Foundation Communities Community Tax Center. I. Introductions II. Overview of Course III. Why Develop a Business Plan? IV. Strategic Planning – A Brief.

ROADMAP TO SUCCESS: HOW TO WRITE A BUSINESS PLAN

Foundation CommunitiesCommunity Tax Center

PART 1: LAYING THE FOUNDATION

I. IntroductionsII. Overview of CourseIII. Why Develop a Business Plan?IV. Strategic Planning – A Brief

OverviewV. Components of Your Business

Plan Your Plan’s “Curb Appeal”

WHAT IS A BUSINESS PLAN ?

Summary of your business and the future you hope to create

Realistic but conveys energy and optimism

Step by step plan to achieve your goals

“A goal is a dream with a deadline” – Steve Smith

WHY DO A BUSINESS PLAN?

Clarifies direction for you and your team

Foundation for raising capital A way to track progress of

your business Protects your financial future

GOALS

RESOURCES

CONSTRAIN

TS

STRATEGIC PLANNING

Success Occurs at the Intersection of: Goals, Constraints, and Resources

GOALS CONSTRAINTS RESOURCES

Own My Own

Business

Financial Find Money: Savings/EquityBorrow, etc.“Bootstrap”

Legal: Permits, Licenses etc.

Become informedConnect with SBDP Staff

Talent/Education/Ability Take CoursesHire TalentWork Hard

Environmental Mitigate, Choose Another Site

BUSINESS PLAN TIPS

Takes 40 + hours to complete, 20 – 30 pages maximum

Be concise; less is more Appearance counts – easy to

read, professional

COMPONENTS OF YOUR BUSINESS PLAN

Cover Sheet Table of Contents Executive

Summary Company Overview Product and

Service Description Market Analysis

Marketing Sales Strategy

Internet Strategy

Management & Personnel Team

Financial Projections

APPENDIX

COVER SHEET

Introduces your business to prospective funders

Keep it clean and simple Full legal name of business Location: Address, Street, City,

State, Zip Telephone numbers and email

addresses Main contact person(s)

TABLE OF CONTENTS

Road map for prospective Funder or Investor

Statement about you Organized Visionary Structured

EXECUTIVE SUMMARY

Write this section last One section that everyone will

read Must capture and hold interest

of reader Encapsulates the entire

Business Plan Shows clarity of your goals

Who you are What you want Where you are going

MISSION STATEMENT

Who You Are What You Do (Products &

Services) For Whom (Customers) Why (What your Customer wants) “It’s not what you sell, it’s what

you stand for” – Roy Spence

FRITO LAY MISSION STATEMENT

Satisfy our Customers by providing fresh, tasty

snack products throughout all

segments of our business

COMPANY OVERVIEW

Provides information on your company including where you’ve been

How your company fits into your industry and marketplace

Your growth potential Economic trends that are

favorable to your company

BUSINESS ENTITIES

Sole Proprietorship General Partnership Limited Partnership (LP) Limited Liability Partnership (LLP) Limited Liability Company (LLC) Corporations

C Corporation S Corporation

PRODUCT & SERVICE DESCRIPTION

Specifics on what your business does Service Industry Product Sales NIC/SIC Code (

http://www.osha.gov/pls/imis/sic_manual.html)

Competitive Comparison Pricing Strategy

PART 2: YOUR BUSINESS PLAN

Market Analysis Marketing and Sales Strategy Internet Strategy Marketing is the process of

creating and retaining customers in large enough numbers to be profitable

MARKET ANALYSIS

Market Segmentation –who will buy your products

Define target market strategy How current market is

underserved or not served effectively

Competition & buying patterns Define a unique niche within

the existing marketplace

MARKETING & SALES STRATEGY

Science of planning for and executing a promotional campaign

Develop marketing strategy Product Price Place Promotion Budget

INTERNET STRATEGY

Sell products or information only

Internet sales integrated with inventory

Website Viral Marketing / Facebook

MANAGEMENT & PERSONNEL PLAN

Experience Maturity Vision Drive Leadership

YOUR MANAGEMENT TEAM

INTERNAL Yourself Partners (if Applicable) Key Staff (If Applicable)

MANAGEMENT TEAM -EXTERNAL

EXTERNAL CPA: with Small Business Experience Attorney: With Small Business

Experience Financial Planner: with Small Business

Experience Board of Directors

PART 3: FINANCIAL PLAN

Start Up Costs Break Even Analysis Projected Profit and Loss Projected Cash Flow – The

Lifeblood of Your Business!

BREAK EVEN ANALYSIS

The point at which a businesses

is neither making a profit nor experiencing a loss

BREAK EVEN ANALYSIS: FIXED COSTS

• Costs that generally remain the same month to month and are not dependent upon the number of Sales.

• What you would have to pay regardless of whether you had any customers walk in.

BREAK EVEN ANALYSIS: FIXED COSTS

Personnel (with exceptions) Lease/Mortgage Utilities Debt Financing Insurance

BREAK EVEN ANALYSIS: VARIABLE COSTS

• Costs that vary directly with:• the number of units sold, or • the number of clients served

BREAK EVEN ANALYSIS: FIXED COSTS SAMPLE (CLASS PROJECT)

Designer Bags Fixed Costs Variable Costs Variable Income Break Even Profit

CASH FLOW STATEMENTS

Shows the effects on Cash of operating and Financing Activities

Indicator of Ability to Generate Positive Cash Flows Pay Liabilities Pay Dividends

Could indicate need for additional Financing

BALANCE SHEET

Provides a ‘snapshot’ of a business’s financial position at a given point in time

Assets: What a business Owns Liabilities: What a business Owes Net Worth (Equity)

NET WORTH = ASSETS – LIABILITES

BALANCE SHEET: ASSETS

Cash Inventory Receivables Prepaid

Expenses Plant &

Equipment

Office Equipment

Machinery Land &

Facilities Goodwill

BALANCE SHEET: LIABILITIES

Current Liabilities Current Debt Payables Credit Cards

Long Term Liabilities Long Term Debt

(Loans) Payments to

Investors

EquityPaid in CapitalRetained Earnings

PROJECTED CASH FLOW:

THREE THINGS TO REMEMBER:

1. Cash is King2. Cash is King3. Cash is King

Class Test

FINANCIALS: PRACTICAL PLANHOW/WHERE DO I START?

Spreadsheets (2) Start up Costs (what are the

things I need to get started and how much do they cost?)

12 Month Cash Flow (Detailed Line Item Income and Expense)

Read Sample Plan through a couple of times highlight and make notes!

APPENDIX

Keep it uncluttered! Biographies and resumes of key

team Supporting documents Brochures, flyers, magazine

articles References

Past lenders Suppliers Trade creditors

BUSINESS PLANNING RESOURCES

City of Austin SBDC Gold Book

Services available through other organizations

Silver Book Networking Resource Guide for

Small Businesses Bronze Book

Resource directory of local women and ethnic minority professional associations

HOW TO WRITE A BUSINESS PLAN RECAP

Components of a Business Plan The Planning Process Researching Target Markets,

Demographics, Competitors Financials: Start Up Costs, Cash

Flow, Break Even, Balance Sheet Relate Business Planning

Components to Own Business Other Resources for Assistance

ROADMAP TO SUCCESS: HOW TO WRITE A BUSINESS PLAN

Questions Comments, Ideas

Suggestions or Thoughts?Thank You!