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SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Business Plan and Financials
KIMBERLY FRELOWSMALL BUSINESS MANAGER
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
THE BUSINESS PLANYour Roadmap to Success
Your map to success in the business world You will gain in-depth knowledge about
your industry Helps you find hidden business flaws and
makes you think carefully It will show you what is involved in making
your business work successfully A tool to helping you achieve your own
business/personal goals
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Why Should You Write a Business Plan? To be more efficient To put your mind at ease To secure your ideas To have a plan of action
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Who Needs A Business Plan?Every Business Owner
If you are starting a new business.
Buying an existing business.
Financing or refinancing a business.
Thinking about becoming an independent contractor for a company.
Thinking about selling a product or service you invented.
Thinking about making extra money.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Most Common Concerns How long does it
take to complete the business plan?
Where will I get my information from?
What are the benefits of doing a business plan
If I have a great business plan can I be certain of getting funding through the SBA or investors or a bank?
How quickly can I get funded once I have a business plan?
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Which Plan Do You Use?
Ask yourself what is the business plan for?
Strategic planning? Marketing? Financing?
*You will need a business plan to secure a loan.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Key Components Of The Plan
Executive Summary
Business Description
Mission Statement
Vision Statement
Industry Trends
Marketing
Management Team
Operations
Financial Data
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Executive Summary A.K.A. Cover Letter
Gives a snapshot of the business and the management staff.
Summarizes the entire business plan in one or two pages.
Usually accompanies a request financing.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Business Description Capability Statement Years in Business Key Personnel Firm Expertise License Number Clients Served
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Mission StatementA mission statement is a formal, short,
written statement of the purpose of a company or organization.
It should guide the actions of the organization, spell out its overall goals, and provide a sense of direction.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Vision StatementA vision statement provides inspiration,
the basis for all the organization's planning.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Sample Mission StatementKimberly and Associates, Inc. is a for-profit business training and consulting firm; dedicated to providing youth and adults with excellent services and resources that will result in their ability to attain a job or launch a business.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Sample Vision StatementThe vision of Kimberly and Associates, Inc.
is to provide advantaged and disadvantaged youth and adults with lifelong skills and information needed to succeed in the areas of business management, ownership and gainful employment.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Industry Trends Provide an overview of the industry include
the following information: What trends are being followed in your
particular industry? How are consumers responding now and
historically? Where are the opportunities -- are their
benefits for being eco-friendly or providing “green” products?
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Marketing Plan What are you offering a product or service? Competition Target Market Marketing Strategy
Marketing budget Advertising Unique Position
Social Media Linkedin Facebook YouTube
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Operations
S o le P ro prie to r P a rtne rsh ip C o rp ora tion
B u s in ess S tru c tu re
*Depending on how the business is set-up will determine how the business will operate day-to day.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
FINANCIALS Are You Prepared For Public Contracting?
Initial Capital Needs: Calculating initial capital needs begins with a sales projection and cost of operations to run the business.
Capitalization is the activity of ramping up the business with all of the equipment and personnel necessary to operate or grow a business.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Start-up Costs PersonnelEquipment
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Public Works -- Capital NeedsAdministrator (F/T@$14/hour)•Prequalification/Certifications•Union Fees
$29,120.00
Estimator $48,000.00
Field Supervision $46,000.00
Accounting (F/T@$18/hour)•Payroll Reporting
$36,720.00
Labor Compliance Officer (P/T@$24/hour) $24,960.00
Equipment $
Trucks $
Supplies $
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Expenses In addition to capital costs, you will have an
increase in monthly cost of operating the business. What is this cost?
You must focus on your Job Cost to ensure you are not exceeding your estimated bid.
What system will you use to keep track of your cost?
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Cash FlowA cash flow statement is a month-by-
month projection of financial activities. This analysis allows you to prepare for
potential cash flow problems. A cash flow statement tells you what
your business’s cash position really is.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Initial Operating ExpensesItem Monthly Cost
Rent $
Utilities $
Payroll $
Automobiles $
Insurance/Bond $
Advertising $
Phones $
Union Fees $
Equipment $
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Financial RecordsEntrepreneurs should maintain their
own daily and monthly accounting records and use accountants for preparing tax returns and formal financial statements.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Business Plan (cont.’d)
Financial StatementsThe business plan for a new business
should include a pro forma financial statement.
A pro forma financial statement describes the expected financial status of a business at a future date.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Income StatementsAn income statement shows the
revenues and the expenses of a business over a specified period of time.
It also shows the business’s profits. New business owners should make pro
forma income statements for the first year of operation as well as for future years (usually the first three).
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Simplified Pro Forma Income Statement
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Balance SheetsA balance sheet is a financial
statement that shows the worth, or value, of a business.
A pro forma balance sheet projects the growth of a business in terms of how much capital value the business will have at a particular date in the future.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Balance Sheets (continued) The assets side shows all property and
capital to which the business claims ownership.
The liabilities side shows all the debts of the business.
The net worth of a business is determined by adding all the value of what is owned and subtracting from this the total debt of the business.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Assets Current assets include cash and assets that
are easily converted into cash, such as inventory and accounts receivable.
Fixed assets are those capital purchases that generally take a longer time to convert or liquidate into cash, such as property, equipment, and fixtures that require a special buyer.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Liabilities Current liabilities are debts that are to
be paid within 12 months of the date of the balance sheet.
Longterm liabilities are usually debts that come due more than 12 months after the date of the balance sheet.
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Simplified Pro Forma Balance Sheet
SUCCESSFUL BUSINESS PLANNING FOR ENTREPRENEURS© South-Western Thomson
Financial RecordsSmall business owners should have access to Income and expense register Accounts payable ledger Accounts receivable ledger Furniture, fixture, and equipment ledger Notes payable ledger Payroll records