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Financial Planning

Business Plan Checklist

"The dictionary is the only place where success comes before work."  Mark Twain

A comprehensive, well researched business plan provides a strong foundation for the success of a  business practice.  Unfortunately, many business plans are done haphazardly, or as a quick-fix to attract necessary financial support.    Numerous other businesses fail to write a business plan, citing lack of knowledge as the reason for not writing a plan.  Too many small business hope that by running their business “by the seat of their pants”, or “as they go”, they can overcome the lack of a well founded plan.  


85% of the people that do not take the time to plan their businesses or career will not reach their desired level of success or will fail altogether.   Of those that do take the time to write their plan, 85% will succeed.


40% of people with a strategic plan will double their income and profits within two years of writing their plan.

With a strategic plan, greater than 70% of these people will exceed their own expectations within the next 5 years regardless of economic conditions.

"For most people, their planning consists of
setting the alarm clock to get out of bed to go to work;
 Others plan by daily To-Do lists and crisis management; 
Those with an unwavering commitment to a desire of greater success
will take the steps to plan their business and their life."

 ~ Sumner M. Davenport~

Many people mistakenly assume that to write a successful start-up business plan they should dazzle their readers with complicated technical jargon, complex corporate structures and fierce non-disclosure pledges.  Yet the truth is that this type of approach can actually alienate potential investors, business plan is not to show how sophisticated you are as a writer, but how practical and attainable your goals are.

Whether you are attempting to raise $20,000 or $2,000,000, you should be sure to address certain crucial areas that convince investors your business is a good risk.  Following is a general approach that you can use as a foundation. However, you should tailor your plan to meet the specific circumstances of your business, emphasizing its strengths and addressing the potential problems and challenges to be faced.

"The successful person makes a habit of doing
what the failing person doesn't like to do.
~Thomas Edison

1. Summary
The summary should concisely describe the key elements of your business plan. If you are  seeking financing, your summary should convince the lender or venture capitalist that it is worthwhile to review your plan in detail. The summary should briefly cover at least the following:   
     * Name of your business; 
     * Business location (virtual and/or Physical Brick & Mortar);
     * Discussion of the product, market and competition; 
     * Expertise of the management team;
     * Summary of your financial projections;
     * Amount of financial assistance requested (if applicable);
     * Form of and purpose for the financial assistance (if applicable);
     * Purpose for undertaking the project (if financial assistance is sought);
     * Business goals.

Note: Even if you are writing this plan only to help you identify your business idea, each of these points is essential. Many entrepreneurs mistakenly overlook the financial projections, silently hoping it will all work out. The more focus you put into the foundation of your business plan, the easier it will be to see your route.

For some this process of putting their idea into writing is easy, and others need assistance. Whether you need short term coaching or assistance with your full written plan, there are coaches, business consultants and workshops available. Some offer discounts and free initial consultations. Let us assist you.  Email us with your request.

2. The Company

This section provides background information on the company and usually includes:     

 * A general description of the business, including the product or service;
     * Historical development of the business, including:
          - Name, date and place (state) of formation;
          - Legal structure (proprietorship, partnership, corporation);
          - Significant changes (including dates) in ownership, structure, new products or lines, and acquisitions;
          - Subsidiaries and degree of ownership, including minority interests;
          - Principals and the roles they played in the formation of the company. 

3. The Product or Service
Describe the present or planned product or service lines, including:
     * Relative importance of each product/service including sales projections;
     * Product evaluation (use, quality, performance);
     * Comparison to competitors' products/ services and competitive advantages over other producers;
     * Demand for product or service and factors affecting demand other than price.

4. The Project
If financing is sought for a specific project, describe the project, the purpose for which it is undertaken, its cost and the amount, and the form and use of the financial assistance. 

5. Management
     * Organizational chart;
     * Key individuals:
          - Responsibilities;
          - Personal resumes (describing skills and experience as they relate to activities of the business);
          - Present salaries (include other compensation ,ie: stock options, bonuses); 
           -Planned staff additions.
     * Other employees:
          - Number of employees at year end, total payroll expenses for each of previous five years broken down by wages and benefits;
          - Method of compensation;
          - Departmental or divisional breakdown of work force.
     * Planned staff additions. 

6. Ownership
     * Names, addresses, business affiliations of principal holders of subject's common stock and other types of equity securities (include details on holdings);
     * Degree to which principal holders are involved in management;
     * Principal non-management holders; 
     * Names of board of directors, areas of expertise and role of board when business is operational;
     * Amount of stock currently authorized and issued.

7. Marketing Strategy/Market Analysis
     * Description of the industry. Include:
          - Industry outlook;
          - Principal markets (commercial/industrial, consumer, government, international);
          -Industry size - current as well as anticipated in the next 10 years (explain sources of projections);
          - Major characteristics of the industry. 
                 Effects of major social, economic, technological or regulatory trends on the industry.
     * Description of major customers. Include:
          - Names, locations, products or services sold to each;
          - Percentage of annual sales volume for each customer over previous five years (if applicable);
          - Duration and condition of contracts in place.
     * Description of market and its major segments. Include:
          - Principal market participants and their performance;
          - Target market;
          - Customer requirements and ways of filling those requirements;
          - Buying habits of customers ;
          - Impact on customers using your product/service.
     * Description of competition: companies with which your business competes and how your business compares with these companies.  This section is a more detailed narrative than that contained in the description of the product or service above.
     * Description of prospective customers. Include reaction to your firm and any of its products or services they have seen or tested.
     * Description of firm's marketing activities. Include:
          - Overall marketing strategy;
          - Pricing policy;
          - Method of selling, distributing and servicing the product;
          - Geographic penetration, field product support, advertising, public relations and promotions, and priorities among these activities.
     * Description of selling activities. Include the method for identifying prospective customers and how and in what order you will contact the relevant decision-makers. Also describe your sales effort--sales channels and terms, number of salespersons, number of sales contacts, anticipated time, initial order size--and estimated sales and market share.

 8. Technology
* Describe technical status of your product--idea stage, development stage, prototype--and the relevant activities, milestones and other steps necessary to bring the product into production.
     * Present patent or copyright position (if applicable). Include how much is patented and how much can be patented (how comprehensive and effective the patents or copyrights will be).  Include a list of patents, copyrights, licenses or statements of proprietary interest in the product or product line.
     * Describe new technologies that may become practical in the next five years  that may affect the product.
     * Describe new products (derived from first generation products) the firm plans  to develop to meet changing needs.
     * Describe regulatory or approval requirements and status, and discuss any other technical and legal considerations that may be relevant to the technological development of the product.
     * Describe research and development efforts and future plans for research and development. 

9. Production/Operating Plan
     * Explain how the firm will perform production or delivery of service. 
                 Describe in terms of:
          - Physical facilities--owned or leased, size and location, expansion capabilities, types and quantities of equipment needed.  Include a facilities plan and description of planned capital improvements, and timetable for those improvements.
          -Suppliers: names and locations, length of lead time required, usual terms of purchase, contracts and subcontractors.
          - Labor supply (current and planned): number of employees, unionization, stability (seasonal or cyclical), and fringe benefits.
          - Technologies/skills required to develop and manufacture the products.
          - Cost breakdown for materials, labor and manufacturing overhead for each product, plus cost versus volume curves for each product or service.
          - Manufacturing process.
     * Describe production or operating advantages of the firm;  discuss whether they are expected to continue.
     * Specify standard product costs at different volume levels.
     * Present a schedule of work for the next one to two years.

 If you are seeking financing, most lenders and venture capitalists require:
     * A funding request indicating the desired financing, capitalization, use of funds and future financing;
     * Financial statements for the past three years, if applicable;
     * Current financial statements;
     * Monthly cash flow financial projection, including the proposed financing, for two years;
     * Projected balance sheets, income statement and statement of changes in financial position for two years including the proposed financing.

Read: Give yourself the Edge when seeking Capital

Make Your Own Destiny: Guides to Start a Business
Get ideas, get inspiration, just remember the success of your plan will be based on your input and your commitment. It's more than just copying someone else's idea.

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Brian Tracy is a Best Selling Author, International Speaker and Chairman and CEO of Brian Tracy International, a company specializing in the training and development of individuals and organizations. Brian's goal is to help you achieve your personal and business goals faster and easier than you ever imagined.

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Business Planning Articles

  Is there really Instant Success?
  Ten Steps to Financial Freedom
 10 Easy Ways To Organize Your Business Finances

  Business Dilemma or Blueprint for Success   
  Business Plan Checklist
 Give yourself the Edge when seeking Capital


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