Business Plan for a Startup Business
Creating a Business Plan Narrative
Save this to your computer as a template, and then make your changes to the working file. As you go thru this plan, you’ll replace suggestions with actual content.
Please note: Some information will be repetitive. This is intentional:
• Not many people will read the entire document.
• Repetition of certain information will help the reader retain it.
You will need to hit certain highlights in several places & several different ways.
There are two primary components to a business plan:
1. What you’re planning to do - The Projected Financials
2. How you’re planning to do it – The Financial Assumptions and the Narrative
Sounds simple huh?
It’s not, but as you go thru the steps to create a detailed financial plan, you will work thru important issues you may not have considered. This is one of the reasons banks and investment bankers like to see Business Plans: They are evidence that you have thought things thru and you have a strategy.
This business plan is designed to be integrated with the financial modeling tool offered at . The financial tool is designed to be a stand-alone product, and it is the preferred format for bank loans of $1,000,000 or less. If you are going after Private Equity Financing, or a large bank loan, you’ll need the financial projection plus this narrative.
To integrate this narrative with the financial projection, simply use this table of contents instead of the one offered with the projection.
Read this entire narrative before you begin: Take notes as you read in order to formulate a strategy for preparing a meaningful business plan.
If you need further assistance: There are several ways to get assistance with creating a business plan:
• Do-it-yourself help: We recommend a book titled Saving Without Sacrifice – Small Business Edition. This book is designed to guide someone thru the process of building a business, expanding a business, or helping a business operate more efficiently.
• Personal Assistance: If you need more assistance, there are a couple options we recommend:
• Contact your CPA: If you have a CPA, they could be very helpful in preparing a business plan with you. Several firms have already begun using to prepare business plans for their clients because our tools are very easy to use – Easy if you are a financial professional.
• Contact us: Please also consider contacting us if you would like help preparing a business plan. We will find a financial professional in your area who works with our software, or we will send someone from our office.
We wish you the best of luck and success with all your business endeavors!
Small Company
Please note! This narrative was purchased as a single company license. You do not have permission to sell it or use it in any way for business consulting purposes without express written permission from Gruber and Company, Inc.
Detailed Business Plan
Including
Financial and Cash Projections
Your Business Name
Address
City, ST ZIP Code
Telephone
Fax
E-Mail
Company Name
Business Plan
Table of Contents
Executive Summary
General Company Description
Products & Services
Product Features, Benefits
Marketing Plan
Industry Information, Customers, Competition, Strategy,
Promotional Budget, Sales Forecast
Operational Plan
Management and Organization
Startup Expense and Capitalization
Appendix
Explanation of Ratios Used in the Financial Projection
Footnotes
Line and Bar Chart Summary of Projected Financial Data
Financial Projection:
Comparative Summary Financial Statements:
Actual Activity thru December 31, 2007
Budgeted & Projected Activity for 2011, 2012, 2013 & 2014
Balance Sheets, Income Statements, Statements of Cash Flow, General and Administrative Expenses
Detailed Budgeted Financial Statements:
For the 24 months ended December 31, 2012
Balance Sheets, Income Statements, Statements of Cash Flow, General and Administrative Expenses
Assumptions for the Detailed Budgeted Financial Statements:
Detailed assumptions by line item
Budgeted Employee Headcount
Monthly Sales: Calculation and Schedule
Depreciation Schedule
Ratio Analysis
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4
5
10
14
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20
21
22
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Executive Summary
Write this section last.
This should be one page or less.
Explain what you plan to do, and how you plan to do it in a concise and professional manner. Try to elicit enthusiasm from your intended audience. This is the basic information you want to share:
• The fundamentals of the proposed business
• The product
• The potential
• Who are your customers?
• Concise outlook for your industry and your business territory
Clearly state how much capital you need, where it’s coming from, and how you intend to use it.
General Company Description
This should also be a one page summary. Much of this information will be covered in detail later. If the Exec. Summary is done last, this should be done next to last.
What industry will you be in? Describe it…Growth industry? etc. Where are you located? What will you do?
Describe your most important company strengths and core competencies. What factors will make the company succeed?
Mission Statement:
Optional: Some companies try to set a corporate tone with a mission statement, and some clients like to read mission statements.
Company Goals and Objectives:
You define what the goals are. Are you interested in growing to a certain level? Creating a certain level of profit? Positioning yourself in a certain way?
Business Philosophy:
What is important to you in business? What is your basic approach or emphasis regarding making sales, serving customers, employee relations etc..
Products and Services
Describe your products and/or services in detail including their superiority. Keep drawings and graphs at ½ page or smaller. How does your product or service stand out?
What are the pricing structures of your products and/or services?
How will your customers’ react to your product? IE: Have you thought about what your customers will think of your product?
Features and Benefits
List all of your major products or services.
For each product or service:
• Describe the most important features. What is special about it?
• Describe the benefits. That is, what will the product do for the customer?
Note the difference between features and benefits, and think about them. For example, a house that gives shelter and lasts a long time is made with certain materials and to a certain design; those are its features. Its benefits include pride of ownership, financial security, providing for the family, and inclusion in a neighborhood. You build features into your product so that you can sell the benefits.
What after-sale services will you give? Some examples are delivery, warranty, service contracts, support, follow-up, and refund policy.
Marketing Plan
Market research will help demonstrate that you’re on track. Use the business planning process as your opportunity to uncover data, to question your marketing efforts, and to improve your chances of success.
Market research
There are two kinds of market research - primary and secondary:
Secondary research means using published information such as industry profiles, trade journals, newspapers, magazines, census data, and demographic profiles. This type of information is available in public libraries, industry associations, chambers of commerce, from vendors who sell to your industry, and from government agencies.
Most librarians are pleased to guide you through their business data collection. You will be amazed at what is there. There are more online sources than you could possibly use.
Your chamber of commerce has good information on the local area.
Trade associations and trade publications often have excellent industry-specific data.
Primary research means gathering your own data. For example, you could do your own traffic count at a proposed location, use the yellow pages to identify competitors, and do surveys or focus-group interviews to learn about consumer preferences. Professional market research can be very costly, but there are many books that show small business owners how to do effective research themselves.
Be as specific as possible in your marketing plan. Give statistics, numbers, and sources. The marketing plan supports Projected Sales – the most important figure in the entire business plan.
Industry Information
Facts about your industry:
• What is the size of your market? Is there a physical territory (like a franchise agreement)?
• What percent share of the market will you have? (Skip this if you don’t plan to go after 5% or more).
• Trends in target market—growth trends, trends in consumer preferences, and trends in product development.
• Growth potential and opportunity for a business of your size.
• What barriers do you face to enter this market? How will you overcome the barriers? Some typical barriers are:
o High initial capital requirements (production, marketing, etc.)
o Consumer acceptance and brand recognition
o Education and/or skill level of the local workforce.
o Training costs
o Technology
o Unions
o Transportation costs and logistics.
o Local tax structure (Real Estate, Income, Sales)
• How could the following affect your company?
o Change in technology
o Change in government regulations
o Change in the economy
o Change in your industry
Customers
Identify your targeted customers, their characteristics, and their geographic locations, otherwise known as their demographics.
The description will be completely different depending on whether you plan to sell to other businesses or directly to consumers. If you sell a consumer product, but sell it through a channel of distributors, wholesalers, and retailers, you must carefully analyze both the end consumer and the middleman businesses to which you sell.
You may have more than one customer group. Identify the most important groups. Then, for each customer group, construct what is called a demographic profile:
• Age
• Gender
• Location
• Income level
• Social class and occupation
• Education
• Other (specific to your industry)
• Other (specific to your industry)
For business customers, the demographic factors might be:
• Industry (or portion of an industry)
• Location
• Size of firm
• Quality, technology, and price preferences
• Other (specific to your industry)
• Other (specific to your industry)
Competition
List your major competition – Companies as well as competing products.
How will your products or services compare with the competition? How will your product compare in a good economy v. a bad economy?
You could use a table or a narrative to compare yourself against your competition. Consider using the table below followed by a brief narrative to explain the key points illustrated by the table.
Competitive Analysis
| |Products |Price |Quality |
|Bankrupt |Less than 1.1 |Less than 1.23 |Less than 1.81 |
|Zone of Ignorance |1.1 to 2.6 |1.23 to 2.9 |1.81 to 2.99 |
|Non-Bankrupt |Greater than 2.6 |Greater than 2.9 |Greater than 2.99 |
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