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Although mentioned first and placed at the front of your plan or under
separate cover, the executive summary is best written last, since it serves as
a concise overview of the business plan and highlights the key points
from every section of your completed plan. In a few precise, clear sentences,
the executive summary crystallizes the hours of labor you have spent in re-
searching and writing each section. A maximum of one or two pages is
recommended.
Your objective in writing the executive summary is to get the reader's at-
tention and to stimulate his or her interest.
Suggested key points with criteria weighting:

– The company (10% weight)
° Define business purpose.
° Provide summary of your company™s history and current status.
° State overall corporate strategy and objectives.
– The products or services (20% weight)
° Describe important features and benefits”relate to market needs and
to the competition.
° Describe existing products and status of new projects.
° Discuss pricing and margins for both your products and your com-
petitors™ products.
° Explain proprietary position”trademarks, patents, trade secrets, and
special production/process.
° Articulate any relevant regulatory or environmental issues.
– The market and marketing strategy (30% weight)
° Market analysis”size, anticipated growth, key changes, trends.
° Market strategy”How are you going to reach the market? What
gives you a special advantage?
° Product/service”What makes you different? What gives you a special
advantage?
° Evaluate competition”Who are they? How much of the market do
they control? What are their advantages/disadvantages?
° Discuss the issues of circumstances that "drive" or create the mar-
ket”What compels people to buy?
302 APPENDIX A


– Management (30% weight)
° Give brief background of key individuals”specifically, why they add
value to the company, and their past successes and achievements.
° History of working together as a team.
° Identification of immediate and future personnel needs and initial or-
ganizational structure.
– Financial summary (10% weight)
° Provide revenues, income, and expenses projected over three- to five-
year period. Justify your financial assumptions. Include any past fi-
nancial history.
° Define funding requirements”How much is needed at each stage of
development within the next five years?
° Describe the history of previous investments.
° Indicate an exit strategy (i.e., mergers, acquisitions, or IPOs). Com-
pare with similar businesses and their results.


II. Mission or Charter
The mission statement says”in a few words, a graphic, or an image”what
your business should be about. The statement defines the thrust of your
business.
Exercise in preparation for writing your mission statement:

What do you want to accomplish from your business? Think about why you
are in business.

What is important to you about your business? What excites you about it?

Explain how the short-term and long-term personal goals of the owner(s)
harmonize with the business requirements and objectives.

List the benefits to the community; for example, retaining or creating jobs,
building rehabilitation, meeting the community™s needs, increasing the com-
munity™s tax base.


III. Description of the Business
Your objectives in this section are to display your knowledge of your busi-
ness and to provide the historical background leading up to your current sit-
uation and request for funding.

Describe the historical development of your business.
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How to Write and Present an Investor-Oriented Business Plan


Describe the general nature of the business that you are in:

___________ Manufacturing

___________ Retail

___________ Services

___________ Wholesale

How do you generate revenues and make a profit?

What is unique about your business?

Is the company™s development stage in start-up or is it a continuing business?

List the major expenses in your business.

Work into your description of the business the following information: Name
of the business. Year founded. Name of founder. Location of the business.
Number of employees. Features of the area (accessibility to customers).
Description of facilities (size, zoning, age, and condition). Lease. Legal form
of organization. Major equipment involved in your business. If current busi-
ness is different from past business or firm is considering expansion, explain.
Briefly summarize any future plans”both short-range and long-range”for
expansion or relocation.


IV. Ownership Structure and Equity
What legal form does this ownership take?

_________ Sole proprietorship

_________ Partnership

_________ Corporation (date, state of incorporation, type)

_________ LLC

Explain any significant ownership changes that have occurred, subsidiaries,
and degree of ownership, if applicable.
304 APPENDIX A


List the names of principal owners and roles they played in the firm™s
foundation.

Give the percentage of interest of principal owners or managers in the busi-
ness. Present sources of funds.

Give the expected sources of future funds.

List the principal shareholders and note the stock that each principal holds.

Disclose the borrowings of the business.

If you are a start-up, be sure to consider the following:

How will ownership/equity be distributed?

Briefly give the background on the founders, active investors, key employees,
directors, and consultants.

If the business is a corporation, give the classes of stock, shares authorized,
shares issued and outstanding.

If the business is a partnership, give the respective partners™ interests.


V. Description of the Product/Service
The key to writing about your product or service is to focus on its benefits
and how you will meet a need. Include printed materials that provide de-
tailed descriptions of features and how a service works in the Supporting
Documents section”for example, drawings, photos, brochures, services
flowcharts, patents, trademarks, engineering studies, or proprietary features.
Whenever possible, provide factual documentation supporting your belief
that the market will buy your product”for example, sales performance, let-
ters of commitment to purchase, or purchase orders.
Some questions to prepare you for writing the product/service descrip-
tion section are:

What problem does your product or service solve?

What results can customers expect? Are they visible? Valuable? Measurable?

What does your product do or your service deliver to the customer?
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How to Write and Present an Investor-Oriented Business Plan


Is the product or service in a developmental stage?

How was the product developed?

If you purchase the products that your company sells, describe materials and
supply sources, availability, and product cost. Also describe your purchasing
department.

Are you dependent on one supplier for materials? If overseas sources or ven-
dors are subject to shortages, what is your backup?

What makes your product/service different? How is your solution different
from or better than the solution offered by competitors?

How complex is your product/service to use? Is training needed to use it?

What risks, if any, are inherent in its use?

Are there government regulations relevant to the use of your product or
service?

Will customers need to change the way they do things in order to use it?

What is the cost of and profit on each product/service line and the break-
even point?

How will funding affect product/service lines?

Describe your research on future products.


VI. The Market
Who are your customers? (It is essential to your success and credibility with
the readers of your plan that you demonstrate knowledge of who your cus-
tomers are or will be.)

The following questions will help you begin an evaluation and profile of
your target markets:

What is the geographic scope of your market: local, regional, national, or in-
ternational? Current versus potential customers?
306 APPENDIX A


What are your targeted markets? Are they individuals or other businesses?
How many potential customers are there in each target market segment?

What is the size of your market? What are the trends in your market?

Give a general description of your customers. Use demographics when pos-
sible to describe the following: age, gender, income. If your customers are
companies, are they merchandisers? Service organizations? Manufacturers?
Original equipment manufacturers (OEMs)? Government? Contractors?
Industrial distributors?

What is the average purchase amount of your product(s)/service(s)?

How do you know that potential customers need your product or service?
What evidence do you have of customer acceptance?

Is the target market aware of its need for the product/service? Explain.

How many competitors are there in your target market? Give name, loca-
tion, and size. Who are the emerging competitors?

What is your competitors™ market share distribution? Is there a single com-
petitor or multiple competitors? Who are the most powerful competitors and
who are your future competitors?

What percentage of the total market do you think that you can currently
capture as customers? In one, two, three, or five years? How did you deter-
mine this figure?

What impact will funding or lack of funding have on these projections?
What is the time frame?

What could prevent you from achieving your goals? Is the market aware of
you? What is your image in the marketplace?

What is the major advantage of your company over the competition? What
is your competitive edge”for example, barriers to competition or entry, sta-
ble customer base, or proprietary technology? What are the strengths and
weaknesses of competitors? (Barriers to entry include patents, high start-up
costs, substantial expertise required, and market saturation.)
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How to Write and Present an Investor-Oriented Business Plan


Why do customers buy your product/service over your competitors™? Is it
price? Quality? How will you exploit this advantage?

Who is involved in the decision to buy your product/service?

How do you”or will you”find out what your customers want?

______ Customer surveys

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