NBDC - Servcies - Plan Outline

Sample Business Plan Outline
Prepared by
Loren Kucera, Director
Nebraska Business Development Center
Wayne State College
Wayne NE 68787-1172
(402) 375-7575
fax (402) 375-7574
e-mail - nbdc@wsc.edu

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The Company
For a New Business
For an Acquisition
The Product/Service
The Market (Customers)
The Competition
Selling and Advertising
Location of the Business
Management
Personnel
Financial Nees and Projections
Other Considerations
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THE COMPANY

What is/will the Company be called?
Is this a merchandising, manufacturing, or service business?
When will/did the Company start operating?
What products or services will/does the Company provide?
Is this a seasonal business?
What will be the business form of the Company? (sole proprietorship, partnership, corporation)
Who will/does own and manage the Company?
What facilities will be needed to operate the Company? (Ex. office, retail, factory)
What territory will the Company operate in or serve?
Why have you chosen your particular location?
What will/are the Company’s normal business hours?
Will/Is the business a part-time or full-time business?
What is the current status of the Company? (start-up, expansion, acquisition)
What licenses or tax permits are required to operate the Company in the county, city, state, country?

FOR A NEW BUSINESS

Why will the business be successful?
What is your experience in this business or industry?
Have you spoken with other people in this kind of business? What was their response?
What will be special about your business?
Have you spoken with prospective trade suppliers to find out what managerial and/or technical help they will provide?
Have you asked about trade credit?
If you will be doing any contract work, what are the terms? Reference any firm contract and include a copy as supporting documentation.
Do you have letters of intent from prospective purchasers of the product/service?

FOR AN ACQUISITION

When and by whom was the business founded?
Why is the owner selling the Company?
How did you arrive at a purchase price for the Company?
What is the trend of sales?
If the business is going downhill, Why? How can you turn it around?
How will your management make the business more profitable?
Will seller share last three years of financial data, including income tax returns?

THE PRODUCT/SERVICE
If you are manufacturing a product:

What is the product?
What will you need (raw materials) to manufacture the product?
What suppliers (by name) will you need to provide raw materials?
Who will buy your product? Do you have a contract?
What manufacturing capacity will you need?
Where will you manufacture the product?
Will the product need to be protected by patent of copyright?

If you are reselling a product manufactured by someone else:

What is the product?
Who will supply the product?
How will the product be shipped to you?
Do you need to package the product for resale to your customer?
If you deliver, how will you ship the product?
How will you display the product if the customer buys at your store?
Will you drop ship the product directly from the manufacturer to the customer?

If you are providing a service:

What is the service?
What will you need to do in order to provide this service? (Buy equipment, hire people)
Does this service require special insurance, licensing, or bonding?

THE MARKET (CUSTOMERS)

Who are your customers (target market) and how would you describe them (market segmentation: age, sex, profession, income, lifestyle, etc.)?
What percent of the market will you have? How will you attract and keep this market?
What features and benefits will the customer get when they buy your product/service?
Who needs this product of service?
Where is the customer located?
What is the present size of the market?
What is the market growth potential?
As the market grows, does our share increase or decrease?
How are you going to satisfy your market?
How will you expand your market?
How will the customer buy your product or service?
What is the price of your product or service?
How did you arrive at the price?
Is the price competitive to your competitors?
How much product/service do you need to sell in order to cover your expenses? To show a profit? This tells you your needed and desired market share. (You’ll need to do your financial projections before you can answer this question but the answer goes in this section of the Business Plan.)
Why will someone pay your price? How did you arrive at that price?
What special services do you offer that may justify higher prices?
Will you offer to your customers? If so, describe your credit policy. Can you afford to extend credit?

THE COMPETITION

Who is the competition? List the five nearest by name by name.
Where are they located?
Is their business: steady? increasing? decreasing? why?
What price(s) do the competitors charge?
What are their strengths and weaknesses?
How do competitors advertise?
Have any competitors gotten out of this industry and if so, why? (This information might indicate there are too many businesses for a certain market or this type of business is not a good idea?)
What competitor has the greatest share of the market? Why are they so successful?
What is happening in this business/service/product’s industry? (For example: technological changes, rapid growth, declining demand, etc.)
Why will someone buy your product/service versus your competitors?
How will your operation be better then theirs?
How are their operations similar and dissimilar?
What have you learned from watching their operations?

SELLING AND ADVERTISING

Who will sell?
Who will advertise?
Do you have an advertising plan? Budget?
How will you advertise? How do your competitors advertise?
What sales skills will be needed and what training will be offered?
What marketing skills and techniques will be utilized?
How will you sell?
What sales/advertising will you need?
What marketing materials will you need?
How will you monitor sales results?
What are your sales goals? (You need to do your financial projections before you can answer this question.)
What are your terms and conditions of sale?
How will your Company bill the customers? Will all sales be cash or will the Company extend credit? If the Company extends credit, what will the credit terms be?

LOCATION OF THE BUSINESS

What is your business address?
What are the physical features of the building including square footage?
Is the building leased or owned? If leased, state the terms.
If renovations are needed, what are they? What is the expected cost? Get quotes in writing. Include quotes as supporting documentation.
Does zoning permit your business in that location?
What is the neighborhood like (stable, changing, improving, deteriorating)? Are there other special permits or licenses you may need?
What kinds of businesses are in the area?
Have you considered other areas? Why is this one the desirable site for your business?
Why is this the right building and location for your business?
How does this location affect your operating costs?

MANAGEMENT

Who manages the Company? What is the person’s business background?
What is the person’s experience in this particular business?
How does the past education/experience of all key personnel contribute to this venture and complement each other? Include a resume of key personnel.
What will each person do? Who sells/advertises? Who keeps the books?
How will the people be paid? (salary, hourly, commission, profit sharing, etc.)
What will they be paid?
Do you have a Board of Directors? If so, who are they?
Who is the Company’s accountant? Lawyer? Other advisors?

PERSONNEL

What are your personnel needs now? In the near future? In five years?
What skills must they have?
Are the people you need available? How many will you hire?
Will your employees be full-time or part-time?
Will you pay salaries or hourly wages?
Will you provide fringe benefits? If so, what? Have you calculated workers compensation costs? Have you calculated the cost of all these benefits?
Will you utilize overtime?
Will you have to train people? If so, at what cost to the business (both time of more experienced workers and money)?

FINANCIAL NEEDS AND PROJECTIONS

What are the sources of revenue for the business? How much product or service, in dollars, will your Company sell in the first year, second, and third? Estimate sales in year one by the month and estimate sales in years two and three by quarters.
How much will the product cost to buy or manufacture, or what will the service cost to produce? How much will these expenses grow as the business grows? Identify each expense and write them in this answer? (These are costs directly related to the production, procurement, of development of the product or service.)
What are the expenses to sell the product of service and to operate the business, by the month and the year? Identify each and list as fixed or variable cost? (Fixed expenses remain constant regardless of change in sales; variable expenses increase or decrease with changes in sales.)
- Fixed expenses might be for salaries, rent, insurance, and other expenses to run business
- Variable expenses might be sales commissions, telephone, raw materials, and other expenses related to sales.
If this is a start-up business or acquisition of an ongoing business,. be sure of the start-up costs. Ask your utility companies how much the deposits will be. Never guess as these deposits vary from community to community. Ask the suppliers or providers what start-up costs will be, never assume what they will be.
How much do you estimate the business will grow each month, quarter, and year?
How much money is needed to start and operate the business for the first three years?
· To buy equipment?
· To buy product/raw materials?
· To secure office space and/or manufacturing facilities?
· To pay operating expenses?
· To provide adequate working capital?
What equipment will the business need to acquire? List each with the cost.
What furniture and fixtures will the business need to acquire? List each with cost.
Where will the money needed to start the business or finance the expansion come from? How much will you need? Will the owner or owners put up the capital or will the business require financing from a bank or other financial sources?
If financed, what are the terms of the loan or loans? What is the period of time that the loan has to be repaid? Are payments monthly, quarterly, etc.? How much are the payments, principle, and interest?
Will the Company be extended credit by its suppliers or will it pay cash? What are the terms for credit?

OTHER CONSIDERATIONS

How is the loan or investment to be spent? (Example: working capital, new equipment, inventory, supplies, fixtures, construction, etc.)
List all items to be purchased. Equipment, machinery, and/or fixtures which cost greater than $500 must be listed individually. A quote must be provided by a supplier on their letterhead, invoice, or stationery listing price, make and model number. Is installation included?
If you are purchasing a going concern or you are an existing business seeking a loan you must provide a list of all equipment and/or machinery that had an original value greater then $500. Included in this list must be original price (indicate if new or used), current value, date purchased, make, model, and serial number. Indicate if any or all of these listed items are being held as collateral. If they are held as collateral include name of lending institution and principle amount. If you are building a building you will need a quote from a contractor.
How will the loan or investment make the Company more profitable?