Business Plans - NECO - Community Futures Development Corporation

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Business Plans

Business Planning Aids

Most of our programs, as well as financing require the preparation of a business plan.

What is a business plan? Why is it important? What are the elements of a complete business plan? Let NECO help you prepare a proper plan for your future.

The number one reason businesses fail is poor planning.

What goes into a business plan?

Hard work
Time and energy
Research and ideas
Money

Some Key Elements of a Complete Business Plan are:

Executive Summary

Describes:

Opportunity Available (idea)
Business Description (Ownership, place of business, etc...)
Product(s) / Service(s)
Marketing / Promotions (How you will distribute product/service, generate sales)
Business Structure and Management (job descriptions, responsibilities, etc.)
Financial requirements (to start up the business, expected return, etc.)
Should be exciting as a stand-alone summary of your plan in a nutshell.

Business Concept (Company Overview)

A brief but detailed description of your business concept.

Description of the Industry

There are two types of research - Primary (Surveys, Questionnaires) and Secondary (Sources include the Internet, libraries, articles, StatsCan, NECO's Business Planning Links, etc.)

Industry outlook, growth potential and trends.
Markets and Customers - number, characteristics that describe them
Competitive Companies - their market share, strengths/weaknesses, profitability
National and Economic trends (population shifts, consumer trends, economic indicators, the 'big picture')

Description of the Business Venture

Product / Service - characteristics, quality.

Target Market - typical customers identified by groups, buying patterns - how much, how often, when - wants and needs.

Key Success Factors for the Industry (Competitive Advantage) - ex. Price (Competitive Advantage used by Wal-Mart), Location (Key Factor of Success for Corner Stores), Uniqueness (Key Success Factor for gift or craft shops). - with your Competitive Advantage identified, how large is your potential target market for sales?

Promotion Strategy - How will you reach your target market to strategically promote your Product/Service and Sales. - Price, Product, Place and Promotion.

Marketing Plan

How do you plan on marketing your product and/or service? A detailed description including target markets & demographics and budgets should be added to the overall business plan.

Financial Statements & Projections

It is said that the common mistake among start-up businesses is that they overestimate start-up costs, and underestimate cash-flow needs. Make sure to allocate adequate resources to cash-flow requirements so that your ship isn't sunk by costs you haven't foreseen. Financial forecasts can be a very important aspect to your planning.

Cash-flow forecast: elements involved

estimated sales (with notes to explain)
estimated start-up costs
estimated on-going costs (variable and fixed)
displayed month by month

Note: Variable costs are costs that vary with sales, such as advertising or delivery costs. Fixed costs, such as rent stay fixed no matter how much sales increase or decrease.

Income statement forecast: elements involved

summarizes income and expenses on a yearly basis

Balance sheet forecast: elements involved

estimated assets required and contributed (equity)
estimated loans required to finance assets and business start-up

Production/Service and Operations Plan

- Description of Principal Products/Services
- Patents or trademarks held
- Franchinse or licensing agreements and regulatory, certification, or other requirements
- Timefrance and schedule for the implementation of your business

Market

- Describe your taget market and prospective customers in terms of geography and customer profile
- Principal factors consumers consider in the purchase of products like yours
- Outline the principal benefit received from your firm
- Describe how target market might be broken down into segments
- Descrie weekly, monthly, seasonal, or other sales patterns.
- Indicated what is really unique about your product/service

Operations

-Lay out a schedule of milestones or significant events for the implementation of your busienss and a timetable for completion
- Indicated who will be responsible for the completion of each task.
- Develop an organization chart indicating who is responsbile for each of the major areas of activity in your business
listing each function and indicate the name of the individual who wil perform that function
- Include a brief resume of each of these individuals
- If your is a new venture, indicate your estimate of the start-up financial requirements of your business

Ownership and Management Structure

- Describe the ownership of your business (Sole proprietorship, Partnership, Corporation)
- Provice complet information regarding your professional advisors (accountant, lawyer etc.)
- Indicate the compenstaiton to be received by each member of your management team

Security

- Indicated what collateral or other security you are prepared to provide to the prospective lender or investor

Created on 12/06/2005 11:36 AM by steve
Updated on 07/15/2010 04:02 PM by paspin_lecour