Chapter 15: Pull Your Plan Together - Launch With Passion

1. Learning Objectives: Gather all your information and Action Steps together to build one coherent Business Plan; which will become a portable showcase for your business and more importantly an ever-evolving guide Review the advantages and disadvantages of Business Plan software and using outside help to complete the plan Review a sample Business Plan to discover how one pair of entrepreneurs defined, developed, and planned for their business Understand that words talk, however numbers show it can be done Develop the Notes section for your financial plan Recognize the importance of providing all backup data for your readers Launch your finished Business Plan with passion and hard work Chapter 15: Pull Your Plan Together - Launch With Passion

2. Preparing to Write Your Business Plan • Three-Part Structure: Words, Numbers and Appendices • Use Words: Introduce your strategies for marketing and management in Section I • Present Numbers: Present projected financial information in Section II and the appendix • Business Plan Software • Outside Assistance in Writing a Business Plan • Reminders • A Business Plan helps reduce the risk of failure • Make sure your Plan is easy to ready and well documented • The Cover Letter • The Table of Content

3. Action Step 62: Write a Draft Cover Letter • Address your letter to a specific person who can help your business • Be brief • State the reason you are sending the plan • Purpose is to open the door and prepare the way for negotiations • Tone should be confident and slightly formal

4. Action Step 63: Write a Draft Executive Summary • Imagine you have 3 -5 minute to explain your Business Venture to a stranger • This gives you an idea of the info you need in your executive summary • Answer the following questions: • What is the problem? • Why is your product/service the correct solution? • Who is the target market & has the product/service been tested? • Where will you reach you target market? • When will you launch the product/service? • How will you make money? • Practice explaining your venture • When you are satisfied, type up your summary • Make the reader exclaim, “Tell me more!”

5. Serves as an introduction to the Business Plan Similar to the preface of a book Written to: Acquaint the reader with the subject matter Direct the reader to strengths the entrepreneur wants to emphasize Define the market and plan to reach the market Make the reader want to turn the page and keep reading Pay special attention to: Business description, current position, future outlook, management, uniqueness Funds sought, how they will be used and how and when they will be repaid Summary should excite, entire and draw the reader into the plan May be your own chance to sell your idea Lenders prefer hard numerical data and facts Executive Summary

6. Action Step 64: Describe Your Company, Product, and Services • Excite your reader about your business • If this is a start-up: • Explain your product or service fully • Mention numbers whenever you can • If this is an on-going business: • Your financial records will substantiate your need for money • Keep the words flowing – you need to convince the reader to continue reading

7. Section I: Description of the Business • A. Company Analysis and Services • Include unique qualifications, company history and past accomplishments • Let the facts speak for themselves and support all claims with numbers • Avoid hard-sell tactics and refuse to puff-up the product • Project a positive future • B. Industry and Market Overview and Target Customers • Give reader information about the size of the market, trends and what you are aiming your product towards • Prove to the reader you understand the market and are meeting customer needs

8. Action Step 65: Describe The Market and Target Customers & Action Step 66: Describe Competitors • Bring all your marketing research into this section • Wow your reader with a picture of your Target Customer just waiting for your product • Profile businesses that compete with you directly • What are your competitors’ strengths & weaknesses? What can you learn from them? • What makes your product unique in the eyes of your customer? • How are you going to implement your competitive positioning strategy? • Provide back-up research in the appendix

9. Section I: Description of the Business • C. Competitive Analysis • Persuade the reader that your competitive tactics are well developed and will be effective • D. Marketing Strategy • Price, Product, Promotion, Pace, & Participation • Distribution channels, selling methods and public relations • E. Facility Location & Operations • F. Management & Personnel • G. Exit Strategy

10. Action Step 67: Describe Marketing Strategy Work Through the Four P’s • Develop the thrust of your marketing strategy • What techniques will reap the most cost-effective response? Encourage repeat business and positive word of mouth? • Start with what your Target Customers see as a good value • Develop your marketing mix (4 P’s + participation) • Prepare back-up data for the appendix

11. Action Step 68: Show Off Your Facility, Location and Operations • Lenders can visit & see what’s going on • Gives you an opportunity to impress your banker on your own turf • Persuade potential lenders to visit with photographs, diagrams & illustrations • If you have a manufacturing facility discuss the selection process & operating costs

12. Action Step 69: Introduce Your Management Team and Personnel • Highlight the positive qualities of your team • Focus on accomplishments, education, training, flexibility, imagination, tenacity • Include experience and make sure your team has balance • Describe the people you need as employees and what they will cost • Provide short resumes for each major player

13. Section II: Financial Section • Good Numbers • This is the heart of your Business Plan • Pro-forma statements, pricing scenarios and so on • Good Notes • Most lenders study notes that accompany income and cash flow projections • Use them to explain how you generated your numbers and make them easy to read • A. Projected Income • B. Balance Sheet

14. Action Step 70: Project Your Income Statement and Cash Flow & Action Step 71: Complete Your Balance Sheet • You are looking for net profit so figure your sales and cost of goods sold. The difference is your gross margin • Subtract your other expenses from gross margin to get profit before taxes. Subtract taxes to arrive at net profit after tax. • The income statement and cash-flow statement can be combined into one or be shown as two separate statements. • A balance sheet is a snapshot of your financial position at a certain point in time. • Add your assets and divide them into current and fixed. • Depreciate fixed assets that wear out and show their net value. • Add up and divide your liabilities into current and long-term. • Subtract liabilities from assets. You now have a picture of your net worth. Are you in the red or in the black?

15. Ending Thoughts: The Top Myths About Starting a Business • It is all dependent upon hard work • Hard work is absolutely necessary but not enough • If your product or service is compelling enough customers and investors will beat a path to your door • It is all about you • The government is your friend • A maze of regulations and paperwork is required for a business – get help! • The government is your enemy • Despite the maze, governmental units make great customers • It is only worth doing if you become the next Google • The vast majority of small businesses remain small businesses • Aim high but have success metrics grounded in probability

16. Make Sure Your Business Plan has Answered the Following Questions: • What is your mission? • How are you going to market your product or service? • Who is going to purchase your product or service? • How will you reach your Target Customers? • What makes your firm unique? • What is your business model? • What is your revenue model? • How will you support the financial needs of your growing firm?

17. Think Points for Success • The executive summary should read like advertising copy. Keep revising until it is tight & convincing. Do not exaggerate. • Section I should generate enthusiasm for your business. • Section II should substantiate the enthusiasm with numbers. • Be sure footnotes sufficiently explain the numbers in your financial statements. • Do not inflate numbers to impress. • Use your Business Plan as a road map to success. • Your Business Plan is a working, living document; revise it every 3, or 12 months depending on the volatility in your industry.