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Schramko & Associates, LLC

Dr. Tim D. Schramko Deborah S. Schramko, CPMSM

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A BUSINESS PLAN OUTLINE This Business Plan Outline is meant as a guide for developing a business plan. Please follow the General Guidelines as noted below. General Guidelines: Complete the sections as noted and provide all data in a footnote format at the bottom of each page where the data is referenced in the narrative. Number all pages and sections and include exhibits at the end of the document. Order of document: Title page Table of Contents Executive Summary Mission Statement Sections 1.0 to 7.0 to follow

1.0 Executive Summary A business plan is not just for proposing a new venture but also for establishing a plan for the business that addresses the goals & objectives to meet the needs of the market being served. A business plan helps make sense out of the myriad of details that confront the Business owner on a daily basis. Having a BP and being able to adjust or systematically respond to changing market conditions separates the successful businesses from those that react to the pressures of the market and do not think clearly about how best to organize resources. Although this topic, the executive summary, appears first in the plan, you will write it last. You should address the most important facts, such as sales growth and profitability and strategic focus. Those facts may change during the planning process. Make sure you include the Who, What, Where, When, Why and How of the plan in the first part of the narrative. The financial data [amount of money you are requesting and the use of the funds] should be part of the summary section of the Executive Summary. If possible, the Executive Summary should be no more than one page in length.

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1.1 Objectives List your objectives for the business, which should be specific and measurable. Normally you'll have a numbered list of a few selected objectives. Keep the list to three or four, because long lists make it hard to focus. Each objective should have a timetable including date when expected to be complete and who will be responsible for completing the objective. The objectives are for the Business Owner AND the Employees to achieve as the business grows.


When to be completed by

Who is responsible for completion

Anticipated outcome

Making your objectives concrete is the best way to measure them. Your chance of implementation depends on your being able to track progress. Set measurable objectives such as number of clients served, profitability by month, number of sales and revenue generated.

1.2 Mission Use your mission statement to establish your business' fundamental goals for the quality of the services being provided. A good mission statement can be a critical element in defining your business and communicating to employees, other businesses, and general public of your dedication to maintaining high standards. The following components of a Mission Statement are helpful to include in the document: Customers: Who are the business's customers? Products or Services: What are the businesss major services?

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4 Markets: Geographically, where does the business compete? Technology: Is the business technologically current? Concern for survival, growth, and profitability: Is the business committed to growth and financial soundness? Philosophy: What are the basic beliefs, values, aspirations, and ethical priorities of the business? Self-Concept: What is the business's distinctive competence or major competitive advantage? Concern for the public image: Is the business responsive to social, community, and environmental concerns? Concern for the employees: Are employees a valuable asset of the business?

For example, customer service experts frequently point out the need for a mission statement that explicitly states the importance of customer service, so that employees understand how much the business values its customers. Quality assurance experts will also turn to a mission statement as a fundamental element of quality control. A business needs to state its goals and priorities so the people charged with carrying them out can know and understand them.

1.3 Keys to Success Virtually every business has different keys to success. These are a few key factors that make the difference between success and failure. This depends on who you are and what services you offer. In a restaurant, for example, location and parking might be keys to success for one strategy, and variety and atmosphere for another. For accountants and attorneys, the keys might include professional quality, reliability, and participation in community organizations. For a service business, a major key would be the quality of support staff and the type and kind of technology. Another example may be the training of the support staff and the quality of customer service.

The Keys to Success are factors that make the difference between success and failure of the business. If you do not do a selected task, then the business may fail or not do as planned. Develop no more than 4 to 5 Keys and be able to monitor and measure them as you proceed in the plan.

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2.0 Business Summary Most business plans include a chapter describing the business. The Business Summary is a re-cap of the main points of the business. A paragraph or two here to introduce your business by explaining where it is, how long it's been around, what services it sells, and to whom. From another perspective think of this Business Summary as being read by the people who will only read this summary and who don't want to know more than what you can put in a single paragraph. Make sure you include AGAIN the Who, What, Where, When, Why and How of the plan in the first part of the narrative. Remember.........throughout the business plan development, you will find yourself repeating many sections of the plan. However, each section is being referenced from a different perspective. Only when you are complete with the plan will the whole plan be in focus. Who - name of the business

What - type of business and/or specialty Where - where is the business located and what geographic area does the business serve When - when will the business provide services? Why - why is this business plan being developed, what is the need for the service or product and what are the strengths of the business that would allow for the service or product to be provided?

2.1 Business Ownership In this paragraph, describe the ownership and legal establishment of the business. This is mainly specifying whether your business is a corporation, partnership, sole proprietorship, or some other kind of legal entity, such as a limited liability partnership or mainly a professional corporation. You should also explain who owns the business, and if there is more than one owner, are they related and in what capacity do they know each other.

2.2 Business Locations and Facilities Briefly describe offices and locations of your business, the nature and function of each, square footage, lease arrangements, etc. As a business, you might have technology or warehousing facilities that are relevant to providing service.

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6 In the start-up of a new business, a location may not be known. In this instance, state the criteria upon which you will make a determination as to where you will locate your business. A map or guide for the region is helpful and what attracted you to the general area should also be noted. If you require parking it may be near the entrance to the offices, have access to a major highway, or be in close proximity to public transportation, and near other businesses. State these conditions for selecting the space. 3.0 Business Detail List and describe the service(s) your business offers. For each business offering, cover the main points including what the service is, how much it costs, type of customers served, and why.

Type of Service

Target audience

Approximate cost

Reason for delivery of service

It is always a good idea to think in terms of customer needs and customer benefits, as you define your service offerings, rather than thinking of your side of the equation--how you generate the service--first. For example, are there selected days of the week that a certain service may be provided? In this case, the customer population can be grouped to take advantage of the economy of scale and schedule efficiency. Consider the customer who requires a high level of service at the best possible price. As you list and describe your services, you may run into one of the serendipitous benefits of good business planning, which is generating new ideas. Describe your service offerings in terms of customer types and customer needs, and you'll often discover new needs. This is the way ideas are generated. Be sure to include any glossary of terms so the reader can understand the language you use to describe your business. Be specific and detailed in this section on what it is that drives the business and in particular, what will attract customers. The idea must be concrete and specific enough that the reader knows exactly what you are saying.

3.2 Competitive Comparison In this section, you need to examine how well you do with respect to other businesses. The Competitive Matrix below should guide you in thinking about how to compare

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7 yourself [or benchmark yourself] against other businesses either in your service area or on a regional or national level. Developing benchmarks or a set of standards by which you measure your value, is a means to improve the business and be the provider of choice. Knowing what the other businesses are offering and how successful they are in attracting customers can help with securing long term viability of the business. In other words, in this section you should discuss how you are positioned in the market. Why do customers come to your business instead of other businesses? What benefits do you offer at what price, to whom, and how does your mix of services compare to others.
Competitors Image Services Locatio n Quality of service Facility Proximity to competitors Total

Scale: 1 = lowest, 5 = highest

Develop a set of evaluative criteria as noted above. Each business will be different in terms of the criteria selected. The main point is to compare or benchmark you against the BEST businesses. Consider 6 to 7 evaluative criteria on the horizontal axis. Provide a definition of each criterion. Select 4 to 5 competitors by which you will evaluate your own performance along the same criteria set. Rate each competitor [Scale: 1 = lowest, 5 = highest] along with your business and total the points at the end of the matrix. Once you have identified the areas where you are both strong and weak, you can then assess your competitive position and make plans to improve in those areas where you feel you have the ability to make a difference.

In the Competitive Matrix, the main objective is to know where you are vulnerable and where you have the ability to excel. Making investment decisions for future rates of return will depend upon how well you have evaluated your businesss ability to make adjustments in response to market conditions. 3.3 Sales Literature In this section, include copies of advertisements, brochures, direct mail pieces, catalogs, and technical specifications of the services or products the business provides. These should be added as appendices.

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If it is relevant for your business, you should also use this topic to discuss your present situation regarding business literature and your future plans. Is your sales literature a good match to your services and the image your business wants to present? How is it designed and produced? Could you improve it significantly, or cut the cost, or add additional benefits? What image and standard do you want to be known by and how do you want to be perceived by potential customers? You do not have to develop a brochure or any literature at this time. However, what criteria will guide you in developing the sales literature and what key characteristics of the business will you place in the sales literature?

3.4 Outsourcing What services or products do you require for the business that must be provided by outside vendors? What services or task do you contract for to complement your internal operations and at what cost is this arrangement being made on behalf of the business? It is important to note in this section any outside services that may be considered in the future. Vendors such as computer technicians, legal and accounting services, repairs and maintenance, uniform cleaning, housekeeping services, staffing, and billing/collection services are a few to consider.

3.5 Technology Explain how technology affects the services you provide, the customer benefits, and particularly your competitive edge. Sometimes technology can be vital to a business, such as the case of a business by providing diagnostics and an array of specialty care services requiring high tech computers/software. Also consider the telecommunications systems, document systems, record retrieval systems, and customer data base management. Technology by itself is not the driving force in a business. Technology coupled with the professional component and technical support staff is the competitive edge for the business. Include special staff that is required to manage the technology and their availability in the marketplace.

Not all businesses depend on technology. Technology might also be irrelevant for your business. You can delete this section if it doesn't seem important.

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3.6 Future Services This section looks ahead at the benefits you offer and the services you provide. You might have some specific plans that should be included here, such as plans to open new office sites or expand operations. Adding a new partner to the existing administrative structure, moving to another location after establishing a foundation for the business are examples. Present an outlook for future services. Is there a long-term service strategy? How are new services established? Is there a relationship between market segments, market demand, market needs, and service development?

4.0 Market Analysis Summary Without going into great detail, you should generally describe the different groups of customers you serve in your market analysis, and refer briefly to why you are selecting these customers as targets. You may also want to summarize market growth, citing highlights of some growth projections, if you have this information available. This section begins the DATA collection for use in specifying your strategies for promoting the business and overall management of the business. All businesses must define the customer base and what part of the whole market you will be most active in pursuing. Industry ------------->Local Market---------------->Your Business Remember..........You must first address the Industry you are in and then the Local Market within that industry before you can describe where Your Business best fits in the equation. The value of information is limited by its impact on decisions. If more market information is not going to help you do something better, then don't bother. If you obtain good data to help with future decisions, then it is obvious that an active means to collect data is essential to the success of the business.

It important to note that if there is no active means to collect data, that one must be developed. In order to assess the market position of any business, a data base that monitors the market is essential. If no active means to track customer utilization of services and demographic data is in place, then you must consider, even if it a manual method, the collection of pertinent information.

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10 Data to consider as a first step in this process may include: Demographic data: o Age of customers o Gender o Geographic distribution o Buying patterns o Financial status o Education/training o Special needs Do not rely solely upon the financial system to capture this data. A separate system that continuously monitors the non-financial customer data will serve you well into the future. Regardless of what data or information you collect, you MUST HAVE A DATA SOURCE. Any reference to how large a market is or growth in a particular segment must have a reference as to where the data came from. Data in a Business Plan must be empirical NOT anecdotal. In other words, if you cannot support with 100% accuracy the data you are stating as to its validity, then do not include it in the text. All data referenced must be in the form of a footnote at the bottom of the page on which the data was noted. 4.1 Market Segmentation Your market analysis summary is based on a list of potential customer groups, each of which is a market segment. Explain how your segments are defined. The market segmentation concept is crucial to market assessment and market strategy. Divide the market into workable market segments--divided by age, income, product type, geography, buying patterns, customer needs, or other classification. The most classic market segmentation divides customers by demographics (age, income, gender, occupation, education, etc.) or geographics (city, state, county, ZIP code, etc.). However you decide to segment your market, use this section to explain the segmentation, define the different classifications, and develop as much information as you feel you need about the customers within each market segment group.

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Market Analysis Potential Customers Segment name Segment name Segment name Total

Growth 0% 0% 0% 0.00%

2006 0 0 0 0

2007 0 0 0 0

2008 0 0 0 0

2009 0 0 0 0

2010 0 0 0 0

4.2 Market Needs This section should be based on underlying needs. For each market segment included in your strategy, explain the market needs that lead to this group's wanting to buy your service. What is the driver for you in providing the product or service for this plan? Define the market needs in terms that the reader can understand and once again, explain your source for the data being referenced. Segment Needs Driver for the Need

4.3 Target Market Segment Strategy In this section you should introduce the strategy behind your market segmentation and your choice of target markets. Explain why your business is focusing on these specific target market groups. What makes these groups more interesting than the other groups that you've ruled out? Why are the characteristics you specify important? This is more important for some businesses than others. Knowing how you will spend the resources to market to selected segments and what rate of return to expect will depend upon how well focused you are in this section.

Target Market


Forecasted Outcome

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4.4 Market Trends To describe market trends, think strategically. What factors seem to be changing the market, or changing the business? What developing trends can make a difference? Market trends could be changes in demographics, changes in customer needs, new sense of style or fashion, or something else. It depends on what business you are in. For example, a construction business might note the trend toward remodeling older homes instead of buying new homes, or a trend toward more rooms in larger houses, despite smaller families, because of home offices, dens, and exercise rooms. A restaurant business might note a trend toward Asian foods or spicier foods, or toward fresher, healthier foods, or development of a new restaurant district in a different part of town. An accounting business might note demographic trends, as baby boomers age, leading toward more need for estate planning and retirement planning. Look to market trends as a way to get ahead of the market; to know where it is going before it gets there. Once again, what are the data sources you used to gather the details of the market?

4.5 Market Growth Use this topic to explain and discuss market growth. Ideally you cite experts, a market expert, market research business, trade association, or credible journalist, projecting market growth. This is particularly important when your plan is related to finding investors, or supporting a loan application, because market growth enhances the implied value of your business. Cite growth rates in terms that fit the available information, whether growth in the number of potential customers, projected dollar sales, meals served, Web site projects, tax reporting hours, yards to landscape, or whatever you have. Whenever you can, relate the growth rates cited in expert forecasts to the growth in potential customers. WHENEVER YOU ARE MAKING A STATEMENT ABOUT DATA, YOU MUST INCLUDE THE SOURCE OF THE DATA IN A FOOTNOTE AT THE BOTTOM OF THE PAGE WHERE THE STATEMENT IS MADE. ANECDOTAL SOURCES ARE NOT THE BEST METHOD FOR CITING DATA SINCE WE DO NOT KNOW THE VALIDITY OF THE DATA OR HAVE CONFIDENCE IN MAKING DECISIONS ON DATA WHEN WE DO NOT KNOW WHO OR HOW IT WAS COMPILED.

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4.6 Competition and Buying Patterns Explain the general nature of competition in this business, and how the customers seem to choose one provider over another. In the restaurant business, for example, competition might depend on reputation and trends in one part of the market, and on location and parking in another. In many professional service businesses the nature of competition depends on word of mouth, because advertising is not completely accepted. Is there price competition between accountants, doctors, and lawyers? How do people choose travel agencies or florists for weddings? Why does someone hire one landscape architect over another? Why choose Starbucks, a national brand, over the local coffee house? All of this is the nature of competition. What factors make the most difference for your business? What might make customers choose your business over another; price or billing rates, reputation, image and visibility? Are brand names important? Or is it simply word of mouth, in which the secret is longterm satisfied customers? You may also wish to review the evaluative criteria in the Competitive Matrix to see if there is a linkage with the buying pattern.

4.7 Main Competitors Use this section to list your specific competitors, and the strengths and weaknesses of each. This is different than the Competitive Matrix. The focus here is on the main attributes of each business with whom you compete and how you see them in the same marketplace as your business. List the three or four main competitors in this topic, and use paragraphs to describe the strengths and weaknesses of each. Consider their service, pricing, reputation, management, financial position, brand awareness, business development, technology, or other factors that you feel are important. In what segments of the market do they operate? What seems to be their strategy? How much do they impact your business, and what threats and opportunities do they represent?

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A matrix to compute the data in this section may be helpful. Strengths Weaknesses Opportunities Threats

Business A

Business B

Business C

5.0 Strategy and Implementation Summary In this section, summarize the strategy you will use to grow the business. Once you have identified the future services, growth prospects, competitive profiles and the market in which you will grow, you can now develop the way to get from here to there. Think of the strategy as your main focus. Of the whole range of possible market segments, and whole range of services and possible marketing activities, which are your main priorities? Avoid making long lists of priorities. More than three or four points make them more like a to-do list than a strategic focus.

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State the Strategy and then several bullets associated with each Strategy for the Implementation. The strategy is WHAT you are going to do to grow the business. The implementation is HOW you are going to do it. Example: Strategy: XXXXXXXXXXX Implementation XXXXXXXX Implementation XXXXXXXX

5.1 Strategic Alliances Use this section to explain your strategic alliances, such as a trade association, a friendly competitor, a support service where you can draw upon expertise you do not possess within your own firm. A trade association in which you belong where you receive critical information about the business is a vital link. Is your fate tied to that of any other business? A strategic alliance is typically an arms length relationship. It may also be one in which you have an investment where you receive a direct benefit such as ownership in a building or facility. A Strategic Alliance is meant to aid the business in moving forward in the marketplace. Who or What can help you build the business and at what cost? In the initial start-up period of a new business, a strong Strategic Alliance may help overcome some hurdles and assist the business for long-term growth.

5.2 Milestones Milestones are where a business plan becomes reality, with specific and measurable activities, instead of just a collection of words. Include as many specific tasks as possible. For each task, give it a name, a person responsible (manager), a milestone beginning and ending date, and a budget. Make your plan real. Give it as many milestones as you can think of to make it more concrete. Then make sure that all your people know that you will be following the plan, and tracking results. Details are good.

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A Milestone chart is similar to a GANT or PERT Chart in that it tracks progress.

Milestones Milestone

Start Date

End Date



6.0 Organizational Structure The organizational structure of a business is what you frequently see as an organizational chart, also known as an "org chart." You may want to include a chart as an illustration in the Exhibits to this document or in the text itself. Graphically representing the organization provides more specific information on how the business is managed. Employees want to know who is in charge and how they can communicate with the business owner or President in an orderly manner. Typically, businesses with one to two employees may not require an organizational chart. Larger businesses with more than 5 to as many as 100 employees definitely need an organizational chart to indicate the hierarchy of authority. For businesses having to address any type of certification or outside review, an org chart is not an option. Example: President/ Owner

Business Manager

Support Staff
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Sales/Marketing Staff


6.1 Management Team Building on those individuals indicated in the organizational chart, list the most important members of the management team. Include summaries of their backgrounds and experience, such as education and training, previous work experience and relationship to their position in the business. 6.2 Management Team Gaps Specify where the Management Team is weak because of gaps in coverage of key management personnel. How will these weaknesses be corrected? How will the more important gaps be filled? It is important to identify the areas where the business is also weak in the type and quality of the management team members. A gap is either a vacancy or a weakness.

6.3 Personnel Plan A personnel plan, projecting the number of employees, their salaries, and positions is useful as you plan for future activities as well as manage present tasks. In the chart below, note the divisions of staff in the business if any. Give consideration to future events and how many personnel may be required to manage the new services, increased volume or new technology. Human Resource planning is critical to a business. Be sure to note any problems with recruiting or retention of new employees. Also, what fringe benefits will you provide to attract new employees and what evaluation methods will you employ to monitor activities?

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Personnel Plan Administrative Personnel Name or title Name or title Name or title Subtotal Service Personnel Name or title Name or title Name or title Subtotal Total Staff Total Payroll Payroll Burden Total Payroll Expenditures

2003 $0 $0 $0 $0 $0 $0 $0 $0 0 $0 $0 $0

2004 $0 $0 $0 $0 $0 $0 $0 $0 0 $0 $0 $0

2005 $0 $0 $0 $0 $0 $0 $0 $0 0 $0 $0 $0

7.0 Financial Plan The financial plan of a business is the culmination of all of the previous sections. From the start, you have been qualifying all the essential elements that comprise the business. In this section, you now will quantify the business through a defined methodology such as developing a Profit and Loss statement. Noting how much you spend and why, how much you generate from patient revenues and where are the major areas where cost of the business is exhibited are essential to a good financial plan. 7.1 Important Assumptions In this section, discuss important assumptions about the financial experience of the business. What do you assume will happen over the next few years that will impact your financial status? Questions such as how will market conditions change, what will be the future buying patterns, will the business require more employees or less in the coming years and what are the factors that will influence the quality/quantity of the service or product and ultimately the revenues? It is important to ask as many questions as you feel are applicable to the financial plan.
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19 An Assumption is what I assume is happening in the market, finances or industry that will influence my decision-making.

7.2 Key Financial Indicators This section depends on benchmarking of other businesses in the same market. They may include revenues, operating expenses, staff turnover, and collection days. These four indicators have a real impact on the health of a business. Focus not on gross amounts as much as changes. For example, increasing revenues from $250,000 to $350,000 is a Key Financial indicator that revenue is growing. The same is true of increasing gross margin from 20% to 40%, or increasing collection days from 30 to 60. A Key Financial Indicator is what you can actually observe and have empirical proof that the data is accurate and it is not "assumed".

7.3 Projected Profit and Loss (P & L) A Profit and Loss statement is a final step in the overall business plan (BP) process. Think of the P & L as a budget that reflects the way the business should look from a financial perspective. It is a reflection of all the work you have done up to this point in the BP. Be sure to consider how realistic are your revenue and expense projections? How good do your numbers look? Be as specific as possible and do not project farther out into the future than 3 to 5 years. A worksheet attached to the P & L should indicate the details of each revenue and expense item for the first year only. Subsequent years are predicated on the success of the first year. Show where the estimate came from and any methodology used in determining the forecast.

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Think of the P & L as a budget where you monitor the business's progress but only in financial terms. Profit and Loss (Income Statement) 2007 Patient Revenues: Other Total Revenue Operating expenses: Supplies Rent Utilities Telephone Cell Phone Internet Postage License/Fees Uniform expense Auto lease Maintenance/Repairs Travel Commissions Payroll Expenses: FICA SUT FUT WC Net payroll Health insurance Pension Continuing Education Insurances: Business Liability Misc. Expenses Computer Expense 2008 2009

Total Operating Expenses

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21 Net Profit $0 $0 $0

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