Below is an outline of what goes into a business plan, followed by pages of detailed descriptions.

This is only intended as a guide when developing your business plan, every situation is unique - make your business plan unique as well. Elements of a Business Plan

Cover sheet Statement of purpose Table of contents Descriptions of your business Marketing plans Describe the competition Operating procedures Personnel Business insurance Financial data

Your financial data should include:

Loan applications Capital equipment and supply list Balance sheet Break even analysis Income projections (profit & loss statements) that could include a three-year summary, details by month and first year, details by quarters, second and third years, and the assumptions upon which your projections were based. Current cash flow that could include details similar to your income projections.

You should include supporting documents for example:

Tax returns of all principals (you and your partners) for last three years. Personal financial statement (all banks have these forms) Copy of proposed lease or purchase agreement for building space Copy of licenses, patents, and other legal documents Copy of the resumes of all principals Copies of letters of intent from suppliers, etc.

Sample Business Plan

The following business plans are examples of what a completed business plan might look like. Use the instructions and information included in The Business Plan for Independent Inventors to fill out your own business plan. Sample Business Plan for American Management Technology (AMT)
1.0 Executive Summary

By focusing on its strengths, its key customers, and the underlying values they need, American Management Technology will increase sales to more than $10 million in three years, while also improving the gross margin on sales and cash management and working capital. This business plan leads the way. It renews our vision and strategic focus: adding value to our target market segments, the small business and high-end home office users, in our local market. It also provides the step-bystep plan for improving our sales, gross margin, and profitability. This plan includes this summary, and chapters on the company, products and services, market focus, action plans and forecasts, management team, and financial plan. 1.1 Objectives 1. Sales increasing to more than $10 million by the third year. 2. Bring gross margin back up to above 25%, and maintain that level. 3. Sell $2 million of service, support, and training by 1998. 4. Improve inventory turnover to 6 turns next year, 7 in 1996, and 8 in 1997. 1.2 Mission AMT is built on the assumption that the management of information technology for business is like legal advice, accounting, graphic arts, and other bodies of knowledge, in that it is not inherently a do-it-yourself prospect. Smart business people who aren't computer hobbyists need to find quality vendors of reliable hardware, software, service, and support. They need to use these quality vendors as they use their other professional service suppliers, as trusted allies. AMT is such a vendor. It serves its clients as a trusted ally, providing them with the loyalty of a business partner and the economics of an outside vendor. We make sure that our clients have what they need to run their businesses as well as possible, with maximum efficiency and reliability. Many of our information applications are mission critical, so we give our clients the assurance that we will be there when they need us. 1.3 Keys to Success 1. Differentiate from box-pushing, price-oriented businesses by offering and delivering service and support -and charging for it. 2. Increase gross margin to more than 25%. 3. Increase our non-hardware sales to 20% of the total sales by the third year.

2.0 Company Summary AMT is a 10-year-old computer reseller with sales of $7 million per year, declining margins, and market pressure. It has a good reputation, excellent people, and a steady position in the local market, but has been having trouble maintaining healthy financials. 2.1 Company Ownership

AMT is a privately-held C corporation owned in majority by its founder and president, Ralph Jones. There are six part owners, including four investors and two past employees. The largest of these (in percent of ownership) are Frank Dudley, our attorney, and Paul Karots, our public relations consultant. Neither owns more than 15%, but both are active participants in management decisions. 2.2 Company History AMT has been caught in the vise grip of margin squeezes that have affected computer resellers worldwide. Although the chart titled Past Financial Performance shows that we have had healthy growth in sales it also shows declining gross margin and declining profits. The more detailed numbers in Table 2.2 include other indicators of some concern The gross margin % has been declining steadily, as we see in the chart. Inventory turnover is getting steadily worse. All of these concerns are part of the general trend affecting computer resellers. The margin squeeze is happening throughout the computer industry worldwide. Past Performance Sales Gross Gross % (calculated) Operating Expenses Collection period (days) Inventory turnover 1994 $3,773,889 $1,189,495 31.52% $752,083 35 7 1995 $4,661,902 $1,269,261 27.23% $902,500 40 6 1996 $5,301,059 $1,127,568 21.27% $1,052,917 45 5

Balance Sheet: 1996 Short-term Assets Cash $55,432 Accounts receivable $395,107 Inventory $651,012 Other Short-term Assets $25,000 Total Short-term Assets $1,126,551 Long-term Assets Capital Assets $350,000 Accumulated Depreciation $50,000 Total Long-term Assets $300,000 Total Assets $1,426,551 Debt and Equity

Accounts Payable $223,897 Short-term Notes $90,000 Other ST Liabilities $15,000 Subtotal Short-term Liabilities $328,897 Long-term Liabilities $284,862 Total Liabilities $613,759 Paid in Capital $500,000 Retained Earnings $238,140 Earnings $437,411 $366,761 $74,652 Total Equity $812,792 Total Debt and Equity $1,426,551 Other Inputs: 1996 Payment days 30 Sales on credit $3,445,688 Receivables turnover 8.72 2.4 Company Locations and Facilities We have one location-- a 7,000 square foot store in a suburban shopping center located conveniently close to the downtown area. It includes a training area, service department, offices, and showroom area.

3.0 Products and Services AMT sells personal computer technology for small business including personal computer hardware, peripherals, networks, software, support, service, and training. Ultimately, we are really selling information technology. We sell reliability, and confidence. We sell the assurance to small business people to know that their business will not suffer an information technology disaster. AMT serves its clients as a trusted ally, providing them with the loyalty of a business partner and the economics of an outside vendor. We make sure that our clients have what they need to run their business as well as possible, with maximum efficiency and reliability. Since many of our information applications are mission critical, we give our clients the confidence that we will be there when they need us. 3.1 Product and Service Description

In personal computers, we support three main lines: The Super Home is our smallest and least expensive, initially positioned by its manufacturer as a home computer. We use it mainly as a cheap workstation for small business installations. Its specifications include .... The Power User is our main up-scale line. It is our most important system for high-end home and small business main workstations, because of .... Its key strengths are .... Its specifications include .... The Business Special is an intermediate system, used to fill the gap in the positioning. Its specifications include ... In peripherals, accessories and other hardware, we carry a complete line of necessary items from cables to forms to mousepads ... In service and support, we offer a range of walk-in or depot service, maintenance contracts and on-site guarantees. We have not had much success selling service contracts. Our networking capabilities ... In software, we sell a complete line of ... In training, we offer ... 3.2 Competitive Comparison The only way we can hope to differentiate well is to define the vision of the company to be an information technology ally to our clients. We will not be able to compete in any effective way with the chains using boxes or products as appliances. We need to offer a real alliance. The benefits we sell include many intangibles: confidence, reliability, knowing that somebody will be there to answer questions and help at the important times. These are complex products, products that require serious knowledge and experience to use, and our competitors sell only the products themselves. Unfortunately, we cannot sell the products at a higher price just because we offer services; the market has shown that it will not support that concept. We have to also sell the service and charge for it separately. 3.3 Sales Literature Copies of our brochure and advertisements are attached as appendices. Of course one of our first tasks will be to change the message of our literature to make sure we are selling the company, rather than the product. 3.4 Sourcing Our costs are part of the margin squeeze. As competition on price increases, the squeeze between manufacturer's price into channels and end-users ultimate buying price continues. With the hardware lines, our margins are declining steadily. We generally buy at ... Our margins are thus being squeezed from the 25% of five years ago to more like 13-15% at present. In the main-line peripherals a similar trend shows, with prices for printers and monitors declining steadily. We are also starting to see that same trend with software .... In order to hold costs down as much as possible, we concentrate our purchasing with Hauser, which offers 30day net terms and overnight shipping from the warehouse in Dayton. We need to concentrate on making sure our volume gives us negotiating strength. In accessories and add-ons we can still get decent margins, 25% to 40%.

For software, margins are ... 3.5 Technology We have for years supported both Windows and Macintosh technology for CPUs, although we've switched vendors many times for the Windows (and previously DOS) lines. We are also supporting Novell, Banyon, and Microsoft networking, Xbase database software, and Claris application products. 3.6 Future Products and Services We must remain on top of the new technologies, because this is our bread and butter. For networking, we need to provide better knowledge of cross platform technologies. Also, we are under pressure to improve our understanding of direct-connect internet and related communications. Finally, although we have a good command of desktop publishing, we are concerned about getting better at the integration of technologies that creates fax, copier, printer, and voice mail as part of the computer system.

4.0 Market Analysis Summary AMT focuses on local markets, small business and home office, with special focus on the high-end home office and the 5-20 unit small business office. 4.1 Market Segmentation The segmentation allows some room for estimates and nonspecific definitions. We focus on a small-medium level of small business, and it is hard to find information to make an exact classification. Our target companies are large enough to need the high-quality information technology management we offer, but too small to have a separate computer management staff such as an MIS department. We say that our target market has 10-50 employees, and needs 5-20 workstations tied together in a local area network; the definition is flexible. Defining the high-end home office is even more difficult. We generally know the characteristics of our target market, but we can't find easy classifications that fit into available demographics. The high-end home office business is a business, not a hobby. It generates enough money to merit the owner's paying real attention to the quality of information technology management, meaning that there is both budget and concerns that warrant working with our level of quality service and support. We can assume that we aren't talking about home offices used only part-time by people who work elsewhere during the day, and that our target market home office wants to have powerful technology and a lot of links between computing, telecommunications, and video. 4.2 Industry Analysis We are part of the computer reselling business, which includes several kinds of businesses: 1. Computer dealers: storefront computer resellers, usually less than 5,000 square feet, often focused on a few main brands of hardware, usually offering only a minimum of software, and variable amounts of service and support. These are usually old-fashioned (1980s-style) computer stores and they usually offer relatively few reasons for buyers to shop with them. Their service and support is not usually very good and their prices are usually higher than the larger stores. 2. Chain stores and computer superstores: these include major chains such as CompUSA, Computer City, Future Shop, etc. They are almost always more than 10,000 square feet of space, usually offer decent walk-in service, and are often warehouse-like locations where people go to find products in boxes with very aggressive pricing, and little support. 3. Mail order: the market is served increasingly by mail order businesses that offer aggressive pricing of boxed product. For the purely price-driven buyer, who buys boxes and expects no service, these are very good options. 4. Others: there are many other channels through which people buy their computers, usually variations of the main three types above.

4.2.1 Industry Participants 1. The national chains are a growing presence: CompUSA, Computer City, Incredible Universe, Babbages, Egghead, and others. They benefit from national advertising, economies of scale, volume buying, and a general trend toward name-brand loyalty for buying in the channels as well as for products. 2. Local computer stores are threatened. These tend to be small businesses, owned by people who started them because they liked computers. They are under-capitalized and under-managed. Margins are squeezed as they compete against the chains, in a competition based on price more than on service and support. 4.2.2 Distribution Patterns Small business buyers are accustomed to buying from vendors who visit their offices. They expect the copy machine vendors, office products vendors, and office furniture vendors, as well as the local graphic artists, freelance writers, or whomever, to visit their office to make their sales. There is usually a lot of leakage in ad-hoc purchasing through local chain stores and mail order. Often the administrators try to discourage this, but are only partially successful. Unfortunately our home office target buyers may not expect to buy from us. Many of them turn immediately to the superstores (office equipment, office supplies, and electronics) and mail order to look for the best price, without realizing that there is a better option for them at only a little bit more. 4.2.3 Competition and Buying Patterns The small business buyers understand the concept of service and support, and are much more likely to pay for it when the offering is clearly stated. There is no doubt that we compete much more against all the box pushers than against other service providers. We need to effectively compete against the idea that businesses should buy computers as plug-in appliances that don't need ongoing service, support, and training. Our focus group sessions indicated that our target Home Offices think about price but would buy based on quality service if the offering were properly presented. They think about price because that's all they ever see. We have very good indications that many would rather pay 10-20% more for a relationship with a long-term vendor providing back-up and quality service and support; they end up in the box-pusher channels because they aren't aware of the alternatives. Availability is also very important. The home office buyers tend to want immediate, local solutions to problems. 4.2.4 Main Competitors Chain stores: We have Store 1 and Store 2 already within the valley, and Store 3 is expected by the end of next year. If our strategy works, we will have differentiated ourselves sufficiently to not have to compete against these stores. Strengths: national image, high volume, aggressive pricing, economies of scale. Weaknesses: lack of product, service and support knowledge, lack of personal attention. Other local computer stores: Store 4 and Store 5 are both in the downtown area. They are both competing against the chains in an attempt to match prices. When asked, the owners will complain that margins are squeezed by the chains and customers buy on price only. They say they tried offering services and that buyers didn't care, instead preferring lower prices. We think the problem is also that they didn't really offer good service, and also that they didn't differentiate from the chains.

4.3 Market Analysis The home offices in Tintown are an important growing market segment. Nationally, there are approximately 30 million home offices, and the number is growing at 10% per year. Our estimate in this plan for the home offices in our market service area is based on an analysis published four months ago in the local newspaper. Home offices include several types. The most important, for our plan's focus, are the home offices that are the only offices of real businesses, from which people make their primary living. These are likely to be professional services such as graphic artists, writers, and consultants, some accountants and the occasional lawyer, doctor, or dentist. There are also part-time home offices with people who are employed during the day but work at home at night, people who work at home to provide themselves with a part-time income, or people who maintain home offices relating to their hobbies; we will not be focusing on this segment. Small business within our market includes virtually any business with a retail, office, professional, or industrial location outside of someone's home, and fewer than 30 employees. We estimate 45,000 such businesses in our market area. The 30-employee cutoff is arbitrary. We find that the larger companies turn to other vendors, but we can sell to departments of larger companies, and we shouldn't be giving up leads when we get them. Market Analysis . . . (numbers and percentages)

5.0 Strategy and Implementation Summary 1. Emphasize service and support. We must differentiate ourselves from the box pushers. We need to establish our business offering as a clear and viable alternative for our target market, to the price-only kind of buying. 2. Build a relationship-oriented business. Build long-term relationships with clients, not single-transaction deals with customers. Become their computer department, not just a vendor. Make them understand the value of the relationship. 3. Focus on target markets. We need to focus our offerings on small business as the key market segment we should own. This means the 520 unit system, tied together in a local area network, in a company with 5-50 employees. Our values -training, installation, service, support, knowledge -- are more cleanly differentiated in this segment. As a corollary, the high end of the home office market is also appropriate. We do not want to compete for the buyers who go to the chain stores or mail order, but we definitely want to be able to sell individual systems to the smart home office buyers who want a reliable, full-service vendor. 4. Differentiate and fulfill the promise. We can't just market and sell service and support, we must actually deliver as well. We need to make sure we have the knowledge-intensive business and service-intensive business we claim to have. 5.1 Marketing Strategy The marketing strategy is the core of the main strategy: 1. Emphasize service and support

2. Build a relationship business 3. Focus on small business and high-end home office as key target markets 5.1.2 Pricing Strategy We must charge appropriately for the high-end, high-quality service and support we offer. Our revenue structure has to match our cost structure, so the salaries we pay to assure good service and support must be balanced by the revenue we charge. We cannot build the service and support revenue into the price of products. The market can't bear the higher prices and the buyer feels ill-used when they see the same product priced lower at the chains. Despite the logic behind this, the market doesn't support this concept. Therefore, we must make sure that we deliver and charge for service and support. Training, service, installation, networking support-- all of this must be readily available and priced to sell and deliver revenue. 5.1.3 Promotion Strategy We depend on newspaper advertising as our main way to reach new buyers. As we change strategies, however, we need to change the way we promote ourselves: 1. Advertising We'll be developing our core positioning message: "24 Hour On-Site Service - 365 Days a Year With No Extra Charges" to differentiate our service from the competition. We will be using local newspaper advertising, radio and cable TV to launch the initial campaign. 2. Sales Brochure Our collaterals have to sell the store, and visiting the store, not the specific book or discount pricing. 3. We must radically improve our direct mail efforts, reaching our established customers with training, support services, upgrades, and seminars. 4. It's time to work more closely with the local media. We could offer the local radio a regular talk show on technology for small business, as one example. 5.2 Sales Strategy 1. We need to sell the company, not the product. We sell AMT, not Apple, IBM, Hewlett-Packard, or Compaq, or any of our software brand names. 2. We have to sell our service and support. The hardware is like the razor, and the support, service, software services, training, and seminars are the razor blades. We need to serve our customers with what they really need. The Yearly Total Sales chart summarizes our ambitious sales forecast. We expect sales to increase from $5.3 million last year to more than $7 million next year and to more than $10 million in the last year of this plan. 5.2.1 Sales Forecast The important elements of the sales forecast are shown in the Total Sales by Month in Year 1 table. The nonhardware sales increase to about $2 million total in the third year. Sales Forecast . . . (numbers and percentages)

2.2 Startup Summary 93% of startup costs will go to assets. The building will be purchased with a down payment of $8,000 on a 20-year mortgage. The espresso machine will cost $4,500 (straight-line depreciation, three years). Startup costs will be financed through a combination of owner investment, short-term loans, and long-term borrowing. The startup chart shows the distribution of financing. Other miscellaneous expenses include: *Marketing/advertising consultancy fees of $1,000 for our company logo and assistance in designing our grandopening ads and brochures. *Legal fees for corporate organization filings ($300). *Retail merchandising/designing consultancy fees of $3,500 for store layout and fixture purchasing.

Executive Summary The Pasta Tree is the only fresh pasta retail producer in the city of Springfield. For the past three years, the company has sold its fresh pasta products out of its own storefront and in the city's five natural food stores. The company has built a loyal consumer base with customers that have increased sales by 15% each year for the past three years. This year, The Pasta Tree will gross more than $300,000 in sales. This was generated from an initial investment of $80,000. The Pasta Tree is planning to expand its operation to include distribution to the major supermarket chains within the entire city. There are fifteen major supermarkets that operate in Springfield and over thirty-five smaller grocery stores that serve the metro and expanding suburban communities. To meet the increased product demand, The Pasta Tree will have to double production. Owner funding and internally generated cash flow will enable only a portion of the expansion plan. The Pasta Tree will secure a $50,000 loan to fund the expansion of its production facility. Sales projections for the next three years are based on current sales success with the target customer base in Springfield. This plan will result in sales revenues growing to almost $420,000 by Year 3. The Pasta Tree is located in a 3,000 square feet facility that operates as a storefront and a production facility. With the expansion, 3/4 of the area will be dedicated to production. The preparation of the new production space will cost $10,000. The new equipment will cost an additional $30,000. The company will also have to upgrade its packaging equipment to meet the new demand. This will cost $10,000. The Pasta Tree will embark on a new marketing program in supermarkets and grocery stores that will be carrying its products. Eye catching in-store displays have been created to attract new customers. The displays will also hold discount coupons to promote sales to new customers. In conjunction with the introduction of the products, The Pasta Tree will be a major sponsor of the Canal Run which raises funds for children's cancer research.

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1.1 Objectives

The objectives of The Pasta Tree are the following:

Expand production facility without compromising product quality. Establish strong sales in the city's major supermarket chains. Maintain tight control of cost and operation during expansion.

1.2 Mission
The Pasta Tree's mission is as follows:

Quality: Our products are the highest quality and the freshest pasta available to the consumers. Value: We offer greater value to the consumer with nutritious products that have tremendous flavor. Integrity: Our customers depend on the quality of our pasta products. Our commitment to the highest standard is the foundation of our customers trust in The Pasta Tree. We promise our customer that they will never be disappointed with our products.

Read more: http://www.bplans.com/pasta_manufacturer_business_plan/executive_summary_fc.php#ixzz1aDUB3aao Company Summary The Pasta Tree has built a reputation on offering the most delicious, nutritious pasta products. The business will operate as a general partnership with Jill Forman and John Wingate both performing management responsibilities.

2.1 Company Ownership

The Pasta Tree is owned by Jill Forman and John Wingate.

2.2 Company History

The Pasta Tree's first products were created in the kitchen of Jill Forman. It was in her kitchen that she first created fresh pasta that was used in a part-time catering business operated by John Wingate and herself. Customers quickly began to request special orders of the pasta products. They proved to be so popular that Jill and John pooled their resources and began The Pasta Tree. They opened a storefront and began to sell directly to the public. After one year of operation, John was successful in getting the city's natural food stores to carry The Pasta Tree products. Over the last two years, The Pasta Tree's products have become popular in upscale natural food stores in Springfield. The Pasta Tree's operations has expanded dramatically over the past three years. What was initially a two person operation has expanded to now include a staff of four in production, delivery, and sales. The following table and chart illustrates the sales success of The Pasta Tree.

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Past Performance

FY 2000

FY 2001

FY 2002

Sales

$155,000

$178,250

$200,000

Gross Margin

$60,000

$70,000

$80,000

Gross Margin %

38.71%

39.27%

40.00%

Operating Expenses

$100,000

$105,000

$110,000

Collection Period (days)

35

35

39

Inventory Turnover

15.00

15.00

15.00

Balance Sheet

FY 2000

FY 2001

FY 2002

Current Assets

Cash

$20,000

$30,000

$70,000

Accounts Receivable

$10,000

$12,000

$14,000

Inventory

$8,000

$8,000

$8,000

Other Current Assets

$0

$0

$5,000

Total Current Assets

$38,000

$50,000

$97,000

Long-term Assets

Long-term Assets

$0

$0

$36,736

Accumulated Depreciation

$0

$0

$5,248

Total Long-term Assets

$0

$0

$31,488

Total Assets

$38,000

$50,000

$128,488

Current Liabilities

Accounts Payable

$3,000

$7,000

$10,000

Current Borrowing

$2,000

$4,000

$3,000

Other Current Liabilities (interest free)

$0

$0

$0

Total Current Liabilities

$5,000

$11,000

$13,000

Long-term Liabilities

$30,000

$20,000

$10,000

Total Liabilities

$35,000

$31,000

$23,000

Paid-in Capital

$20,000

$10,000

$0

Retained Earnings

($17,000)

$9,000

$81,488

Earnings

$0

$0

$24,000

Total Capital

$3,000

$19,000

$105,488

Total Capital and Liabilities

$38,000

$50,000

$128,488

Other Inputs

Payment Days

30

30

30

Sales on Credit

$105,000

$114,000

$123,000

Receivables Turnover

10.50

9.50

8.79

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Edit this sample plan

2.3 Company Locations and Facilities

The Pasta Tree is located on 1234 Main St. The storefront is 3,000 square feet with 2/3 of the area dedicated to production. The location is perfect for foot traffic and there is quick access to the city's freeway system.

Read more: http://www.bplans.com/pasta_manufacturer_business_plan/company_summary_fc.php#ixzz1aDUxx500 Products The Pasta Tree offers the following products:

Fettuccine; Linguini; Spaghettini; Spinach linguini; Tomato fettuccine; Tricolor fusilli; New mexico chile linguini; Black linguini; Basil spaghettini; Cayenne tagliolini; Black and white spaghettini.

Read more: http://www.bplans.com/pasta_manufacturer_business_plan/products_fc.php#ixzz1aDV85MdC Products The Pasta Tree offers the following products:

Fettuccine; Linguini; Spaghettini; Spinach linguini; Tomato fettuccine; Tricolor fusilli; New mexico chile linguini; Black linguini; Basil spaghettini; Cayenne tagliolini; Black and white spaghettini.

Read more: http://www.bplans.com/pasta_manufacturer_business_plan/products_fc.php#ixzz1aDV85MdC Market Analysis Summary

The population in Springfield has grown by 5% over the past five years. The current population stands at over 250,000. It is projected that the population will continue its growth pattern for the next three years and will eventually reach over 280,000. There are fifteen major supermarkets that operate in Springfield and over thirty-five smaller grocery stores that serve the metro and expanding suburban communities. Approximately 60% of these stores serve communities that are made up predominantly of urban professionals. The Pasta Tree has identified the upscale shopper as the target customer for the fresh pasta products.

4.1 Market Segmentation

The Pasta Tree has identified two store types where the products will reach the target customers:

Supermarkets: The volume of activity in these stores creates tremendous opportunity for The Pasta Tree. The supermarkets have been losing market share steadily to smaller stores that offer the customers products that the larger stores don't carry. Though the price of the products ($3.00 for a serving for two) is higher than dry pasta products, it is still affordable to most shoppers. Smaller Grocery Stores: These stores serve customers in specific communities. These also include speciality stores like wine shops and fish markets where the product line would fit in nicely.

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Market Analysis

2002

2003

2004

2005

2006

Potential Customers

Growth

CAGR

Supermarkets

5%

15

16

17

18

19

6.09%

Smaller Stores

5%

35

37

39

41

43

5.28%

Total

5.53%

50

53

56

59

62

5.53%

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4.2 Target Market Segment Strategy

The Pasta Tree's marketing will focus on the urban professional segment, which has little time to prepare dinner and will be attracted to quality and freshness of The Pasta Tree products. The pasta products are ready to eat in half the time of dry pasta (one to three minutes) and are fresher than the competition. This gives The Pasta Tree products a decidedly better taste and consistency.

4.3 Service Business Analysis

Pasta is a staple in a supermarket with a number of products and brands to pick from. Most of the competition is in dry pasta. Fresh pasta has a much shorter shelf life (about 30 days) so there is less competition in products. Currently, several large food companies offer a limited line of fresh pasta products. Though fresh, these products are only slightly better than dry pasta and really only offer reduced preparation time. As a local product, The Pasta Tree can offer better quality and better packaging of fresh pasta.

4.3.1 Competition and Buying Patterns

The Pasta Tree products will be displayed in the deli case of the supermarkets. The only competition in this section are two other product lines whose packaging is boxy and unattractive. To improve the ability to transport the product, these pasta products have been folded into a small container. The Pasta Tree products are not folded and are wrapped in an air-tight colorful plastic package. Their presentation is similar to the dry pasta packaging which is important to consumers. No one wants their fettuccine folded.

Read more: http://www.bplans.com/pasta_manufacturer_business_plan/market_analysis_summary_fc.php#ixzz1aDVT 7ndB Strategy and Implementation Summary

The strategy of The Pasta Tree will be to initially push our three most popular sellers; fettuccine, linguini, and spaghettini. Our plan is to introduce the rest of The Pasta Tree's product line as sales increase and we can negotiate more cooler space for products.

5.1 Marketing Strategy

The Pasta Tree will advertise its products with a 20% off regular price coupon during the first month of the product being introduced into the supermarkets. The Pasta Tree will use in-store displays that will hold the coupons and attract customer attention. In addition, The Pasta Tree will be a major sponsor of the city's Canal Run that raises money for children's cancer research. The run will occur the first weekend the products have been introduced into supermarkets. The Pasta Tree will distribute discount coupons at the event.

5.2 Sales Strategy

The sales strategy is to present our products as an affordable upscale dinner item that is quick to make and tastier than our dry competition.

5.2.1 Sales Forecast

The following table and charts show the rapid ramp-up of sales during the next twelve months of operation.

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Need actual charts?

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Sales Forecast

FY 2003

FY 2004

FY 2005

Sales

Supermarkets

$128,000

$143,000

$173,000

Grocery Stores

$185,000

$203,000

$246,000

Total Sales

$313,000

$346,000

$419,000

Direct Cost of Sales

FY 2003

FY 2004

FY 2005

Supermarkets

$12,800

$15,000

$16,400

Grocery Stores

$18,500

$20,300

$23,900

Subtotal Direct Cost of Sales

$31,300

$35,300

$40,300

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5.3 Milestones
The accompanying table and chart shows specific milestones, with responsibilities assigned, dates, and budgets. We are focusing on a few key milestones that should be accomplished.

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Milestones

Milestone

Start Date

End Date

Budget

Manager Department

Production Facility Expansion

1/1/2002

3/15/2002

$10,000

Jill Forman

Production

Production Equipment

3/1/2002

3/20/2002

$40,000

Jill Forman

Production

In-Store Displays

2/10/2002

3/28/2002

$5,000

John Wingate

Sales

Canal Run

1/1/2001

4/12/2002

$1,000

John Wingate

Sales

Totals

Read more: http://www.bplans.com/pasta_manufacturer_business_plan/strategy_and_implementation_summary_fc.ph p#ixzz1aDVgpLVD Management Summary Co-owners, Jill Forman and John Wingate, currently manage the daily operation of The Pasta Tree. Jill is responsible for production and distribution, while John works as the sales manager. Jill and John have fifteen years of experience working in food production and sales. Jill Forman was one of the owners of the Mason Peak Deli, 4th and Tyler. Jill managed the deli for five years, eventually starting a catering business with John Wingate in 1997. John Wingate was a salesperson for Sunburst Natural Foods for ten years. At the time he started the catering business with Jill, John annual sales had reached $1 million dollars.

6.1 Personnel Plan

The personnel plan for The Pasta Tree is as follows:

Production manager; Sales manager; Production staff (4 total, 2 new hires); Store staff (1 new hire); Delivery staff/sales (1 new hire).

Personnel Plan

FY 2003

FY 2004

FY 2005

Production Manager

$36,000

$38,880

$44,712

Sales Manager

$36,000

$38,880

$44,712

Production Staff

$81,600

$88,128

$101,347

Delivery

$24,000

$25,920

$29,808

Store Staff

$21,600

$23,328

$26,827

Total People

Total Payroll

$199,200

$215,136

$247,406

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Read more: http://www.bplans.com/pasta_manufacturer_business_plan/management_summary_fc.php#ixzz1aDVtuK we Management Summary Co-owners, Jill Forman and John Wingate, currently manage the daily operation of The Pasta Tree. Jill is responsible for production and distribution, while John works as the sales manager. Jill and John have fifteen years of experience working in food production and sales. Jill Forman was one of the owners of the Mason Peak Deli, 4th and Tyler. Jill managed the deli for five years, eventually starting a catering business with John Wingate in 1997. John Wingate was a salesperson for Sunburst Natural Foods for ten years. At the time he started the catering business with Jill, John annual sales had reached $1 million dollars.

6.1 Personnel Plan

The personnel plan for The Pasta Tree is as follows:

Production manager; Sales manager; Production staff (4 total, 2 new hires); Store staff (1 new hire); Delivery staff/sales (1 new hire).

Personnel Plan

FY 2003

FY 2004

FY 2005

Production Manager

$36,000

$38,880

$44,712

Sales Manager

$36,000

$38,880

$44,712

Production Staff

$81,600

$88,128

$101,347

Delivery

$24,000

$25,920

$29,808

Store Staff

$21,600

$23,328

$26,827

Total People

Total Payroll

$199,200

$215,136

$247,406

Need real financials?

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Read more: http://www.bplans.com/pasta_manufacturer_business_plan/management_summary_fc.php#ixzz1aDVtuK we

Appendix

Sales Forecast

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Sales

Supermarkets

0%

$9,000

$9,000

$10,000

$9,000

$10,000

$10,000

$10,000

$11,000

$12,000

$12,000

$13,000

$13,000

Grocery Stores

0%

$14,000

$14,000

$14,000

$15,000

$15,000

$15,000

$15,000

$16,000

$16,000

$16,000

$17,000

$18,000

Total Sales

$23,000

$23,000

$24,000

$24,000

$25,000

$25,000

$25,000

$27,000

$28,000

$28,000

$30,000

$31,000

Direct Cost of Sales

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Supermarkets

$900

$900

$1,000

$900

$1,000

$1,000

$1,000

$1,100

$1,200

$1,200

$1,300

$1,300

Grocery Stores

$1,400

$1,400

$1,400

$1,500

$1,500

$1,500

$1,500

$1,600

$1,600

$1,600

$1,700

$1,800

Subtotal Direct Cost of Sales

$2,300

$2,300

$2,400

$2,400

$2,500

$2,500

$2,500

$2,700

$2,800

$2,800

$3,000

$3,100

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Personnel Plan

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Production Manager

0%

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

Sales Manager

0%

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

Production Staff

0%

$6,800

$6,800

$6,800

$6,800

$6,800

$6,800

$6,800

$6,800

$6,800

$6,800

$6,800

$6,800

Delivery

0%

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

Store Staff

0%

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

Total People

Total Payroll

$16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600

General Assumptions

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Plan Month

10

11

12

Current Interest Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00% 10.00%

Long-term Interest Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00% 10.00%

Tax Rate

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00% 30.00%

Other

Pro Forma Profit and Loss

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Sales

$23,000

$23,000

$24,000

$24,000

$25,000

$25,000

$25,000

$27,000

$28,000

$28,000

$30,000 $31,000

Direct Cost of Sales

$2,300

$2,300

$2,400

$2,400

$2,500

$2,500

$2,500

$2,700

$2,800

$2,800

$3,000

$3,100

Other Production Expenses

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Cost of Sales

$2,300

$2,300

$2,400

$2,400

$2,500

$2,500

$2,500

$2,700

$2,800

$2,800

$3,000

$3,100

Gross Margin

$20,700

$20,700

$21,600

$21,600

$22,500

$22,500

$22,500

$24,300

$25,200

$25,200

$27,000 $27,900

Gross Margin %

90.00%

90.00%

90.00%

90.00%

90.00%

90.00%

90.00%

90.00%

90.00%

90.00%

90.00% 90.00%

Expenses

Payroll

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600 $16,600

Sales and Marketing and Other Expenses

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

Depreciation

$800

$800

$800

$800

$800

$800

$800

$800

$800

$800

$800

$800

Leased Equipment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Utilities

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

Insurance

$800

$800

$800

$800

$800

$800

$800

$800

$800

$800

$800

$800

Rent

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

Payroll Taxes

15%

$2,490

$2,490

$2,490

$2,490

$2,490

$2,490

$2,490

$2,490

$2,490

$2,490

$2,490

$2,490

Other

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Operating Expenses

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490 $22,490

Profit Before Interest and Taxes

($1,790)

($1,790)

($890)

($890)

$10

$10

$10

$1,810

$2,710

$2,710

$4,510

$5,410

EBITDA

($990)

($990)

($90)

($90)

$810

$810

$810

$2,610

$3,510

$3,510

$5,310

$6,210

Interest Expense

$345

$332

$402

$388

$458

$445

$432

$418

$405

$392

$378

$365

Taxes Incurred

($641)

($636)

($388)

($383)

($135)

($131)

($127)

$418

$692

$696

$1,240

$1,514

Net Profit

($1,495)

($1,485)

($904)

($895)

($314)

($305)

($295)

$974

$1,614

$1,623

$2,892

$3,532

Net Profit/Sales

-6.50%

-6.46%

-3.77%

-3.73%

-1.26%

-1.22%

-1.18%

3.61%

5.76%

5.80%

9.64% 11.39%

Pro Forma Cash Flow

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Cash Received

Cash from Operations

Cash Sales

$5,750

$5,750

$6,000

$6,000

$6,250

$6,250

$6,250

$6,750

$7,000

$7,000

$7,500

$7,750

Cash from Receivables

$7,000

$7,575

$17,250

$17,275

$18,000

$18,025

$18,750

$18,750

$18,800

$20,275

$21,000

$21,050

Subtotal Cash from Operations

$12,750

$13,325

$23,250

$23,275

$24,250

$24,275

$25,000

$25,500

$25,800

$27,275

$28,500

$28,800

Additional Cash Received

Sales Tax, VAT, HST/GST Received

0.00%

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Current Borrowing

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Other Liabilities (interestfree)

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Long-term Liabilities

$30,000

$0

$10,000

$0

$10,000

$0

$0

$0

$0

$0

$0

$0

Sales of Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Investment Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Cash Received

$42,750

$13,325

$33,250

$23,275

$34,250

$24,275

$25,000

$25,500

$25,800

$27,275

$28,500

$28,800

Expenditures

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Expenditures from Operations

Cash Spending

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

Bill Payments

$10,160

$4,794

$4,850

$6,769

$7,512

$8,020

$7,904

$7,927

$8,854

$9,093

$9,009

$9,936

Subtotal Spent on Operations

$26,760

$21,394

$21,450

$23,369

$24,112

$24,620

$24,504

$24,527

$25,454

$25,693

$25,609

$26,536

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Principal Repayment of Current Borrowing

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

Other Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Long-term Liabilities Principal Repayment

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

Purchase Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Purchase Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Dividends

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Cash Spent

$28,360

$22,994

$23,050

$24,969

$25,712

$26,220

$26,104

$26,127

$27,054

$27,293

$27,209

$28,136

Net Cash Flow

$14,390

($9,669)

$10,200

($1,694)

$8,538

($1,945)

($1,104)

($627)

($1,254)

($18)

$1,291

$664

Cash Balance

$84,390

$74,721

$84,921

$83,226

$91,764

$89,819

$88,715

$88,088

$86,834

$86,816

$88,107

$88,771

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Pro Forma Balance Sheet

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Assets

Starting Balances

Current Assets

Cash

$70,000

$84,390

$74,721

$84,921

$83,226

$91,764

$89,819

$88,715

$88,088

$86,834

$86,816

$88,107

$88,771

Accounts Receivable

$14,000

$24,250

$33,925

$34,675

$35,400

$36,150

$36,875

$36,875

$38,375

$40,575

$41,300

$42,800

$45,000

Inventory

$8,000

$5,700

$3,400

$2,640

$2,640

$2,750

$2,750

$2,750

$2,970

$3,080

$3,080

$3,300

$3,410

Other Current Assets

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

Total Current Assets

$97,000 $119,340 $117,046 $127,236 $126,266 $135,664 $134,444 $133,340 $134,433 $135,489 $136,196 $139,207 $142,181

Long-term Assets

Long-term Assets

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

Accumulated Depreciation

$5,248

$6,048

$6,848

$7,648

$8,448

$9,248

$10,048

$10,848

$11,648

$12,448

$13,248

$14,048

$14,848

Total Long-term Assets

$31,488

$30,688

$29,888

$29,088

$28,288

$27,488

$26,688

$25,888

$25,088

$24,288

$23,488

$22,688

$21,888

Total Assets

$128,488 $150,028 $146,934 $156,324 $154,554 $163,152 $161,132 $159,228 $159,521 $159,777 $159,684 $161,895 $164,069

Liabilities and Capital

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Current Liabilities

Accounts Payable

$10,000

$4,635

$4,626

$6,519

$7,245

$7,756

$7,641

$7,632

$8,551

$8,793

$8,678

$9,597

$9,839

Current Borrowing

$3,000

$2,900

$2,800

$2,700

$2,600

$2,500

$2,400

$2,300

$2,200

$2,100

$2,000

$1,900

$1,800

Other Current Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Current Liabilities

$13,000

$7,535

$7,426

$9,219

$9,845

$10,256

$10,041

$9,932

$10,751

$10,893

$10,678

$11,497

$11,639

Long-term Liabilities

$10,000

$38,500

$37,000

$45,500

$44,000

$52,500

$51,000

$49,500

$48,000

$46,500

$45,000

$43,500

$42,000

Total Liabilities

$23,000

$46,035

$44,426

$54,719

$53,845

$62,756

$61,041

$59,432

$58,751

$57,393

$55,678

$54,997

$53,639

Paid-in Capital

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Retained Earnings

$81,488 $105,488 $105,488 $105,488 $105,488 $105,488 $105,488 $105,488 $105,488 $105,488 $105,488 $105,488 $105,488

Earnings

$24,000

($1,495)

($2,980)

($3,884)

($4,779)

($5,092)

($5,397)

($5,692)

($4,718)

($3,104)

($1,482)

$1,411

$4,942

Total Capital

$105,488 $103,994 $102,508 $101,604 $100,709 $100,396 $100,091

$99,796 $100,770 $102,384 $104,006 $106,899 $110,430

Total Liabilities and Capital

$128,488 $150,028 $146,934 $156,324 $154,554 $163,152 $161,132 $159,228 $159,521 $159,777 $159,684 $161,895 $164,069

Net Worth

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