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1994-06-18
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Copyright (c) 1994,
Versatile Software Solutions, Inc.
All Rights Reserved
This is NOT free software. This is
NOT public domain software. This
is SHAREWARE: You must pay the
registration fee after your 10 day
trial period has lapsed. Please see
registration details in the
REGISTER.ME file
BUSINESS PLAN MASTER 2.7
Straight Text Version
PLEASE READ
"USER'S GUIDE"
Registration has great benefits:
1. User's Guide
2. Latest version of Business Plan Master
3. Bonus diskette
BUSINESS PLAN
[My Company]
123 Main Street
Anytown, USA 10000
123-4567
[Your Name]
[DATE]
TABLE OF CONTENTS
EXECUTIVE SUMMARY 4
THE MANAGEMENT 6
[MY COMPANY] HISTORY 10
[PRODUCT, SERVICE] DESCRIPTION 12
OBJECTIVES 14
COMPETITORS 16
OUR COMPETITIVE ADVANTAGES 17
PRICING 21
SPECIFIC MARKETS 22
TARGETING NEW MARKETS 25
LOCATION 26
MANUFACTURING PLAN 27
RESEARCH & DEVELOPMENT 28
HISTORICAL FINANCIAL DATA 29
PROFORMA FINANCIAL DATA 30
Proforma Cash Flow Analysis 30
Income Statement 31
Proforma Balance Sheet 32
Ratio Analysis 32
Financial Standards 32
Breakeven Point 33
EFFECTS OF LOAN OR INVESTMENT 34
ATTACHMENTS 35
EXECUTIVE SUMMARY
SAMPLE:
[My Company] was formed as a [proprietorship, partnership,
corporation] in [Month, Year] in [City, State], by [John Doe] in
response to the following market conditions:
o [Start-up, growth] opportunities exist in
[Product/Service].
o The need for use of efficient distribution and
financial methods in these overlooked markets.
o [I/we] have several [customers/clients] who are willing
to place large [orders/contracts] within the next three
months.
o Several other prospective [customers/clients] have
expressed serious interest in doing business within six
months.
[I/we] previously owned a company that was active in the
widget industry. Over the past few years [I/we] spent much
time studying ways to improve overall performance and increase
profits. This plan is a result of that study.
The basic components of this plan are:
<Product>
o Competitive pricing
o Expand the markets
o Increased advertising
o Lower our unit costs,
o Thereby achieving higher profits.
<Service>
o Sign contracts
o Increased advertising
o Increase office staff
To this end, [I/we] need investment from private individuals
and/or companies. A total of $XXX is being raised which will be
used to finance working capital, plant and equipment, real estate
and my Ferrari Testarossa. The company will be incorporated and
common stock issued to investors. The company will be run as a
[proprietorship, partnership].
Financial Goals
Year 1 Year 2 Year 3
Sales (000's) 650.00 3,880 16,649
Net Income 99.03 1,120.83 16,649
EPS $.25 $2.80 $9.58
THE MANAGEMENT
SAMPLE:
Principals
President
John Q. Doe
Qualifications
Owner: John Doe Co. 1980-1987
Manufacturer of premium widgets.
Sales growth from zero to $1,000,000 in five years.
Led market in market share - 30%.
Formulated advertising budgets & campaigns.
Pioneered new distribution channels.
Established national sales force.
Established national repair & service centers.
Brought new and innovative [Product/Service]s to the market.
Designed point-of-purchase materials.
Recent Experience: 1987 - 1991
Sales XYZ Cheap Widgets
National Sales Manager
Sales records April-May, September, October 1991
Education
University of Colorado
Boulder, Colorado
B.A. - Philosophy
Minors - German, History
Short Biographies
SAMPLE:
President
John Q. Doe, Chief Executive Officer, and Director since February
1988 and President since January 1990. Mr. Doe was the founder
and Chief Executive Officer of the original operating company
known as Random Excess, Inc. He has had experience in the widget
field with his own firm, John Doe Co., of Oshkosh (Wisconsin),
from 1980 to 1987. This firm was sold to FatCat Widgets, Inc. in
1987. Mr. Doe has held a sales position with U S West Inc. since
then. Mr. Doe graduated from the University of Colorado in 1981
with a bachelor's degree in philosophy. Mr. Doe is employed by
the Company on a full-time basis.
Chief Financial Officer
Richard Roe, CPA, Chief Financial Officer, Treasurer and
Director. Mr. Roe joined Random Excess, Inc. in December 1988 as
a corporate controller and was named Chief Financial Officer in
July 1989. Mr. Roe was appointed Treasurer and a Director in
July 1990. He served as corporate controller of XYZ Lumber
Company from August 1981 to December 1988. Mr. Roe graduated
from Metropolitan State College in Denver, Colorado in 1976 with
a bachelor's degree in accounting. Since 1979 he has been
licensed as a Certified Public Accountant in the State of
Colorado and is a member of the American Institute of Certified
Public Accountants. Mr. Roe is employed by the Company on a
full-time basis.
Vice President
Joe Dokes, Secretary, Executive Vice President and Director. Mr.
Dokes supervises the company's sales and implementations to its
largest corporate customers, including US West, Great West Life
Insurance, etc. Mr. Dokes has served as Secretary and a Director
since February 1988, Vice President of Operations from February
1988 to December 1988, President of the Company from December
1988 to January 1990 and Vice President of Contract Sales since
January 1990. He has been involved since 1986 with the private
company originally formed as Random Excess, Inc., where his
duties included managing the purchasing and sales department.
From November 1984 to May 1986 he managed the sales department at
Integrated Management Systems, Inc. From June 1983 to October
1984 he was a buyer for Adams County, Colorado, School District
50. Mr. Dokes attended Oklahoma State University in 1980 and
1981 and Trinidad State College in Trinidad, Colorado in 1981 and
1982. He did not receive a degree from either university. Mr.
Dokes is employed by the Company on a full-time basis.
Vice President
Sally Seaugh Vice President of Marketing. Ms. Seaugh has been
the Company's Vice President of Marketing since November 1988.
From September 1986 to October 1988 she was involved in business
development and marketing for United Bank of Aurora (Colorado).
From February 1980 to August 1986 she was self-employed as an
independent oil and gas landman. Ms. Seaugh graduated from the
University of Denver in 1974 with a bachelor's degree in
Education. She is employed by the Company on a full-time basis.
Responsibilities
John Q. Doe, Chief Executive Officer - Responsible for entire
operation. Oversees management function and all other
executives. Salary - $60,000.
Richard Roe, CPA, Chief Financial Officer - Responsible for
financial operations, accounts payable, accounts receivable,
interaction with auditors, investor relations. Salary - $40,000
Joe Dokes, Executive Vice President - Responsible primarily for
sales and sales support. Salary - $35,000
Sally Seaugh Vice President of Marketing. Responsible for
marketing, human resources and training. Salary - $30,000.
Total Executive Compensation
$165,000.
This Page is for an Organization Chart, if applicable.
[MY COMPANY] HISTORY
SAMPLE:
In [Month, Year] [I/we] formed a [Product/Service] company
that [manufactured, distributed, serviced, consulted to, etc.]
state-of-the-art complex widgetry [market]. This company was
located in [City, State]. [I/we] formed this company as a
[proprietorship, partnership, corporation]. Others involved in
this business were: [list names].
The main goal of this company was to [explain].
Financing was arranged through [home equity loans, savings,
venture capital, friends and family, etc.] [Explain terms, rates
and ability to repay.]
This venture was very successful in generating and
increasing sales, but was not effective in achieving
profitability. The main reason for this was the amount of actual
overhead experienced. This overhead was not initially anticipated
by me at the beginning of that venture. Items including credit
checking, warranty program management, extensive travel,
maintaining warehouse stock and the management and expense of a
national sales force were expenses not originally forecast or
expected. With this level of overhead, it was mathematically
impossible to achieve profitability
OR:
This venture was very successful in generating and
increasing sales, as well as effective in achieving
profitability. This was due to the following reasons:
o [Reason 1]
o [Reason 2]
o [Reason 3]
OR:
[My Company] was recently conceived and is still in the
beginning stages. To this point the following has been
accomplished:
o A team consisting of [list names and primary
responsibility. (i.e. John Doe - Marketing) has been
formed.
o A prospective [customer/client] list has been drawn up.
o Strategy meetings are being held every Monday,
Wednesday and Friday evenings.
o This business plan has been drawn up.
[Now link the past to the future - why a former company will
lead into this one or how your present company and history will
lead into any future plans. A short paragraph should suffice.]
SAMPLE:
We are now able to adequately address the markets we have
targeted. We have adjusted our staff, redirected our advertising
and sales force, and have added the [Product/Service]s necessary
to meet the needs and expectations of our customers.
[PRODUCT, SERVICE] DESCRIPTION
SAMPLE:
[My Company] intends to offer [product/service]. This
[product/service] offers our customers the best possible solution
as it:
<Product>
o Offers the lowest price on the market
o Is the most technically advanced
o Offers more useful features
o Saves them time and money
o Offers our users better value per dollar spent
o Provides an alternative way to realize a similar goal.
<Service>
o Provides a service which is not presently available in
this area.
o Is strengthened by a team with combined experience of
XX years.
o Saves them time and money
o Provides an alternative, cost effective way for them to
realize a similar goal.
We have a [copyright, service mark, trademark] or [exclusive
agency, marketing rights] for this [product/service]. This
agency will last until XXX at which time it may be extended for
XX years or terminated. This agency agreement is cancelable upon
XX days written notice.
<Product>
The [product/service] has a useful life of XX years. To
distribute this product so that it remains usable for our
customers, we must use the following methods of storage and
transportation:
o Overnight delivery
o Cold storage
o Incorporate preservatives
o Shipment within two weeks to distributors.
o Specially padded boxcars.
Even though the technology used to create this product is
new, we expect that others will be able to substantially
reproduce our patented results within XX years. To remain on the
leading edge of this product, we will need to devote
approximately XX% of revenues toward research and development.
Also due to the fast changing nature of this industry, we will
need to retrofit these machines within XX years at customer
expense. Our manufacturing plan has considered this.
<Service>
[If general service to be offered is not obvious, such as carpet
cleaning, sales rep, lawn care, consulting, etc. explain what
service is. Then give a detailed description of your particular
service and its uniqueness.]
Short Examples:
1. Our carpet cleaning machinery is state-of-the-art.
2. Our consulting practice will address these specialized
areas: [list]
3. We will only rep these specific product lines. [list]
SAMPLE:
Even though at this time our expertise is unique in the
marketplace, we expect advances to be made and competitors to
arise and offer similar services. We will meet this challenge
by:
o Hiring staff specialized in these new areas.
o Increase our continuing education and training expense.
o Adding complementary lines.
o Make regular investments in new equipment.
OBJECTIVES
Long Term
SAMPLE:
[My Company] believes very strongly in technical, financial,
business and moral excellence. To secure a stable future for all
those connected with [My Company] we have set the following long
term goals:
o Present market is estimated at $XXX. Our goal for
market share is XX%.
o We want to be considered by our peers to be the market
leader in sales as evidenced by:
o Trade industry awards
o High end of scale in financial ratios
o Major market share
o Technical excellence (awards, honors, etc.)
o Community involvement (Rotary, United Way, etc.)
Short Term
SAMPLE:
o Market share goals -
First Year XX%
Second Year XX%
Third Year XX%
Fourth Year XX%
o [Decrease, Maintain] costs through acquisition of new
plant and equipment.
o Increase productivity by investing in employee training
and education.
1. Budget for complete computer training for
appropriate applications.
2. [Set up, Maintain] employee benefit program for
continuing college education.
3. Budget for necessary seminars and/or continuing
job-specific education.
o Maintain state-of-the-art accounting system for careful
tracking.
o Monthly reports on financial status vis-a-vis the
industry.
o Aggressive recruitment of the best technical staff in
the industry.
o Support company involvement in various local and
national charity events.
COMPETITORS
SAMPLE:
Competitor #1
Name
Address
City, State
Strengths:
Location - next door to supplier factory, on major
artery, close to terminal, etc.
Pricing - Low cost producer, known for aggressive
pricing policy.
Delivery - ships overnight to anywhere in the
world.
Management - Everyone has an MBA from Harvard.
Weaknesses
Service - takes more than 3 months to receive spare parts.
Dedication - If it's sunny, they're on the golf course or
ski slope.
Machinery - Slowly approaching obsolescence unless
replaced within six months.
Overhead - Spend lavishly on corporate dining room,
limousines and champagne.
OUR COMPETITIVE ADVANTAGES
SAMPLE:
<Product>
The distinctive competitive advantages which [My Company]
brings to this market are:
o Experience in this market. [I/We] have XX years of hands-
on experience in this industry.
o Sophistication in finance and distribution. This results
in [my,our] being the low cost supplier in these price
sensitive markets.
o The philosophy of [My Company] is to price not just
according to our costs, but also according to what the
market will pay.
o Our targeted minimum gross profit margin for a
category must be XX%.
o By pricing to the market, [I/we] will achieve
higher sales and therefore increase my buying
power. As the amounts of my purchases increase,
my per unit costs of shipping decrease and [I/we]
will achieve higher discount levels from my
suppliers. Through these economies of scale, many
items currently on the market can be sold with
lower prices, yet a higher net profit.
o [Product/Service] pricing will include a range of
quantity discounts as well as an early payment
discount.
o Rather than being strictly regional, [I/we] will expand
into the national market.
o To control foreign exchange risks, [I/we] will monitor
the markets and hedge accordingly. [I/we] will also
use overseas bank accounts.
o With those companies with which [I/we] have established
a relationship or are known to be financially secure,
[I/we] will work on a pre-pay basis. This allows me
greater discounts.
o A level and policy of Capitalization that will allow [me/us] to
fully address the respective markets with comprehensive
marketing and customer service plans.
o By keeping my overhead low, [I/we] will be able to
funnel my profits back into operations thus avoiding
high debt ratios or lost sales opportunities.
o A quarterly direct mail campaign directed at both
current customers and prospective new customers
consisting of an informative newsletter.
o A toll-free national 800 number will be used for
customer orders and inquiries.
o [I/we] will print complete four-color catalogs on a
yearly basis. Price lists will be updated as needed.
[I/we] intend to be aggressive in trade magazine
advertising.
o Consideration will also be given to attending trade
shows around the country.
o With this level of capitalization, should an unexpected
downturn occur, [I/we] will be able to continue
operations on a positive scale.
o Innovation. [I/We] have a history of innovative ideas.
[List your most meaningful ideas and any new ideas you have
for the future.]
<Service>
The distinctive competitive advantages which [My Company]
brings to this market are:
o Experience in this market. [I/we] have XX years of hands-
on experience in this industry.
o Sophistication in management and finance. We are able to
run an efficient and lean structure, yet still provide
quality service to our clients and customers.
o Because of the nature of this industry, we will be able
to rent office space in more moderately priced
buildings.
o As a unique service company, we will be able to keep
our margins high, allowing us to provide internal
financing for growth possibilities.
o A level and policy of Capitalization that will allow [me/us] to
fully address the respective markets with comprehensive
marketing and customer service plans.
o By keeping my overhead low, [I/we] will be able to
funnel my profits back into operations thus avoiding
high debt ratios or lost sales opportunities.
o Our initial marketing campaign will allow us to book a
sufficient amount of business so that we can implement
our telephone customer service support program.
o Innovation. [I/we] have a history of innovative ideas.
[List your most meaningful ideas and any new ideas you have
for the future.]
Summary
SAMPLE:
<Product>
Through [my,our] leadership, [I,we] will be able to reduce
overhead as a percentage of sales thereby increasing the amount
of profit to be retained in the business. Because of our pricing
policy, more people will purchase our merchandise thus increasing
the size of the market and we will be increasing our market
share. What [My Company] proposes to use are just good solid
business sense, economies of scale, and the use of efficient
financial techniques. This will allow us the following options:
o increase service
o increase advertising
o reduce prices
o increase profits
o increase selection
<Service>
Through [my,our] leadership, [I,we] will be able to reduce
overhead as a percentage of sales thereby increasing the amount
of profit to be retained in the business. What [My Company]
proposes to use are just good solid business sense, economies of
scale, and the use of efficient financial techniques. This will
allow us the following options:
o increase customer service
o increase advertising expenditures
o increase profits
o increase selection of services offered
This plan will give us tremendous flexibility to use any of
these options or a mix of them to effectively attack our target
markets and meet our long term goals. This combination of
experience, sophistication, capitalization and innovation will
assist [My Company] as it strives to reach its sales, profit and
return objectives.
PRICING
SAMPLE:
<Product>
Before [I/we] set the price for my complex widgets, [I/we]
determined on a unit basis what my costs were going to be.
[I/we] then determined what the market price was for the normal
widget. At this price it was determined that for all but the
lowest sales projections, this [Product/Service] would turn a
profit at this price. However, since our complex widgets offer
additional features, we felt that we could price it approximately
50% above simple widgets.
To test this price, we called a database of 50 large users
of simple widgets. We first questioned them about the
desirability of our extra features and then asked them directly
if this price would be acceptable if such a product were
available. We found that 75% of those polled would be
interested in this product. Of this 75%, we received 10 firm
orders representing approximately 30% of this group.
OR:
We have determined that the market price is $ XX per unit.
This will equal a margin of XX%.
OR:
Our unit cost has been figured at $XX. We need a margin of
XX% to pay our overhead and earn a sufficient profit. Therefore,
our selling price will be $XX.
<Service>
Before [I/we] set the price for our [service], [I/we]
forecast what our fixed monthly costs were going to be. [I/we]
then determined what the market rate for comparable services
were. At this rate it was determined that for all but the lowest
billing projections, this [Service] would turn a profit at this
rate.
[Optional, if applicable]
However, since our service is unique and demands a higher
level of expertise, we felt that we should bill above other
comparable rates.
SPECIFIC MARKETS
Market #1
General History
SAMPLE:
<Product>
The first widget was introduced into the market in 1036.
Widgets remained much as the original production until well into
the 20th century when computer modeling showed that there could
be some enhancements made to the basic widget. The market for
widgets has been generally steady with market growth closely
following the typical population growth. At this time there are
approximately 1,500 companies worldwide making comparable simple
widgets.
<Service>
Lawn care companies have enjoyed a period of steady growth
over the past twenty years. This demand is due to many factors,
not the least of which is the advance of lawn care technology.
In our proposed marketing area, there are 25 lawn care services.
Entry Strategy
SAMPLE:
<Product>
Our widget has been designed by the latest in computer aided
design. We are able to manufacture our complex widgets on
computer driven assembly lines using the latest in robotics
manufacturing. This gives us a tremendous price advantage.
We intend to market our complex widget through all the
normal channels available to simple widgets. These include
retail, wholesale, and OEM. To penetrate this market
efficiently and swiftly, we intend to initially use commission
sales representatives strategically located throughout the USA.
We also will start a national advertising campaign targeting the
end user in various national publications and on national TV
commercials.
Our sales representatives will be chosen based on their own
experience in the marketplace. It is our intention to hire the
best and the brightest among those currently available. Our
marketing tests included many of the reps we initially would like
to hire.
<Service>
Over the past few years, we have noticed an increase in
demand for full lawn care services - not just grass cutting and
snow removal. Our computerized office allows us to track our
clients needs and schedule house calls on one hours notice.
We intend to attack this market very aggressively through
the use of:
1. A pool of 10 telemarketers.
2. House-to-house visits to neighbors of present clients.
3. Advertisements in upscale magazines.
4. Radio advertisements on weekends.
5. Sales calls on real estate management companies.
As we are offering a unique service, informing the public of
our capabilities is of utmost importance.
Growth Strategy
SAMPLE:
<Product>
After having successfully introduced the complex widget into
the American market, our expansion will be in two separate areas:
increasing sales in the USA and entering various foreign markets.
After we have reached our first year sales goals, we intend
to offer our sales reps the opportunity to sell our products
exclusively by joining our company. We expect that a small
percentage will desire to remain independent and these will have
to be replaced with our own sales force. We intend to develop
further sales reps from within by hiring and training them in our
own sales methods. We will increase national advertising and
begin targeting smaller accounts and specialty outlets.
Additionally, we will conduct in house seminars for various OEM's
demonstrating how the inclusion of complex widgetry into their
own products will increase the value of their products.
<Service>
After having successfully completed this entry phase into
this market in the geographical are we have chosen, we will then
expand our market by doing the following:
1. Expand telemarketing pool to 20.
2. Increase number of direct sales reps.
3. Expand into neighboring cities.
Market Size and Share
SAMPLE:
The American market for [product/service] is estimated at
$8 Billion annual sales based on data furnished by XYZ Survey.
We estimate that we can achieve XX% market share within XX years.
Marketing data for other markets is in the process of
collection.
Other Markets
Use the same format for additional markets.
TARGETING NEW MARKETS
SAMPLE:
To continue our growth, we will be using the following
methods to expand our markets and to increase our new areas of
doing business:
o Customer contact - find out their needs
o Customer referrals
o Adding complementary [Product/Service]s
o Trade shows
o World Trade Center "Network"
o U.S. Government trade leads
o State Government trade leads
o On-line computer prospecting and qualification
(DIALOG, D&B, etc.)
o Market surveys
o Research & development
LOCATION
RETAIL SAMPLE:
This business will be operated at 123 Any Street. This
location is desirable because:
o The traffic flow has been rated at high.
o The rent is below market
o The building has the necessary facilities to operate
this business.
o The location is convenient for our customers.
We are renting this building on a XX year lease. We will
have renovations costing $XXX based upon three estimates. The
building is zoned R-3, commercial use.
OTHER SAMPLE:
This business will be operated at 123 Any Street. This
location is desirable because:
o The building is structurally compatible for our use.
o The rent is below market
o The building has the necessary facilities to operate
this business.
o The location is convenient for our freight companies,
suppliers, clients and employees.
o Possibility of expansion in the area.
We are renting this building on a XX year lease. We will
have renovations costing $XXX based upon three estimates. The
building is zoned R-3, commercial use.
MANUFACTURING PLAN
SAMPLE:
We will be using a conventional assembly line method of
construction of our complex widgets. Our main supplier of
component parts will be DEF Manufacturing of Fort Lee, NJ. In
the event that they are not able to ship according to our
specifications our secondary supplier will be MNO Amalgamated
located in Charlotte, NC. These parts will be shipped to us by
motor freight.
The actual machinery used in the production line will be
manufactured by A&M Machine Tools of Arlington, Texas. They also
will be doing maintenance under a service contract. This design
of machine and assembly will allows us to produce 24 hours a day
as the entire assembly process is fully automated with state-of-
the-art robotics of American manufacture.
With robotics our labor costs and therefore our production
costs will be the lowest in the industry. To maintain our
advantage we have established lines of communication with all of
our potential machinery suppliers. Most importantly we have an
ongoing relationship with several universities and are actively
participating in various studies and experiments relating to
production methods.
These machines also incorporate quality checking by lasers.
All products must come within XX% of specifications. Also, at
regular intervals we will be using human inspection of products
and machines.
We do not anticipate generating any toxic materials at this
time for these products. However, we will be closely monitoring
all production to determine if any hazardous materials are being
generated. We have contracted with an environmental engineering
company to advise us on any possible problems as well as
solutions including legal disposal of all hazardous wastes.
We anticipate the following outlays for this capital
equipment:
A&M Machines $XXX
Service Contract $XXX
RESEARCH & DEVELOPMENT
SAMPLE:
We have already spent a considerable amount of time in
researching and developing our complex widgets. We have a very
simple laboratory equipped with the basic research equipment we
need. We have thus far been able to discover lighter materials
and several cost cutting manufacturing methods. The largest
achievement to date is the discovery of a water based lubricant
that does not disintegrate in rainstorms. We have called this
lubricant "H2Ocus-Pocus".
Presently our research is being supervised by our Technical
Director, John Q. Public. He will continue in this capacity.
Having been the researcher involved with all our activities to
this point, he is well qualified to continue our research
efforts.
Our next research project will center around using this new
lubricant in our manufacturing processes and testing of a new
material that has come to our attention.
To this point, our research has paid for itself as we have
been keying on bringing this new product to market. However, now
that we are becoming more experimental in our research efforts
such a continued success ratio can not be maintained.
We have been investigating several potential government
(both state and federal) funding sources. Our present program of
joint research with the local university has proven very
beneficial.
HISTORICAL FINANCIAL DATA
See "Attachments"
[This discussion should include all facts pertaining to your
financial statements.]
SAMPLE:
Income Statement
[Discuss both positive and negative aspects of your income
statements. This is no time for trying to hide the facts.]
Balance Sheet
[Discuss both positive and negative aspects of your balance
sheets. This is no time for trying to hide the facts.]
Asset Worksheet
[Discuss both positive and negative aspects of your assets. This
is no time for trying to hide the facts.]
Ratio Analysis
Financial ratios are included for your convenience.
Financial Standards
We have also included financial standards as compiled by
Dun & Bradstreet and Robert Morris Associates.
PROFORMA FINANCIAL DATA
See "Attachments"
Proforma Cash Flow Analysis
SAMPLE:
Assumptions:
Cash Receipts: Percentages as indicated.
Rent: Building rental at $12/square foot.
Utilities: Water, gas, sewer, trash, electric
Telephone: Local, long distance and cellular
Salaries: Executives.
Payroll: Hourly, non executive
Withholding: Figured at XX %.
Inventory:
Freight-In:
Office Supplies:
Postage:
Advertising: Trade, magazine, direct mail, etc.
Professionals:
Commissions: Figured at 10%.
Insurance:
Travel & Entertainment:
Research: [Explanation]
Miscellaneous:
State Taxes: XX%
Federal Taxes: XX%
Terms to customers: 2/10, n/30 (only to qualified accounts).
Terms from suppliers: Suppliers offers 3% cash discount.
Sales Forecast
SAMPLE:
Sales have been forecast at the following growth rates:
Year 2 Year 3
[Product/Service] 1: XX% XX%
[Product/Service] 2: XX% XX%
Cash Flow Variables:
SAMPLE:
We project that we will be able to generate sufficient
capital from operations to meet our initial needs after the
infusion of $200,000. However, our projections are in industries
that have never been fully addressed and are based upon present
real buying conditions and our own experience. Should sales not
be up to projections, adjustments will be made in ordering and
long term commitments decreased or postponed.
Income Statement
Assumptions:
Returns, discounts: We are offering a range of quantity
discounts, plus an early payment discount to
those extended credit. Average is estimated
to be 5%.
Cost of goods sold:
Expenses: Totaled from Cash Flow Analysis spreadsheets.
Freight: Paid by customers.
Risks & Variables:
SAMPLE:
We have considered seasonal trends and have forecasted
accordingly. [I/we] believe the forecasts are conservative.
Proforma Balance Sheet
Cost Control
SAMPLE:
Our books will initially be maintained manually. [My
Company] seeks at a future point to use a computerized accounting
package to monitor our financial performance. This information
will be compiled at the end of each month for preparation of
financial statements. Each month these statements will be
reviewed against our proforma statements and appropriate action
taken to adjust costs or our budget. If we find that we are
continually over budget, our first step will be to reevaluate our
markup on [Product/Service]s and then to recheck our costs to
make certain that we are obtaining the best possible prices.
Ratio Analysis
Financial ratios are included for your convenience.
Financial Standards
We have also included financial standards as compiled by Dun
& Bradstreet and Robert Morris Associates.
Breakeven Point
Taken from BPMBREAK.XLS spreadsheet.
SAMPLE:
The following chart shows our breakeven point:
Profit Revenue Fixed Costs Variable Costs
$0 $20,000.00 $3,900.00 $16,100.00
It is intended that [My Company] will be profitable in the
XXX Quarter, 199X.
EFFECTS OF LOAN OR INVESTMENT
SAMPLE:
The money invested in [My Company] will be used for the
following purposes:
o Purchase of DEF Machine, Model # 333058 including
installation - ($150,000)
o Working capital - ($50,000)
o Leasehold improvements - (est. $15,000)
o Laboratory equipment - Beakers, test tubes, petri
dishes - ($1,500)
o Start-up costs - legal fees, filing fees
o Inventory - raw materials - ($25,000)
o Delivery trucks (GMC Model 80, $10,995)
o Computer equipment - 15 Compaq Prolinea 486/33's -
($40,425)
o Office equipment and supplies.
o Initial office expenses, lease deposits, phone
equipment, office furniture, etc.
These outlays will enable us to operate at a level that will
allow us to meet our conservative sales goals for the first year.
This will also allow us to outright purchase these items rather
than finance or lease them.
ATTACHMENTS
Business Plan
[My Company]
Confidential
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