The Business Plan Continues Below
There are eight key areas to a business plan:
- Summary of Business Plan
- An introduction to you, your proposed business, product or service and a financial overview
- Management
- Detail of your (and partners etc.) management and/or business experience
- Product / Service
- Detail the main product/s and/or service’s
- Marketing
- Past, present and future of sales capability, competitors and customer profile
- Sales
- Your product/service unique selling points and prices, who will sell, advertising avenues
- Operational
- Business location, equipment in-situ, proposed equipment
- Short Term Trading
- Short-term objective, contingency plans
- Financial Documents
- Profit and Loss Account, Balance Sheet, Cash Flow Forecast
Content
You should approach the completion of your business plan with confidence and a positive slant within the script (after all, you are not going to use all the bad things you have done in your life and career in your new venture, are you?). If there are any area’s that a lender needs expanding on they can ask you to explain when you meet. The purpose of the plan is to show the lender;
- that you have covered all aspects of the venture,
- that you have a suitable history to undertake the venture
- and that you have a good chance of success.
Should you attach a CV? If you are requested to do so, then you must, but keep any CV down to 2 – 3 pages and concentrate on the CV complimenting the business plan. If it is your choice, only provide a CV if it has an obvious benefit to your business plan. Remember, a CV is about what ‘you’ can do, it is not about ‘you’ – whether you collect stamps or that your children are called John and Jane will have no ‘positive’ effect on the lender. However, in the example business plan it states that John is married with two kids: this is included to show commitment, reliability and not least responsibility. As Jane is a single female there is no real positive or negative aspect.
Size of Business Plan
The size of a business plan depends on the type and size of business, and of course the amount of funding you require. A £5,000 loan to open a shoe repair shop would suffice with a seven page business plan and basic financial documents. A loan of £35,000 to open a hi-fi shop would need extensive notes, and detailed financials that may need the use of an accountant to achieve 100% balanced projected accounts.
The following is a business plan for a fictitious company Acme Training Services& Computer Sales, with fictitious business owners, who sell computers and provide training services. The figures, specifications and scenario’s used in the plan are not intended to be accurate.
BUSINESS PLAN
for
Acme Training Services & Computer Sales
June 2003
For Barwest Bank plc
INDEX
Page 1 Summary of Business Plan
a) Introduction to Acme Business Services & Co
b) Product: Computer Sales
c) Product: Training Services
d) Why the Business will Succeed
e) Financial Summary
a) Proprietor: Employment Record
b) Junior Partners: Brief Summary
c) How and Why the Business Started
a) Computers Sales
b) Printer Sales
c) Training Sales
The market Size
b) Future Growth
c) Market Sector
d) Expected Client Profile
d) Competitors
a) Advertising
b) Promotion
c) Who will Sell
d) The Unique Selling Points
e) Setting the Price
a) Location
b) Equipment and Costs To-date
c) Equipment Required
d) Staff
a) Objective Short Medium-term
b) What if ? – contingency plans
End
| Page 1 |
| Introduction to Acme Training Services & Computer Sales
Acme Training Services & Computer Sales has been established for two months, and trade on a regional basis. There are currently two partners: John Smith (28) and Jane Jones (25), who have extensive experience of computers and training.
Product: Computer Sales
John Smith has been building computers for five years for the well known firm BuildComputer.com and he has access to favourably priced computer parts. The computers are aimed at the corporate market, with service contracts available.
Product: Training Services
Jane Jones has been involved in computer training for for 5 years, the last two years as an independent consultant. Jane specializes in cutting edge technology. The planned courses run for 2 – 3 days, with quarterly 1-day progress and update courses to keep those under training up to date with the latest technology.
Why the Business will Succeed
Jane and John compliment each other: John worked for his father for four years as an office manager in a small manufacturing company, as such he has strong managerial skills to compliment Jane’s ability to easily digest new technology and her undoubted skills in technology training. Further, both parties bring existing business and network contacts. Both parties believe that they could increase their own business areas by 200% within 6 – 12 months if they could delegate some less skilful areas within their current work schedules..
Financial Summary
As you will see from the enclosed financials, the mark-up is 40% with an expected profit of £90,00 in the first year. They have £20,000 capital to invest in the company and seek further funds of £40,000 from a lender – secured on Johns property. An overdraft facility of £15,000 is also required to finance larger than expected growth if cash flow is limited due to increased costs.
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| Page 2 |
| Proprietor: Employment Record John Smith – CV attached
Aged 28, John with City & Guilds Computer Studies (1994), has always had responsible positions in his career to-date. Working for his fathers manufacturing company as office manager for five years up to 1995: where his interest in computers began. For the past three years John worked for WeBuildComp.com as Computer Services Manager and has gained much experience of ‘blue chip’ requirements. John has been married for 4 years with two young children.
Jane Jones – CV attached
Aged 25, Jane with three A Levels in English, History and Art, has always sought positions that allow her to use her skills as a communicator and organiser. Jane worked for the leading firm WinMac Training Systems for three years before branching out as a successful independent training consultant for the past two years.
Other: Brief Summary
John Smith’s father, Richard Smith, will be assisting with the initial setup of the manufacturing outlet. He is retired after running his own successful manufacturing business for 40 years. And of course, he will be available as an ongoing source of help and advice.
Two other suitable individuals have been sounded out for management positions and are keen to be involved with this venture.
How and Why the Business Started
Jane and John worked for the same client about a year ago and have used each others services on an informal basis since then. They believe that actively sourcing business for each other as a combined service will give them ‘first sight’ of opportunities.
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| Page 3 |
| Computer Sales
Three standards of computers will be built:
RS01 350 MHz 32MB 6.4GB 15″ Screen
RS02 450 MHz 64MB 6.4GB 15″ Screen
RS03 550 MHz 128MB 12.6GB 17″ Screen
Each machine can have a number of specified add-on’s: CD ROM, DVD, Modem The machine will built in their own manufacturing unit, with service for the first year on the client’s site.
Servers will be purchased as required to the specifications of the client.
Printer Sales
A number of leading laser and ink jet printers will be available, with the anticipated service contracts as a major source of income.
Training Sales
Four levels of training will be available:
Trainee up to 8 persons with no, or little, computer experience
Basic up to 8 persons with basic computer skills
Intermediate up to 8 persons who have a good working knowledge of computer systems
Advanced up to 4 persons who understand technical computer systems
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| Page 4 |
| The Market Size
Currently, corporate computer sales are rising at 15% per quarter. It is expected to continue at that rate for another two years. There are few business’s that will avoid using a computer in those two years. The ability to configure a network of computers will be an important requirement.
Future Growth
The computer is still not integrated within 75% of UK business’s. The computer will not be superseded within the next five years, and even then it is hard to see a dramatic change in hardware that will not be backward compatible.
Market Sector
Based in Manchester the need for computer hardware and training is always available. SME Office space is increasing by 10% per annum. There are currently 95,000 SME’s in Manchester.
Expected Client Profile
- Small Medium Enterprise (SME) Computer Sales
- Medium – Large Companies for Training Services
- Commerce and Industry
- Turnover £2m +
- Initially: Manchester and Districts
- Prefer client to be computer literate
Competitors COMPUTERS
Six companies have been identified as true competitors i.e. computer and peripheral sales and service direct to corporate clients on-site. The three main competitors are:
ABC Computers
Established 6 years, turnover £0 (Not Known), 6 staff, no growth in past two years
Bell & Son PC’s
Established 4 years, turnover £2m, 10 staff, specialist computer systems, steady growth
Corporate Comps (National Company)
Established 2 years, turnover £7.5m, 40 staff, mainly top end clients, always stretched
Summary
Service complaints are common with all competitors, and hardware upgrades are long overdue. Corporate Comps are looking to revamp their national operation in the spring.
TRAINING
Three companies currently service the above client profile in computer training. Top two are:
Easy Train
Established 15 years, turnover £900,000, computer training staff 4, no plans for rapid growth
The PC Training Co. (National Company)
Established 8 years, turnover £6.5m, computer training staff 35, no local office
Summary
At present demand exceeds resources. No effective competition is challenging the top companies, who offer only limited cutting edge technology training skill.
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| Page 5 |
| Advertising
An advert have been placed in the
- ‘Computer Sales’ and ‘Training’ sections of Yellow Pages
- The Tuesday business section of the Manchester Regional News (on going)
- PCMAC Computer Monthly magazine
Promotion
- Targeted mail shot within 3 months
- Telesales company to start promotion within 1 month
- Two regional computer shows booked – 1st in 2 months 2nd in 6 months
Who will Sell
Both proprietors are competent sales negotiators
The Unique Selling Points
Dual capability of hardware supplier and training provider
Latest technology training package
Availability
Setting the Price COMPUTERS
Prices include 1 year on-site total cover
RS01 350 MHz 32MB 6.4GB 15″ Screen £650.00
RS02 450 MHz 64MB 6.4GB 15″ Screen £800.00
RS03 550 MHz 128MB 12.6GB 17″ Screen £950.00
PC Service contracts are
£150 per annum for one PC and then £85 for each additional PC
Printer
£50 per annum for one, then £30 for each additional unit
TRAINING
£110 Per Day Trainee up to 8 persons with no, or little, computer experience
£135 Per Day Basic up to 8 persons with basic computer skills
£180 Per Day Intermediate 8 persons, a good working knowledge of computer systems
£295 Per Day Advanced up to 4 persons who understand technical computer systems
20% reduction for in-house training
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| Page 6 |
| Location
New office-warehouse development on Industrial Estate located 3 miles from city centre. Development has three meeting/conference rooms of high standard.
3 year lease – no payment for first 3 months, then £3,000 per quarter in advance.
Equipment and Costs To-date
| Office
6 x Tables
6 x Chairs
3 x Filing cabinet
2 x Computer
laser printer
Ink jet printer
Photocopier
Fax
Answer phone
2x Phone line
Stationery and printing
Sub Total Warehouse
4 x Work bench
8x Stack shelving
Tools
Lighting
Sub Total Stock
Computer parts
TOTAL £ |
Cost
475
350
210
875
375
300
1200
250
100
150
1100
5,385
2000
1500
375
750
4,625 3750 13,860 |
|
Staff
A mature office manager, and a trainee computer assembler will be sufficient for the initial 3 months – between 3 and 9 months two training staff (to cover Trainee and Basic training) and a junior office clerk will be employed. At 9 months a review of staff needs will take place.
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| Page 7 |
| Objective Short-term COMPUTERS
An average of 5 computer sales per week, and 2 service contracts. The trainee assembler to be competent at assembly within 6 months, and to service a computer on site within 9 months.
TRAINING
Jane training for average of 3 days per week within 3 months. New training staff to be working an average of 4 days per week by 9 months.
At the 12 month plus period, a number of Jane and John’s tried and tested ex-colleagues and friends will be approached to join the company with equity available.
What if ? – contingency plans
Both John and Jane are confident (with good reason) that a contingency plan is unlikely to be needed, however, John has contacts who can provide him with computer fitting and servicing without notice, and likewise Jane with her training contacts.
In a real emergency, say, John or Jane became ill, it is anticipated that the new staff could continue with ‘basic’ computer servicing or training – the requirement of a mature Office Manager is a strategic and important position.
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Page 8
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| To see a Profit & Loss Account explanation The Profit & Loss Account To understand more about profit Profit & Cash Flow Monthly Profit & Loss Account (P&L) – projected for 2 years 2000 to 2001 Net Profit £ 90,000 2001to 2002 Net Profit £175,000
As you can see from the P&L the business is expecting to make a net profit of £90,000 in the first year. The figures include the salary of the full compliment of staff as outlined on page 6(c) above. The second year shows a net profit of £275,000: if this does happen they will purchase their own premises for £180,000. The total compliment of staff at the end of 2002 is 25.
To see a Balance Sheet and explanation The Balance Sheet Balance Sheet projected for 2 years 2000 to 2001 Net Assets £130,000 2001to 2002 Net Assets £260,000
The projected figures show the anticipated reinvestment of all profits for the first two years: this trend will continue. Stock at the end of the second year is high but the discounts on bulk purchase is a profitable option in the computer industry, if technology allows.
To see a Cash Flow Forecast and explanation The Cash-Flow Forecast To understand more about cash flow Profit & Cash Flow Monthly Cash Flow Forecast for 2 years 2000 to 2001 Year-End Net Cash Flow £ 25,000 2001to 2002 Year-End Net Cash Flow £120,000
In the first year the cash flow will remain positive unless an opportunity to buy bulk computer parts presents it’s self. Likewise the entire second year is planned to be in the black and consideration will be given at that time as to the purchase of assets.
N.B. If you are an existing company your audited accounts for up to three years are usually required |
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| John Smith
01234 9876543
09876 1234567
0196713546387
96 Avenue Hill
MANCHESTER M34 5RR
|
Office
Unit 3 The Trading Estate
The Avenue
MANCHESTER M23 4SA
Home Mobile Home Address |
Jane Jones
01234 9876543
01234 1234567
017790 9876544
12 High Road
MANCHESTER M12 3AA
|
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Below you will find a working business plan example which will help you create your very own. However, other software packages are available to help you create your own business plan.
