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Proper business
planning is essential for the success of any business endeavor. It
is of paramount importance in the development of a new manufacturing
facility.
An integral part of developing any new
business is the development of the business plan.
A business plan looks ahead to future business opportunities,
focuses on key elements of the business and allocates human, physical
and financial resources, and preplans for future business
problems and/or opportunities. This preplanning allows you to operate
the business on a consistent basis without resorting to crisis
management. A solid business plan helps you to optimize growth
and development or a priority basis.
A business plan is applicable for not only start-up businesses, but
for ongoing business operations. An ongoing business needs a
roadmap for their operations. They need to know if they have
sufficient cash to fund the ongoing operations. They need to
know about planning for expansion and equipment upgrades. And,
what about the competition? Are you ahead of them or always
following the pack? Park of your business plan is a sales and
marketing plan that allows you to stay ahead of competition and to
gain a larger market share.
Following is information regarding
the development of those two strategic planning documents.
Why
Are Business Plans Necessary?
To use as a
guide for developing the business
To use as a
guide to help achieve the goals you set
To demonstrate
commitment to the business endeavor
To develop ideas
and create and refine strategies
To outline
financial objectives and how those objectives will be met
To direct the
organization on its mission
To compare the
plan with actual performance
To use as a
financial tool to raise funds from lenders and/or investors
To maintain
consistency throughout the organization
Following is information on
two important business planning documents:
Business Plan
Financial Plan
BUSINESS PLANS:
The business plan is the
planning tool for management and potential investors.
The business plan defines the
mission of the company, it’s goals and objectives and the strategies it will
employ to achieve those goals and objectives.
Today smart businesses are
documenting their expertise and delineating their future plans in the form of a
comprehensive business plan that any bank, lender, venture capitalist or other
potential investor can review as the need may arise.The benefits derived from a well prepared business plan are enormous.
The business plan includes a
review of the proposed business venture, a review of the past and current
situation, a review of the competition, evaluation of the proposed endeavors
strategic plan for the next five years, market analysis, market strategy and
financial projections all prepared and assimilated into an easy to read, well
organized document.
One of the most important aspects of a business plan, especially for a start-up
businesses. Cash flow analysis and source and use of funds are extremely
important to a start-up business.
The Source and Use of Funds statement breaks down where capital is coming from.
This can be equity, bank loans, government loans, equity from investors, etc.
Another critical element of a Bobbitt Group plan are the face-to-face reviews
with the business owners, principals and management team. Bobbitt
thoroughly reviews the complete plan with major emphasis on cost and source and
use of funds. Unfortunately when many business people read a proforma operating
statement they often confuse cash flow with profits, and vice versa.
Profits do not guarantee you that you have cash for operations. Cash flow
is a major element in operations.
The suggested outline for the
business plan is as follows:
1.Executive Summary
The
Executive Summary emphasizes the main points of the business plan.
2.Company Description
Company ownership
Company history (for
startups the startup plan)
Product(This is a brief description not to be confused with the detailed Product
section which is included in a separate section.)
The business and its
industry.Description of the
nature and history of the business and some background on its industry.
Description and discussion
of the industry.
3.Product
Product and industry
description
Important product features
and comparison.
Description of the
competitive features of the products.
Why will people buy this
product instead of competition?
Will it be sold due to
better features, better price, better quality or better service or some
other factor.
Potential
Product literature
4.Manufacturing Analysis
Manufacturing facilities
Plant location - space
Capital equipment
Wage structure
Labor force
Technology
Bill of Materials
Availability of
materials (sourcing)
5.Market Analysis
Industry Analysis
Participants
Distribution patterns
Competitive forces and
buying patterns.
Main competition
Keys to success
Market forecast
6.Sales and Marketing Strategy
This
section will explain the entire concept of the company sales and marketing
strategy.It will include verbiage
describing the overall strategic plan.
Marketing strategy
Pricing strategy
Promotion
Customers - Distribution
network
Marketing programs
Sales Strategy
Sales forecasts
Sales programs
Service
7.Organization
Organizational structure
Management team
Outside professional
assistance
Personnel plan
Other management team
considerations
8.Financial
Financial plan overview
Preparation of Budget
assumptions
Pro Forma operating
statements
Break-even analysis
Profit and loss
9.Risk Evaluation
Identification of the
various elements of risk.
Mitigation of the elements of risk.
10.Conclusions
11. PLAN IMPLEMENTATION
We can develop you
a wonderful business plan — on paper. However, if that plan is
not properly implemented your chances for success are dramatically
reduced.
Too often we find businesses
preparing their
business plan and then putting the plan on the shelf to gather dust!
That type of operation is often headed for failure!
The Business Plan is only as good as
how well it is
implemented.
To help in this The
Bobbitt Group offers to coach, guide and direct our clients through
the implementation of the business plan through the overall
development of the business -- from factory development through
startup of manufacturing operations. We help you to assign
various tasks from the plan with budgets and completion dates;
follow-up and results tracking.
It is very
important for you must establish a system of reporting and
accountability. To simply assign a task is of little use without
having a system of reporting and accountability.
THE FINANCIAL PLAN:
An integral part of our
business plans is the FINANCIAL SECTION. This section includes FIVE FULL
YEARS of proforma operating statements prepared using our copyrighted
format. These precedent setting financial proformas include full
departmental budgets and are prepared using budget assumptions developed via
Wm. Bobbitt's industry experience.
All to often when reviewing
proforma operating statements prepared by others, we see numbers that are used
JUST TO MAKE THE PLAN FEASIBLE. Too often I see financial plans that are
based on nothing but "pie in the sky" estimates.
Our financial plans are based
upon assumptions that are prepared using industry standards and rules of thumb
that I have developed.
The Budget Assumptions are
included in all business plans as they enable the reader of the plan to
determine exactly how numbers are developed.
The business plan
financial section includes
the following:
Budget assumptions
Source and Use of Funds
Statement & Analysis
Year One Start Up
Proforma
Years two - five
operating proformas
Annual Cash Flow Analysis
Breakeven Analysis
Debt Repayment - Exit
Strategy
Information Request Form
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that apply, and then let us know how to contact you.
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Title
Company
Address
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For More Information Contact:
William S. Bobbitt
The
Bobbitt Group
Tel: 480-982-6173
Email: WBobbitt@aol.com
Internet: www.thebobbittgroup.com
