Business Plan - Schramko & Associates, LLC 2009

8/3/2019 Business Plan - Schramko & Associates, LLC 2009

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BUSINESS PLAN OUTLINE

Schramko & Associates, LLC

Dr. Tim D. Schramko

Deborah S. Schramko, CPMSM

Schramko & Associates, LLC 2009


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NEW CORP, INC.

A BUSINESS PLAN OUTLINE

This Business Plan Outline is meant as a guide for developing a businessplan. Please follow the General Guidelines as noted below.

General Guidelines:

Complete the sections as noted and provide all data in a footnote format atthe bottom of each page where the data is referenced in the narrative.Number all pages and sections and include exhibits at the end of thedocument.

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 forthe business that addresses the goals & objectives to meet the needs of the market beingserved. A business plan helps make sense out of the myriad of details that confront theBusiness owner on a daily basis. Having a BP and being able to adjust or systematicallyrespond to changing market conditions separates the successful businesses from thosethat react to the pressures of the market and do not think clearly about how best toorganize resources.

Although this topic, the executive summary, appears first in the plan, you will write itlast. 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 youinclude the Who, What, Where, When, Why and How of the plan in the first part of thenarrative. The financial data [amount of money you are requesting and the use of thefunds] should be part of the summary section of the Executive Summary. If possible, theExecutive 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 includingdate when expected to be complete and who will be responsible for completing theobjective. The objectives are for the Business Owner AND the Employees to achieve asthe business grows.

Objectives 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 objectivessuch as number of clients served, profitability by month, number of sales and revenuegenerated.

1.2 Mission

Use your mission statement to establish your business' fundamental goals for the qualityof the services being provided. A good mission statement can be a critical element indefining your business and communicating to employees, other businesses, and generalpublic of your dedication to maintaining high standards.

The following components of a Mission Statement are helpful to include in thedocument:

Customers: Who are the business's customers?

Products or Services: What are the businesss major services?


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Markets: Geographically, where does the business compete?

Technology: Is the business technologically current?

Concern for survival, growth, and profitability: Is the business committed togrowth and financial soundness?

Philosophy: What are the basic beliefs, values, aspirations, and ethical prioritiesof the business?

Self-Concept: What is the business's distinctive competence or major competitiveadvantage?

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 missionstatement that explicitly states the importance of customer service, so that employeesunderstand how much the business values its customers. Quality assurance experts willalso turn to a mission statement as a fundamental element of quality control. A businessneeds to state its goals and priorities so the people charged with carrying them out canknow and understand them.

1.3 Keys to Success

Virtually every business has different keys to success. These are a few key factors thatmake the difference between success and failure. This depends on who you are and whatservices you offer. In a restaurant, for example, location and parking might be keys tosuccess for one strategy, and variety and atmosphere for another. For accountants andattorneys, the keys might include professional quality, reliability, and participation incommunity organizations. For a service business, a major key would be the quality ofsupport staff and the type and kind of technology. Another example may be the trainingof the support staff and the quality of customer service.

The Keys to Success are factors that make the difference between success and failure ofthe business. If you do not do a selected task, then the business may fail or not do asplanned. Develop no more than 4 to 5 Keys and be able to monitor and measure them asyou 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 yourbusiness by explaining where it is, how long it's been around, what services it sells, andto whom. From another perspective think of this Business Summary as being read by thepeople who will only read this summary and who don't want to know more than what youcan 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 yourselfrepeating many sections of the plan. However, each section is being referenced from adifferent perspective. Only when you are complete with the plan will the whole plan be infocus.

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 orproduct and what are the strengths of the business that would allow for the serviceor product to be provided?

2.1 Business Ownership

In this paragraph, describe the ownership and legal establishment of the business. This ismainly specifying whether your business is a corporation, partnership, soleproprietorship, or some other kind of legal entity, such as a limited liability partnership ormainly a professional corporation. You should also explain who owns the business, and ifthere is more than one owner, are they related and in what capacity do they know eachother.

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 orwarehousing facilities that are relevant to providing service.


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In the start-up of a new business, a location may not be known. In this instance, state thecriteria upon which you will make a determination as to where you will locate yourbusiness. A map or guide for the region is helpful and what attracted you to the generalarea should also be noted. If you require parking it may be near the entrance to theoffices, 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, coverthe main points including what the service is, how much it costs, type of customersserved, 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 youdefine your service offerings, rather than thinking of your side of the equation--how yougenerate 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 takeadvantage of the economy of scale and schedule efficiency. Consider the customer whorequires 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 benefitsof good business planning, which is generating new ideas. Describe your serviceofferings in terms of customer types and customer needs, and you'll often discover newneeds. This is the way ideas are generated. Be sure to include any glossary of terms so thereader can understand the language you use to describe your business. Be specific anddetailed in this section on what it is that drives the business and in particular, what willattract customers. The idea must be concrete and specific enough that the reader knowsexactly 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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yourself [or benchmark yourself] against other businesses either in your service area oron a regional or national level. Developing benchmarks or a set of standards by whichyou measure your value, is a means to improve the business and be the provider ofchoice. Knowing what the other businesses are offering and how successful they are inattracting 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 doyou offer at what price, to whom, and how does your mix of services compare to others.

Competitors Image Services Location

Quality ofservice

Facility Proximityto

competitors

Total

Scale: 1 = lowest, 5 = highest

Develop a set of evaluative criteria as noted above. Each business will be different interms of the criteria selected. The main point is to compare or benchmark you against theBEST businesses. Consider 6 to 7 evaluative criteria on the horizontal axis. Provide adefinition 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 youhave identified the areas where you are both strong and weak, you can then assess yourcompetitive position and make plans to improve in those areas where you feel you havethe ability to make a difference.

In the Competitive Matrix, the main objective is to know where you are vulnerable andwhere you have the ability to excel. Making investment decisions for future rates ofreturn will depend upon how well you have evaluated your businesss ability to makeadjustments 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. Theseshould be added as appendices.


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If it is relevant for your business, you should also use this topic to discuss your presentsituation regarding business literature and your future plans. Is your sales literature agood match to your services and the image your business wants to present? How is itdesigned and produced? Could you improve it significantly, or cut the cost, or addadditional benefits?

What image and standard do you want to be known by and how do you want to beperceived by potential customers? You do not have to develop a brochure or anyliterature at this time. However, what criteria will guide you in developing the salesliterature and what key characteristics of the business will you place in the salesliterature?

3.4 Outsourcing

What services or products do you require for the business that must be provided byoutside vendors? What services or task do you contract for to complement your internaloperations 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 thefuture. Vendors such as computer technicians, legal and accounting services, repairs andmaintenance, uniform cleaning, housekeeping services, staffing, and billing/collectionservices are a few to consider.

3.5 Technology

Explain how technology affects the services you provide, the customer benefits, andparticularly your competitive edge. Sometimes technology can be vital to a business, suchas the case of a business by providing diagnostics and an array of specialty care servicesrequiring 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 theiravailability in the marketplace.

Not all businesses depend on technology. Technology might also be irrelevant for yourbusiness. 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 newoffice sites or expand operations. Adding a new partner to the existing administrativestructure, moving to another location after establishing a foundation for the business areexamples.

Present an outlook for future services. Is there a long-term service strategy? How are newservices 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 ofcustomers you serve in your market analysis, and refer briefly to why you are selectingthese customers as targets. You may also want to summarize market growth, citinghighlights of some growth projections, if you have this information available.

This section begins the DATA collection for use in specifying your strategies forpromoting the business and overall management of the business. All businesses mustdefine the customer base and what part of the whole market you will be most active inpursuing.

Industry ------------->Local Market---------------->Your Business

Remember..........You must first address the Industry you are in and then the LocalMarket within that industry before you can describe where Your Business best fits inthe equation.

The value of information is limited by its impact on decisions. If more marketinformation is not going to help you do something better, then don't bother. If you obtaingood data to help with future decisions, then it is obvious that an active means to collectdata 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 bedeveloped. In order to assess the market position of any business, a data base thatmonitors the market is essential. If no active means to track customer utilization ofservices and demographic data is in place, then you must consider, even if it a manualmethod, the collection of pertinent information.


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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 thatcontinuously 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 DATASOURCE. Any reference to how large a market is or growth in a particular segmentmust have a reference as to where the data came from. Data in a Business Plan must beempirical NOT anecdotal. In other words, if you cannot support with 100% accuracy thedata you are stating as to its validity, then do not include it in the text. All datareferenced must be in the form of a footnote at the bottom of the page on which the datawas noted.

4.1 Market Segmentation

Your market analysis summary is based on a list of potential customer groups, each ofwhich is a market segment. Explain how your segments are defined. The marketsegmentation concept is crucial to market assessment and market strategy. Divide themarket 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 thesegmentation, define the different classifications, and develop as much information asyou feel you need about the customers within each market segment group.


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Market Analysis Potential Customers Growth 2006 2007 2008 2009 2010

Segment name 0% 0 0 0 0 0

Segment name 0% 0 0 0 0 0 Segment name 0% 0 0 0 0 0 Total 0.00% 0 0 0 0 0

4.2 Market Needs

This section should be based on underlying needs. For each market segment included inyour strategy, explain the market needs that lead to this group's wanting to buy yourservice. 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, explainyour 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 andyour choice of target markets. Explain why your business is focusing on these specifictarget market groups. What makes these groups more interesting than the other groupsthat 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 theresources to market to selected segments and what rate of return to expect will dependupon how well focused you are in this section.

Target Market Strategy Forecasted Outcome


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4.4 Market Trends

To describe market trends, think strategically. What factors seem to be changing themarket, or changing the business? What developing trends can make a difference?Market trends could be changes in demographics, changes in customer needs, new senseof 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 olderhomes 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 restaurantbusiness 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. Anaccounting business might note demographic trends, as baby boomers age, leadingtoward 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 goingbefore 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 marketexpert, market research business, trade association, or credible journalist, projectingmarket growth. This is particularly important when your plan is related to findinginvestors, or supporting a loan application, because market growth enhances the impliedvalue of your business.

Cite growth rates in terms that fit the available information, whether growth in thenumber 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 inpotential 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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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 haveidentified 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 marketsegments, and whole range of services and possible marketing activities, which are yourmain priorities? Avoid making long lists of priorities. More than three or four pointsmake them more like a to-do list than a strategic focus.


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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 Budget Manager

6.0 Organizational Structure

The organizational structure of a business is what you frequently see as an organizationalchart, also known as an "org chart." You may want to include a chart as an illustration inthe 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 thebusiness owner or President in an orderly manner. Typically, businesses with one to twoemployees may not require an organizational chart. Larger businesses with more than 5to as many as 100 employees definitely need an organizational chart to indicate thehierarchy of authority. For businesses having to address any type of certification oroutside review, an org chart is not an option. Example:


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President/

Owner

Business

Manager

Support

Staff

Sales/Marketing

Staff


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6.1 Management Team

Building on those individuals indicated in the organizational chart, list the most importantmembers of the management team. Include summaries of their backgrounds andexperience, such as education and training, previous work experience and relationship totheir 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 moreimportant gaps be filled? It is important to identify the areas where the business is alsoweak in the type and quality of the management team members. A gap is either avacancy or a weakness.

6.3 Personnel Plan

A personnel plan, projecting the number of employees, their salaries, and positions isuseful as you plan for future activities as well as manage present tasks. In the chartbelow, note the divisions of staff in the business if any. Give consideration to futureevents and how many personnel may be required to manage the new services, increasedvolume or new technology.

Human Resource planning is critical to a business. Be sure to note any problems withrecruiting or retention of new employees. Also, what fringe benefits will you provide toattract new employees and what evaluation methods will you employ to monitoractivities?


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Personnel Plan 2003 2004 2005Administrative Personnel

Name or title $0 $0 $0Name or title $0 $0 $0Name or title $0 $0 $0

Subtotal $0 $0 $0

Service PersonnelName or title $0 $0 $0Name or title $0 $0 $0Name or title $0 $0 $0

Subtotal $0 $0 $0

Total Staff 0 0 0Total Payroll $0 $0 $0

Payroll Burden $0 $0 $0Total PayrollExpenditures

$0 $0 $0

7.0 Financial Plan

The financial plan of a business is the culmination of all of the previous sections. Fromthe 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 suchas developing a Profit and Loss statement. Noting how much you spend and why, howmuch you generate from patient revenues and where are the major areas where cost of thebusiness is exhibited are essential to a good financial plan.

7.1 Important Assumptions

In this section, discuss important assumptions about the financial experience of thebusiness. What do you assume will happen over the next few years that will impact yourfinancial status? Questions such as how will market conditions change, what will be thefuture buying patterns, will the business require more employees or less in the comingyears and what are the factors that will influence the quality/quantity of the service orproduct and ultimately the revenues? It is important to ask as many questions as you feelare applicable to the financial plan.


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An Assumption is what I assume is happening in the market, finances or industry thatwill influence my decision-making.

7.2 Key Financial Indicators

This section depends on benchmarking of other businesses in the same market. They mayinclude revenues, operating expenses, staff turnover, and collection days. These fourindicators have a real impact on the health of a business. Focus not on gross amounts asmuch as changes. For example, increasing revenues from $250,000 to $350,000 is a KeyFinancial indicator that revenue is growing. The same is true of increasing gross marginfrom 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 thatthe 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 afinancial perspective. It is a reflection of all the work you have done up to this point inthe 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 fartherout into the future than 3 to 5 years.

A worksheet attached to the P & L should indicate the details of each revenue andexpense item for the first year only. Subsequent years are predicated on the success ofthe first year. Show where the estimate came from and any methodology used indetermining the forecast.


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Think of the P & L as a budget where you monitor the business's progress but only infinancial terms.

Profit and Loss

(Income Statement)

2007 2008 2009

Patient Revenues:

Other

Total Revenue

Operating expenses:

SuppliesRentUtilitiesTelephoneCell PhoneInternetPostageLicense/FeesUniform expenseAuto leaseMaintenance/RepairsTravelCommissionsPayroll Expenses: FICA SUT FUT WC Net payroll Health insurance PensionContinuing EducationInsurances: Business LiabilityMisc. ExpensesComputer Expense

Total Operating Expenses


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Net Profit $0 $0 $0

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Documents

Business Plan - Schramko & Associates, LLC 2009