Business Plan Writing WorkshopThis presentation was created and compiled by staff at the Farmingdale State Small Business Development Center.This presentation was created and compiled by staff at the Farmingdale State Small Business Development Center.Presented By:Small Business Development CenterIntroductionFarmingdale Small Business Development CenterSmall Business AdministrationAgenda9am 4pm9am 4pmWelcome and IntroductionsIce Breaker Business Plan OutlineWriting WorkshopLunch BreakWriting Workshop Questions and AppointmentsBusiness Plan What?What? RoadmapRoadmap Self-checking toolSelf-checking tool Funding toolFunding tool Operating guideOperating guide Why?Why? 1,000,001 questions1,000,001 questions Infinite number of Infinite number of possibilitiespossibilities Distractions galoreDistractions galore HowLong?HowLong? 6-9 pages for the 6-9 pages for the narrative, plus financials/ narrative, plus financials/ appendicesappendicesGeneral RulesMake it an interesting read!Make it an interesting read! Bullet pointsBullet points Balance creativity while still getting your point Balance creativity while still getting your point acrossacross Use short (1-3 sentence) paragraphsUse short (1-3 sentence) paragraphs Be careful with using industry jargonBe careful with using industry jargonWrite with objectivityWrite with objectivity Consider using the third-personConsider using the third-personFocus more on initial future (1-2 years), Focus more on initial future (1-2 years), less on later yearsless on later yearsOutline of a Business PlanCover SheetExecutive SummaryTable of Contents1)Statement of Purpose2)Company History3)Business Description4)Products and ServicesOutline of a Business Plan5)Market Analysisa.CustomersCustomersb.CompetitionCompetitionc.Marketing StrategyMarketing Strategy6)Management7)Operations8)Financial Plan9)Appendices Cover SheetIdentity informationIdentity informationThe words “Business PlanThe words “Business PlanYour name and business nameYour name and business nameCompany logoCompany logoAddressAddressTelephone numberTelephone numberFax NumberFax NumberEmail AddressEmail AddressWeb Address (URL)Web Address (URL)Submission dateSubmission dateLooks vs. contentLooks vs. contentExecutive SummaryMost important part of the plan30-second testConcise explanationVenture objectivesVenture objectivesMarket prospectsMarket prospectsFinancial forecastsFinancial forecastsSources and usesSources and usesWRITTEN LASTTable of ContentsInclude page numbersList of headingsMajorMajorSubsectionsSubsectionsSame font!Statement of PurposeThe business plans objectives: financing The business plans objectives: financing or operating guide or operating guide FinancingFinancing How much money is needed?How much money is needed? What will the money be used for?What will the money be used for? How will the funds benefit the business?How will the funds benefit the business? Why does this loan or investment make Why does this loan or investment make business sense?business sense? How will the funds be repaid?How will the funds be repaid?Operating guideOperating guide Who will use it?Who will use it? Will it layout strategy plans?Will it layout strategy plans? How will it be updated?How will it be updated?Becoming self-sufficientBecoming self-sufficientSample: Statement of PurposeThis business plan is written to secure financing This business plan is written to secure financing in the amount of $24,000, which will cover the in the amount of $24,000, which will cover the following costs:following costs: $10,000 in equipment$10,000 in equipment $14,000 in operating capital$14,000 in operating capitalThe loan will supplement the owners equity The loan will supplement the owners equity investment of $20,000, and will be repaid beginning investment of $20,000, and will be repaid beginning the month after disbursement according to lender the month after disbursement according to lender terms. Funds will play a crucial role in sustaining the terms. Funds will play a crucial role in sustaining the business as the client base grows, and will allow the business as the client base grows, and will allow the business to become self-sufficient by the beginning of business to become self-sufficient by the beginning of year two.year two.Company HistoryMission Statement Mission Statement Basic product descriptionBasic product descriptionNames of principals and brief background on eachNames of principals and brief background on eachLegalities: business typeLegalities: business typeCompany locationCompany locationNumber of employeesNumber of employeesCustomer highlightsCustomer highlightsYour niche and unique qualitiesYour niche and unique qualitiesStrategic alliancesStrategic alliancesAwards and meritsAwards and meritsCompany milestones (business formation, opening Company milestones (business formation, opening date, hiring employees, revenue levels/ growth) date, hiring employees, revenue levels/ growth) 1-3 year plan future milestones to reach (sales 1-3 year plan future milestones to reach (sales goals, hiring employees)goals, hiring employees)Sample: Company History (1 of 2)ABC Child Care strives to become the most-well ABC Child Care strives to become the most-well known and reputable service provider in the XYZ known and reputable service provider in the XYZ area, with a targeted focus on safety, enrichment, area, with a targeted focus on safety, enrichment, and comfort. The Company was founded based on a and comfort. The Company was founded based on a growing trend: quality child care is a key issue for growing trend: quality child care is a key issue for working parents, and has now become a top priority working parents, and has now become a top priority for New York State. for New York State. The business is owned and operated by its co-The business is owned and operated by its co-founders, John and Jane Doe. Each has had founders, John and Jane Doe. Each has had extensive experience working with children prior to extensive experience working with children prior to opening ABC, in both a teaching and managing opening ABC, in both a teaching and managing capacity. Since opening in March of XXXX, ABC capacity. Since opening in March of XXXX, ABC Building Blocks Child Care has reached the following Building Blocks Child Care has reached the following milestones: milestones: Sample: Company History (2 of 2) Incorporated as a New York State S-Corporation and Incorporated as a New York State S-Corporation and became licensed in March, XXXXbecame licensed in March, XXXX Renovated owned residence of principal to operate, Renovated owned residence of principal to operate, at 123 Main Street, at 123 Main Street, AnytownAnytown, NY in March XXXX, NY in March XXXX Enlisted first 6 full-time clients in April XXXXEnlisted first 6 full-time clients in April XXXX Reached monthly break even with 8 full-time clients Reached monthly break even with 8 full-time clients in June XXXXin June XXXX Hired full-time staff teacher June XXXXHired full-time staff teacher June XXXX $50,000 in revenue by September XXXX$50,000 in revenue by September XXXXABC plans to reach its capacity of 12 children by the ABC plans to reach its capacity of 12 children by the end of December XXXX, where projected monthly income end of December XXXX, where projected monthly income will be $10,000. By June of the following year, the ABC will will be $10,000. By June of the following year, the ABC will look to expand to a center-based day care, with a capacity look to expand to a center-based day care, with a capacity of up to 60 children. Existing clients and waiting list will be of up to 60 children. Existing clients and waiting list will be transferred and housed in new facility. Please see appendix transferred and housed in new facility. Please see appendix for projections and growth chart. for projections and growth chart. Business DescriptionMission statementMission statementLegalities: business typeLegalities: business typeBasic product or service descriptionBasic product or service descriptionNew, takeover, expansion, franchiseNew, takeover, expansion, franchiseGeneral strategy planGeneral strategy plan List of planned milestones (business formation, List of planned milestones (business formation, opening date, hiring employees, reaching opening date, hiring employees, reaching certain revenue goals)certain revenue goals)Planned strategic alliancesPlanned strategic alliancesWork already doneWork already doneExperienceinthebusinessExperienceinthebusinessSample: Business Description (1 of 3)JavaNet will provide customers with a unique and JavaNet will provide customers with a unique and innovative environment for enjoying great coffee, specialty innovative environment for enjoying great coffee, specialty beverages, and bakery items. JavaNet, soon to be located beverages, and bakery items. JavaNet, soon to be located in downtown Eugene on 10th and Oak, will offer the in downtown Eugene on 10th and Oak, will offer the community easy and affordable access to the Internet. community easy and affordable access to the Internet. JavaNet will provide full access to email, WWW, FTP, JavaNet will provide full access to email, WWW, FTP, Usenet and other Internet applications such as Telnet and Usenet and other Internet applications such as Telnet and Gopher.Gopher.JavaNet will appeal to individuals of all ages and JavaNet will appeal to individuals of all ages and backgrounds. The instructional Internet classes, and the backgrounds. The instructional Internet classes, and the helpful staff that JavaNet provides, will appeal to the helpful staff that JavaNet provides, will appeal to the audience that does not associate themselves with the audience that does not associate themselves with the computer age. This educational aspect will attract younger computer age. This educational aspect will attract younger and elderly members of the community who are rapidly and elderly members of the community who are rapidly gaining interest in the unique resources that online gaining interest in the unique resources that online communications have to offer. The downtown location will communications have to offer. The downtown location will provide business people with convenient access to their provide business people with convenient access to their morning coffee and online needs.morning coffee and online needs.Sample: Business Description (2 of 3)JavaNet is a privately held Oregon Limited Liability JavaNet is a privately held Oregon Limited Liability Corporation. Cale Bruckner, the founder of JavaNet, is Corporation. Cale Bruckner, the founder of JavaNet, is the majority owner. Luke Walsh, Doug Wilson, and John the majority owner. Luke Walsh, Doug Wilson, and John Underwood, all hold minority stock positions as private Underwood, all hold minority stock positions as private investors.investors.JavaNets start-up costs will cover coffee making JavaNets start-up costs will cover coffee making equipment, site renovation and modification, capital to equipment, site renovation and modification, capital to cover losses in the first year, and the communications cover losses in the first year, and the communications equipment necessary to get its customers online.equipment necessary to get its customers online.The communications equipment necessary to The communications equipment necessary to provide JavaNets customers with a high-speed provide JavaNets customers with a high-speed connection to the Internet and the services it has to connection to the Internet and the services it has to offer make up a large portion of the start-up costs. offer make up a large portion of the start-up costs. These costs will include the computer terminals and all These costs will include the computer terminals and all costs associated with their set-up. Costs will also be costs associated with their set-up. Costs will also be designated for the purchase of two laser printers and a designated for the purchase of two laser printers and a scanner.scanner.In addition, costs will be allocated for the In addition, costs will be allocated for the purchase of coffee making equipment. One espresso purchase of coffee making equipment. One espresso machine, an automatic coffee grinder, and minor machine, an automatic coffee grinder, and minor additional equipment will be purchased from Allann additional equipment will be purchased from Allann Brothers.Brothers.The site at 10th and Oak will require funds for The site at 10th and Oak will require funds for renovation and modification. A single estimated figure renovation and modification. A single estimated figure will be allocated for this purpose. The will be allocated for this purpose. The renovation/modification cost estimate will include the renovation/modification cost estimate will include the costs associated with preparing the site for opening costs associated with preparing the site for opening business.business.Please refer to the attached appendix for strategic Please refer to the attached appendix for strategic goals and measures during the first 24 months.goals and measures during the first 24 months.Sample: Business Description (3 of 3)Products and ServicesDetailed description of products or services Indicate stage of development: in-process, prototypes, samplesPatents or trademarks, legal contracts, licensing agreements, regulations, certifications“The Brochure SectionSample: Products and Services (1 of 3)At ABC Building Blocks Child Care, we continually At ABC Building Blocks Child Care, we continually work to provide the most well-balanced day care work to provide the most well-balanced day care schedule possible for the children. Every day is a mix schedule possible for the children. Every day is a mix of lesson time and free play with a weekly theme, of lesson time and free play with a weekly theme, generally a number or letter. Most children arrive generally a number or letter. Most children arrive between 7:30 and 9:30am. The early arrivals eat between 7:30 and 9:30am. The early arrivals eat breakfast at the facility and then engage in free play breakfast at the facility and then engage in free play as the other children arrive and join them. At 9:30, all as the other children arrive and join them. At 9:30, all of the children sit down for a snack. All food served of the children sit down for a snack. All food served meets the guidelines set forth by the New York State meets the guidelines set forth by the New York State Child and Adult Care Food Program. After snack, there Child and Adult Care Food Program. After snack, there is a lesson. Each day, the program begins with the is a lesson. Each day, the program begins with the pledge of allegiance and then moves to activities pledge of allegiance and then moves to activities related to the calendar.related to the calendar.Sample: Products and Services (2 of 3)The program includes discussion of the months of The program includes discussion of the months of the year, days of the week, seasons, holidays, and the the year, days of the week, seasons, holidays, and the weather. During the lesson, two-to-four worksheets weather. During the lesson, two-to-four worksheets (made up in advance) on the topic of the week are used. (made up in advance) on the topic of the week are used. The sheets include tracing of the letter or number The sheets include tracing of the letter or number the children are learning, coloring pictures of the related the children are learning, coloring pictures of the related objects, matching games, etc. At least once each week, objects, matching games, etc. At least once each week, the children use paints, glue, and scissors to complete a the children use paints, glue, and scissors to complete a project or craft pertaining to the scheduled theme.project or craft pertaining to the scheduled theme.After lessons, the children read a book, or are After lessons, the children read a book, or are taught a new song. This is followed by free play prior to taught a new song. This is followed by free play prior to lunch. It is a goal of the center to bring the children lunch. It is a goal of the center to bring the children outdoors, weather permitting, each day. At noon, lunch outdoors, weather permitting, each day. At noon, lunch is served, and is generally a hot meal, consisting of a is served, and is generally a hot meal, consisting of a meat, vegetable, fruit, and grain (such as pasta, rice, or meat, vegetable, fruit, and grain (such as pasta, rice, or bread) as per the New York State guidelines.bread) as per the New York State guidelines.After lunch, the morning program is repeated After lunch, the morning program is repeated and expanded. This is followed by afternoon and expanded. This is followed by afternoon snack at 2:30pm. Since parents begin pickups at snack at 2:30pm. Since parents begin pickups at 3:30pm, the children are allowed free play with 3:30pm, the children are allowed free play with developmental toys such as puzzles, blocks, and developmental toys such as puzzles, blocks, and Legos, all of which are kept within their reach.Legos, all of which are kept within their reach.Diapers are changed as needed throughout Diapers are changed as needed throughout the day and records are kept of the changes. The the day and records are kept of the changes. The younger children are put down to nap either in younger children are put down to nap either in porta-cribs or on mats during the morning or porta-cribs or on mats during the morning or afternoon hours as dictated by their individual afternoon hours as dictated by their individual schedules and the parents wishes. Hands-on schedules and the parents wishes. Hands-on computer training is planned once the center computer training is planned once the center moves to its new location and space permits a moves to its new location and space permits a computer center.computer center.Sample Products and Services (3 of 3)Additional Sample: Products and Services (1 of 3)JavaNet will provide full access to email, WWW, FTP, JavaNet will provide full access to email, WWW, FTP, Usenet and other Internet applications such as Telnet Usenet and other Internet applications such as Telnet and Gopher. Printing, scanning, and introductory and Gopher. Printing, scanning, and introductory courses to the Internet will also be available to the courses to the Internet will also be available to the customer. JavaNet will also provide customers with a customer. JavaNet will also provide customers with a unique and innovative environment for enjoying great unique and innovative environment for enjoying great coffee, specialty beverages, and bakery items.coffee, specialty beverages, and bakery items.JavaNet will provide its customers with full access to JavaNet will provide its customers with full access to the Internet and common computer software and the Internet and common computer software and hardware. Some of the Internet and computing services hardware. Some of the Internet and computing services available to JavaNet customers are listed below:available to JavaNet customers are listed below: Access to external POP3 email accounts.Access to external POP3 email accounts. Customers can sign up for a Customers can sign up for a JavaNetJavaNet email email account. This account will be managed by account. This account will be managed by JavaNetJavaNet servers and accessible from computer systems servers and accessible from computer systems outside the outside the JavaNetJavaNet network. network. Additional Sample: Products and Services (2 of 3) FTP, Telnet, Gopher, and other popular Internet FTP, Telnet, Gopher, and other popular Internet utilities will be available.utilities will be available. Access to Netscape or Internet Explorer browser.Access to Netscape or Internet Explorer browser. Access to laser and color printing. Access to laser and color printing. Access to popular software applications like Adobe Access to popular software applications like Adobe Photoshop and Microsoft Word. Photoshop and Microsoft Word. JavaNetJavaNet will also provide its customers with access to will also provide its customers with access to introductory Internet and email classes. These classes will introductory Internet and email classes. These classes will be held in the afternoon and late in the evening. By be held in the afternoon and late in the evening. By providing these classes, providing these classes, JavaNetJavaNet will build a client base will build a client base familiar with its services. The computers, Internet access, familiar with its services. The computers, Internet access, and classes wouldnt mean half as much if taken out of the and classes wouldnt mean half as much if taken out of the environment environment JavaNetJavaNet will provide. Good coffee, specialty will provide. Good coffee, specialty drinks, bakery goods, and a comfortable environment will drinks, bakery goods, and a comfortable environment will provide provide JavaNetJavaNet customers with a home away from home. customers with a home away from home. A place to enjoy the benefits of computing in a comfortable A place to enjoy the benefits of computing in a comfortable and well-kept environment.and well-kept environment.Additional Sample: Products and Services (3 of 3)JavaNet will obtain computer support and Internet JavaNet will obtain computer support and Internet access from Bellevue Computers located in Eugene. access from Bellevue Computers located in Eugene. Bellevue will provide the Internet connections, network Bellevue will provide the Internet connections, network consulting, and the hardware required to run the consulting, and the hardware required to run the JavaNetwork. Allann Brothers will provide JavaNet with JavaNetwork. Allann Brothers will provide JavaNet with coffee equipment, bulk coffee, and paper supplies. At this coffee equipment, bulk coffee, and paper supplies. At this time, a contract for the bakery items has not been time, a contract for the bakery items has not been completed. JavaNet is currently negotiating with Humble completed. JavaNet is currently negotiating with Humble Bagel and the French Horn to fulfill the requirement.Bagel and the French Horn to fulfill the requirement.JavaNet will invest in high-speed computers to provide JavaNet will invest in high-speed computers to provide its customers with a fast and efficient connection to the its customers with a fast and efficient connection to the Internet. The computers will be reliable and fun to work Internet. The computers will be reliable and fun to work with. JavaNet will continue to upgrade and modify the with. JavaNet will continue to upgrade and modify the systems to stay current with communications technology. systems to stay current with communications technology. One of the main attractions associated with Internet cafes, One of the main attractions associated with Internet cafes, is the state of the art equipment available for use. Not is the state of the art equipment available for use. Not everyone has a Pentium PC in their home or office.everyone has a Pentium PC in their home or office.Market AnalysisIndustry analysis Customers: individual, businessCompetitionMarketing StrategyCiteSources!Market Analysis: Industry AnalysisMarket backgroundIndustry-wide information, trendsLocal industry information, trendsMarket capture and expectations Social, economic, legal, technological issuesMarket Analysis: CustomersCustomer definition, consistencyIndividual customer demographicsLocation, age, gender, occupationLocation, age, gender, occupationEthnic group, lifestyle, education, Ethnic group, lifestyle, education, income income Business customer demographicsSector, location, structureSector, location, structureSales level, distribution classification, Sales level, distribution classification, number of employeesnumber of employeesSample: Market AnalysisThe child care industry is an ever expanding segment of The child care industry is an ever expanding segment of todays business world necessitated by the increase in families todays business world necessitated by the increase in families who have two working parents. In Anytown and the surrounding who have two working parents. In Anytown and the surrounding areas, these individuals are predominantly between the ages of areas, these individuals are predominantly between the ages of 30 and 45 years old with a median age of 36.6. The majority 30 and 45 years old with a median age of 36.6. The majority have completed high school and many have varying degrees of have completed high school and many have varying degrees of college education. While the dual incomes (most families earn college education. While the dual incomes (most families earn between $65,000 and $100,000) provide some disposable between $65,000 and $100,000) provide some disposable income, approximately 65% have at least two children under the income, approximately 65% have at least two children under the age of sixteen. These people are wealthy enough to be able to age of sixteen. These people are wealthy enough to be able to afford day care, but unlikely to have live-in help. afford day care, but unlikely to have live-in help. Demographic research conducted uncovered the following:Demographic research conducted uncovered the following: the population of children under the age of six years old is the population of children under the age of six years old is 5,307 within the surrounding three-mile radius5,307 within the surrounding three-mile radius parents of these children seek quality daycare with parents of these children seek quality daycare with extended hours to accommodate long work days and extended hours to accommodate long work days and schedulesschedulesABC Building Blocks will serve children under six years old, and ABC Building Blocks will serve children under six years old, and open at 7:00am and remain open until 7:00pm. Parents can open at 7:00am and remain open until 7:00pm. Parents can conveniently drop their children off on their way to work and conveniently drop their children off on their way to work and pick them up on their way home.pick them up on their way home.CompetitionRule of Three for Competitive StudyRule of Three for Competitive Study Why your company is superiorWhy your company is superior Trends in competitive companiesTrends in competitive companies Similar and dissimilarSimilar and dissimilar SWOT (strengths, weaknesses, opportunities, SWOT (strengths, weaknesses, opportunities, threats)threats) Lessons learnedLessons learned AdvertisingAdvertising Eye on the futureEye on the futureCompetitivegridandexplanationCompetitivegridandexplanationSample: Competition (1 of 2)The main competitors in the retail coffee The main competitors in the retail coffee segment are Cafe Paradisio, Full City, Coffee segment are Cafe Paradisio, Full City, Coffee Corner and Allann Bros. These businesses are Corner and Allann Bros. These businesses are located in or near the downtown area, and target located in or near the downtown area, and target a similar segment to JavaNets (i.e. educated, a similar segment to JavaNets (i.e. educated, upwardly-mobile students and business people).upwardly-mobile students and business people).Competition from online service providers Competition from online service providers comes from locally-owned businesses as well as comes from locally-owned businesses as well as national firms. There are approximately eight, national firms. There are approximately eight, local, online service providers in Eugene. This local, online service providers in Eugene. This number is expected to grow with the increasing number is expected to grow with the increasing demand for Internet access. Larger, online demand for Internet access. Larger, online service providers, such as AOL and CompuServe service providers, such as AOL and CompuServe are also a competitive threat to JavaNet. Due to are also a competitive threat to JavaNet. Due to the nature of the Internet, there are no the nature of the Internet, there are no geographical boundaries restricting competition.geographical boundaries restricting competition.Due to intense competition, cafe owners must Due to intense competition, cafe owners must look for ways to differentiate their place of look for ways to differentiate their place of business from others in order to achieve and business from others in order to achieve and maintain a competitive advantage. The founder of maintain a competitive advantage. The founder of JavaNet realizes the need for differentiation and JavaNet realizes the need for differentiation and strongly believes that combining a cafe with strongly believes that combining a cafe with complete Internet service is the key to success. complete Internet service is the key to success. The fact that no cyber-cafes are established in The fact that no cyber-cafes are established in Eugene, presents JavaNet with a chance to enter Eugene, presents JavaNet with a chance to enter the window of opportunity and enter into a the window of opportunity and enter into a profitable niche in the market.profitable niche in the market.JavaNet will be the first Internet cafe in JavaNet will be the first Internet cafe in Eugene. JavaNet will differentiate itself from the Eugene. JavaNet will differentiate itself from the strictly-coffee cafes in Eugene by providing its strictly-coffee cafes in Eugene by providing its customers with Internet and computing services.customers with Internet and computing services.Sample: Competition (2 of 2)Competitive GridCompetitorCompetitorBoboSalonandBoboSalonandStylingStyling JohnnysHairJohnnysHairBESTCUTSBESTCUTSOfferingsOfferingsMens/womens Mens/womens cut/styles/color permscut/styles/color permsMens cuts onlyMens cuts onlyMens/ womens Mens/ womens cut/ style/ color/ cut/ style/ color/ perms perms Service PricesService PricesStarts at $38Starts at $38Starts at $50Starts at $50Starts at $30Starts at $30Retail PricesRetail Prices100% markup 100% markup 100% markup100% markup75% markup75% markupLocationLocationHigh traffic, highly High traffic, highly visiblevisibleModerate traffic, Moderate traffic, highly visiblehighly visibleHigh traffic,High traffic,not visiblenot visibleExpertiseExpertise20+years, up-to-date 20+years, up-to-date trendstrends15+ years, 15+ years, young hairstylistsyoung hairstylists13+ years, up-to-13+ years, up-to-date trendsdate trendsServiceServiceSet hours, little Set hours, little schedule flexibilityschedule flexibilityManager never Manager never therethereCustom hours to Custom hours to suit clients needssuit clients needsTurnoverTurnoverLowLowHighHighSole stylistSole stylistCapacityCapacity11 active chairs11 active chairs8 active chairs8 active chairs1 active chair1 active chairClient BaseClient BaseOver 4000Over 4000? ?Over 300Over 300Marketing StrategyObtaining a profitable share of the entire marketplaceProduct: sellable aspects, brand imageProduct: sellable aspects, brand imagePricing: cost-plus or economic valuePricing: cost-plus or economic valuePlacement Placement PromotionPromotionSample: Marketing StrategyJavaNet will position itself as an upscale JavaNet will position itself as an upscale coffee house and Internet service provider. It will coffee house and Internet service provider. It will serve high-quality coffee and espresso specialty serve high-quality coffee and espresso specialty drinks at a competitive price. Due to the number drinks at a competitive price. Due to the number of cafes in Eugene, it is important that JavaNet of cafes in Eugene, it is important that JavaNet sets fair prices for its coffee. JavaNet will use sets fair prices for its coffee. JavaNet will use advertising as its main source of promotion. Ads advertising as its main source of promotion. Ads placed in The Register Guard, Eugene Weekly, placed in The Register Guard, Eugene Weekly, and the Emerald will help build customer and the Emerald will help build customer awareness. Accompanying the ad will be a awareness. Accompanying the ad will be a coupon for a free hour of Internet travel. coupon for a free hour of Internet travel. Furthermore, JavaNet will give away three free Furthermore, JavaNet will give away three free hours of Internet use to beginners who sign up hours of Internet use to beginners who sign up for an introduction to the Internet workshop for an introduction to the Internet workshop provided by JavaNet.provided by JavaNet.ManagementJob descriptions of the decision makers“I do everything!Compensation, benefitsContribution and background as leverage to performAdvisory boardSample: Management (1 of 2)Mr. Jarvis was born in Anytown, USA, and has lived Mr. Jarvis was born in Anytown, USA, and has lived there all his life. After graduating from local schools and there all his life. After graduating from local schools and serving in the US Navy for three years, he became a serving in the US Navy for three years, he became a self-employed carpenter, taking night courses in small self-employed carpenter, taking night courses in small business management and sales at the University of business management and sales at the University of California, with the aim of owning and managing a retail California, with the aim of owning and managing a retail store. He currently serves on the local zoning board. He store. He currently serves on the local zoning board. He and his wife (a medical secretary) live in Anytown with and his wife (a medical secretary) live in Anytown with their two children.their two children.Mr. Bo was born in Utah, attended schools in Texas, Mr. Bo was born in Utah, attended schools in Texas, Nebraska, and New York, and served four years in the Nebraska, and New York, and served four years in the Marines (rank upon separation: E-3). He test-drove Marines (rank upon separation: E-3). He test-drove motorcycles for a year, then served as parts manager for motorcycles for a year, then served as parts manager for Wheely Cycles, Inc. before joining the Fatback Fish Wheely Cycles, Inc. before joining the Fatback Fish Division of Tasty Foods as a packer in March 1989 in Division of Tasty Foods as a packer in March 1989 in their East Machias, Maine, plant. In June 1996, he their East Machias, Maine, plant. In June 1996, he resigned as line foreman of the Frozen Food Filleting resigned as line foreman of the Frozen Food Filleting Department to join Mr. Jarvis in Finestkind. He is Department to join Mr. Jarvis in Finestkind. He is unmarried and lives in Anytown.unmarried and lives in Anytown.Sample: Management (2 of 2)Both men are healthy and energetic. They believe their Both men are healthy and energetic. They believe their energies complement each other and help make Finestkind a energies complement each other and help make Finestkind a success. In particular, Mr. Bo knows all of the fishermen while Mr. success. In particular, Mr. Bo knows all of the fishermen while Mr. Jarvis is a well-known member of the community. Because Mr. Bo Jarvis is a well-known member of the community. Because Mr. Bo has had experience in cost control and line management, he will has had experience in cost control and line management, he will be responsible for the store and inventory control. Mr. Jarvis will be responsible for the store and inventory control. Mr. Jarvis will be primarily responsible for developing the wholesale business. be primarily responsible for developing the wholesale business. They will set policies together. Personnel decisions will be made They will set policies together. Personnel decisions will be made jointly.jointly.Salaries will be $1,500/ month for the first year to enable the Salaries will be $1,500/ month for the first year to enable the business to pay off start-up costs. Mr. Jarvis wife earns enough to business to pay off start-up costs. Mr. Jarvis wife earns enough to support their family; Mr. Bos personal expenditures are low support their family; Mr. Bos personal expenditures are low because he shares a house with five other men. In the second because he shares a house with five other men. In the second year they will earn $2,000/ month; in the third year $2,500/ year they will earn $2,000/ month; in the third year $2,500/ month with any profits returned to the business.month with any profits returned to the business.In order to augment their skills, they have enlisted the help In order to augment their skills, they have enlisted the help of Harris and Wakeman (CPAs), James, Garvey, and Kippers of Harris and Wakeman (CPAs), James, Garvey, and Kippers (attorneys), and Jake Stemmer, a retired banker who will be on (attorneys), and Jake Stemmer, a retired banker who will be on their advisor board. Other advisory board members are Steven their advisor board. Other advisory board members are Steven Tessus, business consultant; the University of Californias Venture Tessus, business consultant; the University of Californias Venture Incubator Centers John Lawrence; and Peter Shortt of FFFR (First Incubator Centers John Lawrence; and Peter Shortt of FFFR (First For Fish Retailers). This board will provide ongoing management.For Fish Retailers). This board will provide ongoing management.Production/ OperationsLogisticsLogistics plant location, facilities needed, space plant location, facilities needed, space requirements, capital equipment needed, labor requirements, capital equipment needed, labor requirements requirements If applicable: purchasing policy, quality control If applicable: purchasing policy, quality control program, inventory control system, production program, inventory control system, production cost breakdown, subcontractscost breakdown, subcontractsEnvironmental and other issuesEnvironmental and other issuesFurther research and developmentFurther research and developmentWhat is done vs. what is TO BE doneWhat is done vs. what is TO BE doneSample: Production/ Operations (1 of 3)The Companys facilities will include a 120-foot live-aboard The Companys facilities will include a 120-foot live-aboard vessel designed specifically for diving. This vessel will include vessel designed specifically for diving. This vessel will include private rooms, restaurant-like meals, a photo lab, and a dive private rooms, restaurant-like meals, a photo lab, and a dive classroom for divers who want to brush up on dive techniques, classroom for divers who want to brush up on dive techniques, and a medical room for treatment of any injuries that might be and a medical room for treatment of any injuries that might be incurred. Also aboard is a jacuzzi and unlimited dry air supply for incurred. Also aboard is a jacuzzi and unlimited dry air supply for air tanks. air tanks. The land-based office will sit along the beach and have its The land-based office will sit along the beach and have its own covered port for maintaining the vessel and keeping it in own covered port for maintaining the vessel and keeping it in good condition when not underway. The office will be easily good condition when not underway. The office will be easily accessible on a paved road. The Company will carry thirty air accessible on a paved road. The Company will carry thirty air tanks, thirty pairs of masks, fins, and snorkels, thirty weight tanks, thirty pairs of masks, fins, and snorkels, thirty weight belts, thirty BCUs, thirty regulators, and fifty pounds of weights. belts, thirty BCUs, thirty regulators, and fifty pounds of weights. A number of different accessories will be for rent by the dive. A number of different accessories will be for rent by the dive. Such accessories include underwater cameras, dive knives, Such accessories include underwater cameras, dive knives, underwater lights, and gloves, dive computers, and torpedos.underwater lights, and gloves, dive computers, and torpedos.In order to maintain the quality of equipment, all of it, from In order to maintain the quality of equipment, all of it, from the snorkel to the boat engine is inspected monthly by owners. the snorkel to the boat engine is inspected monthly by owners. Defective items will be returned to suppliers for a new product Defective items will be returned to suppliers for a new product replacement. The air tanks will be checked yearly as required by replacement. The air tanks will be checked yearly as required by law by a licensed technician. law by a licensed technician. Sample: Production/ Operations (2 of 3)All equipment will be hosed down with fresh water All equipment will be hosed down with fresh water extensively after every dive to maintain its quality. extensively after every dive to maintain its quality. Salt water will not remain on any equipment to be Salt water will not remain on any equipment to be stored. The restaurant will maintain above standard stored. The restaurant will maintain above standard health code regulations with an extensive cleaning of health code regulations with an extensive cleaning of the all-aluminum kitchen.the all-aluminum kitchen.To keep track of equipment, a weekly count will be To keep track of equipment, a weekly count will be taken of all equipment aboard the vessel. There will taken of all equipment aboard the vessel. There will be a count before passengers board and before be a count before passengers board and before passengers leave.passengers leave.Operations will be handled by the owners, by Operations will be handled by the owners, by which a handout will be given to all hands daily as to which a handout will be given to all hands daily as to what their assigned jobs will be. The assignments will what their assigned jobs will be. The assignments will be fairly routine from day to day. Before each dive, all be fairly routine from day to day. Before each dive, all divers will be surveyed, and given a thorough and divers will be surveyed, and given a thorough and illustrated briefing to clear up any confusion. illustrated briefing to clear up any confusion. Sample: Production/ Operations (3 of 3)Four part-time hands will be hired at $15/ hour, Four part-time hands will be hired at $15/ hour, for 20 hours per week each. Owners will cover the for 20 hours per week each. Owners will cover the employee payroll requirements: medicare, social employee payroll requirements: medicare, social security, workers compensation, unemployment, security, workers compensation, unemployment, which will amount to an additional $4 per each which will amount to an additional $4 per each employee hour worked. No medical benefits will be employee hour worked. No medical benefits will be offered.offered.Sources of supply include: Jamison Scuba and Sources of supply include: Jamison Scuba and Water Lung (scuba equipment), Nighthawk Solutions Water Lung (scuba equipment), Nighthawk Solutions (lighting equipment), Bahamas Boats (live-aboard (lighting equipment), Bahamas Boats (live-aboard vessel), and Harvey Foods (food).vessel), and Harvey Foods (food).The Company will purchase supplies in bulk to The Company will purchase supplies in bulk to receive a discount on the merchandise. Bills will be receive a discount on the merchandise. Bills will be paid off within ten days of arrival to take advantage of paid off within ten days of arrival to take advantage of the 2% discount. All orders and payments are the 2% discount. All orders and payments are approved by owners.approved by owners.“Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete? - Luke 14:28Maximum sway at top caused by metal dilation: 18 cm (7 inches). Pressure on foundation: 4.1 to 4.5 kg per square centimeter 15,000 iron pieces (excluding rivets). 2.5 million rivets. 40 tons of paint. 1671 steps to the top. Maximum sway at top caused by wind: 12 cm (4.75 inches). Maximum sway at top caused by metal dilation: 18 cm (7 inches). Weight of elevator systems: 946,000 kg (1042.8 tons). Total weight: 8.56 million kg (9441 tons). Weight of foundations: 277,602 kg (306 tons). Size of base area: 10,281.96 square meters (2.54 acres). Cost of construction: 7.8 million francs ($1.5 million). How Much $ Do I Need?Determine start up costs and estimate monthly operating costs to determine your working capital needsFinancial PlanTHE PRIMARY EVALUATING TOOLSupport all informationSupport all informationMake conservative projectionsMake conservative projectionsStart-up Budget: amount needed to openOperating Budget: ongoing expenses once openSources and Uses SheetFinancing Your New BusinessStart up loans are very Start up loans are very difficult to obtaindifficult to obtainChances are you have Chances are you have to rely on the funds to rely on the funds you can personally you can personally raiseraiseGrants?! Sidebar hereGrants?! Sidebar here Matthew Lesko, NGCMatthew Lesko, NGCMethods of FinancingPersonal fundsPersonal fundsFamily/ friend loans and giftsFamily/ friend loans and giftsAngel investorAngel investorVenture capitalVenture capitalGrantsGrantsPersonal loanPersonal loanBusiness loanBusiness loanWhat is an SBA Guaranteed Loan?Loan obtained from a financial institution, guaranteed by the SBALoans of various sizesWhat are the Requirements?An excellent personal and business credit record Adequate collateralCash investment: generally 20-30% of total projectExperience in the business you are startingA solid business planFinancial Plan: Startup BudgetPersonnel (costs prior to opening)Personnel (costs prior to opening)Occupancy (lease, rent, or mortgage)Occupancy (lease, rent, or mortgage)Legal/ Professional FeesLegal/ Professional FeesEquipmentEquipmentSuppliesSuppliesSalary/ WagesSalary/ WagesUtilitiesUtilitiesPayroll ExpensesPayroll ExpensesInternetInternetLicenses/ PermitsLicenses/ PermitsInsuranceInsuranceAdvertising/ PromotionsAdvertising/ PromotionsFinancial Plan: Operating Budget PersonnelPersonnel Lease/ Rent/ MortgageLease/ Rent/ Mortgage Loan PaymentsLoan Payments Legal FeesLegal Fees AccountingAccounting SuppliesSupplies Salaries/ WagesSalaries/ Wages Dues/ Subscriptions/ Dues/ Subscriptions/ FeesFees Repairs/ MaintenanceRepairs/ Maintenance InsuranceInsurance Advertising/ Advertising/ PromotionsPromotions DepreciationDepreciation Payroll ExpensesPayroll Expenses InternetInternet Payroll TaxesPayroll Taxes Travel/ EntertainmentTravel/ Entertainment MiscellaneousMiscellaneous 3-6 Months of 3-6 Months of Operating CapitalOperating CapitalFinancial Plan: Sources and UsesSources of fundsDetails of requested financingAmountAmountUse Use TermsTerms AppendicesSupplemental materialsSupplemental materials Resumes of management teamResumes of management team Past three years of tax returnsPast three years of tax returns Current bank statementsCurrent bank statements Copies of existing loans or notesCopies of existing loans or notes Interim income statement and balance sheetInterim income statement and balance sheet Personal financial statementPersonal financial statement Copies of legal documentsCopies of legal documents Copies of potential contractsCopies of potential contracts Letters of referenceLetters of referenceTOTAL PACKAGE FOR A LOAN TOTAL PACKAGE FOR A LOAN APPLICATIONAPPLICATIONSample: Executive Summary (1 of 2)JavaNet, unlike a typical cafe, will provide a unique JavaNet, unlike a typical cafe, will provide a unique forum for communication and entertainment through the forum for communication and entertainment through the medium of the Internet. JavaNet is the answer to an medium of the Internet. JavaNet is the answer to an increasing demand. The public wants: (1) access to the increasing demand. The public wants: (1) access to the methods of communication and volumes of information now methods of communication and volumes of information now available on the Internet, and (2) access at a cost they can available on the Internet, and (2) access at a cost they can afford and in such a way that they arent socially, afford and in such a way that they arent socially, economically, or politically isolated. JavaNets goal is to economically, or politically isolated. JavaNets goal is to provide the community with a social, educational, provide the community with a social, educational, entertaining, atmosphere for worldwide communication.entertaining, atmosphere for worldwide communication.This business plan is prepared to obtain financing in the This business plan is prepared to obtain financing in the amount of $24,000. The supplemental financing is required amount of $24,000. The supplemental financing is required to begin work on site preparation and modifications, to begin work on site preparation and modifications, equipment purchases, and to cover expenses in the first equipment purchases, and to cover expenses in the first year of operations. Additional financing has already been year of operations. Additional financing has already been secured in the form of: (1) $24,000 from the Oregon secured in the form of: (1) $24,000 from the Oregon Economic Development Fund (2) $19,000 of personal Economic Development Fund (2) $19,000 of personal savings from owner Cale Bruckner (3) $36,000 from three savings from owner Cale Bruckner (3) $36,000 from three investors (4) and $9,290 in the form of short-term loans.investors (4) and $9,290 in the form of short-term loans.Sample: Executive Summary (2 of 2)JavaNet will be incorporated as an LLC corporation. JavaNet will be incorporated as an LLC corporation. This will shield the owner Cale Bruckner, and the three This will shield the owner Cale Bruckner, and the three outside investors, Luke Walsh, Doug Wilson, and John outside investors, Luke Walsh, Doug Wilson, and John Underwood, from issues of personal liability and double Underwood, from issues of personal liability and double taxation. The investors will be treated as shareholders and taxation. The investors will be treated as shareholders and therefore will not be liable for more than their individual therefore will not be liable for more than their individual personal investment of $12,000 each.personal investment of $12,000 each.The financing, in addition to the capital contributions The financing, in addition to the capital contributions from the owner, shareholders and the Oregon Economic from the owner, shareholders and the Oregon Economic Development Fund, will allow JavaNet to successfully open Development Fund, will allow JavaNet to successfully open and maintain operations through year one. The large initial and maintain operations through year one. The large initial capital investment will allow JavaNet to provide its capital investment will allow JavaNet to provide its customers with a full featured Internet cafe. A unique, customers with a full featured Internet cafe. A unique, upscale, and innovative environment is required to provide upscale, and innovative environment is required to provide the customers with an atmosphere that will spawn the customers with an atmosphere that will spawn socialization. Successful operation in year one will provide socialization. Successful operation in year one will provide JavaNet with a customer base that will allow it to be self JavaNet with a customer base that will allow it to be self sufficient in year two.sufficient in year two.planningSummary SlideResourcesFree One-on-One Counseling:Free One-on-One Counseling: SBDC Farmingdale, Hempstead, CW Post, SBDC Farmingdale, Hempstead, CW Post, Stony Brook: call 631.420.2765 for Stony Brook: call 631.420.2765 for appointmentappointment (small business resources) (small business resources), , (information on incorporating, LLCs, sole , , (information on incorporating, LLCs, sole proprietorships)proprietorships) (Market research) (Market research) (to browse sample plans for free) (to browse sample plans for free)ResourcesDmnews (statistics on direct marketing, Dmnews (statistics on direct marketing, trends, consumer behavior)trends, consumer behavior)Clickz (online behavior stats)Clickz (online behavior stats)Competia /express/index.html (trade Competia /express/index.html (trade association database)association database)Hoovers (info on industries, specific Hoovers (info on industries, specific companies)companies)Proquest (article search)Proquest (article search)Findarticles (article search)Findarticles (article search) (marketing research) (marketing research)NY Department of Labor StatisticsNY Department of Labor Statistics (Service Corps of Retired Executives) (Service Corps of Retired Executives)Thank you for working so hard today!Call the office anytime!631.420.2765,