ROADMAP TO SUCCESS:
HOW TO WRITE A BUSINESS PLAN
Foundation Communities
Community Tax Center

PART 1: LAYING THE FOUNDATION
I.
II.
III.
IV.
V.
Introductions
Overview of Course
Why Develop a Business Plan?
Strategic Planning – A Brief Overview
Components of Your Business Plan

Your Plan’s “Curb Appeal”

WHAT IS A BUSINESS PLAN ?

Summary of your business and the future you hope to create

Realistic but conveys energy and optimism

Step by step plan to achieve your goals

“A goal is a dream with a deadline” – Steve
Smith


Clarifies direction for you and your team

Foundation for raising capital

A way to track progress of your business

Protects your financial future

STRATEGIC PLANNING
GOALS
CONSTRAINTS RESOURCES
Success Occurs at the Intersection of:
Goals, Constraints, and Resources

GOALS
Own My
Own
Business
CONSTRAINTS
Financial
RESOURCES
Find Money:
Savings/Equity
Borrow, etc.
“Bootstrap”
Become informed
Connect with SBDP Staff
Legal: Permits,
Licenses etc.
Talent/Education/Ability Take Courses
Hire Talent
Work Hard
Environmental Mitigate,
Choose Another Site

BUSINESS PLAN TIPS

Takes 40 + hours to complete, 20 – 30 pages maximum

Be concise; less is more

Appearance counts – easy to read, professional

COMPONENTS OF YOUR BUSINESS PLAN






Cover Sheet
Table of Contents
Executive Summary
Company Overview
Product and Service
Description
Market Analysis





Marketing Sales
Strategy
Internet Strategy
Management &
Personnel Team
Financial Projections
APPENDIX

COVER SHEET

Introduces your business to prospective funders

Keep it clean and simple

Full legal name of business

Location: Address, Street, City, State, Zip

Telephone numbers and email addresses

Main contact person(s)

TABLE OF CONTENTS

Road map for prospective Funder or
Investor

Statement about you

Organized

Visionary

Structured

EXECUTIVE SUMMARY

Write this section last

One section that everyone will read

Must capture and hold interest of reader

Encapsulates the entire Business Plan

Shows clarity of your goals



Who you are
What you want
Where you are going

MISSION STATEMENT

Who You Are

What You Do (Products & Services)

For Whom (Customers)

Why (What your Customer wants)

“It’s not what you sell, it’s what you stand for”
– Roy Spence

FRITO LAY MISSION STATEMENT
Satisfy our Customers by providing fresh, tasty snack products throughout all segments of our business

COMPANY OVERVIEW

Provides information on your company including where you’ve been

How your company fits into your industry and marketplace

Your growth potential

Economic trends that are favorable to your company

BUSINESS ENTITIES

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



Sole Proprietorship
General Partnership
Limited Partnership (LP)
Limited Liability Partnership (LLP)
Limited Liability Company (LLC)
Corporations


C Corporation
S Corporation

PRODUCT & SERVICE DESCRIPTION

Specifics on what your business does

Service Industry

Product Sales

NIC/SIC Code
( http://www.osha.gov/pls/imis/sic_manual.html
)

Competitive Comparison

Pricing Strategy

PART 2: YOUR BUSINESS PLAN

Market Analysis

Marketing and Sales Strategy

Internet Strategy

Marketing is the process of creating and retaining customers in large enough numbers to be profitable

MARKET ANALYSIS

Market Segmentation –who will buy your products

Define target market strategy

How current market is underserved or not served effectively

Competition & buying patterns

Define a unique niche within the existing marketplace

MARKETING & SALES STRATEGY

Science of planning for and executing a promotional campaign

Develop marketing strategy

Product

Price

Place

Promotion

Budget

INTERNET STRATEGY

Sell products or information only

Internet sales integrated with inventory

Website

Viral Marketing / Facebook

MANAGEMENT & PERSONNEL PLAN

Experience

Maturity

Vision

Drive

Leadership


INTERNAL

Yourself

Partners (if Applicable)

Key Staff (If Applicable )


EXTERNAL

CPA: with Small Business Experience

Attorney: With Small Business Experience

Financial Planner: with Small Business Experience

Board of Directors

PART 3: FINANCIAL PLAN

Start Up Costs

Break Even Analysis

Projected Profit and Loss

Projected Cash Flow – The Lifeblood of Your
Business!

BREAK EVEN ANALYSIS
The point at which a businesses is neither making a profit nor experiencing a loss

BREAK EVEN ANALYSIS:
FIXED COSTS
• Costs that generally remain the same month to month and are not dependent upon the number of Sales.
• What you would have to pay regardless of whether you had any customers walk in.

BREAK EVEN ANALYSIS:
FIXED COSTS

Personnel (with exceptions)

Lease/Mortgage

Utilities

Debt Financing

Insurance

BREAK EVEN ANALYSIS:
VARIABLE COSTS
• Costs that vary directly with:
• the number of units sold, or
• the number of clients served

BREAK EVEN ANALYSIS:
FIXED COSTS SAMPLE (CLASS PROJECT)

Designer Bags

Fixed Costs

Variable Costs

Variable Income

Break Even

Profit

CASH FLOW STATEMENTS

Shows the effects on Cash of operating and Financing Activities


Indicator of Ability to



Generate Positive Cash Flows
Pay Liabilities
Pay Dividends
Could indicate need for additional
Financing

BALANCE SHEET




Provides a ‘snapshot’ of a business’s financial position at a given point in time
Assets: What a business Owns
Liabilities: What a business Owes
Net Worth (Equity)
NET WORTH = ASSETS – LIABILITES


Cash

Inventory

Receivables

Prepaid Expenses

Plant & Equipment

Office Equipment

Machinery

Land & Facilities

Goodwill

BALANCE SHEET: LIABILITIES

Current Liabilities



Current Debt
Payables
Credit Cards

Long Term Liabilities


Long Term Debt
(Loans)
Payments to Investors
 Equity
 Paid in Capital
 Retained Earnings

PROJECTED CASH FLOW:
THREE THINGS TO REMEMBER:
1.
2.
3.
Cash is King
Cash is King
Cash is King
Class Test

FINANCIALS: PRACTICAL PLAN
HOW/WHERE DO I START?

Spreadsheets (2)

Start up Costs (what are the things I need to get started and how much do they cost?)

12 Month Cash Flow (Detailed Line Item
Income and Expense)

Read Sample Plan through a couple of times
 highlight and make notes!

APPENDIX

Keep it uncluttered!

Biographies and resumes of key team

Supporting documents

Brochures, flyers, magazine articles

References

Past lenders

Suppliers

Trade creditors

BUSINESS PLANNING RESOURCES

City of Austin SBDC

Gold Book

Services available through other organizations

Silver Book

Networking Resource Guide for Small Businesses

Bronze Book

Resource directory of local women and ethnic minority professional associations

HOW TO WRITE A BUSINESS PLAN RECAP



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Components of a Business Plan
The Planning Process
Researching Target Markets,
Demographics, Competitors
Financials: Start Up Costs, Cash Flow,
Break Even, Balance Sheet
Relate Business Planning Components to
Own Business
Other Resources for Assistance

ROADMAP TO SUCCESS:
HOW TO WRITE A BUSINESS PLAN
Questions
Comments, Ideas
Suggestions or Thoughts?
Thank You !