Computer-assisted!

Young Entrepreneurs Leadership ProgramCopyright 2014

Business PlanToolkitSeminar

Part 1Concepts and

Software Features

Tutorial and GuideComputer-Assisted

Customized Business Plan

Copyright 2014

Everything is Explained!

Business PlanToolkit

Every successful business consistsof a Good Idea and Good Resources!

(in comparison to the competition)

GoodResources

GoodIdea

A Successful Business

4

Concept: Every successful business consists of a Good Idea and Good Resources! A Good Idea cannot compensate for

Poor Resources and Good Resources cannot compensate for a Poor Idea. Both are required for success!

Eureka!! = The Entrepreneur Business Model!

The Business Plan Toolkit Concept

Differentiation

SalesAdvertising

Competition

Products &Services

CustomerProfiles

Facilities BalanceSheet

Staffing Funding

Ownership FinancialModel

BusinessIdea

BusinessResources

BusinessModel

Split the Business Model into the Idea and the Resources

5

Step 2 - Customer Profiles Example

10 25 50 100 300

10 25 50 100 500

Assessment of Customer Profiles Competitive Caution

Comments:

4. What special customer interests are important to your business?Homeowner Health Sports Other:

$25,000 $50,000 $100,000 Other:Comments:

Comments:2. What are the demographics for your customers?

3. What is the average household income of your customers?

Male Female Married ChildrenWhite Black Asian HispanicComments:

Comments:

B. Instructions for Consumer (non-business) Customers: In general, only select characteristics of the customers "most likely" to buy your services so that you will know how to focus your advetising program. Multiple selections are recommended to identify all of the characteristics that apply.1. How far from your location in miles can you serve customers?

Other:

Comments:5. Can you identify the decision maker?Name Title Address Telephone

4. How many employees do your customers have?10 50 100 Other:

$100,000 $500,000 $1,000,000 Other:Comments:

3. What size of business in revenue matches your capabilities?

Comments: 2. What industries are most likely to use your products?Manufacturer Wholesaler RetailerComments:

Step 2 - Customer Profiles Worksheet

A. Instructions for Business Customers: In general, you should only select the characteristics of the business customers "most likely" to buy from you so that you will know how to direct your advertising program (Step 5 - Advertising). Multiple selections are recommended to identify all of the characteristics that apply. 1. How far from your location in miles can you serve customers?

Other:

Color Indicates Competitive Quality

Each worksheet is assessed as Competitive/Blue orCaution/Yellow as compared to your competition.

The example below reflects an assessment ofa small business with potential

competitive issues.

The yellow elements dramatically display areas of concern.These weaknesses should be the focus of corrective action.

Differentiation

SalesAdvertising

Competition

Products &Services

CustomerProfiles

Facilities BalanceSheet

Staffing Funding

Ownership FinancialModel

BusinessIdea

BusinessIdea

BusinessResources

BusinessModel

7

8

The Business Plan Toolkit Software

• The Business Plan Toolkit software provides four small business planning tools:– The Business Plan Toolkit Instructions -

a great tutorial on small business principles and how to use the Business Plan Toolkit software

– The 12 Excel Worksheets - provide an easy to use, comprehensive, and structured approach to developing a business plan

– The PPT Business Model - a terrific management tool to portray your business strengths and weaknesses

– The Word Business Plan Outline - preformatted to match the worksheet data and simplify writing the plan

• The following slides will demonstrate the details of these tools

9

Part 2Worksheets andBusiness Model

10

Differentiation

SalesAdvertising

Competition

Products &Services

CustomerProfiles

Facilities BalanceSheet

Staffing Funding

Ownership FinancialModel

BusinessIdea

BusinessResources

BusinessModel

The Business Idea Elements

These six elements define the Business Idea.To be a “Good Idea”, these six elements

“must be competitive in the marketplace”. We will review these six worksheets.

Step 1 – Products and Services

11

Price Cost

Price

Step 1 - Products and Services Worksheet

What is your primary business function?

A. Instructions for Products: Products are tangible items you can own and transfer. List no more than 10 products. If you sell a large number of products, group them into "packages" you can visualize a customer buying. Enter the Product Name, Price, Cost and Source.

Product Name Source

Manufacturer Other:

Comments:

Assessment of Products/Services Competitive Caution

Wholesaler Retailer

Comments

Comments:

B. Instructions for Services: Services are defined as "work performed for a customer". List no more than 10 services. If you sell many services, group them into "packages" you can visualize a customer buying. Enter the Service Name and Price.

Service Name

Step 2 – Customer Profiles

12

10 25 50 100 300

10 25 50 100 500

Assessment of Customer Profiles Competitive Caution

Comments:

4. What special customer interests are important to your business?Homeowner Health Sports Other:

$25,000 $50,000 $100,000 Other:Comments:

Comments:2. What are the demographics for your customers?

3. What is the average household income of your customers?

Male Female Married ChildrenWhite Black Asian HispanicComments:

Comments:

B. Instructions for Consumer (non-business) Customers: In general, only select characteristics of the customers "most likely" to buy your services so that you will know how to focus your advetising program. Multiple selections are recommended to identify all of the characteristics that apply.1. How far from your location in miles can you serve customers?

Other:

Comments:5. Can you identify the decision maker?Name Title Address Telephone

4. How many employees do your customers have?10 50 100 Other:

$100,000 $500,000 $1,000,000 Other:Comments:

3. What size of business in revenue matches your capabilities?

Comments: 2. What industries are most likely to use your products?Manufacturer Wholesaler RetailerComments:

Step 2 - Customer Profiles Worksheet

A. Instructions for Business Customers: In general, you should only select the characteristics of the business customers "most likely" to buy from you so that you will know how to direct your advertising program (Step 5 - Advertising). Multiple selections are recommended to identify all of the characteristics that apply. 1. How far from your location in miles can you serve customers?

Other:

Step 3 - Competition

13

GOOD FAIR POOR Very Not Very

GOOD FAIR POOR Very Not Very2. How do you rate your competition for Services? How important is this factor to you?

4 to 10 11 or more 1 to 3

LocationEquipmentManagementStaffFinancial Strength

Factors to CompareServicesPricingEstablished Clientele

Assessment of Competition

ReputationAdvertising

Comments:

Competitive Caution

B. Instructions for Services: In question 1, the more competitors you have, the more diffi cult it is to assess their quality. In question 2, Rate each factor and then check how important that factor is to your business.1. How many competitors do you have for Services in your geographic area?

StaffFinancial StrengthReputationAdvertising

PricingEstablished ClienteleLocationEquipmentManagement

2.Rate each factor for your competition for Products? How important is this factor to you?Factors to CompareProducts

Step 3 - Competition Worksheet

A. Instructions for Products: In question 1, the more competitors you have, the more you will to average the results. In question 2, Rate each factor and then check how important that factor is to your business.1. How many competitors for Products do you have in your geographic area? 1 to 3 4 to 10 11 or more

Step 4 - Differentiation

14

Better Equal Worse

Better Equal Worse

Rate how you compare to your Competition for each Factor for Products.Factors to CompareProducts

Step 4 - Differentiation Worksheet

Instructions for Products: Differentiation is defined as "the reasons why a customer will buy from you instead of your competitor". It is one of the most important elements of your business. You may find an advantage in any one of the factors on the list. The list will also identify weaknesses that may exist in your Business Model.

Comments

PricingEstablished ClienteleLocationEquipmentManagement

Instructions for Services: Differentiation is defined as "the reasons why a customer will buy from you instead of your competitor". It is one of the most important elements of your business. You may find an advantage in any one of the factors on the list. The list will also identify weaknesses that may exist in your Business Model.

StaffFinancial StrengthReputationAdvertising

Assessment of Differentiation

ReputationAdvertising

Comments: (you may want to identify your major strengths and weaknesses while you are thinking about them).

Competitive Caution

Rate how you compare to your Competition for each Factor for Services.

LocationEquipmentManagementStaffFinancial Strength

Factors to CompareServicesPricingEstablished Clientele

Comments:

Step 5 - Advertising

15

B. Impersonal - Inexpensive

Instructions for selecting your Advertising Venues: The advertising alternatives listed below are divided into three groups; Personal, Impersonal - Inexpensive and Impersonal - Expensive. Each group is itemized in the "least expensive to most expensive" order. You may select one or more items from all three groups. Check Alternatives under Your Plan and then check how your Competitor's advertise.

4. Personal email

Advertising Alternatives

Comments

1. Personal Visit2. Telephone call3. Personal Letter

A. Personal

Step 5 - Advertising Worksheet

Your Plan

Compet. Plan

1. Business Cards2. Brochures3. Flyers4. Email5. Website/Internet

7. ZIP code mailers8. Limited direct mail

6. Local Print media

Assessment of Advertising

Comments:

4. Radio5. TV6. Magazines7. Catalogs

Competitive Caution

C. Impersonal - Expensive1. Yellow Pages2. Bill Boards3. Urban Newspapers

Step 6 - Sales

16

Sales Alternatives Your Plan

Compet. Plan

Comments

A. Instructions for Product Sales: This is a relatively simple worksheet to complete because the Sales Alternatives for most businesses reflect the decisions made in Steps 1 - 5. Most sales are made by a sales person interacting with a customer one-to-one. However some sales are made by the advertising technique. For example, a restaurant puts a buy one meal, get a second meal free coupon in the news media. The coupon actually makes the sale. Check your Plan and what your Competitor's do.

5. Coupons in Media6. Paper Catalogs7. Website Catalog Displays8. Affi liate Marketing

1. Personal at Bus. Location2. Personal at Cust. Location3. Cold Calling4. Direct Mail

9. Email

B. Instructions for Services Sales: Services usually require a personal sales contact because services are less well defined than products and may vary in price. Change or add Sales Alternatives to match your business concept characteristics. Check your Plan and what your Competitor's do.

Sales Alternatives Your Plan

Compet. Plan

Comments

4. Direct Mail5. Coupons in Media6. Paper Catalogs

1. Personal at Bus. Location2. Personal at Cust. Location3. Cold Calling

Assessment of Sales Competitive Caution

Step 6 - Sales Worksheet

9. Email

Comments:

7. Website Catalog Displays8. Affi liate Marketing

17

Posting Your Business Model

At this point you should have posted your Business Idea element assessments on the

blank Business Model. It might look like this.

Differentiation

SalesAdvertising

Competition

Products &Services

CustomerProfiles

Facilities BalanceSheet

Staffing Funding

Ownership FinancialModel

BusinessIdea

BusinessResources

BusinessModel

These six elements define the Business Resources. Good Resources are “all of the assets required

to implement and sustain the Idea.” We will review these six worksheets.

The Business Resources Worksheets

18

Differentiation

SalesAdvertising

Competition

Products &Services

CustomerProfiles

Facilities BalanceSheet

Staffing Funding

Ownership FinancialModel

BusinessIdea

BusinessResources

BusinessModel

Step 7 - Ownership

19

Business Address: Owner(s) Names and Titles:

Step 7 - Ownership Worksheet

Business Name:

Business Structure:Sole Prop. Partnership Corporation S Corp. LLC

Non-Financial Goals: for example - form a family businesss, improve ecology, help disadvantaged

Owner's Investment in Business: $

Website Name (Domain):Business Credit Rating:Owner's Credit Rating:

Owner's Financial Goals: total income from all business sourcesYear 1: Year 2:

Owner's education and experience in this Industry:

Owner's management experience:

Assessment of Ownership Competitive Caution

Comments:

Step 8 - Staffing

20

1Q 2Q 3Q 4Q

Step 8 - Staffing Worksheet

A. Instructions: List the Position Titles in descending order (most to least important). Enter the projected average monthly salary or wage for each position (these expemses are required for the Financial Model). List the number of people you expect to have in each position during each quarter of the year.Position Titles Monthly Salary

Comments:

Assessment of Staffing:

B. Instructions: Re-enter the Position Titles in the same order as above. List the experience requirements for each position. List the education requirements for each position.

Experience Requirements Education RequirementsPosition Titles

Competitive Caution

Comments:

Step 9 - Facilities

21

Manufacturing

Cost $ Mo. Pymt

Amount Mo. Pymt

1Q 2Q 3Q 4Q

B. This section is used to specify vehicle, offi ce equipment and other equipment needs and expenses.

Enter quantity required each quarterEquipment Description

Lease/RentOwn or Buying

Vehicles

Comments:Zoning, covenants and permits

Comments:Leased Rent $ Owned Mortgage /Mo. $

Home Major Street

4. Check the box if the space and location meet the following requirements.Operational Needs Customer Expectations

Business Park

Step 9 - Facilities Worksheet

A. This section is used to specify the space requirements for the enterprise. Use comments to provide more detail.1. What kind of space is required? Add explanation in comments as required.

2. Where is it located? Indicate number of square feet below in last cell.

3. Indicate whether space is leased or owned and enter monthly rent or monthly mortgage payment.

Retail StorefrontOffi ce StorageComments:

Comments: Square Ft.

Warehouse

Rural

Caution

Comments:

Other Equipment

Assessment of Facilities Competitive

Office Equipment

Step 10 – Financial Model

22

1Q 2Q 3Q 4Q

0 0 0 0 00 0 0 0 00 0 0 0 00 0 0 0 0

0000000000000000000

Total Expenses 0 0 0 0 0

0 0 0 0 0

Assessnent of Financial Model

Offi ce Supplies Rent Salaries/Contract Labor Salary Burden

Total Income Less Cost of Goods

Gross Margin

Entertainment/Meals

Internet/Website Leased Equipment

Expenses Accounting/Legal Advertising

Insurance

Less Cost of Sales = (% of sales)

Step 10 - Financial Model

Start this worksheet at the top and work your way to the bottom. Duplicate this form to create additional years or prior years.

Cost of Goods

Enter number of sales for each quarter Year PriceProducts & Services

Supplies Telecommunications Vehicle Mileage

Loan (P & I)

Profit before Taxes (Gross Margin - Expenses)

Competitive Caution

Step 11- Funding

23

0 0

Amount Source0

0

Comments:

Total Funds Required

B. Instructions for estimating the total funding requirements: Enter the Amount of funds required for each Funding category and the Source of the funds. If not known, insert "Unknown" and explain planned source. The source can include cash on hand, credit cards, loans, grants, etc.

WebsiteSalaries

Total Startup Expenses

Inventory

Assessment of Funding Competitive Caution

Renovations

Items Requiring Funding ExplanationStartup ExpensesOperating CapitalContingencies

Startup Expense Item Paid For

Not Paid For

Comments

Fees and PermitsLegal/ProfessionalOffi ce EquipmentOther EquipmentVehicles

Step 11 - Funding Worksheet

Background: The information on the Ownership, Staffi ng, Facilities and Financial Model worksheets provide the source data to complete the Funding Worksheet. This worksheet is divided into two sections. The top section is for entrepreneurs not yet in business and identifies all of the startup expenses required before the business opens. The bottom section identifies the total funds required to open, operate and sustain the business. Most importantly, it asks that you identify the source of funds required.

A. Instructions for estimating startup expenses: If you are not yet in business, enter the amount of funds required for each applicable item. Change, add or delete names of items as appropriate. If the item has already been paid for, enter the amount under the "Paid For" column. Otherwise, enter the amount under the "Not Paid For" column.

Step 12 – Balance Sheet

24

0

0

0

1. Current Bills2. Credit Card Balance

Competitive Caution

Liabilities

3. Real Estate Mortgage

Explanation

Total Assets (Current Value)

6. Vehicles7. Equipment8. Inventory9. 401 K or similar plans

4. Vehicle Loans5. Other Loans

5. Real Estate

Assets Current Value

OK for Collateral Explanation

1. Cash2. Checking and Savings Accts3. Stocks4. Bonds

Step 12 - Balance Sheet

Instructions for Balance Sheet: The Balance Sheet is a reflection of the current financial strength of an individual or an organization. Very simply, it indicates Assets (what you own), Liabilities (what you owe) and Net Worth (difference between the two). Check whether this Balance Sheet is for yourself or for the business. List the assets (change or add as appropriate) and their worth in the current marketplace. If the asset can be used for collateral, check the adjacent box. Then list all of your Liabilities and the amount you owe. The Assets and Liabilities will be totaled and the difference will be posted in the Net Worth

Business Balance Sheet Personal Balance Sheet

Assessment of Balance Sheet

Comments:

Net Worth Net Worth = Assets minus Liabilities

Total Liabilities

The Business Model is a Summary

The Business Model is a graphic summary of your Business Plan. It’s easy to interpret and it is based upon your own worksheet data. It dramatically focuses your attention on critical elements that could prove to be fatal. It’s easy to

have an experienced mentor check your judgment.

25

Differentiation

SalesAdvertising

Competition

Products &Services

CustomerProfiles

Facilities BalanceSheet

Staffing Funding

Ownership FinancialModel

BusinessIdea

BusinessResources

BusinessModel

26

The Business Plan Toolkit process:• Gather the Business Plan Data (Worksheets)

– Facts– Assumptions– Goals– Alternatives– Conclusions

• Assess the Quality of the BP Data– Does the data reflect a strong competitive

position?– Is it likely to be successful in meeting the goals?– Is the decision to proceed with the Plan?

• Write the Business Plan (the Easy Part)– Follow the Business Plan Outline– Convert the abbreviated worksheet data into

good business English– The Worksheets and the Business Model may

meet your business planning needs

The Business Plan Toolkit Process