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Business Plan EvaluationGuide http://www.prenhall.com/scarbzim/html/plan.html

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The following areas are of interest to lenders and investors:

The purpose of the loan (expansion or startup business)

Sources and uses of the funds Management of the business Industry information Financial analysis Collateral (secured) Personal debt/credit history of borrower

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Technical Business Plans may be evaluated on the following:

Viability Management background Market advantage Technology

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This evaluation guide scores business plan elements on a scale from 1 to 10, with 10 being the best possible rating.

Scores are subjective. The reader determines a value based on his or her perception of the quality and content of the business plan.

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My organization and management plan depicts a level of skill and experience for a successful operation.

Management has never owned nor operated their own business and employees are inexperienced (1)

Mission Statement Legal structure of the entity Organizational chart Job descriptions, duties and responsibilities Compensation methods Background and experiences

operational experience managerial experience

Support services (external advisors and specialists)

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All managers and employees

have experience in this business (10)

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My plan shows that the company has the ability to control the delivery and quality of the product or service.

We depend solely on outside contractors (1)

Suppliers are established source of needed materials reliable delivery best price/quality

Understand the production process in detail production capacity Packaging

Facility requirements are met land building equipment labor

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We have the resources we need in-house that are needed for distribution (10)

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My plan describes a potential market

Customers exist only on paper (1)

There is tangible evidence of market demand Surveys conducted Market tests

Demographic research Target market

Size Education Location Gender Age Buying habits Income Lifestyle

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I know my market and have firm commitments from customers (10)

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My plan clearly shows a competitive edge over my rival’s

My product is no better than my competitor’s (1)

PriceQualityService and guaranteesAppearanceEase of purchase (location, parking,

online, credit)Customers understand the benefit of

product or serviceLong-term benefits (not a fad)

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My product or service is unique and there is market demand (10)

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My plan contains realistic financial projections

Financial statements indicate an annual rate of return of 1% (1)

Reasonable assumptionsRatio analysisPersonal investment

Personal financial statements includedCredit worthy

Most likely, pessimistic and optimistic scenariosSeasonal fluctuations

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My plan offers a high rate of return in a short period of time (10)

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My plan lays out a clear, well-conceived, workable strategy for getting the business up and running

No real strategy exists--except in my head (1) The business plan lays out a workable business

strategy The business plan is polished and professional My oral presentation is polished and professional Resumes are included for managers

Business documentation

Employer identification number Fictitious name registered Partnership agreement Articles of incorporation Contracts and leases Permits and licenses

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My plan communicates my vision for the business and why it will succeed to potential lenders and investors in a clear, concise fashion (10)

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Grading the Business Plan

There are six questions each worth 10 points.

50 - 60 High potential for success 40 - 50 Needs work, but loan is probable 30 - 40 Review deficiencies, workable Under 30 Keep your day job

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Evaluate the plan web siteBusiness Plan Evaluation Scale

http://www.prenhall.com/scarbzim/html/plan.html