Post on 16-Nov-2014
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Business Plan
Jose Cintron, MBA-CPCBusiness/Accounting Professor
Josecintron.mba@gmail.com(954) 374-8298
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Why a Business Plan?
If you don't know where you're going any road will take you there
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Why a Business Plan?
to look aheadallocate resourcesfocus on key pointsprepare for problems and opportunitiesTake business to next level
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No Business Plan = Russian Roulette
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Why a Business Plan?
Strategic GuideLenders- borrow moneyInvestors-partnership
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Strategic Guide
Where Do You Want To Go?How You Get There?What is your Market?What is your Niche?How Much $ Cost?Greatest Profit opportunity!What Exit Strategy?
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Funding Sources $$$
Savings-401kRefinanceFriends and FamilyFinancial Institutions Angel Investors
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Lender Expectations
Good Business Track Ability to RepayStaying PowerCollateral
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Investors Expect More!
Competitive AdvantageHuge MarketStrong Management TeamStrong Marketing and Sales Plan and strategiesHigh ROI and Exit Strategy
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What is in a Business Plan?
Executive SummaryCompany DescriptionProduct / Services Industry OverviewMarket AnalysisCompetitors
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What is in a Business Plan?
CustomersMarketing & Sale PlanMarketing StrategiesMarketing ProgramResearch & DevelopmentOperations
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What is in a Business Plan?
ManagementPersonnel Financial Financial Summary
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Executive Summary
A mini-business plan on one/two pagesHighlights the most important points …It is NOT an introduction to the planIt must grab your reader’s attention
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Executive Summary
Identify the company, its background and structureDescribe what the company does, and the market it servesDescribe the market potential and market trends.Competitive Advantage
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Executive Summary
Outline the backgrounds and experience of the top management team
Describe the funding $ required, the purposes, collateral available and the expected outcomes
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Company Description2
Brief Company Introduction– Mission statement– Location, size, history– Market and products– Overview of company – Start up $$$– Objectives
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Example
Vision statement
Avon: To be the company that best understands and satisfies the product, service and self-fulfillment needs of women - globally.
Mission statement
Google's mission is to organize the world's information and make it universally accessible and useful
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Products or Services
Products / Services– What does it do?– Uniqueness– Competitive AdvantageTechnology– Brief description– Applications
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Industry Overview
Legislation and Policies Driving the IndustryHistorical-Future TrendsIndustry Definition and DescriptionMajor players-industry
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Market Analysis
Market Definition– Primary Market– Secondary Markets
Market Size and Trends– Current total revenues– Predicted annual growth rate
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Competitors
Direct Competitors– Who are they?– Size and product breadth– Revenues and
profitability– Strengths and
weaknesses– Market sharesIndirect Competitors
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Customers
Customer Characteristics– Who are they?– Why do they buy?– Customers Need satisfied? – How is the need currently filled?– What are the alternatives?– Who makes the decision to buy?– How frequently do they buy?
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Marketing Strategies
Product or Service StrategyPricing StrategyDistribution StrategyAdvertising and Promotion Push and pull strategySales StrategyMarketing and Sales Forecasts
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Interruption Marketing
DOES NOT WORK (Low ROI) Outbound Marketing is out • Telemarketing • Trade shows • Direct mail
• Print ads
TV/radio ads
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Marketing and Sales Plans: Marketing Program
Conventional marketingInternet Marketing Social Media Marketing Website and SEONetworking /PREmail campaignMarketing Budget
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Marketing and Sales Plans: Pricing (4)
Basis for targeted price (cost analysis)Margins and profitability by volume levelsAdd valueCompetitors
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Marketing and Sales Plans: Sales Plan
Sales force structure – (direct or reps)Sales expectations/quotasMargins given to intermediariesService and warrantiesSales Budget
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Research & Development
Research & Development Plan– Objectives– Milestones and
current status– Difficulties and risks– R & D Budget
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Operations:Manufacturing/Production Plan
ObjectivesFacilitiesStaffingSubcontractorsQuality ControlBudget / Operating Expenses
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Management
Company OrganizationManagement Team Administrative Expenses
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Management Team
PresidentVP FinanceVP SalesVP MarketingVP ManufacturingGeneral Manager
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Personnel
Human Resource Plan– Staffing Objectives– Organizational
Structure– 3-5 year growth plan– Budget
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Summary of Financials
Financial Objectives– Time to Cash Flow
Positive (milestone)– Time to profitability
Capital RequirementsRepaymentExit Scenario
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BEP and Contribution Margin
Fixed Cost- $10,000(Rent, insurance, manager, interest…)Variable cost- $800/ea (Hourly, commission, inventory…)Sales are $1,000 per unit
$1,000-$800=$200 Contribution Margin
$10,000/$200=50 Units to BEP Fixed Cost/Contribution Margin.
$10,000+5.000=$15,000/200=75 units to make a $5,000 profits.
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Financials
Pro-forma Cash Flow Pro-forma Profit & Loss StatementsPro-forma Balance SheetBreak Even PointBusiness RatiosMethod of Repayment
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Appendices
Resumes of KeyPhotographsPatent InformationCustomer ListTestimonialsReferences
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Market Research for your Business Plan
Primary market Research– Existing customers – Potential customers Your competition
Software Equipment Niche Strategies
Secondary Market ResearchTrade associations*Government information – Federal, state and local government reports – Small Business Administration – SBA– Small Business Development Center – SBDC – U.S. Bureau of Census Chambers of CommerceMarket research firms ($$$$$$$)
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Conclusion
With Business Plan NO Business Plan!