Investor Ready Business Plan Template

INVESTOR READY BUSINESS PLAN TEMPLATE

1.0Executive Summary

Write this section last.

We suggest that you make it two pages or fewer.

Include everything that you would cover in a five‐minute interview.

Explain the fundamentals of the proposed business: What will your product be? Who will your customers be? Who are the owners? What do you think the future holds for your business and your industry?

Make it enthusiastic, professional, complete, and concise.

If applying for a loan, state clearly how much you want, precisely how you are going to use it, and how the money will make your business more profitable, thereby ensuring repayment.

SAMPLE ONE EXECUTIVE SUMMARY

Pop Cleaners is a start-up enterprise to be established in [location] as a limited liability company owned by [Full Owner’s Name]. The company will provide dry cleaning, laundry, and garment alterations, offered with regular home pick-up and delivery services. The company will have a production facility, but will not need a retail shop because of our pick-up and delivery service. However, we will need delivery vans, and customer service trained drivers.

Customers can choose payment either at the time of each delivery, or by monthly credit card billing. At the end of each month we will send statements to each contract customer, itemizing service fees and the charge for the service to their credit cards for payment.

The business provides a new door-to-door dry cleaning, laundry, and alteration service in [location], OR and surrounding neighborhoods that will surely attract customer attention. Working customers may find this service is convenient for them and want to try it. If they are satisfied with the service quality they will likely become repeat customers. When the patronage happens continuously, they become loyal customers of the service. These customers will recommend Pop Cleaners to their friends and coworkers. As more and more customers use this service, Pop Cleaners' image is enhanced and we will gain more and more market share.

Sales forecast gradually increase over the first year and comprise total sales of $324,700. We project modest net profits the first year. Our second and third year net profits are expected to grow substantially.

SAMPLE TWO EXECUTIVE SUMMARY

GoMart.com is an e-commerce start-up company positioning itself to become the market leader in offering online merchants and consumers a uniform and trouble-free way to return merchandise purchased online. The company offers a business-to-business solution to online merchants of physical, non-perishable products. The company utilizes a consolidation approach in handling all product returns that allows online merchants to instantly save bad sales, restore customer satisfaction and stimulate repeat sales, while offering consumers a convenient, centralized online location to claim returns. By creating a new service category and utilizing the first-mover advantage, GoMart.com positions itself for rapid growth and gains a strong opportunity to raise entry barriers for possible competition.

The Market

E-commerce continues to accelerate and the amount of money spent on purchases made through the Internet shows no sign of decline. During the past holiday season (November 20 to December 19), retailers saw online revenues quadruple, jumping 300% to about $11 billion and far exceeding expectations, according to a study by Shop.org and Boston Consulting Group. The study of 30 retailers in such categories as apparel, books and music, home and garden, specialty foods and electronics showed a 270% growth in the number of orders. The study indicated that online sales were growing at 145% annually and it projected online retailer revenues of more than $36 billion for last year. An earlier study conducted by Ernst & Young, before the holiday frenzy, already estimated that total revenues for online retail and consumer products for the calendar year just completed were around $25-30 billion. Currently, the average rate of returns for Internet-based companies is 9%. In the coming year the value of returned merchandise was $1.5 billion. This indicates an amazing opportunity.

Service Offerings

GoMart.com's services streamline the entire return process for retailers. They allow retailers to outsource a large part of their business, allowing the retailer to concentrate on their core competencies and not get distracted with activities that add little value. GoMart.com will reduce capital expenditures of a company that uses their services, increase customer service of the retailer, increase sales opportunities, increase revenues, and improve inventory management. Customers will benefit by having a convenient, easy way to return their purchases as well as the ability to track their returns.

Keys To Success

GoMart.com has three ambitious and obtainable keys to success. The first is the development of a customer service / customer satisfaction software application. This robust software will be GoMart.com's engine that ensures a seamless management of all of their business activities. Their second key is the formation of strategic relationships with online merchants, shippers, and credit card companies. The relationships with merchants will allow GoMart.com to quickly grow their customer base of retailers served. Alliances with shipping companies will be formed since the actual cost of shipping is their largest cost driver. Partnerships with credit card companies will allow GoMart.com to offer the respective cards as the preferred credit card thereby generating an additional source of revenue.

Management Team

There are two principals that are responsible for the idea and the progress of the firm up. They recognize as the companies quickly grows, certain positions such as CEO and CFO will need to be filled. The company was founded by Steve Logic and Dan Codder. Steve has spent the last ten years at Federal Express. While at FedEx, Steve was responsible for their logistics system. Steve has the incredible skill of perceiving business needs and creating a solution to address the need. At FedEx, Steve was the architect behind their benchmarked logistic system that has the ability to track customer packages and share the information with the client. What this meant for FedEx is that they could tell the customer exactly where their package is at any one point. This logistics system is the main driver behind FedEx's exponential growth. Dan Codder is a twenty-year veteran in the computer industry. Self taught, Dan has worked at IBM, Cadence, Tektronix, and several other companies. Dan has the ability to design and write computer code very quickly and accurately. GoMart.com will leverage Dan's skills for the completion of their customer service software engine.

Financials

GoMart.com's financials are conservative yet quite promising. Once they are up and running and sign up some merchants as customers, GoMart.com will quickly gain momentum and generate impressive sales. Revenue for year two will be $19 million, climbing to $59 million by year three. Net profit for these years respectively will be $4.7 million and $27.3 million. Even more impressive is GoMart.com's net profit margin. Year two will only see a net margin of 25%, but the following year will see a sustainable 45%. GoMart.com will be creating a new service category leveraging their first mover status and seizing the incredible market potential of Internet-based retailers.

2.0Company Summary

Summarize the company the following:

MissionStatement

Goals and Objectives (Goals are destinations—where you want your business to be. Objectives are progress markers alongthe way togoal achievement. For example, a goal might be to have a healthy, successful company that is a leader in customer serviceand that has a loyal customer following. Objectives might be annual sales targets and some specific measures ofcustomer satisfaction.),

BusinessPhilosophy

Market, Industry

Your company strengths andcore competencies.

Legalform of ownership: Sole proprietor, Partnership, Corporation,Limited liability corporation (LLC)?Why haveyou selected this form?

SAMPLE COMPANY SUMMARY

START-UP REQUIREMENTS
Start-up Expenses
Legal / $1,000
Stationery etc. / $1,200
Brochures / $3,000
Recruitment & training / $1,000
Insurance / $700
Rent / $1,200
Utilities / $700
Leased equipment / $1,667
Expensed equipment / $10,000
Other / $2,533
TOTAL START-UP EXPENSES / $23,000
Start-up Assets
Cash Required / $10,000
Start-up Inventory / $2,000
Other Current Assets / $0
Long-term Assets / $15,000
TOTAL ASSETS / $27,000
Total Requirements / $50,000

Pop Cleaners is astart-up enterprise to be established as a limited liability company in Hillsboro, OR. The company willprovide dry cleaning, laundry, and garment alterations, offered with regular homepick-up and delivery services. The company will have a production facility, but will not need a retailstore front because of our pick-up and delivery service. However, we will need delivery vans and customer service trained drivers. Initially, the production facility will be rented. Cleaning equipment will be leased with accompanyingmaintenance contracts.

Start-up financing will be through owner investment and bank loans, with a line of credit established for operations eventualities.

2.1 Company Ownership

The proposed legal form of business is a limited liability company, wholly owned by its founder J.C. Copperbeech. This is a small business and need not publicly disclose its finances. The registration procedures are quite simple and the business can start operations as soon as possible. Theowner/founder will be thedirector and will initially handle the bookkeeping responsibilities.

2.2 Start-up Summary

Startup expenses, funded through a combination of owner's equity capital and a commercial loan, are summarized in the table below.

Leasing equipment:Buying new machines costs approximately $50,000as opposed toleasing whichcosts $20,000 per year including maintenance. Evaluating the leasing solution shows NPV higher than that of buying machines. Moreover, the business is new and has less experience in maintenance andrepair ofmachine breakdown, therefore the optimal solution is leasing machines. The following machines will be leased:

• 1 Washer - 38 lb capacity, high spin, microprocessor control, electric heat
• 1 Tumble dryer -40 lbcapacity, stainless steel drum and gas heated
• 1 Dry cleaning machine - 25 lb
• 1 Roller Iron40 x12 inch, variable speed and vacuum exhauster
• 1 Ironing table with steaming vacuum board, integral 2 gallon boiler, iron, water pumpand light

Capital plan:The owner will invest $40,000 in the business. Additional capital for the business in the amount of $20,000 will be borrowed from a bank.

• Buying a van, and office/facilities equipment (computer, printer, fax, telephone instrument, tables, chairs, shelving, work tables, racks, etc.) and initial leasing of laundry machines: approx. $27,000
• Buying another van in April: $10,000 (see the Cash Flow Table later in the document)

Loan:Lending plan has to be completed and submitted to the bank 6 months before starting the business. Loan will be needed two months in advance. Annual interest of 10% has to be paid on the long-term loans secured with fixed assets.

3.0 Products and Services

Describeindepth your products or services(technical specifications, drawings, photos, sales brochures, and other bulky items belong in Appendices).

Whatfactors will give you competitive advantages ordisadvantages? Examples include level of quality or unique or proprietary features.

Whatare the pricing,fee, or leasing structures of yourproducts or services?

SAMPLE SERVICES

Columbia Cleaners is going to provide the following services for customers with free home pick-up and delivery in the Hillsboro area:

• Dry cleaning
• Laundry for personal clothes and large items such as blankets, duvets, curtains, etc.
• Alteration service

Operations plan

There are two ways for customers to take part in the service. Customers can sign contracts with Columbia Cleaners to get regularly scheduled service, or, if it is more convenient, they can orderover the telephone or via e-mail.

Customers can choose payment either at the time of each delivery, or by monthly credit card billing. We will send statements to each contract customer, itemizing service fees and the charge for the service to their credit cards for payment, at the end of each month.

No retail shop will be rented in order to reduce the operation cost.An operations facility for installing machines and equipment, washing and cleaning activities, and storing not yet cleaned and cleaned garments and items is needed. The operations facility will require about 2,000 square feet divided into four main sections as following:

1. Machine installation and cleaning activities
2. Sorting and storage of dirty garments received
3. Storing cleaned garments after finishing prior to delivery
4. Garment alteration workroom

The whole operation process will be controlled and monitored by a laundry expert employee, and generally managed by the business owner.

4.0MarketingPlan

Nomatter how goodyour product and yourservice, the venture cannot succeedwithouteffective marketing. And this beginswith careful, systematic research. It is very dangerous to assume that you already knowabout your intendedmarket. You need to do market research to makesureyou’re on track. Use the businessplanning process as your opportunity to uncover data and to question yourmarketingefforts. Your timewillbe well spent.

Market research - How?

Thereare two kinds of market research: primary and secondary.

Secondaryresearch means using published informationsuch as industry profiles, trade journals, newspapers,magazines, census data, and demographicprofiles. This type of information is available in public libraries, industry associations, chambers of commerce,fromvendors who sell to your industry, andfromgovernment agencies.

Startwithyour local library. Most librariansare pleased to guide you throughtheir business data collection. You willbe amazed at what is there. There are moreonline sources than you could possibly use. Your chamber ofcommercehas good information on the localarea. Trade associationsand trade publications often have excellent industry‐specific data.

Primaryresearch means gathering your own data. Forexample, you could do your own traffic countat a proposed location, use the yellow pages to identify competitors, and

dosurveysor focus‐group interviews to learn about consumer preferences. Professional market research can be very costly, but there are many books that show small business ownershow to doeffective research themselves.

Inyour marketing plan, be as specific as possible; give statistics, numbers, andsources. The marketing plan will be the basis, later on, of the all‐important sales projection.

Economics

Factsabout your industry:

•What is thetotal size ofyour market?

•What percent share of the market will you have? (This isimportantonly if you thinkyou will be a major factor in the market.)

•Current demand in target market.

•Trends in target market—growthtrends, trends in consumer preferences, and trends in product development.

•Growth potential andopportunity for a business of your size.

•What barriers to entrydo you face in enteringthis market with your new company? Some typical barriers are:

oHigh capital costs

oHigh production costs

oHigh marketing costs

oConsumeracceptance and brandrecognition

oTraining and skills

oUnique technology and patents

oUnions

oShipping costs

oTariff barriers and quotas

•And of course, how will you overcome the barriers?

•How could the following affect your company?

oChange in technology

oChange ingovernment regulations

oChange in the economy

oChange inyour industry

Product

Inthe Products and Services section, you described your products and services as you see them. Now describe them fromyour customers’ point of view.

Featuresand Benefits

Listall of your majorproducts or services. For eachproduct or service:

•Describe the most important features. What is special about it?

•Describe the benefits.That is, what will theproduct do for the customer?

Notethe differencebetweenfeatures and benefits, and think about them. Forexample, a house that gives shelter and lasts a long time is madewith certain materials and to a certain design; those are its features. Its benefits include pride of ownership, financial security, providing forthe family, and inclusionin aneighborhood. You build features into your product so that you can sell the benefits.

Whatafter‐sale services will you give? Someexamples are delivery, warranty, service contracts, support, follow‐up, and refund policy.

Customers

Identifyyour targeted customers,their characteristics, and their geographic locations, otherwise known as their demographics.

Thedescription willbe completely different dependingon whetheryou planto sell to other businesses or directly to consumers. Ifyou sell a consumer product, butsell it through a channel of distributors, wholesalers, and retailers, you must carefully analyze both the end consumer and the middleman businesses to which you sell.

Youmay have more thanone customer group. Identify the most importantgroups. Then, for eachcustomer group, construct what is called a demographic profile:

•Age

•Gender

•Location

•Income level

•Social class and occupation

•Education

•Other (specific to your industry)

•Other (specific to your industry)

Forbusiness customers, the demographic factors mightbe:

•Industry (or portionof an industry)

•Location

•Size of firm

•Quality, technology, and price preferences

•Other (specific to your industry)

•Other (specific to your industry)

Competition

Whatproductsand companies will compete with you? List your major competitors:

(Namesand addresses)

Willthey compete with you across the board, or just forcertain products, certain customers,or in certain locations?

Willyou have important indirectcompetitors? (For example, video rental stores compete with theaters, although they are different types of businesses.)

Howwill your products or services comparewith the competition?

Usethe Competitive Analysis table below to compare your company with your two most important competitors. In the first columnare key competitive factors.Since these vary fromone industry to another, you may want to customize the list of factors.