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:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: : : : Copyright (c) 1992, David A. Works : : All Rights Reserved : : : : This is NOT free software. This is : : NOT public domain software. This : : is shareware: you are expected to : : pay a registration fee to the : : author of this program if you find : : find it useful. See registration : : details in the REGISTER ME file : : : :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: PLEASE READ "USER'S GUIDE" Registration has great benefits: 1. User's Guide 2. Latest version of Business Plan Master 3. Bonus diskette 4. More Programs Business Plan Master USER'S GUIDE David A. Works Grand Universal P. O. Box 4118 Whitefish, MT 59937 Member Association of Shareware Professionals (ASP) HOW TO REGISTER BUSINESS PLAN MASTER® There are several different ways to register BUSINESS PLAN MASTER. Please use whichever method is most convenient for you. In all cases you will receive the latest version available at the time your order is received. Read the sections that follow and the registration forms below for other benefits of registration. -BASIC REGISTRATION- Latest Version Of Business Plan Master Technical support (minimum 3 months) via regular mail, e-mail (via the online services listed below), or phone. Update notices will be sent to you. SPECIAL OFFERS: Registered Users of BUSINESS PLAN MASTER are entitled to receive a discount on a subscription to Shareware Magazine. The regular yearly subscription rate of $14.95 is reduced to just $9.97. A toll-free number and special Order Number will be provided upon registration. CompuServe: full details about a special offer for CompuServe will also be provided. The offer provides for FREE sign up, a $15.00 usage credit and a complimentary subscription to CompuServe Magazine. **PROFESSIONAL REGISTRATION** ADDITIONAL FEATURES: In addition to all the features listed above, we will also include the following: • Personal Net Worth Statement For many loans, a Personal Net Worth statement is part of the mandatory application package. This spreadsheet creates one for you! • Promissory Note Borrowing money from family or friends? Keep it on a business level with a promissory note that details all the terms and conditions of the loan. • Nondisclosure Agreement This Nondisclosure Agreement protects your rights and ideas. Mandatory when sharing your business plan with investors. • Non-Compete Agreement You have spent many years sharing your ideas with your employees or partners, now one of them runs off to your competitor! Not if they have signed one of these! USER'S GUIDE A complete PRINTED User's Guide will be included with all registrations. The User's Guide will also include screen shots of all templates and spreadsheets. This will make filling out these spreadsheets MUCH easier! BONUS DISKETTE: Also included with the registered version diskette will be another diskette with exceptional business and productivity programs. COUPON FOR ONE FREE UPGRADE Included in your registration packet will be a coupon good for one free upgrade. ~~~~~~~~~~~~~~~~~~~~~~~ PROFESSIONAL PACKAGE ~~~~~~~~~~~~~~~~~~~~~~~ Receive the PROFESSIONAL versions of three of our most popular software packages - Business Plan Master, Propose It! and "F&L". Individually these programs would cost you well over $100, but you can have all three programs for only $66 plus shipping and handling. Propose It! Create winning proposals by using these proven templates. Close that sale, win that bid or get that pet project approved. Templates. Professional registration - $24. F & L Create over 100 business Forms & Letters. Includes business correspondence, legal forms and agreements. Save hundreds of hours of time! Professional registration - $34. REGISTER DIRECTLY WITH THE AUTHOR: VISA or MASTERCARD Call us at (406) 862-1280 between 9:00 and 4:30 (Mountain Time; GMT-6) Monday through Friday. We will ship immediately. You may also mail the completed Author Registration Form with payment to Grand Universal at the address below. Please include any comments about BUSINESS PLAN MASTER with your order. Hope the P. O. Box doesn't offend you, but going to the Post Office is one of the highlights of our small town's social scene. This program is produced by a member of the Association of Shareware Professionals (ASP). ASP wants to make sure that the shareware principle works for you. If you are unable to resolve a shareware-related problem with an ASP member by contacting the member directly, ASP may be able to help. The ASP Ombudsman can help you resolve a dispute of problem with an ASP member, but does not provide technical support for members' products. Please write to the ASP Ombudsman at 545 Grover Road, Muskegon, MI 49442 or send a CompuServe message via CompuServe mail to ASP Ombudsman 70007,3536. BUSINESS PLAN MASTER® v2.5 Author Registration Form Macintosh NAME: _______________________________________________________ COMPANY: _______________________________________________________ ADDRESS: ___________________________ CITY/TOWN: ________________ STATE/PROV: _____________ ZIP/CODE: _________ COUNTRY: ____________ TELEPHONE: ______________________ HOW DID YOU FIRST LEARN OF BUSINESS PLAN MASTER ? _________________ HOW DID YOU GET THE EVALUATION COPY ? _____________________________ ----------------------------------------------------------------------------------------------------- QTY DESCRIPTION PRICE TOTAL ----------------------------------------------------------------------------------------------------- BASIC: latest version of BUSINESS PLAN MASTER, upgrade notices, other Grand Universal ___ shareware programs, CIS/Shareware Mag. offers $34.00 ___.00 PROFESSIONAL: above, plus includes a Printed User's Guide, a coupon for 1 FREE upgrade, ___ BONUS diskette $44.00 ___.00 ********************************************************* * PROFESSIONAL PAK: Includes Professional * * versions of Business Plan Master, Propose * *___ It! and F&L. Normally a $99 value! * $66.00 ********************************************************* Shipping and Handling: ANY: $4 US (1st class), $10 overseas (air) __.00 ___.00 TOTAL: ___.00 INVOICE contains an invoice that can be given to your purchasing department to ease ordering. Grand Universal CompuServe 70400,153 David A. Works Delphi DAVIDWORKS P.O. Box 4118 GEnie D.WORKS3 Whitefish, MT 59937 America OnLine DAVIDW2959 (406) 862-1280 Table of Contents _________________________________________________ Introduction 1 Requirements 2 Usage 2 Files 3 Using Business Plan Master 4 BPM Historical Financial Worksheet 4 BPM Proforma Worksheet 6 Break Even Worksheet 12 Business Plan Master® 13 Title Page 13 Table of Contents 13 Executive Summary 13 The Management 14 [Your Company] History 15 Objectives 15 Our Competitive Advantages 16 Pricing 17 Specific Markets 17 Targeting New Markets 18 Location 18 Manufacturing Plan 18 Research & Development 19 Historical Financial Data 19 Proforma Financial Data 19 Proforma Cash Flow Analysis 20 Income Statement 20 Balance Sheet 21 Ratio Analysis 21 Financial Standards 21 Breakeven Point 21 Use of Money 21 Business Plan Master - User's Guide -------------------------------------------------- Introduction ____________ Back in my younger days, I ran a small importing company. One of the sayings we used to pass around was "We may not be making any money, but we sure have fun!" Unfortunately that was very true. As a young kid out of college, it was a great thrill to drive all over the country, seeing new sights and having the impression that I was making a lot of money. But I wasn't, and it took me many years to discover why I didn't make money. As foolish as it might sound, I recently attempted to re-enter the same market but in a different way. This time I put down my plans in writing. I found it to be a lifesaver! I originally had hoped to raise outside capital but that was not a realistic proposition. I eventually gave up on the idea before investing much money in it. The point I am making is this - I wouldn't have known when to quit if I hadn't had my ideas, plans and assumptions in writing. Even though I tried to raise money, I soon learned that the value of the plan far exceeded all the hype I originally was advised to include (through various books and consultants) to impress outside investors. I ended up writing the plan just for ME and found that others liked it better that way. Now I am involved with several businesses and spend a fair amount of time helping other businessmen. I owe a lot of my current success to my original business plan and the discipline it brought into my business life. Every business needs a business plan and every business needs to keep their business plan current. It will be your road map to reach your goals and your guide to achieving what you want. David A. Works Business Plan Master Page 1 User's Guide Business Plan Master - User's Guide ------------------------------------------------ Requirements ____________ In order use "Business Plan Master®" you will need: • Any Macintosh • A word processing program • A spreadsheet program. Optional: • Microsoft Word 4.0 • Microsoft Works 2.0 • Laser printer (fonts are nice too!) • Spelling checker • Grammar checker • Thesaurus Usage ______ A good business plan is clear and concise and lays out your goals and plans. Good writing takes time and preparation. To save time, I have designed "Business Plan Master®" to be used verbatim. I recommend that you use your business plan as a guide for your business. Refer to it often to check your progress. Update it periodically. I recommend annually or semi-annually. Keep your old copies for future reference. Here are some ideas to get the most out of "Business Plan Master": • Get a copy of the "User's Guide". You can print this file out or register at the *Professional* level and I will send you one. You may find it useful to print out the other files as well as t hey are lengthy (also included in the registration package). • Work only on copies of the documents. • Keep your ideas simple and concise. Nobody likes to read long winded business plans. • Allow several hours for the preparation of your business plan. • Although we will generate a business plan that is some 30 pages long, your's may be shorter or longer. Some sections may not apply to your business. • Fill out the financial worksheets before spending time on the text. Business Plan Master Page 2 User's Guide Business Plan Master - User's Guide ------------------------------------------------- Files ______ BPM Proforma Financials This file contains a large Excel or Works worksheet that will give you a cash flow forecast, balance sheet, income statement, ratio analysis, and financial comparisons. BPM Breakeven Analysis A worksheet to help you determine your breakeven point. Must be used with BPM Breakeven Macros. BPM Historical Statements A worksheet to allow comparisons between your past financial statements and your proforma statements. Business Plan Master A file containing a sample business plan with sample text which you can use or modify. Formatted in the most popular style USERS GUIDE This User's Guide. REGISTER ME Registration details and order form. INVOICE Many companies need an invoice for accounting and tax purposes. Business Plan Master Page 3 User's Guide Business Plan Master - User's Guide -------------------------------------------------- USING BUSINESS PLAN MASTER® ------------------------------------------------- As mentioned previously, my recommendation is to start with the financial worksheets and then move into the text. This is very sadistic, I know, but if your business is not going to work out at a level acceptable to you or your investors, you need to know that before spending time on the text. So let me explain how to fill out the worksheets with your own projections and to understand the output they give you. BPM Historical Financial Worksheet ____________________________ [Optional] If you are already in business, then you probably have financial statements. You will need to include those in the "Attachment" area. You will find it useful to plug in that information into this file. This will allow you to compare your past financial history with the statements that will be generated by the other worksheets. This way you will be making a valid comparison. Description: This worksheet was originally created in Excel 3.0. It is one large worksheet. I had considered making a series of smaller "linked" worksheets, but decided that many users may not understand the usage of linked worksheets and therefore might lose data. Also, because it is one large worksheet, by using separate windows and separating the screen, you can instantly see the effect one area has on another. Also, I have placed protection on everything except the numbers. This is not to frustrate you, but to save you from making any changes which you have not thought totally through. To undo the protection use: Excel: "Options - Worksheet Protection Off" Works: You can only protect a single cell at a time. If you need to unprotect a cell, use "Options - Protected" and uncheck. Please keep in mind that any numbers already in the worksheet are examples and are probably nonsense. Business Plan Master Page 4 User's Guide Business Plan Master - User's Guide ------------------------------------------------- NOTE: (Excel only) Each section is recorded as a range name. This will make it easier for you to maneuver through the worksheet. To move to an area, use "Formula Go To" and pick out a range name. The first items to be entered are the variables into the "Income Statement". "Formula Go To - Statement Variables". Enter 1. The percentage rates of returns you have experienced 2. Your state tax rate 3. Your federal tax rate. Now you may go on to enter the remainder of the "Income Statement" information. This format should match most income statements. You may have to exercise some discretion as to where you should put specific items. Move to the "Asset Worksheet" "Formula Go To - "Asset Worksheet". Fill in: 1. The numbers in column K 2. The amount of goodwill in L17. If you have other fixed assets, include them in one of the topics as best you can. DO NOT ALTER L13! If you have other intangible assets, include them in "Goodwill" and put them in L17. DO NOT CHANGE THE LOCATION OF THIS TOTAL! Move to the "Balance Sheet" Formula Go To - "Balance Sheet". Next fill in the balance sheet. You will notice that your Fixed and Intangible Assets will be transferred over to this sheet. You will need to manually enter your depreciation rates in R17-T17. Once you have completed these, the other sheets will be automatically computed. Business Plan Master Page 5 User's Guide (Excel only) To print out any section of this worksheet, just use the "Option Set Print Area" command, then "Print" and you can have it printed out. I strongly suggest printing out each area separately to make your work easier. You can shrink the size of the printout on the Page Set Up menu. These are also included in the printed User's Guide received when you register. Locations: Income Statement: A13:F72 Statement Variables: A75:C80 Asset Worksheet: H1:M19 Balance Sheet: P1:V53 Ratio Analysis: P56:V79 D&B X1:AG61 RMA AI1:AO54 ----------------------------------- BPM Proforma Worksheet ____________________ You may have a great business idea, but if it doesn't make financial sense, you mustn't go any farther. The purpose of this large worksheet is to test the financial validity of your idea. This section is undoubtedly the most complex, but it is the most vital. Without some hope of financial success, there is no reason to start or continue a business. Even if you find that your idea is not viable or does not meet your own personal expectations, this exercise will be well worth the time and effort to determine that fact. Description: This worksheet was originally created in Excel 3.0. It is one large worksheet. I had considered making a series of smaller "linked" worksheets, but decided that many users may not understand the usage of linked worksheets and therefore might lose data. Also, because it is one large worksheet, by using separate windows and separating the screen, you can instantly see the effect one area has on another. Also, I have placed protection on everything except the numbers. This is not to frustrate you, but to save you from making any changes that you have not thought totally through. To undo the protection use: Excel: "Options - Worksheet Protection Off" Works: You can only protect a single cell at a time. If you need to unprotect a cell, use "Options - Protected" and uncheck. Business Plan Master Page 6 User's Guide Business Plan Master - User's Guide -------------------------------------------------- Cash Flow Projections A11:AQ71 This is a very large worksheet to help you track your cash flow. You may want to print out just this section to get a handle on what is involved. ----------------------------------------------------------------- IMPORTANT NOTE: REMEMBER THAT ENTRIES IN ONE AREA OF THE WORKSHEET WILL EFFECT OTHER AREAS OF THE WORKSHEET. DO NOT MAKE CHANGES IN THE FORMAT OF THE WORKSHEET UNTIL YOU ARE VERY CONFIDENT OF THOSE CHANGES. WORK ON A BACKUP COPY. ----------------------------------------------------------------- The best way to learn the relationships in the worksheet is to look at cells where it is obvious a calculation is being made. In general, the cash flow chart feeds into the Income Statement, which feeds into the Balance Sheet which feeds into the ratios and analyses. The place to start is to the "Variables" area. Formula Go To - "Variables". Here is what you need to fill in: Cash Reserve: You don't want to end any month with $0 or less in the bank. What will your cash reserve be? The worksheet will automatically determine how much of a bank loan you will need based on this figure. Markup: This is important for figuring inventory. If you have a service business, enter 100%. This will give you no inventory. (Default) Markup is figured as a percentage of SALES, i.e. you sell something for $100 and your cost is $50, your Markup is 50%. In mathematical terms (Sales Price/Gross Profit = Markup). Many think of Markup as the percentage difference between our cost and our sales price, i.e. I paid $50, sold it for $100, my mark up is 100%. This is markup on COST, not on sales. This distinction is important in your dealings with financial consultants, bankers or venture capitalists. Business Plan Master Page 7 User's Guide Business Plan Master - User's Guide -------------------------------------------------- Freight %: What percentage of inventory cost will your inbound freight be? If you have a service business, there will be none as this amount is figured as a percentage of inventory and you will have no inventory (due to the above entry). If you have a manufacturing company, inbound freight on raw materials will not be included, so the percentage is 0. Commission: How much commission (%) will you pay on sales? You might have this in a service business as finder's fees. Beg Cash: How much are you starting out with? Having completed this section, let's go to the "Sales" section (A20). If you have more than two products, you may insert them BEFORE the 2nd Product. This will keep the Total Sales calculation ok. I suggest that you wait before entering actual sales forecasts numbers. If you do an insertion, Edit Insert Row, keep in mind that several of the worksheets next to this Cash Flow Worksheet will have some holes in it. This will not effect the calculations, just the appearance. You can correct the appearance by 1. saving the worksheet and 2. Use the "Move" command on the section to be moved (highlight, Edit Cut, the Paste in the area you want). "Cash Receipts"(A26) I have used percentages which are typical if you grant terms of 2/10,n/30 (2% cash discount within ten days, otherwise net 30 days). If your terms are different you may adjust accordingly by changing the percentages next to the month. If you are on a cash basis, put all cash receipts in the "Month of Shipment" row. Do NOT delete any rows. If you do, the rest of the worksheets will not work! Remember that the cells are protected so you will need to unprotect them to change data. Now you can fill in the remainder of your costs. Try to make things fit in the closest category. If you have any questions as to where anything belongs (and I haven't explained it well enough!) contact me and I will help. If your financials are complex enough, we may need to do a customized spreadsheet. (This is not a blatant advertisement; I like tinkering with spreadsheets and financial info.) Business Plan Master Page 8 User's Guide Business Plan Master - User's Guide -------------------------------------------------- Don't delete any category or the worksheets will fail! If you feel secure that these costs are going to be stable you can copy them across the width of the worksheet. Rent Rent or mortgage payments. Utilities Electric, gas, garbage, water, etc. Telephone Office, cellular, long distance charges (not equipment, that is an asset). Salaries Management personnel (not hourly). Total of all. Payroll Hourly employees Withholding In the US, we have to deduct a certain percentage for federal and state taxes, as well as Social Security. Other countries may have different rules. You will need to check with accountant or a government publication to determine rates as they vary according to many factors. Inventory,Materials This will be automatically calculated on your sales using the Mark Up percentage you entered into the "Variables". Freight-In Will also be automatically calculated based on "Freight Percent" in the "Variables". Office Supplies Paper, pencils, envelopes, coffee, etc. Postage Ordinary mail or overnight, but not in association with shipping finished merchandise. Advertising Newspaper, radio, flyers, brochures, etc. Professionals Accountants, lawyers, etc. Commissions Figured automatically from the "Variables". Insurance Liability, fire, auto, truck, etc. Travel/Entertn I put this here as it is a cost, but the US Government keeps changing the rules, so be careful about what you try to deduct out of this category. Be smart and only put legitimate expenses in. Business Plan Master Page 9 User's Guide Business Plan Master - User's Guide ------------------------------------------------- Research Every company devotes a different amount for research and development. Please enter an amount which is appropriate for your company, if any. Miscellaneous A good spot for odds and ends. State Taxes You may have to pay quarterly taxes. It will depend on your income. Federal Taxes Same reasoning as "State Taxes". Now, you can enter in sales goals. I left this purposely for last. Controlling costs is far more important than getting tons of sales. If your costs are not in line, you will be tempted to "fudge" on the sales. Having determined your costs up front will help you to be more honest. I have devised this worksheet to be all you need. If you have more products or other costs which need to be included, take your time changing the worksheet. Make sure you are very familiar with its operation and always fiddle around on copies, not on originals. It is a lot of work to rebuild this type of material. I know. While putting the finishing touches on this worksheet my hard drive fizzled. I recovered all of "Business Plan Master®" except this one worksheet. Lost a lot of time. Asset Worksheet AS1:BC19 This is a very simple worksheet which asks you to enter your proposed assets. They are totaled automatically and are used in the balance sheets. Income Statement AT84:BA145 This is automatically generated from the cash flow worksheet. This is often called a "Profit & Loss Statement". Hopefully, you will see a profit! I have included information on year-to-year changes for your own information. Business Plan Master Page 10 User's Guide Business Plan Master - User's Guide ------------------------------------------------- It is very important that you enter the correct numbers in the "Statement Variables" area. Formula Go To - Statement Variables". Enter 1. The percentage rates of returns you project 2. Your state tax rate 3. Your federal tax rate. ****** Note: ****** In the following sections, you might see an entry "NA". This means that the denominator in the equation equaled zero. Since we can't divide by zero, an error is created. This should not be taken as a negative. In fact it cane be very positive. Many of the ratios are figured on debt. If you have no debt, you have a zero denominator. Frankly, I think that is wonderful. I just wanted you to know the math behind this. Look at each ratio to determine if there might be cause for concern or celebration. Balance Sheet AT150:BA194 Automatically generated. This shows the relationship of your assets, liabilities, and your net worth. Ratio Analysis AT199:BA220 Now we analyze the Income Statement and the Balance Sheet. Now you can start to see if your idea is healthy or not. Current Ratio Current Assets/Current Liabilities Acid Ratio Cash + AR/Current Liabilities Debt Ratio Total Assets/Total Liabilities TIE Times Earned Interest EBIT (Earnings Before Interest & Taxes)/ Interest Expense (no usage here) Inventory Turn Ending Inventory X 360/Cost of Goods Sold Avg. Collection AR X 360/Sales Total Asset Turn Sales/Total Assets Gross Margin Gross Profit/Sales Net Margin Net Income/Sales Return on Assets Net Income/Total Assets Return on Equity Net Income/Net Worth Officers Comp Officer's Compensation/Sales Business Plan Master Page 11 User's Guide Business Plan Master - User's Guide -------------------------------------------------- Dun & Bradstreet Industry Norms BE3:BM60 None of the ratios mean anything until you can compare them to others in your industry. The "Industry Norms" are complied on the basis of SIC Code numbers. Not all numbers are available, so if your isn't use the closest you can find. You do not want to be in the lower range of numbers nor do you want to be beyond the highs. No one will believe you if you are higher. If you are low, it will be very hard to get anyone to fund you as most projections are believed to be optimistic. (Available from most public libraries). These ratios are similar to the above ratios. Detailed (excruciating) explanations are in the D&B book. RMA BQ3:BV52 Another set of industry statistics comes from the Robert Morris Associates. The same advice holds for these as for the D&B reports. (Available from most public libraries). ------------------------------- Break Even Worksheet __________________ This is an incredibly simple worksheet to help you determine your breakeven point. All you have to do is enter the numbers in the noted areas. The two items you may not know are price and quantity. Price is defined as the price at which you will be selling your product. The quantity is the number sold. Everything else you should already know. So, if you want to know your breakeven price and you know everything else enter it in. Then (Excel) hit "Option-Command-p" or use "Run Macro - Price" or (Works) Command-p. This solves for price. If you want to know your breakeven quantity, enter everything else and then hit (Excel) "Option-Command-q" or "Run Macro-Quantity" (Works) Command-q. This solves for quantity. Please remember that Profit always equals $0. Also as with all Excel and Works macros, make sure you have the Breakeven Macros file open or it won't run. Business Plan Master Page 12 User's Guide Business Plan Master - User's Guide -------------------------------------------------- ----------------------------- Business Plan Master _________________ This file contains boilerplate text and is already formatted for a well-written professional business plan. We will now explain how to complete the following sections: Title Page First replace [My Company] with your company's name. Fill in the correct address and phone number as well. Finally replace [Your Name] with your name and replace [DATE] with today's date. Table of Contents Many word processing programs can generate a table of contents automatically and can paginate automatically. If yours doesn't you may want to consider paginating manually. Executive Summary This is the page where pagination and your footer starts. Open up the footer and replace [My Company] with your company name. Be sure to start pagination at Page 1. The remainder of this section should be written after the other sections are complete. It is a complete summary of your company and its objectives. Go through and replace the following: 1. [My Company] to your company name. It is ok to do a global search-and-replace if your program supports that. If you are allowed to confirm each replacement, it is a good idea to do so. 2. [I/we] to whichever is appropriate. May also be globally replaced. 3. Most other changes are unique to this page and are obvious. Whenever you come across <Product> and <Service>, this means that the items following pertain either to a product oriented business or a service oriented business. Of course, if you see something you want to use, by all means do so. Business Plan Master Page 13 User's Guide Business Plan Master - User's Guide -------------------------------------------------- 4. Always look out for "XXX" this means to replace this with a number. 5. Also be on the lookout for my attempts at comedy (i.e. Ferrari Testarossa). A business plan doesn't have to be dry and boring. But it should be original so use your own jokes! Be sure to include: • Type of business you have or are starting. • If you are currently in business, how are you doing? • What form you business is in - proprietorship, partnership, corporations (Subchapter S, etc.) • How are you going to be profitable and how profitable? • What distinguishes your business from the competition? • What are the financial rewards? Financial Goals Table: The data for this table is available from the BPM Proforma Financials (Stock Analysis) spreadsheet. The exact location is CA1 through CE25. You must enter this manually from the BPM Proforma Financials. The Management [Include either your resume (if proprietor) or short biographies (if partnership or corporation). Be sure to include all experience and information pertinent to this type of business. Then you will need to include a section on duties and responsibilities. This might incorporate a simple organization chart. Include salaries. Business Plan Master Page 14 User's Guide Business Plan Master - User's Guide -------------------------------------------------- [My Company] History If you have been in business, give a complete but brief history of your accomplishments to date. Short, succinct paragraphs are all that is truly necessary. Include all highlights whether positive or negative. The negative portions should include the lessons you learned and the steps taken to prevent a recurrence. This is very valuable. Everyone has made mistakes. Did you learn from them? Make sure your history ties into where you are going from now. Don't leave time gaps. [Product, Service] Description The readers of your business plan will want to know exactly what your product or service offering is. The length of this section is in direct proportion to the complexity of your service or product. Look one again for comments and suggested text in brackets which will need to be replaced. The complexity of your description will also be dictated by the audience your business plan is addressing. Investors may not understand all your technical lingo, whereas a partner with a technical background will want to see it all. Objectives Long Term State very simply what your firm's long term objectives are. Long term should be considered 5-10 years. Pithy statements such as "market leader", "most profitable", etc. are obvious. What you need are clear direct statements of intent. Short Term Short-term goals are those to be met within 5 years. Again steer clear of pithy overused marketing mumbo jumbo and just state your intent backed up with a plan. Short-term goals should mesh invisibly into and support long term goals. Competitors List all your competitors along with their respective strengths and weaknesses. Discuss how you will compete against these strengths and weaknesses, if you intend to do so directly. Business Plan Master Page 15 User's Guide Business Plan Master - User's Guide -------------------------------------------------- Our Competitive Advantages Unless you can distinguish yourself from the competition, you may have a rough go of it. It is very important that you have an honest appraisal of your company strengths and weaknesses as well as the strengths and weaknesses of your competitors. Some may prefer to switch this section with the section on "Competitors". However, if you have multiple products with different competitors, use a separate section for each product and examine the competition there. Make sure that you speak to all of your competitors' strengths and weaknesses whether you intend to meet them or not, as well as how these strengths and weakness will impact your business. This section has also been divided between <Product> and <Service>. Summary Because you have been so thorough in your explanation of your particular advantages, you need to summarize your competitive advantages so that your reader will get the gist of what your are saying. Business Plan Master Page 16 User's Guide Business Plan Master - User's Guide -------------------------------------------------- Pricing You will need to discuss at what price you will be offering your products or services. Respond to the following questions: • How did you calculate this price? • How does this price compare to your competition? Remember that price competition for a startup company is usually deadly for the startup company. It is better to offer more services or tangible benefits with a higher price. • What pricing policy are you following (cost plus, market, seat-of-pants, etc.)? Specific Markets If you are entering several markets at once (not a good idea unless they are very compatible or the single line of products or services you are offering cross market lines) it is mandatory that you discuss your strategy for each market. Market #1 General History Give a specialized history of this market and how it pertains to your product. Keep in mind that you know your market better than anyone. Therefore outsiders may not understand it as you do. Try to imagine writing this for someone who knows nothing about your industry or product. This will help you keep your ideas simple and clear. Entry Strategy Discuss how you will enter (or have entered) this particular market in detail. Growth Strategy Having now entered this market, how will you maintain and increase your sales and service? Market Size & Share State directly what you expect to achieve in this market. Business Plan Master Page 17 User's Guide Business Plan Master - User's Guide -------------------------------------------------- Other Markets Use the same format for additional markets. Targeting New Markets In order to keep growing, you will need to either expand into your present market or address other markets. How are you going to do this? Location For many businesses, the location where you run your business is extremely important. This is true for manufacturing, distribution or wholesale businesses as well as many service industries and product-based industries where being close to clients and customers is very important. Manufacturing Plan This section does not apply to service businesses. Because of the difference in manufacturing processes, I have just included some sample text. You will need to address the following questions: • What are your sources of supply? Do you have secondary sources? • Which production method will you be using? Is it state of the art? • How do you [will you] protect your cost advantage? • Will you be a job shop or mass production? • Are there any toxic or hazardous materials involved with your production [include by-products] and how will you handle them? • What will be your quality control procedures? • What do you estimate to be your capital asset requirements? Business Plan Master Page 18 User's Guide Business Plan Master - User's Guide -------------------------------------------------- Research & Development Probably also only for product based businesses, unless continuing education will play an important role in your service- based business. The following points need to be covered: • List and explain your present research achievements. • Who will control research efforts? • Describe projects underway are planned for near future. • What has been your success in terms of rate of investment? • Are any government funding sources available to you? • Are you involved or seeking to be involved in any R&D partnerships? Historical Financial Data Simply include these statements in the "Attachment" area. Also discuss all assumptions, successes, problems, discrepancies and other items not obvious to the Casual observer. Also include the worksheet "BPM Historical Financials". These include valuable guides to industry standards for use in comparing your business with others in your field. For information on filling in this spreadsheet, see the section "BPM Historical Financial Worksheet" above. Also explain any occurrences of "NA" and their significance. Proforma Financial Data Give a complete explanation of all your financial statements. Clear up anything that might not be obvious to the casual observer. Check documentation for complete explanation of spreadsheets. Also explain any occurences of "NA" and their significance. Business Plan Master Page 19 User's Guide Business Plan Master - User's Guide -------------------------------------------------- Proforma Cash Flow Analysis Assumptions Just because the worksheets make sense to you, they probably won't make sense to anyone else. Also, you may forget what your own assumptions were. BE SURE TO KEEP THIS UP-TO-DATE! Sales Forecast Putting your growth rates here will help you remember what you forecast as well as presenting these numbers in a simplified fashion. Cash Flow Variables You need to be forthcoming about any variables which may effect your cash flow. No business ever goes exactly according to plan. The idea is to show that you can keep on top of it when things go worse than expected and also when things go better than expected. Both can be dangerous! Income Statement Assumptions Just because the worksheets make sense to you, they probably won't make sense to anyone else. Also, you may forget what your own assumptions were. BE SURE TO KEEP THIS UP-TO-DATE! Risks & Variables Share your assumptions and what might happen if your assumptions are wrong - positive or negative. Business Plan Master Page 20 User's Guide Business Plan Master - User's Guide -------------------------------------------------- Balance Sheet Cost Control How do you plan to track your financial progress? Ratio Analysis Ratio Analysis allows you to track your performance in accord with some financial conventions. These ratios will be closely looked at by bankers and others interested in investing in your business. More importantly, you should know where you stand. Financial Standards The two most popular sources of industry financial rations are Dun & Bradstreet's Industry Norms and the Robert Morris Associates tables. Both of these references should be available in your public library in the business reference section. These two items are copyrighted by their respective companies. Breakeven Point Taken from Breakeven Analysis spreadsheet. Use of Money This section is for those who are seeking to raise capital or debt financing. You need to let your prospective investors know where the money is going. Even close friends and family need to be kept informed about where the money is going. Consider the following questions: • Where is the money going? • Who is the supplier? • What is the price? • Model name and number. • Are there any extra charges such as sales tax, installation charges and freight? • How will this make this business more profitable? Business Plan Master Page 21 User's Guide