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Business Plan
Outline
Below is a recommended
structure for a business plan excerpted from New Venture Creation
by Jeffrey Timmons (Irwin, 1994. Page 420).
I. EXECUTIVE SUMMARY
A. Description of the Business Concept and the Business
B. The Opportunity and Strategy
C. The Target Market and Projections
D. The Competitive Advantages
E. The Economics, Profitability, and Harvest Potential
F. The Team
G. The Offering
II. THE INDUSTRY
AND THE COMPANY AND ITS PRODUCT (S) OR SERVICE (S)
A. The Industry
B. The Company and Concept
C. The Product(s) or
Service(s)
D. Entry and Growth Strategy
III. MARKET RESEARCH AND ANALYSIS
A. Customers
B. Market Size and Trends
C. Competition and Competitive Edges
D. Estimated Market Share and Sales
E. Ongoing Market Evaluation
IV. THE ECONOMICS OF THE BUSINESS
A. Gross and Operating Margins
B. Profit Potential and Durability
C. Fixed, Variable, and Semi-Variable Costs
D. Months to Breakeven
E. Months to Reach Positive Cash Flow
V. MARKETING PLAN
A. Overall Marketing Strategy
B. Pricing
C. Sales Tactics
D. Service and Warranty Policies
E. Advertising and Promotion
F. Distribution
VI. DESIGN AND DEVELOPMENT PLANS
A. Development Status and Tasks
B. Difficulties and Risks
C. Product Improvement and New Products
D. Costs
E. Proprietary Issues
VII. MANUFACTURING AND OPERATIONS PLAN
A. Operating Cycle
B. Geographical Location
C. Facilities and Improvements
D. Strategy and Plans
E. Regulatory and Legal Issues
VIII. MANAGEMENT TEAM
A. Organization
B. Key Management Personnel
C. Management Compensation and Ownership
(Employment & Other Agreements, Stock
Option/Bonus Plans)
D. Other Investors
F. Board of Directors
H. Supporting Professional Advisors and Services
IX. OVERALL
SCHEDULE
X. CRITICAL RISKS,
PROBLEMS, AND ASSUMPTIONS
XI. THE FINANCIAL
PLAN
A. Actual Income Statements and Balance Sheets
B. Pro Forma Income Statements
C. Pro Forma Balance Sheets
D. Pro Forma Cash Flow Analysis
E. Breakeven Chart and Calculation
F. Cost Control
G. Highlights
XII. PROPOSED COMPANY OFFERING
A. Desired Financing
B. Offering
C. Capitalization
D. Use of Funds
E. Investors Returns
XIII. APPENDICES
Developing a Business Plan
Customer Research
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Contact at least three potential customers regarding your
proposed product or service
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Obtain qualitative information such as the number of
potential customers that exist, the prices they are willing to pay and the
economic value of your product or service to the customer.
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Collect qualitative facts such as purchasing cycles and
decision-makers involved, the likely barriers to adoption of your product
or service, and why your product makes sense in the use environment of
your target users and customers.
Competitor Research
Market, Goals and Strategy
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Define the market opportunity
.
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Explain what you expect to accomplish in attacking that
opportunity.
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Detail your strategy for achieving your dollar goals
.
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Attach any
exhibits such as market projections, customer testimonials, survey data,
press clippings, product specifications, or marketing materials for your
product or service.
Operations
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What are the critical success factors for achieving your
goals and how do you reflect these priorities in your plans to execute all
the important aspects of building the venture? For example, how will you
hire people and what kind of people will you need? How will you develop
your products, build a sales force, form distribution partnerships, select
locations, generate positive publicity, protect your intellectual
property, and manufacture your products? What are the critical risks
involved in this process and how does this venture roll out over time? In
short, present a detailed picture of the venture’s operations as it
grows from today to two years out, five years out and into the future. It
will be useful to take a first detailed cut at financial projections in
order to see how the operations of this venture scale up in terms of
revenues, units sold, customers or other drivers of growth. In this
process you will conceptualize fully the economics of your venture.
Team
Financials
Online Resources
Below are some online resources to help you develop your
business plan:
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