo of substantiating your financial assumptions... the numbers that drive all the others are the ones that must make complete sense (the rest is arithmetic). You may need to review parts of your plan to further build the foundation for some of your assumptions. "Conceal a flaw, and the world will imagine the worst." - Marcus Valerius Martial



[Company] Business Plan

Financial Plan

Extraordinary yet Realistic Projections "Many budding entrepreneurs fail to actually look at their proposition from the investor's (or even the banker's) point of view. Investors will take the following approach: "If I put X dollars in today under the following assumptions, will I end up with 10X dollars at a certain period in the future?" Your projections need to show that a tremendous return is possible, to compensate for the risk; yet the projections need to be based on numbers that are realistic." ~ Ken Wilcox, Executive Vice President & Chief Lending Officer, Silicon Valley Bank As you started this project, you were asked to select the financials you would need for your plan. You will use those completed documents to proceed with the next section of your narrative. Valuation: Valuation is very important, but don't obsess over it, or be penny-wise and pound-foolish. You must give credit to the value added by your angel or venture investors. Everyone gets a piece of a much larger pie than you would without your investor's money and experience. Never discuss valuation in your business plan. For a more detailed overview of the Financial Plan, refer to the BizPlanBuilder Handbook of Business Planning, or visit our website for more answers. Recommended Reading: "Are Your Financial Projections Believable?" (Excerpted from Business Black Belt by Burke Franklin), in the Resources Section of BizPlanBuilder:

"Show me something I can believe."

~ Common Venture Capitalist sentiment

[Company]'s financial plan consists of profit(loss) projections by month for 12-months, by quarters for years 2-3, and by years for years 1-5. Likewise, we include a detailed budget, cash flow projection, projected balance sheet, and a breakeven calculation. Our worksheets also include a detailed headcount and space requirements analysis (indicating who is paid from investment/loan funds and when they switch over to being compensated from operating cash flow). Other financial models provided include:

Detailed Expansion/Start-up Cost worksheet summarized to the Uses of Funds page. Revenue/Demand Model indicating possible market segments, total available market and projected penetration, including product lines and pricing. Sales Assumptions with allowances for future changes in product/distribution channel mix as well as seasonality effects. Comprehensive Ratio Analysis Detailed Sensitivity Analysis showing best/worst case scenarios. Together these form a reasonable estimate of your company's financial future. More importantly, however, the process of thinking through the financial plan will improve your insight into the inner financial workings of your company.


Describe the assumptions you made to develop your financial statements (your business assumptions, not the numbers you entered into the financial spreadsheets). Everything you have included so far in you business plan, builds your case for your assumptions. This is where you will face the most challenges from investors and others--what numbers go in at



[Company] Business Plan

the beginning... How did you arrive at them? Can you back them up? How they will change over time due to circumstances you presume, forecast, create, etc. The rest is arithmetic (we've done it all for you!)

[Company]'s financial projections are based on the assumption that additional [equipment / facilities / product lines] will generate an increase in profits of [$][x][%] within [years / months]. The new equipment will reduce [production / packaging / transportation / delivery] costs by $[x], thereby increasing our profit margin by [x]%. Taking advantage of volume discounts, we will reduce Cost of [Goods Sold / Sales] by [x]%. We plan to have a working prototype by [month], 20[xx]. Product field-testing is to begin by [month], 20[xx] and complete by [month], 20[xx]. Initial market penetration is anticipated to be $[x] at a [x]% margin and increase to $[x] at the end of the first year. By the end of our fifth year we project revenues exceeding $[x].

It is usually assumed that your costs, including labor, will increase by the general inflation rate. Hopefully, costs will also be decreased by volume discounts and better negotiations with suppliers. If costs are shown to be level or increasing, comment on that fact and the underlying reasons.

General inflation rates are assumed to be [x]% per year, and we expect a [slight / moderate / significant], [positive / negative] impact on our profit margins.

Financial Statements

Keep in mind that projected financial statements do not stand on their own. Anyone reviewing your financial statements will also expect to read a discussion that supports the projections you made (based on market research, competition, industry forecasts, etc.). Discuss briefly the summary/analysis results for each of the financial statements that you provide in the Financials section of your business plan. Growth rates for sales and any large expense items should be discussed. Economies of scale should be noted. Any large fluctuation in a category should be explained. Volume-adjusted measurements are helpful to add perspective to the discussions. These include income subtotals as a percent of sales; inventory, accounts receivable and accounts payable levels in days; return on equity; etc. The basic question to ask yourself is: "What would I want to know to evaluate a business proposal before I would consider investing my own money?" If you have answered all the questions that you would have as an investor, you are probably prepared for lenders or outside investors.

The following table highlights our primary income-related items:

If you have an established business, your operating results from any year, up to three years prior years should be included in the following table. The sales dollars, gross profit dollars, operating income dollars and net income dollars come respectively from the Total Sales, Gross Profit, Income from Operations, and Net Income After Taxes lines of your Income Statement for years 1 - 5. You will likely want to use the financial models to show the numbers ­ this section enables you to add certain notes and explanation to your financial projections. We pasted in the table below from the Comprehensive Financial Model for you. However, given Excel / Word , you may need to re-paste it in. You can easily copy the section from the "Summary" tab and paste it below.



[Company] Business Plan

Projected Product/Services Revenue 2004

Intro Offer Start-Ups Small Businesses USA Businesses Non-USA Associations Affiliates Resellers Schools Corporations Consultants Other Returns & Allowances Total Revenue Growth Total Cost of Goods Sold Gross Profit Gross Margin Operating Expenses Sales & Marketing Research & Development G & A (without Depreciation) Depreciation Amortization of Capitalized R & D Total Operating Expenses Income from Operations Operating Profit Margin Interest Income Interest Expense Income Before Taxes Taxes on Income* $ $ - $ - $


- $ - $ #DIV/0!


- $ - $ #DIV/0!


4,200 $ 100 100 (42) 4,408 $ #DIV/0! 889 3,519 $ 80%


105 $ 105 105 (1) 369 $ -92% 51 318 $ 86%


221 $ 221 221 (2) 720 $ 95% 93 627 $ 87%


347 $ 232 232 (3) 873 $ 21% 122 752 $ 86%


486 365 365 (5) 1,284 47% 179 1,105 86%


- $ 0%

- $ 0%

- $ 0%


$ $

- $ - $ - $ 0% - $ - $ - $

- $ - $ - $ 0% - $ - $ - $

- $ - $ - $ 0% - $ - $ - $

- $ 132 1,799 1,931 $ 1,588 $ 36% 8 $ 1,596 $ 622 $

125 $ 11 1,637 1,774 $ (1,455) $ -394% 6 $ (1,450) $ - $

245 $ 22 1,738 2,005 $ (1,378) $ -191% - $ (1,378) $ - $

297 $ 26 1,813 2,136 $ (1,385) $ -159% - $ (1,385) $ - $

437 39 1,916 2,391 (1,286) -100% (1,286) -

$ $ $

Use "Paste Special" (you'll see in Excel) when you paste the table here ­ it will automatically update this table as you make changed to your financial model. If you do not want to link the spreadsheets, you can easily fill in the table below.

Y ear S a le s % G ro w th COGS G r o ss P r o fit % G ro w th O p e ra tin g E x p e n se s O p e ra tin g In c o m e % G ro w th O th e r In c o m e / E x p e n se In c o m e T a x e s N e t In c o m e % G ro w th


2005 1 ,0 0 0 35 965 350 615 50 266 399


$ $ $

$ $ $

$ $

$ $

2006 2 ,0 0 0 200% 65 1 ,9 3 5 201% 450 1 ,4 8 5 241% 50 614 921 231%


$ $ $

$ $

2007 3 ,0 0 0 150% 120 2 ,8 8 0 149% 550 2 ,3 3 0 157% 50 952 1 ,4 2 8 155%


$ $ $

$ $

2008 4 ,0 0 0 133% 200 3 ,8 0 0 132% 650 3 ,1 5 0 135% 50 1 ,2 8 0 1 ,9 2 0 134%


$ $ $

$ $

2009 5 ,0 0 0 125% 350 4 ,6 5 0 122% 750 3 ,9 0 0 124% 50 1 ,5 8 0 2 ,3 7 0 123%



[Company] Business Plan

The growth percentages over prior years should be manually calculated by taking each year's amount minus the previous year's amount, then dividing by the previous year's amount. To get industry ratios, visit Robert Morris Associates (RMA) Also, take a look at ­ we have included links on the Ratios page in the Comprehensive Financial Model. This excerpt below comes from the Summary tab:

Some Rows are Hidden for Brevity -- Details are available on the Balance Sheet, Cashflow and Ratios pages Selected Ratios

Current Ratio Quick Ratio (Acid Test) Interest Coverage Liabilities / Net Worth (Debt/Worth) Total Liabilities / Total Assets Return on Assets








5.25 4.98 0.24 0.19 81%


(2.13) (2.15) (0.32) (0.47) 448%


(9.60) (9.64) (0.09) (0.10) 82%


(16.21) (16.25) (0.06) (0.06) 45%


(20.13) (20.18) (0.05) (0.05) 30%

Values for the ratios listed above can be obtained from the Ratio Analysis section of the Integrated Financials Spreadsheet. If you did not use the Integrated Financials Spreadsheet to project your financial statements, you will need to manually calculate any ratios you plan to include. See the Analyzing Financial Statements discussion in the BizPlanBuilder Handbook of Business Planning for more information on ratios.

Gross Profit Analysis

The Gross Profit Analysis in the Supporting Documents section shows monthly sales revenues, cost of goods sold and gross profit values for each of our product lines for our first year.

Budget The budget is primarily for internal purposes. You may not want to include your budget in your business plan package. Instead, include a monthly Income Statement that summarizes your expenses into categories. During your presentation, have the budget available (in case your potential lender or investor asks to see it), and be prepared to discuss it.

Income Statements

Comment on any unusually large items or changes, such as R&D or marketing expenses that are relatively large in your first few months (especially as a percentage of sales revenue), but taper off over time. This narrative assumes the use of either the Comprehensive Financial Model (first option below) or the Intermediate Financial Model (second option). These descriptions apply to each of the statements discussed below, as incorporated in the Comprehensive and Intermediate Financial Models respectively. The Basic Statements cover one or two years, by month, or annually, depending on the statement.

The Income Statement in the Financials section of this business plan reflects year one by month, years two and three by quarter, and years four and five as annual figures.


The Income Statement in the Financials section of this business plan reflects years one, two and three by both month and quarter.



[Company] Business Plan

Balance Sheet

Comment on any large or unusual items, such as other current assets, other assets, other accounts payable, or accrued liabilities.

The Balance Sheet in the Financials section of this business plan reflects year one by month, years two and three by quarter, and years four and five as annual figures.


The Balance Sheet in the Financials section of this business plan reflects years one, two and three by both month and quarter.

Break-Even Analysis

The Break-Even Analysis in the Financials section indicates that the break-even point will be reached in [month], 20[xx]. Sales are projected to be $[x] above break-even in [month], 20[xx]. The contribution margin for the first year is [x]% representing $[x].

Cash Flow Statements

The Cash Flow Statement in the Financials section of this business plan reflects year one by month, years two and three by quarter, and years four and five as annual figures.


The Cash Flow Statement in the Financials section of this business plan reflects years one, two and three by both month and quarter.



[Company] Business Plan

Exit / Payback Strategy

Although an investor's first thought is the excitement of your investment, his or her next priority is how to get out of it. An IPO is one obvious path, but today, strategic buyers are acquiring more and more companies. Be explicit about potential buyers and the rationale for their interest in your company. Determine how much time you will require before you can pay back the loan, or until investors can convert their equity; in other words, when will 'exit' be possible. "I can't understand why people are frightened of new ideas. I'm frightened of the old ones." ~ John Cage Describe how repayment will be handled, or the strategy for how investor equity will be converted to cash (i.e. a public stock offering, sale of the business, etc.). Your financial projections should indicate that the loan/investment funds will help generate the profits and cash required for payback and exit. Discuss any significant increases in profits/cash flows anticipated as a direct result of financing, and how these increases will help to pay back the funds.

The market for [Company] [product(s) / services] is clearly [what the market is doing], giving us a prime opportunity to [what you've said you will do in your plan]. The [consistent sales volume / rapidly expanding annual sales figures / explosive growth] for this market support [Company] reaching its breakeven point by [month / quarter / year] and profitability in just [x] years. By driving [x]% of profits back into the company, we expect to [accelerate loan payments / reduce our line of credit balance to zero] and be debt free by [month / quarter / year], a full [x] [months / years] ahead of schedule. The increase in profits generated by [x] will allow us to have the funds to repay the loan in [months / years].

Although you might not want to sell your business, it's likely hat this will be the best way to return your investors the best return on their investment. And, with the right offer from a buyer, you should take the money and spend some quality time at the beach!


At every level of business development, we anticipate a significant jump in business value. Each milestone achieved will incrementally bump valuation. While we simultaneously track competitors, we also track possible acquirers. Some will want our intellectual property, others will want our distribution channels and customer base, others will see value in our strategic relationships. Some strategic acquirers include: [Starbucks ­ they will want our line of coffee carts and mall relationships] [Microsoft ­ they will want our engineers and patents] [FedEx ­ they will want our packaging systems]

Initial Public Offering (IPO) ­ You really need to prove that your business is scalable (like ebay, Google, drug companies ­ lots of work, but when a drug hits, its big $$$) A `time & materials' kind of business will not achieve the kind of economical scalability investors will be interested in. (more people, more costs, etc. like perhaps a consulting firm) Investors want to see your ability to rapidly grow revenues while marginal costs rapidly diminish.

While, if we can demonstrate our ability to scale quickly and economically, we believe that the Company



[Company] Business Plan

will be a viable candidate for an IPO. However, given our marketplace and industry, the logical exit for investors will likely be through a future merger or acquisition. Our financial projections indicate that exit of [Investor] will be achievable in [x] years.



[Company] Business Plan


This is the time and the place to ask for the cash. Be concise, be direct, be professional, be sincere, and ask for either a signature or a list of additional items to be provided or steps to be completed to get a signature. DO NOT BE VAGUE. Nobody "gets" subtle. This is your all-out pitch to the investor as to why this is a good deal for them, and why they should put their money with you, your idea, your project, your scheme.

In order to [start / continue / proceed] we are requesting a [loan / investment] of $[x] by [date], 20[xx]. Our highest priority is [loan repayment / returning our investor's invested capital].

Your `mantra' with investors is paying them back FIRST! They can be flexible with the upside ROI, but their initial invested capital is precious ­ they cannot, under any circumstances, lose that! Convince them that you appreciate this risk and that protecting and returning this investment is your top priority.

Market Success

Based on the attached financial projections, our research, our own personal experience, and careful scrutiny of the specific audience and area where we are focused, we are convinced that the market for [Company] [product(s) / services] will support the accomplishment of our goals and objectives. We have built in specific means of measuring our effectiveness in our marketing efforts, engaged with strategic partners and secured co-marketing relationships to support our success. The market is [still wide open / growing quickly / building on the growth of the [xxx] industry in this area / forecast to enjoy consistent, steady growth...] over the next [x] years. We fully intend to [ride the wave / be first and best in our class / lead the industry in our market / establish and maintain the highest standards / position ourselves as the [product] retailer of choice for [city / county / region / area] and surrounding areas. We fully anticipate reaching our break-even point by [month / quarter / year]--ahead of schedule--and profitability in just [x] years. We will drive [x]% of profits back into the company, to support our planned [acceleration of loan payments / reduction our line of credit balance to zero] and be operating debt free on cash from sales, with cash reserves of $[xxx] by [month / quarter / year].

Future Growth

Approaching our goals aggressively will allow us to build an even stronger position than indicated in this plan. Our most recent test marketing indicates that demand [may be greater than originally projected / will probably experience a sudden spike in 20xx / will be affected by xxx / will fluctuate...]. With careful monitoring, we will be prepared to respond immediately to such shifts in the market, and protect our market share and profitability. As we expand our Internet presence to encompass [online sales / online sales with in-store pick-up / community features that will attract and hold loyal customers...] we expect to further strengthen our market position. We are excited about the prospects of turning this business into a recognized contributor in our community, effectively meeting the needs of our customers, and growing with them as the market and their needs change.



[Company] Business Plan

Investor FAQs

Can't people do this all by themselves? Why do they need your [product/service]? Sometimes they can and they often do. These subjects like writing a business plan or an employee manual have been around for years and most people know enough about their business to pull it off, but also these projects have been addressed by thousands of others--so why reinvent the wheel? Our business is to stay on top of these subjects and synthesize the best of everything and give it to you in a format you can simply customize for your business using your PC. Going forward, we build a line of 100+ modules that any business can use for an average of only $20 per sale. This is very do-able from our side and very compelling from every customer's perception.

Why haven't you raised money sooner?

Until now, we have been assembling our management team, developing and testing our [products/services], surveying our market(s), and making sure that the Company is fully compliant for raising capital. We have been very careful to solicit investors with an appetite for our industry and [products/services]. The Company has already raised a round of capital from friends and family. We are now seeking additional, professional capital from appropriate investors who can not only provide needed cash, but can also include their unique expertise and industry contacts to assure our success.

JIAN example: Until now, investors have been enamored of retail software, multimedia, hand-held computers, and now the internet... small business has been perceived as small; however, the combination of explosive entrepreneurship and the Internet as a platform, makes now the perfect time to roll this business out and scale it up.

What is [Company] doing differently?

Here is an example from the JIAN business plan

The simple thing to do is just take the stuff from books and put it into software--and that's what our competitors have done. We constantly compare... and what we see is that they've added nothing new. At JIAN, we've taken advantage of what a computer can really offer, plus we work with specialists in many areas of business--these are active business experts who share with us what is currently working in the real world. Plus, we've been in business over seventeen years so we've had a long time (and been through several business cycles) to include much customer feedback enabling us to continuously refine our software. What builds the most value in the Company? The most expensive part of building a business is marketing. Therefore, our reputation, brand image and experience are the major component of long-term value. Technology comes and goes, but who you are remains. The size and quality of our customer base, our strategic alliances and marketing relationships are what IPO investors or acquiring companies really value. The Company has a low overhead and burn rate. The profit margins on our products are good and can be made even better by [continued engineering/revisions/workflow] of the [product/service]. Given that we can solve and or simplify the technical issues involved in enhancing the [products/services], [Company] can cost-effectively develop many successful products/services that should tie-in nicely with the our other [products/services/programs]. A broad product offering can be used to [Company]'s advantage. There are some products that can be developed or modified to `sell' into larger companies. A key factor will be how the Company can develop a way to raise capital to support the product development and marketing expenses. In order to optimize the capital, an option would be a `pay' program that includes revenue participation to the content contributors and technical developers, as well as the investors.



[Company] Business Plan

Be careful here... although you may be able to make deals with certain key suppliers/contributors, you don't want to over-sell your business ­ these details can be worked out later (perhaps with your investors' assistance), but it may be worth mentioning that you are thinking about to demonstrate flexibility and shrewdness.

Invest in [Company]

I believe in [Company] and think that it has very real potential and a very bright future. As a wise investment, the Company provides a solution to many real problems experienced daily by many people ready, willing, and able to [spend/invest] money for the results. These are real products, in a viable business model, showing profits and credibility and an enormous customer base. Furthermore, it's an understandable product anyone can explain and refer at a cocktail party!

Language lesson: `Spend'/'expense' = money spent/gone, a cost... Investment = money put in expecting more back. You would do well to consider using the word `invest' in places of the words `cost,' `expense,' `spend', etc. anytime you are speaking to a prospective customer or investor about your products/services.

It will be easy and inexpensive to demonstrate value to new customers--as well as to quickly convert many current [Company] customers. All promotions will link to our compelling Web demo to offer proven solutions--right now--at prices enabling any [customer/manager] to take immediate action to purchase or subscribe. We've got the [prototype/products/people] and we're ready--the world is waiting. Thank you very much for considering investing in [Company]. Warm regards, [Your Signature Here]

Either leave a space to sign here or copy your signature from a graphics file

[Owner/Founder] [Title]

Leave your investor with a positive feeling about you and your company. "Your last impression is your lasting impression." ­ Burke Franklin, Author: BizPlanBuilder, Business Black Belt (I think of otherwise good movies that ended badly ­ I walked out afterwards not liking the film. I believe you can overcome a bad first impression, but leave people with a positive memory of you and that will remain as their lasting memory.) Add any personalized concluding remarks that you feel would augment the credibility of your plan, or answer a specific question that comes up as you discuss your plans with interested parties. If the same question comes up repeatedly, you will probably do yourself a favor to incorporate the topic into your plan. Be sure you provide a clear response and explanation. "When you do the common things in life in an uncommon way, you will command the attention of the world." ~ George Washington Carver,1864-1943, Scientist & Educator



[Company] Business Plan

Supporting Documents

The documents that follow include supporting information relative to [Company] logistics, background, management, and preparedness for operating this business successfully.

"A bureaucrat's idea of cleaning up his files is to make a copy of every paper before he destroys it." - Laurence J. Peter You may choose to insert a table of contents or a list of the supplements you are including here, making it easier for your reader to find any necessary items, or to see at a glance if a particular document is included. Insert supporting documents behind this page in your printed plan to support the viability and likely success of your business. To be sure you include everything you need, you can use this as a checklist to gather the necessary items. There is a printed, perforated copy of this list in the back of your manual that you can use, also. Include copies* of: Articles of Incorporation and Corporate Bylaws (if applicable) Tax returns of principals for last three years Include personal financial statements for each owner and major stockholder, showing assets and liabilities held outside the business and personal net worth. Owners will often have to draw on personal assets to finance the business, and these statements will show what is available. Bankers and investors usually want this information as well. Please refer to the Personal Financial Statement spreadsheet in the menu at left. Personal financial statements for the owners. You'll find a template for this in the Master Supporting Documents section of BizPlanBuilder, and all banks have these forms as well. In the case of a franchised business, a copy of franchise contract and all supporting documents provided by the franchise Fictitious Name or "Doing Business As" (DBA) filing, and the requisite publication copy and proof of publication. Resumes for all principals Detailed lists of equipment owned or to be purchased Tax and wholesale licenses Business and professional licenses, permits and other legal documents Include details & studies used in your Business Plan; for example: Brochures & advertising materials Industry studies Market research studies Magazine or other articles Blueprints & plans Any pending or issued patents, trademarks Proposed or executed lease or purchase agreement for building space and occupancy permits Maps & photos of location Any other materials needed to support the assumptions in this plan



[Company] Business Plan

Letters of intent from suppliers, prospective customers, etc. List of assets available as collateral for a loan See also the included "Due Diligence Checklist" located in Master Managing Your Business Documents section of BizPlanBuilder. *Keep all original documents stored safely in a secure place such as a safety deposit box or a fire safe. Since many of these documents are sensitive in nature, you should consider including them with your business plan only upon request. Include only photocopies of the stored originals.



[Company] Business Plan

Here is a sample PowerPoint "Investor Pitch" No more than 15-18 slides LARGE print ­ Remember that the average angel or VC investor is 50+ and often needs reading glasses.

Bus ines s Po e To o l s TM wr

A Positive Force in BusinessTM

[Date] [Your Name] [Title] [Email]

Business Model / Overview

What we DO (in simple terms) Goal is to quickly generate investor interest Reference past milestones... (if relevant) Present business overview as an opportunity




[Company] Business Plan

Value Proposition

67% of businesses are sued by former employees ­ average lawsuit: $250,000 Present case study or scenario of market problem or need Others have not addressed xxx

Describe pain in the market Quickly mention why other products and services have not adequately solved the pain

Introduce your compelling solution How you make money


[Company] solution / products

Our solution & key features of [product or service] (use visuals when appropriate) Cost savings/customer No acronyms ­ keep it simple! Why customers need/must buy your product/service?




[Company] Business Plan

Market Opportunity / Drivers

Top down and bottom-up market estimates Market penetration estimates Market drivers How will you reach your target customers and how much will it cost to acquire them


Marketing Channels / Partners

Describe sales, distribution or marketing channels ­ execution strategy and typical sales cycle Highlight any exclusive or unique channels or partners Identify key strategic partners or alliances




[Company] Business Plan

Demand/Revenue Model


2005 574 $574 $138 $775 ($339)

2006 2,500 $25,000 $12,000 $ 8,000 $5,000

2007 12,500 $125,000 $50,000 $32,000 $43,000

# Units Revenue COGS Expenses Gross Margin


Competitive Position

·Show your relative competitive position ·Adjust the axes [yellow] to position your company/product/service most favorably


Competitor 1 Competitor 2

Your Company Here

Competitor 3 Competitor 4 Competitor 5 Competitor 6





[Company] Business Plan

Advantages / Barriers to Entry

Advantages should be sustainable Patents, exclusive channels or contracts, high transaction costs, R&D If the market opportunity is so big, what prevents others from quickly entering your market


Management Team

Bob Jones, CEO

Formerly with abc, xyz & xxx ­

John Smith, CTO

Formerly with abc, xyz & xxx ­

Janet Johnson, CFO

Formerly with abc, xyz & xxx ­

Janet Johnson, VP Marketing

Formerly with abc, xyz & xxx ­

To Be Hired, COO

Manage the xxx process




[Company] Business Plan

Directors & Advisors


Bob Jones, CEO, xyz Company Bbb Ccc


Aaa Bbb Ccc


$xxx million

Xxx shares of common stock 12.5% Note paid over 5 years (cumulative interest) + convert upon first institutional round >$500K @ same valuation + warrants to purchase 1% of outstanding shares @ $.50/share Principal + 20% APR repaid first from 10% of revenue + 20% APR paid as equity @ $.50/share




[Company] Business Plan

Use of Funds

Hire team Complete product Secure key customers Launch Roll-Out

3 Key Customers Alpha Test Complete Team



Month A

Month B

Month C


Possible Liquidity Scenarios

Valuation = $xxx @ 1x Revenue Valuation = $xxx @ 2x Revenue Valuation = $xxx @ 1x Profit Valuation = $xxx @ 2x Profit Acquisition by abc, Inc., xyz, Inc. IPO in [Date]




[Company] Business Plan


Describe funding needs and use of funds Exit Strategy ­ potential value based upon recent comparable acquisition or IPO [Company] = flexible, scalable, unique




[Company] Business Plan





Microsoft Word - Sample Business Plan.doc

144 pages

Report File (DMCA)

Our content is added by our users. We aim to remove reported files within 1 working day. Please use this link to notify us:

Report this file as copyright or inappropriate