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IVD Business Plan

e-book series 36 pages

Copyright 2009…Industry View Daily. All Rights Reserved.


Unauthorized duplication a violation of applicable laws.

[Company]
[1234 State Street]
[Yourcity, USA 55555]
[[800] 555-5555]
[Month & Year Prepared]
Copy ##
Prepared by [Name]

CONFIDENTIAL

This is a business plan. It does not imply an offering of securities.

[Substitute your Business Name, Company Information, etc. on this page to create
the appropriate Cover Sheet for your business plan.]

TIP: Use CTRL-H and replace [Company] with the name of your company to
quickly update the company name throughout the business plan

© 2001 - 2009 – IVD


The contents of this template may not be resold in any form, in part or in whole,
without the express written permission of IVD.
Information Regarding [Company]’s Business Plan

This Business Plan [the “BP”] contains certain information regarding the current and planned
operations and business of [Company], (“[Company]” or the “Company”), including information
regarding the projected financial performance of the Company. This Business Plan has been
provided to the recipient solely for the purpose of assisting the recipient in deciding whether to
proceed with an in-depth investigation of the Company in accordance with procedures
established by the Company.

By accepting a copy of this Business Plan, the recipient hereby agrees, among other
things, to keep the information contained herein and the existence of this Business Plan
confidential and to restrict the use of any information contained herein to those people
within the recipient’s organization or its designated representatives who have been
informed of the confidential nature of such information and who need to have such
information in connection with the organization’s evaluation of the Company.

This Business Plan has been prepared by [Company] on the basis of internally prepared
information, as well as information from public and private sources, including trade and statistical
sources commonly used in the industry. The Business Plan does not purport to contain all of the
information that may be required to evaluate all of the factors that would be relevant to a recipient
in considering a transaction with the Company. The Company makes no warranty or
representation, express or implied, as to the accuracy or completeness of either the material
contained herein or any other written or oral information provided by the Company to the
recipient, and no liability shall attach thereto.

Nothing contained in this Business Plan is, or should be relied on as, a promise or representation
as to the future. The projected financial information contained herein was prepared expressly for
use herein and is based upon the stated assumptions and the Company’s analysis of information
available at the time that this Business Plan was prepared. There is no representation, warranty,
or other assurance that any of the projections set forth herein will be realized. This Business Plan
does not purport to contain all of the information that may be required to evaluate the Company
and any recipient hereof should conduct its own independent investigation and analysis of the
business described herein.

Any questions regarding the Company should be directed to the following representatives named
below.

[Name] [Name] [Name]


CEO and President Managing Director CFO
[(888) 555-1212] [(888) 555-1212] [(888) 555-1212]

[Company]
[Address]
[City, State, Zip Code]

Telephone: [(888) 555-1212]


Facsimile: [(888) 555-1212]
Executive Summary
Note: Do not write the executive summary until you have completed your
business plan! It is a summary and reflects the contents of the finished plan.

The Company

[Company] is a [business type (corporation, llc, partnership, etc)] based in


[State]. It was founded in [Year]. The Company is a [please mention briefly the
company’s main products and/or services and the market that it is targeting or
plans on targeting].

[Company] has differentiated itself by [please mention competitive advantages,


what makes it unique]. Currently [Company] has ## employees, and over ##
locations throughout [region], providing local support and/or distribution to over
## cities. [If your company is a startup, briefly summarize the company’s growth
plans]

For the past three months ending [date], the Company had revenues of $## and
net earnings of $##. For the full fiscal year ending [month], [Company] is
expecting revenues of $## and net earnings of $##, which represents ##% top
line growth versus the previous year. [If applies, mention how much money has
been invested into the company since its foundation.]

[Company] is a [subsidiary, partner, client, supplier] of [any organization that


makes a difference in positioning the company’s future].

The Market and Industry

The Company participates in the rapidly growing worldwide [name of the sector
or market] industry, which is expected to grow from nearly $## today to
approximately $## in the next ## years. [Company] estimates that [please
mention the company’s view and projections on the performance of the sector it
is participating in].

In the United States alone, the Company estimates approximately [mention


number of competitors in the country and their competitive advantage]. The
Company believes that within its specific niche, it currently holds an approximate
##% market share.

Products and services are distributed to this market primarily [explain the key
marketing and distribution procedures within the industry and/or how competitors
have been marketing themselves. Then elaborate on the way your company will
operate, and which are their competitive advantages within the industry].

Business Model/ Strategy


[Please comment on the company’s revenue model, including pricing, clients and
how will this be translated into a sustainable revenue stream. Elaborate on the
key issues that allow the company to achieve low costs and better profit
margins]. Because of a long history of execution and favorable pricing under this
model, the Company has positioned itself as one of the core [suppliers, installers,
clients, partners] for companies such [mention name of key clients, suppliers or
partners]. In addition, [Company] is currently in the process of becoming a
[mention any certification and/or major milestone that the company is currently
pursuing and the impact that this might have on revenues and/or profits].

Regarding new markets, [Company] has recently penetrated the [market name]
market, a market niche with significant potential in the short-term [provide recent
and projected growth data if possible].

Product and Services

[Please briefly describe the products and/or services that the company provides.
Only mention the ones that have or will have an important contribution to total
revenues].
Core Clients

[Include a list of current clients and/or target clients].

Facilities and Employees

[Company] has ## full time employees and ## offices in ## cities. The office
space is [rented -or- leased -or- owned].

Websites

The company has acquired these website properties:


• [www.website.com]
• [www.website.com]
• [www.website.com]

Financing Requirements

The Company is in the process of raising $## through a [loan facility, private
equity fund, IPO, the sale of a stake in the company, or any other financing
alternative] which will be used to [mention main uses of funds. [e.g., acquire
machinery, launch an advertising campaign, pay down debt, reduce costs,
acquire a competitor, finance inventory, etc].

Management

The core management team of [Company] includes several executives with


successful backgrounds in the [industry name] industry and experience with
startup operations:
[CEO name] is President and Chief Executive Officer. His/Her experience
includes [# of years] with [Company] where he/she [state several noteworthy
achievements: grew sales, cut expenses, launched a new product].

[CFO name] is [Company]’s Chief Financial Officer. [Mr/Ms] [CFO name] has
held financial positions with [Company #1] and [Company #2] and has also
served as a Public Accountant with [name of CPA firm]. His/Her
accomplishments include [state several noteworthy achievements: grew sales,
cut expenses, implemented tax-saving measures].

Financials

By achieving its sales targets, [Company] will position itself for exceptional
profitability and self-funded growth. The table below is a brief summary of the
[Company] Profit and Loss Statement for the years [Year - Year].

$000s 200# 200# 200#

Sales $ ## $ ## $ ##

Gross Profit $ ## $ ## $ ##
Operating
expenses $ ## $ ## $ ##
Pre-tax Income $ ## $ ## $ ##

All figures are expressed in thousands.

Sources & Use of Funds

Management is seeking an investment of $## in addition to the $## already


invested by the founders. Proceeds will be used to finance the Company’s
ongoing start-up expenses, the enhancement of its systems and infrastructure,
and the cash shortfall until cash flow breakeven is achieved [list all other
significant uses of the funds being sought].

Exit Strategy

Given the financial results expressed above, management believes it will be in an


excellent position to capitalize on its success through a [Leveraged Buyout,
Management buyout, Acquisition by Industry leader, Initial Public Offering,
Acquisition by other 3rd party]. A reasonable valuation for the Company
assuming the sales and profitability outlined above would be $##, which would
make the shares included in this offering worth $##, a return on investment of ##
%.
Table of Contents
I. Investment Consideration...................................................................9
II. The Company...................................................................................10
Ownership.........................................................................................10
SWOT Analysis..................................................................................11
Products and Services.......................................................................11
Intellectual Property..........................................................................12
Company Location.............................................................................12
IV. Industry Analysis.............................................................................13
Size and Growth Rate of the Industry................................................13
Maturity of Industry...........................................................................13
Trends in the Industry.......................................................................13
Barriers to Entry................................................................................13
V. The Target Market............................................................................14
Target Market....................................................................................14
Market Analysis.................................................................................14
Demographics...................................................................................14
Market Readiness..............................................................................14
Positioning.........................................................................................15
Industry Trends.................................................................................15
Target Market....................................................................................15
Competitive Environment..................................................................15
Company Strengths...........................................................................15
Definition of Strategic Position..........................................................15
VI. The Competition..............................................................................17
Direct Competitors............................................................................17
Market Share Distribution.................................................................17
Competitive Advantages...................................................................17
[Focus only on the competitors who are aiming at the same target
market.]............................................................................................18
Competitive Positions........................................................................18
Barriers to Entry................................................................................18
VIII. Marketing Outline & Sales Strategy...............................................19
Company Image/Message.................................................................19
Sales Program...................................................................................19
Marketing Vehicles............................................................................19
Sales Forecast...................................................................................20
Facilities............................................................................................22
Equipment.........................................................................................22
Production.........................................................................................23
Inventory Control..............................................................................23
Supply & Distribution........................................................................23
Customer Service..............................................................................23
Research & Development..................................................................23
Other Operational Issues...................................................................24
X. Technology Outline..........................................................................25
Internet.............................................................................................25
Hardware Needs................................................................................25
Software Needs.................................................................................25
Telecommunications Needs..............................................................25
XI. Management & Organization...........................................................26
Management Team...........................................................................26
Staffing..............................................................................................27
Board of Directors ............................................................................27
Advisory Board..................................................................................27
XII. Milestones, & Exit Strategy............................................................29
Goals ................................................................................................29
Strategies .........................................................................................29
Milestones.........................................................................................29
Risk Evaluation..................................................................................29
Exit Plan............................................................................................30
XIII. Financial Data & Projections .........................................................31
Financial Assumptions.......................................................................31
Capital Requirements........................................................................31

[To Update Table of Contents: Right Click with your mouse and select “Update
Table.” If you add any headings, you will need to set them as either ‘Heading 1’
or ‘Heading 2’ using ‘Styles’ for them to be included in this table. Styles is found
in the ‘Format’ menu under ‘Styles and Formatting’]
I. Investment Consideration
Investors should consider these points when evaluating [Company] for
investment purposes.

• Significant growth achieved in the past. [Please elaborate on the


growth that the company has been able to achieve, mention key drivers,
and the annual growth rate]. Moreover, the Company expects revenues
going forward to maintain a sustainable growth rate of ##% per year given
the potential business that [mention the specific driver of growth for the
future].

• Valuable relationships with major XXX. The Company’s relationships


with XXX and XXX will translated into a significant source of revenues and
new clients. This results from the confidence major manufacturers and
distributors have in [Company], given its proven reliability and quality
standards.

• Strong and scalable business model. [Elaborate on the company’s


competitive advantage and the main reason why the corporation will be
successful in the specific market niche where it operates].

• Profitable. The company has been profitable for ## years, achieving


average gross margins of ##%, and net margins of ##%. [If the company
is not profitable yet, please mention when is management expecting to
turn profitable, and what is it needed to become profitable].

• Extremely lean organization. With only ##employees, the Company has


one of the highest returns in the industry given its lean structure. Revenue
per employee is expected to be around $## in FY ##.

• Clean balance sheet. The Company has [elaborate on the company’s


leverage, interest coverage and account receivables – before or after the
financing takes place].

• Affected by economic cycles. [Talk about the company’s cyclical nature,


and its dependence on [or isolation from] the overall economic activity of
the country. Indicate the major macroeconomic scenarios that may affect it
and/or benefit it, if any].
II. The Company
[Company] is a [legal form of business i.e. Corporation] founded in [Year] and
based in [City, State]. The Company’s founder is [founder] who identified the
need in the market for [describe the market opportunity that the company seeks
to fulfill] and developed [product, strategy or vision that fulfills the need in the
market]. The company was initially financed with $## by [source of initial
funding]. [Briefly elaborate briefly on any relevant company history, mention how
the company emerged and the main achievements and/or problems that made it
what it is today. If your company is a new startup, mention plans for launching
the business.]

The company’s management developed a mission statement that addresses


both the short- and long-term goals of the company. This mission is to [state
your company's mission statement].

The Company [provides/manufactures - or - sells] [mention briefly the company’s


main products and/or services] to [target market]. [Company] is a [subsidiary -or-
partner -or- client -or- supplier] of [list any companies that make a difference in
positioning the company’s future].

Most of [Company]’s [current and/or future] revenues come from the following
sources [please elaborate briefly on the main sources of revenue - by client,
product and/or region].

Ownership

Chose one business type for your business plan & delete the others from your
business plan.
Sole Proprietorship
[Company] is a sole proprietorship owned and managed by [name of owner].

Partnership (General or Limited)


[Company] is a [general/limited] partnership with the following general partners:
• [General Partner 1]
• [General Partner 2]

The Company also has the following limited partners who have made
investments into the Company:
• [Limited Partner 1] - [Amount of Investment]
• [Limited Partner 2] - [Amount of Investment]

Corporation & LLC


[Company] is registered as a [business type] and has issued ## shares that are
distributed as follows:

Shareholder Number of shares


[Shareholder #1] ##
[Shareholder #2] ##
[Shareholder #3] ##
For future distribution ##

SWOT Analysis

The following SWOT analysis compares the internal strengths and


weaknesses of our organization with external opportunities and
threats.

Overcome weaknesses to pursue opportunities


Strengths Weaknesses
Pursue opportunities that fit with strengths

Establish a defensive plan to minimize threats


• [item] • [item]
• [item] • [item]
• [item] • [item]
• [item] • [item]
• [item] • [item]

Opportunities Threats

• [item] • [item]
• [item] • [item]
• [item] • [item]
• [item] • [item]
• [item] • [item]

Minimize vulnerability to threats using strengths

Products and Services


[Product/Service]
[Product/Service 1] is our primary source of revenue. It is sold for $##.## and is
distributed primarily through [primary distribution method]. It has the following
features:
• [Feature]
• [Feature]
• [Feature]
• [Feature]

[Product/Service 1] offers customers the following benefits:


• [Benefit]
• [Benefit]
• [Benefit]
• [Benefit]
[Company] also offers its customers the following products and services:
• [Product/Service 2] – [Briefly describe this product and its benefits]
• [Product/Service 3] – [Briefly describe this product and its benefits]
• [Product/Service 4] – [Briefly describe this product and its benefits]
• [Product/Service 5] – [Briefly describe this product and its benefits]

[Company] has identified additional [products/services] that it believes will


effectively complement its current product mix in the future. These future
opportunities are listed below.
• [Future Product/Service 1] – [description of product/service]
• [Future Product/Service 2] – [description of product/service]
• [Future Product/Service 3] – [description of
product/service]

Intellectual Property

[Company] has secured the following patents for [product/service]. These


patents are registered with the Office of Trademarks and Patents.
• [Patent number] - [Briefly describe this patent]
• [Patent number] - [Briefly describe this patent]
• [Patent number] - [Briefly describe this patent]
• [Patent number] - [Briefly describe this patent]

[Trademark #1], [Trademark #2], and [Trademark #3] are all registered
trademarks of [Company]. Management has taken the following steps to protect
these trademarks:
• [Step 1]
• [Step 2]
• [Step 3]

Company Location

[Company] currently has ## office(s) located in [location(s)].

In addition, the company has a [warehouse, distribution center, other facilities]


located in [location(s)].

The company’s manufacturing facilities are located in [location(s)].

[Company] also has retail locations at [location(s)]. Future locations for the
Company are planned for [location(s)].
IV. Industry Analysis
Size and Growth Rate of the Industry

According to [source of information (recommend industry/gov't publication], total


[industry] industry sales in the United States were $## Billion in [Year] and $##
Billion in [Year]. This includes [products/services included in these figures]. The
industry has grown at ##% for the last ## years, and is expected to grow ##%
over the next ## years.

Maturity of Industry

The [industry segment] segment of the industry in which [Company] operates is


[new -or- expanding -or- stable -or- declining]. Management believes that there
is opportunity in the industry for a company that can [describe traits that will
make a new player in the industry successful].

Trends in the Industry

The major trend in the [product/service] market is towards [description of trend].


Because of [reason for trend], consumers are more likely to expect [expectation].
[Products/Services] that deliver only [characteristic] will gradually be replaced by
those that offer additional features and benefits such as [list of features]. Other
trends in the industry include the following:
• [Trend] - [Briefly mention the impact that this trend will have on the
industry]
• [Trend] - [Briefly mention the impact that this trend will have on the
industry]

Industry Opportunities

[Company] is poised to take advantage of the trend towards [trend] through its
[product/service]. There is substantial opportunity for growth for a [local,
regional, national, international] firm such as [Company] to capture market share
and develop a profitable business.

Barriers to Entry

The costs of [infrastructure, product development, staffing, technology, etc] make


it difficult for new companies to establish themselves in the [industry] market. In
addition, existing customers have been reluctant to try new [suppliers, providers]
because of the time and effort involved in switching allegiances. [Describe
industry characteristics that make it difficult for a company to enter the industry.]
V. The Target Market
Fact: this is the most crucial but worst-prepared section of most business plans.

Target Market

In today’s competitive [product/service] market, [elaborate on how leading


companies in the specific sector are behaving, which strategies they are
implementing, what their weaknesses are and how your company is going to
compete against them – quality, service, innovative product, etc.]

Market Analysis

The Company participates in the rapidly growing [product/service] market, which


is expected to grow from nearly $## today to approximately $## in [Year]. The
Company estimates the revenue of [niche or market segment] is above $##.
This is shared by national, regional, and many local competitors. A CAGR of ##%
has been registered for the past 5 years on this segment.

In the United States alone, the Company estimates approximately ## companies


compete in the same market niche as [Company].

The [product/service] market's annual growth rate of roughly ##% is driven by


[Describe what type of demand and/or need is driving growth]. Other factors
include [Describe other factors driving growth in your industry].

Demographics

Most of the Company’s client base will be made up of [segment of target market]
located in [primary geographic area]. They will account for ##% of the
company’s revenue. According to [source of information], [segment of target
market] typically [buying characteristic]. They most often purchase via
[distribution method], but also buy from [other distribution method].

[Company] projects that ##% of its customers will be [market


segment]. According to the [source of information], [market segment]
typically [buying characteristic]. They most often purchase via [distribution
method], but also buy from [other distribution method].

Market Readiness
[Company] management has conducted its own research into the target
customer base in the company’s marketing plan. (For information on developing
a marketing plan, visit http://www.marketing-plan-success.com.) Based on this
research, management has concluded that there is demand in the market for
[Company]’s [products/services]. This research also indicated that the following
needs either are not being met or are being met poorly by [products/services]
currently available in the market:
• [Need not being met by the competition]
• [Need not being met by the competition]
• [Need not being met by the competition]

[Who are your customers? Where are they, and how do you reach them? Are they
buying your product / service from someone else? How will you educate
customers to buy from you? Why will they care?]

[Secondary research can also be used to complete the preceding section if it is


recent and reputable.]

Positioning

[Company]’s strategy is to position the company as the [premier, leading, major]


provider of [product, service] in the [geographic area] market. It will achieve this
goal by establishing a market position characterized by the following:

Management has established its strategic position after careful evaluation of


industry trends, the target market, the competitive environment, the company’s
strength, and the inherent risks.

Industry Trends

The major trend in the [product/service] market is towards [description


of trend]. Because of [reason for trend], consumers are more likely to
expect [expectation]. [Products/Services] that deliver only
[characteristic] will gradually be replaced by those that offer additional
features and benefits such as [list of features].

Target Market

[Company]’s target market is the [target market]. This market is characterized


by [list key characteristics].

Competitive Environment

Although direct competitors such as [list competitors] exist, they do not currently
provide [unique product or service]. This enables [Company] to distinguish itself
in its customers’ eyes and differentiate it from the competition.

Company Strengths

[Company] management is convinced that its [major strength] puts it


in a unique position in the market. In addition, our [other important
strength] enables us to [action] better than any other firm can.

Definition of Strategic Position


Management’s analysis of the factors just outlined leads us to the conclusion that
the biggest threat to our plan is [threat]. It is imperative that we [action] to ensure
that the [threat] will not keep us from meeting our objectives.

It is the strong belief of [Company] management that [#1 risk], although real, will
not keep companies such as ours from succeeding. Our ability to provide
[product, service, or attribute thereof] and [other product, service, or attribute
thereof] should ensure our competitive position.
VI. The Competition
[Company] has performed extensive analysis of its competitors in the
[product/service] market in [geographic area]. The following types of firms offer
either direct or indirect competition:

• [Firm Type 1]
• [Firm Type 2]
• [Firm Type 1]
• [Firm Type 1]

Management considers only [list firm type(s) from above list] to be in direct
competition with our products and services. They offer the only realistic
challenge to [Company]’s share of the market. [Other firm types] do not provide
[state the difference between their offering and yours].

Direct Competitors

[Provide brief but informative descriptions of your main competitors. If possible,


classify them by segment.]

Segment 1. – Main competitors include: [Names, location, products and


market share]
Segment 2. – Main competitors include: [Names, location, products and
market share]

Market Share Distribution

A recent survey conducted by [management or reputable third party] indicates


that target customers’ purchases of [products/services] are distributed among
companies as displayed in the chart below.
Market Share Distribution
Company #1 - 10%
Company #5 - 20%

Company #2 - 20%
Company #4 - 10%

Company #3 - 40%

Competitive Advantages
[Company] enjoys the following advantages over its competition:

• [Competitive Advantage]
• [Competitive Advantage]
• [Competitive Advantage]
[Focus only on the competitors who are aiming at the same target market.]

Competitive Positions

Management considers its main competitors to be the following (ranked in order


of strength in the marketplace):

• [Competitor]
• [Competitor]
• [Competitor]

[Competitor 1] is considered to be the strongest competitor because of


[discussion of competitor #1’s advantages and strengths]. The specific
advantages that [Company] holds over [Competitor 1] are [list the advantages].

[Competitor #2] [discuss competitive advantages as well as our own competitive


strengths].

Barriers to Entry

Potential entrants into the [industry] market face obstacles such as [describe
barriers].

Companies that are likely to successfully capture market share are those that
[describe characteristics of potential new entrants].
VIII. Marketing Outline & Sales Strategy
[Company]’s marketing strategy is to communicate its competitive differences
particularly as they relate to the needs of its target customers. Our ability to
[competitive advantage] is what sets us apart and all of our marketing efforts and
tactics focus on driving this point home.

Company Image/Message

{Company]’s logo, marketing materials, promotions, and sales approach are all
coordinated so as to present a clear and consistent message to its customers
and potential customers: [Company]’s [product, service] is the ideal solution to
their need for [need #1], [need #2], and [need #3].

The company’s logo, a [describe logo] integrates with its slogan: “[company
slogan].” This integration leads to a variety of consistent messages throughout
our communications with the target customers. For example, [give example of
communication].

Sales Program

The nature of [Company]’s [product/service] makes the [direct sales,


telemarketing, catalog, internet, or other mechanism] the most effective
approach. [Discuss the pertinent details of the appropriate sales mechanism. Be
sure to mention the organizational structure and a description of who does what
internally.]

Marketing Vehicles

[Company] has used or will use the following marketing vehicles to express its
message to its target market:

Brochures
The company has [developed its own sales literature, or used the services of a
marketing/design firm]. These materials are [used by the sales team, sent out as
direct mail pieces].

Public Relations
Management recognizes the importance of creating interest in its offerings, and
has retained the services of [PR firm] to handle its public relations. The firm has
extensive experience in the [industry] industry and has helped [Company] get
favorable press coverage in [Publication #1], [Publication #2], and [Publication
#3].

Advertising
To support its promotion efforts, [Company] is working with the [Ad Agency
name] advertising agency. Management is spending its advertising budget
primarily in [consumer/business/trade] [magazines/newspapers/other
publications] that cater to its target customers. Ads will be run strategically to
support and maximize the impact of the positive editorial that is garnered in the
publications mentioned above.

Customer Loyalty
Management believes that in today’s marketplace the most successful
companies are those that provide excellent service to their customers.
[Company] is committed to total customer satisfaction and recognizes it has an
opportunity to separate itself from its competitors by servicing its customers
better than anyone else.

Management has already put into place loyalty programs that will reward its
customers for their business. The program [describe main features of program].
Management believes that these types of programs serve to not only
reward its customers, but also to build the company’s credibility in the
marketplace.

Trade Shows
Management has realized significant sales and sales leads through its
participation in trade shows. It has attended [list relevant shows] and intends to
follow up its success there by establishing booths at [list relevant trade show(s)].

Strategic Partnerships
In [month, year], management agreed to a marketing alliance with [name of firm].
[Name of firm], a leading [producer, provider] of [product, service] has a similar
customer target as [Company] albeit for different products. This common
customer target has made for an excellent opportunity for joint promotions and
activities. Further events are in the planning phase.

Sales Forecast

Management projects that [Company] will achieve direct sales of ## units and
$## of revenue in [Year]. These figures will grow to ## units and $## in [Year]
and ## and $## in [Year].

The Table below indicates [Company]’s other sales sources and


projected revenues from each.

Sales Source 200X 200X 200X 200X 200X


Direct Sales $ . $ . $ . $ . $ .
Catalog Sales $ . $ . $ . $ . $ .
Internet Sales $ . $ . $ . $ . $ .
Other #1 Sales $ . $ . $ . $ . $ .
Other #2 Sales $ . $ . $ . $ . $ .
Total Revenue $ . $ . $ . $. $.
All figures are expressed in $##.
IX. Operations
[Here is where you explain the day-to-day functions of your
business. Focus on the aspects of operations that impact the overall
success, provide a competitive edge, or show innovation. Delete the
sections below that are not relevant to your company’s success.]

A key to the success of [Company] is the [supplier network, production process,


order fulfillment system, design lab, consulting organization, or any other
operational advantage the Company possesses]. Our ability to effectively
manage this aspect of our business enables us to [keep costs down, provide
superior service or quality, bring products to market more quickly than
competitors, or other competitive advantage]. [Briefly mention any other
operations-related items that are important to the success of your business]

Facilities

[Company] operates its business from ## locations. Its headquarters are located
at [address] and comprise ## square feet of office space. The headquarters
includes the senior management of the company, and all sales and
administrative functions including [use all that apply: Marketing, Advertising,
Research and Development, Finance and Accounting, and Customer Service].

The company’s warehouse is located at [address] and includes ## square feet.


The facility is leased from [lessor] for a total cost of $## monthly, which is $## per
square foot. -or- [The company owns the facility and is paying a $[mortgage] at a
rate of [rate] % for a monthly payment of $[amount].]

[Company] also operates a manufacturing facility at [address]. The facility is


leased from [lessor] for a total cost of $## monthly, which is $## per square foot.
-or- [The company owns the facility and is paying a $[mortgage] at a rate of [rate]
% for a monthly payment of $[amount].] [Company] produces all of its products
here and management believes that it will be able to achieve the sales goals
outlined in this plan without any additional manufacturing capabilities.

Equipment

[Company] currently [owns/leases] the following equipment:

General Office
• [equipment]
• [equipment]
• [equipment]

Warehouse
• [equipment]
• [equipment]
• [equipment]
Manufacturing
• [equipment]
• [equipment]
• [equipment]

Production

[Company]’s products are [assembled in our own factory, assembled by factories


with whom we have contracts]. [Company] [purchases components from third
parties, produces components] which are then shipped to [our, the third party]
facility for final assembly. Quality control is handled by [Company or contract
factory].

Factories are currently working at ##% of capacity. To achieve the sales forecast
in this plan will require [additional staffing, a larger facility, no increase in staffing
or production space]. [Add additional pertinent information about the supply chain
or production process]

Inventory Control

[Company] management is committed to an efficient supply chain. The current


lead time from production order to finished product is ## weeks. This compares
favorably with the industry standard of ## weeks. We have implemented the
[name of technology] system to manage our supply chain and are always
analyzing processes to improve lead times. This enables us to keep our
inventories at the lowest possible levels.

Supply & Distribution

Finished goods are held in inventory at our [distribution center, warehouse]. It is


this location that handles order fulfillment and ships products to our customers.
Because of our ability to manage the supply chain, we have been able to turn
over our inventory an average of ## times per year.

[Company] has implemented the [name of system] distribution system, which


enables us to ship orders efficiently. Our contract with [UPS, FedEx, other
shipping company] provides for reduced shipping fees that we are able to pass
on to our customers.

Customer Service

The [distribution center, warehouse] includes a Customer Service department


that receives and processes orders, assists with expediting major orders, and
provides support to customers in changing and tracking orders and returns. The
department is staffed [24/7, during normal business hours].

Research & Development


Management is committed to the ongoing development of new products and
services that will ensure our competitive position and continued growth. To that
end, research and development is conducted by [key management, engineering,
a dedicated R&D department]. An example of the effectiveness of this process is
the [product], which was conceived internally and is now in production.

Other Operational Issues

Management has experienced difficulties in the past with [operational challenge].


To date it has corrected this problem by [methods used to correct problem].

Other potential problems that we foresee include [state potential problems]. We


anticipate that we will be able to work through such difficulties by [describe
contingency plans].
X. Technology Outline
Technology and effective systems are crucial to successful modern companies.
Management of the company’s information systems is handled [internally, by an
outside consulting firm]. This arrangement provides [Company] with the flexibility
to continually monitor its systems and upgrade when business requirements
dictate.

The company presently uses the following systems:

• [Accounting and finance]


• [Data warehouse]
• [Inventory management]
• [Graphic design]
• [CAD/CAM]
• [Point-of-sale]

Internet

[Company] owns a web site, [website URL], where it [provides


information about its products/services, accepts orders, hosts an online
catalog, other web site uses]. The hosting of the site is handled
[internally, by third party hosting [Company]].

Hardware Needs

The company currently [owns, leases] ## desktop PC systems and ## laptop


computers. In addition, it [owns, leases] ## network servers used for our internal
information processing. [List any other hardware or hardware needs addressed by the
funding from this plan.]

Software Needs

In addition to the systems already used by [Company], management foresees the


need for [type of system]. Such a system will enhance our ability to [compete,
cut costs, manage finances, design products, etc.].

Telecommunications Needs

[Company] currently uses a [type of system] phone system. Although adequate


for our present needs, our projected growth will spur the need for increased
capacity and, in all likelihood, a new system. Management projects that it will
upgrade to a larger system in [date].

The company also [has, needs] a [private network, virtual private network] that
will [state benefit of network].
XI. Management & Organization
If you are using this plan to help raise money, be aware that many investors will give this
section high priority and read it very carefully. It is a common belief that the people
[experience, skills, personalities] are more important than the product in determining
success.

Management Team

[Company] has a capable and experienced management team.

Mr./Mrs. XXX
President, CEO and XXX founded [Company] in [year] and has been key in
Founder orchestrating growth by building critical relationships with
customers and vendors to assure the Company’s
continued viability. Before joining [Company], XXX worked
for XXX Co. Specific management accomplishments
include XXXX and XXX that grew into a $XX million
revenue company in just X years. He/She also managed
the turnaround of a XXX company from a $XX million a
year revenue company that was losing money into a $XX
million a year operation. XXX has a MBA in XXX from the
University of XXX, State.
Mr./Mrs. XXX
Vice President XXX joined [Company] in [year]. His/Her main role within
the corporation is XXXX. Before joining [Company], XXX
worked for XXX Co. Specific management
accomplishments include XXXX and XXX that grew into a
$XX million revenue company in just X years. He/She also
managed the turnaround of a XXX company from a $XX
million a year revenue company that was losing money into
a $XX million a year operation. XXX has a BA in XXX from
the University of XXX, State.
Mr./Mrs. XXX
CFO XXX joined [Company] in [year]. His/Her main role within
the corporation is XXXX. Before joining [Company], XXX
worked for XXX Co. Specific management
accomplishments include XXXX and XXX that grew into a
$XX million revenue company in just X years. He/She also
managed the turnaround of a XXX company from a $XX
million a year revenue company that was losing money into
a $XX million a year operation. XXX has a BA in XXX from
the University of XXX, State.

Mr./Mrs. XXX
COO XXX joined [Company] in [year]. His/Her main roe within
the corporation is XXXX. Before joining [Company], XXX
worked for XXX Co. Specific management
accomplishments include XXXX and XXX that grew into a
$XX million revenue company in just X years. He/She also
managed the turnaround of a XXX company from a $XX
million a year revenue company that was losing money into
a $XX million a year operation. XXX has a BS in XXX from
the University of XXX, State.

Mr./Mrs. XXX
CTO XXX joined [Company] in [year]. His/Her main role within
the corporation is XXXX. Before joining [Company], XXX
worked for XXX Co. Specific management
accomplishments include XXXX and XXX that grew into a
$XX million revenue company in just X years. He/She also
managed the turnaround of a XXX company from a $XX
million a year revenue company that was losing money into
a $XX million a year operation. XXX has a BA in XXX from
the University of XXX, State.

Staffing

[Company] [currently runs/anticipates running] its business with a staff of


[number of employees] full time and [number of employees] part-time employees.
Each is responsible for a different function, although management has created a
system of cross-functional training that will keep its business running smoothly
despite illness, attrition, or turnover.

The staff is organized along for the following functional framework:


• Sales
o [List Responsibilities]
• Administration
o [List Responsibilities]
• Operations
o [List Responsibilities]
• Customer Service
o [List Responsibilities]
• [Department]
o [List Responsibilities]

Board of Directors

The following individuals make up the [Company] Board of Directors:

• [Name], [Title] – Chairman of the Board


• [Name], [Title] – Director
• [Name], [Title] – Director
• [Name], [Title] – Director
• [Name], [Title] – Director
• [Name], [Title] – Director

Advisory Board

Management has also assembled an advisory board to compliment the strengths


of the management team. The company’s advisers are:
• [Name], [Title]
• [Name], [Title]
• [Name], [Title]
• [Name], [Title]
XII. Milestones, & Exit Strategy

[What is your ultimate destination? And what will your business look
like at different intervals along the way? This section should tell
investors how much money they can make and when and how they
can get it.]

Goals

[Company] management’s vision includes the continued development of


[Company]’s concept and the establishment of the company as a [Lifestyle
provider, innovator, quality provider, growth company, and/or niche leader] in the
[industry] industry. ## years from now, we expect to have [state one or more
goals to have accomplished at that time].

Strategies

[Discuss strategies that the company will implement to achieve the


goals outlined above. Explain priorities especially in terms of
strategies for which significant expenditure is required.]

Milestones

Milestone Status/Date
Hire [CEO/CFO/CMO/COO] [Status/Completion Date]
[Open store/launch web site/begin [Status/Completion Date]
construction]
First dollar revenue [Status/Completion Date]
[Other Milestone] [Status/Completion Date]
[Other Milestone] [Status/Completion Date]
Achieve profitability [Status/Completion Date]
Cash flow breakeven [Status/Completion Date]
[Other Milestone] [Status/Completion Date]
[Other Milestone] [Status/Completion Date]
[Other Milestone] [Status/Completion Date]
[Other Milestone] [Status/Completion Date]
[Other Milestone] [Status/Completion Date]
[Other Milestone] [Status/Completion Date]

Risk Evaluation

Although management is convinced that [Company] will succeed and provide an


outstanding return for its investors, there are inherent risks in its plan:

• [Risk]
• [Risk]
• [Risk]

[Include such risk considerations as market acceptance, changing


demographics, new competition, new customer tastes, management
performance, operating costs, regulatory and licensing issues.]

Exit Plan

[Company] management is projecting that it will have a highly profitable business


with a relatively small expense and asset base. Its forecast of $## of pretax
income in its third year of operation is evidence of this belief.

Although [Company]’s books are maintained by an independent, certified public


accountant and the company is positioning itself for an initial public offering, its
remarkably low overhead and capital needs make early acquisition a more
probable scenario. Management believes that large, established companies in
the [industry name] industry will find [Company] to be an attractive acquisition
target because of its [characteristic #1] and its [characteristic #2].

[Alternatively, discuss another exit option such as sale to


individual[s], stockholder or employee buyout, franchise, hand down
to family member[s], or close.]
XIII. Financial Data & Projections
[All the decisions you have made in the previous sections have
financial outcomes. These numbers must be gathered, sorted and
reported so that you can assess your present position, current
progress and make new decisions about the future. For startup
ventures, a good set of projected financial statements can be a
great tool for making many important choices. It is perhaps the best
[if not the most realistic] way to “see into the future.”]

Financial Assumptions

In assembling the [Company] financial plan, management made a number of


important assumptions:

• [Assumption]
• [Assumption]
• [Assumption]
• [Assumption]

Capital Requirements

[Company] management has determined that it requires $## of


capital to implement its strategy as defined in this plan. The table
below indicates the sources and uses of the required capital.

Guidelines:
♦ Consult your accountant and your attorney.
♦ Be conservative and honest
♦ Use standard industry forms and formats

Forms to include:
♦ Income Statement
♦ Cash Flow
♦ Balance Sheet
♦ Break-Even Analysis
♦ Uses of Funds
♦ Optional:
♦ Sources of Capital & Debt Service
♦ Detail of Expenses Worksheets
♦ Amortization and Depreciation Schedule

Note: The Income Statement, Cash Flow, and Balance Sheet below will
automatically update when data is entered into the IVD financial template. You
can update the link by right-clicking on the table and selecting ‘update link.’ If
some of the numbers are showing as ##### you need to go into the spreadsheet
and increase the column width by double-clicking on the line to the right of the
column letter.
XIV. Appendix
The appendix is the place for supporting documents and information. The items
in the appendix should only confirm, reinforce or elaborate on the major ideas
and facts already stated in the main plan. Many people don’t even read the
appendix so include all essential items in the plan itself.

Appendix Items
♦ Resumes and financial statements of key people
♦ Lease and other location information [pictures]
♦ Marketing information [logo, dummy ads, packaging]
♦ Supporting media information [newspaper articles, etc.]
♦ Budgets & schedules & analysis [equipment lists, project charts, flow chart]
♦ Design or construction information [floor plan, renderings]
♦ Contracts, trademarks
♦ Bank loans, financial statements
♦ Market research studies [bibliography]
♦ Letters of Reference
♦ Corporate Documents [proof of Incorporation
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