BUSINESS PLAN OUTLINE 2

6. MANAGEMENT AND ORGANIZATION


Make investors feel confident that the management team knows the market, the product, and can implement

 Background of the principals

 Personal data (age, special abilities, interest in business idea, education-formal and informal)

 Personal financial statements with documentation


 Business background (Direct operational and managerial experience, and indirect managerial experience)

 Philosophy of management and company culture

 Legal structure of the company

If your team is lacking, admit it and provide a solution

MANAGEMENT AND ORGANIZATION: PERSONNEL

Demonstrate that you are fully aware of your staffing requirements and that you will be able to meet them

 Current and near-term personnel needs

 The skill sets you will need

 How you will find and attract the talent you need

 Number and duration of shifts

 Salary versus hourly wages

 Overtime policy

 Worker rights aspects

 Unions

 Employment of women

 Working conditions and risks

 Disabled persons

Salaries must be sufficient to attract the talent you need

 Duties and responsibilities

 Who will do what and why (through job descriptions)

 Decision makers

 Develop an organization chart: who answers to who

 Salaries and benefits

 Salary levels for management positions

 Bonus structure

 Benefits packages

OTHER RESOURCES

 Board of directors

 Insurance broker(s)

 Company lawyer

 Accountant

 Consulting groups

 Business/industry associations

 Colleges and universities

 Government agencies

 Bankers



7. THE MARKETING STRATEGY

Describe a viable method for reaching the market and distributing your product or service

 The purpose of the marketing plan

 The media and promotional strategies that you will use (e.g. TV, Radio, Print, Web, Trade shows, Strategic alliances, Direct mail, PR, Promotional materials, Telephone sales)

 Attach samples of marketing materials that have already proven successful.



8. OPERATIONS

Show that you have a plan to implement your idea-that you know what resources and processes are needed and when

 Manufacturing process

 Production capacity

 Product distribution strategy (e.g. mail order, delivery, sales reps, distributors, resellers)

 Quality control

 Research and development (R&D)

 Purchasing

 Staffing

 Facilities and equipment management

 The vendors that you will use and whether you have already established relationships with them

Provide a roll-out plan and tie to your financials



9. FINANCIAL PLAN

If you are seeking financing, you must demonstrate the need for the funding and your ability to repay the loan

 You will need to be specific in terms of what you need the financing for/how you will use it

 To obtain financing, you need to generate financial forecasts to demonstrate the need for funds as well as the future value of equity investment or debt repayment

 Forecasts should cover a 3-5 year period

Establish a robust book-keeping system!



FINANCIAL PLAN REQUIREMENTS

 Summary of key points including capital requirements

 Needs: hard costs, working capital, start-up costs

 Assumptions and comments

 Starting balance sheet

 Profit and loss projection

 Cash flow projection

 Balance sheet projection

 Ratios and analysis

 Break-even plan

Provide alternative financial scenarios



10. EXPANSION OR EXIT PLAN

Assuming your business evolves, you must consider the future

 What are your long range goals?

 What do you perceive as major milestones as the business grows?

 Will you diversify, penetrate market deeper, increase market share?

 Will you franchise, go public, sell your business, look for a merger, hand it down, close it?



11. APPENDIX: SUPPORTING DOCUMENTATION

 Financial Statements

 Assumptions

 Credit information

 Documents supporting budget, cash flow, income statements, balance sheets

 Process plan documentation

 List operating requirements including cost estimates

 List manufacturing requirements including cost estimates

 Leases or buy/sell agreements

 Census/demographic or other market data

 Marketing plan documents

 Census/demographic or other market data

 Marketing tools and budget

 Media plan

 Organizational plan documents

 Resumes for key staff

 Compensation plans

 Legal documents relevant to the business

 Contingency plan

 How your business will respond to changing conditions:

• In the market (decline in sales, new competition etc)

• Within your company (loss of crucial employees etc)

• To external threats (new government regulations etc)

 Other supporting documents

 Letter of intend from prospective customers

 Letter of support from credible people you know



12. THE EXECUTIVE SUMMARY

Highly persuasive, concise summary that will engage the reader and convince them to read on…

Maximum 2-page overview including

 Company’s history and objectives

 The products and/or services

 The industry

 The market

 How and why the business will succeed

 Projected growth for the company and the market

 Overview of the management team

 Funding requirements, including a timeline and how the funds will be used

USING THE BUSINESS PLAN

Once complete, the business plan should be used to assist in procuring financing and subsequently as an operational tool

 Update the plan as milestones are reached

 Reflect periodically on your vision statement-update as needed

 Consult your mission statement when considering new products, services or markets

Don’t let the business plan collect dust on a shelf!

USING THE PLAN TO MONITOR PROGRESS

Think of your business plan as a living document and refer to it and review it often

 Schedule periodic business check-ups

 Review your data to assess business performance

 Fine-tune your plan

 Get help from others

 Strive to operate your business according to your plan

WHEN TO UPDATE YOUR PLAN

 A new financial period is about to begin (you may update your plan annually, quarterly or even monthly if your industry is a fast-changing one)

 You need additional financing. Lenders and other financiers need an updated plan to help them make financing decisions

 There’s been a significant market change. Shifting client tastes, consolidation trends among customers and altered regulatory climates can trigger a need for plan updates

 Your firm develops or is about to develop a new product, technology, service or skill. If your business has changed a lot since you wrote your plan the first time around, it’s time for an update

 You have had a change in management. New managers should get fresh information about your business and your goals

 Your company has crossed a threshold, such as moving out of your home office, crossing the $ 1 million sales mark or employing your 100dth employee

 Your old plan doesn’t seem to reflect reality any more. Maybe you did a poor job last time; maybe things have just changed faster than you expected. But if your plan looks irrelevant, redo it

THINGS TO AVOID

 Lack of research and supporting data

 Incomplete executive summary

 Weak management team or description

 Unreasonable financial projections

 Submitting your plan to the wrong people

 Typos!

 Greed

A GREAT BUSINESS PLAN: THINGS TO REMEMBER

 Fully understand the need for the plan

 Don’t go it alone; ask for help where needed

 Follow a framework

 Tell the reader where you are now

 Tell the reader where you intend to be

 Tell the reader how you are going to get there

 Provide supporting information

 Ask someone to review it

 Get the presentation right

 Deliver your plan to the reader on time