Pro Bp Coffee Shop Business Plan

The Business Plan for Your Coffee Shop Fourth Edition

The Business Plan for Your Coffee Shop

Other Titles of Interest from 125aday.com Publishing Company, Inc. Helping Small Business Do More Business! More Coffee Shop Related Products

• Start Your Own Coffee Shop

Top Business Books

• New Customer Development Program

• Customer Care Guide

• Market Research: Surveys and Questionnaires

• Human Resources: Independent Contractors

Special Offers Business Talk™ Newsletter For more information, go to www.125aday.com to sign up or e-mail us at [email protected]

ii

http://www.125aday.com/

mailto:[email protected]


The Business Plan for Your Coffee Shop Fourth Edition Starting, operating and managing a coffee shop is a complex task. A functional business plan is not only valuable when seeking investment funds, but in the day to day management of the coffee shop. This eleven step business plan will help you create your coffee shop business plan with confidence. This user friendly business plan was prepared with ProBP, the professional business plan software solution. Be sure that you have all of the components; the workbook, the Excel spreadsheet and the Word Option document. Jack Samson 125aday.com Publishing Company, Inc. PO Box 2432 Frisco, Texas USA 75034 866-900-7887 www.125aday.com

iii


Publisher: 125aday.com Publishing Company, Inc. Cover Design: Chad Wade Photographs & Graphs Copyright © 2007 David Lee This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering professional services. If legal, account, medical, psychological, or any other expert assistance is required, the services of a competent professional person should be sought. ADAPTED FROM A DECLARATION OF PRINCIPLES OF A JOINT COMMITTEE OF THE AMERICAN BAR ASSOCIATION AND PUBLISHERS. Copyright 2004-2008 by 125aday.com Publishing Company, Inc. All rights reserved. Reproduction or translation of any part of this work beyond that permitted by Section 107 or 108 of the 1976 United States Copyright Act without the permission of the copyright owner is unlawful. Requests for permission or further information should be addressed to the Permissions Department, 125aday.com Publishing Company, Inc. 125aday, 125aday.com, Business Talk and ProBP (business plan software) are trademarks of Dallas Distribution and Publishing Company, Inc. Third-Party Materials and Linked Materials - The publisher is not responsible for the content of those "third-party" materials which are not directly related to the publisher, and not under its control or auspices. Further, the publisher makes no representations regarding the content, products, services, advertising or other materials available from "third-party" materials and is not responsible for the legality, decency, copyright compliance, or accuracy of information provided by those individuals/companies which have paid to be linked to this material. Additionally, the publisher will not be held liable for damage or loss (caused or alleged to be caused) in connection with the use of a "third party" material. Please be advised that when you use affiliated services or third-party materials, you may be subject to additional terms and conditions. As with a multitude of other web materials, we ask that you exercise due diligence in browsing any "outside" vendor page. Trademark Notice - The words contained in this text which are believed to be trademarked, service marked, or otherwise to hold proprietary rights have been designated as such by use of initial capitalization. No attempt has been made to designate as trademarked or service marked any personal computer words or terms in which proprietary rights might exist. Inclusion, exclusion, or definition of a word or term is not intended to affect, or to express judgment upon, the validity of legal status of any proprietary right which may be claimed for a specific word or term.

iv



Table of Contents

Introduction................................................................................................. 1

Customizing the Business Plan ................................................................. 2 Changing the Page Setup.......................................................................... 2

The Page Tab ...................................................................................... 2 Orientation ...................................................................................... 2 Paper Size ....................................................................................... 2 Print Preview.................................................................................... 2

The Margins Tab .................................................................................. 2 The Header/Footer Tab ......................................................................... 2

Changing the Header......................................................................... 2 Changing the Footer.......................................................................... 2

The Sheet Tab ..................................................................................... 3 Changing the Font and Font Size ............................................................... 3 Changing the Color of the Text .................................................................. 3 Adding or Removing Worksheets................................................................ 3 Renaming the Pages in the Spreadsheet ..................................................... 4 Renaming the Pages in the Spreadsheet ..................................................... 5 Adding or Removing Rows or Columns........................................................ 5 Inserting Pictures .................................................................................... 5 Changing the Formulas............................................................................. 5 Excel Help .............................................................................................. 5

Word® Option........................................................................................... 5

Samples and Illustrations ......................................................................... 6

Changing Chart Information ..................................................................... 6

Mutual Non-Disclosure Agreement............................................................ 8

Step One ...................................................................................................... 9

Your Personal Evaluation.......................................................................... 9 Your Net Worth ....................................................................................... 9

Instructions on How to Complete in Excel ................................................ 9 Your Personal Budget............................................................................... 9 Why This Information Is Important ............................................................ 9

Step Two .................................................................................................... 11

The Cover Sheet...................................................................................... 11 First Impression! ....................................................................................11 Elements of the Cover Sheet ....................................................................11 Complete the Cover Sheet Section ............................................................11 Saving Your Business Plan File..................................................................11 Cover Sheet Sample ...............................................................................13

v


Step Three.................................................................................................. 14

The Executive Summary.......................................................................... 14 The Basics of the Executive Summary .......................................................14 Applying for Loans or Investors ................................................................14 Information That Should Be Included ........................................................14

Mistakes to Avoid ................................................................................16 Mission Statement ..................................................................................16

The Basics of the Mission Statement ......................................................16 Mistakes to Avoid ................................................................................17

Products and Services .............................................................................17 Complete the Executive Summary.............................................................18 When You Have Completed the Executive Summary ....................................18 Executive Summary Sample.....................................................................19

Step Four ................................................................................................... 22

General Company Description................................................................. 22 Company Description: Business Plan Basics................................................22 Mistakes to Avoid ...................................................................................23 Company Goals and Objectives.................................................................23 Business Philosophy................................................................................23 Legal Form of Ownership .........................................................................24 Complete the General Company Description Section ....................................24 When You Have Completed the Company Goals and Objectives.....................24 General Company Description Sample .......................................................25

Step Five .................................................................................................... 26

Products and Services Description.......................................................... 26 Competitive Advantages or Disadvantages..............................................26 Pricing Structures................................................................................26

Products and Services Description: Business Plan Basics ..............................27 Mistakes to Avoid ...................................................................................27 Complete the Products and Services Section...............................................28 When You Have Completed the Products and Services Description .................28 Products and Services Description Sample .................................................29

Step Six...................................................................................................... 31

Start-Up Costs and Capitalization ........................................................... 31 Qualified and Non-Qualified Start-Up Costs ................................................31

Qualified Start-Up Costs.......................................................................31 Non-Qualified Start-Up Costs ................................................................31

Budget Allowances..................................................................................31 Evaluating Start-Up Costs........................................................................32 Start-Up To Do List.................................................................................33 Start-Up Narrative ..................................................................................34

Instructions on How to Complete in Excel ...............................................35 Complete the Start Up Costs Section .........................................................36 When You Have Completed the Start Up Costs and Capitalization Section .......36 Start-Up Narrative Sample.......................................................................37

Step Seven ................................................................................................. 41

The Marketing Plan ................................................................................. 41 Marketing & Sales: Business Plan Basics ....................................................41

vi


Mistakes to Avoid ...................................................................................42 Target Market: Business Plan Basics..........................................................43 Mistakes to Avoid ...................................................................................44 Market Research Basics ...........................................................................44

Market Research - Why? ......................................................................44 Market Research - How?.......................................................................45

Primary Market Research ..................................................................45 Secondary Market Research ..............................................................45

Economics of the Industry .......................................................................45 Product .................................................................................................46

Features and Benefits ..........................................................................46 Customers.............................................................................................47 Competition...........................................................................................47 Niche Market .........................................................................................48 Marketing Strategy .................................................................................48

Promotion ..........................................................................................48 Promotional Budget .............................................................................48 Pricing ...............................................................................................49 Proposed Location ...............................................................................49

Complete the Marketing Plan....................................................................50 When You Have Completed the Marketing Plan ...........................................50 Marketing Plan Sample............................................................................51

Step Eight................................................................................................... 54

Sales Forecast......................................................................................... 54 Financial Projections: Business Plan Basics .................................................54 Sales Forecast .......................................................................................55 The Excel Spreadsheet ............................................................................55

Instructions on How to Complete in Excel ...............................................55 Complete the Sales Forecast Section .........................................................56 When You Have Completed the Sales Forecast............................................56

Step Nine ................................................................................................... 57

The Operational Plan .............................................................................. 57 Operational Plan: Business Plan Basics ......................................................57 Mistakes to Avoid ...................................................................................57 The Operational Plan...............................................................................58 Production.............................................................................................58 Location ................................................................................................59

Physical Requirements .........................................................................59 Access ...............................................................................................59 Construction.......................................................................................59 Cost ..................................................................................................59

Legal Environment..................................................................................59 Personnel ..............................................................................................59 Inventory ..............................................................................................60 Suppliers...............................................................................................60 Managing your Accounts Receivable ..........................................................60 Managing your Accounts Payable ..............................................................61 Complete the Operational Plan Section ......................................................61 When You Have Completed the Operational Plan .........................................62 Operational Plan Sample..........................................................................63

vii


Step Ten..................................................................................................... 66

Management and Organization ............................................................... 66 Management Team: Business Plan Basics...................................................66 Specific Team Members...........................................................................66 Board of Directors ..................................................................................67 Board of Advisors ...................................................................................67 Consultants ...........................................................................................67 Mistakes to Avoid ...................................................................................68 Professional and Advisory Support ............................................................68 Complete the Management and Organization Section...................................68 When You Have Completed the Management and Organization .....................68 Management and Organization Sample ......................................................69

Step Eleven ................................................................................................ 71

The Financial Plan................................................................................... 71 Financial Projections: Business Plan Basics .................................................71 Mistakes to Avoid ...................................................................................72 The Financial Plan for Your Company.........................................................73

Instructions on How to Complete the Profit-Loss Narrative ........................73 Profit-Loss Projection ..............................................................................73

Instructions on How to Complete the Profit-Loss Statement.......................74 Projected Cash Flow................................................................................74

Instructions on How to Complete the Projected Cash Flow.........................75 Opening Day Balance Sheet .....................................................................76

Instructions on How to Complete the Balance Sheet .................................76 Break-Even Analysis ...............................................................................76

Instructions on How to Complete the Break-Even Analysis ........................77 When You Have Completed the Financial Plan .............................................77 Financial Plan Sample .............................................................................78

Appendixes ................................................................................................ 81

Your Business Plan Now Complete and Ready for Printing......................... 82

In Conclusion ............................................................................................. 82

PowerPoint:Demonstrations ................................................................... 82

Non-Disclosure Agreement......................................................................... 84

Attachment One ......................................................................................... 87

A Discussion of the Basic Legal Forms of Ownership .............................. 87 Proprietorship, Partnership or Incorporation?..............................................87

Advantages and Disadvantages of Proprietorship .....................................87 Advantages.....................................................................................87 Disadvantages.................................................................................88

Advantages and Disadvantages of Partnership.........................................88 Advantages.....................................................................................88 Disadvantages.................................................................................89

Advantages and Disadvantages of Incorporating......................................89 Advantages.....................................................................................89 Disadvantages.................................................................................90

Registering a Proprietorship or Partnership .............................................90 Registering a Corporation .....................................................................90 Incorporating a Company in your State ..................................................90

viii


ix

Attachment Two......................................................................................... 91

Information Resources ........................................................................... 91 U.S. Small Business Administration (SBA) ..................................................91 Service Corps of Retired Executives (SCORE) .............................................92 Small Business Development Centers (SBDCs) ...........................................92 Small Business Institutes (SBIs) ...............................................................92 SBA Business Development Programs........................................................92 Other U.S. Government Resources............................................................92 Federal Publications ................................................................................92 Consumer Information Center (CIC)..........................................................93 Consumer Product Safety Commission (CPSC) ............................................93 U.S. Department of Agriculture (USDA) .....................................................93 U.S. Department of Commerce (DOC) .......................................................93 U.S. Department of Health and Human Services (HHS) ................................93 U.S. Department of Labor (DOL)...............................................................94 Internal Revenue Service (IRS) ................................................................94 U.S. Environmental Protection Agency (EPA) ..............................................94 U.S. Food and Drug Administration (FDA) ..................................................94 For More Information ..............................................................................94

Government and State Websites ................................................................ 96

Index ......................................................................................................... 97


Introduction There are few very secrets and absolutely no short cuts to preparing a business plan for a coffee shop. Careful investigation, complete research, and a through thought process is required to complete an accurate business plan for a coffee shop. The real value of creating a business plan is not in having the finished product in your hand; rather, the value lies in the process of researching and thinking about your business in a systematic way. The act of planning helps you to think of things thoroughly, study and research if you are not sure of the facts, and look at your ideas critically. It takes time now, but avoids costly, perhaps disastrous, mistakes later. This business plan is carefully structured to take you a step at a time. In order to complete this business plan accurately, you should take each step, in order, and then move on to the next step. You do not have to complete the entire business plan at once. We do suggest that you complete each step before leaving your work. Important Notes and Tips Throughout this business plan, there will be important notes and tips about entering information into the business plan spreadsheet template, formatting the business plan spreadsheet template, Word option narratives, and printing suggestions and alerts. If you have any problem with these areas, check the Appendix on page 81 for trouble shooting information related to these important notes and tips. So when you see these, carefully read the information! Let’s get started. The Business Plan for Your Coffee Shop is divided into eleven (11) steps. These steps are: Step One – Your Personal Evaluation on page 7 Step Two – The Business Plan Cover Sheet on page 11 Step Three – The Executive Summary on page 13 Step Four – General Company Description on page 22 Step Five – Products and Services on page 26 Step Six – Start Up Costs on page 31 Step Seven - The Marketing Plan on page 41 Step Eight – Sales Forecasts on page 54 Step Nine – The Operational Budget on page 57 Step Ten - Management and Organization on page 66 Step Eleven – The Financial Plan on page 71 Appendixes on page 81 Your business plan Is Now Complete and Ready for Printing on page 82

1


In Conclusion on page 82 Customizing the Business Plan You can customize the business plan and how it looks when viewed on the computer and when the business plan is printed. Here we explain some of the basics of customizing the Excel® spreadsheet. Changing the Page Setup The Page Tab Orientation Here you can select to view and print your business plan in portrait (vertical) or landscape (horizontal) format. The default setting is portrait. Paper Size Here you can select to and view print in letter, legal or custom paper sizes. The default setting is letter. Print Preview Here you can select to print the business plan from the back to the front, or vice versa. The default setting is back to front. The Margins Tab Here you can select the margins for your business plan. The default settings are the recommended settings. The Header/Footer Tab Changing the Header Click on the Custom Header button and you can customize the header for your business plan. Also notice that you can select a print preview from this screen that allows you to see the entire page, with headers and footers. After changing the header, click OK to save your changes. Changing the Footer Click on the Custom Footer button and you can customize the header for your business plan. After changing the footer, click OK to save your changes.

2


The Sheet Tab Here you can adjust and set the:

Print Area Print Titles Print Instructions for:

Gridlines Row & Column Headings Comments

Page Order Changing the Font and Font Size You can select the entire worksheet or specific text to assign font and font size to in the workbook and make your changes on the toolbar. You can have different size fonts on the same page. The default font is Trebuchet MS and the font size varies. You can select the Formatting Toolbar that will show the font and font size. It will look like this:

Changing the Color of the Text You can select the entire worksheet or specific text to assign font and font size to in the workbook and make your changes on the toolbar. You can have many different colors on the same page. The default color is the color that is on the worksheets now. Adding or Removing Worksheets You can add worksheets by clicking on Insert, Worksheet. You will want to click on the tab next to the area where you want to insert the worksheet. You can delete a worksheet by clicking on Edit, Delete Sheet. Spreadsheet Note

Important Note Regarding Deleting a Worksheet WARNING: if you delete a sheet with formulas that extend to other pages in the spreadsheet, you will receive errors in the formulas. So

be sure you want to delete the worksheet before doing so!

3


Viewing the Pages in the Spreadsheet The pages of the spreadsheet are shown at the bottom of the page as tabs.

To view the different pages, the sheet tabs Sheet tab bar appears at the bottom of the screen with tab scrolling buttons displayed on the left side.

If the Sheet Tabs are not there, you can restore them by the following:

1. On the Tools menu, click Options. 2. On the View tab, under Window options, select or clear the Sheet tabs

check box. You will notice that the columns are labeled with letters (A, B, C, etc) and the rows are numbered. As we go through spreadsheets, we will refer to the column letter and the row number. The column letter is across the top of the spreadsheet. The row number is along the left hand side of the spreadsheet. Each individual block in the spreadsheet is called a cell.

Rows, Columns and Cells

While we have attempted to include everything necessary in these spreadsheets, if you add rows to the spreadsheets, the totals may not add up! You will need to adjust the formulas to add up the figures if you add rows. While this is not difficult, you will need to ensure that you can adjust the totals so the figures will be correct. You can also change the text colors, fonts, and sizes of the fonts as you work.

4


Renaming the Pages in the Spreadsheet Select the tab you want to rename. Right click on the tab and select Rename. Type the new name of the page, but there is a character limit. Adding or Removing Rows or Columns You can rows or columns by selecting where you want to add the row or column. Then select Insert, then row or column. You can remove an entire row by clicking on the row number (far left) and selecting Edit, delete. You can remove an entire column by click on the column and selecting Edit, delete. Spreadsheet Note

Important Note Regarding Deleting a Rows or Columns WARNING: if you delete a cell, row or column with formulas that extend to other pages in the spreadsheet, you will receive errors in

the formulas. So be sure you want to delete the cell, row or column before doing so! Inserting Pictures You can insert pictures from your computer into the business plan by selecting the cell where you want the picture to be inserted. Then select Insert, Picture and browse to the picture you want to insert. Double click the picture and then format the cell. Changing the Formulas Changing or adding formulas is not extremely difficult in Excel®. However, it does require a working knowledge of the formulas. You can search the Help section for information pertaining to the formula you want to change or add. Excel Help Depending on the version you are using, you can use the Help section in the application and later versions have online extend help resources. Just click on Help on the toolbar or you can hit F1. Word® Option If you are not familiar with how to enter text into the Excel® spreadsheet, you might find it easier to enter all of the narrative information in the Word® Option document. If you use the Word® Option document, you will need to manually enter the page numbers onto each page of your business plan.

5


Samples and Illustrations In each step of the business plan, we provide you either a sample or an illustration of the information that you will need to provide in the step. Sample Illustration Excel Step 1 Net Worth √ Step 2 Cover Sheet √ Step 3 Executive Summary √ Step 4 General Company Description √ Step 5 Products and Services Description √ Step 6 Start-Up Costs Narrative √ Step 6 Start-Up Costs √ Step 7 Marketing Plan √ Step 8 Sales Forecast √ Step 9 Operational Plan √ Step 10 Management and Organization √ Step 11 Financial Plan Narrative √ Step 11 Profit-Loss Statement √ Step 11 Projected Cash Flow √ Step 11 Balance Sheet √ Step 11 Break-Even Analysis √ Changing Chart Information We have provided charts in the Excel® spreadsheet for the information that bankers, investors, and other lenders want to see in your business plan. The charts are automatically produced from the information that you enter. Based on the information that you enter, you may need to change the information on the axis of the chart. For example, this Chart Example 1 is from Step One, Personal Net Worth. As you can see, the Income Needed axis on the left is in the increments of $100,000 and $200,000. The axis information needs to be changed to make the information look better and more visible.

6


Chart Example 1

We have changed the axis information to increments of $10,000 up to $90,000. See the difference in Chart Example 2 below.

Chart Example 2

How to change entries on the X-axis or Y-axis: 1. Right click on the Axis that you would like to change and then click the tab labeled Scale. 2. When you have determined what range of numbers you want to use insert them into the proper boxes to the minimum and maximum units that you want to use. 3. With this option you can also change the font, sizing of the font, the category and alignment.

7


Mutual Non-Disclosure Agreement A non-disclosure agreement (NDA) can send up red flags to your intended audience. A seasoned banker or venture capitalist is bound by client confidentiality and may find a NDA insulting. Secondly, if the business needs to protect its ideas and concept at this stage of the game then there may not be any barriers to entry for others to enter the market. A simple confidentiality clause at the front of the plan should suffice. In some cases, such as setting up a strategic alliance a non-disclosure may be necessary. If in doubt, consult with a lawyer. A sample agreement is shown on page 84. We have chosen to include a Confidentiality and Recognition of Risks statement on the Cover Sheet. You can view this statement on the Cover Sheet Sample on page 13.

8


Step One Your Personal Evaluation Your Net Worth Before starting your coffee shop, you need to have a firm grasp on your own personal financial situation. For that reason, the first step in preparing your business plan will be to determine your personal financial picture. Instructions on How to Complete the Excel Spreadsheets Refer to your Excel® Spreadsheet. The first page is entitled Step 1 -Your Net Worth. In viewing the first page of the Excel® spreadsheet entitled Step 1 -Your Net Worth, you will find that this information is very straight forward and simple, so a detailed discussion is unnecessary. Just fill in the blanks. At the bottom of the page, you will see your Estimated Net Worth. The areas in the light blue color automatically fill themselves in, so do not enter any figures in these cells. Hopefully, this will be a positive number. Your Personal Budget Refer to your Excel® Spreadsheet, Step 1 – Your Net Worth and scroll down to the section entitled Your Personal Budget. Again, this information is commonplace and you should know what dollar amounts to enter into the cells. For instance, in Column C, Row 56, this is monthly mortgage. If you monthly payments are $1,500.00, enter 1500 in Column D, Row 56. You will see that this Personal Budget is for 1 month, 3 months, 6 months, and 1 year. You should also notice that as you enter your monthly mortgage payment, the spreadsheet automatically totals the rest of the row. So you only need to enter the monthly amounts to get the 3 and 6 months totals and the yearly total. Why This Information Is Important In starting your coffee shop, you need to have your personal financial situation firmly planted on the ground. Starting a business is difficult enough without personal financial problems getting in the way of your success. If the Total Income Needed (Column D, Row 89) is greater than your Total Income (Column D, Row 87), you have some financial issues to fix before starting your coffee shop. We can’t tell you how to fix this problem, but we

9


can tell you that your will be starting your coffee shop in financial trouble and that is no way to start a business! In the example below, the total income is $8,000 a month with monthly expenses of $4,355. Therefore, there is a surplus of funds monthly for savings, investment and/or starting a business.

Figure 1-1. Income Differential

Figure 1-2. Income Differential

Now, assuming that your personal financial situation is acceptable, you are ready now to begin preparing The Business Plan for Your Coffee Shop.

10


Step Two The Cover Sheet First Impression! The Cover Sheet is the first page of your business plan. The cover of the document is often the "First Impression" of your shop for any interested parties or investors. The purpose of a cover is to tell the reader what the document is about. Your cover sheet should include:

Name and business name Company logo Address Telephone number Fax number E-mail address Other contact information

Tip

Important Tip Cover Sheet

The cover should be attractive and professional looking. Fonts used should be

easily read and color contrasts should be pleasant to the eye. Elements of the Cover Sheet The information is very basic. You can view an example of a Cover Sheet on page 13. Complete the Cover Sheet Section You can prepare the Cover Sheet in Excel® or Word®. To complete the Cover Sheet in Excel®, go to the Excel® spreadsheet to the tab labeled Step 2 – Cover Sheet. Fill in the information and save your work. To complete the Cover Sheet in Word®, go to the Word® options file and complete the information. Saving Your Business Plan File As you complete the Steps in this business plan, be sure to save your work often.

11


Tip

Important Tip Save Your Work Often

Nothing is worse than working on your business plan for an hour

and then having the computer shut down expectedly. Save your work often and you won’t lose your information!

When you have completed the Cover Sheet, you are ready for the next step in the preparation of your business plan. So proceed to Step Three, the Executive Summary on page 13.

12


The Business Plan For Perk Me Up Coffee Shop

Perk Me Up Coffee Shop 2738 Commerce Way Any Town, State, Zip Contact Person: Dustin Roberts Telephone: 222-333-4444 Fax: 111-222-3333 Email: [email protected]

Confidentiality and Recognition of Risks Confidentiality Clause

The information included in this business plan is strictly confidential and is provided on the understanding that it will not be disclosed to third parties without the expressed written

consent of Dustin Roberts. Recognition of Risk

This business plan represents management's best estimate of the future potential of our business venture. It should be recognized that not all-major risks can be accurately predicted or otherwise avoided and that few business plans are free of errors of omission or commission.

Therefore investors should be aware that this business has inherent risks that should be evaluated prior to any investment.

13


Step Three The Executive Summary The Basics of the Executive Summary The Executive Summary is a narrative and should be one to two pages in length. We certainly suggest you make it two pages or less, especially if investors or bankers will be reviewing your business plan for loan or investment purposes. You should explain the fundamentals of your coffee shop:

1. What will your menu products and store services be, 2. Who will be your customers, 3. Who are the owners of your coffee shop, and 4. What you think the future holds for your coffee shop and the industry.

You should make this narrative enthusiastic, professional, complete and concise without overstating the financial figures. If You Will Be Applying For Loans or Investors If you will be applying for a loan or looking for investors, state clearly how much you want, precisely how you are going to use it, and how the loan or investment will make your coffee shop more profitable and successful, thereby ensuring repayment. Tip

Important Tip Applying for Loans or Approaching Investors

If you are going to use your business plan for applying for loans

and especially if you are going to be looking for investors, make sure that your business plan meets any requirements as it can be construed as a Securities Offer. You consult with your attorney regarding this matter.

What Information Should Be Included in the Executive Summary? We have provided a sample Executive Summary to help give you an idea of the way the information can be formatted. See the sample Executive Summary on page 19. The following are commonly used sub-headings to cover the key points. Avoid general statements and be sure to clearly articulate key numbers.

• The Company

14


• Mission statement • Management • Products & Markets • Sales and Profit Summary • Funding Requirement • Investment Proposal

Regardless of how you organize your Executive Summary, be sure to answer the following questions (note - due to the sensitive, confidential nature of what you might say in such a document, you might want to restrict your disclosure in certain areas and only reveal such information to others if you are assured of confidentiality). You should address these questions, and any others which you consider important, under headings such as those noted above. We have provided a sample of a simple Executive Summary to help give you an idea of the way the information can be formatted. See the sample Executive Summary on page 19. Questions to Address:

1. What is the full, legal name (and jurisdiction of incorporation) of your coffee shop (if it exists) and a brief history (when incorporated, ownership and capital structure, track record, accomplishments to date if any, etc)? Don't forget to include a complete address and contact details (email address, telephone numbers, etc).

2. What is the "Mission" of your coffee shop (i.e. what is it setting out to achieve or accomplish)?

3. What is the market which your business is going after (who, where, size -in dollars) and what is the unique (i.e. proprietary advantage in the form of patents, trade secrets, trademarks) or new product or service which is being offered to this market? A comment on competition is useful. Also, identify and current and potential customers. Testimonials are helpful.

4. Who are the key people behind your coffee shop (i.e. why would someone entrust them with their money?) and what are their credentials? Include all board members and key management people.

5. What does your coffee shop expect to achieve in sales and profit (before tax) (in $) in years 1, 2, 3 and beyond?

6. How much capital is needed (at various stages over the first 3 years)? And what are the uses to which these funds will be applied?

7. What has already been invested (# of years sweat equity, or seed investment amounts, i.e.#shares@$xx, and by whom)?

8. What is being offered for the investment (e.g. equity %, board seat, etc.)

9. What kind of return might an investor expect? Over what time frame? And what is the "exit strategy"?

10.What else is important to note? (that hasn't been covered elsewhere)

15


Executive Summary: Mistakes to Avoid Here are several common mistakes that can make your Executive Summary less effective:

• Lacking a specific focus • Too long and wordy, and failing to get to the point • Trying to be all inclusive (it should be a powerful summary) • Failing to demonstrate a special or unique opportunity • Failing to outline the terms of the investment sought • Failing to generate enthusiasm in the reader

Some suggestions to combat these problems:

• Limit your Executive Summary to a maximum of 3 pages (at the very most)

• If possible, attempt to present your Executive Summary on 1 or 2 pages

• Focus on the opportunity you are presenting your investor and explain why it is special

• Make certain that the opinions and claims in your Executive Summary are fully supported in the other sections of your business plan

• Attempt to use only concrete facts and figures that explain your business concept, market niche and financial projections

• Don't forget to include the details of your investment (the amount you need, what you will spend it on, and the return you offer your investor)

• Keep your reader in mind - why are they reading the plan and what response/action to you hope to generate?

Mission Statement Many companies have a brief mission statement, usually in thirty words or less, explaining their reason for being in business and their guiding principles. Some are very complex. You should carefully think through your own personal Mission Statement for your coffee shop, also referred to as Mission and Vision Statements. You might write down whatever comes to mind now. The good news is that you can change, revised, and detail your Mission Statement later on, as you should with your entire business plan over the years. The Basics of the Mission Statement

The Mission and Vision Statements set the tone for not only your business plan, but also for your company. They define the path your company will follow and act as a guiding principle by which your company functions.

16


Your Mission and Vision Statements tell your reader what you and your business are all about - what your company stands for, what you believe in, and what you intend to achieve.

Economy of words is critical. This doesn't necessarily mean that they should be short at the expense of effectiveness, but that each word should be powerful and meaningful. Be clear and concise and make it obvious what your company is attempting to do.

Is there a difference between a mission and vision statement? Yes, the differences are:

Your VISION defines your long-term dream. It should not be achievable. That may sound ridiculous, but the objective is for your vision to always be just slightly out of your reach. It's what you constantly strive to attain, and it becomes your reason for being.

Your MISSION is what you intend to become or accomplish. It should be challenging but achievable. A well-written mission statement demonstrates that you understand your business, have defined your unique focus, and can articulate your objectives concisely to yourself and others.

Mission & Vision: Mistakes to Avoid Here are some of the "don'ts" to avoid when writing your Mission Statement or Vision Statement:

• Don't regurgitate a description of your business. • Don't make it boring. • Don't make it the length of a Ph.D. thesis. • Don't fake emotion. • If you don't believe it, don't include it. • Don't lie or claim to be something you aren't (i.e. intend to do exactly

what you say you are going to do in your mission statement). • Don't forget to get the input of everyone on your team.

Products and Services This is a SUMMARY of the menu products and store services that you will offer in your shop. The detailed products and services section is in Step 5 of the business plan. For now, you might have a good idea of the menu products and store services that you will offer. Some might include the following: Coffee Club Blends Special Blend Full Service Menu Buffet Specials

17


Grab and Go Menu Café Rental Delivery Service Banquet Facilities Smoking Facilities Business Meetings Souvenirs Other Retail Sales Bakery Products Cold and Hot Beverages (Other) Describe each of the menu products and store services you will offer in your coffee shop. Go into as much detail as necessary for the reader to get an understanding for what the enterprise will be. Make it interesting. It is important to point out how your coffee shop is different from other coffee shops. Just saying "It is better" is not enough. You must tell how it is better. Every business claims to be "high quality, better service". While a business must have quality and good service, it is no real selling point, since the consumer is bombarded with that claim at every turn. One can not bore a reader into buying their proposal! One must convince them about their product or service. If it can not be done here, it won’t be done in the market place when your business starts. Complete the Executive Summary To complete the Executive Summary in Excel®, go to the Excel® Spreadsheet to the tab labeled Step 3 – Executive Summary. Fill in the information and save your work. To complete the Executive Summary in Word®, go to the Word® options file and complete the information. When You Have Completed the Executive Summary Now you are ready to proceed to the next step in the preparation of your business plan, so proceed to Step Four, General Company Description.

18



Executive Summary The Company Perk Me Up Coffee Shop is incorporated in the state of Washington. It is equally owned and managed by its two partners. The company intends to hire six full-time waitresses and six part-time workers/students to handle day to day operations. Mission Statement Perk Me Up Coffee Shop aims to offer beverages, coffee, and pastries at a competitive price to meet the demand of the local market area residents. Management Dustin Roberts has extensive experience in sales, coffee products, and management. Mr. Roberts was manager of Coffee and Donuts. Lynn Baur brings experience in the area of office management and financial accounting. Ms. Baur was operating manager of Coffee To Go. Products & Markets The Company will provide the following products and services: Coffee Club Blends Special Blend Full Service Menu Buffet Specials Grab and Go Menu Café Rental Delivery Service Banquet Facilities Smoking Facilities Business Meetings Souvenirs Other Retail Sales Bakery Products Cold and Hot Beverages (Other)

19


The Company will target the following market: local market area residents. Sales and Profit Summary Perk Me Up Coffee Shop is a start-up company. Financing will come from the partners' capital and a ten-year SBA loan. The following chart and table illustrate the company's projected initial start-up costs.

Start-up

Funding Requirement Perk Me Up Coffee Shop expects to raise $110,000 of its own capital and to borrow $100,000 guaranteed by the SBA as a ten-year loan. This provides the bulk of the current financing required. Perk Me Up Coffee Shop anticipates sales of about $389,000 in the first year, $443,000 in the second year, and $590,000 in the third year of the plan. The company should break even by the fourth month of its operation as it steadily increases its sales. Profits for this time period are expected to be approximately $33,000 in year 1, $56,000 by year 2, and $76,000 by year 3. The company does not anticipate any cash flow problems.

20


Investment Proposal The company is currently seeking total capital in the amount of $110,000 to be repaid as follows: Interest only for five (5) years at a negotiated rate (APR). Principal payments of $10,000 per year plus interest payable as negotiated, but quarterly payments are preferred. Stock, equity or ownership is available as negotiated.

21


Step Four General Company Description The General Company Description is made up of the following: Company Goals and Objectives on page 23 Business Philosophy on page 23 Legal Form of Ownership on page 24 Company Description: Business Plan Basics The Company Description section of your business plan should outline your company’s basic background information and business concept. Explain in general terms who you are and what you do. It should also cover the history of your company, how you reached this point, and where you intend to go in the future. Consider covering the following in your company description section: Legal Description Include details about where and when the company was formed, where and when it was incorporated, a one line description of what business you are in, and a brief overview of what your shop offers. If the location of your shop is important, explain the advantages and benefits to your reader. History of the Company Provide a general overview of the history of your company. Organize details of your company into a timeline or narrative format, and include your achievements and significant milestones. Explain why you started the shop, the driving force behind its inception, and how your company’s product/service mix has changed over time. Include historical data on sales, profits, individual menu products and store services, number of employees, and other important facts to build a case for your company. Current Status Provide a snapshot of where your company is today. Are you in one location, what do you offer to your customers now, how many employees do you have, and how successful are you? Point out your current strengths, but also honestly and frankly address your weaknesses. Investors know all businesses have weak points. You demonstrate business maturity by acknowledging your weaknesses and outlining steps to combat them. Future Goals This section gives your reader an idea of where your company is heading. What are looking to accomplish over the next 1, 3, 5 and 10 years? Relate these goals to the investment you seek so an investor understands why you need their money and what you intend to do with it. Explain the overall approach for reaching growth and profit goals in optimistic language, but

22


make sure it's realistic. It's easy to make rosy projections about the future of your coffee shop, but it's harder to make them believable. Company Description: Mistakes to Avoid The company description should clearly explain your shop and the products and services you offer. This section could be considered the who, what, why, where, when and how of your company, with the focus on significant highlights of your business. Here are some of the most common mistakes that we find in the company section:

• Including far too much detailed information about your business • Providing information that an investor would consider your "personal

opinion" • Appearing as though you have no business history or business purpose • Leaving out important business and legal particulars • Writing the section in an unorganized or confusing manner

Company Goals and Objectives for Your Coffee Shop Your goals and objectives for your shop are destinations; where you want your shop now and in the future. Objectives are progress markers along the way to measure goal achievement. For example, a goal might be to have a healthy, successful shop that is a leader in freshly brewed import JavaBest brand coffee availability and world famous Southern Style® pecan pie. Objectives might be annual sales targets and some specific measures of customer satisfaction. Tip

Important Tip Goals & Objectives

This particular area of the business plan may be difficult to completely fill out

at this time. You might need additional financial data to reasonable determine your goals and objectives. Nevertheless, you should make some

notes in on the page and then proceed. Business Philosophy This is a description of what is important to you in your business as the owner and operator of a coffee shop. You will need to address, in some detail, the following:

1) To whom will you market your products and services. 2) Describe who your target market is. 3) Describe the coffee industry with some emphasis on the following

items: 4) Is the shop in a growth industry?

23


5) What changes do you foresee in your industry, short term and long term?

6) How will your company be poised to take advantage of the changes mentioned above?

7) Your most important company strengths and core competencies. 8) What factors will make your shop succeed? 9) What do you think your major competitive strengths will be? 10) What background experience, skills, and strengths do you

personally bring to this new venture? Legal Form of Ownership Describe what legal form of ownership you have decided to form for your coffee shop; Sole Proprietor, Partnership, Corporation, Limited Liability Corporation (LLC) and describe why you have selected this form. Tip

Important Tip Legal Form

If you haven’t determined the legal form of ownership, you certainly need to

discuss with your attorney and/or accountant. We will provide you some information here about this, but in no way is this information to be assumed

to be legal advice. Only your professional legal and accounting team can correctly advice you what you should do in this regard as to the legal form of

ownership of your coffee shop. For a general discussion on the legal forms of business ownership, please see Attachment One – A General Discussion on page 84. We have provided a sample General Company Description to help give you an idea of the way the information can be formatted. See the sample General Company Description on page 25. Complete the General Company Description Section To complete the General Company Description in Excel®, go to the Excel® Spreadsheet to the tab labeled Step 4 – Gen Co Description. Fill in the information and save your work. To complete the General Company Description in Word®, go to the Word® options file and complete the information. When You Have Completed the Company Goals And Objectives Now you are ready to proceed to the next step in the preparation of your business plan, so proceed to Step Five, Products and Services on page 26.

24



General Company Description

Company Goals and Objectives The initial goal of the Company will be to gain enough customers in the first six (6) months of operation to reach a break even point between expenses and revenue. In the following twelve months of operation, the Company will strive to increase the total base increase of new customers by 10% per quarter. Thereafter, the Company will strive for a total base increase of new customers by 5% per quarter. Business Philosophy The Company will provide top quality menu products and store services to a market consisting of local market area residents. The coffee industry is a staple growth industry, as rated by Standard & Poor’s when reporting on the condition of the industry as of December 2007. With an increase in expected population growth, the expected marketplace will increase 30% over the next three (3) years in the state of Washington. By gaining a foothold in the next six (6) months with the Company’s new customer base, the Company will be firmly situated to take advantage of increases in the marketplace. The experience and past success of the main participates in the Company will enhance the success potential of Perk Me Up Coffee Shop. Legal Form of Ownership Perk Me Up Coffee Shop is a corporation form in the state of Washington in September 2007. All corporate documentation is available for inspection upon request.

25


Step Five Products and Services Description The Products and Services Description section of your business plan will describe in detail the products and services you will provide in the course of your operating your coffee shop. We have provided an illustrative Products and Services Description to help give you an idea of the way the information can be formatted. See the Products and Services Description on page 29. How to Describe In Depth Your Products and Services Here, you will describe in depth your menu products and store services. Here is a general list of potential products and services, but you will need to elaborate and breakdown the pricing for each products and services. Coffee Club Blends Special Blend Full Service Menu Buffet Specials Grab and Go Menu Café Rental Delivery Service Banquet Facilities Smoking Facilities Business Meetings Souvenirs Other Retail Sales Bakery Products Cold and Hot Beverages (Other) Competitive Advantages or Disadvantages You will need to list what factors will give you competitive advantages or disadvantages. For example, the level of quality or unique or proprietary features you will offer in your coffee shop. Pricing Structures You will need to list what the pricing structures are for the menu products and store services. If you have any drawings, photos, sales brochures, etc, these can be shown in your first Appendix. We have provided an example Appendix One on page 30.

26


Tip Important Tip

Appendixes

The Appendixes will be at the back of your business plan, so keep this in mind when saving your files.

Products and Services Description: Business Plan Basics The products and services section is one of the most important parts of your business plan. It's your chance to clearly explain your menu products and store services, identify their features and benefits, and discuss what needs or problems they address in the market. Product Overview In explaining each of the products you will offer, your reader will want to know what it is, what it does, and its features and benefits. Consider including pictures if they would help your reader get a better understanding of your product. Service Overview In explaining each of the services you will offer, your reader will want to know what it is, what it does, and its features and benefits. Consider including pictures if they would help your reader get a better understanding of your service. Write this section with enough information to satisfy an outsider's need to understand your service without boring them with trivial details. Products and Services Description: Mistakes to Avoid The following are the some of the most common mistakes we find in the products and services description section:

• Failing to identify the benefits of the menu products and store services (focusing instead on the features)

• Describing the products and services in language that is too technical, with too many industry specific words or phrases

• Omitting the specific problem the products and services addresses and how that problem is solved

• Assuming an improved products and services will "sell itself" • Describing the products and services in terms that are too broad • Failing to include a third-party evaluation or analysis of your menu

products and store services • Underestimating the importance of legally protecting your products

and services

27


Complete the Products and Services Description Section To complete the Products and Services Description in Excel®, go to the Excel® Spreadsheet to the tab labeled Step 5 – Prod and Servs. Fill in the information and save your work. To complete the Products and Services Description in Word®, go to the Word® options file and complete the information. Tip

Important Tip Appendixes

If you use Appendixes, be sure to number them in the actual

order that you use them. When You Have Completed the Products and Services Description Section Now you are ready to proceed to the next step in the preparation of your business plan, so proceed to Step Six, Start Up Costs and Capitalization on page 31.

28



Products and Services Description (As described in the instructions, you will need to elaborate on your products and services. You can start with this list.) Coffee Club Blends Special Blend Full Service Menu Buffet Specials Grab and Go Menu Café Rental Delivery Service Banquet Facilities Smoking Facilities Business Meetings Souvenirs Other Retail Sales Bakery Products Cold and Hot Beverages (Other)

29


Appendix One Products and Services Attachments

30


Step Six Start-Up Costs and Capitalization You will have many expenses before you even begin operating your coffee shop. It is important to estimate these expenses accurately and then plan where you will get sufficient capital. This is a research project. The more thorough your research, the less chance you will leave out important expenses or underestimate them. Qualified and Non-Qualified Start-Up Costs Qualified Start-Up Costs

Start-up costs include costs for the following:

Surveys of potential markets. Analyses of available facilities, labor, supplies, etc. Advertisements for the opening. Salaries and wages for employees who are being trained, and their

instructors. Travel and other necessary costs for securing prospective distributors,

suppliers, or customers. Salaries and fees for executives and consultants, or for similar

professional services.

Non-Qualified Start-Up Costs

Start-up costs do not include the following.

Deductible interest. Taxes. Research and experimental costs.

Budget Allowances Even with the best of research, however, opening a coffee shop has a way of costing more than you anticipate. There are two ways to make allowances for surprise expenses. The first is to add a little “padding” to each item in the budget. The problem with that approach, however, is that it destroys the accuracy of your carefully thought out plan. The second approach is to add a separate line item, which we call contingencies, to account for the unforeseeable. This is the approach we recommend, and you will see a “Contingencies” line in our spreadsheet.

31


Tip Important Tip Contingencies

You should talk to other individuals who have started similar coffee shops to get a good idea of how much to allow for contingencies. If you cannot get

good information, we recommend a rule of thumb that contingencies should equal at least 20% of the total of all other startup expenses.

Evaluating Start-Up Costs When starting a new coffee shop, moving to a new location, opening a new branch or expanding your shop, there will be start-up or one-time expenses. Know what these expenses will be by filling in the amounts of dollars required for each of the items listed below. Item Dollar Cost Real Estate, furniture, fixtures, machinery, equipment:

a) Purchase price - if paid in full with cash

$ ______________

b) Cash down payment - if purchased on contract

$ ______________

c) Transportation & installation costs

$ ______________

Starting Inventory $ ______________

Decorating, refurbishment, & remodeling costs

$ ______________

Deposits Required:

a) Utilities $ ______________

b) Rent $ ______________

c) Other (identify) $ ______________

Fees Required:

a) Legal, accounting, others $ ______________

b) Licenses, permits, etc. $ ______________

c) Other (identify) $ ______________

32


Initial Advertising & Marketing Costs (i.e., flyers, sales letters and calls, signs, brochures, etc.)

$ ______________

Accounts Receivable (_____ days of sales)

$ ______________

Salaries and owners draw until business enterprise opens or until cash flow is positive

$ ______________

Other miscellaneous expenses: Merchant Association fees, equipment rental, office supplies, cleaning service, other supplies, signs, etc.

$ ______________

Payments on other fixed obligations $ ______________

Total Start-Up Costs $

______________ Start-Up To Do List _____ 1. Know what type of business you would like to start and learn al

you can about it. _____ 2. Appraise your business strengths and weaknesses.

Be strict and objective. _____ 3. Conduct thorough research of potential customers,

your industry, your competition, your licensing and tax requirements, location, and name.

_____ 4. Determine type of business organization (i.e. Proprietorship, Partnership, or Corporation)

_____ 5. Evaluate possible shop locations. Check physical conditionsuitability, traffic flow, parking, utility requirements, andcost.

_____ 6. Prepare a comprehensive business plan – include your action timetable.

_____ 7. Decide on your business hours. _____ 8. Secure necessary capital. (Bank loan, budget to

save, borrow on insurance, etc.) _____ 9. Obtain needed facilities, equipment, furnishings,

signage, supplies, stock. _____ 10. Recruit personnel. Establish job descriptions and a

training program.

33


_____ 11. Print business cards, stationery, invoice or statement forms.

_____ 12. Register name of business (your assumed name) and/or file articles of incorporation with the Secretary of State. Publish notice in newspaper.

_____ 13. Secure any necessary permits, licenses, or zoning variations. Check with both local and state licensing agencies.

_____ 14. Register your business with the state and obtain a Sales & Use Tax Permit (if applicable).

_____ 15. Register for Federal tax number (Form SS-4) and obtain employee tax and withholding information from the IRS.

_____ 16. Establish bank account (separate from personal account). Shopfor the bank and services that best suit your needs.

_____ 17. If you intend to hire employees in your business, phone your Department of Economic Security or Workforce Commission.

_____ 18. Phone the IRS for a free "Small Business Tax Kit" at 1-800-829-3676. For information about free Tax Education Workshops, call 1-800-829-1040 or check out the IRS website (http://www.irs.gov/) for this information.

_____ 19. Issue news releases. Publicize your new coffee shop. Start-Up Narrative We have provided a sample Start-Up Narrative to help give you an idea of the way the information can be formatted. See the sample Start-Up Narrative on page 37. To complete the Start-Up Narrative in Excel®, go to the Excel® Spreadsheet to the tab labeled Step 6 - Startup Costs Narrative. Fill in the information and save your work. To complete the Start-Up Narrative in Word®, go to the Word® options file and complete the information. Explain your research and how you arrived at your forecasts of expenses. Give sources, amounts, and terms of proposed loans. Also explain in detail how much will be contributed by each investor and what percent ownership each will have.

34

http://www.irs.gov/


Instructions on How to Complete this Section in the Excel® Spreadsheet In the Excel® spreadsheet, you will either enter the dollar amount that you know will reflect the projected cost of the item to the left or use the best estimate approach we told you about earlier. In Column C, these dollar amounts will reflect the actual start up costs while the dollar amounts in Column G will reflect a gross amount spent over a 3 month period. This is considered your Start-Up Period. Start-Up Costs (to be completed in Excel®)

C G

Start-up

Costs Operating

Costs

(Pre-Revenue (3-Months

Cash

Requirements) assuming no

revenue)

Audit / Accounting Fees $0 $0

Bus Dev. - Travel $0 $0

Bus. Dev. - Entertainment $0 $0

Bus. Dev. - Meals $0 $0

Capital Acquisitions $0 $0

Charitable Contributions $0 $0

Commissions $0 $0

Conferences & Seminars $0 $0

Consulting Fees $0 $0

Contingencies $0 $0

Employee Benefits $0 $0

Entertainment $0 $0

Equipment Lease $0 $0

Facilities - Insurance $0 $0

Facilities - Phone $0 $0

Facilities - Property Taxes $0 $0

Facilities - Rent $0 $0

Facilities - Security $0 $0

Facilities - Utilities $0 $0

Facility - Other $0 $0

Financial Charges $0 $0

Furniture $0 $0

Insurance $0 $0

Inventory Purchases $0 $0

IT Consulting $0 $0

Legal Fees $0 $0

35


Loan Interest $0 $0

Loan Capital $0 $0

Miscellaneous $0 $0

Office Supplies $0 $0

Payroll - Administrative Staff $0 $0

Payroll - Sales / Marketing $0 $0

Payroll - Owner / Directors $0 $0

Payroll Taxes $0 $0

Postal / Shipping $0 $0

PR / Advertising $0 $0

Repairs & Maintenance $0 $0

Research and Development $0 $0

Storage $0 $0

Subscriptions & Dues $0 $0

Taxes & Licenses $0 $0

Telecommunications $0 $0

Vehicle Expenses $0 $0

Total Start-Up Costs $0 $0

The total amount in Column G represents the total Start-Up Cost for start-up period. Complete the Start-Up Costs Section in the Excel® Spreadsheet Go to the Excel® Spreadsheet to the tab labeled Step 6 – Start Up Costs. Fill in the information and save your work. When You Have Completed the Start-Up Costs and Capitalization Section Now you are ready to proceed to the next step in the preparation of your business plan, so proceed to Step Seven, The Marketing Plan on page 41.

36



An Explanation of the Facts, Assumptions, and Information Pertaining to the Start-Up Costs Section

The Company estimates that the total Monthly Start-Up Costs to be $192,960. Therefore, the total Start-Up Costs for the Start-Up Period will be $578,880. The Company will use Larry Belcher, CPA for all accounting needs and functions. The anticipated Audit/Accounting Fees for the Start-Up Period will be $1,000. The Company estimates the Business Development expenses to be $2,000. Of this amount, $1,500 is for Travel, $400 for Entertainment and $100 for Meals. The Company does not anticipate any Capital Acquisitions during the Start-Up Period. The Company will not make any Charitable Contributions during the Start-Up Period, but will consider such expenses based on profitability. The Company estimates that Commissions will be $3,000 per month and will be funded directly from revenue. The Company plans to attend one Conferences or Seminars. The cost has already been included in the Business Development section. The Company estimates that Consulting Fees will be paid in the amount of $1,000 for training related to safety issues and food delivery/handling techniques. The Company estimates Contingencies to be $32,160 which is 20% of the total Start-Up Costs estimates.

37


The Company plans to offer Employee Benefits after the first year of operation, so no allocations have been made for employee benefits for the Start-Up Period. The Company plans to lease certain office equipment and may lease coffee shop equipment and fixtures. The Company estimates that the Equipment Lease amount will be $2,000. The Company estimates Facility expenses for the shop as follows: Facilities – Insurance, $1,000 Facilities – Phone, $500 Facilities - Property Taxes, $1,500 Facilities – Rent, $1,300 Facilities – Security, $75 Facilities – Utilities, $300 Facility – Other, $200 The Company estimates Financial Charges will be $200 and will result from credit card finance charges. The Company estimates Furniture expense to be $2,000, which will be primarily office furniture purchases. The Company estimates Insurance expenses will be $700. This insurance will be a policy purchased to cover general liability, employee dishonesty, dining area furniture, fixtures, kitchen appliances and equipment, and premise from damage. The Company estimates Inventory Purchases will total $130,000. The inventory will consist of food items, dining room furniture, initial kitchen appliances and equipment, and other related products and support items. The Company estimates that there will be IT Consulting expenses in the amount of $1,000. The Company plans to explore the use of staffing resources for kitchen help, wait staff, and building maintenance. The Company also plans to study, design, development, implement, support or manage computer-based information systems, particularly software applications and computer hardware by using computers and computer software to convert, store, protect, process, transmit, and securely retrieve information.

38


The Company estimates that Legal Fees will be incurred in the amount of $2,000. These costs represent incorporation and filing fees. The Company has not included Loan Interest which might result from the Investment Needed Proposal. The Company will revise the Start-Up Costs for the loan interest costs when the negotiated investment proposal is completed. The Company estimates Miscellaneous and unforeseen costs might be $1,000. The Company estimates Office Supplies to be $200. The Company estimates Payroll expenses to be: Payroll - Administrative Staff, $2,000 Payroll - Sales / Marketing, $3,000 Payroll - Owner / Directors, $500 Payroll Taxes, $1,500 The Company estimates Postal / Shipping costs to be $200. These costs will result from a Direct Mail program. The Company estimates PR / Advertising to be $1,000. These costs will result from print and media advertising. The Company estimates Repairs & Maintenance budget to be $500. The Company estimates Research and Development to be $1,000. This cost can result due to menu product research, Consumer Report comparisons of cold storage equipment, and traffic studies. The Company estimates Storage costs to be $100. This cost will result from storing excess inventory, extra dining room furniture, spare equipment and parts. The Company estimates Subscriptions & Dues costs to be $25. This cost will be for subscriptions. The Company estimates Taxes & Licenses costs to be $300. This cost will result from municipal business license, occupancy license, and police, building and sellers permits. Also for regulations that might include health regulations and requirements, fire safety standards or regulations, retail sales tax, and/or zoning by-laws.

39


The Company estimates Telecommunications expenses will be $300. These costs include land lines and mobile (wireless) expenses. The Company estimates Vehicle Expenses to be $400. This cost includes insurance and possible lease fees.

40


Step Seven The Marketing Plan Marketing & Sales: Business Plan Basics Every good marketing plan should include two major parts - a definition of your target market and a specific outline to market, promote and sell your menu products and store services. Target Market It's critical to clearly define your target market in your business plan - investors expect it. Tell your business plan reader about your customers and describe their defining characteristics in detail. Include information such as age, gender, geographic location, income bracket, buying similarities, and more. The goal of this section is to build a demographic profile of your typical coffee shop customer. The more clearly you pinpoint the defining traits of your customer, the easier it is to construct a marketing program to reach them effectively. The information and research included in your target market section should originate from primary and secondary sources. Primary sources includes information that you discover or conclude from personal observation and research, such as personal studies, results of questionnaires, site visits, and conversations with experts in your coffee industry. Secondary sources include such sources as journals, books, published reports, government statistics, or internet findings. Marketing Program After you define your target market, you need to determine specifically how you will reach them. Outline the details and steps necessary to reach potential customers and convert them from prospects to paying customers. Tip

Important Tip Market Avenues and Procedures

It is important to demonstrate to investors that you have identified specific

marketing avenues and procedures to effectively sell your products and services.

Answer questions such as the following in your marketing program section:

• What specific marketing mediums will you use to reach your customer?

41


• How often will each be used? What will they cost? Why did you choose these marketing avenues over others?

• What marketing materials will you need? (brochures, website, etc) • Who will design your marketing materials? What will they cost? • What is the cost of marketing materials per customer? (You may

choose to include marketing pieces in the appendix of your business plan)

• Will your shop be able to attract PR? Why will they run your story? What's the "angle"? Which publications and mediums will you target?

Marketing & Sales: Mistakes to Avoid Here are some of the most common mistakes found in the marketing and sales section:

• Defining your target market too widely and assuming success will result from simply capturing a "small portion" of this enormous market.

• Unclear definition of your target market. • Attempting to attack an entire market instead of a narrow niche. • Making assumptions about your target market without research or

concrete support. • Not specifically identifying the mediums you will use to advertise and

promote your products and services. • Omitting details such as when, where, why and how you will reach

your target customer - along with costs. • Making the assumption that offering a lower price will lead to

increased sales. • Underestimating the importance of packaging, brand name, and

reputation. • Attempting to immediately fill several lucrative but unrelated markets. • Lacking clarity about how future changes might affect your market.

We have provided an illustrative Marketing Plan to help give you an idea of the way the information can be formatted. See the Marketing Plan on page 51. The Marketing Plan consists of six (6) primary sections and five (5) sub-sections under Marketing Strategy. Those sections are: Economics on page 45 Product on page 46 Customers on page Competition on page 47 Niche on page 48 Marketing Strategy on page 48 Promotion on page 48 Promotional Budget on page 48 Pricing on page 49

42


Proposed Location on page 49 You will gather the information necessary for these sections to fit your exact demographical area. This is not something that can be a “One Size Fits All” scheme. Someone starting a coffee shop in Chicago, IL will have different statistics than someone starting a coffee shop in Charlotte, NC. The only way to gather this information is by conducting market research for your specific demographical area. Target Market: Business Plan Basics The target market section of your business plan must clearly identify the current and prospective buyers of your menu products and store services. Your goal in preparing the target market section is to demonstrate to readers that you clearly understand who your customers are and how your products and services directly meet the needs of the marketplace. Properly identifying your potential customer base also helps to drive overall marketing and sales strategies that you will include within other sections of your business plan. Although your product or service may meet the needs of a large constituency of potential customers, the goal is to define your customer base as specifically as possible, both quantitatively and qualitatively. Consider the follow types of characteristics for inclusion in the target market section of your business plan: Size How large is your target market? Are there 1,000 business customers? 10 million potential customers ready to purchase your product or service? Or a small handful of very large target customers? Demographics The demographic traits of your customers often vary based on whether you are focused on serving the consumer or business markets:

• Consumer - Income, Occupation, Gender, Single/Married, Ethnic Group, Education

• Business - Industry, Product/Service, Years in Business, Revenue, Employee Size, Private/Public

Geographic Where are your customers located? While technology has made location less of an issue for many companies, it doesn’t mean you should overlook the importance of defining the geographic location of your coffee shop customers. Clarifying these issues also helps to ensure that your marketing and sales strategies/budgets properly match your goals to capture market share.

43


Other Characteristics What are some of the more subjective traits that define your customers? This might include things such as current buying motivations, perceived shortcomings of other solutions in the market, and trends/purchasing shifts likely to occur within your target market. Naturally, the more you understand your customers, the better your chances of success. Many times the best approach to answer the target market question: Who is our customer? Invest time and resources in primary market research. Conduct simple surveys or focus groups. If feasible, work with a reputable market research firm to guide you through the process. At the very least, use the Internet and industry groups to locate market research studies and statistics for your business plan. These resources can range from free information available on websites to expensive professional market research studies prepared by experts in the field. Performing primary research enables you to gather and document the quantitative and qualitative information needed to prepare a solid target market section for your business plan. Target Market: Mistakes to Avoid Here are some of the "don'ts" to avoid when writing the Target Market section of your business plan:

• Don't assume that everyone is a buyer of your products and services. • Don't be unclear about the characteristics that define who your target

customers are. • Don't assume you must have a "huge" target market - a well-defined

target market that your coffee shop can serve is far better. • Don't jump to conclusions about why your target market needs you -

instead explain how you meet their needs. • Don't underestimate the value of focus - sell a specific product or

service to a specific group. • Don't try to attack too many markets at once - particularly if you are a

startup or early-stage coffee shop. Market Research Basics Market Research - Why? No matter how good your product or service, your coffee shop cannot succeed without effective marketing. This begins with careful and systematic research. It is very dangerous to simply assume that you already know about your intended market. You need to do market research to make sure that you are on correct track. Use the business planning process as your opportunity to uncover data and question your marketing efforts. Your time will be well spent.

44


Market Research - How? There are 2 kinds of market research: primary and secondary. Primary market research means gathering your own data. For example, you could do your own traffic count at a proposed shop 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 out that show business owners how to do effective research by themselves. Tip

Important Tip Be Specific

In your marketing plan, be as specific as possible; give statistics & numbers

and sources. Later on, the Marketing Plan will be the basis of the all-important sales projection.

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, vendors who sell to the coffee industry, government agencies (Commerce Dept. and state and local development agencies), and the SBA Business Information Centers. Start with your local library. Most librarians are pleased to guide you through their business data collection. A good way to start is at the SBA site, http://www.sba.gov/; click the Outside Resources button for a great collection of resource links. Your Chamber of Commerce has good information on the local area. Trade associations and publications often have excellent industry specific data. The Economics of the Industry You will need to gather information from your market research that will be able to address these questions and provide facts about your coffee industry: What is the total size of your coffee shop target market? What percent share of the market will you have? (This is important only if you think you will be a major factor in the market.) Current demand in your target market. Trends in target market - growth trends, trends in consumer preferences, and trends in product development.

45

http://www.sba.gov/


Growth potential and opportunity for a coffee shop of your size. What barriers to entry do you face in entering this market with your coffee shop? Some typical barriers are: High capital costs High production (food prep) costs High marketing costs Consumer acceptance/brand recognition Training/skills And of course, how will you overcome the barriers? You will also need to address how could the following affect your business? Change in technology. Government regulations. Changing economy. Change in the coffee shop industry. Back to Market Plan Sections on page 42 Product In the Step Five, Products and Services section, you described your menu products and store services as YOU see them. Now describe them from your CUSTOMER'S point of view. Features and Benefits List all your major menu products and store services. For each product or service that you provide in your coffee shop:

Describe the most important features. That is, what will the product or service do for the customer? What is special about it? Now, for each menu product and store service, describe its benefits. That is, what will the product or service do for the customer?

Note the difference between features and benefits, and think about them. You build features into your product or service so you can sell the benefits. Back to Market Plan Sections on page 42

46


Customers Identify your targeted customers, their characteristics, and their geographic locations; i.e., demographics. You may well have more than one customer group. Identify the most important groups. Then, for each customer group, construct what is called a demographic profile: Customer Profile Age Gender Location Income level Social class/occupation Education Group Profile Industry (or portion of an industry) Location Size of shop Quality/technology/price preferences Back to Market Plan Sections on page 42 Competition What products and services and other coffee shops will compete with you and your coffee shop? List your major competitors: Names & addresses Will they compete with you in across the board, or just for certain products and services, certain customers, or in certain locations? Will you have important indirect competitors? How will your menu products and store services compare with the competition? Back to Market Plan Sections on page 42

47


Niche Market Now that you have systematically analyzed your industry, your product or service, your customers and the competition, you should have a clear picture or where your coffee shop fits into the marketplace. In one short paragraph, define your niche market; your unique corner of the market. Back to Market Plan Sections on page 42 Marketing Strategy Now you can outline a marketing strategy for your coffee shop that is consistent with your niche. Back to Market Plan Sections on page 42 Promotion How will you get the word out to customers? Advertising: what media, why, and how often? Why this mix and not some other? Have you identified low cost methods to get the most out of your promotional budget? Will you use methods other than paid advertising, such as incentives, word of mouth (how will you stimulate it?), network of friends or professionals? What image do you want to project? How do you want customers to see you? In addition to advertising, what plans do you have for graphic image support? This includes things like logo design, cards and letterhead, brochures, signage, and interior design. Should you have a system to identify repeat customers, and then systematically contact them? Back to Market Plan Sections on page 42 Promotional Budget How much will you spend on the items listed above?

48


Before startup? (These numbers will go into your Startup budget.) Ongoing? (These numbers will go into your Operating Plan budget, which we will discuss later.) Back to Market Plan Sections on page 42 Pricing Explain your method(s) of setting prices. For most coffee shops, having the lowest price is not a good policy. It robs you of needed profit margin; customers may not care as much about price as you think; and large competitors can under price you anyway. Usually, you will do better to have average prices and compete on quality and service in your coffee shop. Does your pricing strategy fit with what was revealed in your competitive analysis? Compare your prices with those of the competition. Are they higher, lower, the same? Why? How important is price as a competitive factor? Do your intended customers really make their decisions mostly on price? What will be your customer service policies? Back to Market Plan Sections on page 42 Proposed Location Probably you do not have a precise location picked out yet. This is the time to think about what you want and need in a location. You will describe your physical needs later, in the Operational Plan section of your business plan. Here in the marketing section, analyze your location criteria as they will affect your customers. Is your location important to your customers? If yes, how so? When customers come to your place of business: Is it convenient? Parking? Interior spaces? Not out of the way? Is it consistent with your image? Is it what customers want and expect? Where is the competition located? Is it better for you to be near them or distant? Back to Market Plan Sections on page 42

49


Complete the Marketing Plan Section in the Excel® Spreadsheet To complete the Marketing Plan in Excel®, go to the Excel® Spreadsheet to the tab labeled Step 7 – Marketing Plan. Fill in the information and save your work. To complete the Marketing Plan in Word®, go to the Word® options file and complete the information. When You Have Completed the Marketing Plan Now you are ready to proceed to the next step in the preparation of your business plan, so proceed to Step Eight, Sales Forecasts on page 54.

50



Marketing Plan Economics Address these items:

Size of the target market Percentage of the market you will have Current demand in your market Trends in the market Growth potential and opportunity for the market Barriers How you will overcome the barriers How will changes in technology affect the business How will changes in government regulations affect the business How will changes in the economy affect the business How will changes in the industry affect the business

Product For the Product section:

Describe your menu products and store services from your customer’s point of view

List all of your major menu products and store services For each product or service that you provide in your coffee shop:

o Describe the most important features. That is, what will the product or service do for the customer? What is special about it?

o Now, for each menu product and store service, describe its benefits. That is, what will the product or service do for the customer?

51


Customers Provide the demographic profile of your customers: Customer Profile Age Gender Location Income level Social class/occupation Education Group Profile Industry (or portion of an industry) Location Size of shop Quality/technology/price preferences Competition Here, you will describe the following:

What related product or service or combination of products and services will compete with you and your coffee shop

What other coffee shops will compete with your coffee shop Make a list of your major competitors with names and addresses Describe if these major competitors will compete with you across

the board, or just for certain products and services, certain customers, or in certain locations

Will you have important indirect competitors How will your menu products and store services compare with the

competition Niche In one short paragraph, define your niche market Marketing Strategy Your broad based Marketing Strategy could be: Perk Me Up Coffee Shop will succeed by offering customers beverages, coffee, and pastries with personal service at a competitive price.

52


Promotion How will you get the word out to customers What advertising media will be used and how often Why this mix of advertising media Methods to get the most out of your promotional

budget Will you use methods other than paid advertising,

such as incentives, word of mouth (how will you stimulate it?), network of friends or professionals?

What image do you want to project What plans do you have for graphic image support?

This includes things like logo design, cards and letterhead, brochures, signage, and interior design

Do you have a system to identify repeat customers

Promotional Budget How much will you spend on promotions Before Start-Up On an ongoing basis

Pricing

Explain your method(s) of setting prices Does your pricing strategy fit with what was revealed

in your competitive analysis How does your prices compare with the competition;

higher, lower, the same Why How important is price as a competitive factor What will be your customer service policies

Proposed Location Answer these questions: Is your location important to your customers? If yes, how so? When customers come to your place of business: Is it convenient? Parking? Interior spaces? Not out of the way? Is it consistent with your image? Is it what customers want and expect? Where is the competition located? Is it better for you to be near them or distant?

53


Step Eight Sales Forecast Too many would be entrepreneurs want success so bad, they refuse to listen or consider the possibility of failure. Somehow, they confuse caution and reasonable doubt with negative thinking. They are blinded by fantasy and unrealistic dreams that they believe real. If you have ample historical sales data, reasonable forecasts are easy; even calculating the figures with intuition and knowledge of the coffee market can result in a creditable projection. The problem is new products or companies with no sales history are difficult to predict. As accurate as the numbers may appear, it is still a guess. In addition, guesses are based on judgment-good and bad. A sales forecast is just that, a forecast; an educated guess with a possibility of error. Every business, every new product or project has a break-even point; a minimum sales volume necessary to generate enough income to cover your expense. If the forecast is above your break-even, then you have a margin of safety. If not, you may be headed for trouble with no room for error. Be sure to compare the sales forecast to that all-important break-even sales or income level. It will give you a yardstick of risk. You may be comfortable with statistics or any of the number of methods for sales forecasting, but be uncomfortable with sales guesses that are too optimistic. If you want to avoid heartache and money worries, always question sales projections and never assume they are accurate. Financial Projections: Business Plan Basics Your financial plan will be highly scrutinized by your business plan reader. All the ideas, concepts and strategies discussed throughout your entire business plan form the basis for, and should flow into, your financial statements and projections in some manner. When it gets down to it, your reader wants to know if and when your coffee shop will make money and become profitable. Financial statements and projections should follow Generally Accepted Accounting Standards and must (at a minimum) include properly prepared balance sheets, income statements and cash flow statements. Bankers and investors are familiar with the correct content, organization and presentation of financial statements, and expect to see them in your business plan. Don't cut corners or attempt to devise your own method of financial and pro forma statement presentation.

54


Sales Forecast for Your Coffee Shop Spreadsheet Note

Important Note Regarding Data Entered Into Spreadsheet

In this section, you will be entering information about the Sales Forecast for individual products and services. These sales forecasts are then auto filled to Step 11, Profit-Loss Statement and Projected Cash Flow. If you add more products and services than is provided for in the template, you will need to adjust the cell formulas in the totals for each column on Row 5. Print Note

Important Note Regarding Printing this Section of the Spreadsheet

The Projected Cash Flow is formatted to print each month on one (1) sheet of paper. If you add items in the Revenue and/or Payments section, you might extend a portion of the spreadsheet to the next page. In this case, you will need to format the page to correctly print each month properly. Now that you have described your menu products and store services, customers, markets, and marketing plans in detail, it is time to attach some numbers to your plan. Use the Sales Forecast spreadsheet to prepare a month-by-month projection for your coffee shop. The forecast should be based upon your historical sales (if any), the marketing strategies that you have just described, upon your market research, and industry data, if available. You may wish to do two forecasts: 1) a "best guess", which is what you really expect, and 2) a "worst case" low estimate that you are confident you can reach no matter what happens. The Excel Spreadsheet For this section, please refer to the Page 8 of the Excel® spreadsheet entitled “Sales Forecast”. This is the Twelve-Month Sales Forecast Spreadsheet. Instructions on How to Complete the Excel Spreadsheets Remember to keep notes on your research and your assumptions as you build this sales forecast, and all subsequent spreadsheets in the plan. This is critical if you are going to present it to funding sources. In Column A, you will list the products and services that you will offer in your coffee shop. Here you will enter each and every products and services that you identified in Step 5, Products and Services.

55


Input your dollar figures for each product or service into the correct columns. As you will note, Row 3 will total the revenue (sales) from all of the products and services. In the beginning, you want to categorize your products and services rather than list each one separately. You will also need to provide a narrative with information about each category. Complete the Sales Forecast Section in the Excel® Spreadsheet Go to the Excel® Spreadsheet to the tab labeled Step 8 – Sales Forecast. Fill in the information and save your work. When you are finished, you have completed an annual sales forecast. When You Have Completed the Sales Forecast Now you are ready to proceed to the next step in the preparation of your business plan, so proceed to Step Nine – The Operational Plan on page 57.

56


Step Nine The Operational Plan Operational Plan: Business Plan Basics The Operational Plan deals specifically with the internal operations of the company. The following are selected areas that need to be addressed in this section. Location Where will your shop be located? What square footage is needed, in how many locations? What type of space is it? Office space, dining area, storage, sales area, retail space for the products? What is the advantage, if any, of your location? At what point will the goals of the shop exceed the above mentioned facilities? Provide a layout of your facility in the appendices of your business plan. Equipment Outline and describe the significant equipment needed in the course of operating your coffee shop, including cost. What does the equipment do and how do the pieces function together? Will you purchase or lease your equipment? Why and from whom? Be sure to include food preparation equipment, vehicles, computers, and office equipment. Labor How many employees will you need? Full-time? Part-time? Break them out by function, number of hours worked, and hourly pay. Describe the skill sets needed. What are the salaries of those in management, wait staff and kitchen workers? What are your hours of operation? What criteria are used to locate and hire quality employees? Other Issues to Consider:

• How will you keep track of inventory? Provide specific procedures and equipment used.

• How will you maintain quality control? What are the procedures to ensure that you are providing the top quality product or service?

• What type of insurance does your shop need? Discuss the legal liability issues of your coffee shop.

Operational Plan: Mistakes to Avoid Here are some of the most common mistakes found in the Operational Section of business plans:

• Failing to clearly outline the process by which you sell your products and services.

• Failing to account for all costs (direct and indirect). • Failing to assess the delivery process in terms of costs, taxes, etc.

57


• Failing to develop adequate inventory control and quality assurance guidelines.

• Failing to identify all machinery and equipment needed. • Failing to properly plan the layout of the shop, the workflow process,

and the handling procedures. • Failing to properly outline personnel management, scheduling, and

hiring practices. • Failing to properly plan for contingencies to meet production and

staffing challenges. • Failing to plan for long term facility and equipment changes.

The Operational Plan We have provided a sample Operational Plan to help give you an idea of the way the information can be formatted. See the sample Operational Plan on page 63. The Operational Plan explains the daily operation of your coffee shop; its location, equipment, people, processes, and surrounding environment. In this step, you will fill out the answers to questions posed in the following section. Attach supporting documentation as an Appendix (once again, be sure to keep a chronological order to your Appendixes) The nine (9) sections in the Operational Plan include: Production on page 58 Location on page 58 Legal Environment on page 59 Personnel on page 59 Inventory on page 60 Suppliers on page 60 Credit Policies on page 60 Managing your Accounts Receivable on page 60 Managing your Accounts Payable on page 61 Production Product Production How and where are your products produced? Explain your methods of:

Production techniques & costs Quality control Customer service Inventory control Product development

58


Location What qualities do you need in a location? Describe the type of location you will have for your coffee shop. Physical requirements:

Space; how much? Type of building Zoning Power and other utilities

Access: Is it important that your location be convenient to transportation or to suppliers? Do you need easy walk-in access? What are your requirements for parking, and proximity to freeway, airports, railroads, shipping centers? You might include a drawing or layout of your proposed facility. Construction: Most new companies should not sink capital into construction, but if you are planning to build, then costs and specifications will be a big part of your plan. Cost: Estimate your occupation expenses, including rent, but also including: maintenance, utilities, insurance, and initial remodeling costs to make it suit your needs. These numbers will become part of your financial plan. What will be your business hours? Legal Environment Describe the following Licensing and bonding requirements required for your coffee shop Permits Health, workplace or environmental regulations Special regulations that might apply Zoning or building code requirements Insurance coverage Produced product trademarks, copyrights, or patents (pending, existing, or purchased if applicable) Personnel Number of employees Type of labor (skilled, unskilled, professional)

59


Where and how will you find the right employees? Quality of existing staff Pay structure Training methods and requirements Who does which tasks? Do you have schedules and written procedures prepared? Have you drafted job descriptions for employees? If not, take time to write some. They really help internal communications with employees. For certain functions, will you use contract workers in addition to employees? Inventory What kind of inventory will be kept: raw materials for food and beverage production, supplies, finished goods? Average value in stock (i.e., what is your inventory investment)? Rate of turnover and how this compares to industry averages? Lead-time for ordering? Suppliers Identify key suppliers.

Names & addresses Type & amount of inventory furnished Credit & delivery policies History & reliability

Should you have more than one supplier for critical items (as a backup)? Do you expect shortages or short term delivery problems? Are supply costs steady or fluctuating? If fluctuating, how would you deal with changing costs? Managing your Accounts Receivable You should do an aging at least monthly, to track how much of your money is tied up in credit given to customers, and to alert you to slow payment problems.

60


A receivables aging looks like this:

Accounts Receivable Aging Total Current 30

Days 60

Days 90

Days Over 90

Days

Client One

Client Two

Client Three

Client Four

You will need a policy for dealing with slow paying customers. When do you make a phone call? When send a letter? When do you get your attorney to threaten? Managing your Accounts Payable You should also age your Accounts Payable, what you owe to your suppliers. This helps you plan who to pay and when. Paying too early depletes your cash, but paying late can cost you valuable discounts and damage your credit. Are prompt payment discounts offered by your proposed vendors? A payables aging looks like this:

Accounts PayableAging

Total Current

(discounts?) 30

Days 60

Days 90

Days

Over 90

Days

Vendor One

Vendor Two

Complete the Operational Plan Section To complete the Operational Plan in Excel®, go to the Excel® Spreadsheet to the tab labeled Step 9 - Operational Plan. Fill in the information and save your work. To complete the Operational Plan in Word®, go to the Word® options file and complete the information.

61


When You Have Completed the Operational Plan Now you are ready to proceed to the next step in the preparation of your business plan, so proceed to Step Ten, Management and Organization on page 66.

62



Operational Plan Production Here you will need to explain the following:

Product Production How and where are your products produced? Explain your methods of:

o production techniques & costs o quality control o customer service o inventory control o product development

Location Here you will describe:

What qualities do you need in a location The type of location you will have The physical requirements

o how much space o type of building o zoning o power and other utilities

Information related to access to the location such as Is it important that your location be convenient to transportation

or to suppliers Do you need easy walk-in access What are your requirements for

o parking o proximity to freeway, airports, railroads, shipping centers

You might include a drawing or layout of your proposed facility. if you are planning to build, then explain costs and specifications

with supporting documentation

63


Estimate your occupation expenses, including rent, but also including:

o maintenance o utilities o insurance o initial remodeling costs to make it suit your needs

What will be your business hours Legal Environment Describe the following:

Licensing and bonding requirements required for your coffee shop Permits Health, workplace or environmental regulations Special regulations that might apply Zoning or building code requirements Insurance coverage Produced product trademarks, copyrights, or patents (pending,

existing, or purchased if applicable) Personnel Provide detail information on the following:

Number of employees Type of labor (skilled, unskilled, professional) Where and how will you find the right employees Quality of existing staff Pay structure Training methods and requirements Who does which tasks Do you have schedules and written procedures prepared Have you drafted job descriptions for employees Will you use contract workers in addition to employees

Inventory

What kind of inventory will be kept: raw materials for food and beverage production, supplies, finished goods

Average value in stock (i.e., what is your inventory investment) Rate of turnover and how this compares to industry averages Lead-time for ordering

64


Suppliers Provide information on the following:

Identify key suppliers o names & addresses o type & amount of inventory furnished o credit & delivery policies o history & reliability

Do you have more than one supplier for critical Do you expect shortages or short term delivery problems Are supply costs steady or fluctuating

Managing your Accounts Receivable Explain the following:

Your credit policy What do you expect your accounts receivable aging chart to be What is your policy for dealing with slow paying customers When do you make a phone call When send a letter When do you get your attorney to threaten

Managing your Accounts Payable Address the following:

Are prompt payment discounts offered by your proposed vendors What are the discounts Provide an account payables aging chart

65


Step Ten Management and Organization In the Management and Organization section, you will describe the management and organization plan you have in mind now for your coffee shop. We have provided a sample Management and Organization section to help give you an idea of the way the information can be formatted. See the sample Management and Organization on page 69. Who will manage the coffee shop on a day to day basis? What experience does that person bring to the business? What special or distinctive competencies? Is there a plan for continuation of the business if this person lost or incapacitated? If you will have more than about ten employees, create an organizational chart showing the management hierarchy and who is responsible for key functions. Management Team: Business Plan Basics Many investors base their entire investment decision on the management team behind a venture. Investors expect a well-rounded team of professionals with experience in every function critical to the coffee shop operation. Your management section should clearly demonstrate who each person is, why he or she is on your team, and what each person will do.

Try and limit your management team to 3 to 5 people - and to those individuals involved in the day to day coffee shop operation that have the greatest impact on the future success of your shop. Everyone else is considered either an employee, or if not involved in day to day operations should be included as a member of the Board of Advisors, Board of Directors or consultants. A discussion of your employees should be included in the operations section.

The basic components of the management section include:

Specific Team Members

Construct a narrative description for each team member, clarifying his or her background and intended contribution. This should include:

• Title of this position

66


• Duties and responsibilities of this position - what will they be doing, which functions they will be overseeing, who do they supervise, who do they report to, etc.

• Previous industry and related business experience - should be those that relate directly to this new position. Who have they worked for, what were they doing, for how long did they do it, etc.

• Previous Successes - what did they accomplish, did they help grow a coffee shop, or were they responsible for a turnaround or some new breakthrough idea.

• Education; keep educational descriptions brief

Board of Directors

Briefly describe who is on your Board and what role they play within your coffee shop. Briefly list the names, backgrounds, and contributions that will be made by each board member.

Board of Advisors

Your board of advisors should consist of individuals with valuable industry expertise and insight, and they help and consult with you on your business. A solid and experienced board of advisors goes a long way towards building credibility in the eyes of investors. Briefly list the names, backgrounds, and contributions that will be made by each of your board members.

Consultants

The last part of your management section should include a brief mention of the outside consultants you will work with as your coffee shop grows. A typical list of consultants would include accountants, attorneys, bankers, insurance agents, and experts such as technology advisors, food prep, wait staff techniques, and payroll specialists, for example. Explain the background of the founder(s) of the company at some length. However, limit this background information to under a page. Stick to the facts on all your management team bios, making it evident why each person is experienced, why they hold their position and the benefits they provide your coffee shop. Tip

Important Tip Investors Prefer

Always keep in mind that given the choice between an excellent business concept with second-rate managers and a mediocre business concept with

top-notch managers, investors prefer the latter.

67


Management Team: Mistakes to Avoid

The following are several common mistakes that decrease the effectiveness of the management team section of your business plan:

• Depending on unqualified friends or family in key management positions.

• Assuming that previous success in other industries applies to your business.

• Presenting a "one-man-team" management philosophy. Investors know it's difficult to wear every hat and successfully run and grow a shop.

• Attempting to attract top managers without sharing ownership. • Lacking non-compete agreements for critical management staff. • Failing to attract and assemble a knowledgeable board of advisors.

Professional and Advisory Support Here, you will list the following information about the individuals that will be involved in your coffee shop. Be through and attach resumes or information from websites or brochures about these individuals, if available. This adds to the creditability of your company’s organization. List board of directors and management advisory board. Attorney Accountant Insurance agent Banker Consultant(s) Mentors and key advisors in addition to the above Complete the Management and Organization Section To complete the Management and Organization Section in Excel®, go to the Excel® Spreadsheet to the tab labeled Step 10 – Mgt and Organization. Fill in the information and save your work. To complete the Management and Organization Section in Word®, go to the Word® options file and complete the information. When You Have Completed the Management and Organization Now you are ready to proceed to the next step in the preparation of your business plan, so proceed to Step Eleven, The Financial Plan on page 71.

68



Management and Organization Founders Explain the background of the founder(s) of the company at some length. Limit this background information to under a page. Stick to the facts on all your management team bios, making it evident why each person is experienced, why they hold their position and the benefits they provide your coffee shop. Management Team Provide information on Specific Team Members (Try and limit your management team to 3 to 5 people)

Construct a narrative description for each team member, clarifying his or her background and intended contribution. This should include:

• Title of this position • Duties and responsibilities of this position - what will they be

doing, which functions they will be overseeing, who do they supervise, who do they report to, etc.

• Previous industry and related business experience - should be those that relate directly to this new position. Who have they worked for, what were they doing, for how long did they do it, etc.

• Previous Successes - what did they accomplish, did they help grow a coffee shop, or were they responsible for a turnaround or some new breakthrough idea.

• Education; keep educational descriptions brief

69


Board of Directors

Briefly describe who is on your Board and what role they play within your coffee shop. Briefly list the names, backgrounds, and contributions that will be made by each board member.

Board of Advisors

Your board of advisors should consist of individuals with valuable industry expertise and insight, and they help and consult with you on your business. A solid and experienced board of advisors goes a long way towards building credibility in the eyes of investors. Briefly list the names, backgrounds, and contributions that will be made by each of your board members.

Consultants The last part of your management section should include a brief mention of the outside consultants you will work with as your coffee shop grows. A typical list of consultants would include accountants, attorneys, bankers, insurance agents, and experts such as technology advisors, food prep, wait staff techniques, and payroll specialists, for example. Professional and Advisory Support List board of directors and management advisory board.

Attorney Accountant Insurance agent Banker Consultant(s) Mentors and key advisors in addition to the above

70


Step Eleven The Financial Plan Financial Projections: Business Plan Basics Your Financial Plan will consist of five (5) parts: The Profit and Loss Narrative The Profit and Loss Statement The Project Cash Flow The Balance Sheet The Break-Even Analysis Your financial plan will be highly scrutinized by your business plan reader. All the ideas, concepts and strategies discussed throughout your entire business plan form the basis for, and should flow into, your financial statements and projections in some manner. When it gets down to it, your reader wants to know if and when your coffee shop will make money and become profitable. Financial statements and projections should follow Generally Accepted Accounting Standards and must (at a minimum) include properly prepared balance sheets, income statements and cash flow statements. Bankers and investors are familiar with the correct content, organization and presentation of financial statements, and expect to see them in your business plan. Don't cut corners or attempt to devise your own method of financial and pro forma statement presentation. In most cases, capital sources expect financial projections for a three to five year period, and historical statements for the past three years (or since inception if operating period is less than three years). Consider organizing your financial statements as follows: Income Statements

• Year 1 - Monthly Projections • Years 2 thru 5 - Quarterly or Yearly Projections • Existing businesses should provide income statements for the last 3

years if available. Balance Sheets

• Year 1 - Quarterly Projections • Years 2 thru 5 - Yearly Projections • Existing businesses should provide current balance sheet and balance

sheets from the prior 2 years if available.

71


Cash Flows

• Year 1 - Monthly Projections • Years 2 thru 5 - Quarterly or Yearly Projections

Other information that you may consider including: Financial Assumptions These financial assumptions are critical to properly convey the "reasons behind the numbers" for outsiders reviewing your financial projections. Explain how you calculated the numbers you used in your financial statements. For example, we will sell X number of Y per month at $X per Y. This is projected to increase by 4% every month, etc. Break-Even Analysis These break-even analysis figures demonstrate the volume of sales, in units and dollars that must be generated to cover fixed and variable expenses. At the break-even point, you start becoming profitable. Normally this data is presented in a graph format with sales on the X-axis and specific products and services on the Y-axis. Sources and Uses of Funds This section explains to your reader which sources you expect to secure capital from, and what you specifically plan to spend it on. Investment Structure and Objectives This section outlines the amount of capital needed, various investment structures, and the estimated return to your investor. It is critically important to tell your investor how they will recoup their money, when they can cash out, and what they will receive as a return. Financial Ratios Providing standard financial ratios helps your business plan reader to analyze how well your coffee shop will perform compared to other companies within the industry. For existing companies, show the trends over the last 3 to 5 years to outline any improvements in your performance. Financial Projections: Mistakes to Avoid Here are some of the most common mistakes found in the financial projection sections of business plans:

• Failing to include the "Big 3" statements and projections (income statement, balance sheet, cash flow).

72


• Presenting sales and profit projections that are unrealistic and unfounded.

• Omitting financial assumptions to explain where the "numbers" originated.

• Presenting "creative" rather than "accepted" financial statements. • Underestimating expenses and not budgeting for unexpected costs. • Lack of financial investment on the part of the founders. • Including excessive salaries and office expenses at start-up. • Offering a lower percentage of ownership than the investment

requirement demands. • Offering a return on investment that is out of line for your industry. • Absence of contingencies and projections for worst case scenarios. • Financial statements that are not prepared or reviewed by a reputable

accountant. The Financial Plan for Your Company The Financial Plan consists of a 12-month Profit and Loss Statement, a Projected Cash Flow, a Balance Sheet, and a Breakeven Calculation. Together they constitute a reasonable estimate of your coffee shop financial future. More importantly, however, the process of thinking through the Financial Plan will improve your insight into the inner financial workings of your coffee shop. Instructions on How to Complete the Profit-Loss Narrative Now, you need to refer to the Excel® spreadsheet entitled Step 11 – Narrative or you can complete the Narrative in the Word® options file. Profit projections should be preceded by a narrative explaining the major assumptions used to estimate the company’s income & expenses. We have provided an illustrative Profit and Loss Narrative to help give you an idea of the way the information can be formatted. See the Profit and Loss Statement Narrative included in the Financial Plan found on page 78. Twelve Month Profit and Loss Projection Many business owners think of this as the centerpiece of their business plan. This is where you put it all together in numbers and get an idea of what it will take to make a profit and be successful in your coffee shop. This twelve month forecast will provide you information related to forecast sales, cost of goods sold, expenses, and profit month by month for one year.

73


Instructions on How to Complete the Profit-Loss Statement in the Excel Spreadsheets This section will be your Profit-Loss Statement. You need to refer to the Excel® spreadsheet entitled Step 11 – Profit-Loss Statement. You will find that most of the financial data has been auto filled and your sales projections will come from the Sales Forecast you did in Step Eight. Tip

Important Tip Keep Notes

Research Notes: Keep careful notes on your research and

assumptions, so you can explain them later if necessary, and also so you can go back to your sources when it is time to revise your plan later on.

Projected Cash Flow If the profit projection is the heart of your business plan, then cash flow is the blood. Businesses fail because at some point they cannot pay their bills. Every part of your business plan is important, but none of it means a thing if you run out of cash. The point of this step is to plan how much you need before startup, for preliminary expenses, operating expenses, and reserves. You should keep updating it and using it afterwards as well. It will enable you to foresee shortages in time to do something about them; perhaps to cut expenses, or perhaps to negotiate a loan. There is no great trick to preparing it: the cash flow projection is just a forward look at your business checking account. Use the Profit and Loss Statement for a starting point. For each item, determine when you actually expect to receive cash (for sales) or when you will actually have to write a check (for expense items) Your Cash Flow Projection will show you whether your working capital is adequate. Clearly, if your projected cash balance ever goes negative, you will need more startup capital. This plan will also predict just when and how much you will need to borrow. New loans can be placed on Row 42, currently labeled Miscellaneous.

74


Your Cash Flow Projection chart will appear similar to this example:

We have provided an illustrative Profit and Loss Narrative to help give you an idea of the way the information can be formatted. See the Projected Cash Flow Narrative included in the Financial Plan found on page 78. In the Narrative, you will need to explain your major assumptions, especially those which make the cash flow differ from the Profit and Loss Statement; How will this affect cash flow? Are some expenses payable in advance? When? Are there irregular expenses such as quarterly tax payments, maintenance and repairs, or seasonal inventory buildup which should be budgeted? Loan payments, equipment purchases, and owner's draws usually do not show on profit and loss statements, but definitely do take cash out. Be sure to include them. And of course, depreciation does not appear in the cash flow at all because you never write a check for it. Instructions on How to Complete the Projected Cash Flow in the Excel Spreadsheets Now, you need to refer to the Excel® spreadsheet entitled Step 11 – Project Cash Flow. You will see that Row 7, Gross Sales is already filled in from the

75


Sales Forecasts section of the Excel® spreadsheet. Other rows have been auto filled from the Profit-Loss Statement. Fill in the remaining dollar figures based on your estimates. When you have finished this page in the Excel® spreadsheet, you will have your twelve month Projected Cash Flow. Opening Day Balance Sheet A balance sheet is one of the fundamental financial reports which any business needs for reporting and financial management. A balance sheet shows what items of value are held by the company (Assets), and what its debts are (Liabilities). When liabilities are subtracted from assets, the remainder is Owners’ Equity. Instructions on How to Complete the Balance Sheet in the Excel Spreadsheets Use the Excel® spreadsheet tab, Step 6 - Start Up Costs, as a guide to preparing a balance sheet as of the opening day of your coffee shop. You need to refer to the Excel® spreadsheet Step 11 - Balance Sheet. In this step of your business plan, explain how you calculated the account balances on your Opening Day Balance Sheet and you will do this in the Excel® spreadsheet under the tab Step 11 – Balance Sheet. You will also need to explain your findings in the Narrative. When you have completed this spreadsheet, you will have your Opening Day Balance Sheet. Break-Even Analysis A Break-Even Analysis predicts the sales volume, at a given price, required to recover total costs. In other words, it’s the sales level that is the dividing line between operating at a loss and operating at a profit. From the Excel® spreadsheet in the tab entitled Step 11 – Projected Cash Flow that you have already prepared, you will be able to determine how many months it will take before your coffee shop is operating the “black” (at a profit). This Break-Even Analysis section is a narrative of the results of the Projected Cash Flow to profitability.

76


Instructions on How to Complete the Break-Even Analysis To complete the Break-Even Analysis in Excel®, go to the Excel® Spreadsheet to the tab labeled Step 10 – Mgt and Organization. Fill in the information and save your work. To complete the Break-Even Analysis in Word®, go to the Word® options file and complete the information. When you have finished, you will have a good idea of when you can expect to breakeven in your coffee shop. When You Have Completed the Financial Plan Now, you ready to finish up your business plan and you should now go to the Appendixes section on page 81.

77



Financial Plan This is a narrative to explain the findings of the following: Profit and Loss Statement Here you will explain the major assumptions used to estimate the company’s income & expenses. Use the following list to include those areas that must have detailed explanations. Revenue Gross Sales Less Returns and Allowances Net Sales Cost of Sales Beginning Inventory Purchases (Net) Sub-Contractors Direct Labor Ending Inventory (Negative) Total Cost of Sales Expenses Audit / Accounting Fees Bus Dev. - Travel Bus. Dev. - Entertainment Bus. Dev. - Meals Capital Acquisitions Charitable Contributions Commissions

78


Conferences & Seminars Consulting Fees Depreciation Employee Benefits Entertainment Equipment Lease Facilities - Insurance Facilities - Phone Facilities - Property Taxes Facilities - Rent Facilities - Security Facilities - Utilities Facility - Other Financial Charges Furniture Insurance Inventory Purchases IT Consulting Legal Fees Loan Capital Loan Interest Miscellaneous Office Supplies Payroll - Operational staff Payroll - Administrative Staff Payroll - Owner / Directors Payroll - Sales / Marketing Payroll Taxes Postal / Shipping PR / Advertising Repairs & Maintenance Research and Development Storage Subscriptions & Dues Taxes & Licenses Telecommunications Vehicle Expenses Projected Cash Flow You provide an explanation of the following:

Your major assumptions How will these assumptions will affect cash flow Are some expenses payable in advance

79


When Are there irregular expenses such as quarterly tax payments,

maintenance and repairs, or seasonal inventory buildup which should be budgeted

Since loan payments, equipment purchases, and owner's draws usually do not show on profit and loss statements, but definitely do take cash out, you should include an explanation of these assumptions

Balance Sheet Give a detailed explanation of the Balance Sheet, as shown on the Excel spreadsheet. The Balance Sheet shows what items of value are held by the company (Assets), and what its debts are (Liabilities). When liabilities are subtracted from assets, the remainder is Owners’ Equity. Breakeven Analysis A Break-Even Analysis predicts the sales volume, at a given price, required to recover total costs. In other words, it’s the sales level that is the dividing line between operating at a loss and operating at a profit. From the Excel® spreadsheet in the tab entitled Step 11 – Projected Cash Flow that you have already prepared, you will be able to determine how many months it will take before your coffee shop is operating the “black” (at a profit). This Break-Even Analysis section is a narrative of the results of the Projected Cash Flow to profitability.

80


Appendixes Here you will list your Appendixes and you should associate a certain Appendix with a section of the business plan. The following is a list of all the Tabs (spreadsheet page) required in this business plan in order of appearance: Name of Tab

Tab

Appendix Number

Your Net Worth

1

Cover Sheet 2 Executive Summary 3 General Company Description 3 Products & Services Description 4 Start-Up Costs Narrative 5 Start-Up Costs 6 Marketing Plan 7 Sales Forecast 8 Operational Plan 9 Management & Organization 10 Financial Plan Narrative 11 Profit and Loss Statement 12 Projected Cash Flow 13 Balance Sheet 14 Breakeven Analysis 15 Spreadsheet Note

Important Note Regarding Tabs Tabs are sometimes referred to as “pages” in the spreadsheet.

However, a tab can contain from one to a hundred pages! For instance, the Cover Sheet is a one page Tab. But the Projected Cash Flow consists of twelve pages. When you add the data, there could be more! Include details & studies used in your business plan; for example: Brochures & advertising materials Industry studies Blueprints & plans Maps & photos of location Magazine or other articles Detailed lists of equipment owned or to be purchased Copies of leases & contracts Letters of support from future customers Any other materials needed to support the assumptions in this plan Market research studies

81


List of assets available as collateral for a loan Your Business Plan Is Now Complete and Ready for Printing You are now ready to format and print your business plan. Depending on the amount and size of text you used and imputed, the amount of additional lines in the spreadsheets and the fonts used, and the format you use for the page setups (portrait or landscape), and the paper you use (letter or legal), you will need to format the entire workbook. Sometimes, you must use page setup and set different settings for different pages. To review how to format and customize your business plan for how it will look when you view or print it, go to page 2. Spreadsheet Note

Important Note Regarding Spreadsheet Pages To view the actual page margins, you can click on File, Page Setup

and then click OK. The page borders will show as a dotted line. You can then see if the information is going to print on one page or numerous pages. In Conclusion Your Business Plan for your coffee shop is complete, or should we say as complete as it can be for now. A business plan is a work in progress, a never ending process to plan your coffee shop, revise the projections, adjusts the expenses, and plan for your overall success. You should revisit your business plan often. As a rule, you should revisit the business plan at least once every three months or so for revisions and/or updates to the business plan. PowerPoint Demonstrations You can use PowerPoint as a powerful tool in presenting your business plan to any audience; bankers, investors, employees, partners, etc. PowerPoint turns your business plan into a “Show and Tell” experience. PowerPoint is a presentation software program included as part of the Microsoft Office package. PowerPoint is a complete presentation graphics package. It gives you everything you need to produce a professional-looking presentation. PowerPoint offers word processing, outlining, drawing, graphing, and presentation management tools- all designed to be easy to use and learn. PowerPoint is a product for producing slide shows that can incorporate text, graphics, video, animations, etc. LCD / DLP projectors are known to many people as "PowerPoint projectors." The following gives you a quick overview of what you can do in PowerPoint.

82


PowerPoint uses a graphical approach to presentations in the form of slide shows that accompany the oral delivery of the topic. This program is widely used in business and classrooms and is an effective tool when used for training purposes. PowerPoint is one of the simplest computer programs to learn. It is the number 1 program used worldwide for presentations. Anyone can create stunning presentations that look like they were designed by a professional. PowerPoint presentations can be made into photo albums, complete with music or narrations, to distribute on CDs or DVDs. So you can leave copies with anyone to view at a later date. This can be extremely important (and impressive) with lenders or investors. PowerPoint is easy to customize presentations with your company logo and to dazzle your audience by using one of the many design templates that come with the programs. Many more free add-ins and templates are available online from Microsoft and a host of other websites. In addition to an on screen slide show, PowerPoint has printing options that allow the presenter to provide handouts and outlines for the audience as well as notes pages for the speaker to refer to during the presentation. All in all, PowerPoint is a "one-stop-shop" to create successful presentations for the business world. To summarize:

• When you create a presentation using PowerPoint, the presentation is made up of a series of slides. The slides that you create using PowerPoint can also be presented as overhead transparencies or 35mm slides.

• In addition to slides, you can print audience handouts, outlines, and speaker's notes.

• You can format all the slides in a presentation using the powerful Slide Master.

• You can keep your entire presentation in a single file- all your slides, speaker's notes, and audience handouts.

• You can import what you have created in other Microsoft products, such as Word and Excel into any of your slides.

You can even host your business plan PowerPoint demonstration online. There are many companies that offer this service, such as Glance, http://www.glance.net.

83

http://www.glance.net/


Mutual Non-Disclosure Agreement It is understood and agreed to that the parties to this Agreement would each like to provide the other with certain information that may be considered confidential. To ensure the protection of such information and in consideration of the agreement to exchange said information, the parties agree as follows: 1. The confidential information to be disclosed under this Agreement (”Confidential Information”) can be described as and includes: Technical and business information relating to proprietary ideas, patentable ideas and/or trade secrets, existing and/or contemplated products and services, research and development, production, costs, profit and margin information, finances and financial projections, customers, clients, marketing, and current or future business plans and models, regardless of whether such information is designated as “Confidential Information” at the time of its disclosure. In addition to the above, Confidential Information shall also include, and the parties shall have a duty to protect, other confidential and/or sensitive information which is (a) disclosed as such in writing and marked as confidential (or with other similar designation) at the time of disclosure; and/or (b) disclosed by in any other manner and identified as confidential at the time of disclosure and is also summarized and designated as confidential in a written memorandum delivered within thirty (30) days of the disclosure. 2. The parties shall use the Confidential Information only for the purpose of evaluating potential business, employment and/or investment relationships. 3. The parties shall limit disclosure of Confidential Information within its own organization to its directors, officers, partners, members and/or employees having a need to know and shall not disclose Confidential Information to any third party (whether an individual, corporation, or other entity) without prior written consent. The parties shall satisfy its obligations under this paragraph if it takes affirmative measures to ensure compliance with these confidentiality obligations by its employees, agents, consultants and others who are permitted access to or use of the Confidential Information. 4. This Agreement imposes no obligation upon the parties with respect to any Confidential Information (a) that was possessed before receipt; (b) is or becomes a matter of public knowledge through no fault of receiving party; (c) is rightfully received from a third party not owing a duty of confidentiality; (d) is disclosed without a duty of confidentiality to a third party by, or with the authorization of the disclosing party; or (e) is independently developed. 5. The parties warrant that they have the right to make the disclosures under this Agreement.

84


6. This Agreement shall not be construed as creating, conveying, transferring, granting or conferring upon either party any rights, license or authority in or to the information exchanged, except the limited right to use Confidential Information specified in paragraph 2. Furthermore and specifically, no license or conveyance of any intellectual property rights is granted or implied by this Agreement. 7. Neither party has an obligation under this Agreement to purchase any service, goods, or intangibles from the other party. Furthermore, both parties acknowledge and agree that the exchange of information under this Agreement shall not commit or bind either party to any present or future contractual relationship (except as specifically stated herein), nor shall the exchange of information be construed as an inducement to act or not to act in any given manner. 8. Neither party shall be liable to the other in any manner whatsoever for any decisions, obligations, costs or expenses incurred, changes in business practices, plans, organization, products, services, or otherwise, based on either party’s decision to use or rely on any information exchanged under this Agreement. 9. If there is a breach or threatened breach of any provision of this Agreement, it is agreed and understood that the non-breaching party shall have no adequate remedy in money or other damages and accordingly shall be entitled to injunctive relief; provided however, no specification in this Agreement of any particular remedy shall be construed as a waiver or prohibition of any other remedies in the event of a breach or threatened breach of this Agreement. 10. This Agreement states the entire agreement between the parties concerning the disclosure of Confidential Information and supersedes any prior agreements, understandings, or representations with respect thereto. Any addition or modification to this Agreement must be made in writing and signed by authorized representatives of both parties. This Agreement is made under and shall be construed according to the laws of the State of ___________________, U.S.A. In the event that this agreement, is breached, any and all disputes must be settled in a court of competent jurisdiction in the State of ____________________, U.S.A. 11. If any of the provisions of this Agreement are found to be unenforceable, the remainder shall be enforced as fully as possible and the unenforceable provision(s) shall be deemed modified to the limited extent required to permit enforcement of the Agreement as a whole. WHEREFORE, the parties acknowledge that they have read and understand this Agreement and voluntarily accept the duties and obligations set forth herein.

85


Recipient of Confidential Information: Name (Print or Type): Company: Title: Address: City, State & Zip: Signature: Date: Discloser of Confidential Information: Name (Print of Type): Company: Title: Address: City, State & Zip: Signature: Date:

86


Attachment One A Discussion of the Basic Legal Forms of Ownership This information is for individuals who are ready to start operation and want instruction on the regulations that affect most small business start ups. You might want to start by deciding if you want to operate as a proprietor, a partnership or a corporation. You will want to know what taxes might affect your business and if you are going to be employing people in your business, then there are a number of regulations that may affect you. This information discusses the basic regulations that are common to most start ups and does not encompass permits, licenses or regulations that may be required. Proprietorship, Partnership or Incorporation? Advantages and Disadvantages of Proprietorship on page 87 Advantages and Disadvantages of Partnership on page 88 Advantages and Disadvantages of Incorporating on page 89 Registering a Proprietorship or Partnership on page 90 Registering a Corporation on page 90 Incorporating a Company in your State on page 90 From a legal point of view, there are three common types of businesses: sole proprietorship, partnership and corporation. Each has different and important implications for liability, taxation and succession. A lawyer or accountant can advise you on which is suited to your needs, and undertake the necessary formalities. Advantages and Disadvantages of Proprietorship This is the simplest way to set up a business. A sole proprietor is fully responsible for all debts and obligations related to his or her business. A creditor with a claim against a sole proprietor would normally have a right against all of his or her assets, whether business or personal. This is known as unlimited liability. In a proprietorship, one person performs all the functions required for the successful operation of the business. The proprietor secures the capital, establishes and operates the business, assumes all risks, accepts all profits and losses, and pays all taxes. The proprietor is said to be self-employed. Advantages: - Low start-up costs

87


- Greatest freedom from regulation - Owner in direct control of decision making - Minimal working capital required - Tax advantages to owner - All profits to owner Disadvantages: - Unlimited liability - Lack of continuity in business organization in absence of owner - Difficulty in raising capital Return to Proprietorship, Partnership Or Incorporation on page 87 Advantages and Disadvantages of Partnership A partnership is an agreement in which two or more persons combine their resources in a business with a view to making a profit. In order to establish the terms of the partnership and to protect partners in the event of a disagreement or dissolution of a partnership, a partnership agreement should be drawn up. Standard form partnership agreements can also be purchased for about $5.00 at stationary stores. Partners share in the profits according to the terms of the agreement. In a General Partnership, two or more owners share the management of a business, and each is personally liable for all the debts and obligations of the business. This means that each partner is responsible for, and must assume the consequences of, the actions of the other partner(s). A second type of partnership is a Limited Partnership which involves limited partners who combine only capital. They are not involved in managing the business and cannot be liable for more than the amount of capital they have contributed. This is known as limited liability. A limited partnership also involves general partners, who are involved in management. They are fully liable for the debts and obligations of the business, but may be entitled to a greater share of the profits. Advantages: - Ease of formation - Low start-up costs - Additional sources of investment capital - Possible tax advantages - Limited regulation - Broader management base

88


Disadvantages: - Unlimited liability - Divided authority - Difficulty in raising additional capital - Hard to find suitable partners - Possible development of conflict between partners - Partners can legally bind each other without prior approval - Lack of continuity Return to Proprietorship, Partnership Or Incorporation on page 87 Advantages and Disadvantages of Incorporating A corporation, also known as a Limited Company, is a legal entity which is separate and distinct from its members (shareholders). Each shareholder has limited liability. A creditor with a claim against the assets of the company would normally have no rights against its shareholders, although in certain circumstances shareholders may be held liable. It is recommended that legal advice be sought. This type of business can be incorporated at either the federal or provincial level. Ownership interests in a corporation are usually easily changed. Shares may be transferred without affecting the corporations’ existence or continued operation. The following characteristics distinguish it from a partnership or proprietorship: Limited liability - normally no member can be held personally liable for the debts, obligations or acts of the corporation beyond the amount of share capital the members has subscribed; and Perpetual succession - because the corporation is a separate legal entity, its existence does not depend on the continued membership of any of its members. Advantages: - Limited liability - Possible tax advantage (if you qualify for a small business tax rate) - Specialized management - Ownership is transferable - Continuous existence - Separate legal entity - Easier to raise capital

89


Disadvantages: - Closely regulated - Most expensive form to organize - Charter restrictions - Extensive record keeping necessary - Double taxation of dividends - Shareholders may be held legally responsible in certain circumstances - Personal guarantees undermine limited liability advantage Return to Proprietorship, Partnership Or Incorporation on page 87 Registering a Proprietorship or Partnership Proprietorships and Partnerships are regulated by the government. See your State Government Website on page 96. Return to Proprietorship, Partnership Or Incorporation on page 87 Registering a Corporation You have the option to incorporate at a state level or at a federal level. If a company intends to carry on its activities solely in one state, state incorporation may be preferable. If the company wishes to expand its activities outside of its state jurisdiction at a later date, it must obtain an extra-state license from every other state in which it wishes to open an office or obtain a presence. Under Federal Law, any individual or corporation may receive a certificate of incorporation for any legal purpose with the exception of operating such institutions as banks, insurance companies, and trust and loan companies. In several states, a federally incorporated company will still have to obtain extra state registration to operate. Return to Proprietorship, Partnership Or Incorporation on page 87 Incorporating a Company in your State Incorporating can be a very involved process and it is recommended that you seek the advice and services of a lawyer and/or an accountant. For information on incorporating in your state, go your state’s Website located in Government Websites on page 96. Return to Proprietorship, Partnership Or Incorporation on page 87

90


Attachment Two Information Resources We have provided these Information Resources to assist you in contacting any of the listed agencies or information sources for assistance in starting your new business. The list includes: U.S. Small Business Administration (SBA) on page 91

Service Corps of Retired Executives (SCORE) on page 92

Small Business Development Centers (SBDCs) on page 92

Small Business Institutes (SBIs) on page 92

SBA Business Development Programs on page 92

Other U.S. Government Resources on page 92

Federal Publications on page 92

Consumer Information Center (CIC) on page 93

U.S. Department of Agriculture (USDA) on page 93

U.S. Department of Commerce (DOC) on page 93

U.S. Department of Health and Human Services (HHS) on page 93

U.S. Department of Labor (DOL) on page 94

U.S. Department of Treasury on page 94

Internal Revenue Service (IRS) on page 94

U.S. Environmental Protection Agency (EPA) on page 94

U.S. Food and Drug Administration (FDA) on page 94

For More Information on page 94

Books, Magazine and Newspaper Articles on page 95

U.S. Small Business Administration (SBA) The SBA offers an extensive selection of information on most business management topics, from how to start a business to exporting your products. This information is listed in "The Small Business Directory". For a free copy, contact your nearest SBA office. SBA has offices throughout the country. Consult the U.S. Government section in your telephone directory for the office nearest you. SBA offers a number of

91


programs and services, including training and educational programs, counseling services, financial programs and contract assistance. Back to the list of Information Resources on page 91 - Service Corps of Retired Executives (SCORE) , a national organization sponsored by SBA of over 13,000 volunteer business executives who provide free counseling, workshops and seminars to prospective and existing small business people. Back to the list of Information Resources on page 91 - Small Business Development Centers (SBDCs), sponsored by the SBA in partnership with state and local governments, the educational community and the private sector. They provide assistance, counseling and training to prospective and existing business people. Back to the list of Information Resources on page 91 - Small Business Institutes (SBIs), organized through SBA on more than 500 college campuses nationwide. The institutes provide counseling by students and faculty to small business clients. Back to the list of Information Resources on page 91 For more information about SBA Business Development Programs and services call the SBA Small Business Answer Desk at 1-800-8-ASK-SBA (827-5722). Back to the list of Information Resources on page 91 Other U.S. Government Resources Many publications on business management and other related topics are available from the Government Printing Office (GPO). GPO bookstores are located in 24 major cities and are listed in the Yellow Pages under the "bookstore" heading. You can request a "Subject Bibliography" by writing to Government Printing Office, Superintendent of Documents, Washington, DC 20402-9328. Back to the list of Information Resources on page 91 Federal Publications Many federal agencies offer publications of interest to small businesses. There is a nominal fee for some, but most are free. Below is a selected list of government agencies that provide publications and other services targeted to small businesses. Back to the list of Information Resources on page 91

92


- Consumer Information Center (CIC) , P.O. Box 100 Pueblo, CO 81002 The CIC offers a consumer information catalog of federal publications. Back to the list of Information Resources on page 91 - Consumer Product Safety Commission (CPSC) Publications Request Washington, DC 20207 The CPSC offers guidelines for product safety requirements. Back to the list of Information Resources on page 91 - U.S. Department of Agriculture (USDA) 12th Street and Independence Avenue, SW Washington, DC 20250 The USDA offers publications on selling to the USDA. Publications and programs on entrepreneurship are also available through county extension offices nationwide. Back to the list of Information Resources on page 91 - U.S. Department of Commerce (DOC) Office of Business Liaison 14th Street and Constitution Avenue, NW Room 5898C Washington, DC 20230 DOC's Business Assistance Center provides listings of business opportunities available in the federal government. This service also will refer businesses to different programs and services in the DOC and other federal agencies. Back to the list of Information Resources on page 91 - U.S. Department of Health and Human Services (HHS) Public Health Service Alcohol, Drug Abuse and Mental Health Administration 5600 Fishers Lane Rockville, MD 20857 Drug Free Workplace Helpline: 1-800-843-4971. Provides information on Employee Assistance Programs. National Institute for Drug Abuse Hotline: 1-800-662-4357. Provides information on preventing substance abuse in the workplace. The National Clearinghouse for Alcohol and Drug Information: 1-800-729-6686 toll-free. Provides pamphlets and resource materials on substance abuse. Back to the list of Information Resources on page 91

93


- U.S. Department of Labor (DOL) Employment Standards Administration 200 Constitution Avenue, NW Washington, DC 20210 The DOL offers publications on compliance with labor laws. Back to the list of Information Resources on page 91 - U.S. Department of Treasury Internal Revenue Service (IRS) P.O. Box 25866 Richmond, VA 23260 1-800-424-3676 The IRS offers information on tax requirements for small businesses. Back to the list of Information Resources on page 91 - U.S. Environmental Protection Agency (EPA) Small Business Ombudsman 401 M Street, SW (A-149C) Washington, DC 20460 1-800-368-5888 except DC and VA 703-557-1938 in DC and VA The EPA offers more than 100 publications designed to help small businesses understand how they can comply with EPA regulations. Back to the list of Information Resources on page 91 - U.S. Food and Drug Administration (FDA) FDA Center for Food Safety and Applied Nutrition 200 Charles Street, SW Washington, DC 20402 The FDA offers information on packaging and labeling requirements for food and food-related products. Back to the list of Information Resources on page 91 For More Information A librarian can help you locate the specific information you need in reference books. Most libraries have a variety of directories, indexes and encyclopedias that cover many business topics. They also have other resources, such as trade association information. Ask the librarian to show you a directory of trade associations. Associations provide a valuable network of resources to their members through publications and services such as newsletters, conferences and seminars. Back to the list of Information Resources on page 91

94


- Books Many guidebooks, textbooks and manuals on small business are published annually. To find the names of books not in your local library check "Books In Print", a directory of books currently available from publishers. - Magazine and newspaper articles Business and professional magazines provide information that is more current than that found in books and textbooks. There are a number of indexes to help you find specific articles in periodicals. In addition to books and magazines, many libraries offer free workshops, lend skill-building tapes and have catalogues and brochures describing continuing education opportunities.

95


Government and State Websites United States Government - http://www.firstgov.gov/ Individual US state websites Alabama http://www.alabama.gov

Alaska http://www.state.ak.us

Arizona http://www.az.gov

California http://www.ca.gov

Colorado http://www.colorado.gov

Connecticut http://www.ct.gov

Delaware http://www.delaware.gov

Florida http://www.myflorida.com

Georgia http://www.georgia.gov

Hawaii www.ehawaiigov.org

Idaho http://www.accessidaho.org

Illinois http://www.illinois.gov

Indiana http://www.state.in.us

Iowa http://www.iowa.gov

Kansas http://www.accesskansas.org

Kentucky www.ky.gov

Louisiana http://www.state.la.us

Maine http://www.state.me.us

Maryland http://www.maryland.gov

Michigan http://www.michigan.gov

Minnesota www.governor.state.mn.us

Mississippi http://www.mississippi.gov

Missouri http://www.state.mo.us

Montana http://www.state.mt.us

Nebraska http://www.nebraska.gov

Nevada http://www.nv.gov

New Hampshire http://www.state.nh.us

New Jersey http://www.state.nj.us

New Mexico http://www.state.nm.us

New York http://www.state.ny.us

North Carolina http://www.ncgov.com

North Dakota http://discovernd.com

Ohio http://www.state.oh.us

Oklahoma http://www.ok.gov

Rhode Island http://www.state.ri.us

South Carolina http://www.myscgov.com

South Dakota http://www.state.sd.us

Tennessee http://www.state.tn.us

Texas http://www.state.tx.us

Utah http://www.utah.gov

Vermont http://vermont.gov

Virginia http://www.virginia.gov

96

http://www.firstgov.gov/

http://www.accessidaho.org/

http://www.illinois.gov/

http://www.state.in.us/

http://www.iowa.gov/

http://www.accesskansas.org/

http://www.ky.gov/

http://www.state.la.us/

http://www.state.me.us/

http://www.maryland.gov/

http://www.michigan.gov/

http://www.governor.state.mn.us/

http://www.mississippi.gov/

http://www.state.mo.us/

http://www.state.mt.us/

http://www.nebraska.gov/

http://www.nv.gov/

http://www.state.nh.us/

http://www.state.nj.us/

http://www.state.nm.us/

http://www.state.ny.us/

http://www.ncgov.com/

http://discovernd.com/

http://www.state.oh.us/

http://www.ok.gov/

http://www.state.ri.us/

http://www.myscgov.com/

http://www.state.sd.us/

http://www.state.tn.us/

http://www.state.tx.us/

http://www.utah.gov/

http://vermont.gov/

http://www.virginia.gov/


Index

A

Account Payables Aging · 61

Account Receivables Aging · 61

Accounts Payable Operational Plan · 61

Accounts Receiveable Operational Plan · 60

Advisory Support · 68 Aging

Payables · 61 Receivables · 61

Agreement Non-Disclosure · 8

Allowances Budget · 31

Analysis Break-Even · 72, 76

Assumptions Financial · 72

B

Balance Sheet Opening Day · 76

Balance Sheets · 71 Board of Advisors · 67 Board of Directors · 67 Break-Even Analysis · 72, 76

Completing In Excel · 77 In Word · 77

Budget · See Spreadsheet:Personal Budget Promotional · 48

Budget Allowances · 31 Business Philosophy · 23

C

Capitalization · 31 Cash Flow · 72

Projected · 74 Cell · 4 Charts

Changing Information · 6

CIC · 93 Column

Letter · 4 Columns · 5

Adding · 5 Adding/Removing

Warning · 5 Removing · 5

Consultants · 67 Consumer Information Center · 93 Consumer Product Safety Commission

· 93 Cover Sheet · 11

Elements · 11 In Excel · 11 In Word · 11 Sample · 13

CPSC · 93 Customizing · Also See

Spreadsheet:Customizing Customizing the Business Plan · 2

D

DOC · 93 DOL · 94

E

EPA · 94 Excel

Help · 5 Excel Spreadsheet

Customizing · 2 Executive Summary · 14

Basics · 14 In Excel · 18 In Word · 18 Mission Statement · 16 Sample · 19

F

FDA · 94 Federal Publications · 92 Financial Assumptions · 72 Financial Plan · 71, 73

Balance Sheets · 71 Basics · 71

97


Break-Even Analysis · 72, 76 Cash Flow · 72 Financial Assumptions · 72 Financial Ratios · 72 Income Statements · 71 Income Structure · 72 Investment Objectives · 72 Sample · 78 Source of Funds · 72 Twelve Month Loss Projection · 73 Twelve Month Profit Projection · 73 Use of Funds · 72

Financial Projections · 54 Financial Ratios · 72 Forecast

Sales · 54 Formulas

Adding · 5 Changing · 5

Funds Source · 72 Use · 72

Future Goals · 22

G

General Company Description · 22 Basics · 22

Current Status · 22 Future Goals · 22 History of the Company · 22 Legal Description · 22

In Excel · 24 In Word · 24 Mistakes to Avoid · 23 Sample · 25

Government Websites U.S. Federal · 96 U.S. States · 96

H

HHS · 93 History of the Company · 22

I

Illustrations · 6 Income Objectives · 72 Income Statements · 71 Income Structure · 72

Incorporation · 89 Information Resources · 91 Inventory

Operational Plan · 60 IRS · 94

L

Legal Description · 22 Legal Environment

Operational Plan · 59 Legal Form of Ownership · 24 Legal Forms of Ownership · 87

Incorporation · 89 Partnership · 88 Proprietorship · 87

Location Operational Plan · 59 Proposed · 49

M

Management · 66 Board of Advisors · 67 Board of Directors · 67 Consultants · 67 Team · 66

Management and Organization Sample · 69

Management and Organization Section Completing

In Excel · 68 In Word · 68

Manager · 66 Market

Niche · 48 Strategy · 48 Target · 41

Market Research Basics · 44 How · 45 Primary Market · 45 Secondary Market · 45 Why · 44

Marketing Plan · 41 Basics · 41 In Excel · 50 In Word · 50 Primary Sources · 41 Program · 41 Sample · 51 Secondary Sources · 41

98


Sections · 42 Competition · 47 Customers · 47 Economics · 45 Marketing Strategy · 48 Niche Market · 48 Pricing · 49 Product · 46 Promotion · 48 Promotional Budget · 48 Proposed Location · 49

Marketing Program · 41 Mission Statement · 16

Basics · 16 Mutual Non-Disclosure Agreement · 8

N

Narrative Profit-Loss · 73 Projected Cash Flow · 75 Start-Up · 34

Net Worth · See Personal Evaluation:Net Worth

Non-Disclosure Agreement · 8 Non-Qualified Start-Up Cost · 31

O

Objectives Income · 72

Opening Day Balance Sheet · 76 Operational Plan · 57, 58, 61

Accounts Payable · 61 Accounts Receivable · 60 Basics · 57 Completing · 61

In Excel · 61 In Word · 61

Inventory · 60 Legal Enviroment · 59 Location · 59 Personnel · 59 Production · 58 Sample · 63 Suppliers · 60

Organization · 66 Organizational Chart · 66 Ownership

Legal Form · 24 Legal Forms · 87

Incorporation · 89

Partnership · 88 Proprietorship · 87

P

Pages · 4, 5 Renaming · 5 Viewing · 4

Partnership · 88 Payables

Aging · 61 Personal Budget · See

Spreadsheet:Personal Budget Personal Evaluation · 9

Net Worth · 9 Personnel

Operational Plan · 59 Philosophy

Business · 23 Pictures

Inserting · 5 PowerPoint

Demonstrations · 82 Pricing · 49

Structure · 26 Primary Market Research · 45 Print · Also See Spreadsheet:Page

Tab:Print Preview Product

Benefits · 46 Features · 46

Product Overview · 27 Production

Operational Plan · 58 Products and Services Description · 26

Basics · 27 In Excel · 28 In Word · 28 List · 26 Sample · 29

Professional Support · 68 Profit Projection · 73 Profit-Loss Narrative · 73 Profit-Loss Statement · 73 Projected Cash Flow · 74

Narrative · 75 Projections

Financial · 54 Promotional Budget · 48 Proposed Location · 49 Proprietorship · 87 Publications

99


Federal · 92

Q

Qualified Start-Up Cost · 31

R

Ratios Financial · 72

Receivables Aging · 61

Resources Government · 92 Information · 91

Row Number · 4

Rows · 5 Adding · 5 Adding/Removing

Warning · 5 Removing · 5

S

Sales Forecast · 54 Excel · 55

Sample Cover Sheet · 13 Executive Summary · 19 Financial Plan · 78 General Company Description · 25 Management and Organization · 69 Marketing Plan · 51 Operational Plan · 63 Products and Services Description ·

29 Start-Up Narrative · 37

Samples · 6 SBA · 91 SBA Business Development Programs ·

92 SBDCs · 92 SBIs · 92 SCORE · 92 Secondary Market Research · 45 Service Corps of Retired Executives ·

92 Service Overview · 27 Small Business Administration · 91

Small Business Development Centers · 92

Small Business Institutes · 92 Source of Funds · 72 Spreadsheet

Customizing · 2 Header/Footer Tab · 2

Changing the Footer · 2 Changing the Header · 2

Margin Tab · 2 Net Worth · 9 Page Setup · 2 Page Tab · 2

Orientation · 2 Paper Size · 2 Print Preview · 2

Personal Budget · 9 Sheet Tab · 3

Changing the Color of Text · 3 Changing the Font · 3

Spreadsheet Cell · See Cell Spreadsheet Columns · See Columns Spreadsheet Pages · See Pages, See

Pages Spreadsheet Rows · See Rows Spreadsheet Tabs · See Pages, See

Pages Start-Up · 33

Checklist · 33 Narrative · 34

In Word · 34 In Excel · 34

Period · 35 Start-Up Cost

Excel · 36 List · 35

Start-Up Costs · 31 Budget Allowances · 31 Elvaluating · 32 Non-Qualified · 31 Qualified · 31

Start-Up Narrative Sample · 37

State Government Websites · 96 Statement

Profit-Loss · 73 Suppliers

Key · 60 Operational Plan · 60

Support Advisory · 68 Professional · 68

100


101

T

Tabs · See Pages, See Pages Target Market · 41

Basics · 43 Demographics · 43 Geographic · 43 Primary Sources · 41 Secondary Sources · 41 Size · 43

Twelve Month Loss Projection · 73 Twelve Month Profit Projection · 73

U

U.S. Department of Agriculture · 93 U.S. Department of Commerce · 93 U.S. Department of Health and Human

Services · 93 U.S. Department of Labor · 94

U.S. Department of Treasury · 94 U.S. Environmental Protection Agency

· 94 U.S. Food and Drug Administration ·

94 U.S. Government Recourses · 92 U.S. Government Website · 96 U.S. Small Business Administration ·

91 U.S. State Government Websites · 96 USDA · 93 Use of Funds · 72

W

Word® Option · 5 Worksheets

Adding/Removing · 3 Warning · 3


Notes:

102


Notes:

103


104

Notes: