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CANONGATE CAPITAL
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08189897198 08126841660
[Esthad Ventures] Business Plan [2017]
Esthad Ventures
33, Iyaka Street
Television
Kaduna South, Kaduna
08137760729
x_odus4me@yahoo.com
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[Esthad Ventures] Business Plan [2017]
Table of Contents
I. ............................................................................................... Table of Contents
........................................................................................................................... 3
V. ...................................................................................................Marketing Plan
........................................................................................................................... 9
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[Esthad Ventures] Business Plan [2017]
Executive Summary
Esthad Bakery and Confectionery is a start-up and bakery retail establishment located
at No.33,IYAKA SREET, TELEVISION ,KADUNA SOUTH,KADUNASTATE.
Esthad Bakery is into production of bread. Bread is eating by all and sundry i.e. old and
youngs, male and female and usually serve as breakfast with tea in most homes in
Nigeria. There is therefore a large customer base consisting of all members of the
general publics. These customers are largely reached through the efforts of
wholesalebread distributors, supermarkets, food vendors e.t.c while some others like
boarding institutions are being reached directly.
Esthad bakery is a private company largely owned by Mrs Olufunmilayo Ojo and produces
bread under the brand name City buttered bread. More partners may be brought in the
future as the business expands.
Bread is a major staple food in almost all homes in Nigeria and with the continuous
increase in Nigeria population, the demand for the product keeps increasing and as such,
the market is wide and large. The bakery industry has been in existence for very long
time and almost as old as human beings. The industry will continue to exist as man
cannot live without food. The industry can only keep evolving in terms of technology and
innovation . There is therefore a great prospect and future for the bakery industry.
Esthad Ventures have great advantage of high demand to leverage on and therefore aims
at sustaining her competitive edge by keeping her product appealing to her loyal
customers and the general public by producing differentiated delicious bread at
competitive price.
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[Esthad Ventures] Business Plan [2017]
Bakery/Bread Production
Mission Statement:
Company Goals:
To be a leading bakery in Northern Nigeria with major focus on Kaduna state bread
market.
Objectives:
Distributors’ network cut across all areas in Kaduna town and environ.
A minumum production of ten bags of flours per day for six working days every week.
Business Philosophy:
Integrity
Excellence
Customer Focus: Our desire is to always satisfy our customer. We seek their need day
by day and produce our products to satisfy their demand and taste.
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[Esthad Ventures] Business Plan [2017]
Quality: Though quantity is important, but we ensure we do not for any reason jettision
quality product.
Excellence: We try all means to ensure that the needs of our customers are met and
surpass by giving quality product and excellent service. Custmers are treated like king to
have their needs met.
The product is being marketed to wholesaler/ network of distributors across Kaduna state
who in turn sell to retailer across the town.
Bakery industry is not a strange industry. It has been in existence for very long time and
alsmot as old as human age. The industry has evolved through use of different baking
technology and methods in making bread and production of different flavours of bread to
meet the the taste and demand.
The industry has witnessed price change due to constant increase in cost of production
materials and inflation in economy. Nothwithstanding, it appears households in Nigeria
cannot do without bread as it is a ready made food that can be combined with other
forms of food or eat alone.
The consistent surge in the population of Nigeria is a great plus for the product. This has
caused the need for more bakery to be imminent, the market is very wide and cut across
all classes in the society from the low income earners to the super rich. The industry will
keep growing in demand as long as human race is in existence because if there is no food
, there is no live.
The products come in different flavours and largely produced from wheat flour in Nigeria.
The two major type of bread are wheat bread and white bread. The wheat bread is in low
demand because it does come with high sugar content and seems tasteless. The main
demand is on the white bread on which Esthad ventures productions is focused on.
Few years ago, the Federal Government of Nigeria wanted the production of bread to be
changed from the use of wheat flour to cassava flour, however this could not be enforced
due to inconsistent in Government policy and also shortage of cassava supply. Cassava
currently have a lot of use in Nigeria which have been left unmet for now. If this policy is
implemented however, it does not really affect our production as long as flour company
can sustain production.
Esthad Ventures is poised to take advantage of the continuous growth in the demand for
bread by producing unique flavour of bread at very affordable price to the general public.
We also intend to ensure that our customer are treated well so that they can maintain
repeated patronage and refer us to other network of customer within our environment.
Our Products are highly nutritious and healthy as well as unique in nature. We are also
fast in production and our products are neat. We are also in a good and open location
with easy distribution channel.
We also have proactive management and very resourceful staff who have gained
various experience in the bakery industry.
We are perfect in time management and organization and as such we are able to meet
requested demand in time..
Government incentives for small scale business in terms of trainings and various
trainings undergone by our management are leverage for us towards sound management
practise.
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[Esthad Ventures] Business Plan [2017]
There is also an existing market due to increase in population thereby leading to high
demand for the product being one of the most sought staple food.There are existing
network of distributors on ground and also boarding schools, eateries, market, shop
owners etc.Ourmanagement and staff experience in the industry brings competence and
credibility to the business
Describe your most important company strengths and core competencies. What factors
will make the company succeed? What do you think your major competitive strengths will
be?What background experience, skills, and strengths do you personally bring to this
new venture?
Mrs. Ojo Esther Olufumilayo is the proprietor of the company and doubles as the general
manager of the company. I hold National Diploma and Higher national Diploma in
Accounting from Osun state Polytechinc, Iree, Osun sate. I also hold Post graduate
Diploma in Education.I was into educational sector of the economy as a teacher for about
ten years before venturing into entreprenurship. IhaveaDiploma in Innovation and
entrepreneurial finance from Kaduna Business School. I also completed Sterling Bank
MSME academy course among other leadership and management trainings.
I was once a bread distributor before turning around to venture into production of the
same. Iunderwent training with Fesojaye Bakery and was released to start my own
bakery. I was mentored by the same bakery owner for a while until I was able to gain
stand in the business. I am a member of Master Baker Association of Nigeria, Kaduna
Chapter. Ipossess good inter-personal and marketing skills which overtime has been an
advantage to influencing customer patronage.
WEAKNESS
Our competitors have dominated the market, so we have great work to do. Accepting
new thing takes times. Some of these competitors are well known brand that the public
seek at all times. The secret of majority of these well known brands however lie in their
form of packaging which we have also embraced by producing quality packaging (nylon)
and this has proved positive to our current demand.
THREATS
There are new and emerging competitors in the Bakery industries since the business is
promising.Increasing operational costs,Fluctuating prices of raw materials leading to high
cost of production and subsequently discouraging many customers.Emergency of new
technologies every day.Inadequate power supply leading to high cost of production.Lack
of funding.Cash flow problems.Credit terms industry standard.
Partnership: This was selected for better management skills, funding and business
continuity.
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[Esthad Ventures] Business Plan [2017]
Currently city bread is produced in three sizes i.e. small ,medium and long size.The long
size are sliced. The purpose of the three sizes is to meet the need of the general
populace based on their varied income/earnings.
Our areas of competitive advantage lie in the fact that most of the dominant bakery in
Kaduna are selling the same size of bread with us at higher price. We have therefore
taken advantage of cost differentiation to edge some of our compettitors in the market.
We are also located in well accessible area to various networks of distributors and usually
go extra miles to satisfy the need of our customers. We have decided for now not to go
into special bread until we are popular enough to convince the market.
Although,competing with the market leaders has not been very easy due to loyalty of
large part of the public to some popular brand.
What are the pricing, fee, or leasing structures of your products or services?
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[Esthad Ventures] Business Plan [2017]
Marketing Plan
As earlier said, the demand for bread as staple food has been enormous over the years.
The current number of bakeries in town are not meeting the demand of the populace.
The market is very large and wide enough for every serious competitor to have a fair
share of the market.
Esthad ventures will serve all its customers lower, middle and upper income by providing
its products with affordable prices and by rendering services that will put a smile on the
faces of its customers. It will make no discrimination between its customers,
Esthad Ventures will focus on Kaduna and its near by areas. There are many other
bakeries already established in Kaduna but we shall be providing unique and quality
bread at very effective and affordable cost. We will strongly focus on the priority of low
and middle income earner while we will also not neglect completely the upper income
earner as we grow the business.
Economics
What percent share of the market will you have? (This is important only if
you think you will be a major factor in the market.)
There is high demand of the product because is a staple food of all categories
of people.
For us to remain relevant, we create flavors and varieties that will keep us
afloat in the bakery business. And we are willing to explore the ‘bakery
world’; and we come up with a product that tastes unique from what is
readily available in the present market.
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[Esthad Ventures] Business Plan [2017]
80%. The drive for the growth will be that it has become an household name
and the demand of every lover of bread
What barriers to entry do you face in entering this market with your new
company? Some typical barriers are:
o Unions
o Shipping costs
For the production costs,we will reduce cost at every possible means by using
efficient means of production and ensure we cut wastages in our production.
For high marketing costs ,we will go for cheaper and affordable means of
advertisng and also engage the services of already established bread
distributors who need no cost to help us market the product.
For consumer acceptance,we are going to give sample as taste and reduce the
cost of sale and give it a unique and attractive packaging.
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[Esthad Ventures] Business Plan [2017]
Product
My customers see our product as a necessity. They also see it as a quality product and a
product to beat in the market.
BREAD:Our bread comes in three sizes.SMALL,MEDIUM AND BIG. The product is white
bread produced from white flour. It is very tasty.
The small size is or may be for one person.The medium can go for one or two people
while the big size is the family size.
The benefits of our product is that it satisfies the customers hunger. Its a ready
made food.
We have delivery van to convey bread to some of the wholesalers and in case of any
damage before the shelf life there is refund and we follow-up on our product.
Customers
Esthad Ventures will focus on Kaduna and its near by areas. Although, our presence is
largely felt in the southern area of Kaduna city for now. We also focus on wholesaler
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[Esthad Ventures] Business Plan [2017]
Location: within the bakery location and outside the bakery location
Income level: They are low income ,middle income earners and high income
earners.
Social class and occupation:There is no class barriers ,every social class and
occupation patronize us.
Competition
Products that may likely compete with our bread are other pastry products such as
cake,dough nut, puff-puff e.t.c.and some special bread. Howver, the pastry product are
not directly in the same class with bread while the special bread are expensive.
Will they compete with you across the board, or just for certain products,
certain customers, or in certain locations?
Some of them compete across the board and others are just for certain sizes
Will you have important indirect competitors? (For example, video rental stores
compete with theaters, although they are different types of businesses.)
There is an indirect competitor called TEA TIME SNACK.It is not fully bread but very close
to bread. Other pastry products such as cake,dough nut, puff-puff e.t.c are also in the
class of indirect competition
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[Esthad Ventures] Business Plan [2017]
My product is far preferred to it in the sense that ,bread can be taken with tea, egg,
butter, beans e.tc but the snack can only be taken alone. Also the snack and other pastry
products are not in the class of bread
Use the Competitive Analysis table below to compare your company with your
two most important competitors. In the first column are key competitive
factors. Since these vary from one industry to another, you may want to
customize the list of factors.
In the column labeledMe, state how you honestly think you will stack up in
customers' minds. Then check whether you think this factor will be a strength
or a weakness for you. Sometimes it is hard to analyze our own weaknesses.
Try to be very honest here. Better yet, get some disinterested strangers to
assess you. This can be a real eye-opener. And remember that you cannot be all
things to all people. In fact, trying to be causes many business failures because
efforts become scattered and diluted. You want an honest assessment of your
firm's strong and weak points.
Now analyze each major competitor. In a few words, state how you think they compare.
In the final column, estimate the importance of each competitive factor to the customer.
1 = critical; 5 = not very important.
Table 1: Competitive Analysis
Importance to
Factor Me Strength Weakness Competitor A Competitor B
Customer
Expertise We expert hands X Also have expert Also have expert hands 1
hands
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[Esthad Ventures] Business Plan [2017]
Importance to
Factor Me Strength Weakness Competitor A Competitor B
Customer
Our competitive advantage is in the size of our product , the price and our quality which
are the major factors customers consider in buying bread. We are also located in the
central area and residential area of the town which is very accessible to our customers.
We also deliver through our numerous distributors.
Our competitive disadvantage however is that we are new comer. And as such, we are
yet to build reputation because it takes time to do that. We also have challenge in the
area of advertising as we cannot afford high cost of advertsing though the product is
gradullay becoming known to many.
Niche
Strategy
The best marketing stategy is the engagement of bread distibutors who had been in the
line of the business for a while.
Promotion : We give away bread and also reward our major distributors though
discounted price based on performance
How will you get the word out to customers? Word of mouth via our agents and
meeting the distributors one on one. We intend to later organise distributors’ forum.
Advertising: Event. This will be in form of forum for the distributors . Though we have
online presence but this may not do much as bread business in Nigeria is dominated by
the midlle men called distrbutors who move from bakery to bakery to supply customers
and retailers.
Have you identified low-cost methods to get the most out of your promotional
budget?
Yes. We have collated list of distributors and reached out to many through personal
visitation and phone calls.
Will you use methods other than paid advertising, such as trade shows,
catalogs, dealer incentives, word of mouth (how will you stimulate it?), and
network of friends or professionals? We are also using network of friends and
acquitances
What image do you want to project? How do you want customers to see you?
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In addition to advertising, what plans do you have for graphic image support?
We have done our logo. We have also developed better branded nylon .
We shall also remodel our factory to be very neat and this will send a signal of the
neatness of our production process. This will convince our customers that our products
are hygyenic.
Should you have a system to identify repeat customers and then systematically
contact them?
Our customers are well known to us and well identified by us. We keep record of sales by
customer and as such we know repeated customers.
Promotional Budget
N100,000.00
Pricing
Explain your method or methods of setting prices. We set price based on our cost
of production and then put a 7.5 % profit margin on the cost of production.
Does your pricing strategy fit with what was revealed in your competitive
analysis? Yes
Compare your prices with those of the competition. Are they higher, lower, the
same? Lower
Why? Because we are not focus too much on profit for now but to gain market. We
currently adopt low cost strategy. While we put 7.5% profit margin on our product, most
established bakery put 10 -15% profit margin on their products.
Production of quality product while we set limit both in amount and number of days for
credit.
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Proposed Location
You will describe your physical needs later, in the OperationalPlansection. Here, analyze
your location criteria as they will affect your customers.
Yes. Bread is better sold in a location accessible to vehicle with good road infrastructure.
Yes. It is convenient.
Yes
Where is the competition located? Is it better for you to be near them (like car
dealers or fast food restaurants) or distant (like convenience food stores)?
Our competition spread all over the kaduna metropolis. Some are close to us while
others are far. This does not really matter.
Distribution Channels
We also have a network of distributors who come to our bakery to sell to retailers
Sales Forecast
Now that you have described your products, services, customers, markets, and
marketing plans in detail, it’s time to attach some numbers to your plan. Use a sales
forecast spreadsheet to prepare a month-by-month projection. The forecast should be
based on your historical sales, the marketing strategies that you have just described,
your market research, and industry data, if available.
You may want to do two forecasts: 1) a "best guess", which is what you really expect,
and 2) a "worst case" low estimate that you are confident you can reach no matter what
happens.
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Remember to keep notes on your research and your assumptions as you build this sales
forecast and all subsequent spreadsheets in the plan. This is critical if you are going to
present it to funding sources.
SALES FORCAST
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Operational Plan
Explain the daily operation of the business, its location, equipment, people, processes,
and surrounding environment.
Production
The company will operate at 60% of the installed capacity and will operate from
existing plant located at33, Iyaka Street Television Chukun LGA, Kaduna State
Quality control
Customer service
Inventory control
Product development
Location
What qualities do you need in a location? Describe the type of location you’ll
have.
Physical requirements:
Amount of space 30m x 15m space
Type of building: Production Room, Store, Ware house ,Office, Staff Changing
room and toilet
Zoning
Power and other utilities Bore hole and 5000 storage facility and 25 kva
standby generator
What are your requirements for parking and proximity to freeway, airports, railroads, and
shipping centers? Just normal parking
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Construction? Most new companies should not sink capital into construction, but if you
are planning to build, costs and specifications will be a big part of your plan.
Cost: Estimate your occupation expenses, including rent, but also including maintenance,
utilities, insurance, and initial remodeling costs to make the space suit your needs. These
numbers will become part of your financial plan.
What will be your business hours? single shift of 8 hours per day for production only
Legal Environment
Trademark
Personnel
Number of employees: 10 nos
Type of labor (skilled, unskilled, and professional) Both skill and unskilled
Where and how will you find the right employees? They have been recruited
already.
Quality of existing staff : They have the needed experience in bakery process.
Production Manager
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For certain functions, will you use contract workers in addition to employees?
Yes
Inventory
What kind of inventory will you keep? Raw materials such as flour,sugar
yeaste.t.c, and finished goods?
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Lead-time for ordering? Stocks are readily available in the open market.
Suppliers
Should you have more than one supplier for critical items (as a backup)? Yes
Are supply costs steady or fluctuating? If fluctuating, how would you deal with
changing costs? Steady
Credit Policies
Do you plan to sell on credit? Yes
If yes, what policies will you have about who gets credit and how much?
Small scale supplier are treated on cash andcarry basis while large scale
supplier are given credit line. Credit line is limited to one week and 50% of
product supplied.
How will you check the credit worthiness of new applicants? New
applicants are first treated on cash & carry basis but they are checked or
accessed for credit worthiness based on recommendation or based on
experience with them on their performance.
What terms will you offer your customers; that is, how much credit and
when is payment due? Maximum of 50% of total sales and one week
maximum
Will you offer prompt payment discounts? (Hint: Do this only if it is usual
and customary in your industry.) Yes. It is currently being practiced.
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Do you know what it will cost you to extend credit? Yes. Have you built the
costs into your prices? Yes
If you do extend credit, you should do an aging at least monthly to track how much of
your money is tied up in credit given to customers and to alert you to slow payment
problems. A receivables aging looks like the following table:
Total Current 30 Days 60 Days 90 Days Over 90 Days
Accounts
Receivable Aging
When do you send a letter? No.It is not relevant to our line of business based
on its peculiarity.
When do you get your attorney to threaten? If the cutomers refused to pay
and absconded from patronizing us.
You should also age your accounts payable, what you owe to your suppliers. This helps
you plan whom to pay and when. Paying too early depletes your cash, but paying late
can cost you valuable discounts and can damage your credit. (Hint: If you know you will
be late making a payment, call the creditor before the due date.)
Accounts Payable
Aging
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The business is being managed by Mrs. Ojo Esther Olufumilayo. She holds Higher
national Diploma in Accounting from Osun State Polytechnic, Iree Osun State Nigeria.
She obtained graduate diploma in Education from Federal College of Education Kano
State and also holds Master in Education planning and administration from National Open
University. She had a career in Education from 2003 after her youth service(NYSC) till
later in 2014 when she ventured into entrepreneurship.
Due to her flare for bakery and pastry products she underwent skills acquisition/training
in bread making with Fesojaiye bakery, Kaduna and worked a while with them before
venturing into starting her own bakery.
If you’ll have more than 10 employees, create an organizational chart showing the
management hierarchy and who is responsible for key functions.
Managing
Director/ CEO
Sales/
Production
Accountant Marketing
manager
Manager
Factory
Baker /casual Miller Marketer Marketer
workers (4)
Include position descriptions for key employees. If you are seeking loans or investors,
include resumes of owners and key employees.
Attorney
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Accountant
Insurance agent
Banker
Consultant or consultants
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Even with the best of research, however, opening a new business has a way of costing
more than you anticipate. There are two ways to make allowances for surprise expenses.
The first is to add a little “padding” to each item in the budget. The problem with that
approach, however, is that it destroys the accuracy of your carefully wrought plan. The
second approach is to add a separate line item, called contingencies, to account for the
unforeseeable. This is the approach we recommend.
Talk to others who have started similar businesses to get a good idea of how much to
allow for contingencies. If you cannot get good information, we recommend a rule of
thumb that contingencies should equal at least 20 percent of the total of all other start-
up expenses.
Explain your research and how you arrived at your forecasts of expenses. Give sources,
amounts, and terms of proposed loans. Also explain in detail how much will be
contributed by each investor and what percent ownership each will have.
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Financial Plan
The financial plan consists of a 12-month profit and loss projection, a four-year profit and
loss projection (optional), a cash-flow projection, a projected balance sheet, and a break-
even calculation. Together they constitute a reasonable estimate of your company's
financial future. More important, the processof thinking through the financial plan will
improve your insight into the inner financial workings of your company.
Many business owners think of the 12-month profit and loss projection as the centerpiece
of their plan. This is where you put it all together in numbers and get an idea of what it
will take to make a profit and be successful.
Your sales projections will come from a sales forecast in which you forecast sales, cost of
goods sold, expenses, and profit month-by-month for one year.
Research Notes: Keep careful notes on your research and assumptions, so that you can
explain them later if necessary, and also so that you can go back to your sources when
it’s time to revise your plan.
The 12-month projection is the heart of your financial plan. The Four-Year Profit
projection is for those who want to carry their forecasts beyond the first year.
Of course, keep notes of your key assumptions, especially about things that you expect
will change dramatically after the first year.
If the profit projection is the heart of your business plan, cash flow is the blood.
Businesses fail because they cannot pay their bills. Every part of your business plan is
important, but none of it means a thing if you run out of cash.
The point of this worksheet is to plan how much you need before startup, for preliminary
expenses, operating expenses, and reserves. You should keep updating it and using it
afterward. It will enable you to foresee shortages in time to do something about them—
perhaps cut expenses, or perhaps negotiate a loan. But foremost, you shouldn’t be taken
by surprise.
There is no great trick to preparing it: The cash-flow projection is just a forward look at
your checking account.
For each item, determine when you actually expect to receive cash (for sales) or when
you will actually have to write a check (for expense items).
You should track essential operating data, which is not necessarily part of cash flow but
allows you to track items that have a heavy impact on cash flow, such as sales and
inventory purchases.
You should also track cash outlays prior to opening in a pre-startup column. You should
have already researched those for your startup expenses plan.
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Your cash flow will show you whether your working capital is adequate. Clearly, if your
projected cash balance ever goes negative, you will need more start-up capital. This plan
will also predict just when and how much you will need to borrow.
Explain your major assumptions,especially those that make the cash flow differ from the
Profit and Loss Projection. For example, if you make a sale in month one, when do you
actually collect the cash? When you buy inventory or materials, do you pay in advance,
upon delivery, or much later? How will this affect cash flow?
Are there irregular expenses, such as quarterly tax payments, maintenance and repairs,
or seasonal inventory buildup, that should be budgeted?
Loan payments, equipment purchases, and owner's draws usually do not show on profit
and loss statements but definitely do take cash out. Be sure to include them.
And of course, depreciation does not appear in the cash flow at all because you never
write a check for it.
A balance sheet is one of the fundamental financial reports that any business needs for
reporting and financial management. A balance sheet shows what items of value are
held by the company (assets), and what its debts are (liabilities). When liabilities are
subtracted from assets, the remainder is owners’ equity.
Optional: Some people want to add a projected balance sheet showing the estimated
financial position of the company at the end of the first year. This is especially useful
when selling your proposal to investors.
Break-Even Analysis
(Where fixed costs are expressed in dollars, but variable costs are expressed as a
percent of total sales.)
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Appendices
Include details and studies used in your business plan; for example:
Brochures and advertising materials
Industry studies
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Bankers want assurance of orderly repayment. If you intend using this plan to
present to lenders, include:
o Amount of loan
For Investors
Investors have a different perspective. They are looking for dramatic growth,
and they expect to share in the rewards:
o How the company will use the funds, and what this will accomplish for
growth.
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Manufacturing
Service Businesses
Service businesses sell intangible products. They are usually more flexible
than other types of businesses, but they also have higher labor costs and
generally very little in fixed assets.
Your prices
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Will you be on the cutting edge with your products and services?
What is the status of research and development? And what is required to:
High-tech companies sometimes have to operate for a long time without profits and
sometimes even without sales. If this fits your situation, a banker probably will not want
to lend to you. Venture capitalists may invest, but your story must be very good. You
must do longer-term financial forecasts to show when profit take-off is expected to occur.
And your assumptions must be well documented and well argued.
Retail Business
Company image
Pricing:
Inventory:
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Location: Does it give the exposure that you need? Is it convenient for
customers? Is it consistent with company image?
Credit: Do you extend credit to customers? If yes, do you really need to, and
do you factor the cost into prices?
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