Business Plan

Use these worksheets and questions to create a more professional-looking business plan. Follow

the guidelines in Chapter 2 to ensure the quality of the business plan. These features will make

your plan a better roadmap for running your organization and will make it more attractive to

investors.

Contents

Cover Page Promotion Strategy

Confidentiality Customer Service

Table of Contents Place of Business

Business Idea Management Team

Economics of One Unit Employees & Policies

Ownership Corporate Governance

Mission, Vision, and Culture Advisors

Company Description Research & Development

Research Intellectual Property

Target Customers Facilities

Industry Analysis Inventory,Production,Quality

Assurance
SWOT Analysis International Opportunities

Competitive Analysis Segmentation

1
 Products/Services Balance Sheet Projections

Philanthropy Income Statement Projections

Pricing Breakeven Analysis

Insurance & Risk Management Ratio Analysis

Record Keeping Risks & Assumptions

Sources & Uses of Capital Funding Request and Exit Strategy

Start-Up Costs Milestones

Financing Appendices

Cash Flow Projections and Fixed Costs Non-Profit Organizations

Business Plan Worksheet Questions/Notes

Cover Page

A. What is the full name of your organization?

B. Provide contact information for the organization including the names of majority

owners (use the same format for as many as you have)

Name: ___________________________ Name: __________________________

Address: _________________________ Address: ________________________

City: ___________ ________Zip _____ City: __________ ________ Zip _____

Phone: ___________________________ Phone: __________________________

2
Email: ___________________________ Email: __________________________

C. What confidentiality/non-disclosure language will you include?

D. Provide the date of the plan. (Month) (Day), (Year)

Table of Contents (can be placed before or after the Executive Summary)

A. List the key sections of the plan and the page numbers.

1.0 Executive Summary

2.0 Mission, Vision, & Culture

3.0 Company Description

4.0 Opportunity Analysis & Research

4.1 Industry Analysis

4.2 Environmental Analysis

4.3 Competitive Analysis

5.0 Marketing Strategy & Plan

5.1 Products/Services

5.2 Pricing

5.3 Promotion

5.4 Place

6.0 Management & Operations

6.1 Management Team

3
 6.2 Research & Development

6.3 Physical Location

6.4 Facilities

6.5 Inventory, Production, & Quality Assurance

7.0 Financial Analysis & Projections

7.1 Sources & Uses of Capital

7.2 Cash Flow Projections

7.3 Balance Sheet Projections

7.4 Income Statement Projections

7.5 Breakeven Analysis

7.6 Ratio Analysis

7.7 Risks & Assumptions

8.0 Funding Request & Exit Strategy

8.1 Amount & Type of Funds Requested

8.2 Exit Plan

8.3 Milestones

Appendices

Resumes

Sample Promotional Materials

4
 Product Illustrations/Diagrams

Detailed Financial Projections

1.0 Executive Summary

A. What is the name of your organization?

B. Describe your business idea using the following chart:

5
 Components Start-Up Buy Existing Secure a Franchise License
of the Technology
Business

Customers None Established None- but may have None

name recognition

Products or None Established Developed In process

Services

Location Needed In place Assistance possible Needed

Management Owner Owner Owner within terms Owner within

Control of license terms of license

Operational Owner Owner Owner within terms Owner

Control of license

Marketing Needed In place (+/-) Assistance possible. Needed

Rules absolutely.

Reputation None In place (+/-) Should be. If not, Possible

why license?

Royalties/Fees Not usual Maybe Ongoing Likely

Financing Needed Prior owner Assistance possible Needed

may provide

Disclosures None Buyer beware UFOC & contracts Agreement

Business Idea:

C. Target Market (Answer who, what, when, where, and why.)

Factor of Target Market Description

(who)

6
 (what)
(when)
(where)
(why)

D. What type of organization are you starting? (Manufacturing, Wholesale, Retail? For-

profit or not-for-profit?) What products and/or services will you offer?

Product/Service 1:__________________________

Product/Service 2: __________________________

Product/Service 3: __________________________

Product/Service 4:__________________________

Product/Service 5: __________________________

Product/Service 6: __________________________ (do as many as you need)

E. What is your marketing and sales strategy? Explain how your business idea will

satisfy a customer need.

Customer Need How Your Business Will Satisfy It

F. Describe the key success factors for the organization.

7
1.

2.

3.

4.

5.

G. Calculate the “economics of one unit” for your organization.

One Unit =

Selling Price per Unit P

– COGS per Unit

– Other Variable Costs

TOTAL Variable Costs P

per Unit
Contribution Margin P

per Unit

H. What are your short-term business goals? (less than one year) Long-term business

goals? (from one to five years)

1.

2.

3.

8
1.

2.

3.

I. What resources and skills do you (and the other owners and managers) have that will

help make your organization successful? What other skills are needed and how will

they be obtained?

Resource or Skill Possess? Who? How Obtained?

J. If there is more than one owner, describe how the ownership will be shared.

Owner Percent of Ownership

%
%
%
%

K. What are the sources and uses of funds?

L. Include a summary of the financial projections.

Topic Key Measure Growth or Growth Time Frame

9
 Rate
Revenue Sales Growth
Profitability Return on

Investment or

Return on Sales
Industry Position Market Share
Value Net Worth
M. What is the growth and exit strategy?

2.0 Mission, Vision, & Culture

A. Write a mission statement for your organization in 21 words or fewer that clearly states

your competitive advantage, strategy, and tactics. ______ ______ ______ _______

_______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______

______ ______ ______ ______ ______ ______

B. Create a vision statement for your organization.

C. Describe the core beliefs you will use to run your organization and how they will be

reflected in its culture.

Core Belief How It Is Reflected in the Culture

D. Identify the ways you plan to run a socially responsible organization.

10
1.

2.

3.

3.0 Company Description

A. What industry are you in?

B. What type of organization is it (manufacturing, wholesale, service)?

C. What needs will this business satisfy?

1.

2.

3.

D. What is your strategic advantage?

E. What is your organization’s legal structure (sole proprietorship, partnership, LLC, C

Corp, etc.)?

F. Why did you choose this legal structure?

G. In what state are you registered or do you intend to register?

H. Where will you physically operate the organization?

I. What is the geographic reach of the organization?

J. Who will be the owner(s), partners, or stockholders for your company? If your

business is incorporated, describe what percentage of the company is owned by each

11
 shareholder .

1. ____________________ ______%

2. ____________________ ______%

3. ____________________ ______%

4. ____________________ ______% (Do for each. % adds up to 100)

4.0 Opportunity Analysis & Research

A. Describe your research methods (surveys, focus groups, general research, and

statistical research).

Research Method Respondents/Description

Written Survey (mailed)
Written Survey (emailed)
Written Survey (online)
Telephone Survey
“Street” Survey
Focus Groups
Document Research – Review

of Books and Records

Personal Interviews
Observation
Tracking (Media)
Benchmarking
Online Searches
Article and Book Searches
Trade Associations
Chambers of Commerce

12
Public Agencies
Competitor Websites

B. Describe your target customer along as many dimensions as you have defined (i.e.,

demographic, geographic, needs, trends, decision-making process).

Dimension Target
Demographic
Geographic
Needs
Trends
Lifestyles
Psychographics
4.1 Industry Analysis

A. What is the industry or set of industries in which your organization operates (include

the NAICS codes)?

B. What factors influence the demand for your product or service?

Demand Factor What Is the Influence?

C. What factors influence the supply for your product or service?

Supply Factor What Is the Influence?

13
 D. How large is your industry (historic, current, projected size)?

Time Frame Dates Size ($ or units) Data Source

Included
Historic size
Current size
Projected size

E. What are the current and anticipated characteristics and trends in the industry?

1.

2.

3.

F. What are the major customer groups for the industry (consumers, governments,

businesses)?

G. How large is your target market (number of customers, size of purchases, frequency of

purchases, trends)?

Measures of Market Size Source of Data

Size
Number of customers
Size of purchases
Frequency of purchases
Trends

14
 4.2 Environmental Analysis

A. Perform a SWOT analysis of your organization.

Strengths Weaknesses

Opportunities Threats

B. What external/environmental factors are likely to impact your business?

1.

2.

3.

C. Are there customers for your business in other countries? How do you plan to reach

15
 them?

4.3 Competitive Analysis

A. How do you define/describe your competition--both direct and indirect?

We have competition because our product is almost the same which related to foods and

drinks.

B. Describe your competitive advantage.

Our product is unique because we use organic spices that is good for the health and for

the sake of our client. We also have promo/ 10% discount to all medical student and staff.

And our price is affordable to everyone.

C. Find three competitors and describe them.

Our first competitors are Wildcat café’s because they are located at the center of CIT-U

campus which they offer foods and their business is there already for a long time.

Second competitors are the Street foods because they cheapest price.

Third competitors are Convenience store because they serve the entire purchasing

population.

Your Company Competitor #1 Competitor #2 Competitor #3

Wildcats cafe Street foods Convenience

store
Wt. Ratin Wtd. Rating Wtd. Rating Wtd. Rating Wtd.

g Rating Rating Rating Rating

(1-20) (100%) (1-5) (100% (1-5) (100%) (1-5) (100%)

16
 (1-50) )
Quality .20 4 .80 2 .40 3 .40 2 .40
Price .15 4 .60 3 .45 2 .45 3 .40
Location .10 2 .20 2 .20 2 .20 1 .20
Selection .15 3 .30 2 .20 2 .20 1 .20
Service .15 4 .60 3 .45 2 .30 2 .25
Speed or .10 3 .30 2 .20 2 .20 2 .20

Turnaround
Specialization .15 2 .30 2 .30 2 .30 2 .15
Personalization .10 3 .15 2 .10 2 .10 2 .10
Total 1.00 3.25 2.30 2.15 1.9

D. Describe any international competitors you have found who may be able to access your

customers. How do you intend to compete?

International Competitor Method of Competition

E.Describe your strategy for outperforming the competition.

Competitive Advantage Question Competitive Difference (USP)

The Offer: What will be better and Will want to highlight specific features and
different about the products and services display the item in-store. In some cases,
that will be sold by the business? customers can touch or manipulate the
product before purchase.
Target Market: To make it as successful The focus of our business is the student in
as possible, which customers should be CIT-U and the staff.
the focus of the business?
Production and Delivery Capability: The service because our staffs are polite and
What will be better or different about the can give fast service that the customers know

17
way that offer is produced and delivered
to those customers?
E. What tactics will you use to carry out this strategy?
Tactical Question
Sales Plan: Where and
how will you sell to your
customers?
Market Communications:
How will you communicate
with your customers and
make them aware of your
business offer?
need to wait.
Issues Solutions
How to identify By giving a deadline. Established
prospects and convert a "no communication" deadline to
them to sales remove prospects from your
funnel. Ask a question. When you
ask a question, it requires your
prospect to reply. Try something
along the lines of, “It has been
over a week since we have heard
from you. Mix some icebreakers
into your email marketing. Most of
your prospects are also being
marketed to by your competition,
so do something to stand out from
the bland and overly promotional
emails that are flooding their
inboxes. Offer incentives. Who
doesn't like free stuff? Tossing in a
free gift or offering a discount is
often a great way to convert sales.
It doesn’t have to be a significant
discount or something valuable.
Many people simply can’t pass on
something for free.
How to make By identify the ideal client
customers aware of It’s easier to look for customers if
your offer; how to you know the type of consumers
attract them to the you seek. Discover Where Your
business Customer Lives. With your
targeted customers in mind,
“identify those places where they
are likely to be found. Know Your
Business Inside and Out.
Thoroughly understanding your
industry and having a firm
knowledge of your product or
service is critical to being able to
attract interested clients.
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 Operating Plan: How will How to make the By hiring employees that has the
you manage your internal business go, and ability to cook and have
operations? determine who will experienced already related to
perform the tasks business.
Budget: How do Possible sources of By recording all the expenses and
you plan to manage your revenue; possible items amount earned.
revenues and expenses? that have to be
purchased

F. What barriers to entry can you create to support your organization?

5.0Marketing Strategy & Plan

A.Explain how your marketing plan targets your market segment.

Segmentation Method Segment(s) Marketing Approach

Geographic Customers Sales stalk, customer loyalty

Location Internet/TV/Radio

Region Internet/TV/Radio

19
 Urban Internet/TV/Radio
Demographic Age Social Media/App development/Web

design, Email marketing

Gender

Income

Location

Annual income

Education
Psychographic Personality traits Social Media/App development/Web

design, Email marketing

Values

Attitudes

Interest

Motivations

Priorities

Psychological influences

Behavioral Purchasing habits Social Media/App development/Web

design, Email marketing

Spending habits

A. Write a positioning statement for your business.

Pick n’ drinks is the competitive that provides benefits to our target market.

B. How do you plan to grow the organization (self-generated, franchising, acquisition)?

20
 Method of Growth Details
Self-generated Because we are the one who owns and run the

business.
Franchising
Acquisition
Other

5.1 Products/Services

A. What products/services do you intend to sell?

Product/Service 1:______FRIES___________________

Product/Service 2: _____SHAKE_____________________

Product/Service 3: _____JUICES___________________

Product/Service 4:___POTATO CHIPS_______________

Product/Service 5: __________________________

Product/Service 6: __________________________ (do as many as you need)

B. Explain how your product will meet a customer need.

Our product will meet the customers because we have an affordable price, we have

21
 different options they can choose what foods or drinks they like.

C. Where is your product/service in the product life cycle?

Life Cycle Stage Applicable? (y/n) Impact

Introduction Y Positive
Growth Y Positive
Maturity Y Positive
Decline Y Positive

D. Describe the features and benefits of the product/service your business will focus on

selling.

Product/Service Feature Benefit

Fries Has choices like sizes of Can share with others and can

Small, Medium, Large and a give bonding to friends and

family size and have different family even lovers.

flavors such as cheese, spicy

etc.
Shake Has choices like sizes of Pure fruits flavors unlike

Small, Medium, Large and a others that are uses powder.

family size and flavors.

Juices Has choices like sizes of Pure fruits flavors unlike

Small, Medium, Large and a others that are uses powder.

family size and flavors.

Potato Chips It is crunchy and big sizes It gives satisfaction.

22
 E. What existing copyrights or patents do you own? Project?

F. How will your organization help others? List all the organizations to which you plan to

contribute. (Your contribution may be time, money, your product, or something else.)

Organization Constituency Contribution Rationale

Suppliers Communicating Needed products and Quality and

needs, honoring services consistency of

commitments incoming

materials/services
Customers Supplying evolving Payment and learning Financial pressures

needs while meeting

commitments
Employees Support of individual Increased affiliation Sustainable

development and & contribution employment with a

growth changing economy,

23
 equitable

compensation
Community members Services, products, Infrastructure and Equitable distribution

employment, and community resources of resources,

investment returns; environmental issues

respect for the

environment

G. Do you intend to publicize your philanthropy? Why, or why not? If you do, explain how

you will work your philanthropy into your marketing.

5.2 Pricing

A. Describe your pricing strategy and structure and the gross margins you expect to generate.

Pricing Strategy Using? Pricing Structure Expected Gross

Margin(s)
(y/n)
Keystoning
Cost-plus
Penetration
Skimming
Meet or beat the

competition

B. What will your discount structure, if any, be?

C. Will you accept personal checks from customers? Credit cards? Will you offer charge

accounts or customer credit?

24
 Type of Payment Accept? (yes/no) Rationale
Cash
Personal checks
Credit cards (which ones –

VISA, MasterCard, American

Express, Discover?)
Credit terms (if so, what will

they be?)

5.3 Promotion

A. Identify the ways you plan to promote your product or service, including the message,

the media, and the distribution channels. Describe why you have chosen these methods

and why you think they will work.

Method Message Media Channel Why It Will Work

Advertising

specialties
Banner ads
Billboards
Blogs
Broadcast media
Brochures
Business cards
Catalog
Direct mail
Directories
Flyers
Networking

25
Newsletters
Online store
Print media
Promo items
Public speaking
Sales calls
Samples
Signs
Special events
Sponsorships

Telemarketing

Toll free #

Website

B. Show examples of marketing materials you intend to use.

C. What is your business slogan?

D. Do you have a logo for your business? How do you intend to protect it?

E. Where do you intend to advertise (be specific including identifying reach and

frequency)?

Publication/Media Size/Length of Frequency of Reach (Cost for

(name specific print Advertisement Advertising Budget)

publications or

broadcast channels)

26
 F. How do you plan to get publicity for your organization?

G. List ways you intend to provide superior customer service.

1.

2.

3.

4.

5.

H. Write a one-minute sales pitch for your product or service and describe five sales

prospects you intend to pitch.

Sales Prospects

Name Description (include interest)

Sales Pitch:

27
 I. How will you keep your customer database? What essential questions will you ask every

customer for your database?

Customer database type =

Question 1:

Question 2:

Question 3:

Question 4:

Question 5:

(You may want to make an Excel spreadsheet with all data fields to capture.)

5.4 Place

A. Where do you intend to sell your product? Describe the advantages and disadvantages of

your location(s).

Location Advantages Disadvantages

B. What are surrounding businesses? Access routes?

C. If vehicular traffic is important to your organization, what is the traffic count for this

location?

28
 D. What is the work force availability in the area as it pertains to your needs? (Be sure to

get data from the census, local department of labor, or other reliable source.)

6.0 Management & Operations

6.1 Management Team

A. Create an organizational chart for your business.

General
Management

Marketing Operations Finance

B. Will you be hiring employees? If so, describe what their qualifications should be, what

you intend to pay them, and how they will help your business.

Employee Role Qualifications Compensation Contribution When Hired

29
 C. Do you intend to pay yourself a salary, wage, dividend, or commission? Explain.

D. What will your policies toward employees be?

Key Policies:

1.

2.

3.

4.

5.

E. Ways you will make it a positive and rewarding place to work:

1.

2.

3.

4.

5.

F. Describe the corporate governance plan for your organization. It should include five

policies (rules) that will be the backbone of your organization’s ethics.

1.

2.

3.

4.

30
5.

G. Provide information for each of your mentors or advisors. If there is a board of advisors,

list each member and describe his/her commitment to the board.

Name: ___________________________ Name: __________________________

Title: ____________________________ Title: ___________________________

Organization: _____________________ Organization: ____________________

Address: _________________________ Address: ________________________

City: ___________ ________ Zip _____ City: __________ ________ Zip _____

Phone: ___________________________ Phone: __________________________

Email: ___________________________ Email: __________________________

(indicate relationship of each, role, and include all)

6.0 Provide contact information for your accountant, attorney, banker, and insurance agent.

ACCOUNTANT ATTORNEY

Name: ___________________________ Name: __________________________

Title: ____________________________ Title: ___________________________

Organization: _____________________ Organization: ____________________

City: _____________________ _______ City: ___________________________

Phone: ___________________________ Phone: __________________________

BANKER INSURANCE AGENT

Name: ___________________________ Name: __________________________

31
 Title: ____________________________ Title: ___________________________

Organization: _____________________ Organization: ____________________

City: ____________________ State____ City: ___________________

State____

Phone: ___________________________ Phone: __________________________

6.2 Research & Development

A. What type of research are you doing? What do you intend to do?

B. What are others in the industry doing?

C. How will you protect your intellectual property?

Type of Intellectual Property Protection How It Will Be Used

Patents
Trademarks
Service Marks
Copyrights

6.3 Physical Location

A. Describe the actual physical place in greater detail than above.

B. What are the zoning laws in your area? Does your business comply?

6.4 Facilities

A. What type of building and equipment will you have?

B. Identify which technological tools you plan to use for your organization, and explain

32
 why.

Technological Tool Source Value to Organization

C. How do you plan to get access to the technology you need?

6.5 Inventory, Production, & Quality Assurance

A. Where are you purchasing the products you plan to sell, or the parts you will use to

manufacture those products? Illustrate your supply chain.

Product/Part Source

B. Do you intend to manufacture your product? If so, describe the manufacturing process you

will use. If not, describe how your product is manufactured.

C. Are there any economies of scale to be attained for your business? At what point do you

anticipate attaining them?

D. Have you developed and/or adopted any innovations in production, inventory management,

or distribution that are significant? What are they and why are they meaningful?

33
E. Show the production-distribution channel for your business, and the mark-ups along the

chain.

Stage of Channel Mark-up Notes

F. What is the estimated delivery time between when you place an order with your supplier and

when you will have the product available for your customers? (If there are multiple

suppliers, you should identify each lead time and work on the basis of the longest lead time.)

G. What method(s) will you use to define and ensure the quality of your products/services?

Method Planned? (y/n) Rationale

Benchmarking
Lean Manufacturing
ISO9000
Six Sigma
TQM
Malcolm Baldrige National Quality Award
Other (identify)
H. What types of insurance will your business need, and why?

Type of Insurance Needed (y/n) Why?

Workers’ Compensation Insurance
Disability Insurance
Commercial Fleet Insurance
Property Insurance

34
 Liability Insurance
Product Liability Insurance
Business Income Insurance
Errors and Omissions Insurance
Life Insurance—Key Person

Insurance

I. What methods will you use to ensure that you comply with federal, state, and local tax laws?

J. What laws—such as minimum wage and age requirements, health and safety regulations, or

antidiscrimation laws—will affect your business?

Law Effect on Business

7.0 Financial Analysis & Projections

1. Describe your record keeping system.

2. List the types of bank accounts you will open for your organization.

Type of Account Purpose Which Institution?

Checking
Sweep
Investment
Other

35
 7.1 Sources & Uses of Capital

A. How much capital do you need? When? What type and on what terms?

Type of Capital Amount When Needed? What Terms?

B. How will you use the money that you raise? Be specific.

Use of Capital Amount When Needed? Notes

C. List the items you will need to buy to start your business and add up the items to get your

total start-up capital. Then, add a cash reserve of one-half your total start-up capital.

Item Cost Estimate/Actual

Start-Up Expenses
Accountant Fees
Expensed Equipment
Financial Institution Fees
Identity Set/Stationary
Insurance
Legal Fees

36
Licenses/Certificates/Permits
Marketing Materials
Payroll (with taxes)
Professional Fees – Other
Rent
Research and Development
Travel
Utilities
Web Fees
Other
Total Start-Up Expenses

Start-Up Assets
Cash Balance for Starting Date
Equipment
Furniture & Fixtures
Leasehold Improvements
Machinery
Rent Deposit
Signage
Utility Deposit
Other
Total Start-Up Assets

Total Start-Up Requirements

Item Quantity Cost
Equipment

37
Other Costs

Start-Up Investment—TOTAL $
Cash Reserve $
Total Start-Up Investment + Capital Reserve $

D. List the sources of financing for your start-up capital. Identify each source as equity,

debt, or gift. Indicate the amount and type for each source.

Funding Source Equity Debt Gift

TOTAL START-UP

INVESTMENT $

E. What is your payback period? In other words, how long will it take you to earn enough

38
 profit to cover start-up capital?

Payback = Start-up Investment

Net Profit per Month

F. Describe financing sources that might be willing to invest in your business in exchange

for equity.

G. Describe any debt financing you intend to pursue. What is your debt ratio? What is your

debt-to-equity ratio? Add a cash reserve of one-half your total start-up capital.

H. Do you plan to use bootstrap financing? Explain.

I. Do you plan to pursue venture capital? Why, or why not? List potential sources of

venture capital.

Venture Capital Type of Fund Amount Expected Terms

Source Available

7.2 Cash Flow Projections

A. List and describe your monthly fixed costs and add a cash reserve that covers three

months of fixed costs.

Fixed Cost Amount Description

Utilities

39
Salaries
Advertising
Insurance
Interest
Rent
Depreciation
Unexpected _______________
TOTAL P

B. Create a projected cash flow statement for your business for the first four quarters and

the second and third years of operation.

1Q 2Q 3Q 4Q YR YR YR

1 2 3
Starting Cash (

+)
Cash in from Operations (

[Sales] +)
Cash out from Operations (-

[Cost of Goods Sold, )

Expenses, Taxes]

40
 Cash in from Investing (

[Equity Infusions, Earnings +)

on Investments]
Cash out from Investing (-

[Equipment Purchases, )

Repaying Investors]
Cash in from Financing (

[Loans] +)
Cash out for Financing (- ___ __ __ __ __ ___ ___

[Repayment of Debt] ) __ ___ __ ___ ___ __ __

Ending Cash (

Balance [Starting Balance =)

for Next Period]

C. Calculate the burn rate for your business.

(Cash + Revenue)/Negative Cash Outflow per Month = Number of Months Before Cash Runs

Out

7.3 Balance Sheet Projections

A. Create a Projected Balance Sheet for your business for the first four quarters and

the second and third years of operation.

Balance Sheet for (Company Name)

As of (Month/Day)

1Q 2Q 3Q 4Q YR1 YR2 YR3

41
 Assets
Cash

P_____

P_____ P_____
Accounts

Receivable
Inventory
Capital Equipment
Other Assets

Total Assets P P P P P P P
Liabilities
Short-Term

Liabilities
Long-Term

Liabilities
Total Liabilities P P P P P P P
Owner’s Equity P P P P P P P
Total Liabilities & P P P P P P P

Owner’s Equity

B. Create a pie chart showing your current assets, long-term assets, current

liabilities, and long-term liabilities.

7.4 Income Statement Projections

A. Create a Projected Income Statement for your business for the first four quarters

and the second and third years of operation. (Note: you will need to create very

detailed projections for the items underlying each of these. Such detailed

42
 projections would go into the appendices of your plan.)

Income Statement for (Company Name)

For the Year Ending December 31, Year

1Q 2Q 3Q 4Q YR1 YR2 YR3

Net Sales Revenue(+)

Cost of Goods Sold (-)
____ ____ ____ ____ ____ ____ ____

__ _ _ __ __ __ __
Gross Profit(=)

Operating Expenses (-)

General Expenses (-)
Other Expenses (-)
____ ____ ____ ____ ____ ____ ____

__ __ __ __ __ __ __
Net Income Before

Taxes
Taxes
____ ____ ____ ____ ____ ____ ____

__ __ __ __ __ __ __
Net Income

B. Create a bar chart showing your Gross Revenues, Gross Profit, and Net Income.

7.5 Breakeven Analysis

Use Excel or another spreadsheet software to create a spreadsheet projecting the expenses for

43
your business. Use this data to perform a breakeven analysis.

Breakeven Units = Fixed Cost

Gross Profit per Unit

7.6 Ratio Analysis

A. Use your projected financial statements to calculate all of your key ratios.

Current ratio = Current assets

Current liabilities

Quick ratio = Quick assets (Quick assets = Current assets – inventory)

Current liabilities

Debt ratio = Total debt (or liabilities)

Total assets

Debt to net worth ratio or debt to equity = Total debt (or liabilities)

Tangible net worth

Times interest earned = Earnings before interest and taxes (or EBIT)

Total interest expense

Average inventory turnover ratio = Cost of goods sold

Average inventory

Receivables turnover ratio = Credit sales

Accounts receivable

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Average collection period ratio = Days in accounting period

Receivables turnover ratio

Payables turnover = Purchases

Accounts payable

Average payable period = Days in accounting period

Payables turnover ratio

Total assets turnover ratio = Net sales

Net total assets

Net sales to working capital ratio = Net sales

Current assets – Current liabilities

Net profit on sales = Net profit

Net sales (annual)

Net profit to equity = Net profit

Owners’ equity (or net worth)

Compare these ratios to your industry using publicly available data.

(Company Name) Ratios versus Industry Performance

Ratio (Company Industry Variance Explanation

Name) Data*
Current
Quick
Debt

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Debt to equity
Times interest

earned
Ave. inventory

turnover
Receivables

turnover
Ave. collection

period
Payables

turnover
Ave. payable

period
Total assets

turnover
Net sales to

working capital
Net profit to

sales
Net profit to

equity
* (identify the source here)

7.7 Risks & Assumptions

A. List the risks and assumptions that underlie your financial projections.

Category of Risk or Assumption Assumption Significance

General economy

46
 Interest rates
Inflation
Economic health
Tax rates
Industry growth/decline
Customer preferences
Competitive entrants/changes
Prices
Costs of goods sold
Other
Other

B. Identify any external factors that you feel should be disclosed as substantial risks.

(incorporated above)

8.0 Funding Request & Exit Strategy

8.1 Amount & Type of Funds Requested

A. Clearly state how much money you are requesting in this plan and the terms

under which you anticipate obtaining the funds?

(Company) requests $(amount) in the form of (type and terms).

B. Do you intend to use debt to finance your business? Explain.

C. Do you plan to issue bonds to finance your business at some point in the future?

8.2 Exit Plan

A. How will investors get paid back/out? Public offering? Employee buyout?

Merger or acquisition? Liquidation? Stock buyback?

47
Form of Payment/Payout Planned (yes/no) Anticipated Time Frame
Repayment of debt
Public offering
Employee buyout
Merger/acquisition
Liquidation
Stock buyback

B. Do you plan to franchise your business, or license any of your products?

Explain.

8.3 Milestones

Create a PERT chart for your organization to make your plans clear to potential investors.

(Company) PERT Chart

Task Period 1 Period 2 Period 3 Period 4 Period 5 Period 6

48
Note: This chart should be as detailed as is useful in the business plan. It may cover periods as

short as 1 month, even 1 week, or as long as 1 year.

Appendices

Resumes & Position Descriptions

1. Include a resume for each key team member.

2. Add position descriptions for any vital start-up positions that are not yet filled.

Sample Promotional Materials

1. Include any sample logos, letterhead, advertisements, brochures, or other items that can

be inserted into the plan.

2. Add photos of any promotional items, signage, or larger materials to provide examples.

Product Illustrations/Diagrams

1. If you have non-proprietary drawings or properly authorized proprietary drawings,

illustrations, or diagrams of your product or service concept, insert them here.

2. Any floor plans, assembly layouts, or the like should be included.

Detailed Financial Projections

1. Monthly financials and other financial projections that are in too great detail for

inclusion in the main document go here.

2. Include detailed assumptions and notes underlying the projections.

3. Significant contracts.

49
If you are starting a not-for-profit organization:

1. What is the name of your nonprofit?

2. What problem(s) are you trying to reduce or eliminate?

3. Describe the mission of your organization. ______ ______ ______ ______ ______ ______

______ _______ _______ ______ ______ _______ ______ ______ ______ ______ ______

______ ______ ______ ______. (21 words or fewer)

4. Describe the programs and services you plan to create.

Name of Type Target Method of Additional

Program (advocacy, Population Delivery Information

financial

support, direct

service)

5. How will your organization achieve the changes you intend to bring about?

a.

b.

c.

d.

50
e.

6. What is the unit of change (per person, animal, house, etc.)?

7. How will you measure these changes?

Desired Change Measurement Methodology

8. Who are your competitors (direct and indirect)?

9. How much will it cost you to deliver a unit of service?

10. What are your sources of funding?

Type of Funder Specific Rationale for Funding Range Likelihood of

Individual or Funding ($) Support

Organization

(profile or

name)

Individual

Foundation

Corporation

Charitable

Organization

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Religious Group

Federal

Government

State

Government

Local

Government

Other

52