BUSINESS PLAN OUTLINE
Below is an outline for a business plan. Use
this model as a guide when developing the business plan for your
business.
Elements of a Business Plan
THE BUSINESS PLAN - WHAT IT INCLUDES
What goes in a business plan? This is an excellent
question. And, it is one that many new and potential small business
owners should ask, but oftentimes don't ask. The body of the business
plan can be divided into four distinct sections: 1) the description
of the business, 2) the marketing plan, 3) the financial management
plan and 4) the management plan. Addenda to the business plan
should include the executive summary, supporting documents and
financial projections.
THE BUSINESS PLAN - DESCRIPTION OF THE BUSINESS
In this section, provide a detailed description
of your business. An excellent question to ask yourself is: "What
business am I in?" In answering this question include your
products, market and services as well as a thorough description
of what makes your business unique. Remember, however, that as
you develop your business plan, you may have to modify or revise
your initial questions.
The business description section is divided
into three primary sections. Section 1 actually describes your
business, Section 2 the product or service you will be offering
and Section 3 the location of your business, and why this location
is desirable (if you have a franchise, some franchisors assist
in site selection).
When describing your business, generally you
should explain:
A cover sheet goes before the description.
It includes the name, address and telephone number of the business
and the names of all principals. In the description of your business,
describe the unique aspects and how or why they will appeal to
consumers. Emphasize any special features that you feel will
appeal to customers and explain how and why these features are
appealing.
The description of your business should clearly
identify goals and objectives and it should clarify why you are,
or why you want to be, in business.
THE BUSINESS PLAN - 2. Product/Service
Try to describe the benefits of your goods
and services from your customers' perspective. Successful business
owners know or at least have an idea of what their customers want
or expect from them. This type of anticipation can be helpful
in building customer satisfaction and loyalty. And, it certainly
is a good strategy for beating the competition or retaining your
competitiveness. Describe:
THE BUSINESS PLAN - 3. The Location
The location of your business can play a decisive
role in its success or failure. Your location should be built
around your customers, it should be accessible and it should provide
a sense of security. Consider these questions when addressing
this section of your business plan:
It may be a good idea to make a checklist of
questions you identify when developing your business plan. Categorize
your questions and, as you answer each question, remove it from
your list.
THE BUSINESS PLAN - The Marketing Plan
Marketing plays a vital role in successful
business ventures. How well you market you business, along with
a few other considerations, will ultimately determine your degree
of success or failure. The key element of a successful marketing
plan is to know your customers-their likes, dislikes, expectations.
By identifying these factors, you can develop a marketing strategy
that will allow you to arouse and fulfill their needs.
Identify your customers by their age, sex,
income/educational level and residence. At first, target only
those customers who are more likely to purchase your product or
service. As your customer base expands, you may need to consider
modifying the marketing plan to include other customers.
Develop a marketing plan for your business
by answering these questions. (Potential franchise owners will
have to use the marketing strategy the franchisor has developed.)
Your marketing plan should be included in your business plan and
contain answers to the questions outlined below.
Appendix I contains a sample Marketing Plan
and Marketing Tips, Tricks and Traps, a condensed guide on how
to market your product or service. Study these documents carefully
when developing the marketing portion of your business plan.
THE BUSINESS PLAN - 1. Competition
Competition is a way of life. We compete for
jobs, promotions, scholarships to institutes of higher learning,
in sports-and in almost every aspect of your lives. Nations compete
for the consumer in the global marketplace as do individual business
owners. Advances in technology can send the profit margins of
a successful business into a tailspin causing them to plummet
overnight or within a few hours. When considering these and other
factors, we can conclude that business is a highly competitive,
volatile arena. Because of this volatility and competitiveness,
it is important to know your competitors.
Questions like these can help you:
Start a file on each of your competitors. Keep
manila envelopes of their advertising and promotional materials
and their pricing strategy techniques. Review these files periodically,
determining when and how often they advertise, sponsor promotions
and offer sales. Study the copy used in the advertising and promotional
materials, and their sales strategy. For example, is their copy
short? descriptive? catchy? or how much do they reduce prices
for sales? Using this technique can help you to understand your
competitors better and how they operate their businesses.
THE BUSINESS PLAN - 2. Pricing and Sales
Your pricing strategy is another marketing
technique you can use to improve your overall competitiveness.
Get a feel for the pricing strategy your competitors are using.
That way you can determine if your prices are in line with competitors
in your market area and if they are in line with industry averages.
Some of the pricing strategies are:
- retail cost and pricing
- competitive position
- pricing below competition
- pricing above competition
- price lining
- multiple pricing
- service costs and pricing (for service
businesses only)
- service components
- material costs
- labor costs
- overhead costs
The key to success is to have a well-planned
strategy, to establish your policies and to constantly monitor
prices and operating costs to ensure profits. Even in a franchise
where the franchisor provides operational procedures and materials,
it is a good policy to keep abreast of the changes in the marketplace
because these changes can affect your competitiveness and profit
margins.
Appendix 1 contains a sample Price/Quality
Matrix, review it for ideas on pricing strategies for your competitors.
Determine which of the strategies they use, if it is effective
and why it is effective.
THE BUSINESS PLAN - 3. Advertising and Public Relations
How you advertise and promote your goods and
services may make or break your business. Having a good product
or service and not advertising and promoting it is like not having
a business at all. Many business owners operate under the mistaken
concept that the business will promote itself, and channel money
that should be used for advertising and promotions to other areas
of the business. Advertising and promotions, however, are the
life line of a business and should be treated as such.
Devise a plan that uses advertising and networking
as a means to promote your business. Develop short, descriptive
copy (text material) that clearly identifies your goods or services,
its location and price. Use catchy phrases to arouse the interest
of your readers, listeners or viewers. In the case of a franchise,
the franchisor will provide advertising and promotional materials
as part of the franchise package, you may need approval to use
any materials that you and your staff develop. Whether or not
this is the case, as a courtesy, allow the franchisor the opportunity
to review, comment on and, if required, approve these materials
before using them. Make sure the advertisements you create are
consistent with the image the franchisor is trying to project.
Remember the more care and attention you devote to your marketing
program, the more successful your business will be.
A more detailed explanation of the marketing
plan and how to develop an effective marketing program is provided
in the Workshop on Marketing. See Training Module 3 - Marketing
Your Business for Success.
THE BUSINESS PLAN - THE MANAGEMENT PLAN
Managing a business requires more than just
the desire to be your own boss. It demands dedication, persistence,
the ability to make decisions and the ability to manage both employees
and finances. Your management plan, along with your marketing
and financial management plans, sets the foundation for and facilitates
the success of your business.
Like plants and equipment, people are resources-they
are the most valuable asset a business has. You will soon discover
that employees and staff will play an important role in the total
operation of your business. Consequently, it's imperative that
you know what skills you possess and those you lack since you
will have to hire personnel to supply the skills that you lack.
Additionally, it is imperative that you know how to manage and
treat your employees. Make them a part of the team. Keep them
informed of, and get their feedback regarding, changes. Employees
oftentimes have excellent ideas that can lead to new market areas,
innovations to existing products or services or new product lines
or services which can improve your overall competitiveness.
Your management plan should answer questions such as:
- How does your background/business experience
help you in this business?
- What are your weaknesses and how can you
compensate for them?
- Who will be on the management team?
- What are their strengths/weaknesses?
- What are their duties?
- Are these duties clearly defined?
- If a franchise, what type of assistance
can you expect from the franchisor?
- Will this assistance be ongoing?
- What are your current personnel needs?
- What are your plans for hiring and training
personnel?
- What salaries, benefits, vacations, holidays
will you offer? If a franchise, are these issues covered in the
management package the franchisor will provide?
- What benefits, if any, can you afford at
this point?
If a franchise, the operating procedures, manuals
and materials devised by the franchisor should be included in
this section of the business plan. Study these documents carefully
when writing your business plan, and be sure to incorporate this
material. The franchisor should assist you with managing your
franchise. Take advantage of their expertise and develop a management
plan that will ensure the success for your franchise and satisfy
the needs and expectations of employees, as well as the franchisor.
THE BUSINESS PLAN - THE FINANCIAL MANAGEMENT PLAN
Sound financial management is one of the best
ways for your business to remain profitable and solvent. How well
you manage the finances of your business is the cornerstone of
every successful business venture. Each year thousands of potentially
successful businesses fail because of poor financial management.
As a business owner, you will need to identify and implement
policies that will lead to and ensure that you will meet your
financial obligations.
To effectively manage your finances, plan a
sound, realistic budget by determining the actual amount of money
needed to open your business (start-up costs) and the amount needed
to keep it open (operating costs). The first step to building
a sound financial plan is to devise a start-up budget. Your start-up
budget will usually include such one-time-only costs as major
equipment, utility deposits, down payments, etc.
The start-up budget should allow for these expenses.
Start-up Budget
- personnel (costs prior to opening)
- legal/professional fees
- occupancy
- licenses/permits
- equipment
- insurance
- supplies
- advertising/promotions
- salaries/wages
- accounting
- income
- utilities
- payroll expenses
An operating budget is prepared when you are
actually ready to open for business. The operating budget will
reflect your priorities in terms of how your spend your money,
the expenses you will incur and how you will meet those expenses
(income). Your operating budget also should include money to
cover the first three to six months of operation. It should allow
for the following expenses.
Operating Budget
- personnel
- insurance
- rent
- depreciation
- loan payments
- advertising/promotions
- legal/accounting
- miscellaneous expenses
- supplies
- payroll expenses
- salaries/wages
- utilities
- dues/subscriptions/fees
- taxes
- repairs/maintenance
The financial section of your business plan
should include any loan applications you've filed, a capital equipment
and supply list, balance sheet, breakeven analysis, pro-forma
income projections (profit and loss statement) and pro-forma cash
flow. The income statement and cash flow projections should include
a three-year summary, detail by month for the first year, and
detail by quarter for the second and third years.
The accounting system and the inventory control
system that you will be using is generally addressed in this section
of the business plan also. If a franchise, the franchisor may
stipulate in the franchise contract the type of accounting and
inventory systems you may use. If this is the case, he or she
should have a system already intact and you will be required to
adopt this system. Whether you develop the accounting and inventory
systems yourself, have an outside financial advisor develop the
systems or the franchisor provides these systems, you will need
to acquire a thorough understanding of each segment and how it
operates. Your financial advisor can assist you in developing
this section of your business plan.
The following questions should help you determine
the amount of start-up capital you will need to purchase and open
a franchise.
- How much money do you have?
- How much money will you need to purchase
the franchise?
- How much money will you need for start-up?
- How much money will you need to stay in
business?
Other questions that you will need to consider are:
- What type of accounting system will your
use? Is it a single entry or dual entry system?
- What will your sales goals and profit goals
for the coming year be? If a franchise, will the franchisor set
your sales and profit goals? Or, will he or she expect you to
reach and retain a certain sales level and profit margin?
- What financial projections will you need
to include in your business plan?
- What kind of inventory control system will
you use?
Your plan should include an explanation of
all projections. Unless you are thoroughly familiar with financial
statements, get help in preparing your cash flow and income statements
and your balance sheet. Your aim is not to become a financial
wizard, but to understand the financial tools well enough to gain
their benefits. Your accountant or financial advisor can help
you accomplish this goal.
Sample balance sheets, income projections (profit
and loss statements) and cash flow statements are included in
Appendix 2, Financial Management. For a detailed explanation of
these and other more complex financial concepts, contact your
local SBA Office. Look under the U.S. Government section of the
local telephone directory.
THE BUSINESS PLAN - SELF-PACED ACTIVITY
During this activity you will:
- Briefly describe what goes into a business plan.
- Identify advantages of developing the marketing, management and financial management plans.
- List financial projections included in the financial management plan.
- Sketch an outline for a business plan.
THE BUSINESS PLAN - APPENDIX 1
MARKETING
_________________________________________________________________
THE ENTREPRENEUR'S MARKETING PLAN
This is the marketing plan of____________________________
I. MARKET ANALYSIS
A. Target Market - Who are the customers?
1. We will be selling primarily to (check all that apply):
We will target specific lines ________________
b. Geographic area? Which areas? ________________
c. Sales? We will target sales of ________________
d. Industry? Our target industry is ________________
e. Other? ________________
$________________
B. Competition
NAME ________________________________________
ADDRESS _________________________________________
_________________________________________
Years in Business ___________________
Market Share ___________________
Price/Strategy ___________________
Product/Service
Features __________________
NAME _________________________________________
ADDRESS _________________________________________
_________________________________________
Years in Business
____________________
Market Share
____________________
Price/Strategy
____________________
Product/Service
Features ____________________
High ____________________
Medium ____________________
Low ____________________
Strengths Weaknesses
1._______________________ 1._______________________
2._______________________ 2._______________________
3._______________________ 3._______________________
4._______________________ 4._______________________
C. Environment
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
II. PRODUCT OR SERVICE ANALYSIS
A. Description
________________________________________________
________________________________________________
________________________________________________
B. Comparison
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
C. Some Considerations
__________________________________________________
__________________________________________________
__________________________________________________
III. MARKETING STRATEGIES - MARKET MIX
__________________________________________________
a. Markup on cost ____ What % markup? _____
b. Suggested price ____
c. Competitive ____
d. Below competition ____
e. Premium price ____
f. Other ____
____________________________________________________
____________________________________________________
____________________________________________________
1. Television ________
2. Radio ________
3. Direct mail ________
4. Personal contacts ________
5. Trade associations ________
6. Newspaper ________
7. Magazines ________
8. Yellow Pages ________
9. Billboard ________
10. Other ________
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
MARKETING TIPS, TRICKS & TRAPS - 1. Marketing Steps
- Classifying Your Customers' Needs
- Targeting Your Customer(s)
- Examining Your "Niche"
- Identifying Your Competitors
- Assessing and Managing Your Available Resources
- Financial
- Human
- Material
- Production
_________________________________________________________________
NOTES AND STRATEGIES FOR YOUR BUSINESS
_________________________________________________________________
MARKETING TIPS, TRICKS & TRAPS - 2. Marketing Positioning
- Follower versus Leader
- Quality versus Price
- Innovator versus Adaptor
- Customer versus Product
- International versus Domestic
- Private Sector versus Government
_________________________________________________________________
NOTES AND STRATEGIES FOR YOUR BUSINESS
_________________________________________________________________
MARKETING TIPS, TRICKS & TRAPS - 3. Sales Strategy
- Use Customer-Oriented Selling Approach - By Constructing
- Emphasize Customer Advantage
Must be Important
to the Customer: When the perception of competitive
advantage varies between supplier and customer, the customer wins.
Must be Specific: When a competitive advantage lacks
specificity, it translates into mere puffery and is ignored.
Must be Promotable: When a competitive advantage is
proven, it is essential that your customer know it, lest it not exist at all.
________________________________________________________________
NOTES AND STRATEGIES FOR YOUR BUSINESS
_________________________________________________________________
MARKETING TIPS, TRICKS & TRAPS - 4. Benefits vs. Features
- The six "O's" of organizing Customer Buying Behavior
ORIGINS of purchase: Who buys it?
OBJECTIVES of purchase: What do they need/buy?
OCCASIONS of purchase: When do they buy it?
OUTLETS of purchase: Where do they buy it?
OBJECTIVES of purchase: Why do they buy it?
OPERATIONS of purchase: How do they buy it?
- Convert features to benefits using the "...Which Means..."
- Sales Maxim: "Unless
the proposition appeals to their INTEREST, unless it satisfies
their DESIRES, and unless it shows them a GAIN-then they will
not buy!"
- Quality Customer Leads:
Level of need Ability to pay
Authority to pay Accessibility
Sympathetic attitude Business history
One-source buyer Reputation (price or
quality buyer)
_________________________________________________________________
NOTES AND STRATEGIES FOR YOUR BUSINESS
_________________________________________________________________
CONVERT FEATURES INTO BENEFITS- THE "...WHICH MEANS..." TRANSITION
FEATURES "WHICH MEANS" BENEFITS
Performance Time Saved
Reputation Reduced Cost
Components Prestige
Colors Bigger Savings
Sizes Greater Profits
Exclusive Greater
Convenience
Uses Uniform Production
Applications Uniform Accuracy
Ruggedness Continuous Output
Delivery Leadership
Service Increased Sales
Price Economy of Use
Design Ease of Use
Availability Reduced Inventory
Installation Low Operating Cost
Promotion Simplicity
Lab Tests Reduced Upkeep
Terms Reduced Waste
Workmanship Long Life
BUYING MOTIVES
RATIONAL EMOTIONAL
Economy of Purchase Pride of Appearance
Economy of Use Pride of Ownership
Efficient Profits Desire of Prestige
Increased Profits Desire for Recognition
Durability Desire to Imitate
Accurate Performance Desire for Variety
Labor-Saving Safety
Time-Saving Fear
Simple Construction Desire to Create
Simple Operation Desire for Security
Ease of Repair Convenience
Ease of Installation Desire to Be Unique
_________________________________________________________________
PRICE / QUALITY MATRIX
SALES APPEALS
PRICE/QUALITY HIGH MEDIUM LOW
HIGH "Rolls Royce" "We Try Harder" "Best Buy"
Strategy Strategy Strategy
MEDIUM "Out Performs" "Piece of the Rock" "Smart Shopper"
Strategy Strategy Strategy
LOW "Feature Packed" "Keeps on Ticking" "Bargain Hunter"
Strategy Strategy Strategy
THE BUSINESS PLAN - APPENDIX 2
FINANCIAL MANAGEMENT
1. Income Projection Statement
- Instructions for Income Projection
Statement
2. Balance Sheet
- Instructions for Balance Sheet
3. Monthly Cash Flow Projection
- Instructions for Monthly Cash Flow Projection
4. Information Resources
_________________________________________________________________
INCOME PROJECTION STATEMENT
Industry J F M A M J J
A S O N D Annual Annual
%
total %
Total expenses
Taxes
Net profit (loss) after
taxes
_________________________________________________________________
INSTRUCTIONS FOR INCOME PROJECTIONS STATEMENT
The income projections (profit and loss)
statement is valuable as both a planning tool and a key management
tool to help control business operations. It enables the owner/manager
to develop a preview of the amount of income generated each month
and for the business year, based on reasonable predictions of
monthly levels of sales, costs and expenses.
As monthly projections are developed
and entered into the income projections statement, they can serve
as definite goals for controlling the business operation. As actual
operating results become known each month, they should be recorded
for comparison with the monthly projections. A completed income
statement allows the owner/manager to compare actual figures with
monthly projections and to take steps to correct any problems.
Industry Percentage
In the industry percentage column, enter
the percentages of total
sales (revenues) that are standard for
your industry, which are
derived by dividing
Costs/expenses items x 100%
___________________________
total net sales
These percentages can be obtained from
various sources, such as trade associations, accountants or banks.
The reference librarian in your nearest public library can refer
you to documents that contain the percentage figures, for example,
Robert Morris Associates' Annual Statement Studies (One Liberty
Place, Philadelphia, PA 19103).
Industry figures serve as a useful bench
mark against which to compare cost and expense estimates that
you develop for your firm. Compare the figures in the industry
percentage column to those in the annual percentage column.
Total Net Sales (Revenues)
Determine the total number of units
of products or services you realistically expect to sell each
month in each department at the prices you expect to get. Use
this step to create the projections to review your pricing practices.
- What returns, allowances and markdowns
can be expected?
- Exclude any revenue that is not
strictly related to the business.
Cost of Sales
The key to calculating your cost of
sales is that you do not overlook any costs that you have incurred.
Calculate cost of sales of all products and services used to determine
total net sales. Where inventory is involved, do not overlook
transportation costs. Also include any direct labor.
Gross Profit
Subtract the total cost of sales from
the total net sales to obtain gross profit.
Gross Profit Margin
The gross profit is expressed as a percentage
of total sales
(revenues). It is calculated by dividing
gross profits
______________
total net sales
Controllable (also known as Variable) Expenses
- Salary expenses-Base pay plus overtime.
- Payroll expenses-Include paid vacations,
sick leave, health insurance, unemployment insurance and social
security taxes.
- Outside services-Include costs of
subcontracts, overflow work and special or one-time services.
- Supplies-Services and items purchased
for use in the business.
- Repair and maintenance-Regular maintenance
and repair, including periodic large expenditures such as painting.
- Advertising-Include desired sales
volume and classified directory advertising expenses.
- Car delivery and travel-Include
charges if personal car is used in business, including parking,
tools, buying trips, etc.
- Accounting and legal-Outside professional
services.
Fixed Expenses
- Rent-List only real estate used
in business.
- Depreciation-Amortization of capital
assets.
- Utilities-Water, heat, light, etc.
- Insurance-Fire or liability on property
or products.
- Loan repayments-Interest on outstanding
loans.
- Miscellaneous-Unspecified; small
expenditures without separate accounts.
Net Profit (loss)
(before taxes) - Subtract total
expenses from gross profit.
Taxes - Include inventory
and sales tax, excise
tax, real estate
tax, etc.
Net Profit (loss)
(after taxes) - Subtract taxes
from net profit (before
taxes)
Annual Total - For each of the
sales and expense items in
your income projection
statement, add all
the monthly figures
across the table and
put the result
in the annual total column.
Annual Percentage - Calculate the
annual percentage by dividing
Annual total
x 100%
___________________
total
net sales
- Compare this figure to the industry
percentage in the first column.
_________________________________________________________________
BALANCE SHEET
COMPANY NAME
As of ____________________________,
19____
Assets
Cash
$_______
Petty cash
$_______
Accounts receivable
$_______
Inventory
$_______
Short-term investment
$_______
Prepaid expenses
$_______
Long-term investment
$_______
Land
$_______
Buildings
$_______
Improvements
$_______
Equipment
$_______
Furniture
$_______
Automobile/vehicles
$_______
Other assets
Liabilities
Current Liabilities
Accounts payable
$______
Notes payable
$______
Interest payable
$______
Taxes payable
Federal income tax
$______
State income tax
$______
Self-employment tax
$______
Sales tax (SBE)
$______
Property tax
$______
Payroll accrual
$______
Long-term liabilities
Notes payable
$______
Total liabilities
$______
Net worth (owner equity)
$______
Proprietorship
or
Partnership
(name's) equity
$_____
(name's) equity
$_____
or
Capital stock
$_____
Surplus paid in
$_____
Retained earnings
$_____
Total net worth
$_____
(Total assets will always equal total
liabilities and total net worth)
________________________________________________________________
INSTRUCTIONS FOR BALANCE SHEET
Figures used to compile the balance
sheet are taken from the previous and current balance sheet as
well as the current income statement. The income statement is
usually attached to the balance sheet. The following text covers
the essential elements of the balance sheet.
At the top of the page fill in the legal
name of the business, the type of statement and the day, month
and year.
Assets
List anything of value that is owned
or legally due the business. Total assets include all net values.
These are the amounts derived when you subtract depreciation
and amortization from the original costs of acquiring the assets.
Current Assets
- Cash-List cash and resources that
can be converted into cash within 12 months of the date of the
balance sheet (or during one established cycle of operation).
Include money on hand and demand deposits in the bank, e.g., checking
accounts and regular savings accounts.
- Petty cash-If your business has
a fund for small miscellaneous expenditures, include the total
here.
- Accounts receivable-The amounts
due from customers in payment for merchandise or services.
- Inventory-Includes raw materials
on hand, work in progress and all finished goods, either manufactured
or purchased for resale.
- Short-term investments-Also called
temporary investments or marketable securities, these include
interest- or dividend-yielding holdings expected to be converted
into cash within a year. List stocks and bonds, certificates
of deposit and time-deposit savings accounts at either their cost
or market value, whichever is less.
- Prepaid expenses-Goods, benefits
or services a business buys or rents in advance. Examples are
office supplies, insurance protection and floor space.
Long-term Investments
Also called long-term assets, these
are holdings the business intends to keep for at least a year
and that typically yield interest or dividends. Included are
stocks, bonds and savings accounts earmarked for special purposes.
Fixed Assets
Also called plant and equipment. Includes
all resources a business owns or acquires for use in operations
and not intended for resale. Fixed assets may be leased. Depending
on the leasing arrangements, both the value and the liability
of the leased property may need to be listed on the balance sheet.
- Land-List original purchase price
without allowances for market value.
- Buildings
- Improvements
- Equipment
- Furniture
- Automobile/vehicles
Liabilities
Current Liabilities
List all debts, monetary obligations
and claims payable within 12 months or within one cycle of operation.
Typically they include the following:
- Accounts payable-Amounts owed to
suppliers for goods and services purchased in connection with
business operations.
- Notes payable-The balance of principal
due to pay off short-term debt for borrowed funds. Also includes
the current amount due of total balance on notes whose terms exceed
12 months.
- Interest payable-Any accrued fees
due for use of both short- and long-term borrowed capital and
credit extended to the business.
- Taxes payable-Amounts estimated
by an accountant to have been incurred during the accounting period.
- Payroll accrual-Salaries and wages
currently owed.
Long-term Liabilities
Notes payable-List notes, contract payments
or mortgage payments due over a period exceeding 12 months or
one cycle of operation. They are listed by outstanding balance
less the current position due.
Net worth
Also called owner's equity, net worth
is the claim of the owner(s) on the assets of the business. In
a proprietorship or partnership, equity is each owner's original
investment plus any earnings after withdrawals.
Total Liabilities and Net Worth
The sum of these two amounts must always
match that for total assets.
______________________________________________________________
MONTHLY CASH FLOW PROJECTION
Name of Business Owner Type of Business Prepared
by Date
Pre-start- 1 2
3 4 5 6 Total
up position
Columns 1-6
Year Month
Est.* Act.* Est.Act. Est.Act. Est.Act.
Est.Act. Est.Act. Est.Act. Est.Act.
1. Cash on hand (beginning
month)
2. Cash receipts
3. Total cash receipts
(2a+2b+2c=3)
4. Total cash available
(before cash out) (1+3)
5. Cash paid out
6. Total cash paid out (5a
through 5w)
7. Cash position (end of
month) (4 minus 6)
_________________________________________________________________
INSTRUCTIONS FOR MONTHLY CASH FLOW PROJECTION
_______________________________________________
_______________________________________________
Unexpected expenditures may be included
here as a safety
factor________________________________________
Equipment expenses during the month
should be included
here (non-capital equipment)__________________________
When equipment is rented or leased,
record payments here
Essential operating data (non-cash flow
information)--This is basic information necessary for proper planning
and for proper cash flow projection. Also with this data, the
cash flow can be evolved and shown in the above form.
THE BUSINESS PLAN - APPENDIX 3: INFORMATION
RESOURCES
U.S. Small Business Administration (SBA)
The SBA offers an extensive selection
of information on most business management topics, from how to
start a business to exporting your products.
This information is listed in "Resource
Directory for Small Business Management." For a free copy
contact your nearest SBA office.
SBA has offices throughout the country.
Consult the U.S.
Government section in your telephone
directory for the office
nearest you. SBA offers a number of
programs and services,
including training and educational programs,
counseling services,
financial programs and contract assistance.
Ask about
- Service Corps of Retired Executives
(SCORE), a national organization sponsored by SBA of over 13,000
volunteer business executives who provide free counseling, workshops
and seminars to prospective and existing small business people.
- Small Business Development Centers
(SBDCs), sponsored by the SBA in partnership with state and local
governments, the educational community and the private sector.
They provide assistance, counseling and training to prospective
and existing business people.
- Business Information Centers (BICs),
offering state-of-the-art technology, informational resources
and on-site counseling for start-up and expanding businesses to
create business, marketing and other plans, do research, and receive
expert training and assistance.
For more information about SBA business
development programs and services, call the SBA Small Business
Answer Desk at 1-800-U-ASK-SBA (827-5722).
Other U.S. Government Resources
Many publications on business management
and other related topics are available from the Government Printing
Office (GPO). GPO bookstores are located in 24 major cities and
listed in the Yellow Pages under the "bookstore" heading.
You can request a "Subject Bibliography" by writing
to Government Printing Office, Superintendent of Documents, Washington,
DC 20402-9328.
Many federal agencies offer publications
of interest to small businesses. There is a nominal fee for some,
but most are free. Below is a selected list of government agencies
that provide publications and other services targeted to small
businesses. To get their publications, contract the regional offices
listed in the telephone directory or write to the addresses below:
The CIC offers a consumer information
catalog of federal publications.
The USDA offers publications on selling
to the USDA. Publications and programs on entrepreneurship are
also available through county extension offices nationwide.
DOC's Business Assistance Center provides
listings of business opportunities available in the federal government.
This service also will refer businesses to different programs
and services in the DOC and other federal agencies.
Drug Free Workplace Helpline: 1-800-843-4971.
Provides information on Employee Assistance Programs.
National Institute for Drug Abuse Hotline:
1-800-662-4357. Provides information
on preventing substance abuse in the workplace.
The National Clearinghouse for Alcohol
and Drug Information:
1-800-729-6686 toll-free. Provides pamphlets
and resource materials on substance abuse.
The EPA offers more than 100 publications
designed to help small businesses understand how they can comply
with EPA regulations.
U.S. Food and Drug Administration (FDA)
FDA Center for Food Safety and Applied Nutrition
The FDA offers information on packaging
and labeling requirements for food and food-related products.
For More Information
A librarian can help you locate the
specific information you need
in reference books. Most libraries have
a variety of directories,
indexes and encyclopedias that cover
many business topics. They
also have other resources, such as
- Trade association information
In addition to books and magazines,
many libraries offer free workshops, lend skill-building tapes
and have catalogues and brochures describing continuing education
opportunities.
The SBDC is funded by the U.S. Small Business Administration
and Lord Fairfax Community College.
Copyright © 2003, Lord Fairfax Small Business Development Center. All Rights Reserved.
