What did he identify as key planning issues?
- Purpose of plan
- Market need (product and/or service)
- Market (buyers and sellers of need)
- The offering unfair advantage (must have some to win)
- Marketing strategy (how to make the target market buy without having to sell)
- Financial plan (taxation, need & source of funds, income/cash flow/balance sheet forecast, financial ratios)
What questions must the Plan answer?
- What are the market needs and the market?
- How are those needs presently satisfied?
- What are the strengths and weaknesses of present suppliers?
- What does the company need to offer to become a preferred supplier?
- How is the company going to structure, staff and manage the business?
- What are the financial needs? When are they needed?
- How are those needs going to be financed?
- Is the business going to make money? How much? When?
- Is the company sufficiently capitalized until breakeven point is reached?
- Does the forecast show consistent liquidity and solvency?
- How will the company fill temporary cash flow gaps?
- What is the relative financial health of the company?
What is the most critical and difficult of business planning?
What are sources of market research information?
- Client (if not a good source, then he/she shouldn't be in business)
- Industry associations
- Trade journals and trade shows
- Fee-based services
- Chambers of Commerce
- Bureau of Labor Statistics
What are the conditions for commercial loans?
- Business plan with substantiated financial forecast
- Capital - equity should be 20-25% of the total capital
- Collateral - 100% of the loan request
- Character - of the borrower and guarantors
- Capacity - of the business to be profitable and cash-flow positive
- Credit - of applicant adnd guarantors must be good
- Conditions - state of the economy, industry, etc.
Name the nine pieces of specific information needed to make a business plan.
- Market research
- Legal business structure
- Financing the business
- Business financial model
- Financial health & benchmarking
- Business plan guides
- Licenses and registrations
- Protecting intellectual property