Completing the Workbook
The workbook should be completed essentially in two stages. The first stage is to gather information beginning with
Item 4, History of the (Proposed) Business, and going through Item 11, Appendixes.
After this Information is gathered and recorded, come back and complete Item 1, Cover Sheet. Item 2, Executive
Summary; and Item 3, Table of Contents.
Finally, type the information from the worksheet into a final form (such as the example at the end of Chapter 6).
I. INTRODUCTION
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Item 1, Cover Sheet; On the cover sheet you should include identifying information so that readers Will
immediately know the business name, address, and phone number; the Names and titles of the principals; and the
date the plan was prepared.
1. Cover Sheet
Business name, address, and phone number:
2. Principals:
3. Date:
II. EXECUTIVE SUMMARY
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The executive summary should be a succinct statement of the purpose of the plan. Thus, it should be designed to
motivate the reader to go on to the other sections of the plan. It should convey a sense of excitement, challenge,
plausibility, credibility, and integrity. Even though the summary is the second item in the plan, it should be written
last, after the rest of the plan has been developed. Remember, the executive summary is just that-a summary so keep
it short!
A. Brief Summary of Plan
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B. Major Objectives
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C. Description of Product(s)
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D. Marketing strategy
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E. Financial Projections
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Table of Contents: because the table of contents provides the reader an overview of what is contained in the plan
itself. It should be written and presented concisely, in outline form using numerical and alphabetical designations for
headings and subheadings.
3. Table of Contents (each section listed. with subheads)
II. HISTORY OF THE (PROPOSED) BUSINESS
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History of the (Proposed) Business The history of the (proposed) business should include a discussion of how the
idea for the business, or product, originated and what has been done to develop the idea up to this point. If the
owners or managers have been in business before, and their experience is pertinent to the success of the business,
include that information. Other relevant background information on the persons, products, capitalization, source(s),
funds, and anything else of potential interest to the readers should also be included.
A. Background of the Principals, and/or Company Origins
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B. Background of the Product(s)
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C. Corporate Structure
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D. Capitalization, or Source of Funds
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E. Brief Outline of Company Successes or Experiences, If Any
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IV. DESCRIPTION OF THE BUSINESS
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Description of the Business Item is the place to define your business, as you see it. Therefore, you should essentially
answer such questions as: What business am I in? What services do I provide? This item should include more than
just a statement of plans and a listing of activities. It should tell readers what customer needs the business intends to
meet. In writing this component, try to put yourself in the position of the reader and include information that
potential investors, customers, employees, and community members in General might need to assess your plan.
V. DESCRIPTION OF THE MARKET|
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The description of the market is one of the most Important-but most difficult items of the plan for you to develop. In
it, you should try to answer such questions as: Who will buy my product? Where is my market? What is my sales
strategy? What marketing strategy will I use? Who buys what, when, where, and why? What are my customers like?
Who constitutes my target market (or what special niche am I aiming for)? You should also look at your competition
and appraise it carefully. Showing any weaknesses it has that you are able to, and plan to, exploit.
A. Target Market: Who? How Many?
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B. Market Penetration Projections and Strategies
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C. Analysis of Competition: How Many? Strengths and Weakness?
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VI. DESCRIPTION OF THE PRODUCT(S)
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Description of the Product should describe all of your existing or planned products, including services to be
performed as well as goods to be produced. You should also look at any research and development activities and
new plans to improve or redevelop the product, along with any patents, trademarks, and copyrights you hold-or that
are pending.
A. What Is To Be Developed or Sold?
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B. Status of Research and Development
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C. Patents, Trademarks, Copyrights
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VII. OWNERSHIP AND MANAGEMENT STRUCTURE
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Ownership and Management Structure Item is the place to describe the owner(s), including those you identified by
name and title in Item 1. Here you would want to give more detail about their experience and expertise. Also, you
should describe your management team, along with their abilities, training and development, and experience. Then,
designate who will carry out the plan once it is enacted. Finally, something should be included about organizational
structure, including employee policies and procedures.
A. Owners and Their Experience
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B. Managers and Their Abilities, Training and Development, and Experience
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C. Organizational Structure
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VIII. GOALS - OBJECTIVES / STRATEGY FORMATION
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In essence, your objectives and goals outline what you plan to accomplish in your business, as well as showing how
it will be done. Include such Items as sales and revenue forecasts; marketing plans, including how sales are to be
made and what advertising, sales promotion, and publicity will be used; manufacturing plans, including provisions
for quality assurance and control; and financial plans (but not the specific financial data, ratios, or analyses, which
are in the next item).
A. Revenue Forecasts
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B. Marketing Plans
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C. How Sales Are To Be Made
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D. Advertising and Sales Promotion
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E. Manufacturing Plans
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F. Quality Assurance Plans
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G. Financial Plans
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IX. FINANCIAL ANALYSES
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Because one purpose of the plan is to attract prospective investors or lenders, this is the place in the plan where you
can indicate the expected financial results of your operations it should show prospective investors or lenders why
they should provide funds, when they can realistically expect a return, and what the expected return on their money
should be. While you must make assumptions at this point, you should at least try to include projected income
statement and balance sheets for up to three years, as well as projected cash flow analysis for the first year by
months. There should be an analysis of costs/volume/profits, where appropriate.
Finally, you should provide projected statements of changes 1n financial position that you anticipate. If practical,
you might want to provide some financial ratios.
A. Projected Income Statements (Three Years)
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Profit and Loss Statements
($000's)
1993 1994 1995
Sales $ 161.2 $ 303.3 $ 320.4
Cost of sales:
Materials $ 82.4 $ 104.2 $ 99.1
Labor 64.6 86.2 64.6
Freight - 19.3 42.0
Total cost of sales $ 147.0 $ 209.7 $ 205.7
Gross profit $ 14.2 $ 93.6 $ 114.7
Operating, administrative, and selling costs:
Depreciation $ 15.9 $ 16.4 $ 16.7
Payroll taxes 6.4 10.4 10.0
Repair and maintenance 11.3 3.9 14.5
Rent 13.3 7.2 7.2
Utilities 13.2 19.6 18.0
Salaries 13.0 15.7 20.9
Insurance 11.0 11.2 14.5
Office expense 1.5 1.5 3.6
General tax, legal, accounting 4.3 2.9 0.5
Selling, travel, automobile 3.2 3.4 10.4
Telephone 3.8 4.6 7.6
Sales taxes - - -
Miscellaneous 2.9 1.8 0.5
Total operating, administrative, and selling costs $ 99.8 $ 98.6 $ 124.4
Operating profit $ (85.6) $ (5.0) $ (9.7)
Income - legal - - 10.1
Interest expense 11.8 14.0 19.9
Net income $ (97.4) $ (19.0) $ (19.5)
B. Projected Balance Sheets (Three Years)
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Balance Sheet
December 31, 1995
($000's)
1993 1994 1995
Assets
Current assets:
Cash in bank $ - $ - $ 6.7
Accounts in bank 26.7 22.7 12.8
Inventory 10.5 14.7 7.7
Total current assets $ 37.2 $ 37.4 $ 27.2
Property and equipment:
Equipment $ 87.2 $ 78.5 $ 78.5
Leasehold improvements - 5.5 5.5
Less: accumulated depreciation (52.8) (36.1) (19.8)
Net property and equipment $ 34.4 $ 47.9 $ 64.2
Total assets $ 71.6 $ 85.3 $ 91.4
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 28.2 $ 36.1 $ 38.9
Current long-term debt 25.0 25.0 16.4
Notes payable 85.0 85.1 59.0
Accruals 5.4 9.4 11.8
Total current liabilities $ 143.6 $ 155.6 $ 126.1
Lont-term debt 91.0 80.0 96.5
Total liabilities $ 234.6 $ 235.6 $ 222.6
Stockholders' equity
Common stock $ 1.0 $ 1.0 $ 1.0
Added paid-in capital 16.7 9.0 9.0
Accumulated deficit (180.7) (160.3) (141.2)
Total stockholders' equity $ (163.0) $ (150.3) $ (131.2)
Total liabilities and stockholders' equity $ 71.6 $ 85.3 $ 91.4
C. Projected Cash Flow Analyses (First Year, Three Months)
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Profit and Loss Sheets
1996
($000's)
Months
January February March
Sales $ 30.0 $ 34.7 $ 31.0
Cost of sales:
Beginning inventory $ 10.4 $ 8.9 $ 8.7
Purchased materials 4.0 10.4 4.6
Miscellaneous supplies 0.1 3.6 0.6
Direct Labor 3.8 4.7 5.7
Freight 2.0 3.0 2.8
Less ending inventory (8.9) (8.7) (6.8)
Total cost of sales $ 11.4 $ 21.9 $ 15.6
Gross profit $ 18.6 $ 12.8 $ 15.4
Operating, administrative, and selling costs:
Payroll taxes $ 2.0 $ 1.8 $ 2.1
Repair and maintenance - 1.6 0.8
Rent 0.6 0.6 0.6
Utilities 1.1 1.7 1.4
Salaries 1.3 1.3 2.0
Insurance 0.6 0.6 1.9
Office expense 0.3 0.6 0.1
General tax, legal, accounting - 0.2 0.1
Selling (travel and auto) expenses 0.5 0.8 0.5
Telephone 0.4 1.1 0.4
Interest - 1.0 1.0
Sales taxes 5.9 0.4 0.4
Miscellaneous (loan principal) 6.3 1.3 1.3
Total operating, administrative, and selling costs $ 19.0 $ 13.0 $ 12.6
Net income $ (0.4) $ (0.2) $ 2.8
D. Cost/Volume/Profit Analyses, Where Appropriate
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E. Projected Statements of Changes in Financial Position
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F. Financial Ratios, if Practical
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VI. APPENDIXES
In the appendixes you can include pertinent information about your business that is not included elsewhere in the
plan. Some possible details to include are (1) narrative history of the firm (2.) Organizational structure (if not done
in Item 8), including management structure, organization Chart(s), and resumes of key people; (3) major
assumptions you have made in preparing the plan; (4) brochures or other published information describing the
product(s) and services you provide; (5) letters of recommendation or endorsement; (6) historical financial
information, for the past three years (if not done in Item 10); (7) details of objectives and goals; and (8) catalog
sheets, photographs, or technical information.
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I. INTRODUCTION
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II. EXECUTIVE SUMMARY
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A. Brief Summary of Plan
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B. Major Objectives
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C. Description of Product(s)
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D. Marketing Stratey
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E. Financial Projections
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II. HISTORY OF THE (PROPOSED) BUSINESS
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A. Background of the Principals, and/or Company Origins
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B. Background of the Product(s)
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C. Corporate Structure
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D. Capitalization, or Source of Funds
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E. Breif Outline of Company Successes or Experiences, If Any
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IV. DESCRIPTION OF THE BUSINESS
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V. DESCRIPTION OF THE MARKET
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A. Target Market: Who? How Many?
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B. Market Penetration Projections and Strategies
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C. Analysis of Competition: How Many? Strengths and Weakness?
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VI. DESCRIPTION OF THE PRODUCT(S)
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A. What Is To Be Developed or Sold?
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B. Status of Research and Development
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C. Patents, Trademarks, Copyrights
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VII. OWNERSHIP AND MANAGEMENT STRUCTURE
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A. Owners and Their Experience
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B. Managers and Their Abilities, Training and Development, and Experience
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C. Organizational Structure
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VIII. GOALS - OBJECTIVES / STRATEGY FORMATION
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A. Revenue Forecasts
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B. Marketing Plans
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C. How Sales Are To Be Made
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D. Advertising and Sales Promotion
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E. Manufacturing Plans
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F. Quality Assurance Plans
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G. Financial Plans
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IX. FINANCIAL ANALYSES
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A. Projected Income Statements (Three Years)
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Profit and Loss Statements
($000's)
1993 1994 1995
Sales $ 161.2 $ 303.3 $ 320.4
Cost of sales:
Materials $ 82.4 $ 104.2 $ 99.1
Labor 64.6 86.2 64.6
Freight - 19.3 42.0
Total cost of sales $ 147.0 $ 209.7 $ 205.7
Gross profit $ 14.2 $ 93.6 $ 114.7
Operating, administrative, and selling costs:
Depreciation $ 15.9 $ 16.4 $ 16.7
Payroll taxes 6.4 10.4 10.0
Repair and maintenance 11.3 3.9 14.5
Rent 13.3 7.2 7.2
Utilities 13.2 19.6 18.0
Salaries 13.0 15.7 20.9
Insurance 11.0 11.2 14.5
Office expense 1.5 1.5 3.6
General tax, legal, accounting 4.3 2.9 0.5
Selling, travel, automobile 3.2 3.4 10.4
Telephone 3.8 4.6 7.6
Sales taxes - - -
Miscellaneous 2.9 1.8 0.5
Total operating, administrative, and selling costs $ 99.8 $ 98.6 $ 124.4
Operating profit $ (85.6) $ (5.0) $ (9.7)
Income - legal - - 10.1
Interest expense 11.8 14.0 19.9
Net income $ (97.4) $ (19.0) $ (19.5)
B. Projected Balance Sheets (Three Years)
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Balance Sheet
December 31, 1995
($000's)
1993 1994 1995
Assets
Current assets:
Cash in bank $ - $ - $ 6.7
Accounts in bank 26.7 22.7 12.8
Inventory 10.5 14.7 7.7
Total current assets $ 37.2 $ 37.4 $ 27.2
Property and equipment:
Equipment $ 87.2 $ 78.5 $ 78.5
Leasehold improvements - 5.5 5.5
Less: accumulated depreciation (52.8) (36.1) (19.8)
Net property and equipment $ 34.4 $ 47.9 $ 64.2
Total assets $ 71.6 $ 85.3 $ 91.4
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 28.2 $ 36.1 $ 38.9
Current long-term debt 25.0 25.0 16.4
Notes payable 85.0 85.1 59.0
Accruals 5.4 9.4 11.8
Total current liabilities $ 143.6 $ 155.6 $ 126.1
Lont-term debt 91.0 80.0 96.5
Total liabilities $ 234.6 $ 235.6 $ 222.6
Stockholders' equity
Common stock $ 1.0 $ 1.0 $ 1.0
Added paid-in capital 16.7 9.0 9.0
Accumulated deficit (180.7) (160.3) (141.2)
Total stockholders' equity $ (163.0) $ (150.3) $ (131.2)
Total liabilities and stockholders' equity $ 71.6 $ 85.3 $ 91.4
C. Projected Cash Flow Analyses (First Year, Three Months)
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Profit and Loss Sheets
1996
($000's)
Months
January February March
Sales $ 30.0 $ 34.7 $ 31.0
Cost of sales:
Beginning inventory $ 10.4 $ 8.9 $ 8.7
Purchased materials 4.0 10.4 4.6
Miscellaneous supplies 0.1 3.6 0.6
Direct Labor 3.8 4.7 5.7
Freight 2.0 3.0 2.8
Less ending inventory (8.9) (8.7) (6.8)
Total cost of sales $ 11.4 $ 21.9 $ 15.6
Gross profit $ 18.6 $ 12.8 $ 15.4
Operating, administrative, and selling costs:
Payroll taxes $ 2.0 $ 1.8 $ 2.1
Repair and maintenance - 1.6 0.8
Rent 0.6 0.6 0.6
Utilities 1.1 1.7 1.4
Salaries 1.3 1.3 2.0
Insurance 0.6 0.6 1.9
Office expense 0.3 0.6 0.1
General tax, legal, accounting - 0.2 0.1
Selling (travel and auto) expenses 0.5 0.8 0.5
Telephone 0.4 1.1 0.4
Interest - 1.0 1.0
Sales taxes 5.9 0.4 0.4
Miscellaneous (loan principal) 6.3 1.3 1.3
Total operating, administrative, and selling costs $ 19.0 $ 13.0 $ 12.6
Net income $ (0.4) $ (0.2) $ 2.8
D. Cost/Volume/Profit Analyses, Where Appropriate
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E. Projected Statements of Changes in Financial Position
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F. Financial Ratios, if Practical
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VI. APPENDIXES
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