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AMERICAN INSTITUTE OF SMALL BUSINESS HOW TO WRITE A BUSINESS PLAN INTRODUCTION Going into business, either independently or with others, is a dream that most Americans would like to fulfill during their lifetime. Each year more than 1 million new businesses start up, while more than three to four times that number never leave the planning or thinking stage. It has often been said that SMALL BUSINESSES come and go just like NIGHT and DAY. How often have you driven by a shopping center one week and observed a sign announcing a "GRAND OPENING"; then, within one year or less, driven by the same location, this time seeing a new sign saying: "GOING OUT OF BUSINESS SALE"? How often do we hear stories about people and companies having to close or enter bankruptcy? And why is it that we keep hearing statistics that say: 9 out of 10 new businesses will fail or close within two years? The answer can be found in any number of reasons. These reasons include: * LOW SALES VOLUME * INSUFFICIENT CAPITAL * WRONG LOCATION * INCORRECT MERCHANDISE * COMPETITION IS TOO STRONG * INEFFECTIVE ADVERTISING * CHANGING MARKET CONDITIONS * POOR MANAGEMENT * LACK OF KNOW HOW One could list a dozen more reasons why businesses fail. Regardless of the reason, the ONE WAY OF INSURING A MUCH HIGHER DEGREE OF SUCCESS WHEN STARTING OR OPENING A NEW BUSINESS, and even continuing with a current ongoing successful business, is to have a BUSINESS PLAN. This is what your: HOW TO WRITE A BUSINESS PLAN SOFTWARE PROGRAM is all about. You will learn: * WHAT IS A BUSINESS PLAN * WHAT THE BUSINESS PLAN SHOULD CONTAIN * WHY WRITE A BUSINESS PLAN * SEE AN EXAMPLE OF A COMPLETED BUSINESS PLAN WHAT IS A BUSINESS PLAN: The three main functions of a business plan are: Provide a communications tool which conveys your ideas, research, and plans to others. A basis on which to manage your business. A yardstick by which to measure progress and evaluate changes. WHAT THE BUSINESS PLAN SHOULD CONTAIN: The seven basic elements of a business plan are: A. Business concept. A summary of basic business idea. B. Product or service you will offer. C. The market. Who will buy the product or service D. Marketing strategy. How the product/service will be made. E. Personnel. Employees or contractors needed. F. Production plans. Where products/services will be made. G. Financial plans. Cash required for materials, production. WHY WRITE A BUSINESS PLAN: There are many reasons why a business plan should be prepared. Each is sufficient by itself for why one must go through the exercise of preparing the actual business plan. Regardless of the specific reason, the underlying goal of preparing a business plan is to insure the success of the business. Here are the main reasons why a business plan should be prepared: 1. Provides you with the ROAD MAP that you need in order to run your business. It allows you to make detours, change directions, and alter the pace that you set in starting or running the business. 2. To assist in financing. Whether one is starting up a small business or is an entrepreneur, banks and financial institutions want to see that you know where you are, where you are going, and how you are going to get there. 3. The plan will tell you how much money you need, when you will need it, and how you are going to get it. In other words, how you will do your financing? 4. Helps you to clearly think through what type of business you are starting, and allows you to consider every aspect of that business. 5. Raises the questions that you need to have answered in order to succeed in your business. 6. Establishes a system of checks and balances for your business so that you avoid mistakes. 7. Sets up bench marks to keep your business under control. 8. Helps you develop the COMPETITIVE SPIRIT to make you keenly prepared and ready to operate. 9. Makes you think through the entire business process so that you do not open the business blindly or lack vital information in opening and maintaining your business. 10. Forces you to analyze competition. 11. Will give you a "GO" or "NO GO" ANSWER about starting the business. EXAMPLE OF A COMPLETED BUSINESS PLAN: THE WAY-OFF-BROADWAY DELICATESSEN Date TABLE OF CONTENTS PLAN SUMMARY I. BUSINESS DESCRIPTION A. OVERALL PURPOSE: The WAY-OFF-BROADWAY DELICATESSEN will be a delicatessen type restaurant patterned after New York delicatessens which serve Jewish ethnic style foods. The delicatessen will offer counter, table and take out service. B. SPECIFIC PURPOSE: The delicatessen will be located at the St. Pauls U.S. Interstate I-95 exit and will be open seven days a week serving luncheons and dinner. A breakfast menu will be added three months after the opening. Prices will be moderate compared to New York deli's but somewhat higher then other St. Paul restaurants. C. MARKETING STRATEGY: The great majority of customers will come from Interstate I-95. Accordingly, heavy use of billboard advertising will be made to attract customers. D. FOOD PREPARATION STRATEGY: Since many of the ingredients used in menu cannot be supplied locally, arrangements will be made with out of the area food suppliers and wholesalers. Even though management is assured of overnight deliveries, a one week inventory of all food items will be maintained in either a walk-in cooler or freezer. E. MANAGEMENT TEAM: Mary and John Ashford will own 100 Per Cent of the capital stock of the corporation. Each will own 50 per cent of the outstanding stock. John Ashford is President. Mary Ashford is Vice President and Secretary. F. OBJECTIVES OF THE TEAM: It is the objective of the team to operate the business with a minimal first year loss and have an operating profit by the first quarter of the second year of operations. The principals will pay themselves a minimum salary so as not to imperil the cash flow of the business. G. FINANCIAL CONSIDERATION: Anticipated profits for the first years of operations are forecast as follows: Year 1 $ 6,892 Year 2 $41,773 Year 3 $57,715 Sources of the necessary funds for financing the business are as follows: Building Mortgage $25,000 St. Pauls State Bank Working Capital $29,167 St. Pauls State Bank $15,000 Ashford Savings $14,167 PRODUCTS THE WAY-OFF BROADWAY DELICATESSEN MENU Appetizers and Soups Orange Juice Tomato Juice Potato Skins Chopped Liver Daily Soup Lox and Cream Cheese Chicken Noodle (Served daily) Tomato Vegetable Split Pea Chicken Vegetable Clam Chowder Main Dishes, Sandwiches and Side Orders Bologna Corn Beef Turkey Salami Rueben Chopped Liver Chicken Salad Tuna Salad Potato Pancakes Kosher Hot Dogs Potato Salad Cole Slaw French Fries Bagels with Cream Cheese Daily Hot Meal Chicken Hamburger Steak Roast Beef Fish Minute Steak Desserts Cheesecakes Hot Fudge Cake Chocolate Cake Walnut Cake Ice Cream Fresh Fruit in Season Beverages Coffee Teas Milk Coca Cola Root Beer Orange Soda Dr. Brown's Sodas Milk Shakes Ice Cream Sodas UNIQUE FEATURES OF THE MENU The entire menu has been patterned after typical New York- style delicatessens. Most of the items are unavailable at all other St. Pauls' restaurants with the exception of the daily hot meals and future breakfast menu. The menu will be very unique to St. Pauls and the surrounding community, since almost all of the food items will not be available at any place other then the WAY-OFF-BROADWAY DELICATESSEN. Because of the menu and the marketing strategy, management forecasts that approximately 80 to 85 per cent of it's business will come from the Interstate I-95. Approximately 10 to 15 per cent of it's business will come from North Carolina State Highway 20 and U.S. Highway 301. Only 5 per cent of the deli's business is expected to come from the local community. Future Breakfast Menu The final menu has not yet been determined but will include such items as: Eggs Pancakes Hash Brown Potatoes Grits Bacon Ham Sausage Toast Danish Pastry Bagels English Muffin Fruit Juices Fresh Fruit in Season It is expected to begin serving breakfasts approximately three months after the initial opening of the deli. II.MARKET DEFINITION A. CUSTOMERS: The primary market for the WAY-OFF-BROADWAY-DELICATESSEN is that of the I-95 Interstate Highway travellers going in both north and south directions. These travellers are primarily vacationers and those driving long distances. Their primary vehicle is the automobile. It is expected that the average number of passengers per vehicle will be two. There will be some seasonality to the business in view of the much heavier traffic that is expected on the interstate during the winter months. B. CUSTOMER SIZE: It is anticipated that approximately 100 customers will be served daily. Weekend traffic should be 25 to 30 per cent higher than activity from Monday to Friday noon. Traffic count studies made by the Robeson County Highway Department indicates the following average motor vehicle traffic flow: North to South 23,000 vehicles South to North 24,200 vehicles During the period of November 15 through April 1, average daily traffic increases by approximately 4,000 vehicles. In addition to this very high traffic flow, U.S. Highway 301 has some 5,000 vehicles and North Carolina State Highway 20 has some 3,000 vehicles in average daily traffic flow. Finally, within the town of St. Pauls, local vehicle traffic approximates some 5,000 vehicles a day. All of these traffic flow figures make for a very large potential market. Management strongly believes that 85 Per Cent of their customer base will come from the Interstate. An additional 10 Per Cent will come from U.S. 301 and North Carolina State Highway 20. Only 5 Per Cent of the total volume of business and customers are expected to come from the local population. Initially however, business from the local community will be somewhat higher simply because of curiosity. III. MARKET GROWTH: First month sales are forecast at $18,000. Business is expected to grow by approximately $500 per month. Translated into numbers of customers served, the anticipated monthly increase will be approximately 166 customers. Initially, the Delicatessen will serve some 100 customers daily, or a monthly total of 3,000. Therefore, within six months, the monthly number of customers will be approximately 4,000, or on a daily average basis, will number 110. IV. COMPETITION: The town of St. Pauls has four eating establishments and one facility for lodging. With the exception of Joe Don Danny's, all of the other eating establishments are located within St. Pauls and away from the Interstate Highway 95 exit. They are not visible from the highway. A brief description of each is as follows: Cliff's Barbecue: A barbecue house that serves both lunches and dinners with moderate pricing. Ferguson's: Specializes in sandwiches, including hamburgers and hot dogs. Serves breakfast and is the oldest continuous operating restaurant in St. Pauls. Hardee's: Very successful food operation, and is the only fast food restaurant in St. Pauls. It's very popular with both the highway tourist traffic and the local citizenry. It's open for breakfast and into the late hours of the evening. Joe Don Danny's: Busiest restaurant. Attracts customers from U.S. Interstate I-95 since it is the only truck stop in the area. It is quite popular and is visible from the Interstate. Hardee's and Joe Don Danny's are mentioned in national automobile publications. They also have billboard advertising, and Hardee's is able to take advantage of national advertising in view of its national affiliation. Joe Don Danny's, a truck stop, is well known within trucking circles. The fact that Joe Don Danny's and Hardee's have such visibility is considered an advantage to THE WAY-OFF-BROADWAY DELICATESSEN, bringing traffic off the exit of I-95. V. COMPETITION STRENGTHS AND WEAKNESSES A. Competitive Strengths: 1. HARDEE'S is a national franchise with a highly favorable reputation for both food quality and speed of service. In addition, it has both a very strong advertising campaign and a high name recognition. It is especially popular with the children of many tourists, the primary drawing population by the deli. 2. JOE DON DANNY'S has an excellent reputation. Its location puts the restaurant into a very competitive position with the deli since it is located off of the I-95 exit. 3. Both of the above competitors are open for breakfast. 4. Both of the above restaurants, as well as the two others in St. Pauls, are popular with the local population. B. Competitive Weaknesses: 1. None of the competitors will offer the uniqueness in their menu which is offered by THE WAY-OFF-BROADWAY DELICATESSEN. The menu will be an attraction for many of the I-95 Interstate drivers. 2. Only JOE DON DANNY'S is located adjacent to the exit, which means the deli will compete with only one restaurant for its clientele. 3. The mere name of the deli: THE WAY-OFF-BROADWAY DELICATESSEN will offer considerable curiosity appeal to some vehicle occupants, thus bringing in a certain amount of traffic. VI. MARKETING PLAN A. OVERVIEW: THE WAY-OFF-BROADWAY DELICATESSEN will offer high quality food at moderate prices compared to the pricing of New York delicatessens, which it will be modeled after. However, the menu prices for the WAY-OFF-BROADWAY DELICATESSEN will be somewhat higher than comparable dishes at other St. Pauls' food establishments. It will not be a fast food restaurant, although quick service will be offered either at a counter or at sit down tables. Take-out service will also be available. The owners recognize that Interstate I-95 is the main highway travelled by tourists coming from as far north as Bangor, Maine, including residents of the heavily populated cities of Boston, New York, Philadelphia, Baltimore, and Washington, D.C., who are going to Florida vacation spots. New York-style delicatessens that serve Jewish ethnic foods are immensely popular with these northern tourists. Thus, a restaurant such as the WAY-OFF-BROADWAY DELICATESSEN will be a welcome change and relief to these tourists from the conventional fast food establishments that they normally find along an interstate highway. THE WAY-OFF-BROADWAY DELICATESSEN will be open for business seven days a week. Initially it will provide luncheon and dinner service to its patrons, remaining open until the early hours of the evening. Both cold and hot dish selections, together with unique desserts, will be available. Mary and John Ashford believe that a very viable business opportunity exists for the opening of a New York-style delicatessen at the exit of U.S. Interstate I-95 in St. Pauls. In view of the proposed location of the delicatessen, the anticipated restaurant business should be excellent. B. MARKETING OBJECTIVES: 1. The primary objective of the WAY-OFF-BROADWAY DELICATESSEN will be to attract customers from the very heavily travelled U.S. Interstate I-95 Highway. These customers are mostly tourists travelling between the Florida vacation areas and the heavily populated eastern seaboard urban and suburban centers. Additional customers will come from U.S. Highway 301 and North Carolina State Highway 20. Some local customers are expected to patronize the deli. 2. A second marketing objective will be to gain repeat customers from those who patronize the deli for the first time as well as to gain customers through word of mouth advertising from first time users. This will be done by serving a high quality food product in pleasant surroundings and a clean comfortable atmosphere. C. MARKETING STRATEGY-ADVERTISING AND PROMOTION: 1. An important consideration in the total marketing effort of the Deli is found in the name itself: THE WAY-OFF-BROADWAY DELICATESSEN. This name will not only arouse interest and curiosity from travellers and tourists, but it will also lend itself well to the major theme of the establishment. The theme will be carried out in every aspect of the deli, including advertising, promotion and public relations. 2. Since it is anticipated that the great majority of customers who will patronize the WAY-OFF-BROADWAY DELICATESSEN will be tourists using U.S. Interstate I-95, the company will make wide use of billboard advertising. An important feature of the building purchase and land lease includes the use of four large billboards, two on each side of I-95 approximately one and one half miles from the St. Pauls' exit going in both north and south directions, and two similar signs located approximately 5 miles from the St. Pauls' exit in the same manner. The use of these billboards is for the remaining three years of the current land lease, and subject to renegotiation at that time. Additional billboard locations will be placed on both U.S. 301 and North Carolina State 20 highways. It is expected that the billboards will carry the same message and theme of the name. 3. Since the name THE WAY-OFF-BROADWAY DELICATESSEN connotes the New York Broadway name, the use of theatres, theatre lights, a Broadway stage, and Times Square will be used. The format and decor of the deli include spot lights as used on stage. For example, with regards to the exterior of the building, the deli's name will be highlighted by two large spotlights in the evening hours, thus giving it a showtime look. At the take-out counter, the menu items will be encased in circulating theatre lights similar to those found on a theater marquis. The menus will not only have the theater theme done artistically on their covers, but each item will contain names having a Broadway theme also. For example, "The Big Apple Rueben", "The Times Square Hot Dog", "Lindy's Cherry Cheesecake", and so on. A likewise similar art and copy approach will be given to the point-of-purchase displays used throughout the delicatessen. Items with a Broadway theme will be used to give the interior a proper finishing touch. These will include Broadway Show posters, pictures of actors and actresses, VARIETY magazine pages and reviews of famous shows. 4. Delicatessen items will be attractively displayed in refrigerated delicatessen cases. Also, each of the dessert specialties will be similarly displayed in a refrigerated bakery display case. Such displays will give a high point-of-purchase advertising appeal to patrons. 5. Finally, all of the staff, including waitresses and waiters, will wear T-Shirts specially silk-screened with the WAY-OFF-BROADWAY DELICATESSEN logo. VII. SALES: All sales will be for cash or major credit card. Credit cards from VISA, MASTER CARD, AMERICAN EXPRESS, and DISCOVER-AMERICA will be accepted. Only checks from local residents of St. Pauls will be accepted. VIII. THE PRODUCTION PLAN: A. FACILITY REQUIREMENTS: 1. The deli will be located in a building immediately adjacent to the I-95 exit. This facility was a former restaurant. It has current seating of 60 and can be expanded to accommodate 90 persons at a very moderate cost. 2. Since it is a former restaurant, it contains very important restaurant equipment and fixtures which would be available for purchase together with the restaurant building. The asking price on the building is $30,000. B. EQUIPMENT REQUIREMENTS: 1. Equipment furnished with the building at a cost of $5,000 includes: 1 Small desk 1 60 gal. water heater 1 2 Compartment sink 1 6X10 walk-in cooler 2 6 X 8 walk-in freezer 1 Small bake table 2 three ton heating and air conditioning units 1 6ft. stainless steel table with hot dog warmer 1 Small bake oven 12 42 inch tables 44 black upholstery chair 1 48 inch grill 1 stainless steel up-draft unit with exhaust fan 2 19 quart deep fryers 1 pan steam unit 2 19 Hobart dishwasher 1 2 burner electric cooker 2 Sandwich Refrigerators 48 feet metal shelving 2. Additional tableware, kitchen tools, and accessories will have to be purchased as well as the following: 2 Microwave ovens 1 Large refrigerator 1 Cash register 1 Scale 1 Meat slicer 1 Bread slicer 1 Refrigerated deli display case 1 Bakery display case 1 Large freezer IX. LABOR REQUIREMENTS: A. The two principal positions needed to operate the deli are that of the Manager and the Cook. Both Mary and John Ashford will co-share these responsibilities. Arrangements have been made to take a special one week delicatessen cooking and food preparation course in New York City. B. The following employees and their projected monthly salaries are as follows: Manager-CookJohn Ashford$1,500 Co-Manager-Cook Mary Ashford $1,200 Half time cook 600 Waiters/Waitresses 2,400 Dishwasher/Custodial 900 Miscellaneous 400 Total Labor Costs $7,000 X. FOOD PREPARATION PROCESS: A. As a Jewish-style delicatessen, many of the ingredients and final menu items will have to be supplied by out-of-the-area food and restaurant wholesalers. B. There is no concern for the freshness of these items since arrangements are being made to keep a one week minimum inventory on hand at all times. This will be done with the use of the freezer and walk-in cooler. Arrangements have been made with the following food suppliers and wholesalers to provide for their specialty food requirements. C. Each of these wholesalers have assured the Ashfords that they can deliver orders within 48 hours and, if necessary, deliver within 24 hours subject to an added delivery charge. 1. Lincoln Delicatessen Bakery, Washington, D.C. Bagels Rye Breads 2. Fancy Foods, Norfolk, Virginia Cheesecakes Chocolate Cake Walnut Cake 3. Zion-Kosher Company, New York, New York Nova Scotia Lox 4. Hebrew National Products Company, New York, New York Bologna Corn Beef Kosher Hot Dogs Salami D. A back-up supplier and wholesaler for all of the above products is: Rueben Foods, Washington, D.C. E. Some purchases will be made on a periodic basis from Rueben Foods to assure the company of a second source of supply. All other food products and ingredients can be purchased from local wholesalers who make daily runs to St. Pauls from neighboring North Carolina cities. These include dairy products, fruits, vegetables, seasonings, baking needs, breads, canned goods, etc. F. Management expects to make wide use of Microwave ovens. Delicatessen meats will be stored in the freezer and then in the refrigerated delicatessen case. All meats will be freshly sliced upon demand. Salads and soups will be prepared daily. Most desserts will be kept in the freezer until the day of use. XI. COMPANY STRUCTURE: A. Mary and John Ashford have incorporated their restaurant under the name of the WAY-OFF-BROADWAY DELICATESSEN. John is the president while Mary is vice president and secretary. Each have fifty percent of the capital stock of the corporation. B. With regards to the day-to-day operations, they have assumed the following titles: Manager John Ashford Co-Manager Mary Ashford C. John expects to work 60 hours a week until the operation can afford additional staffing. Mary expects to work a 40 hour week. XII. BUSINESS ADVISORS: A. The following business advisors have been or will be used as needed: Accountant Michael Stefanson with Stefanson and Byron, Certified Public Accountants Lawyer Susan Fallek with Fallek, Hamline, and Zimmerman Banker Jerome Pinkerton, President of St. Pauls State Bank Insurance Bobby Maisel with Bear, Rose and Mythroat General Agents XIII. THE FINANCIAL PLAN SUMMARY: A. Taking into consideration that the WAY-OFF-BROADWAY DELICATESSEN will be a new eating establishment catering to the highway traffic on U.S. Interstate I-95, conservative accounting procedures and projections have been made. The following Profit and Loss projections are as follows for the first three years of operations for the deli: YEAR 1- $ 6,892 YEAR 2- $41,773 YEAR 3- $57,715 B. Cash flow projections indicate that the deli will have a positive cash flow beginning with the fifth month of operations. At that time it is forecast that monthly cash receipts will amount to $20,000 with expenses of $19,633. Until that time, the commercial loan from the St. Pauls State Bank should be sufficient to provide the deli with it's necessary cash needs. C. The three year balance sheet projects indicate that the net worth of the WAY-OFF-BROADWAY DELICATESSEN will be as follows: YEAR 1- $ 6,769 YEAR 2- $ 48,542 YEAR 3- $106,257 D. The three year projections for PROFIT AND LOSS, CASH FLOW and BALANCE SHEETS are shown on the following pages. (Financial Forms would be inserted at this point). XIV. SOURCES OF FUNDS: Building Mortgage 11 years at 11% $25,000 St. Pauls State Bank Commercial Loan, St. Pauls State Bank 15,000 Cash from the Ashfords Savings and common Stock sale 14,167 Total Start Up Funds $54,167 A. The St. Pauls State Bank has also agreed to provide the WAY-OFF-BROADWAY DELICATESSEN with an added/open line of credit amounting to $10,000 should it be necessary. XV. BIOGRAPHIES OF THE PRINCIPALS: A. John and Mary have been married for 18 years and have two children, David, age 16 and Susan, age 14. B. Mary Ashford has a degree from the University of North Carolina where she majored in elementary education. She taught upon graduation. C. John Ashford received his degree in Textile Engineering and after spending three years as a Commissioned Reserve Naval Officer took a position with the Yorkville Atlantic Yarn Company in St. Johns. He has been with the company 18 years. His last position was Assistant Chief Engineer. John has had considerable retail store experience since he worked at his father's hardware store while in high school and during his summer vacations while attending the University of North Carolina. During his term of service in the Navy, he was stationed at the Brooklyn Naval Shipyard and became very acquainted with Jewish style delicatessens. D. John is 42 years old and Mary is 40. They have lived in St. Pauls for the past 16 years and participate in a number of community, school and church activities. E. John has resigned his position at Yorkville Atlantic Yarn Company. Mary has given notice that she most likely will not be available to do substitute teaching since both will devote full time to operating and running the WAY-OFF-BROADWAY DELICATESSEN. BUSINESS QUESTIONNAIRE Questions to answer prior to writing your Business Plan. PART I: PERSONAL QUESTIONS TO HELP ME SELECT MY BUSINESS. 1. In order to assist you in selecting the business that's right, we recommend you complete the following questions regarding your personal profile, experience, aptitude, and personal and business goals. a. What "businesses" or enterprises were you involved in during your early childhood and teens? b. Were one or both of your parents self-employed? Explain. c. Have you ever been fired from a job because of conflict with or competition with your boss or upper management? Explain. d. Where do you fit in order of offspring in your family? Oldest? Youngest? In between? e. How would you rate yourself on the following entrepreneurial traits? i. Desire to make money strong medium not important ii. Hard worker very average I just get by iii. Special talent yes no iv. Success oriented very average don't care v. Sociable very average I just fit in vi. Organized very average I never know where anything is vii. Competitive very average Winning isn't important 2. Why do you want to go into business? List your reasons below. Include both "practical", measurable reasons and personal reasons. 3. In what ways do you expect your new business to change your life during the first year? List your expectations. 4. How strong is your desire to succeed? Describe what you feel: 5. How strong is your diligence? What are some examples of how you've displayed diligence in the past? 6. How good are you with details? What are some ways you keep yourself organized? 7. How disciplined are you? What are some examples of difficult tasks you've pushed yourself to do? 8. How determined are you? What are some examples of pushing on when you've found the going tough? 9. Do you have success-oriented habits? Check yourself on the following: a. Sleeping habits early to bed, early to rise late to bed, late to rise early to bed, late to rise b. Physical condition excellent average poor c. Personal finances, checking accounts, etc. always accurate, current often behind, overdrawn a sorry mess d. Personal appearance always look sharp always casual dress up only when I have to e. Punctuality always on time usually late win a few, lose a few f. Keep appointments, promises always most of the time I'm undependable g. Friendliness I love people I tolerate people Prefer to be alone h. Work ethic I'm a steady hard worker I need to be pushed 10.What are your qualifications? Fill in the "Resume" questionnaire below. What skills do you have? What experience have you acquired that could be applied to your own business? What are your three most satisfying accomplishments? What are your hobbies and interests? What knowledge/expertise have you acquired from schools, seminars, and special training? 11. On the top of a sheet of paper, write "I Can Do". Then think about your school, work, community, and domestic experiences. List everything you have done well. Examples: organized a fund drive, built a cabin, coached a little league team, etc. List below the five things you did best or were most proud of: a. b. c. d. e. 12.Turn over the paper and list the skills you have developed over the years. It may help to list skill areas at the top of the page such as social, verbal, manual, domestic, organizational, problem solving, etc. and categorize your skills accordingly. Examples: I am convincing; I can examine the facts and make sound decisions. List below your five strongest skills. a. b. c. d. e. 13. On the top of a new sheet of paper, write "I Am". List as many adjectives or descriptive phrases as you can think of that characterize you as a person. Examples: I am dependable; I am impatient. Put a (+) in front of your positive characteristics and an (-) in front of the negative characteristics. List below what you would consider your five most important personal strengths. a. b. c. d. e. 14. Then list two personal weaknesses you would like to improve: a. b. 15. On the top of a new sheet of paper, write "I Enjoy". Complete this phrase with a listing of things you like to do. In the space below, write down five things from your list you would like to do more of: a. b. c. d. e. 16. On top of another sheet, write "I like People who...". Make a list to complete the phrase. Do the people you generally associate with in your daily life have these characteristics? List below the two that are most important to you. a. b. 17. Take out another sheet of paper. Make a list of things you would like to gain, possess or accomplish in your life. From your list, write down one goal for each of the following areas of your life: Family: Financial/Business/Professional: Physical: Social: Mental/Intellectual: 18. Select one of the goals you identified in Question 16. What resources do you already have that will help you achieve this goal? What resources do you lack? 19. Outline a step-by-step procedure for achieving this goal. Estimate the time it will take to achieve the goal, and if applicable, each step in the process: a. b. c. d. e. f. g. h. 20. List two active steps you will take to help maintain a positive attitude: a. b. 21. Review your list of skills from Question 12. List five outlets for using these skills to benefit others. a. b. c. d. e. 22. What steps can you take to manage your time more efficiently? 23. Think of an unfortunate event in your recent past. How can you use it to benefit your future? 24. List five specific things you plan to do to improve your interpersonal relationships. a. b. c. d. e. 25. How does your body tell you it is reaching the point of stress overload? What symptoms do you experience? 26. What are five things you routinely do to help you relax? a. b. c. d. e. 27. List five specific things you plan to do to control stress in your daily life. a. b. c. d. e. 28. Prepare a list of the activities you do now or will do for your business. Do not identify every task, but list the major items, such as making the product or rendering the service, invoicing, paying bills, answering the phone, making sales calls, etc. Be sure to include travel. Task Time Task Time 29.Go back through your list and estimate about how much time you devote to each item in an average week and write it in the blank beside the task. Put a plus sign (+) by those items you feel could use more time than you are now able to give. Put a minus sign (-) by the ones you think you already spend too much time on. 31. From the items with minus signs above, develop a list of specific tasks which someone else could do for you, with proper training. 32. Discuss how important employee contact with customers will be in the business you are considering. 33. What are your business goals and personal goals? List your top ten (in both categories) below. BUSINESS GOALS: (Typically concern independence, money, location, size of business, travel, people relations, status.) PERSONAL GOALS: (Typically concern self-realization, creative expression, family, spirituality, physical health, self-esteem.) 34. How many business ideas can you come up with? List them below. 35. What are your top six priority business goals? List them below. BUSINESS GOALS: 1. 2. 3. 4. 5. 6. 36. What are your top six priority personal goals? List them below. PERSONAL GOALS: 1. 2. 3. 4. 5. 6. 37. What five business candidates have you selected? List them below. 1. 2. 3. 4. 5. 38. How do your top five candidates stack up against the three questions posed below? Answer yes or no for each question and each candidate. BUSINESS ANALYSIS CHART #1 #2 #3 #4 #5 A. Satisfies most of my wants and desires B. I have, or can develop or hire, the attributes and capabilities required for success. C. Current condition/outlook is favorable. 39. After completing your BUSINESS ANALYSIS CHART, what business have you selected? Enter it below and list five important reasons why you chose this one. MY BUSINESS CHOICE IS: MY REASONS FOR CHOOSING THIS ONE ARE: 1. 2. 3. 4. 5. 40. Write your principal business goal for the next year ( or your first full year in business). Be sure it's specific, attainable, and measurable. 41. Write three objectives that will help you accomplish the goal stated above. a. b. c. 42. Write at least two tasks that will help you accomplish each of the three objectives you named. Objective 1: Task: Task: Objective 2: Task: Task: Objective 3: Task: Task: PART II. Now that I have completed my personal profile and established initial goals what additional questions about my business need to be answered? 1. Write below at least 10 questions about your business that you would like to have answers to: a. b. c. d. e. f. g. h. i. j. k. l. 2. If you did not list the following topics as part of the 10 questions listed above please add them to your list. The following questions need answers: Size of market Characteristics of your customers Income of your customers Present sales volume of your competitors Information about long-term trends in your industry 3. What information sources do you have at hand that can help answer your questions, i.e. customer lists, coupons, etc. 4. Keeping your answers to number 3 in mind, what other sources of information do you plan to use? 5. What information do you need that a survey could help you get? 6. Think about your answers to question number 5 and list below 5 questions you could use on a survey to find out more about your customers or potential customers. For now, try to avoid questions that just give you a Yes or No answer -- you're looking for specifics. Be sure to test the questionnaire before you use it for your market research. 7. What group of people do you plan to survey? 8. What method of survey do you plan to use? Why? 9. Get specific about factors affecting your business. a. What is the size (geographically and by population) of your market area? b. How many prospective customers are in your market area? (A prospective customer is a person who is likely tomakeat least one purchase in the next 12 months.) c. How many customers will actually buy from you? d. How much will they spend with you? e. What seasonal fluctuations or other variables must be taken into consideration when planning the level of your sales during the next 12 months? 10. Where will your business be located. To properly answer the location question, it will be necessary for you to obtain a map of your community. You will be able to mark the location of your competition when you identify them. You may obtain a map from either your local city or town hall, a map store, a service station, or you may draw one if no map exists. This activity is designed to be both a summary of WHERE TO LOCATE YOUR BUSINESS, and a practical guide to your own location search. a. What business are you in, or planning to enter? b. Why do (or will) your customers buy from you instead of the competition? c. Why is the location of your business important to you? d. What are the customers' needs that you must meet in order to keep their business? e. Where is the best place to start your SITE LOCATION SEARCH? f. List six places where you can get population information about your community: 1. 2. 3. 4. 5. 6. g. List FOUR kinds of CULTURAL CHARACTERISTICS of a population. 1. 2. 3. 4. h. What business trends are occurring in the community in which you are considering locating your business? Please check where applicable. i. Population: growing declining stable ii. Progressiveness of the community: Active Inactive Promotes business activity Receptive to change Open evenings (retailers) Open Sundays (retailers) i. Using your map, place an "X" where your competitors are located. Circle the spot where you feel your best location is. If you have more than one location, you may circle more than one. j. List the names and addresses of each of your present and future competitors. k. Rank the following factors as to their importance to your business. The number "1" will indicate the most important, "9" being the least important. Public transportation Parking availability Distance from residential areas Distance from business areas Traffic congestion Side of the street to locate on Width of street Location on block Appropriate business neighbors l. Will you be able to make a TRAFFIC COUNT at YOUR LOCATION or the LOCATION YOU ARE THINKING ABOUT? yes no m. List at least FIVE QUESTIONS you should answer in selecting a building for your location. 1. 2. 3. 4. 5. n. What do you need if you establish a home office? After you have answered these questions, ask your family to complete the comment section. How many square feet are available? (Measure) Is remodeling necessary? Cost: Is redecorating necessary? Cost: Are safety features necessary? Cost: Compute tax deductions: Divide total costs of your residential utilities, maintenance, improvements and telephones by percentageoffice space you will use in the home. Example: Total s.f. of office 300 Total s.f. of residence 3000 = 10% of costs List necessary licenses, permits and coverage for home office: Family Comments: 11. The next major element to be considered, is the financial aspects of your business. a. What are the three stages of financing that reflect the life cycle of a business? Seed money Start-up Financing Growth Financing b. Debt Financing is another way of defining the word loan. c. In addition to Family or Relatives you should consider several different sources of loan money. For example: i. Friends ii. Small business investment companies iii. Banks iv. Savings & loans v. Community development companies vi. Insurance companies vii. Credit unions viii. Suppliers ix. Loan companies x. Leasing companies xi. Business Brokers 12. What are the four purposes of a budget? 13. What are the titles of the three columns on a forecast (projection)? Projected sales Fixed expenses Variable expenses 14. You have selected your type business, potential market, and location. What additional items do you need to determine? a. Choose a Name for you business! List five names you are considering for your business. Rate them on a scale of 1 to 4 (Excellent, Good, Fair, Poor) as to Appropriate, Length, Descriptive and Personal Choice. Name Approp. Desc. Lgth. P.C. Total b. Identify your office equipment requirements. List the equipment you will need and the delivery dates. Check whether you will lease or buy. Equipment Date Lease Buy c. What communication equipment and service is required? Number of Lines Number of Phones Call Forwarding Call Waiting Recording Machine Answering Service Beeper Long Distance: List systems serving your area: Incoming 800 number: Yes No On a separate sheet of paper, compare costs of these systems. d. What, if any, signs do you need? Complete the section that is appropriate to your business. Home Office Do you need a sign? Yes No List types and sizes: Type Size Office Building Exterior signs in place? Yes No Do you need to negotiate for additional signs Yes No Cost Retail Signs List exterior signs: TypeSizeCost List interior signs: e. Decorating your office. Complete the section that is appropriate to your business. Home Office List items on hand: List items to purchase: Office Building List items needed (excluding equipment) and check New, Used, Lease, or Buy. Note: You can lease some art. Item New Used LeaseBuy Cost Retail Business List items needed (excluding equipment) and check New, Used, Lease, or Buy. Item New Used Lease Buy Cost f. What are my immediate cash requirements? List equipment needed: Yes No Cost Cash box and adding machine? Cash register? Type? Safe? Personnel Bonded? Number of employees in cash area? g.What are my parking requirements? List Restrictions: Reserved Spaces? # Handicapped Spaces? # Customer Parking? # h.Landscaping Yes No Cost Complete? Items needed: Shrubs? Trees? Ground Cover? (Grass, rocks, etc.) Fencing Other i. What will be your hours of operation? Definite: Total Days From To Flexible: Total Hours: j. Special Arrangements for Children: k. How will you handle paperwork i.e. filing? List equipment and supplies needed: Yes No Cost 4-drawer cabinet Hanging folders (Pendaflex) Quantity Manila Folders Quantity 3-ring binders Quantity Card Files Quantity Follow-up file In & Out baskets Quantity Other: Obtain an office supply catalog from one or two vendors. Leaf through for suggestions. l. Shipping and Receiving List choices of vendors for shipping: Local Long Distance (Surface) Long Distance (Air) Calculate total space available for receiving: Calculate total shelving space: Number of employees available to receive? m. Establishing Procedures In the space below, draw your own organization chart, leaving room for additional departments and employeesas you grow. List procedures that need to be posted, such as hours, schedules, emergencies, etc. n. Review possible problems. After discussions with friends, competitors, suppliers, and family, list additional ones that may be common to your business. o. Under what conditions will you accept returns? Yes No Anything and Everything? Exchange only? Within how many days? Repair only? Share cost with customer? No cash refunds? Breakage: No charge Cost only Retail In your business there are certain customer-related problems that will develop. If any problems are your fault, give three examples of these problems and what you would be willing to do to correct them. p. Sales: Will it be your policy to offer - Yes No Money back guarantees Limited warranties Free home trials Demonstrations Price-matching Classes q. Deliveries: Will it be your policy to offer - Yes No No deliveries Deliveries at cost UPS Local service Your vehicle Mail r. Hours: Answer the following questions. i. Are there established merchants hours in your area? Yes No If so, what are they? Days From To Days From To ii. What hours do your competitors keep? Days From To Days From To iii. Based on the above, what hours will you keep? Days From To s. Gift Wrapping:What will be your policy? Yes No Free Box only With your name Will you charge customer? How much? Paper, box and ribbon? With name on sticker? Charge customer? How much? No gift wrapping: t. Miscellaneous Policies Yes No No concern Smoking Food Pets Music Dress code 15. List two charities to which you will contribute initially. 16. Establishing your credit Yes No Have you asked your bank what kind of credit reference they will provide? Is there a dollar limit? If so, what is the amount? Have you asked for a report of your personal credit from your local credit bureau? Do you have any negative or incorrect reports? If so, how will you correct these? Explain: 17. Extending Credit Yes No Will you offer any credit? If so, what kind? Your own business charge Visa MasterCard American Express Diners Club Regional Card (Shoppers, etc.) 18.Security:In the following questions, check the security precautions you plan to take. Yes No a. Fire extinguisher How many? b. Fire drills and/or posted escape procedures? c. Signs stating policy on theft Will you prosecute? If so, at what level of dollar loss? d. Security guard e. Surveillance camera f. Other security measures (lighting, windows, one-way glass, etc.) Explain: g. Internal audits h. Perpetual inventory i. Accounting review How frequent? j. Duplicate records off-site Name of Civil Defense contact: Name: Address: Telephone: 19.What inventory procedures will you use? Yes No a.Which method will you use for inventory control? Stock count Perpetual Both Stock/Sales Ratio b. List six vendors from whom you plan to order, with their addresses, phone numbers and contacts. After contacting, fill in approximate time required for delivery. Delivery Time 1. Business Name Contact Street Address Telephone City and State Zip 2. Business Name Contact Street Address Telephone City and State Zip 3. Business Name Contact Street Address Telephone City and State Zip Delivery Time 4. Business Name Contact Street Address Telephone City and State Zip 5. Business Name Contact Street Address Telephone City and State Zip 6. Business Name Contact Street Address Telephone City and State Zip 20.Memberships: List organizations you plan to join and the contacts for information: Organization Name of ContactPhone 21. It is time for you to evaluate the product or service you plan to sell in your small business. If you will be selling a variety of products or services, select one to answer these questions. Not all of the questions may apply to your type of business. Write N/A (not applicable) when the quest a. List the main features of your product or service: b. Think of how each feature will benefit the customer. List the main benefits of each feature concentrating on the following: Savings of time, money, effort, etc; comfort, pride, enjoyment, health, life-style, peace of mind, advancement, etc. c.What would motivate a customer to buy your product or service? List as many subjective and objective buying motives as you can think of: Subjective Objective 22. Think about a major purchase you made last year. Who assumed the following roles: Initiator: Influencer: Decider: Purchaser: User: Understanding buying roles will help you sell your product or service because you will be able to determine best approach to use in various selling situations. 23. List the information you will need to qualify your initial business prospects and to prepare for the first contact. (Look for ideas like the following) Income, age, sex, educational level, life style, size of family, personal preferences, etc. a. In your business, what makes a prospect qualified? b. List your 10 most qualified prospects: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. c. How will you make your first contact with these prospects? d. Create a benefit offer in the form of a question to be used in your opening to generate interest in your product or service: e. What specific needs will your product or service satisfy? What problems will it solve? f. Write three questions you would ask a typical prospect to asses his/her needs. a. b. c. g. Create a benefit statement for your product or service. a. Assume your prospect, Mr. Smith, has a specific reason to buy. What could you say to support his need? b. Write a statement showing how a feature of your product or service relates to that need. c. Create a benefit statement for Mr. Smith. h. List five objections a prospect might raise when you ask him to buy: Examples a. Your price is too high b. I'm short of cash right now c. I hear your service is sub-par d. We're satisfied with our supplier e. I'm too busy to listen i. Create statements to answer each of these objections as you would in a sales presentation: a. I can understand your desire to keep your costs down, but I can show you that our cost is lower in the long run. b .You can put in a small order now, and we can extend your credit for 60 days. c. Here's a list of satisfied customers you can contact. And our guarantee covers you completely. d. I suggest you take a trial order, then compare the results with your present supplier. e. Would it be alright if I call you next week to set up a time that is more suitable? j. How might your prospect signal a strong desire to buy your product or service? Statements such as: What is your delivery schedule? How much could I save if I buy more than one? How does your quality compare with? Would it really save me time? What would my profit be? k. Create a trial close statement you would use during the sales presentation: Examples: When is your best day for delivery? Would you prefer to pay cash, or may we bill you? How many do you need during the next month? Do you see how this would save you time and money? l. Your prospect seems ready to buy. What will you say to close the sale? Examples We can have these delivered tomorrow. How many of each do you need? Can we start your service this week or next? m. In your business: i. What are some ways you can use the telephone to sell your product or service? ii. When would your prime selling time be? iii. Devise a record keeping system for your telephone selling. n. What is the objective of direct mail in your business? Possible answers: To create a pre-qualified prospect list; to generate sales, to create awareness, to announce special events or special sale. o. What action do you want the reader to take? p. Compile your mailing list. q. Plan your direct mail package. i. Write a sales letter. (Use a separate sheet of paper and attach it.) ii. Design an order form. (Use a separate sheet of paper and attach it.) PART III: Now that you have started your business what do you need to look for? 1. Are you getting discouraged? If so, list the reasons or factors involved. 2. What steps might you take to get yourself "up" again. 3. Are you noticing any signs that might indicate you are in the wrong business? If so, what are they? (If not, move on to Question 4.) 4. What are the five reasons you're confident you have chosen the right business? a. b. c. d. e. 5. What problems, if any, do you detect regarding your business professionals (CPA, attorney, etc.), potential partners or current employees? 6. Based on your experience to date, what mistakes did you make and how would you correct them? 7. What activities during the past 48 hours consumed more than 15 minutes each (itemize)? 8. How many of the activities listed in Question 7 contribute substantially to your productivity and business goals? Circle the ones that do. 9. Other than salaries and fixed overhead expense, what are five expense items you could reduce without seriously affecting sales or productivity? 10. In what way are your company money matters safeguarded against embezzlement and theft? 11. What "danger signs" can you look for regarding a disgruntled employee, shrinkage, bottlenecks and/or turnover? Specify. 12. What could you do to correct problem(s)? 13. What transaction can you recall in which you "won" in a compromise? How about one you "lost"? Describe both: WON: LOST: 14. In what ways do you monitor and control the quality of your product or service? 15. In what ways might your market (your customers, their buying patterns/needs) change during the next three years? 16. Who are your top four competitors? How much of the "market" does each of you share? 17. In what ways have you used and/or might use the SBA?