business plan but should emphasize the key issues presented. A critical point that must be communicated in the Executive Summary is your company's distinctive competence–the factors that will make your business successful in a competitive market.

A. The Purpose of the Plan

1. Attract investors

2. Document an operational plan for controlling the business

B. Market Analysis

1. The characteristics of your target market (demographic, geographic, etc.)

2. The products or services you will offer to satisfy those needs

C. The Company

1. The needs your company will satisfy

2. The products or services you will offer to satisfy those needs

D. Marketing and Sales Activities

1. Marketing strategy

2. Sales strategy

3. Keys to success in your competitive environment

E. Product or Service Research and Development

1. Major milestones

2. Ongoing efforts

F. Organization and Personnel

1. Key managers and owners

2. Key operations employees

G. Financial Data

1. Funds required and their use

2. Historical financial summary

Note–In total, your Executive Summary should be less than three pages in length and

provide the reader with a succinct overview of your entire business plan. The Executive Summary should be followed by a brief table of contents designed to assist readers in locating specific sections in the plan. Detailed descriptions of the plans contents should be avoided in the table of contents.

The Market Analysis section should reflect your knowledge of your industry, and present highlights and analysis of your market research. Detailed market research studies, however, should be presented appendices to your plan.

A. Industry Description and Outlook

a. Historically

b. Currently

c. In five years

d. In ten years

a. HistoricaIly

b. Currently

c. In the future

a. Businesses

b. Governments

c. Consumers

B. Target Markets

Distinguishing characteristics of your primary target markets and market segments. Narrow your target markets to a manageable size. Efforts to penetrate target markets that are too broad are often ineffective.

1. Target Market Definition

a. Critical needs

b. Extent to which those needs are currently being met

c. Demographics

d. Geographic location

e. Purchasing decision-makers and influencers

f Seasonal/cyclical trends

a. Number of prospective customers

b. Annual purchases of products or services meeting the same or similar needs as your products

c. Geographic area

d. Anticipated market growth

a. Market share

b. Number of customers

c. Geographic coverage

d. Rationale for market penetration estimates

a. Price levels

b. Gross margin levels

c. Discount structure (volume, prompt payment, etc.)

a. Directories

b. Trade association publications

c. Government documents

a. Publications

b. Radio/television broadcasts

c. Sources of influence/advice

a. Needs identification

b. Research for solutions to needs

c. Solution evaluation process

a. Needs

b. Demographics

c. Significant future trends

C. Market Test Results

1. Potential customers contacted

2. Information/demonstrations given to potential customers

3. Reaction of potential customers

4. Importance of satisfaction of targeted needs

5. Test groups willingness to purchase products/services at various price levels

D. Lead Times (time between customer order placement and service delivery)

1 . initial orders

2. Reorders

3. Volume purchases

E. Competition

a. Existing

b. Market share

d. Direct

e. Indirect

a. Ability to satisfy customer needs

b. Market penetration

c. Track record and reputation

d Staying power financial resources)

e. Key personnel

a. Ability to satisfy customer needs

b. Market penetration

c. Track record and reputation

d. Staying power (financial resources)

e. Key personnel

a. Cost (investment)

b. Time

c. Technology

d. Key personnel

e. Customer inertia, brand loyalty, existing relationships, etc.)

f. Existing patents and trademarks

F. Regulatory Restrictions

a. Methods for meeting the requirements

b. Timing involved

c. Cost

The Company Description section must provide an overview of how all of the elements of your company fit together without going into detail, since most of the subjects will be covered in depth elsewhere in the plan.

A. Nature of Your Business

1. Marketplace needs to be satisfied

2. Methods of need satisfaction (products and services)

3. Individuals/organizations with the needs

B. Your Distinctive Competencies (primary factors that will lead to your success)

1. Superior customer need satisfaction

2. Production/service delivery efficiencies

3. Personnel

4. Geographic location

Both general and specific information must be included in this part of your plan. Your objective here is to describe the activities that will allow you to meet the sales and margin levels indicated in your prospective financial statements.

A. Overall Marketing Strategy

a. Internal

b. Acquisition

c. Franchise

d. Horizontal (providing similar products to different users)

e. Vertical (providing the products at different levels of the distribution chain)

a. Original equipment manufacturers

b. Internal sales force

c. Distributors

d. Retailers

a. Promotion

b. Advertising

c. Public relations

d. Personal selling

e. Printed materials (catalogues, brochures, etc.)

B. Sales Strategies

a. Internal vs. independent representatives (advantages and disadvantages of your strategy)

b. Size

c. Recruitment and training

d. Compensation

a. Identifying prospects

b. Prioritizing prospects

c. Number of sales calls made per period

d. Average number of sales calls per sale

e. Average dollar size per sale

f. Average dollar size per reorder

Special attention should be paid to the users of your business plan as you develop this section. Too much detail will have a negative impact on most external users of the plan. Avoid turning this section of your business plan into a policies and procedures manual for your employees.

A. Detailed Product/Service Description (from the user's perspective)

1. Specific benefits of product/service

2. Ability to meet needs

3. Competitive advantages

4. Present stage (idea, prototype, small production runs, etc.)

B. Product Life Cycle

1. Description of the product/service's current position within its life cycle

C. Copyrights, Patents, and Trade Secrets

D. Research and Development Activities

a. New products or services

b. New generations of existing products or services

c. Complementary products or services

d. Replacement products or services

a. Direct competitors

b. Indirect competitors

c. Suppliers

d: Customers

Here again, too much detail can detract from the rest of your plan. Be certain that the level of detail included fits the specific needs of the plan's users.

A. Production and Service Delivery Procedures

1. Internal

2. External (subcontractors)

B. Production and Service Delivery Capability

1. Internal

2. External (subcontractors)

3. Anticipated increases in capacity

a. Investment

b. New cost factors (direct and indirect)

c. Timing

C. Operating Competitive Advantages

1. Techniques

2. Experience

3. Economies of scale

4. Lower direct costs

D. Suppliers

1. Identification of the suppliers of critical elements of production

a. Primary

b. Secondary

2. Lead-time requirements

3. Evaluation of the risks of critical element shortages

Your management team’s talents and skills are some of the few truly unique aspects of your company. If you are going to use your plan to attract investors, this section must emphasize your management's relents and skills, and indicate why they are a part of your company's distinctive competence that cannot easily be replicated by your competition. Remember that individuals invest in people, not ideas. Do not use this section of the plan to negotiate future ownership of the company with potential investors. Simply explain the current ownership.

A. Management Staff Structure

1. Management staff organization chart

2. Narrative description of the chart

B. Key Managers (resumes should be presented in an appendix to the business plan)

1. Name

2. Position

3. Brief position description, including primary duties

4. Primary responsibilities and authority

C. Planned Additions to the Current Management Team

1. Position

2. Primary responsibilities and authority

3. Requisite skills and experience

4. Recruitment process

5. Timing of employment

6. Anticipated contribution to the company's success

7. Compensation basis and levels (be sure they are in dine with the market)

D. Legal Structure of the Business

1. Corporation

a. C corporation

b. S corporation

2. Partnership

a. General

b. Limited

3. Proprietorship

E. Owners

1. Names

2. Percentage ownership

3. Extent of involvement with the company

4. Form of ownership

a. Common stock

b. Preferred stock

c. General partner

d. Limited partner

5. Outstanding equity equivalents

a. Options

b. Warrants

c. Convertible debt

6. Common stock

a. Authorized

b. Issued

F. Board of Directors

1. Names

2. Position on the board

3. Extent of involvement with the company

4. Background

5. Contribution to the company's success

a. Historically

b. In the future

Any new or additional funding reflected in your prospective financial statements should be discussed here. Alternative funding scenarios can be presented if appropriate, and corresponding prospective financial statements are presented in subsequent sections of your plan.

A. Current Funding Requirements

1. Amount

2. Timing

3. Type

a. Equity

b. Debt

c. Mezzanine

4. Terms

B. Funding Requirements over the Next Five Years

1. Amount

2. Timing

3. Type

a. Equity

b. Debt

c. Mezzanine

4. Terms

C. Use of Funds

1. Capital expenditures

2. Working capital

3. Debt retirement

4. Acquisitions

D. Long-Range Financial Strategies (liquidating investors' positions)

1. Going public

2. Leveraged buyout

3. Acquisition by another company

4. Debt service levels and timing

5. Liquidation of the venture

The Financial Data section contains the financial representation of all the information presented in the other sections. Various prospective scenarios can be included, if appropriate.

A. Historical Financial Data (past three to five years, if applicable)

a. Income

b. Balance sheet

c. Cash flows

a. Audit

b. Review

c. Compilation

B. Prospective Financial Data (next five years)

a. Income

b. Balance sheet

c. Cash flows

d. Capital expenditure budget

a. Income

b. Balance sheet

c. Cash flows

d. Capital expenditure budget

a. Forecast (management’s best estimate)

b. Projection ("what-if" scenarios)

a. Assembly

b. Agreed-upon procedures

c. Review

d. Examination

C. Analysis

a. Ratio analysis

b. Trend analysis with graphic presentation

a. Ratio analysis

b. Trend analysis with graphic presentation

Appendices or Exhibits Any additional detailed or confidential information that could be useful to the readers of the business plan but is not appropriate for distribution to everyone receiving the body of the plan can be presented here. Accordingly, appendices and exhibits should be bound separately from the other sections of the plan and provided on an as-needed basis to readers.

1. Magazine articles

2. References to books

1. Leases

2. Sales contracts

3. Purchase contracts

4. Partnership/ownership agreements

5. Stock option agreements

6. Employment/compensation agreements

7. Noncompete agreements

S. Insurance

a. Product liability

b. Officers' and directors' liability

c. General liability