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 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

The business plan is the major 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 you chance for success is dramatically reduced.

Too often we find businesses doing a business plan, and using that plan to help obtain their needed finances, and then put the plan on the shelf to gather dust!  That type of operation is often headed for failure!

The plan is only as good as it is implemented.  As such we offer to coach, guide and direct our clients through the implementation of the business plan.  We help you to assign various tasks from the plan with budgets and completion dates; follow-up and results tracking.

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.

An integral part of our business plans are pro-forma operating statements prepared using our copyrighted format.  These precedent setting financial pro-formas include full departmental budgets and are prepared using budget assumptions developed via Bobbitt's industry experience.

All to often when reviewing pro-forma 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 includes the following:

• Budget assumptions

• Source and Use of Funds Analysis

• Year One Start Up Pro-forma

• Years two - five operating pro-formas

• Annual Cash Flow Analysis

• Breakeven Analysis

• Debt Repayment - Exit Strategy

For More Information Contact:

William S. Bobbitt

The Bobbitt Group

Tel: 480-982-6173

Email:  WBobbitt@aol.com

Internet: www.thebobbittgroup.com