Business Plan

Written Document describing all relevant internal and external elements and strategies for starting a new venture

Integration of plans marketing, finance, manufacturing, human resource Addresses short term and long term decision making for first 3 yrs of operation A road map answeringWhere am I now? Where am I going? How will I get there?

Who should write the plan?

- Entrepreneur

- Entrepreneur with consultant/s- lawyers / accountants / marketing / consultants / engineers - Internet

(depending on skill of the entrepreneur)

Who reads the Plan?

Employees, investors, bankers, venture capitalist, suppliers, customers, advisors, consultants

From whose perspectives shall Business Plan be prepared?

-Entrepreneurs Perspective -Marketing Perspective -Investors Perspective

How do potential investors evaluate the plan?

-Suppliers (supply components/finished products/material in large quantity) -Customers before buying product for long term commitment (telecom system) -Capital suppliers 4 Cs of credit: character, cash flow, collateral, equity contribution-of owner -Business plan & stealing of idea - ethics

Presenting the plan entrepreneur wherever required to explore scope Information needed and sources of such information: 1. Setting Goals: Specific and measurable (gr8 store for!! or 12 stores in 3 months) 2. Market information target market / market size
Sources Trade Associations / Govt. reports / Internet / Published resources 3. Operation information Location / Manufacturing operation / Raw materials / Equipments / Labour skills / Space / Overhead 4. Financial information 3 areas: (1) Expected sales and Expenses for 1st 3 yrs

(2) Cash flow figures (3) Current balance sheet & pro-forma balance sheet
Determination of sales and expenses of 1st 12 months should be based on market information discussed earlier.

USING INTERNET AS A RESOURCE TOOL:

Industry Analysis, Competitor Analysis, Market potential analysis, Website to give information to study competitor newsgroup feedback blogs @very low cost
(Bring 5 examples of links that give access to important business data for analysis and cite an example of how you would use it in a particular business plan)

WRITING THE BUSINESS PLAN:

Introductory Page Executive Summary: business concept / data supporting opportunity / marketing strategy / key financial results / important legal documents-if any Industry Analysis: 1. environmental analysis (external uncontrollable factors that may impact business) / Economy / Culture / Technology / Legal Concerns / 2. Industry analysis (Industry demand / Competition) Description of venture (provides complete overview of product/s services and operations of new venture) Production Planning

Marketing Plan
Organizational Plan Assessment of risk Financial Plan Appendix.

Introductory Page:

Name and address of Company Name of entrepreneur/s, telephone no., fax no, e-mail, website Paragraph describing nature of business The amount of financial need stock / debt / other options Statement on confidentiality of report for security

Executive Summary (Business concept, supporting data, how opportunity will be pursued, marketing strategy, how it is different, key financial results
Java Culture coffee bar is determined to become a daily necessity for local coffee addicts, a place to dream of as you try to escape the daily stresses of life and just a comfortable place to meet your friends or to read a book, all in one. With the growing demand for high-quality gourmet coffee and great service, Java Culture will capitalize on its proximity to the University of Oregon campus to build a core group of repeat customers. Java Culture will offer its customers the best prepared coffee in the area that will be complimented with pastries, as well as free books that its patrons can read to enjoy their visit. The company will operate a 2,300 square foot coffee bar within a walking distance from the University of Oregon campus. The owners have secured this location through a three-year lease with an option for extending. They have also provided $140,000 of the required $170,000 start-up funds. The remaining capital will be obtained through Bank of America commercial loans. The company is expected to grow sales revenue from $584,000 in FY2001 to $706,000 in year three. As Java Culture will strive to maintain a 65% gross profit margin and reasonable operating expenses, it will see net profits grow from $100,000 to $125,000 during the same period.

.Executive Summary (Business concept, supporting data, how opportunity will be pursued, marketing strategy, how it is different, key financial results
1.1 Objectives Java Culture's objectives for the first year of operations are: Become selected as the "Best New Coffee Bar in the area" by the local restaurant guide. Turn in profits from the first month of operations. Maintain a 65% gross margin. 1.2 Keys to Success The keys to success will be: Store design that will be both visually attractive to customers, and designed for fast and efficient operations. Employee training to insure the best coffee preparation techniques. Marketing strategies aimed to build a solid base of loyal customers, as well as maximizing the sales of high margin products, such as espresso drinks. 1.3 Mission Java Culture will make its best effort to create a unique place where customers can socialize with each other in a comfortable and relaxing environment while enjoying the best brewed coffee or espresso and pastries in town. We will be in the business of helping our customers to relieve their daily stresses by providing piece of mind through great ambience, convenient location, friendly customer service, and products of consistently high quality. Java Culture will invest its profits to increase the employee satisfaction while providing stable return to its shareholders.

Environmental and Industrial Analysis

Environmental analysis Assessment of external uncontrollable variables that may
impact the business plan: Economy Culture Technology Legal Concerns Industry Analysis Reviews industry trends and competitive strategies: Industry demand Competition

Lastly , specific market who the customer is market segment geographic area
Critical issues1. What are major economic, technological, legal and political trends on national and international level? 2. What are industry sales in past 5 yrs? 3. What is anticipated growth in industry? 4. How many new firms have entered industry in past 3 yrs? 5. What new products have been recently introduced in this industry? 6. Who are the nearest competitors? 7. How will your business operation better than this? 8. Are sales of your competitors declining/growing or steady? 9. Strength / Weakness of your competitors? 10. Trends in your specific market area? 11. What is profile of your customer? 12. How does your customer profile differ from that of your competitor?

Description of Venture (Complete overview of product/s, services and operations of new venture)
-Begin with company mission -Key elements: products, services, location (parking, access from roadways, access to suppliers, customers, distributors, town regulations, zoning laws, legal, lease issues), size of business, personnel, office, equipments, background of entrepreneurs, history of venture Describing the new venture: 1. What is the mission? 2. What are your reasons for going in to business? 3. Why will you be successful in this venture? 4. What development work has been completed to date 5. What are your products/ services? 6. Describe product incl. patent, copyright, trademark status 7. Where will the location be located? 8. Is your building new? Old? In need of renovation? 9. Is building leased or owned? 10. Why is location right for you? 11. What office equipments will be required? 12. Will equipments be purchased or leased? 13. What experience you have or will need to execute the plan?

Production Plan or Operation Plan

(Details of how product would be manufactured or Chronological steps in completing business transaction)
Physical Plant layout, machinery, equipments, raw materials, suppliers, cost of manufacturing, future capital equipment required Merchandize purchasing, storing, presented for sale, control of inventory

Production plan:
1. Will you be responsible for all or part of manufacturing operation? 2. If you will subcontract? Than what? Enlist subcontractors with details. 3. Why did you select these subcontractors? 4. Cost of subcontracted manufacturing? 5. Layout of production process 6. What equipments are needed immeditely for manufacturing? 7. What raw material will be required for manufacturing? 8. Who are the suppliers of new materials and cost? 9. What are costs of manufacturing the product? 10. What are the future capital equipments required?

Marketing Plan Describes market conditions and strategy to how products / services will be distributed, priced and promoted Marketing research a base for strategy and Sales forecast to be mentioned. Marketing plan will be an annual requirement.

Organizational Plan Describes form of ownership and lines of authority and responsibilities of members of new venture
Assessment of Risk Identifies potential hazards and alternative strategies to meet business plan and goals and objectives Should indicate potential risks Should discuss if they become a reality Should discuss strategy to either prevent minimize or respond to these risks (possibilities- new technology, competitor, weakness in area of marketing/production or management team)

Financial Plan
Projection of key financial data that determine economic feasibility and necessary financial investment commitment
First Sales forecast for first 3 yrs, first yr: monthly including COGS / General and Administrative expenses / Profit after tax Second Cash flow Lastly - Projected balance sheet

Appendix

USING AND IMPLEMENTING THE BUSINESS PLAN