Business plan

[Torith]

I went to a site that help me get the outline set up for my business plan. It didnt tell me what to say, but help me in which order I should put stuff in... How does this look?

Executive Summary
This section is best written last. It is a recap and summary of all the other sections. The executive summary is the most important section of the plan because it may be the only part the investor reads. It should be no longer than 3 pages and be written in a clear and convincing style. Refer to the individual sections for reference and use this format as a guide.

Company Description
Name, type of business, location, legal status (business form) Startup or continuing, date founded, has the menu been developed & tested?

Industy Analysis
General information on the state of the restaurant industry--present situations, future trends.

Mission Statement
Verbatim from the "Company Description" section.

Products & Services
List them with a brief description.

Target Market
List the markets, summarize analysis & research.

Marketing & Sales Strategy
List marketing vehicles and summarize overall strategy.

Competition
List, profile & nature of competitors. How the market is divided.
Competitive advantages, distinctions.

Management
Brief synopsis of management team -- history & capability

Operations
Locations, suppliers, production facilities

Financials
Brief summary of expected sales, revenues, profit, cash flow.

Long-Term Goals
Expansion plans, financial goals, milestones.

Sources & Uses of Funds & Exit Strategy
How much money is needed. How many investors are needed. How the funds will be used. How the investors will get their money back.

Company Description
Mission Statement

Nature & philosophy of the business
Quality, price, service, customer relationships, management style, employee relations
Corporate style, image
Social & community image
Growth & profitability goals
Company Name(s)

D.b.a.?
Brand or trade names associated with products?
Any subsidiary companies? (e.g. a catering division)
Legal Form of the Business

Corporation? "C" or "S"? In what state(s) is it incorporated?
Who owns the company? How many shares outstanding? Other major shareholders.
Partnership? Limited partners? Share amount?
Management

President, officers, key management and advisory personnel.
Location

Main place of business, offices or headquarters, branch locations.
Stage of development

When was the company founded?
Any milestones reached so far?
Phase of development -- idea stage (no product finalized) startup (early stages of operations), expansion, established, reworking.
Where are you at within your phase? Has the product been tested, lease signed, suppliers arranged, staff hired, etc.?
Financial and Personnel Status

Stage of previous and/or present funding.
Present financial state and obligations. Past performance if applicable.
Size of work force or anticipated increase.
Patents & Licenses

Trademarks, patents, licenses, copyrights, etc. secured or pending?


Industry Analysis
General Information

Economic sector -- service, manufacturing, retail, or distribution
The restaurant industry
Size and Growth Rate of the Industry

Rate of expansion. How does it compare to GNP growth?
How your specific sector might be different (fast food may be growing while full service is decling)
Predicted trends and the strategic opportunities they offer (low-fat cooking is becoming more popular)
Sensitivity to Economic Cycles & Seasonality

How will national economic trends (recession, inflation) impact your business?
How will local industry ( a large company you depend on for business) affect your situation?
How will seasonal variations in business affect your cashflow?
Regulation

How can local and national regulation affect your business? ( inspection standards, smoking regulations, wage and tax changes)
Financial Norms & Patterns

Terms with vendors, customers, the capital market
Standard markup of products
Inventory par levels
Profit expectations, etc.
(see also Income statement Showing Industry Averages in the Financial section)

Products & Related Services
Description of the Products

General concepts
Specific menu items
Production methods (costs, labor)
How will the products (menu) change?
In what stage of development are the products?
How do the products compare to competitors?
Is there any special value or aspect about the products (patent, etc.)
Product liability considerations?
Description of the Services

What are the special services offered? (take-out, delivery, meals-for-a-week)
How do they help the business and create competitive advantage?
Future Plans & Developments

How will the products and services change to meet changing market demands?
Are there any products or services planned for future implementation? When?

The Target Market
Who exactly will be buying your products?

Demographics

Age, income range, sex, occupations, marital status, family?, ethnic groups, education, sophistication, home or auto owner, etc.
Geographics

Area served -- neighborhood, city, region
Density -- urban, suburban, rural
Nature of the location -- downtown, business, shopping, residential
Transportaion -- how will they get to the store?
Lifestyle

Family status
Hobbies, sports, entertainment interests
Television, radio, magazines, and other media preferences
Political and other organizational affiliation
Pyschographics

Status-seeking or trend-setting?
Socially or environmentally conscious?
Free-spending or conservative?
Practical or fun-seeking?
Buying Factors & Sensitivity

Price, quality, brand name, service
Special product features, advertising, packaging
Location, store design, ambiance, sanitation
Nature or quantity of other customers
Market Size & Trends

How big is the target market?
How fast is it growing?
Where is the market heading?
What economic and social factors will be influencing the market?
How will the market's needs be changing and why?
Strategic Opportunities


In what ways do you plan to use your understanding of the market to your advantage?

Marketing Plan & Sales Strategy
Company Image/Message

The message that you convey through all your marketing vehicles should be clear and consistent and also reflect your general corporate style.
Image can be conveyed directly (description of products, pricing, services, etc.), or indirectly (suggestive design elements, logos, uniforms).
A good campaign will use both in a complimentary and appropriate way.
Think about what the customer wants;
How does the product meet their basic needs?
How much does price matter?
How about ease and convenience of purchase?
How does the product make the customer feel -- about themselves and the company?
Marketing Vehicles What are the ways you will use to reach potential customers?

Brochures, flyers, leaflets
Print media -- newspapers, magazines, specialty publications, Yellow Pages
Broadcast media/Electronic -- television, radio, computer (Internet), movie theaters
Specialties -- packaging, T-shirts, etc.
Hotel -- In-house publications, video guides, concierge relations, services
Direct mail, coupons, mailing list, Val-pak
Promotions (2 for 1), dining clubs, credit card discount programs
Signs -- on store, billboards, trains, cabs, blimps
Trade shows, networking
Point of sale devices, promotions, and employee practices
Sampling
Public relations -- as a communication service media solicitor and event planner
Charity events
Marketing Tactics & Strategy

What mix of marketing vehicles will you use and how will they be coordinated?
Will the campaign be divided into different phases? (pre-opening, opening, etc.)
What creative or unique techniques will you be using?
What are your marketing goals? Methods of monitoring?
Marketing Budget

What is the budget for all phases of the marketing effort?
Sales

Training of employees involved in sales -- waitpersons or counterpersons
Catering or special function salesperson

The Competition
Competitors

Focus only on the competitors who are aiming at the same target market
Categorize the competition (chain restaurants, in-house facility, lunch wagon)
List the competitors in each category.
Competitive Advantages & Comparative Evaluation

For both you and your competitors;

[Torith]

Objective

Price (and hidden costs), credit policies
Location
Quality
Special product features
Image/style/perceived value
Service (and special service features), customer relations, social image
Internal

Financial strength, volume purchasing power
Marketing and promotional program and budget
Operational advantages, strategic partnerships
Company morale -- personnel motivation, commitment, productivity
Market Share and Distribution

How is the market distributed?
Does any one or two companies dominate the market?
How will you obtain sufficient market share?
Future Competition

How and why will new competitors enter the market?
How long will that take?
What factors would prevent new competition from market entry? (secret recipes)
Strategic Opportunities

How can you use your competitive advantages to exploit opportunities in the marketplace?

Operations
Here is where you explain the day-to-day functions of your business. Focus on the aspects of operations that are more important to the overall success, provide a competitive edge, or are innovative.

Facilities

Location -- addresses, parking, floor plans, etc.
Lease -- terms, length, important details
Improvements -- plans, funding, budget
Key Factors -- expansion potential, proximity to market, unique aspects
Production

Process -- how are the products created? stages, flow, efficiency
Labor -- kinds and numbers of workers, costs, part-time?
Productivity -- how do you increase productivity without reducing quality?
Suppliers - who are the major vendors?
Capacity -- how much work/volume can the present facilities handle?
Quality Control -- inspections, testing, training, incentive rewards
Cost Controls

Inventory -- forms, systems (computer), practices
Food & beverage -- check systems, management practices, training, periodic inventory
General -- management, inventory
Administrative & Financial Controls

Bookkeeping systems & policies (payments, billing)
Accounting systems (report intervals)
Sales systems (computer)
Customer Service

Service attitudes & policies
Complaint process
Feedback mechanisms
Other Operational Issues

Safety & health (staff & customers)
Insurance & legal
Licenses & permits
Environmental concerns & practices.


Management & Organization
If you are using this plan to help raise money, be aware that many investors will give this section high priority and read it very carefully. It is a common belief that the people (experience, skills, personalities) are more important than the product in determining success.

Key Employees & Principals

Who are the most important people in the business? Why?
Founders, president, chef, dining room manager, general manager
Assess them as to their experience, successes, education, strengths, weaknesses.
Compensation & Incentives

How will you motivate and retain key personnel?
Salary, bonuses, commissions, profit sharing, equity, stock options
Board of Directors & Advisory Committee

For corporations, a Board of Directors is a legal requirement. An advisory committee is an less formal way of avoiding the cost of a formal Board.
Small restaurants don't really need either and instead get advice and information as they need it from various sources:
Consultants, Professionals, and other Specialists

Explain how you will use any of the following:
Management, financial, or marketing consultants
Attorneys, Accountants
Industry specialists
Architects & design consultants
Key Management to be Added

If there is a key position that is not yet filled explain your plans to do so.
Describe the job and the profile, compensation, and qualifications of the prospects.
Management Structure & Style

Outline of the lines of authority. Include a flow chart in the appendix if you wish.
Describe the management style. Management style should reflect and support the general corporate style (from the mission statement)
Include any innovative or unusual aspects of management style that would impact growth or give a competitive advantage.


Financial Data & Projections
All the decisions you have made in the previous sections have financial outcomes. These numbers must be gathered, sorted and reported so that you can assess your present position, current progress and make new decisions about the future. For startup ventures, a good set of projected financial statements can be a great tool for making many important choices.

It is perhaps the best ( if not the most realistic) way to "see into the future."

Guidelines:

Consult your accountant and your attorney.
Be conservative and honest
Use standard industry forms and formats
Forms to include:

Sources of Capital & Debt Service
Use of Funding & Start-up Costs
Menu and Average Check Calculation (optional)
Sales Calculation
Payroll Calculation
Detail of Expenses Worksheets
Income Statement (1-5 years)
Monthly or quarterly Cash Flow Statement (1-3 years)
Amortization and Depreciation Schedule
Balance Sheet
Assumption Sheet

If you have not clearly stated basic assumptions in the above sheets, make a separate page with information such as sales volume, payroll rates, food costs, financing costs, etc.
Break-Even Analysis

How much income must be earned in order to pay fixed expenses

Long-Term Development & Exit Plan
What is your ultimate destination? And what will your business look like at different intervals along the way? This section should tell investors how much money they can make and when and how they can get it.

Goals -- what general vision do have for the company and yourself?

Lifestyle provider -- good, stable, reliable income
Innovator -- creative, new, different products & services
Quality -- reputation for excellence
Expanding and growth -- market domination, large company, big bucks
Niche leader -- do one thing, but do it well
Specifically, where do you want to be in the market in terms of sales, units, employees, etc., in the next year, 3 years, 5 years, etc.
Strategies -- how will you reach your goals?

Market penetration
Promotion -- increase business by marketing of current products & services
Expansion -- add new products or and new units.
Other?
Milestones -- find a way to mark progress as you move toward your goals

List the goal and the date you will reach it. Consider short-term goals as well:

Financing secured, lease singed, manager hired
Restaurant opened
Projected sales level reached
Second unit planned, second unit opened
Risk Evaluation -- outlining risks shows the investor that you are not naively optimistic in your planning.

Market acceptance, changing demographics
New competition, new customer tastes
Management performance, payroll costs
Regulatory, licensing issues
Exit Plan -- how and when will it end?

Sale -- to individuals
Acquisition -- by another company
Buy-out -- by stockholders or employees
Go public -- stock traded publicly
Franchise -- sell concept, receive royalties
Hand down -- to family?
Close


Appendix
The appendix is the place for supporting documents and information. The items in the appendix should only confirm, reinforce or elaborate on the major ideas and facts already stated in the main plan. Many people don't even read the appendix so include all essential items in the plan itself. If the appendix seems too long, put it in a separate binder.

Appendix Items

Menus
Resumes and financial statements of key people
Lease and other location information (pictures)
Marketing information (logo, dummy ads, packaging)
Supporting media information (newspaper articles, etc.)
Budgets & schedules & analysis (equipment lists, project charts, flow chart)
Design or construction information (floor plan, renderings)
Contracts, trademarks
Bank loans, financial statements
Market research studies (bibliography)

[interactive]

As an outline, it looks like you're heading in the right direction.

I took technical writing last semester and we were tasked with doing a colaborative proposal of this sort (same concept in reality, you're proposing to open a business). Takes a lot of work, but trust me you'll feel like you really accomplished something when you're doing, more so than any other sort of a document.

[DeadWatch]

Wow, that is a lot of questions there!

Well, you've definitely found the right starting point.

Cheers!

Jacob

[beley]

Get some software to help you organize and get this done.

http://www.paloalto.com/ps/bp/

I have it and it's an excellent program. If you're in a slump and can't think of anything for a particular section or want to look at examples - there are thousands of sample business plans and the software is very easy to use. I've written a busienss plan using this software for each of my businesses and update them every quarter or so.

[silverfreak]

I'd say you definately have enough content to it, good luck! :)

[TrueTune]

Palo Alto Software is great! Be careful not to give away the store in your business plan if seeking investors.

Rule of thumb, "KISS" (Keep it Stupid Simple)! 10 pages or less. Complete the rest of the plan so you will have the answers, you need the plan, but keep most of it private.

[datums]

Keep it Stupid Simple ?? :) not to stupid

[TrueTune]

Should be Simple Stupid, but could be misinterpreted as directed to the original writer.

[LiftNw8]

I agree with some of the others, Palo Alto's software is great, I have used it to write a few business plans, and it makes it much easier to write them, by keeping all your formatting set. As for giving to much away, also agree, you don't want to much known by the people you might be trying to get as investors, keep some of it to yourself. But do keep a copy of it that is the full plan for your reference.

[Adam]

You should do a small business summary, which should typically be 3 pages long which is the one you should distribute to interested investors and for yourself, as aforementioned, you should keep it simple, short and sweet. About 10 pages is right.

I've never heard of KISS before, but hey it makes sense and is easy to remember! Thanks for that TrueTune!

[rockergrrl]

UGH!
I have to get a business plan together soon!

I have a couple Angel Investors (that invest in tech businesses here in town) that are interest in giving me $$. But they want a formal business plan in front of them before they give me a final decision.

I hate the thought of putting together a business plan, I don't have enough quiet time to do it myself. Anyone want to BS a business plan together for me for $20 ;) j/k

[Adam]

Yeah, they are really annoyingto do - the reason also why mine is incomplete :o

They're not even majorly time consuming, it's just the amount of concentration you have to put on it lol!

Good luck with your AI's, Tonya.

[My Little]

Palo Alto have made a nice program, especially with their last release of Business Plan, and it certainly cuts down the time in are area of formatting of the plan design. It doesnt however do all the other work for you, if you intend to make a plan based off realistic business operations in today's climate.

Reason i say that is due to the data required being current and while there are examples, they are a base to work from but only just that.

Torith, you should create a basic plan which is the summary of the main plan that you would use to disclose what your business plan incorporates. This still under many circumstances will require a NDA ( Non-disclosure agreement) to be signed, especially essential for areas like Inventors who seek this contractual protection especially.

What you need to do is apply basic information within each section, outlining the base requirements only and not emphasise too much in areas especially marketing.

The marketing component of a plan is essentially a summary outline of the proposed strategy used in the business, listing methods and costs with little real depth as to the strategy.

You will of course need to also create a merketing plan, being an in-depth version of the business plan marketing component which will define the strategies utilised for your marketing campaign for the year or whatever specific time period the campaign will run for.

Rule of thumb is to keep it simple (KISS) which is an old saying alright but a very accurate one.