Business Plan Template by Diwakar Kinra

Business Plan Prepared by:

Company name, address & phone: _______________________________ _______________________________ _______________________________ _______________________________

Owner(s) name, addresses & phone and % ownership: _______________________________ _______________________________ _______________________________ _______________________________

Table of Contents TOPIC Overview

PAGE -------------------------------------------------------------

Description of Business -----------------------------------------------

Product/Service ---------------------------------------------------------

The Market --------------------------------------------------------------

The Competition --------------------------------------------------------

Location of Business ---------------------------------------------------

Management -------------------------------------------------------------

Personnel -----------------------------------------------------------------

Use, and Effect of Financing ------------------------------------------

11-12

Financial Data -----------------------------------------------------------

13-14

Risk Analysis ------------------------------------------------------------

15-16

Rationales ----------------------------------------------------------------

Sales and marketing -----------------------------------------------------

Research Information Sources -----------------------------------------

Addendums #1 Start-up Cost Analysis -------------------------------------------------------#2 Personal Budget and Cash Available Worksheet ------------------------#3 Cash Flow Projection Worksheet ------------------------------------------#4 Financing Request Form -----------------------------------------------------

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20 21 22 23

Overview This should be your “purpose statement” which concisely states what your business does. Everything in your plan will make sense if you focus on this purpose. Be specific and try to keep the length of the statement brief.

______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________

Helpful tips: When describing the purpose of your business, make sure that the reader will understand what you do, even if they are unfamiliar with your type of business.

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Description of Business

Business Entity:     

S-Corp LLP/LLC Sole Proprietor Corporation Partnership

Business Type:    

Retail Wholesale Service Manufacturing

Is your business a start up, acquisition or, are you expanding an existing business? _________________________________________________ Does your business have seasonal highs and lows in sales? If so, when are the peak sales periods, and when are the slow periods? ___________________________________________________________ What is the current trend in your industry? Is it one that is growing, or mature with little potential for growth? Is your product or service sought after? _____________________________________________________ What is your source of information for the above? __________________________________________________________

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Product/Service Explain what service you provide, or the type of product you sell. Be specific, and remember that the reader may not be familiar with your business so use laymen’s terms. Detail any products or services that are stars, and those that are not in such great demand. Also, what is different about the service or product you offer that would attract your potential customers? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Hint: For example, “my business sells men’s suits and accessories that are targeted to the wealthy business person, manufactured by…. And will sell in the high-end price range of $1-2,000. The most popular products are…while the products that are not so popular, yet will be offered to provide full service are… Get the idea?

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The Market Explain, who your target customers are – What are the demographics of this market segment? Detail any market trends you have discovered in your research, how you will attract, hold and increase your market share. What is the annual market potential of this segment – How many target prospects are within your market area, and how much do they spend on average per year on your product/service? Provide the source of your information. Your pricing strategy is key. Is your business Price, Quality or Service Driven? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________

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The Competition Who are your competitors? Explain why you have determined them to be a competitor, what are their strengths, and weaknesses – market opportunity – and how much of the market share they own. Detail how you compare to the competition, both your advantage and disadvantage.

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Location of the Business Explain why you have chosen the location of your business, the type of space you have. Make particular note of any demographic or other market shifts going on - good or bad. Will you rent or own your space? What is the size of the space your business will occupy? Will you have room for future growth? What is the term of your lease, and will you have options to renew it? How much will your monthly rent be, and is there an escalation clause that will make it difficult to meet the increased cost?

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Management Describe your, and the management teams’ background/business experience and how it is relevant to your business. Discuss the strengths and weaknesses of each one, and how gaps in experience or ability will be addressed. Make sure all duties are described and clearly defined and include any additional resources or “advisers” that may be available to your business. Attach a Professional Resume or CV for each.

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Personnel Address your current staffing levels, explain additional staff-level and skill needs, future hiring plans and what the labor pool is like in your industry. This may create certain risks, be aware of them, address these and explain your back-up plan. How will you train your employees, what benefits will you offer and contingency plan do you have if you lose your most key employee(s)?

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Use and Effect of Financing If your business is a start up provide detailed costs to start the business, how much you will provide towards those costs and how much you need to borrow. To do this, complete the Start-Up Cost Analysis worksheet at the back of this workbook. (Use Addendum #1) After completing the Start-Up Cost Analysis, enter that total cost here: Start up cost Capital available from your liquid assets (subtract from start up cost) Deficit capital – loan amount needed

$ $ $

Next, complete the Personal Budget and Cash Available worksheet. (Use Addendum #2) After this is complete, you must project how much it will cost you to run your business for at least the first 12 months, on a month by month basis. This is critical, since your sales levels may fluctuate from month to month, as will your expenses. Use the Cash Flow Projection Worksheet. (Use Addendum #3. More detail on completing this is found in “Financial Data.”) Use the results of these worksheets to complete the following table, which will show you how much you have available in the first 90 days of operations. You may see a deficit – this will be your permanent working capital need. If you do not have these funds available, you will need to add this to your borrowing need to start the business. A B C D

Net cash available from Addendum #2 Net cash available (net deficit) from Addendum #3 Subtract B from A (this may result in a negative amount available) If C is a negative amount, this is your deficit working capital, and the amount you will need to add the borrowing request for start-up expenses. Enter this on the Financing Request Form Addendum #4.

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$ $ $ $

Use and Effect of Financing Cont.’ If your business is already in operation, explain why you need the money, how the loan will make your business more profitable, or what positive outcome will result from the financing. Use the Cash Flow Projection Worksheet to project the increased expense of the financing, and the increased net income as a result. Financing should result in an increase in gross sales or at least in net income. This might be due to improved efficiencies, reduced cost of goods sold – increased gross profit margin – increased capacity or other improvements in business operations. Borrowing simply to meet current expenses indicates other actions might be necessary. These should be explored first, and may include examining when your clients are paying you compared to when you bill them. If you have accounts receivable, then you are the bank for those clients. Are they paying according to your accounts receivable policy? Do you pay for your goods that you have sold, before you receive the money from those sales? Remember – It is all about “Cash Flow.” If your business has been operating for some time, and you still need to borrow, discuss your reasons and rational here.

Financial Data Describe your accounting system and process. It is critical that you have a competent accountant set up a system for good accounting records. Who is your accountant, are they a CPA and how often will they be meeting with you to discuss your business’ performance? Will they offer advice on how to improve the financial performance of your company? You can not afford to skimp on expense in this area. Whatever system you set up, it must generate the information to produce three documents: • • •

Balance Sheet Income Statement Cash Flow Statement

______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ If your business is a start up, provide a projected balance sheet and 12-month Cash Flow Projections. If your business is in operation, provide current financial information, including a balance sheet, latest tax returns and an interim P&L. Your accountant should prepare these. Attach these to this business plan when you submit your loan request.

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Financial Data Cont.’ The Cash Flow Projection will be necessary to determine how much money you will need to borrow from the bank. You will see the sample in Addendum #3 on page 22. This will also be used to determine at what point your business reaches breakeven, or the point at which your revenues equal expenses and your business is no longer operating at a deficit cash flow. Begin at the top with “Cash on Hand,” and enter the amount of capital you will be providing for the start up, and enter this in “Current Month.” All start-up costs should be entered in the column titled “Current Month.” Continue completing this column with all start up costs. You may expand the categories as needed. Follow the instructions on the sheet to total the amount of capital available at the end of each month, and bring this to the top of the next month for the “Beginning of month cash on hand.” Repeat this for 3 months of operations. You will most likely see a deficit on Line 5, “Cash Surplus (deficit).” Determine which month has the greatest deficit, this amount will be added to the loan request for permanent working capital. If you were to add this figure to your initial Cash on Hand under the Current Month, you should see the end of month would no longer be negative. You should continue this projection for 12 months and if you see that the deficit continues much beyond the 90-day period, speak with your accountant and banker to reevaluate your projections. For the purpose of the initial loan request, use the month with greatest amount of deficit for your borrowing request using Addendum #4. This amount should be entered on the “90-Day Working Capital Needs” line. If you provide terms to your customers, you will need to project out when you actually receive the cash from these sales, based on the terms you provide. These collections will be entered on line “b” of the worksheet. If you provide terms to your customers, what are the terms you offer and will you provide discounts if they pay earlier? _______________________________________________________________________ ___________________________________________________ How often do you bill your customers? __________________________ How will you monitor the collection of your receivables? ______________________ If you are already in business, please attach a copy of the most recent aging report for both accounts receivable and accounts payable. What terms do you have with your suppliers? And, do you receive a discount for paying earlier? __________________________________How long after paying your suppliers does it take you to turn your goods into cash? _______________________

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Risk Analysis Every business has risks. They are most dangerous to your business’ survival when you either do not see them coming, were unaware they existed or, worse, refused to believe there were any risks to your business. You should be aware of at least 2 or 3 risks that exist in your being able to make your business a success. Identify these and explain what steps you will take to mitigate these risks. Here is a brief list of some risks that are possible to encounter: Concentration of Accounts Receivable

Concentration of suppliers

Competitor taking key people

Economy declines

Revenue depends on contracts

If you offer terms to your customers, and there are a limited number of them, what happens if they encounter financial difficulty, pay you slower than agreed, or go to another company? What happens if your supplier goes out of business, discontinues your product line, or otherwise makes your product unavailable or too costly to market? Where did you get your best employee from, your competition? Then that is how they get theirs. How will you keep this from happening? This is something beyond your control. However, it is something you can plan for. History shows that economic conditions are not static, they change for good and bad over time. Where are we in the economic climate today? What happens if conditions worsen? Do you depend on contracts for your business? For example, do you sell to the government under contracts, or do you have contracts with organizations or businesses? What if these do not continue the contract after the expiration date? What if their funding source for your service is taken out of their budget? Also, how often and when do they pay for your services?

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Risk Analysis…Continued Use this section to identify risks that apply to your business, and what you will do to plan for and overcome these. Remember to be objective, and not get caught in the common mistake of thinking, “nothing can go wrong with my plan!” Also, you can take steps ahead of time to avoid some risks, other times you will need a contingency plan in the event the risk becomes a reality. (Use more space if needed)

Risk

The action you will take

Hint: Look at some of your competitors that are no longer in business, are having difficulty, or provide sub-par service or products. Find out why – these are risks to your business.

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Rationales In this plan, you have made certain projections, assumptions and other plans that were a result of your research, experience or assistance from advisors. These will be used to explain your rationales – the reason for the reader of this plan to believe your conclusions. Explain the rationale, source of your information and other reasons that justify your conclusions to the following specific areas: Projected Sales Revenue ________________________________________________________ ________________________________________________________ Gross Profit Margin ________________________________________________________ ________________________________________________________ Fixed Expenses ________________________________________________________ ________________________________________________________ Variable Expenses ________________________________________________________ ________________________________________________________ Industry Trends ________________________________________________________ ________________________________________________________ Marketing ________________________________________________________ ________________________________________________________

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Sales and Marketing Present a clear and concise picture of how you will market your product/service and how this will eventually lead to profits. Why did you choose this type of marketing? Is this the industry norm, and how do you know? All of this will be used as the rationales used in any projections you make and lead to your marketing plan.

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Research Information Sources Below are some websites and other helpful information sources. These are not the only places you should look, however these will provide you a start. You should also rely extensively on the advice from your accountant, attorney and banker. Local Public Library ------------------ Many Public Libraries have a separate business section, which will provide many sources of information specific to your industry. One publication to look for is the RMA, which provides the average sales, gross profit margin, net margin and other operating ratios broken down by industry. You should also look for any trade association magazines and periodicals, which may provide some valuable information.

www.sba.gov --------------------- This site will provide a great deal of information on how to write your business plan, research information for your projections and other information you should read before beginning your project.

www.census.gov ------------ This site provides demographic information available for your specific market area. Make sure the area you are going to target has the clientele you are after.

www.bls.gov ---------------- the government provides information here to research an industry and the future outlook of employment opportunities within that industry provides. This will be helpful in determining if your business’ outlook is growing, or retracting. For more assistance and advice, visit the SBA site and look for a SCORE or SBDC office, near you. These offices are funded by the U.S. Government to provide you assistance, free of charge, in starting and running your business. And, of course you may always contact your Business Consultant at the Business Resource Center, at 1 877-717-6738 or visit our website at

www.chase.com/brc

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Start-up Cost Analysis Addendum #1 Advertising Beginning inventory Building construction Cash Decorating Deposits Fixtures and equipment Installing fixtures and equipment Insurance Leasehold improvements Lease payment Licenses and permits Miscellaneous Professional fees Rent, equipment Services Signs Supplies Unanticipated expenses

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

Business Acquisition Other Other Total Setup Dollars Needed

$ $ $ $

Promotion for opening the business The cost of inventory to open business Use actual contractor estimates Requirements for the cash register Use average of estimates received Verify with all utility and phone companies Provide actual cost Use actual bids Verify with your insurance agent The amount per contractor bid Include lease deposit Check with city or state offices All other Include CPA, attorney, engineer, etc. Amount to be paid before opening Cleaning, accounting, etc. The amount per contractor bid Office, cleaning, etc. supplies Amount for unexpected costs (10 percent of total) Total Purchase Price of the business

Use for the “Use and Effect of Financing”

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Personal Budget and Cash Available Worksheet Household Income – From all sources Wages (after taxes & withholdings) Wages (other household income/after taxes) Interest and dividends Miscellaneous Total Income Household Expenses Auto expenses (gas, maintenance, etc.) Auto insurance Auto payment Beauty shop & barber Cable TV Charity Child care Clothing Credit card payments Dues and subscriptions Electricity Entertainment Heating company Gifts Groceries & outside meals Health insurance Home repairs Homeowner’s insurance Household Income tax (additional) Laundry and dry cleaning Life insurance Medical and dental Miscellaneous Mortgage payments Other debt payments Rent School expenses Telephone bill Tuition Vacations Water, sewer, trash collection Other Total Expenses

Addendum 2 Month 1 $ $ $ $ $ Month 1 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

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Month 2 $ $ $ $ $ Month 2 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

Month 3 $ $ $ $ $ Month 3 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

Total $ $ $ $ $ Total $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

Monthly Cash Flow Projections

Addendum #3 Current Month

Month

Total

1. Cash on Hand Beginning of Month

Plus (a) Cash Sales

(b) Collections From Accounts Receivable

2. Total Cash Available (Before Cash Paid Out)

3. Cash Paid Out (a) Purchased Inventory

(b) Gross Wages (Excludes Withdraw als)

(d) Payroll Expenses (Taxes, etc.)

(e) Outside Services

(f) Supplies (Of fices and Operation)

(g) Repairs and Maintenance

(h) Advertising

(i) Car, Delivery and Travel

(j) Account and Legal

(k) Rent

(l) Telephone

(m) Utilities

(n) Insurance

(o) Taxes (Real Estate, etc.)

(p) Interest Expense

(q) Ow ner's Withdraw al

(r) Loan Principal Payment(other)

(s) Miscellaneous (unspecified)

(t) Other Expenses (specify each)

(u) Other Expenses (specify each)

4. Total Cash Paid Out (total 3aThrough 3s)

5. Cash Surplus (Deficit) (2 minus 4)

6. Borrow ings 7. Loan Repayment 8. Cash on Hand (End of Month)

Make additional copies of this page to project 12 months

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Addendum #4

Financing Request Form

Projected date business will begin Date loan proceeds will be needed

____________ ____________

Uses of Capital – Total from Addendum #1 90-Day Working Capital Needs from Addendum #3 Total capital needed

$____________ + $____________ = $____________

Amount of capital from personal liquid assets

- $____________

Total Loan Request

= $____________

To determine what collateral is available for the lender, breakdown the Uses of Capital into the following categories: Equipment Furniture/Fixtures Inventory Leasehold Improvements Real Estate Business Acquisition Working Capital Miscellaneous

$____________ $____________ $____________ $____________ $____________ $____________ $____________ $____________

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For more information call Toll-Free 1.877.CHASE-24 The information in this guide is provided for informational purposes only and is not intended to provide legal, tax or accounting advice. You should consult a qualified advisor for advice specific to your own circumstances. The information provided herein is not warranted to offer a particular result or benefit and Chase makes no representations or warranties as to the accuracy, completeness or timeliness of the information. 2003 J.P. Morgan Chase & Co.. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC. Equal Opportunity Lender