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PART ONE: THE BUSINESS PLAN AND ITS ENVIRONMENT 1
Chapter 1: What Is a Business Plan? An Overview 3
Components and Structure 3
A Generic Outline 3
Some Important Ideas to Keep in Mind 4
Chapter 2: Why Do We Need a Business Plan? 7
The Value of Business Plans and Planning 7
The Broad Business Planning Process 8
Relating the Small Business Plan to the Broad Planning Process 11
Chapter 3: The Perfect (Successful) Business Plan and the Target Audience Principle 13
Focusing on the Plan as a Sales Tool 13
The Target Audience Principle 13
Target Audiences 14
New Ventures and Venture Capitalists 14
Lenders-Usually Banks 16
Corporate Business Planning 19
Other Important Issues 20
Chapter 4: In Pursuit of Money: More on Getting Financed 21
Debt 21
Equity 23
Hybrid Investments 24
Sources of Financing and How to Deal with Them 24
Banks 25
Venture Capital 29
Other Sources of Money 29
How Financial People Will Read Your Plan 30
PART TWO: HOW TO WRITE THE PERFECT BUSINESS PLAN 31
Chapter 5: The Executive Summary and Statements of Mission and Strategy 33
The Executive Summary 33
Statements of Mission and Strategy 34
The Mission 35
Strategy 38
Mission and Strategy in the Business Plan 43
Chapter 6: The Entrepreneur and the Management Team 44
The Importance of the People 44
How to Write the Management Section 46
Organization and Responsibilities 49
The Staffing Plan 51
Chapter 7: Marketing and Sales: The Revenue Forecast-The Basis for All Planning 54
The Importance of the Marketing Section to the Audience 54
How to Write the Marketing and Sales Section 56
Marketing Plan/Strategy 63
The Sales Plan 65
The Importance of Forecasting Product Mix 67
The Commission Plan 69
Accuracy and Detail-Too Much and Too Little 71
Selecting Your Location 75
Chapter 8: Operations: Production, Equipment, and Research 79
Requirements of Different Businesses 79
How to Write the Operations Section 81
Chapter 9: Special Considerations for a Service Business 89
Introduction 89
Pricing a Service 89
Other Factors to Consider 92
Service Contracts vs. Time and Materials 93
Chapter 10: Break-Even Analysis 95
Fixed and Variable Costs 95
Break-Even Diagrams 96
Calculating Break Even 97
Using Break-Even Analysis-A Retail Location 97
Writing Up the Break-Even Analysis in a Business Plan 98
Extending Break Even to Include Profit and Return on Investment 99
Chapter 11: Planning Legal Form and Ownership 100
Basic Legal Forms 100
Proprietorship and Corporate Forms-Basic Differences 101
Hybrid Forms: S-Type Corporations and LLCs-The Best of Both Worlds? 105
Partnerships 106
Special Forms 107
Issues Between Owners 108
Strategy for Minimizing the Effect of Disputes Among Owners 110
Buy-Sell Agreements 111
Chapter 12: What Planners Should Know About E-Commerce 114
What Is E-Commerce? 114
E-Commerce and Business Planning 114
Distinguishing Issues in E-Commerce 116
Business Setup 116
Attracting and Servicing Customers 117
Payment 118
Security in E-Commerce 120
Order Filling and Returns 121
Chapter 13: Contingency Plans: What to Do If Things Don't Go According to Plan 123
Recognizing a Miss 123
Contingency Planning 126
Action Plans 126
Prompt Implementation 127
The Presentation of Contingency Thinking 128
PART THREE: FINANCIAL PROJECTIONS 129
Chapter 14: A Short Course in Finance for Nonfinancial Planners 131
What Are Financial Statements? 131
The Income Statement 135
The Balance Sheet 138
Assets 139
Liabilities 144
Working Capital 147
Capital: Long-Term Debt and Equity 149
The Cash Flow Statement 151
A Business Cash Flow 154
Ratio Analysis 156
Common Size Statements 157
Ratios 158
Cost Accounting 160
Chapter 15: How to Make Financial Projections for Your Business 163
The Role of Financial Forecasts in the Business Plan 163
The Financial Planning Process 164
Example: A Small Manufacturing Start-Up 166
PART FOUR: APPENDICES 177
Appendix A: A Self-Test to See If You're Cut Out to Be in Small Business 179
Appendix B: The Pros and Cons of Buying an Existing Business 185
Appendix C: What About a Franchise? 189
Appendix D: The Small Business Administration (SBA) 194
Appendix E: Sample Business Plans 197
Glossary 273
References 283
Index 285
Library of Congress Subject Headings for this publication: New business enterprises Planning, New business enterprises Finance, Proposal writing in business