Business Plan

Jose Cintron, MBA-CPCBusiness/Accounting Professor

Josecintron.mba@gmail.com(954) 374-8298

www.mba4help.com

Why a Business Plan?

If you don't know where you're going any road will take you there

www.mba4help.com

Why a Business Plan?

to look aheadallocate resourcesfocus on key pointsprepare for problems and opportunitiesTake business to next level

www.mba4help.com

No Business Plan = Russian Roulette

www.mba4help.com

Why a Business Plan?

Strategic GuideLenders- borrow moneyInvestors-partnership

www.mba4help.com

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?

www.mba4help.com

Funding Sources $$$

Savings-401kRefinanceFriends and FamilyFinancial Institutions Angel Investors

www.mba4help.com

Lender Expectations

Good Business Track Ability to RepayStaying PowerCollateral

www.mba4help.com

Investors Expect More!

Competitive AdvantageHuge MarketStrong Management TeamStrong Marketing and Sales Plan and strategiesHigh ROI and Exit Strategy

www.mba4help.com

What is in a Business Plan?

Executive SummaryCompany DescriptionProduct / Services Industry OverviewMarket AnalysisCompetitors

www.mba4help.com

What is in a Business Plan?

CustomersMarketing & Sale PlanMarketing StrategiesMarketing ProgramResearch & DevelopmentOperations

www.mba4help.com

What is in a Business Plan?

ManagementPersonnel Financial Financial Summary

www.mba4help.com

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

www.mba4help.com

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

www.mba4help.com

Executive Summary

Outline the backgrounds and experience of the top management team

Describe the funding $ required, the purposes, collateral available and the expected outcomes

www.mba4help.com

Company Description2

Brief Company Introduction– Mission statement– Location, size, history– Market and products– Overview of company – Start up $$$– Objectives

www.mba4help.com

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

www.mba4help.com

Products or Services

Products / Services– What does it do?– Uniqueness– Competitive AdvantageTechnology– Brief description– Applications

www.mba4help.com

Industry Overview

Legislation and Policies Driving the IndustryHistorical-Future TrendsIndustry Definition and DescriptionMajor players-industry

www.mba4help.com

Market Analysis

Market Definition– Primary Market– Secondary Markets

Market Size and Trends– Current total revenues– Predicted annual growth rate

www.mba4help.com

Competitors

Direct Competitors– Who are they?– Size and product breadth– Revenues and

profitability– Strengths and

weaknesses– Market sharesIndirect Competitors

www.mba4help.com

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?

www.mba4help.com

Marketing Strategies

Product or Service StrategyPricing StrategyDistribution StrategyAdvertising and Promotion Push and pull strategySales StrategyMarketing and Sales Forecasts

www.mba4help.com

Clientele reaching your Business

www.mba4help.com

Interruption Marketing

DOES NOT WORK (Low ROI) Outbound Marketing is out • Telemarketing • Trade shows • Direct mail

• Print ads

TV/radio ads

www.mba4help.com

Marketing and Sales Plans: Marketing Program

Conventional marketingInternet Marketing Social Media Marketing Website and SEONetworking /PREmail campaignMarketing Budget

www.mba4help.com

Marketing and Sales Plans: Pricing (4)

Basis for targeted price (cost analysis)Margins and profitability by volume levelsAdd valueCompetitors

www.mba4help.com

Marketing and Sales Plans: Sales Plan

Sales force structure – (direct or reps)Sales expectations/quotasMargins given to intermediariesService and warrantiesSales Budget

www.mba4help.com

Research & Development

Research & Development Plan– Objectives– Milestones and

current status– Difficulties and risks– R & D Budget

www.mba4help.com

Operations:Manufacturing/Production Plan

ObjectivesFacilitiesStaffingSubcontractorsQuality ControlBudget / Operating Expenses

www.mba4help.com

Management

Company OrganizationManagement Team Administrative Expenses

www.mba4help.com

Management Team

PresidentVP FinanceVP SalesVP MarketingVP ManufacturingGeneral Manager

www.mba4help.com

Personnel

Human Resource Plan– Staffing Objectives– Organizational

Structure– 3-5 year growth plan– Budget

www.mba4help.com

Summary of Financials

Financial Objectives– Time to Cash Flow

Positive (milestone)– Time to profitability

Capital RequirementsRepaymentExit Scenario

www.mba4help.com

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.

www.mba4help.com

Financials

Pro-forma Cash Flow Pro-forma Profit & Loss StatementsPro-forma Balance SheetBreak Even PointBusiness RatiosMethod of Repayment

www.mba4help.com

Appendices

Resumes of KeyPhotographsPatent InformationCustomer ListTestimonialsReferences

www.mba4help.com

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 ($$$$$$$)

www.mba4help.com

Conclusion

With Business Plan NO Business Plan!