HOW TO WRITE A BUSINESS PLAN Managing and Planning Series ______________________________________________________________________________ Copyright 1993 !inda Pinson and "erry "innett. All rights reser#ed. $o part may %e reprodu&ed transmitted or trans&ri%ed 'ithout the permission o( the authors. SBA retains an irre#o&a%le 'orld'ide none)&lusi#e royalty-(ree unlimited li&ense to use this &opyrighted material. *hile 'e &onsider the &ontents o( this pu%li&ation to %e o( general merit its sponsorship %y the U.S. Small Business Administration does not ne&essarily &onstitute an endorsement o( the #ie's and opinions o( the authors or the produ&ts and ser#i&es o( the &ompanies 'ith 'hi&h they are a((iliated. All of SBA's programs and services are extended to the public on a nondiscriminatory basis. ______________________________________________________________________________ TABLE OF CONTENTS INTRODUCTION 1 COVER SHEET 1 STATEMENT OF PURPOSE (MISSION STATEMENT) 2 THE BUSINESS !egal Stru&ture 2 +es&ription o( the Business 2 Produ&ts or Ser#i&es 3 !o&ation 3 Management 3 Personnel 3 Methods o( ,e&ord -eeping 3 .nsuran&e / Se&urity / Summar y 0 MARKETING 1arget Mar2et 0 Competition 0
Methods o( +istri%ution 0 Ad#ertising 3 Pri&ing 3 Produ&t +esign 3 1iming o( Mar2et 4ntry 3 !o&ation 5 .ndustry 1rends 5 FINANCIAL DOCUMENTS Summary o( 6inan&ial $eeds 5 Sour&es and Uses o( 6unds Statement 9 Cash 6lo' Statement 7Budget8 9 1hree-year .n&ome Pro9e&tion 1: Brea2-e#en Analysis ;raph 10 A&tual Per(orman&e Statements 1< Balan&e Sheet 1< Summary 21 SUPPORTING DOCUMENTS Personal ,esumes 22 Personal 6inan&ial Statement 22 Credit ,eports 22 Copies o( !eases 22 !etters o( ,e(eren&e 22 Contra&ts 22 !egal +o&uments 23 Mis&ellaneous +o&uments 23 PUTTING YOUR BUSINESS PLAN TOGETHER 23 KEEPING YOUR BUSINESS PLAN CURRENT Ma2ing ,e#isions 23 .mplementing Changes 23 Anti&ipating Pro%lems 2/ REFERENCES 24 APPENDIX: INFORMATION RESOURCES 2 _____________________________________________________________________ _________ INTRODUCTION 1here are t'o main purposes (or 'riting a %usiness plan. 1he (irst and most important is to ser#e as a guide during the li(e o( your %usiness. .t is the %lueprint o( your %usiness and 'ill ser#e to 2eep you on the right tra&2. 1o %e o( #alue your plan must %e 2ept &urrent. .( you spend
the time to plan ahead many pit(alls 'ill %e a#oided and needless (rustrations 'ill %e eliminated. Se&ond the %usiness plan is a re=uirement i( you are planning to see2 loan (unds. .t 'ill pro#ide potential lenders 'ith detailed in(ormation on all aspe&ts o( the &ompany>s past and &urrent operations and pro#ide (uture pro9e&tions. 1he te)t o( a %usiness plan must %e &on&ise and yet must &ontain as mu&h in(ormation as possi%le. 1his sounds li2e a &ontradi&tion %ut you &an sol#e this dilemma %y using the -ey *ord approa&h. *rite the (ollo'ing 2ey 'ords on a &ard and 2eep it in (ront o( you 'hile 'riting? W!" W!#$ W!%&% W!%' W!( H") H") M*+! Ans'er all o( the =uestions as2ed %y the 2ey 'ords in one paragraph at the %eginning o( ea&h se&tion o( the %usiness plan. 1hen e)pand on that statement %y telling more a%out ea&h item in the te)t that (ollo's. 1here is no set length to a %usiness plan. 1he a#erage length seems to %e 3: to /: pages in&luding the supporting do&uments se&tion. Brea2 the plan do'n into se&tions. Set up %lo&2s o( time (or 'or2 'ith target dates (or &ompletion. @ou may (ind it e((e&ti#e to spend t'o e#enings per 'ee2 at the li%rary 'here the re(eren&e materials needed 'ill %e &lose at hand. .t ta2es dis&ipline time and pri#a&y to 'rite an e((e&ti#e %usiness plan. @ou 'ill sa#e time %y &ompiling your list o( supporting do&uments 'hile 'riting the te)t. 6or e)ample 'hile 'riting a%out the legal stru&ture o( your %usiness you 'ill realiAe the need to in&lude a &opy o( your partnership agreement. *rite partnership agreement on your list o( supporting do&uments. *hen &ompiling that se&tion o( your plan you 'ill already ha#e a list o( ne&essary do&uments. As you go along re=uest any in(ormation that you do not ha#e su&h as &redit reports. *ith the pre#ious &onsiderations in mind you are ready to %egin (ormulating your plan. ,ead through this entire pu%li&ation to get an o#erall #ie' o( the %usiness planning pro&ess. _____________________________________________________________________ _________ COVER SHEET 1he (irst page o( your %usiness plan 'ill %e the &o#er sheet. .t ser#es as the title page o( your plan. .t should &ontain the (ollo'ing in(ormation? $ame o( the &ompany Company address Company phone num%er 7in&lude area &ode8 !ogo 7i( you ha#e one8 $ames titles addresses phone num%ers 7in&lude area &ode8 o( o'ners Month and year in 'hi&h the plan is issued $ame o( preparer
1he (ollo'ing e)ample 'ill ser#e as a guide. _____________________________________________________________________ ABC CORPORATION 332 4ast Main Street Bur2e B@ 1::31 72:38 02<-/319 "ohn Smith President 72:38 51/-:221 32/ South Street "amesto'n $@ 1::51 Mary Bla2e Bi&e President 72:38 3</-1213 5< *est A#enue Bur2e $@ 1::31 "ames !ysander Se&retary 72:385/2-1</5 /23 Potrero A#enue "essup $@ 1:<:2 1andi Ciggins 1reasurer 72:38 51<-:2:1 321 $ason Street Adams $@ 1:<:/ Plan prepared Septem%er 1992 %y Corporate D((i&ers _________________________________________________________________ STATEMENT OF PURPOSE (MISSION STATEMENT) The statement of purpose is also &alled the mission statement or executive summary . .( your lender 'ere to read only this in(ormation he or she 'ould 2no' the name and nature o( your %usiness its legal stru&ture the amount and purpose o( your loan re=uest and your plan (or repayment. Use the 2ey 'ord approa&h mentioned earlier. Be &on&ise and &lear. 1he statement o( purpose is &ontained on one page. Although it is positioned a(ter the &o#er sheet it is most e((e&ti#ely 'ritten a(ter the plan has %een &ompleted. At that time all the in(ormation and (inan&ial data needed are a#aila%le. .( you are 'riting your plan (or a lender %e spe&i(i& a%out the use o( (unds. Support the amount re=uested 'ith in(ormation su&h as pur&hase orders estimates (rom suppliers rate sheets and mar2eting results. .n&lude this in(ormation in the supporting do&uments se&tion. Address the =uestion o( loan repayment. @ou 'ant to sho' the lender your &ompany>s a%ility to meet payments o( interest as 'ell as prin&ipal. Some in#estors li2e to see t'o 'ays out i.e. t'o di((erent sour&es o( repayment. *hen you ha#e ans'ered the 2ey 'ord =uestions you are ready to present that in(ormation in one or t'o &on&ise paragraphs. A sample statement o( purpose
(ollo's. _____________________________________________________________________ _ STATEMENT OF PURPOSE ABC CD,PD,A1.D$ an S-Corporation esta%lished in 1950 is a tool and die &ompany that manu(a&tures spe&ialiAed parts (or the aerospa&e industry and is lo&ated at 332 4ast Main Street Bur2e $.@. 1he &ompany is see2ing gro'th &apital in the amount o( E0:::: (or the purpose o( pur&hasing ne' and more modern e=uipment and (or training e)isting personnel in the use o( that ne' e=uipment. 6unding is needed in time (or the e=uipment to %e deli#ered and in pla&e %y 11 "anuary 1993. 1here is a t'o-month period %et'een order pla&ement and deli#ery date. 1he moderniAed e=uipment 'ill result in a 30 per&ent in&rease in produ&tion and a 20 per&ent de&rease in the unit &ost. ,epayment o( the loan and interest &an %egin promptly 'ithin 3: days o( re&eipt and &an %e (urther se&ured %y real estate 'hi&h is o'ned %y the &ompany and 'hi&h has a 199: assessed #aluation o( E150:::. _________________________________________________________________ _____________________________________________________________________ _________ THE BUSINESS 1he (irst ma9or se&tion o( your plan &o#ers the details o( your %usiness. Begin this se&tion 'ith a one-page summary addressing the 2ey elements o( your %usiness. 1he (ollo'ing te)t 'ill e)pand on ea&h area presented in the summary. Use the 2ey 'ord system to help you 'rite &on&isely. Address all o( the topi&s as they relate to your %usiness in an order that seems logi&al to you. .n&lude in(ormation a%out your industry in general and your %usiness in parti&ular. Be prepared to %a&2 up statements and 9usti(y pro9e&tions 'ith data in the supporting do&uments se&tion. L%,#- S$&*+$*&% State the reasons (or your &hoi&e o( legal stru&ture. .( you are a sole proprietor you may in&lude a &opy o( your %usiness li&ense. .( you ha#e (ormed a partnership in&lude a &opy o( your partnership agreement in the supporting do&uments se&tion. @our agreement should in&lude pro#isions (or partners to e)it and (or the dissolution o( the &ompany. .t must spell out the distri%ution o( the pro(its and the (inan&ial responsi%ility (or any losses. 4)plain the reasoning %ehind the terms o( the agreement. .( you ha#e (ormed a &orporation e)plain 'hy this legal (orm 'as &hosen and ho' the &ompany 'ill operate 'ithin the &orporate stru&ture and in&lude a &opy o( the &harter and arti&les in the supporting do&ument se&tion.
.( you plan to &hange your legal stru&ture in the (uture ma2e pro9e&tions regarding 'hy you 'ould &hange 'hen the &hange 'ould ta2e pla&e 'ho 'ould %e in#ol#ed and ho' the &hange 'ould %ene(it the &ompany. D%.+&/0$/"' "1 $!% B*./'%.. 1his is the se&tion o( the plan in 'hi&h you go into greater detail a%out your %usiness. Ans'er the 2ey 'ord =uestions regarding the %usiness>s history and present status and your (uture pro9e&tions (or resear&h and de#elopment. Dutline your &urrent %usiness assets and report your in#entory in terms o( siAe #alue rate o( turno#er and mar2eta%ility. .n&lude industry trends. Stress the uni=ueness o( your produ&t or ser#i&e and state ho' you &an %ene(it the &ustomer. Pro9e&t a sense o( 'hat you e)pe&t to a&&omplish three to (i#e years into the (uture. P&"2*+$. "& S%&3/+%. ;i#e a detailed des&ription o( your produ&t (rom ra' materials to (inished item. *hat ra' materials are used ho' mu&h do they &ost 'ho are your suppliers 'here are they lo&ated and 'hy did you &hoose themF .n&lude &ost %rea2do'ns and rate sheets to %a&2 up your statements. Although you may order (rom one main supplier in&lude in(ormation on alternate suppliers. Address ho' you &ould handle a sudden in&rease o( orders or a loss o( a ma9or supplier. @ou may hear a lender re(er to the 'orst &ase s&enario. 1his means that the lender 'ants you to %e a%le to anti&ipate and sol#e potential pro%lems. .t is also to your ad#antage to thin2 in terms o( alternati#es and to prepare (or the une)pe&ted so that your %usiness &an &ontinue to run smoothly. Some %usinesses (ail %e&ause they %e&ome too su&&ess(ul too soon. 1here(ore it is also good to plan (or the %est &ase s&enario. .( you are inundated 'ith orders your %usiness plan should &ontain in(ormation needed to hire sta(( and &onta&t additional suppliers. .( you are pro#iding a ser#i&e tell 'hat your ser#i&e is 'hy you are a%le to pro#ide it ho' it is pro#ided 'ho 'ill %e doing the 'or2 and 'here the ser#i&e 'ill %e per(ormed. 1ell 'hy your %usiness is uni=ue and 'hat you ha#e that is spe&ial to o((er to your &ustomers. .( you ha#e %oth a produ&t and a ser#i&e that 'or2 together to %ene(it your &ustomer 7su&h as 'arranty ser#i&e (or the produ&ts you sell8 %e sure to mention this in your plan. Again the 2ey 'ords &ome into use. !ist (uture ser#i&es you plan to add to your %usiness. Also anti&ipate any potential pro%lem areas and 'or2 out a plan (or a&tion. @ou should state any proprietary rights su&h as &opyrights patents or trademar2s in this se&tion. L"+#$/"' .( lo&ation is important to your mar2eting plan you may (o&us on it in the mar2eting se&tion. 6or e)ample i( you are opening a retail shop your &hoi&e o( lo&ation 'ill %e determined %y your target mar2et. .( you are a manu(a&turer and ship %y &ommon &arrier your lo&ation is not dire&tly tied to your target mar2et so you &an dis&uss lo&ation in the %usiness se&tion. @ou may
%egin this topi& 'ith a senten&e su&h as GABC Corporation is housed in 20::: s=uare (eet o( 'arehouse spa&e lo&ated at 332 4ast Main Street Bur2e $@. 1his site 'as &hosen %e&ause o( a&&essi%ility to shipping (a&ilities good se&urity pro#isions lo' s=uare (ootage &osts and pro)imity to sour&es o( supplies.G $o' e)pand on ea&h reason (or &hoosing that lo&ation and %a&2 up your statements 'ith a physi&al des&ription o( the site and a &opy o( the lease agreement. ;i#e %a&2ground in(ormation on your site &hoi&e and list other possi%le lo&ations. @ou may 'ant to in&lude &opies o( pi&tures layouts or dra'ings o( the lo&ation in the supporting do&ument se&tion. Use the 'or2sheet on page / as a guideline (or 'riting a lo&ation 7site8 analysis. Co#er only those topi&s that are rele#ant to your %usiness. .( you need assistan&e &onta&t the SBA resour&e &enter nearest you 7see .n(ormation ,esour&es8. _____________________________________________________ LOCATION ANALYSIS WORKSHEET 1. Address? 2. $ame o( realtorH&onta&t person? 3. S=uare (ootageH&ost? /. Cistory o( lo&ation? 0. !o&ation in relation to target mar2et? <. 1ra((i& patterns (or &ustomers? 3. 1ra((i& patterns (or suppliers? 5. A#aila%ility o( par2ing? 7in&lude diagram8 9. Crime rate (or area? 1:. Iuality o( pu%li& ser#i&es 7e.g. poli&e (ire prote&tion8 11. $otes on 'al2ing tour o( area? 12. $eigh%oring shops and lo&al %usiness &limate? 13. Joning regulations? 1/. Ade=ua&y o( utilities 7get in(ormation (rom utility &ompany representati#es8?
10. A#aila%ility o( ra' materialsHsupplies? 1<. A#aila%ility o( la%or (or&eK 13. !a%or rate o( pay (or the area? 15. Cousing a#aila%ility (or employees? 19. 1a) rates 7state &ounty in&ome payroll spe&ial assessments8? 2:. 4#aluation o( site in relation to &ompetition? _________________________________________________________ M#'#,%4%'$ 1his se&tion des&ri%es 'ho is %ehind the %usiness. .( you are a sole proprietor tell a%out your a%ilities and in&lude your resume. Be honest a%out areas in 'hi&h you 'ill need help and state ho' you 'ill get that help. *ill you ta2e a mar2eting seminar 'or2 'ith an a&&ountant or see2 the ad#i&e o( someone in ad#ertisingF .( you ha#e (ormed a partnership e)plain 'hy the partners 'ere &hosen 'hat they %ring to the &ompany and ho' their a%ilities &omplement ea&h others. 4)perien&e %a&2ground and =uali(i&ations 'ill %e &o#ered in their resumes in the supporting do&uments se&tion. .( your %usiness is in&orporated gi#e detailed in(ormation on the &orporate stru&ture and o((i&ers. .n&lude a resume (or ea&h o((i&er and des&ri%e ea&h one %y ans'ering the (ollo'ing =uestions? *ho are theyF *hat are their s2illsF *hy 'ere they &hosenF *hat 'ill they %ring to the organiAationF P%&."''%- *ho 'ill %e doing the 'or2F *hy are they =uali(iedF Co' 'ill they %e hiredF *hat is their 'ageF *hat 'ill they %e doingF Dutline the duties and 9o% des&riptions (or all personnel. 4)plain any employee %ene(its. .( you are inundated 'ith orders (or your produ&t or items to %e ser#i&ed do you ha#e a plan (or in&reasing personnelF M%$!"2. "1 R%+"&2 K%%0/', 1ell 'hat a&&ounting system 'ill %e used and 'hy the system 'as &hosen. *hat portion o( your re&ord 2eeping 'ill %e done internallyF *ho 'ill %e responsi%le (or 2eeping those re&ordsF *ill you %e using an outside a&&ountant to ma)imiAe your pro(itsF .( so 'ho 'ithin your &ompany 'ill %e s2illed at reading and analyAing (inan&ial statements pro#ided %y the a&&ountantF .t is important not only to sho' that your a&&ounting 'ill %e ta2en &are o( %ut that you 'ill ha#e some means o( using your (inan&ial statements to implement &hanges to ma2e your &ompany more pro(ita%le. A(ter reading this se&tion the lender should ha#e &on(iden&e in your &ompany>s
a%ility to 2eep and interpret a &omplete set o( (inan&ial re&ords. I'.*&#'+% .nsuran&e is an important &onsideration (or e#ery %usiness. Produ&t lia%ility is a ma9or &onsideration espe&ially in &ertain industries. Ser#i&e %usinesses are &on&erned 'ith personal lia%ility insuring &ustomers> goods 'hile on the premises or during the transporting o( those goods. .( a #ehi&le is used (or %usiness purposes your insuran&e must re(le&t that use. .( you o'n your %usiness lo&ation you 'ill need property insuran&e. Some types o( %usinesses re=uire %onding. Partners may 'ant li(e insuran&e naming ea&h other as the %ene(i&iary. Consider the types o( &o#erage appropriate to your %usiness. 1ell 'hat &o#erage you ha#e 'hy you &hose it 'hat time period it &o#ers and 'ho the &arrier is. -eep your insuran&e in(ormation &urrent. S%+*&/$( A&&ording to the U.S. Cham%er o( Commer&e more than 3: per&ent o( %usiness (ailures result (rom employee dishonesty. 1his &on&erns not only the(t o( mer&handise %ut also the(t o( in(ormation. Address the issue o( se&urity as it relates to your %usiness. 6or e)ample i( you are disposing o( &omputer printout data a small paper shredder may %e &ost-e((e&ti#e. Anti&ipate pro%lem areas in your %usiness identi(y se&urity measures you 'ill put into pra&ti&e tell 'hy you &hose them and 'hat you pro9e&t they 'ill a&&omplish. +is&uss this area 'ith your insuran&e agent. By installing se&urity de#i&es you may %e a%le to lo'er &ertain insuran&e &osts along 'ith prote&ting your %usiness. S*44#&( @ou ha#e no' &o#ered all the areas 'hi&h should %e addressed in the %usiness se&tion. Use the 2ey 'ords %e thorough anti&ipate any pro%lem areas and %e prepared 'ith solutions and analyAe industry trends and %e ready to pro9e&t your %usiness into the (uture. *hen you ha#e &ompleted the %usiness se&tion you are ready to %egin de#eloping the mar2eting se&tion. _____________________________________________________________________ _________ MARKETING 1he se&ond ma9or se&tion o( your %usiness plan &o#ers the details o( your mar2eting plan. A good mar2eting plan is essential to your %usiness de#elopment and su&&ess. .n&lude in(ormation a%out the total mar2et 'ith emphasis on your target mar2et. @ou must ta2e the time to identi(y your &ustomers and (ind the means to ma2e your produ&t or ser#i&e a#aila%le to them. 1he 2ey here is time. .t ta2es time to resear&h and de#elop a mar2eting plan %ut it is time 'ell spent. Most o( the in(ormation you need 'ill %e (ound in your pu%li& li%rary and in the pu%li&ations o( the U.S. +epartment o( Commer&e the U.S. Small Business Administration 7SBA8 and the U.S. Census Bureau. ,emem%er that you need a &lear understanding o( 'ho 'ill pur&hase your produ&t 'ho 'ill ma2e use o( your ser#i&e 'hy they 'ill &hoose your &ompany and ho' they 'ill (ind out a%out it.
Begin this se&tion 'ith a one-page summary &o#ering the 2ey elements o( your mar2eting plan. 1he (ollo'ing te)t 'ill e)pand on ea&h area presented in the summary. Ba&2 up statements and 9usti(y pro9e&tions 'ith data in the supporting do&uments se&tion. Again the 2ey 'ord approa&h 'ill help you to thoroughly &o#er ea&h area. 1he topi&s may %e &o#ered in any order that seems logi&al to you. T#&,%$ M#&5%$ 1he target mar2et has %een de(ined as that group o( &ustomers 'ith a set o( &ommon &hara&teristi&s that distinguish them (rom other &ustomers. @ou 'ant to identi(y that set o( &ommon &hara&teristi&s that 'ill ma2e those &ustomers yours. 1ell ho' you did your mar2et resear&h. *hat 'ere your resour&es and your resultsF *hat are the demographi&s o( your target mar2etF *here do your &ustomers li#e 'or2 and shopF +o they shop 'here they li#e or 'here they 'or2F .( you are in the %usiness o( #ideo &assette re&order 7BC,8 repair ho' many BC,s are o'ned 'ithin a &ertain radius o( your shopF *ould in-home ser#i&e %e &ost- e((e&ti#e and a %ene(it to your &ustomersF Ba&2 up your (indings 'ith U.S. Census Bureau reports =uestionnaires and test mar2eting results. State ho' you (eel you &an ser#e this mar2et in terms o( your resour&es strengths and 'ea2nesses. 6o&us on reasona%le %elie#a%le and o%taina%le pro9e&tions regarding the siAe o( your potential mar2et. 7See .n(ormation ,esour&es.8 C"40%$/$/"' +ire&t &ompetition is a %usiness o((ering the same produ&t or ser#i&e to the same mar2et. .ndire&t &ompetition is a &ompany 'ith the same produ&t or ser#i&e %ut 'ith a di((erent target mar2et. 4#aluate %oth types o( &ompetitors. @ou 'ant to determine the &ompetitors> images. 1o 'hat part o( the mar2et are they trying to appealF Can you appeal to the same mar2et in a %etter 'ayF Dr &an you (ind an untapped mar2etF Use the 'or2sheet to &ompile organiAe and e#aluate in(ormation on your &ompetition. @our analysis o( this in(ormation 'ill help you plan your mar2et entry. *hat is the &ompetition>s &urrent mar2et share 7'hat per&ent o( the total &ustomer %ase is theirs8F Can you tap into this share or 'ill you need to &ar#e out your o'n mar2et ni&heF _______________________________________________________ COMPETITOR PROFILE WORKSHEET Competitors .tem 1 2 3 1. $ame o( Competitor7s8? 2. !o&ation? 3. Produ&ts or ser#i&es o((ered? /. Methods o( distri%ution 7'holesale retail mar2eting reps personal selling &orporate sales8? 0. .mage Pa&2aging? Promotional materials? Methods o( ad#ertising? Positioning 7&ustomers> per&eption o( =uality o( produ&t or ser#i&e8? <. Pri&ing stru&ture? 3. Per(orman&e 7past and present8? 5. Mar2et share 7%y num%er type and lo&ation o( &ustomers8? 9. Strengths 71he strengths o( the &ompetition %e&ome your strengths8? 1:. *ea2nesses 7!oo2ing at the 'ea2nesses o( the &ompetition &an help you (ind 'ays o( %eing uni=ue and o( %ene(iting the &ustomer.8? _______________________________________________________ A(ter &ompleting this se&tion you or your lender 'ill 2no' 'ho your &ompetitors are 'here they are lo&ated 'hat produ&ts or ser#i&es they o((er ho' you plan to &ompete ho' your &ustomers &an a&&ess your %usiness and 'hy you &an pro#ide a uni=ue and %ene(i&ial ser#i&e or produ&t. M%$!"2. "1 D/.$&/6*$/"' +istri%ution is the manner in 'hi&h produ&ts are physi&ally transported to the &onsumer or the 'ay ser#i&es are made a#aila%le to the &ustomer. +istri%ution is &losely related to your target mar2et. 4sta%lish the pur&hasing patterns o( your &ustomers. .( you are selling a produ&t do your &ustomers pur&hase %y dire&t mail %uy through &atalogues or ma2e in-store pur&hasesF *ill you sell dire&tly or through a manu(a&turer>s representati#eF .( you are shipping the produ&t 'ho 'ill a%sor% the shipping &osts and 'hat &arrier 'ill %e usedF Use the 2ey 'ords to ans'er =uestions regarding your distri%ution plan. Ba&2 up your de&isions 'ith statisti&al reports rate sheets (rom shippers &ontra&ts 'ith manu(a&turer>s representati#es or any other supporting do&uments. .( you are in#ol#ed in a ser#i&e %usiness 'ill you pro#ide in-shop ser#i&eF *ill you ma2e ser#i&e &alls and i( so ho' 'ill mileage &osts %e handledF *hat is your planned response time to (ill your &ustomers> needsF
!ist the pros and &ons o( the #arious methods o( distri%ution and gi#e reasons (or your &hoi&es. -eep in mind the 'orst &ase s&enarios mentioned a%o#e. Present alternati#es. 6or e)ample i( United Par&el Ser#i&e your ma9or shipper 'ere to go on stri2e ho' 'ould you distri%ute your produ&tsF .( your mo%ile ser#i&e #an 'ere to %rea2 do'n do you ha#e a #ehi&le 'hi&h &ould %e used as %a&2upF Pro#ide (or a smooth %usiness (lo'. A23%&$/./', Ad#ertising presents the message to your &ustomer that your produ&t or ser#i&e is good and desira%le. 1ailor your ad#ertising to your target mar2et. @our mar2eting resear&h 'ill ha#e spelled out 'hi&h tele#ision and radio stations and 'hi&h pu%li&ations are o( interest to your target mar2et. 1hose are the ones you 'ill use. AnalyAe your &ompetitors> ad#ertising in these pu%li&ations. Be ready to %a&2 up your de&isions. .n&lude &opies o( your promotional materials su&h as %ro&hures dire&t mail ad#ertisements and (lyers. 1ell the lender 'here you 'ill put your ad#ertising dollars 'hy you &hose those methods ho' your message 'ill rea&h your target mar2et 'hen your ad#ertising &aign 'ill %egin ho' mu&h your plan 'ill &ost and 'hat (ormat your ad#ertising 'ill ta2e. P&/+/', @our pri&ing stru&ture is &riti&al to the su&&ess o( your %usiness and is determined through mar2et resear&h and analysis o( (inan&ial &onsiderations. Basi& mar2eting strategy is to pri&e 'ithin the range %et'een the pri&e &eiling and the pri&e (loor. 1he pri&e &eiling is determined %y the mar2etK it is the highest &ost a &onsumer 'ill pay (or a produ&t or ser#i&e and is %ased on per&ei#ed #alue. *hat is the &ompetition &hargingF *hat is the =uality o( the produ&t or ser#i&e you are o((eringF *hat is the nature o( the demand and 'hat is the image you are pro9e&tingF 1he pri&e (loor is the lo'est amount at 'hi&h you &an o((er a produ&t or ser#i&e meet all your &osts and still ma2e your desired pro(it. Consider all &osts -- ra' materials o((i&e o#erhead shipping #ehi&le e)pense ta)es loan and interest payments and o'ner dra's are a (e'. 1he pro(ita%le %usiness operates %et'een the pri&e &eiling and the pri&e (loor. 1he di((eren&e allo's (or dis&ounts %ad de%t and returns. Be spe&i(i& a%out ho' you arri#ed at your pri&ing stru&ture and lea#e room (or some (le)i%ility. Positioning -- predetermining the per&ei#ed #alue in the eyes o( the &onsumer -- &an %e a&&omplished through promotional a&ti#ities. 1o %e su&&ess(ul you must de&ide 'hat your produ&t or ser#i&e o((ers that your &ompetitor>s does not and promote it as the uni=ue %ene(it. Bery (e' items on the mar2et ha#e uni#ersal appeal your produ&t or ser#i&e &annot %e all things to all people. Co'e#er i( you position your produ&t or ser#i&e properly prospe&ti#e pur&hasers or users 'ill immediately re&ogniAe its %ene(its to them. P&"2*+$ D%./,' Pa&2aging and produ&t design &an play a ma9or role in the su&&ess o( your %usiness. .t>s 'hat (irst &at&hes the &ustomer>s eye. Consider the tastes o( your target mar2et in the ultimate design o( your produ&t and your pa&2age design. +e&ide 'hat 'ill %e most appealing in terms o( siAe shape &olor material and 'ording. Pa&2aging attra&ts a great deal o( pu%li& attention. Be ad#ised o( the 6air Pa&2aging and !a%eling A&t 'hi&h esta%lished mandatory la%eling re=uirements. 1he U.S. 6ood and +rug Administration 76+A8 has stri&t pro&edures (or the la%eling o( items (alling 'ithin its 9urisdi&tion. 1he pa&2aging guidelines &an %e o%tained (rom the 6+A or (ound in the li%rary. Use 2ey 'ords to ans'er =uestions regarding your produ&t design and pa&2aging. .n&lude s2et&hes or photographs. Also in&lude in(ormation on any proprietary rights su&h as &opyrights trademar2s or patents. T/4/', "1 M#&5%$ E'$&( 1he timing o( your entry into the mar2etpla&e is &riti&al and ta2es &are(ul planning and resear&h. Ca#ing your produ&ts and ser#i&es a#aila%le at the right time and the right pla&e depends more on understanding &onsumer readiness than on your organiAational s&hedule. 1he manner in 'hi&h a ne' produ&t is re&ei#ed %y the &onsumer &an %e a((e&ted %y the season the 'eather and holidays. 4arly "anuary and Septem%er are the %est times to mail (lyers and &atalogs as &onsumers seem to %e more re&epti#e to mail order pur&hasing in those months. 1he ma9or gi(t sho's are held in the summer months 7"une "uly August8 and again in "anuary and 6e%ruary. Most 'holesale %uying ta2es pla&e at these sho's. $o#em%er and +e&em%er are not good months (or introdu&ing ne' ser#i&e %usinesses unless they relate in some 'ay to the holiday season. Spring is a %etter time to introdu&e a ser#i&e. 1rade 9ournals and trade asso&iations in your (ield &an pro#ide the in(ormation you need on the timing patterns o( your industry. 1ell the lender 'hen you plan to enter the mar2et and ho' you arri#ed at your de&ision. L"+#$/"' .( your &hoi&e o( lo&ation is related to your target mar2et &o#er it in this se&tion o( your %usiness plan. !ist the reasons (or your &hoi&e. *hat is the &hara&ter o( the neigh%orhoodF +oes the site pro9e&t your %usiness imageF *here is the &ompetition in the areaF *hat is the tra((i& patternF *hat are the terms o( the leaseF *hat ser#i&es i( any does the landlord pro#ideF *hat is the o&&upan&y history o( your lo&ationF +id any &ompanies in the area go out o( %usiness 'ithin the past (e' monthsF .( so try to (ind out i( it 'as related to lo&ation. .s the area in 'hi&h you plan to lo&ate supported %y a strong e&onomi& %aseF *hat alternate sites 'ere &onsideredF 1hese are some o( the =uestions to %e &onsidered. ,e(er to !o&ation in the %usiness se&tion (or additional in(ormation. I'2*.$&( T&%'2. Be alert (or &hanges in your industry. $e' te&hnology may %ring ne' produ&ts into the mar2etpla&e that 'ill generate ne' ser#i&e %usinesses. ,ead trade 9ournals and industry reports in your (ield. Pro9e&t ho' your mar2et may &hange and 'hat you plan to do to 2eep up. _____________________________________________________________________ _________
FINANCIAL DOCUMENTS @ou are no' ready to de#elop the third area o( your plan. 6inan&ial re&ords are used to sho' past &urrent and pro9e&ted (inan&es. .n this se&tion 'e 'ill &o#er the ma9or do&uments you 'ill 'ant to in&lude in your %usiness plan. 1hey 'ill &onsist o( %oth pro (orma 7pro9e&ted8 and a&tual (inan&ial statements. @our 'or2 'ill %e easier i( these are done in the order presented. Summary o( 6inan&ial $eeds Appli&ation o( !oan 6unds Cash 6lo' Statement 7Budget8 1hree-year Pro9e&tion Brea2-e#en Analysis A&tual Per(orman&e Statements? Balan&e Sheet .n&ome 7Pro(it and !oss8 Statement !oan Appli&ationH6inan&ial Cistory S*44#&( "1 F/'#'+/#- N%%2. .( you are applying (or a loan your lenders and in#estors 'ill analyAe the needs o( your %usiness. 1hey 'ill distinguish among the three types o( &apital to %e used as (ollo's? Woring capital -- Used to meet (lu&tuating needs that are to %e repaid through &ash during the %usiness>s ne)t (ull operating &y&le generally one year. !ro"th capital -- Used to meet needs that are to %e repaid 'ith pro(its o#er a period o( a (e' years. .( you see2 gro'th &apital you 'ill %e e)pe&ted to sho' ho' the &apital 'ill %e used to in&rease your pro(its enough to %e a%le to repay the loan 'ithin se#eral years 7usually not more than se#en8. #$uity capital -- Used to meet permanent needs. .( you see2 e=uity &apital it must %e raised (rom in#estors 'ho 'ill ta2e the ris2 in return (or some &om%ination o( di#idend returns &apital gains or a spe&i(i& share o( the %usiness. -eeping the a%o#e in mind you must no' prepare a summary o( (inan&ial needs. 1his do&ument is an outline telling 'hy you are applying (or a loan and ho' mu&h you need. _______________________________________________________ SUMMARY OF FINANCIAL NEEDS .. ABC Corporation is see2ing a loan to in&rease
its gro'th &apital in the (ollo'ing areas o( produ&tion? A. 4=uipment 7ne' and more modern8 B. 1raining o( personnel in operation o( a%o#e. ... 6unds needed to a&&omplish a%o#e goal 'ill %e E0::::. A. See GUse o( 6undsG (or distri%ution o( (unds and %a&2up statement. _______________________________________________________ U.%. "1 F*'2. S$#$%4%'$ 1he potential lender 'ill re=uire a statement o( ho' the money you intend to %orro' 'ill %e used. .t 'ill %e ne&essary (or you to tell ho' you intend to disperse the loan (unds. Ba&2 up your statement 'ith supporting data. @ou must %e sure that your supporting data &an %e easily (ound %y the loan o((i&er 'ho is e)amining your appli&ation. .( you do not ha#e your in(ormation 'ell organiAed and retrie#a%le your appli&ation may %e re(used (or the simple reason that the material &annot %e (ound. .t 'ill %e ne&essary to ha#e a 'ell 'ritten ta%le o( &ontents. _______________________________________________________ USES OF FUNDS 1. +.SP4,SA! D6 !DA$ 6U$+S ABC Corporation 'ill use anti&ipated loan (unds in the amount o( E0:::: to moderniAe its produ&tion e=uipment. 1his 'ill ne&essitate the pur&hase o( t'o ne' pie&es o( e=uipment and the training o( present personnel in the operation o( this e=uipment. 2. BAC-UP S1A14M4$1 a. 1he e=uipment needed is as (ollo's? 718 Cigh-speed 6-3/ Atlas Press 7pur&hase pri&e -- E329::8 728 S31 "a'ors2i 4%%er 7pur&hase pri&e -- E25::8 %. 1he training is a#aila%le (rom the manu(a&turer as a three-'ee2 intensi#e program 7&ost? 1: employees L E12:: M E12:::8.
&. 1he remaining E23:: 'ill %e used (or the (irst monthly installment on loan repayment -- a period o( lo' produ&tion due to employee training. d. 1he e=uipment 'ill result in a 30 per&ent in&rease in produ&tion a 20 per&ent de&rease in unit &ost and a net pro(it in&rease su((i&ient to repay the loan and interest 'ithin three years 'ith a pro(it margin o( 10 per&ent. $ote? ,e(er to page 13N o( the produ&tion plan o( ABC Corporation. See pages 23 and 25N o( the mar2eting se&tion (or mar2et resear&h and pro9e&ted trends in the industry. ____________________ *hen 'riting your %usiness plan %e sure that your produ&tion plan in&ludes a des&ription o( the e=uipment ho' the 'or2 'ill %e done %y 'hom and at 'hat &ost. 1he mar2et resear&h 'ill sho' pro9e&ted needs (or your produ&t and thus sho' ho' in&reased produ&tion 'ill results in in&reased sales and ultimately in the &apa%ility to ena%le you to repay the loan. 7N1he page num%ers are hypotheti&al and do not re(er to page num%ers in this %oo2.8 _______________________________________________________ C#.! F-") S$#$%4%'$ (B*2,%$) Cash (lo' statements are the do&uments that pro9e&t 'hat your %usiness plan means in terms o( dollars. 1hey sho' &ash in(lo' and out(lo' o#er a period o( time and are used (or internal planning. .( you ha#e %een in %usiness (or some time 'or2sheets &an %e put together (rom the a&tual (igures o( in&ome and e)penses o( pre#ious years &om%ined 'ith pro9e&ted &hanges (or the ne)t period. .( you are starting a ne' %usiness you 'ill ha#e to pro9e&t your (inan&ial needs and dis%ursements. @our pro(it at the end o( the year 'ill depend on the proper %alan&e %et'een &ash in(lo' and out(lo'. 1he &ash (lo' statement identi(ies O *hen &ash is e)pe&ted to %e re&ei#ed. O Co' mu&h &ash 'ill %e re&ei#ed. O *hen &ash must %e spent to pay %ills and de%ts. O Co' mu&h &ash 'ill %e needed to pay e)penses.
.t also allo's the manager to identi(y the sour&e o( ne&essary &ash i.e. 'ill it &ome (rom sales and ser#i&es rendered or must it %e %orro'edF Be sure that your pro9e&tions ta2e into a&&ount re&ei#a%les and ho' long it 'ill ta2e your &ustomer to pay. 1he &ash (lo' statement deals only 'ith a&tual &ash transa&tions and not 'ith depre&iation and amortiAation o( good'ill or other non&ash e)pense items. A &ash (lo' statement &an %e prepared (or any period o( time. .t is re&ommended that you mat&h the (is&al year o( your %usiness. .t should %e prepared on a monthly %asis (or the ne)t year and re#ised not less than =uarterly to re(le&t a&tual per(orman&e in the pre&eding three months o( operations. .n preparing your &ash (lo' statement it might %e use(ul to &ompile se#eral indi#idual %udgets. 1hey &ould %e as (ollo's? 1. Cost o( sales %udget. 2. 6i)ed e)penses %udget. 3. Baria%le e)penses %udget. 1'o 'or2sheets &an %e used in de#eloping a &ash (lo' statement? Sources of cash "orsheet -- Contains all the (inan&ing sour&es (or the %usiness. %ash to be paid out "orsheet -- .denti(ies ho' mu&h &ash is e)pe&ted to %e spent to pay e)penses and o%ligations. &ote? Pro9e&tions in the t'o 'or2sheets must %e made (or the same time period 7monthly =uarterly or annually8. Dn&e you ha#e &ompleted the t'o 'or2sheets you are ready to trans(er the in(ormation into your &ash (lo' statement. @ou 'ill need to thin2 your 'ay through ea&h month pro9e&ting 'hat amount (rom ea&h &ategory o( the 'or2sheets 'ill %e appropriate to 'hat month. 6or e)ample i( your total sales amount to E1::::: you 'ill ha#e to pro9e&t the indi#idual amounts that 'ill pro%a%ly o&&ur in ea&h month. _______________________________________________________ SOURCES OF CASH WORKSHEET 7Cash 6lo'ing .nto @our Business8 Cash on Cand E __________ Sales-,e#enues Sales __________ Ser#i&e .n&ome __________ +eposits on sales or ser#i&es __________
Colle&tions on a&&ounts re&ei#a%le __________ Mis&ellaneous in&ome .nterest in&ome __________ Sale o( long-term assets __________ !ia%ilities !oans 7%an2s (inan&e &ompanies SBA et&8 __________ 4=uity D'ner in#estments 7sole proprietor or partnership8 __________ Contri%uted &apital 7&orporation8 __________ Benture &apital __________ 1otal Cash A#aila%le __________ _______________________________________________________ _______________________________________________________ CASH TO BE PAID OUT WORKSHEET 7Cash 6lo'ing Dut o( @our Business8 Start-up &osts Business li&ense 7annual e)pense8 ___________ +BA (iling (ee 7one time &ost8 ___________ Dther start-up &osts ___________________ ___________ ___________________ ___________ ___________________ ___________ .n#entory pur&hases Cash out (or items (or resale or ser#i&es ___________ Baria%le e)penses 7&ontrolla%le8 Ad#ertising __________ 6reight __________ Pa&2aging &osts __________ Parts and supplies __________ Sales salaries __________ Mis&. dire&t e)penses __________ 1otal dire&t e)penses ___________ 6i)ed e)penses 7o#erhead8 .nsuran&e __________
!i&enses P permits __________ D((i&e salaries __________ ,ent e)pense __________ Utilities __________ Mis&. indire&t e)penses __________ 1otal indire&t e)penses __________ Assets 7long-term pur&hases8 Cash to %e paid in &urrent period __________ D'ner e=uity Cash to %e 'ithdra'n %y o'ner __________ 1otal &ash to %e paid out E__________ _______________________________________________________ Completing @our Cash 6lo' Statement 1he #erti&al &olumns o( a &ash (lo' statement represent the t'el#e months pre&eded %y a total &olumn. CoriAontal ro's on the statement &ontain (igures (or the sour&es o( &ash and &ash to %e paid out &opied (rom the t'o pre#ious 'or2sheets and (rom indi#idual %udgets. 1he (igures are pro9e&ted (or ea&h month re(le&ting the (lo' o( &ash in and out o( your %usiness (or a one-year period. Begin 'ith the (irst month o( the %usiness &y&le and pro&eed as (ollo's? 1. Pro9e&t the %eginning &ash %alan&e. 4nter under the (irst month o( the %usiness &y&le. 2. Pro9e&t the &ash re&eipts (or the (irst month. 3. Add %eginning &ash %alan&e and &ash re&eipts to determine total &ash a#aila%le. /. Pro9e&t the dire&t indire&t and interest e)penses (or the (irst month. 0. Pro9e&t monies due on ta)es long-term assets and loan repayments. Also pro9e&t any amounts to %e dra'n %y o'ners. <. 1otal all e)penses and dra's. 1his is total &ash paid out. 3. Su%tra&t total &ash paid out (rom total &ash a#aila%le. 4nter the result under &ash %alan&eHde(i&ien&y. .( the result is negati#e %e sure to %ra&2et this (igure. 5. Pro9e&t loans to %e re&ei#ed and e=uity deposits to %e made. Add to &ash %alan&eH de(i&ien&y to get ending &ash %alan&e. 9. Carry (or'ard the ending &ash %alan&e (or "anuary as 6e%ruary>s %eginning &ash %alan&e. 1:. ,epeat the pro&ess through the last month o( the %usiness &y&le. 1o &omplete the total &olumn pro&eed as (ollo's? 1. 4nter the %eginning &ash %alan&e (or the (irst month in the (irst spa&e o( the total &olumn. 2. Add the monthly (igures (or ea&h &ategory horiAontally and enter the result in the
&orresponding total &ategory. 3. Compute the total &olumn in the same manner as ea&h o( the indi#idual months. .( you ha#e %een a&&urate in your &omputations the +e&em%er ending &ash %alan&e 'ill %e e)a&tly the same as the total ending &ash %alan&e. &ote? .( your %usiness is ne' you 'ill ha#e to %ase your pro9e&tions solely on mar2et resear&h and industry trends. .( you ha#e an esta%lished %usiness you 'ill also use your (inan&ial statements (rom the pre#ious ta) years. A $uarterly budget analysis should %e used as a re&ord to &ompare your &ash (lo' statement 7or %udget8 'ith your %usiness>s a&tual per(orman&e. .ts purpose is to let you 2no' 'hether or not you are operating 'ithin your pro9e&tions and to help you maintain &ontrol o( all phases o( your %usiness operations. .( your analysis sho's that you ha#e gone o#er %udget in some areas you 'ill ha#e to &ompensate %y ad9usting your &ash (lo' statement 'ith (uture &uts in those or other areas. .( properly used a &ash (lo' statement &an pro#e to %e an in#alua%le tool to help you rea&h your (inan&ial goals. @our &ash (lo' statement &an %e &ompiled on a month-%y-month %asis and then &ompared 'ith a&tual monthly per(orman&e. 1he SBA>s 6orm 11:: 7/-528 is #ery use(ul in this regardK (or a (ree &opy &onta&t your lo&al SBA o((i&e. Prepared in this manner your statement &an pro#ide an annual pro9e&tion (or your ne)t (is&al year. T!&%%7(%#& I'+"4% P&"8%+$/"' 1he three'year income pro(ection is a pro (orma in&ome statement 7pro(it and loss statement (or more in(ormation see .n&ome Statement page 158. 1he di((eren&e is that the three- year pro9e&tion only in&ludes in&ome and dedu&ti%le e)penses 'hile the &ash (lo' statement in&ludes all sour&es o( &ash and &ash to %e paid out. 1here are #arious opinions as to 'hat period o( time should %e &o#ered in estimating in&ome and e)penses i.e. 'hether it should %e on an annual or monthly %asis. .( this in&ome pro9e&tion is (or the purpose o( o%taining a loan tal2 to the lender a%out his or her spe&i(i& re=uirements. .( the pro9e&tions are (or your o'n use a three-year pro9e&tion is suggested 'ith annual rather than monthly pro9e&tions. Sour&es o( .n(ormation .n(ormation (or a three-year in&ome pro9e&tion &an %e (ound in your &ash (lo' statement sales (ore&ast and indi#idual %udgets and your %usiness and mar2eting analyses i( you are ne' in %usiness. Again i( you are an esta%lished %usiness you 'ill also %e a%le to use past (inan&ial statements to help determine (uture pro9e&tions (or your %usiness. Be sure to ta2e into a&&ount (lu&tuations anti&ipated in &osts e((i&ien&y o( operation &hanges in the mar2et and any other (a&tors. .n&reases and de&reases in in&ome and e)penses are only realisti&. 1hese &hanges should %e re(le&ted in any pro9e&tions. ,emem%er too that industry trends &an &ause de&reases in %oth in&ome and e)penses. An e)ample o( this might %e the &omputer industry 'here &ompetition has in&reased greatly and standardiAation o( &omponents has &aused a de&rease in %oth the &ost
and the sales pri&e o( &ertain items. B&%#57%3%' A'#-(./. 1he %rea2-e#en point is the point at 'hi&h a &ompany>s e)penses e)a&tly mat&h its sales or ser#i&e #olume. .t is the point at 'hi&h the %usiness 'ill neither ma2e a pro(it nor in&ur a loss. 1he %rea2-e#en point &an %e &al&ulated in either mathemati&al or graph (orm. .t &an %e e)pressed in total dollars or re#enue e)a&tly o((set %y total e)penses or in total units o( produ&tion 7&ost o( 'hi&h e=uals e)a&tly the in&ome deri#ed %y sales8. 1o apply a %rea2-e#en analysis to a %usiness operation t'o types o( e)penses must (irst %e pro9e&ted? (i)ed &osts and #aria%le &osts. 6i)ed &osts do not #ary 'ith sales or output. Baria%le &osts #ary in dire&t proportion to the output. 1he greater the #olume o( sales the higher the &ost. 6or purposes o( the %rea2-e#en analysis ma2e sure to in&lude &ost o( sales in your #aria%le &osts (igure. Sour&es o( .n(ormation (or a Brea2-e#en Analysis All o( your (igures &an %e deri#ed (rom your three-year pro9e&tion. .n (a&t %y no' you should %e a%le to see that ea&h (inan&ial do&ument in your %usiness plan %uilds on the ones done pre#iously. .t should %e a simple matter to retrie#e the (igures to plug into the (ollo'ing (ormula. Mathemati&ally An e)ample o( &al&ulating the %rea2-e#en point using a mathemati&al (ormula is sho'n %elo'. 6ormula? B-4 point sales 7at %rea2-e#en point8 M (i)ed &osts Q R1 - #aria%le &osts e)pressed as S o( total salesT 1erms used? B-4 point sales M #olume o( sales at %rea2-e#en point 6i)ed &osts M (i)ed e)penses depre&iation interest Baria%le &osts M &ost o( sales and #aria%le e)penses Sales re#enues M in&ome (rom sales o( goodsHser#i&es o#er a spe&i(ied period Balues used? B-4 point sales 7S8 M F 6i)ed &osts M E20::: Baria%le &osts M E/0::: Sales re#enues M E9:::: Computation? ________E20:::_______ S 7at %rea2-e#en point8 M 1-7E/0:::H9::::
S M __E20:::__ 71-:.0:8 S M __E20:::__ 7.0:8 .0:S M E20::: S M E0:::: 7%rea2-e#en point in terms o( re#enue e)a&tly o((set %y total e)penses8 ;raphi&ally A (irm>s sales at %rea2-e#en point &an %e plotted as in the (ollo'ing %rea2-e#en analysis graph. Using the same (igures as in the a%o#e (ormula dra' three lines in the graph? horiAontal line at point representing (i)ed &osts 7208K total e)penses 71C M 6C Q BC8 line (rom le(t end o( (i)ed &ost line sloping up'ard to point 'here total 7(i)ed plus #aria%le8 &osts on #erti&al s&ale 738 meet total sales re#enues on the horiAontal s&ale 798K total re#enues 7sales8 line (rom Aero through a point des&ri%ing total re#enues 7sales8 on %oth s&ales 798. 1he point on the graph 'here the total e)penses line interse&ts the total sales re#enues line is the %rea2-e#en point. 1his %usiness estimates that it 'ill %rea2 e#en 'hen sales #olume rea&hes E0::::. 1he triangular area %elo' that point represents &ompany losses. 1he triangular area a%o#e and to the right o( the point represents potential pro(it. A+$*#- P%&1"&4#'+% S$#$%4%'$. A&tual per(orman&e statements are those (inan&ial statements re(le&ting the a&ti#ity o( your %usiness in the past. .( you are a ne' %usiness o'ner you ha#e no %usiness history. @our (inan&ial se&tion 'ill end 'ith the pro9e&ted statements and a personal (inan&ial history. .( you are an esta%lished %usiness you 'ill in&lude the (ollo'ing a&tual per(orman&e statements? Balan&e sheet Pro(it and loss 7in&ome8 statement Business (inan&ial history or loan appli&ation Balan&e Sheet 1he balance sheetis a (inan&ial statement usually prepared at the &lose o( an a&&ounting period that sho's the (inan&ial position o( the %usiness as o( a (i)ed date. .t is a pi&ture o( your (irm>s (inan&ial &ondition at a parti&ular moment. By regularly preparing this statement you 'ill %e a%le to identi(y and analyAe trends in the (inan&ial strength o( your %usiness and thus implement timely modi(i&ations.
Categories All %alan&e sheets must &ontain three &ategories -- assets lia%ilities and net 'orth -- that ha#e %een esta%lished %y a system 2no'n as generally a&&epted a&&ounting prin&iples. 1he three are related in that at any gi#en time a %usiness>s assets e=ual the total &ontri%utions %y its &reditors and o'ners. Assets M Anything your %usiness o'ns that has monetary #alue. )iabilities M +e%ts o'ed %y the %usiness to any o( its &reditors. &et "orth *capital+ M An amount e=ual to the o'ner>s e=uity. 1he relationship %et'een these terms is simply illustrated in the (ollo'ing a&&ounting (ormula? A..%$. 9 L/#6/-/$/%. : N%$ W"&$! 4)amined as su&h it %e&omes apparent that i( a %usiness possesses more assets than it o'es to &reditors its net 'orth 'ill %e a positi#e #alue. Con#ersely i( a %usiness o'es more money to &reditors than it possesses in assets the net 'orth 'ill %e a negati#e #alue. 6ormat 1he %alan&e sheet also must (ollo' an a&&epted (ormat. By so doing anyone reading the %alan&e sheet &an readily interpret it. All assets are di#ided under three headings? %urrent assets -- Assets that &an %e &on#erted into &ash 'ithin one year o( the date on the %alan&e sheet. )ong'term investments -- Sto&2s %onds and spe&ial sa#ings a&&ounts to %e 2ept (or at least one year. ,ixed assets -- 1he resour&es a %usiness o'ns and does not intend (or resale 7land %uildings e=uipment automo%iles et&.8. !ia%ilities are di#ided into &urrent and long-term lia%ilities? %urrent liabilities -- 1hose o%ligations paya%le 'ithin one operating &y&le. )ong'term liabilities -- Dutstanding %alan&e less &urrent portion due 7e.g. mortgage #ehi&le8. $et 'orth is do&umented a&&ording to the legal stru&ture o( the %usiness? Proprietorship or partnership -- 4a&h o'ner>s original in#estment plus earnings a(ter
Dther assets Corporation Capital sto&2 __________ 1. __________ Surplus paid in __________ ,etained earnings__________ 2. __________ _____________ 3. __________ 1otal net 'orth __________ _____________ _____________ 1otal lia%ilities 1otal assets __________ and net 'orth _____________ *Total assets "ill al"ays e$ual total liabilities and total net "orth+ _________________________________________________________________ .n&ome Statement 1he in&ome 7pro(it and loss8 statement sho's your %usiness (inan&ial a&ti#ity o#er a period o( time usually your ta) year. .n &ontrast to the %alan&e sheet 'hi&h sho's a pi&ture o( your %usiness at a gi#en moment this statement &an %e li2ened to a mo#ing pi&ture 'hi&h sho's 'hat has happened in your %usiness o#er a period o( time. 1he in&ome statement is an e)&ellent tool (or assessing your %usiness. @ou 'ill %e a%le to pi&2 out 'ea2nesses in your operation and plan 'ays to run your %usiness more e((e&ti#ely and there%y in&rease your pro(its. 6or e)ample you may (ind that some hea#y ad#ertising you did in Mar&h did not e((e&ti#ely in&rease your sales. .n (ollo'ing years you may de&ide to use your ad#ertising (unds more e((e&ti#ely %y using them at a time o( in&reased &ustomer spending. Along the same #ein you might e)amine your in&ome statement to see 'hat months ha#e the hea#iest sales #olume and plan your in#entory a&&ordingly. Comparison o( the in&ome statements (rom se#eral years 'ill gi#e you an e#en %etter pi&ture o( the trends in your %usiness. +o not underestimate the #alue o( this parti&ular tool 'hen planning your ta&ti&s. +e#elopment 1he in&ome statement sho's 'here your money has &ome (rom and 'here it 'as spent o#er a spe&i(i& period o( time. .t should %e prepared not only at the end o( the (is&al year %ut at the &lose o( ea&h %usiness month. .t is one o( the t'o prin&ipal (inan&ial statements prepared (rom the ledgers and re&ords o( a %usiness. All pro(it and loss statements &ontain in&ome and e)pense a&&ount %alan&es. 1he remaining asset lia%ility and &apital in(ormation pro#ides the (igures (or the %alan&e sheet. At the end o( ea&h month the a&&ounts in the general ledger are %alan&ed and &losed. Balan&es (rom the re#enue a&&ounts and the e)pense a&&ounts must %e trans(erred to your pro(it and loss statement. 6ormat
A pro(it and loss statement must also (ollo' an a&&epted (ormat and &ontain the (ollo'ing &ategories? .n&ome $et sales 7gross sales returns and allo'an&es8. Cost o( goods sold 7see .,S 6orm 1:/: S&hedule C (or &omputation8. ;ross pro(it 7net sales &ost o( goods sold8. 4)penses Selling e)penses 7dire&t &ontrolla%le #aria%le8. Administrati#e e)penses 7indire&t (i)ed o((i&e o#erhead8. 1otal e)penses .n&ome (rom operations 7gross pro(it total e)penses8 Dther in&ome 7interest in&ome8 Dther e)penses 7interest e)pense8 $et pro(it 7loss8 %e(ore in&ome ta)es .n&ome ta)es 7(ederal state sel(-employment8 $et pro(it 7loss8 a(ter in&ome ta)es 1'o sample in&ome statements are sho'n (or your use. 1he (irst is di#ided into 12 months. 6ill it in monthly a(ter %alan&ing your ledgers. At the end o( the year this (orm 'ill pro#ide an a&&urate pi&ture o( your (inan&ial a&ti#ity. 1he se&ond (orm &an %e used (or your monthly and annual pro(it and loss statements. _______________________________________________________ INCOME STATEMENT 7Also 2no'n as Pro(it and !oss Statement8 6or the year ___ " 6 M A M " " A S D $ + .$CDM4 1. $et Sales _ _ _ _ _ _ _ _ _ _ _ _ 2. Cost o( Sales _ _ _ _ _ _ _ _ _ _ _ _ 3. ;ross pro(it 71 minus 28 _ _ _ _ _ _ _ _ _ _ _ _ 4UP4$S4S 1. Baria%le e)p. 7&ontrolla%le8 a. Ad#ertising _ _ _ _ _ _ _ _ _ _ _ _ %. 6reight _ _ _ _ _ _ _ _ _ _ _ _ &. Pa&2aging &osts _ _ _ _ _ _ _ _ _ _ _ _ d. Parts P supplies _ _ _ _ _ _ _ _ _ _ _ _ e. Sales salaries _ _ _ _ _ _ _ _ _ _ _ _ (. Mis&. dire&t e)penses _ _ _ _ _ _ _ _ _ _ _ _ g. !egal (ees _ _ _ _ _ _ _ _ _ _ _ _
2. 6i)ed e)penses 7o#erhead8 7administrati#e8 a. .nsuran&e __________ %. !i&enses P permits __________ &. D((i&e salaries __________ d. ,ent e)pense __________ e. Utilities __________ (. Mis&. indire&t e)penses __________ 1otal e)penses __________ .n&ome (rom operations 7gross pro(it less e)penses8 __________ Dther in&ome __________ 1. .nterest in&ome __________ Dther e)penses __________ 1. .nterest e)penses __________ $et pro(it 7loss8 %e(ore ta)es __________ .n&ome ta)es _________ $et pro(it 7loss8 a(ter in&ome ta)es __________ _______________________________________________________ Business 6inan&ial Cistory 1he (inan&ial history is the last o( the (inan&ial statements re=uired in your %usiness plan. .t is a summary o( (inan&ial in(ormation a%out your &ompany (rom its start to the present. .( you are a ne' %usiness you 'ill ha#e only pro9e&tions (or your %usiness. .( you are applying (or a loan the lender 'ill re=uire a personal %alan&e sheet. 1his 'ill %e o( %ene(it in that it 'ill sho' the lender the manner in 'hi&h you ha#e &ondu&ted your personal %usiness and %e an indi&ation as to the pro%a%ility o( su&&eeding in your ne' %usiness. .( you are using your %usiness plan to apply (or a loan your %usiness (inan&ial history and the loan appli&ation are the same. 1his do&ument should %e &ompleted last %ut pla&ed (irst in the (inan&ial se&tion o( your plan. *hen you indi&ate that you are interested in o%taining a %usiness loan the institution &onsidering the loan 'ill supply you 'ith an appli&ation. 1he (ormat may #ary slightly. *hen you re&ei#e your loan appli&ation %e sure to re#ie' it and thin2 a%out ho' you are going to ans'er ea&h item. Ans'er all =uestions and %y all means %e &ertain that your in(ormation is a&&urate and that it &an %e #eri(ied i( the need should arise. .n(ormation $eeded and Sour&es As you &omplete your %usiness (inan&ial history or loan appli&ation it should %e&ome immediately e#ident 'hy this is the last (inan&ial do&ument to %e &ompleted. All o( the in(ormation needed 'ill ha#e %een &ompiled in earlier parts o( your plan and in the &ompleted
(inan&ials. 1o help you 'ith your (inan&ial history the (ollo'ing is a list o( in(ormation usually in&luded and the sour&e you 'ill re(er to (or that in(ormation? Assets- liabilities and net "orth -- @ou should %e a%le to re&ogniAe these three as %alan&e sheet terms. ;o %a&2 to your %alan&e sheet and %ring these (igures (or'ard. %ontingent liabilities -- 1hese are de%ts you may &ome to o'e in the (uture 7e.g. de(ault on &osigned note or settlement o( a pending la'suit8. .nventory details -- .n(ormation a%out in#entory is deri#ed (rom your in#entory re&ord. Also the %usiness se&tion should ha#e a summary o( your &urrent poli&ies and methods o( e#aluation. .ncome statement -- 1his is re#enue and e)pense in(ormation. +epending on the period o( time to %e &o#ered you 'ill trans(er the in(ormation (rom your most re&ent annual pro(it and loss statement or (rom a &ompilation o( se#eral i( re=uired %y the lender. /eal estate holdings- stocs and bonds -- ,e(er %a&2 to the %usiness portion o( your plan. @ou may also ha#e to go through your in#estment re&ords (or more &omprehensi#e in(ormation. Sole proprietorship- partnership or corporation information -- 1here are generally three separate s&hedules on the (inan&ial history one (or ea&h (orm o( legal stru&ture. @ou 'ill %e re=uired to (ill out the one that is appropriate to yours. .n the %usiness se&tion you 'ill ha#e &o#ered t'o areas that 'ill ser#e as the sour&e o( this in(ormation -- legal stru&ture and management. @our supporting do&uments may also &ontain some o( the in(ormation that you 'ill need. Audit information -- ,e(er %a&2 to your %usiness se&tion under re&ord 2eeping. @ou may also %e as2ed =uestions a%out other prospe&ti#e lenders 'hether you are see2ing &redit 'ho audits your %oo2s and 'hen they 'ere last audited. .nsurance coverage -- @ou 'ill %e as2ed to pro#ide detailed in(ormation on the amounts o( di((erent types o( &o#erage 7i.e. mer&handise e=uipment pu%li& lia%ility earth=ua2e automo%ile et&.8. @our %usiness se&tion &ontains &o#erage in(ormation that &an %e %rought (orth to the (inan&ial history. S*44#&( 1he (inan&ial do&uments &o#ered in this se&tion 'ill pro%a%ly %e su((i&ient (or %oth your o'n use and that o( potential lenders. Some lenders may not re=uire all do&uments and other lenders may re=uire additional do&uments. 1he important thing to note in &ompiling any (inan&ial statements is that the in(ormation must %e &orre&t and that you must ha#e re&ords to support your (igures. ,emem%er you &an use the in(ormation in your %usiness plan not only to aid you in dealing 'ith a lender %ut also to assist you on an on-going %asis. .( you ha#e done your home'or2 the (inan&ial do&uments you ha#e prepared 'ill %e in#alua%le to you in the assessment o( your operation and may #ery 'ell %e the determining (a&tor in 'hether or not you su&&eed in your %usinessO _____________________________________________________________________ _________ SUPPORTING DOCUMENTS $o' that you ha#e &ompleted the main %ody o( your %usiness plan you 'ill need to in&lude a separate se&tion (or any additional re&ords that should %e in&luded to support your plan. Supporting do&uments are the re&ords that %a&2 up the statements and de&isions made in the three main parts o( your plan. As you are &ompiling the (irst three se&tions it is a good idea to 2eep a separate list o( the supporting do&uments that you mention or that &ome to mind. 6or instan&e dis&ussion o( your %usiness lo&ation might indi&ate a need (or demographi& studies lo&ation maps area studies leases et&. .( you are &onsidering applying (or a loan to pur&hase e=uipment your supporting do&uments might %e e)isting e=uipment pur&hase agreements or lease &ontra&ts. By listing these items as you thin2 o( them you 'ill ha#e a (airly &omplete list o( all o( your supporting do&uments %y the time you rea&h this part o( your tas2. @ou 'ill %e ready to sort them into a logi&al se=uen&e and add any ne' ones that &ome to mind. 1he (ollo'ing are se#eral do&uments that you 'ill 'ant to in&lude. P%&."'#- R%.*4%. .( you are a sole proprietor in&lude your o'n resume. .( your %usiness is a partnership there should %e a resume (or ea&h partner. .( you are a &orporation in&lude resumes (or all o((i&ers o( the &orporation. A resume need not and should not %e a lengthy do&ument. Pre(era%ly it should %e &ontained on one page (or easy reading. .n&lude the (ollo'ing &ategories and in(ormation? Wor history -- $ame o( employers or %usinesses 'ith dates o( employment. Begin 'ith most re&ent. .n&lude duties and responsi%ilities. #ducational bacground -- $ames o( s&hools and dates you attended them degrees earned (ields o( &on&entration. Professional affiliations and honors Special sills -- e.g. relate 'ell to others a%le to organiAe 'illing to ta2e ris2s et&. P%&."'#- F/'#'+/#- S$#$%4%'$ 1he o'ner7s8 should in&lude a statement o( personal assets and lia%ilities. 1his in(ormation &an %e &ompiled in the same manner as a %alan&e sheet. Use the same (ormat and list all assets and lia%ilities to determine net 'orth. .( you are a ne' %usiness o'ner your personal (inan&ial statement 'ill %e a part o( the (inan&ial do&ument and may %e a standard (orm supplied %y the potential lender. C&%2/$ R%0"&$.
Credit ratings are o( t'o types %usiness and personal. @ou &an as2 your suppliers or 'holesalers to supply you 'ith letters o( &redit. Personal &redit ratings &an %e o%tained through &redit %ureaus %an2s and &ompanies 'ith 'hom you ha#e dealt on a %asis other than &ash. C"0/%. "1 L%#.%. .n&lude all lease agreements &urrently in (or&e %et'een your &ompany and a leasing agen&y. Some e)amples are the lease agreement (or your %usiness premises e=uipment automo%iles et&. L%$$%&. "1 R%1%&%'+% 1hese are letters re&ommending you as a reputa%le and relia%le %usiness person 'orthy o( %eing &onsidered a good ris2. 1here are t'o types o( letters o( re(eren&e? %usiness re(eren&es or those 'ritten %y %usiness asso&iates suppliers and &ustomersK and personal re(eren&es or those 'ritten %y non%usiness asso&iates 'ho &an assess your %usiness s2ills 7not (riends or relati#es8. C"'$&#+$. .n&lude all %usiness &ontra&ts %oth &ompleted and &urrently in (or&e. Some e)amples are &urrent loan &ontra&ts papers on prior %usiness loans pur&hase agreements on large e=uipment #ehi&le pur&hase &ontra&ts ser#i&e &ontra&ts and maintenan&e agreements. L%,#- D"+*4%'$. .n&lude all legal do&uments pertaining to your %usiness. Some o( these are arti&les o( in&orporation partnership agreements &opyrights trademar2 registrations patents insuran&e poli&ies property and #ehi&le titles et&. M/.+%--#'%"*. D"+*4%'$. 1hese are all the do&uments 7other than the a%o#e8 that are re(erred to %ut not in&luded in the %usiness and mar2eting se&tions o( your %usiness plan. A good e)ample 'ould %e those re&ords related to sele&ting your lo&ation that may ha#e %een (inaliAed as the result o( de#eloping a lo&ation plan. A potential lender 'ho may %e parti&ularly interested in your lo&ation in(ormation 'ill %e a%le to (ind the lo&ation plan in your supporting do&uments and e)amine your demographi& studies maps area studies on &rime rate in&ome et&. Please note? All supporting do&uments need not %e in&luded in e#ery &opy o( your %usiness plan. @ou need to in&lude only that in(ormation you thin2 'ill %e needed %y the potential lender. 1he rest o( the in(ormation should %e 2ept 'ith your &opy o( the plan and %e easily a&&essi%le should it %e re=uested %y the lender. _____________________________________________________________________ _________ PUTTING YOUR BUSINESS PLAN TOGETHER @our plan should %e put together in a pro(essional manner. 1o &reate a (a#ora%le impression it
should %e as (ollo's? Appearance-- Use a plasti& spiral %inding or &o#ers pur&hased (rom your lo&al stationery store. Use %lue %ro'n or %la&2 &o#ers. Ban2ers are usually &onser#ati#e. )ength-- Be &on&iseO Usually you should ha#e no more than 3: to /: pages in&luding your supporting do&uments. *hen you are 'riting ea&h se&tion thin2 o( it as %eing a summary. .n&lude as mu&h in(ormation as you &an in a %rie( statement. A potential lender does not 'ant to ha#e to 'ade through #olumes o( 'ords to get the in(ormation needed. Presentation-- +o your %est to ma2e your plan loo2 presenta%le. Co'e#er do not go to the unne&essary e)pense o( paying (or typesetting and high-po'ered &omputer graphi&s. 1hese might %e &onsidered (ri#olous %y some lenders a (irst impression that might indi&ate you 'ould not use their loan 'isely. Table of contents -- Be sure to in&lude a ta%le o( &ontents in your %usiness plan. .t 'ill (ollo' the statement o( purpose. Ma2e it detailed enough so the lender &an lo&ate any o( the areas addressed in the plan. .t must also list the supporting do&uments. &umber of copies -- Ma2e &opies (or yoursel( and ea&h lender you 'ish to approa&h. -eep tra&2 o( ea&h &opy. +o not try to 'or2 'ith too many potential lenders at one time. .( your loan is re(used %e sure to retrie#e your %usiness plan. *hen you are (inished your %usiness plan should loo2 pro(essional %ut the lender should 2no' that it 'as done %y you. .t 'ill %e the %est indi&ation a lender 'ill ha#e to 9udge your potential (or su&&ess. Be sure that your %usiness plan represents your %est e((orts. _____________________________________________________________________ _________ KEEPING YOUR BUSINESS PLAN CURRENT M#5/', R%3/./"'. .( your %usiness plan is going to %e e((e&ti#e either to the %usiness or to a potential lender it 'ill %e ne&essary (or you to update it on a regular %asis. Changes ne&essitating re#isions &an %e attri%uted to three sour&es? &hanges 'ithin the &ompany &hanges originating 'ith the &ustomer and te&hnologi&al &hanges. $egle&ting to allo' (or these &hanges 'ill doom your operation to de&reased pro(its and pro%a%le (ailure. I40-%4%'$/', C!#',%. As the o'ner you must %e a'are o( &hanges in your industry mar2et and &ommunity. 6irst you must determine 'hat re#isions are needed. @ou 'ill ha#e to &ompare your plan 'ith the &hanges dis&ussed a%o#e. @ou &an use your employees to help 2eep tra&2 o( %usiness trends appli&a%le to their e)pertise. Co'e#er the (inal 9udgment as to re#isions 'ill rest 'ith you the o'ner. @ou may ma2e errors %ut 'ith e)perien&e your per&entage o( &orre&t de&isions 'ill in&rease and your re'ard 'ill %e higher pro(its.
A'$/+/0#$/', P&"6-%4. 1ry to see ahead and determine 'hat possi%le pro%lems may plague you. 6or e)ample you may ha#e to deal 'ith &osts that e)&eed your pro9e&tions. At the same time you may e)perien&e a sharp de&line in sales. 1hese t'o (a&tors o&&urring simultaneously &an portend disaster i( you are not ready (or them. Also %e &autious 'hen things are too good. 1he in&reased pro(its may only %e temporary. A produ&t or ser#i&e that is in demand this year may not %e popular ne)t year. @ou might thin2 a%out de#eloping an alternate %udget %ased on possi%le pro%lems. A'areness o( &hanges in your industry and re#ision a&&ording to those &hanges 'ill %ene(it you greatly. _____________________________________________________________________ _________ REFERENCES Bo%ro' 4d'in 4. Pioneering &e" Products0 A Maret Survival !uide . Come'ood .!? +o' "ones-.r'in 1953. Breen ;eorge and A. B. Blan2enship. 1o'.t'2ourself Mareting /esearch . $e' @or2? M&;ra'-Cill 1952. Cli((ord +enis and ,alph *arner. The Partnership Boo . Ber2eley? $olo Press 1959. ;oldstein Car#ey. 3p 2our %ash ,lo" . !os Angeles? ;ran#ille Pu%li&ations 195<. Cus&h 1ony and !inda 6oust. That's a !reat .dea . Da2land CA? ;ra#ity Press 195<. !a#in Mi&hael ,. Business .nformation0 4o" to ,ind it- 4o" to 3se it . Phoeni) AJ? Dry) Press 1953. !e#inson "ay Conrad. !uerilla Mareting0 Secrets for Maing Big Profits from 2our Small Business. Boston? Coughton-Mi((lin 195/. Dgil#y +a#id. 5gilvy on Advertising . $e' @or2? Bintage Boo2s 1950. Pinson !inda and "erry "innett. Anatomy of a Business Plan . 1ustin CA? Dut o( @our Mind...and .nto the Mar2etpla&e 1959. Also a#aila%le 'ith a so(t'are pa&2age Automate @our Business Plan that applies prin&iples o( the te)t. Pinson !inda and "erry "innett. Mareting0 /esearching 6 /eaching your Target Maret . 1ustin CA? Dut o( @our Mind...and .nto the Mar2etpla&e 1955. Pinson !inda and "erry "innett. 5ut of 2our Mind...and .nto the Maretplace . 1ustin CA? Dut o( @our Mind...and .nto the Mar2etpla&e 1955. Pinson !inda and "erry "innett. /ecordeeping0 the Secret to !ro"th 6 Profit . 1ustin CA? Dut o( @our Mind...and .nto the Mar2etpla&e 1959.
S&hmenner ,oger *. Maing Business )ocation 1ecisions . 4ngle'ood Cli((s $"? Prenti&e- Call 1952. *orthington Anita and ,o%ert 4. *orthington. Staffing a Small Business0 4iring- %ompensating- and #valuating . +en#er CD? Dasis Boo2s 1953. _____________________________________________________________________ _________ APPENDIX: INFORMATION RESOURCES U;S; S4#-- B*./'%.. A24/'/.$&#$/"' (SBA) 1he SBA o((ers an e)tensi#e sele&tion o( in(ormation on most %usiness management topi&s (rom ho' to start a %usiness to e)porting your produ&ts. SBA has o((i&es throughout the &ountry. Consult the U.S. ;o#ernment se&tion in your telephone dire&tory (or the o((i&e nearest you. SBA o((ers a num%er o( programs and ser#i&es in&luding training and edu&ational programs &ounseling ser#i&es (inan&ial programs and &ontra&t assistan&e. As2 a%out V S%5/#0 %ounselors to America7s Small Business a national organiAation sponsored %y SBA o( o#er 11::: #olunteer %usiness e)e&uti#es 'ho pro#ide (ree &ounseling 'or2shops and seminars to prospe&ti#e and e)isting small %usiness people. 6ree online &ounseling and training at '''.s&ore.org . V Small Business 1evelopment %enters *SB1%s+- sponsored %y the SBA in partnership 'ith state go#ernments the edu&ational &ommunity and the pri#ate se&tor. 1hey pro#ide assistan&e &ounseling and training to prospe&ti#e and e)isting %usiness people. V Women7s Business %enters *WB%s+- sponsored %y the SBA in partnership 'ith lo&al non-go#ernment organiAations a&ross the nation. Centers are geared spe&i(i&ally to pro#ide training (or 'omen in (inan&e management mar2eting pro&urement and the .nternet. 6or more in(ormation a%out SBA %usiness de#elopment programs and ser#i&es &all the SBA Small Business Ans'er +es2 at 1-5::-U-AS-- SBA 7523-03228 or #isit our 'e%site '''.s%a.go# . O$!%& U;S; G"3%&'4%'$ R%."*&+%. Many pu%li&ations on %usiness management and other related topi&s are a#aila%le (rom the ;o#ernment Printing D((i&e 7;PD8. ;PD %oo2stores are lo&ated in 2/ ma9or &ities and are listed in the @ello' Pages under the %oo2store heading. 6ind a WCatalog o( ;o#ernment Pu%li&ations at http?HH&atalog.gpo.go#H6 Many (ederal agen&ies o((er *e%sites and pu%li&ations o( interest to small %usinesses. 1here is a nominal (ee (or some %ut most are (ree. Belo' is a sele&ted list o( go#ernment agen&ies that pro#ide pu%li&ations and other ser#i&es targeted to small %usinesses. 1o get their pu%li&ations &onta&t the regional o((i&es listed in the telephone dire&tory or 'rite to the addresses %elo'? F%2%&#- C/$/<%' I'1"&4#$/"' C%'$%& (FCIC) Cttp?HH'''.pue%lo.gsa.go# 1-5::-333-/<3< 1he C.D o((ers a &onsumer in(ormation &atalog o( (ederal pu%li&ations. C"'.*4%& P&"2*+$ S#1%$( C"44/../"' (CPSC) Pu%li&ations ,e=uest *ashington +C 2:2:3 http?HH'''.&ps&.go#H&ps&pu%Hpu%sHpu%_id).html 1he CPSC o((ers guidelines (or produ&t sa(ety re=uirements. U;S; D%0#&$4%'$ "1 A,&/+*-$*&% (USDA) 12th Street and .ndependen&e A#enue S* *ashington +C 2:20: http?HH'''.usda.go# 1he US+A o((ers pu%li&ations on selling to the US+A. Pu%li&ations and programs on entrepreneurship are also a#aila%le through &ounty e)tension o((i&es nation'ide. U;S; D%0#&$4%'$ "1 C"44%&+% (DOC) D((i&e o( Business !iaison 1/th Street and Constitution A#enue $* *ashington +C 2:23: http?HH'''.ose&.do&.go#Ho%lH +DC>s Business !iaison Center pro#ides listings o( %usiness opportunities a#aila%le in the (ederal go#ernment. 1his ser#i&e also 'ill re(er %usinesses to di((erent programs and ser#i&es in the +DC and other (ederal agen&ies. U;S; D%0#&$4%'$ "1 H%#-$! #'2 H*4#' S%&3/+%. (HHS) Su%stan&e A%use and Mental Cealth Ser#i&es Administration 1 Cho2e Cherry ,oad ,o&2#ille M+ 2:503 http?HH'''.'or2pla&e.samhsa.go# Celpline? 1-5::-'or2pla&e. Pro#ides in(ormation on 4mployee Assistan&e Programs +rug Al&ohol and other Su%stan&e A%use. U;S; D%0#&$4%'$ "1 L#6"& (DOL) 4mployment Standards Administration 2:: Constitution A#enue $* *ashington +C 2:21: 1he +D! o((ers pu%li&ations on &omplian&e 'ith la%or la's. U;S; D%0#&$4%'$ "1 T&%#.*&( .nternal ,e#enue Ser#i&e 7.,S8 10:: Pennsyl#ania A#enue $* *ashington +C 2:23: http?HH'''.irs.go#H%usinessHinde).html 1he .,S o((ers in(ormation on ta) re=uirements (or small %usinesses. U;S; E'3/&"'4%'$#- P&"$%+$/"' A,%'+( (EPA) Small Business Dm%udsman 12:: Pennsyl#ania A#enue $* *ashington +C 2:/5: http?HHepa.go#Hs%o Cotline? 1-5::-3<5-0555 1he 4PA o((ers more than 1:: pu%li&ations designed to help small %usinesses understand ho' they &an &omply 'ith 4PA regulations. U;S; F""2 #'2 D&*, A24/'/.$&#$/"' (FDA) 0<:: 6ishers !ane ,o&2#ille M+ 2:503-:::1 http?HH'''.(da.go# Cotline? 1-555-/<3-<332 1he 6+A o((ers in(ormation on pa&2aging and la%eling re=uirements (or (ood and (ood-related produ&ts. F"& M"&% I'1"&4#$/"' A li%rarian &an help you lo&ate the spe&i(i& in(ormation you need in re(eren&e %oo2s. Most li%raries ha#e a #ariety o( dire&tories inde)es and en&y&lopedias that &o#er many %usiness topi&s. 1hey also ha#e other resour&es su&h as V T% #.."+/#$/"' /'1"&4#$/"' As2 the li%rarian to sho' you a dire&tory o( trade asso&iations. Asso&iations pro#ide a #alua%le net'or2 o( resour&es to their mem%ers through pu%li&ations and ser#i&es su&h as ne'sletters &on(eren&es and seminars. V B""5. Many guide%oo2s te)t%oo2s and manuals on small %usiness are pu%lished annually. 1o (ind the names o( %oo2s not in your lo&al li%rary &he&2 Boo2s .n Print a dire&tory o( %oo2s &urrently a#aila%le (rom pu%lishers. V M#,#</'% #'2 '%).0#0%& #&$/+-%. Business and pro(essional magaAines pro#ide in(ormation that is more &urrent than that (ound in %oo2s and te)t%oo2s. 1here are a num%er o( inde)es to help you (ind spe&i(i& arti&les in periodi&als. V I'$%&'%$ S%#&+! E',/'%.
.n addition to %oo2s and magaAines many li%raries o((er (ree 'or2shops (ree a&&ess to &omputers and the .nternet lend s2ill-%uilding tapes and ha#e &atalogues and %ro&hures des&ri%ing &ontinuing edu&ation opportunities.