Sample Business Plan Template

[NAME OF COMPANY]

[NAME OF COMPANY]

BUSINESS PLAN

[date business plan issued]

Contact: [name], CEO [or President][address][phone no. & fax no.][email][web site]

The information contained in this business plan is confidential and proprietary to [NAME OF COMPANY] (the Company) and is intended only for the persons to whom it is transmitted by the Company or its representatives. Any reproduction of this document, in whole or in part, or the divulgence of any of its contents without the prior written consent of the Company, is prohibited.

This is a business plan. It does not imply and shall not be construed as an offering of securities. Persons interested in pursuing an investment should contact their professional advisors.

Business Plan Copy No. _______

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Confidentiality AgreementThe undersigned reader acknowledges that the information provided by [NAME OF COMPANY] in this business plan is confidential. Therefore, the undersigned reader agrees not to disclose any of such information without the express written permission of [NAME OF COMPANY].

It is hereby acknowledged by the undersigned that the information to be furnished in this business plan is in all respects confidential in nature (other than such information which is already in the public domain through other means) and that any disclosure or use of same by the undersigned may cause serious harm or damage to [NAME OF COMPANY].

Upon request, this document is to be immediately returned to [NAME OF COMPANY].

Signature

Print Name

Date

TABLE OF CONTENTSConfidentiality AgreementiEXECUTIVE SUMMARY1I.COMPANY OBJECTIVES31.1Goals & Objectives31.2Vision / Mission Statement31.3Factors for Success31.4Risk Factors4II.THE COMPANY52.1History & Background52.2Directors52.3Outside Consultants & Professional Advisors52.4Strategic Alliances62.5Facilities & Operations6III.DESCRIPTION OF PRODUCTS & SERVICES73.1Products & Services73.2Future Plans73.3Product Fulfillment7IV.MARKET ANALYSIS & MARKETING PLAN84.1Industry Analysis84.2Target Market84.3Competitors84.4Marketing Strategy94.5Pricing Strategy9V.MANAGEMENT & ORGANIZATION105.1Management Team105.2Organizational Structure105.3Staffing Plan10VI.FINANCIAL PLAN116.1Important Assumptions116.2Sales Forecast116.3Capital Requirements116.4Break-Even Analysis136.5Exit / Repayment Strategy136.6Projected Profit and Loss146.7Projected Cash Flow156.8Projected Balance Sheet166.9Business Ratios17APPENDIX A [support documents]18

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[NAME OF COMPANY]BUSINESS PLAN

EXECUTIVE SUMMARY(NOTE: The Executive Summary is the section of the business plan in which you give an overview of the business, its present status and future direction, and highlight the key points and the purpose of your business plan. This section should be written after the rest of the business plan, and should not exceed 3 pages in length - thats why its called a summary.)Company Background[for existing companies][NAME OF COMPANY] (the Company) is a [describe, e.g. a corporation incorporated under the laws of the State/Province of ___________] which has been in business as a retail bookseller in the _________ area for the past ____ years.

[for new companies:][NAME OF COMPANY] (the Company) is in the process of being formed/created as a [describe, e.g. a corporation incorporated under the laws of the State/Province of ___________], for the purpose of selling books at retail in the _________ area.

The Company [is/will be] managed by a team of _____________ individuals with a total of _______ years experience in the field of ________________, a chief financial officer with _____ years of accounting and administrative experience, and _________ [list].

Mission[revise as appropriate to fit your companys mission - expand on this in Section 1] The Company's mission is to provide our customers with a wide selection of current and classic fiction and non-fiction titles, and to encourage the community's children to read through "[Name of Reading Program"], our weekly in-store reading sessions for children between the ages of ___ and ____. Approximately _______% of our shelf space will be devoted to children's books and publications.

Objectives[briefly describe the short-term and long-term objectives of the company with respect to sales, profits, growth, etc]

The Company's main objective is to become the major bookseller in the _________________ area, with ____% of the market share and revenues in excess of $____________ by the end of Year 3 of this plan.

The Market[briefly outline the market and available customer base in the area, the number of competitors already servicing that market, and the reason(s) why customers will choose your business over the competitors]

There are currently ________ booksellers in the _________ area, which serve a population of approximately ____________. Of these, ______ are general booksellers and __________ specialize in _________________ materials. We believe that there is plenty of room in the local marketplace for a quality general bookseller.

Capital RequirementsThe Company requires an estimated $_________________ in [start-up/operating] capital. The [loan / equity investment] proceeds will be used to [list major items, e.g.: secure a lease and finance leasehold improvements/ purchase equipment and supplies / purchase inventory / as operating capital to ensure positive cash flow in the initial year of operations].

I.COMPANY OBJECTIVES(NOTE: This section sets out the corporate objectives, mission statement, current phase of your business, and the companys goals and objectives for future growth.)1.1Goals & Objectives[In this section, set out the companys goals (desired achievements / sales levels / etc) and objectives (steps necessary in order to reach the goals).]

The Companys goals are:

a _____% share of the local market by _______;revenues of $______________ by the end of Year 1, and $_____________ by the end of Year 3 of the Plan;gross margin of at least ____%;positive net worth by the end of Year ___;[other]

In order to attain the above goals, the Company will carry out the following specific objectives:

[list objectives and dates by which they will be accomplished in order to reach the stated goals, for example:]finalize distribution contract(s) with [list distributors / publishing houses with which the Company will have contracts in place] by _________ [date];[continue list]

1.2Vision / Mission StatementThe Company's mission is to provide our customers with a wide selection of current and classic fiction and non-fiction titles, and to encourage the community's children to read through "[Name of Reading Program"], our weekly in-store reading sessions.

In carrying out our day-to-day business operations, we strive to:

treat our employees with fairness and respect, and create an enjoyable working atmosphere that inspires loyalty and dedication;follow the philosophy that our customers are our first priority, and ensure that all of our personnel are well-trained in providing reliable, timely and efficient customer service;be considered as a responsible business leader in the community.

1.3Factors for SuccessFactors which can help assure the Companys success can be defined as follows: [list]providing the highest level of customer service;stocking a wide variety of quality titles for all age groups;being able to change our product mix quickly in response to customer demand;[continue list]

1.4Risk FactorsThe Company has identified the following risk factors which could hamper its success:problems generating visibility and product positioning;overly aggressive and debilitating actions by competitors;changes in consumer buying trends;changes in federal or state/provincial legislation applicable to the industry;rising costs of products due to an increase in distributor prices;[include any other risk factors]

Worst case scenarios would include:

determining that the business cannot support itself on an ongoing basis;having to liquidate equipment or intellectual property to cover liabilities;[include any other worst case situations]

Potential investors should recognize that not all major risks can be accurately predicted or avoided, and that few business plans are free of errors of omission or commission. Anyone interested in investing should be aware that this business has inherent risks which should be evaluated prior to any investment.

II.THE COMPANY(NOTE: Use this section to describe the history, structure, purpose, operations, board of directors, outside consultants and strategic alliances of the business. If you are starting up a new company, describe the proposed structure, and set out the reasons for starting up the business.)2.1History & Background[The following is provided by way of example and should be revised to fit your particular circumstances.]The Company was incorporated on _____________ [date] in the [State/Province] of __________. The head office of the Company is located at [address].

To date, the Company has issued ___________ shares of common stock [provide details on all shares of stock issued and outstanding]. The following table sets out the current shareholders and the number of shares owned by each:

Name of ShareholderAddressNo. & Class of Shares

The remainder of the issued and outstanding common shares are retained by the Company for [future distribution / allocation under the Companys employee stock option plan / etc].

The Company currently has outstanding shareholder loans in the aggregate sum of $___________________. The following table sets out the details of the shareholder loans:

Name of ShareholderAmount of LoanDate of LoanBalance Outstanding

2.2DirectorsThe Companys Board of Directors, which [will be/is] made up of highly qualified business and industry professionals/experts, [will be a valuable asset to the Company and instrumental to its development by assisting/assists] our management team in making appropriate decisions and taking the most effective action; however, they [will not be/are not] responsible for management decisions. The following persons [will make up the/are the current] Board of Directors of the Company: [list each person on the Board]

Name of Personbusiness & educational background, past industry experience, other companies in which the person played a key role

Name of Personbusiness & educational background, past industry experience, other companies in which the person played a key role

2.3Outside Consultants & Professional AdvisorsAt present, no outside consultants or professional advisors have been retained. [if outside consultants have been retained, list them and their credentials:] The Companys outside consultants and professional advisors provide tremendous input and support to enable management to make well-informed, creative and appropriate decisions:

[accountant/cpa][legal counsel][others]

2.4Strategic Alliances[List strategic alliances / partnerships which assist the company in providing high quality service and establishing/maintaining its reputation, and which give the company an additional competitive edge]

The Company [has negotiated / is negotiating] distribution contracts with __________________ [list distributors / publishing houses who will be suppliers].

2.5Facilities & Operations[describe the companys office(s), square footage, location, etc, and whether the company owns or leases its office(s), also describe the technology which gives the business an edge]

The Company's operations [are/will be] located in ______ square feet at ____________________ [describe location]. [Set out how the square footage is allocated as to on-shelf stock, storage, office space, etc, describe available parking, proximity to other amenities, any details that make the location a good draw for customers]

Store hours will be weekdays from ______ a.m. to _______ p.m., and weekends from ______ a.m. to ______ p.m., excluding statutory holidays on which we will be [closed / open from ___ to ______].

III.DESCRIPTION OF PRODUCTS & SERVICES(NOTE: In this section, describe your current products and services, the unique features, prices, etc that you offer, current and future R&D plans, enhancements, production and distribution strategies. Include data on proprietary processes, patents, copyrights, etc, which make your products unique.)3.1Products & Services[describe the companys products and services in detail, and discuss why customers will purchase your products / services over those of your competitors]

The Company will offer a wide selection of current and classic fiction and non-fiction titles, in areas which appeal to the local population, with a particular emphasis on ______________________ [describe specialty areas which the store will offer].

Approximately ____% of our shelf space will be devoted to children's books and publications. The Company will also encourage reading through "[Name of Reading Program"], our weekly in-store reading sessions for children between the ages of ______ and ______.

3.2Future PlansThe Company plans to develop a literacy program by ___________________ [date]. In addition, we will be expanding our inventory to include books in Braille, audiotape and CD.

3.3Product FulfillmentProduct fulfillment is an important part of customer satisfaction. The Company utilizes ____________________ to monitor and manage the delivery, billing, repair, warranty and repair of our products to ensure customer satisfaction and repeat sales.

To improve our operating efficiencies, the Company plans to use ___________________ [name of fulfillment firm]. They have been in business for ___ years and have an excellent reputation and customer record. This move will avoid the need to hire additional staff and will reduce shipping costs.

The Companys products are shipped to our [distributors / end users] via [FOB/FOB delivered/FOB buyers factory/___________]. We use the following carriers: ________________. [set out ways in which the company controls its shipping costs, volume discounts, etc]

IV.MARKET ANALYSIS & MARKETING PLAN(NOTE: Use this section to identify your current market (if an existing business) and/or your target market (for new or expanding businesses), the growth potential of the market, market share, competitors and their products and services, factors which impact your business (such as seasonal sales, niche markets, etc). This section will also be where you outline your marketing plan (sales, advertising, PR).)4.1Industry Analysis[Market research will be required for this section. Discuss the industry in general, and specifically in your area, growth or lack of growth, current trends, etc]

According to __________________ [cite your sources and the time period(s) it relates to], North American consumers spent US $_____________ on books in _______ [year]. Recent industry analyses indicate that the market for book sales in [country / region] has been increasing at the rate of ________% per year since __________. That trend is expected to continue for at least the next _____ years. Sales figures locally were approximately $_____________ in [year] and $____________ in [year].

People buy books for three principal reasons: for enjoyment (leisure reading), for reference and for educational purposes. Of these, book sales for enjoyment make up ______% of annual book sales in this country, with ____% of this segment being sales of mass market paperbacks by well-known writers.

4.2Target Market[set out demographics for your target market - age range, gender, education level, income level, etc - to create a profile of your target market segments.]

The Company's target market segments for book sales fall into the following demographics:individuals with at least a high school education;households with an annual income of at least $__________;families with school-age children;women between the ages of 18-54;retired persons.

4.3CompetitorsCompetitors in the local market fall into two categories: large national chains, such as ______________, and smaller independent dealers. According to the _____ Yellow Pages, there are currently ______ large chain stores and approximately _______ independent booksellers in the area which would compete directly with the Company. As well, there is some direct competition from gas stations, convenience stores, and grocery stores which carry a limited number of titles - generally best-sellers - but a large number of magazines. These outlets typically do not account for a significant percentage of book sales, but sell a very high percentage of magazine titles.

[Discuss each of the companys main competitors in the local market, how much of the market share they hold, their strengths and weaknesses in comparison with the company]

4.4Marketing Strategy[Describe the company's plan for advertising & marketing campaigns, types of ads, print, broadcast, Yellow Pages, Chamber of Commerce, etc]

Through its "[name of reading program]" the Company will not only encourage reading, but will be able to market quality children's books and reading materials directly to reading-age children and their parents.

Our most successful marketing, however, will be word-of-mouth recommendations from satisfied customers. We therefore must maintain the highest level of customer service.

4.5Pricing StrategyThe Company's stock will be sold at the cover price, except for those items which are sale or clearance items. The bookstore receives a _____% to _____% discount off the cover price (depending on the distributor). Postage and handling fees will be added to the price on any special order items.

V.MANAGEMENT & ORGANIZATION5.1Management TeamThe strength of the Companys management team stems from the combined expertise in both management and technical areas. [if appropriate: This has produced outstanding results over the past ____ years. The leadership characteristics of the management team have resulted in the establishment of broad, flexible goals designed to meet the ever-changing demands of our quickly moving marketplace.]

Name of Person, President (include professional designations, degrees, etc)business & educational background, past industry experience, other companies in which the person played a key role

[include a section for each member of the team - resumes / CVs of each director and manager should be included with the supporting documents]

5.2Organizational Structure[Name of person] is the Chief Operating Officer of the Company. The general manager will report to him/her. [describe the remainder of the organization structure, departments and department heads, each persons responsibilities, etc].

5.3Staffing PlanThe Company [will employ/currently employs] _______ full-time and _______ part-time sales staff. We anticipate hiring ________ additional [full-time/part-time] staff during [the summer/the Christmas season/etc].

Full-time employees will be paid at the rate of $______ per hour, and will be eligible for _______________ [describe benefits plan] after three months of continuous employment. Part-time employees will be paid at the same rate, but will only be eligible for ______________________ [describe benefits available to part-time staff].

VI.FINANCIAL PLAN(NOTE: Use this section to describe (for existing businesses) or project (for new or expanding businesses) your companys capital requirements, projected profits or losses for the period of time covered by the business plan (usually 3 years), the intended use of proceeds from your fund raising efforts, if raising money through investors.)6.1Important AssumptionsThe financial plan depends on important assumptions, both annual and monthly. Interest rates, tax rates and personnel burden are based on conservative assumptions. Some of the more important underlying assumptions are as follows:

We assume a strong local economy.General inflation rates are assumed to be ___% per year.Bad debt ratio is assumed to be ___% of sales.[other]

AssumptionsYear 1Year 2Year 3

Current Interest Rate

Long-term Interest Rate

Tax Rate

Sales on Credit %

Other

Calculated Totals:

Payroll Expense

Sales on Credit

New Accounts Payable

Inventory Purchase

6.2Sales ForecastThe largest direct sales cost is the purchase cost of the inventory, at _____% of gross sales.SALES FORECASTYear 1Year 2Year 3

Sales

Total Sales

Direct Cost of Sales

SUBTOTAL DIRECT COST OF SALES

6.3Capital Requirements[for start-up capital - expand on this] The initial start-up capital required is $_____________. The Company will require an additional investment of $_________ in ___ year(s), to enable us to ________________________.

[for additional operating capital, expansion, etc - expand on this] After analyzing our working capital, the Company estimates its operating working capital requirements to be $________ for Year 1, $_________ for Year 2, and $________ for Year 3. We will need to borrow $__________ to finance working capital for a period of ______________, the remainder to be financed through cash from operations. In order to ___________________________, an estimated total of $________________ in loan financing is required for the 3-year period.

Our confidence in achieving the financial projections in this plan within ____% is [high/average/etc]. In addition to the operations of the business, the Company will provide collateral security in the form of __________________________. In a worst case scenario, the realizable value of the collateral would be $____________, reducing the amount at risk to $_____________. With a projected return of $___________, this represents a return of ___% of the amount at risk.

EXPENSES

Legal costs

Construction costs

Store fixtures

Inventory

Lease costs

Leasehold improvements

Insurance

Utilities

Expensed equipment

Brochures, other print materials

Office supplies, stationery

Other

Total Expenses

Current Assets

Cash Balance on Starting Date

Other Current Assets

Total Current Assets

Long-term Assets

Total Assets

TOTAL REQUIREMENTS

FUNDING

Investment

Investor 1

Investor 2

Other

Total Investment

Current Liabilities

Accounts Payable

Current Borrowing

Other Current Liabilities

Total Current Liabilities

Long-term Liabilities

TOTAL LIABILITIES

Loss at Start-Up

Total Capital

TOTAL CAPITAL AND LIABILITIES

6.4Break-Even AnalysisThe Company estimates that the break-even point will be reached in _______________ [date]. Sales are projected to be $_________ above break-even in __________________ [date]. The contribution margin for the first year is ___%, representing $____________.

BREAK-EVEN ANALYSIS

Monthly Unit Break-even

Monthly Revenue Break-even

ASSUMPTIONS

Average Per Unit Revenue

Average Per Unit Variable Cost

Estimated Monthly Fixed Cost

6.5Exit / Repayment Strategy[for exit of investor] The financial projections indicate that exit of [name of investor] will be achievable in _______ years. The exit settlement will be in the form of ____________.

[for repayment of loan] The increase in profits generated by ____________________ will allow the Company to repay the loan in _______ [months / years].

6.6Projected Profit and Loss

PRO FORMA PROFIT & LOSSYear 1Year 2Year 3

Sales$$$

Direct Cost of Sales

Other

Total Cost of Sales

Gross Margin

Gross Margin %

Operating Expenses

Payroll

Sales and Marketing and Other Expenses

Depreciation

Leased Equipment

Utilities

Insurance

Rent

Bank charges

Payroll Taxes

Other

Total Operating Expenses

Profit before Interest and Taxes

Interest Expense

Taxes Incurred

Net Profit

Net Profit / Sales

6.7Projected Cash FlowPRO FORMA CASH FLOWYear 1Year 2Year 3

Cash Received

Cash from Operations

Cash Sales

Cash from Receivables

Subtotal Cash from Operations

Additional Cash Received

Sales Tax, VAT, HST/GST Received

New Current Borrowing

New Other Liabilities (interest-free)

New Long-term Liabilities

Sales of Other Current Assets

Sales of Long-term Assets

New Investment Received

Subtotal Cash Received

EXPENDITURES

Expenditures from Operations

Cash Spending

Payment of Accounts Payable

Subtotal Spent on Operations

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

Principal Repayment of Current Borrowing

Other Liabilities Principal Repayment

Long-term Liabilities Principal Repayment

Purchase Other Current Assets

Purchase Long-term Assets

Dividends

Subtotal Cash Spent

Net Cash Flow

CASH BALANCE

6.8Projected Balance SheetPRO FORMA BALANCE SHEETYear 1Year 2Year 3

ASSETS

Current Assets

Cash



Long-term Assets

Long-term Assets

Accumulated Depreciation

Total Long-term Assets

TOTAL ASSETS

LIABILITIES AND CAPITAL

Current Liabilities

Accounts Payable

Current Borrowing

Other Current Liabilities

Total Current Liabilities


TOTAL LIABILITIES

CAPITAL

Paid-in Capital

Retained Earnings

Earnings

TOTAL CAPITAL

TOTAL LIABILITIES AND CAPITAL

NET WORTH

6.9Business RatiosThe following table contains important ratios for the retail book sales industry, as determined by the Standard Industry Classification (SIC) code, _________.RATIO ANALYSISYear 1Year 2Year 3Industry Profile

Sales Growth

Percent of Total Assets

Accounts Receivable

Inventory



Long-term Assets

TOTAL ASSETS

Current Liabilities


TOTAL LIABILITIES

NET WORTH

Percent of Sales

Sales

Gross Margin

Selling, General & Administrative Expenses

Advertising Expenses

Profit Before Interest and Taxes

Main Ratios

Current

Quick

Total Debt to Total Assets

Pre-Tax Return on Net Worth

Pre-Tax Return on Assets

Business Vitality Profile

Sales Per Employee

Survival Rate

Additional Ratios

Net Profit Margin

Return on Equity

Activity Ratios

Accounts Receivable Turnover

Collection Days

Inventory Turnover

Accounts Payable Turnover

Payment Days

Total Asset Turnover

Debt Ratios

Debt to Net Worth

Current Liabilities to Liabilities

Liquidity Ratios

Net Working Capital

Interest Coverage

Additional Ratios

Assets to Sales

Current Debt / Total Assets

Acid Test

Sales / Net Worth

Dividend Payout

APPENDIX A[support documents](NOTE: Include such things as director / senior management resumes, financial statements, copy of the lease, press clippings, budgets, market research, all other relevant documentation)

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Documents

Sample Business Plan Template