Business Planning Guide for Web

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1040 Eberly Way, Suite 200 BUS: 724-437-7913Lemont Furnace, PA 15456 FAX: 724-437-7315

BUSINESSPLANNINGGUIDE

*Developed by St. Vincent College SBDC


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Writing a business plan has many benefits:

It serves as a map and a compass for the future of your business

It helps you identify market opportunities It helps you set realistic goals for your business

It allows you to establish effective operating and financing plans

It helps you communicate your ideas and needs to your banker It helps make you more profitable

In todays economy risk is widespread and often unexpected. By assisting you in thebusiness planning process, Fay-Penn hopes to reduce the amount of risk you encounter.Risk can never be eliminated. There will always be surprises; there will always be eventsand forces outside of your direct control. However, going through a business planningprocess will help you manage risk much more effectively. You will become a bettermanager thereby increasing your probability of success.

Within this packet you will find a number of questions designed to aid you in the process.The quality of your plan is dependent upon accurate information. Although answers tosome of these questions may not be readily known, it is important that you try to gathergood information. Your emphasis should be on the planning process itself, not the endresult.

Please attempt to answer these questions as completely as possible. Beware of lookingonly at the positives. Force yourself to recognize the downside as well as the upside ofyour venture. Try not to answer questions in abstract terms. Answers should bemeasurable and specific. Work at your own pace. If you reach a point where you requireassistance, your Business Development Specialist will be glad to help. Keep in mind thatthis is only the first step in preparing your business plan. View this guide as a worksheet,not a finished document.

Please call if you have any questions.


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Your name:

Partners/Shareholders Names:

Business Name:

Current Mailing Address:

Business Address (if different from mailing address):

Home Phone:

Daytime Phone:

Fax:

Email:

Please indicate where you can be reached for questions during business hours.


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DESCRIPTION OF THE BUSINESS

1. OVERVIEW

a. What type of business are you in?

b.

What is the status of your business (start-up, existing [if existing, how long?])?c. Briefly describe your proposed business.d. What is or will be unique about your business?e. With so many failures, why will your business be successful?


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2. PRODUCT(S) OR SERVICE(S)

a. Describe the products or services you will sell.b. What are the benefits of your products or services?c. Will you require an initial inventory and if so, how much?

d.

What is your market niche?


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3. GOALS

a. Why do you want to enter this business?b. What are your short-term goals (year one)?c. What are your long-term goals (year two to five)?

(Please state in measurable terms with a target date)


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4. INDUSTRY PROFILE (nationally and/or locally)

a. Is this a growth industry? Why or why not?b. Are many others entering this field? Why or why not?c. Please list/explain any information you have acquired from other individuals or

associations operating in this industry.d. Please explain/describe any seasonality present in this industry.


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THE MARKETING PLAN

1. KNOW YOUR CUSTOMERS AND PROSPECTS

a. Who are they and how many?

b.

Where are they?c. What do they buy?d. Why do they buy?e. When do they buy?f. How much do they buy?g. Why do they buy from you or from someone else?


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2. MARKET SHARE

a. How large is the market for your business?b. What percentage of the market do you expect to attract?c. Is the market growing, steady, or declining? Why?


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3. COMPETITION

a. Please list and describe 3 to 5 of your most significant competitors.b. How are their sales---steady, increasing, decreasing?c. How are their operations similar and/or dissimilar to yours?

d.

How do your products and services differ from competitive products and servicescurrently on the market?e. What will make your operations different from theirs?


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4. PROMOTION

a. How will you promote your product or service?b. What dollar amount do you expect to spend on promotional activities?c. How will you track your results?


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5. SUPPLIERS

a. Who are you potential suppliers?b. Are they stable?c. Have you made contact?

d.

Will they provide trade credit? (If so, what are the terms?)


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6. LOCATION

a. Where will your business be located? (Street address).b. Describe the physical features of the facility. (For example, a one-story brick

building with 3,000 square feet of space.)

c.

Do you intend to own, rent, or lease? (What is your rent?)d. Are there any local regulations such as zoning that may affect the operation ofyour business?

e. Why is this a good location?f.

What are your hours of operation?


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7. EQUIPMENT

a. Are you purchasing new or used equipment?b. Are you buying or leasing?c. List the special equipment you will need for your business and its estimated cost.


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8. PRICING

a. How did you arrive at the price for your product or service?b. Can this pricing strategy be maintained over the long-term?c. What is the prevalent pricing strategy of your industry?


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9. DISTRIBUTION

a. Where/how will consumers acquire your product or service?b. Why this method of distribution?c. What follow-up customer service is involved with the sale of this product?


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THE MANAGEMENT PLAN

1. EXPERIENCE (attach resume(s) if available)

a. Describe the business background and related experiences of the principals.

b.

What is your direct experience in this kind of business?c. What education have you acquired that is relevant to this business?d. What factors contribute to the success of this venture?


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2. FINANCIAL RESOURCES

a. Do you expect this project to require commercial financing?b. How much cash do you have to invest in the business?c. How is your credit rating?

d.

Do you own your own home?e. How much equity do you have in your home?


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3. LEGAL ISSUES

a. What legal form of ownershipsole proprietorship, partnership, corporationwill the business have?

b. Why this structure?

c.

Who are the principals, and what are their titles and responsibilities?d. Do you have a sales agreement?e. Do you have a partnership agreement?f. Have you filed any forms?


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4. HUMAN RESOURCES

a. How many employees will be needed?b. Will these individuals be full-time or part-time? Employees or subcontractors?c. What skills are required?

d.

List the duties and responsibilities of key personnel within the business.e. How much will they be paid?f. What fringe benefits will you provide?


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5. PROFESSIONAL ASSISTANCE

a. Who is assisting you in starting or operating your own business?b. List the name and address of your accountant, lawyer, insurance agent, banker, or

other professionals assisting you.


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6. LICENSES/REGULATIONS

a. What licenses or permits will you need?b. What regulations will affect your business?


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ENVIRONMENTAL

Many small businesses overlook environmental issues and concerns during planning.This checklist is a first step in determining which environmental regulations may apply.

a.

Will you have any hazardous substances at your site?b. Will you vent any gas, fume, smoke, dust or odors? Will you use a boiler or other

equipment using fuel on site?c. Will there be, or has there been, any storage tank on site?d. Will there be any radiation sources on site?e. Will there be any process liquid discharges to a sewer or waterway?f.

Will you generate, process, or treat any hazardous wastes?


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GOVERNMENT REGULATIONS

Are you aware of the many regulations that impact small businesses?

Local

Zoning laws (districts, uses and variances)

Land development and subdivision (Planning Commission and Council orSupervisors)

Permits and Licenses, Building Codes

State

Department of Environmental Protection (DEP)Sewage Pennsylvania Department of TransportationHighway Occupancy Permits Labor and IndustryFire and Safety, Americans with Disabilities Act

Licenses and Certifications

Federal

Americans with Disabilities Act(through State for buildings)

Occupational Safety and Health Administration (OSHA) Department of Laborwages

Equal Employment Opportunity Commission (EEOC), Department of Justicepersonnel

Specialized Regulationso Environmental Protection Agency (EPA)o

Federal Communications Commission (FCC)o Federal Trade Commission (FTC)


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THE FINANCIAL PLAN

START-UP COSTSList your one-time, start-up costs expected prior to day one of operation:

a. Start-up investment (purchase of business, franchise, etc.) $_________

b. Initial inventory $_________

c. Building acquisition $_________

d. Machinery and equipment $_________

e. Furniture and fixtures $_________

f. Remodeling and decorating $_________

g. Licenses and permits $_________

h. Pre-paid insurance $_________

i. Utility deposits $_________

j. Pre-opening advertising/promotion $_________

k. Professional (legal/accounting) $_________

l. Other ________________ $_________

TOTAL START-UP INVESTMENT NEEDEDPRIOR TO DAY ONE OF OPERATION $_________


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OPERATING EXPENSES***Please list your estimated monthly operating expenses. These are expenses incurred on aregular basis.

a. Salaries and wages (employees) $_________

b. Owners withdrawal $_________

c. Employment taxes (FICA, FUTA, Workmens Compensation) $_________

d. Employee Fringe Benefits $_________

e. Rent/Mortgage $_________

f. Telephone $_________

g. Electricity $_________

h. Gas $_________

i. Water $_________

j. Office Supplies $_________

k. Shop Supplies $_________

l. Existing Debt $_________

m. Maintenance and Repair $_________

n. Local Taxes/Licenses $_________

o. Legal and Accounting $_________

p. Insurance $_________

q. Vehicle expense $_________

r. Advertising and Promotion $_________

s. Miscellaneous $_________

TOTAL MONTHLY OPERATING EXPENSES $_________

***If an existing company, please include three years of your income tax profit and lossrecord, if available.


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AMOUNT RECOMMENDED FOR WORKING CAPITAL. FOR START-UPS WESUGGEST MULTIPLYING TOTAL MONTHLY OPERATING EXPENSES BY AMINIMUM OF 1 TO 2 MONTHS.

$_________

TOTAL COST TO START BUSINESS:

1. Start-up Costs Prior to Day One: (page 25 total) $_________

2. Working Capital: (ABOVE) + $_________

3. Total Capital Required (add lines 1 and 2) $_________

AVAILABLE CAPITAL:

4. Owners Equity(Cash you will be investing in the business) - $_________

5. Financing Needed (subtract line 4 from line 3) $_________

Owners equity and external financing should be equal to the amount of capital required.Make a list of possible resources for the above figure. Consider if you desire to seekcommercial financing or approach private investors. There are different issues involvedwith both strategies.

Possible Resources Amount

_______________ $________________________ $________________________ $________________________ $_________TOTAL FINANCING $_________


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SALES

In the first 12 months of operation, what will be your estimated business sales by month?

On the next page, explain how you arrived at these figures.

Month 1 $_________ Month 7 $_________

Month 2 $_________ Month 8 $_________

Month 3 $_________ Month 9 $_________

Month 4 $_________ Month 10 $________

Month 5 $_________ Month 11 $________

Month 6 $_________ Month 12 $________

TOTAL (Months 1 through 12): _______________

What are you paying for the product? This figure, known as Cost of Goods Sold, isexpressed either as an absolute dollar amount or as a percentage of total sales.

Estimated Cost of Goods Sold*: __________________(dollars or percentage)

If an existing company, what is your companys average cash balance?__________

*The Cost of Goods Sold for service firms is typically zero.


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SALES EXPLANATION AND OTHER INFORMATION

Documents

Business Planning Guide for Web