preparing a business plan
DESCRIPTION
TRANSCRIPT
Preparing a Business Plan
SCORE®Chapter 414www.score414.org
Revision 3June 2009
Preparing a Business Plan
ContentsI. Introduction......................................................................................3
Is this a new business or an existing business?....................................................................3Will the plan be used to raise capital?...................................................................................4What is the nature of the business?.......................................................................................4Organizing a Plan..................................................................................................................4
I. Executive Summary......................................................................5Sample Executive Summary..................................................................................................5
III. Organization of the business..........................................................6Business Description.............................................................................................................6Legal Structure...................................................................................................................... 6Goals and Objectives.............................................................................................................6Management Team................................................................................................................6Exit Strategy..........................................................................................................................6Record Keeping.....................................................................................................................6Sample Organization of the Business....................................................................................7
II. Marketing Plan..............................................................................8Strategy................................................................................................................................. 8Product.................................................................................................................................. 8Location................................................................................................................................. 8Competition............................................................................................................................8Customer Demographics.......................................................................................................8Advertising.............................................................................................................................8Pricing....................................................................................................................................8Inventory................................................................................................................................9Sales Projection.....................................................................................................................9Sample Marketing Plan..........................................................................................................9
III. Financial Plan.............................................................................11Personal Financial Statement..............................................................................................11Start up costs.......................................................................................................................11Cash flow.............................................................................................................................12
VI. Business Plan Summary..............................................................15Sample Business Plan Summary.........................................................................................15
APPENDICES……………………………………………………………….............................16
2
Preparing a Business Plan
I. IntroductionThere is no substitute for a well prepared business plan. It is the road map to small business success. It is the way to test whether an idea will be workable and it is also an essential part of any request for financing.
Some reasons for preparing a business plan:
Convince yourself that you are on the right track . Understand the risks and rewards. Convince a lender or investor to provide financing.
Only one person can prepare the plan – you.
You gain an in-depth knowledge of the plan. You are able to answer questions accurately and convincingly.
It typically takes several weeks to complete a good plan. Most of the time is spent in research and re-thinking ideas and assumptions. That is the value of the process. So take the time to do the job properly.
Statistics show that more than half of new businesses fail in the first two years. So it is not surprising that lending institutions are very careful about lending to new businesses. Some banks won’t do it at all.
People don’t plan to failThey fail to plan
There is a wealth of information available to assist people in preparing a plan. One source is the SCORE® national web site – www.score.org. These resources are generic in nature. Not every part of a generic plan is appropriate for a particular business.
So the first step is to focus your plan by asking some basic questions –
Is this a new business or an existing business? An existing business will have made some basic decisions that may or may not
need to be re-visited. There will be a track record of results to support projections and assumptions.
In a new business, projections and assumptions must be based on research and experience. All basic decisions must be explained.
3
Preparing a Business Plan
Will the plan be used to raise capital? Bankers will focus on the length of the loan and they look for assurances that the
business will generate sufficient funds to repay the loan on time. Investors have a different perspective. They look for dramatic growth and they
expect to share in the rewards. The plan should show them how it will happen.
What is the nature of the business? A plan for a manufacturing business focuses on profits by product line, production
capacity and new product development. Service businesses sell intangible products. Emphasis is on marketing, a
competitive edge, pricing and quality control. For a retail business, company image is important as well as location, pricing,
inventory management, etc. High-tech start-up businesses may not have access to bank lending because of
negative cash flow in the early years. They need a particularly good business plan to attract investment from venture capitalists.
Organizing a PlanA loan officer in a major bank may read 30 or more plans in a day. Having all of the plans in a familiar format allows him or her to concentrate on the merits of the plan. The consensus favors a plan organized with a table of contents and five parts:
Executive Summary
Organization of the business
Marketing Plan
Financial Plan
Plan Summary
Complexity and size are not virtues in a plan. A concise plan is appreciated by the reader because it is easy to read and, in writing it you are forced to express summaries and conclusions.If detailed information is deemed to be necessary, it can be included as an appendix.
Oscar Wilde once wrote:
“I’m writing you this long letter because I didn’t have time to write a short one”
4
Preparing a Business Plan
I. Executive Summary
The purpose of the executive summary is to give the reader a general idea of what the plan is about with just enough information to make the reader want to know more.Although it appears at the beginning of the plan, experience has shown that it is best to write the executive summary last.
It should tell the story on one page. Be sure to ask for what you want.
Following is an example of an executive summary for a start-up retail business.
It addresses the two most common reasons why small businesses fail – Lack of experience and not enough capital,
Sample Executive Summary
1. Executive SummaryThe purpose of this plan is to describe a business opportunity that has been thoroughly researched and carefully planned.
It features:
An owner/operator who is qualified by experience and education to successfully execute his plan.
A marketing strategy that is realistic and well researched.
A substantial investment by the owner with a debt that is manageable.
This is a business opportunity that will be rewarding for both the borrower and the lender.
5
Preparing a Business Plan
III. Organization of the business
Business DescriptionBegin by describing the business. What do you do? What do you offer your customers?
Legal StructureDescribe the legal form of ownership – sole proprietorship, partnership, S Corp., C Corp. or LLC. Explain reasons for your choice.
Goals and ObjectivesDescribe the company goals and objectives. Goals are destinations – where you want to be in five or ten years. Objectives are progress markers along the way.For example: a goal might be to have a healthy, successful company that is a leader in customer service and has a loyal customer following. Objectives might be annual sales targets and some critical indicators of customer satisfaction.
Notice the use of critical indicators in setting objectives. They are unique to your business and may or may not be a product of the accounting system. Some examples might be: customer complaints, product returns, quality rejects. Or ratio of internet orders to web site visits.
This is a good place to state you management philosophy. What is important to you in business?
Management TeamIntroduce the management team and describe their roles. Describe the education and experience of each key player to establish that they are capable of handling their responsibilities.Also list your professional and advisory support such as: Attorney, Accountant, Insurance Agent, Banker etc.
Exit StrategyDescribe your exit strategy. Do you foresee a business that will be in the family for generations or will it be sold at some point in the future? There is no correct answer here. What is important is the fact that you have thought it through.
Record KeepingBriefly describe the record keeping system that will be used. Many small business failures can be attributed to a lack of good records or the owners’ failure to use the financial information that was available.
6
Preparing a Business PlanFollowing is an example of the organization section of the plan for the retail business in the executive summary:
Sample Organization of the Business
Not Just Sneakers is a retail operation offering middle-of –the line athletic footwear and related items such as socks, sweat suits, fanny packs, etc.
The owner has decided to form a corporation in order to allow for equity financing of future expansion or additional locations as well as liability protection inherent in the corporate structure.It will initially be a subchapter S corporation.
The owners are willing to accept some reduction from their current level of income in the first year as the business becomes established.
Their goal is, after two years, to have a business that is financially sound and growing at 5% annually.
After two years, they expect to be in a position to consider several options such as:
Purchase the building at the present location Open a second location Expand the present location
Any choice that is made will be aimed at selling the business in 7 or 8 years. Proceeds will be used to invest in one or more businesses that can be sold in time to provide a comfortable retirement for the owners.
The owners of Not Just Sneakers are Mr. and Mrs. Hiram W. Venture.
Mr. Venture is 45. He has an Associate Degree in business management from Santa Fe Community College. For the past 8 years he has been employed by Sneaks R Us, a national chain of retail footwear stores. He is manager of the Sneaks R Us store in Astatula, FL. Having joined the company as a salesman and risen to his present position, he knows the business well. Mr. Venture will devote full time to the business with two full-time employees or the equivalent in part-time employees.
Mrs. Felicity Venture is 47 and employed as a nursing supervisor at Florida Hospital. She plans to remain in that position.
They have two grown daughters who are self-sufficient.
They have arranged for the advice and services of a CPA, an attorney and an insurance agent. Sales information will be captured by an electronic cash register using a bar code reader. The information will be summarized using retail industry software.
7
Preparing a Business PlanFinancial records will be maintained using Quick Books software and given to a CPA for review and analysis on a monthly basis. Members of the Venture family are available to maintain the record keeping system.
II. Marketing PlanIn many respects, the marketing plan is the heart of a business plan. It focuses on the nature and structure of the business and seeks to answer the basic question – “why should the customer buy from me?”
The answer to that question is often called – “the competitive edge”.
Finding the competitive edge requires data and research. Intuition and guesswork will not do it. SCORE® offers a separate workshop on the subject of preparing a marketing plan.
StrategyA well constructed marketing plan begins with a statement of strategy looking at the big picture such as “Our research has shown that the widget market in Lake County is not being served properly. We will market widgets through a direct mail campaign focused on our main demographic”. An appendix could be attached to the plan showing data such as purchases of widgets per capita in Florida or some other data to support the statement that the Lake County market is under-served.
ProductThe product being offered may have been defined elsewhere in the plan. If not, this is the place to do it. Some products may be affected by style or seasonal factors and that requires special attention.
LocationLocation is critical in a retail business. Discuss whether location is important to your customers and how your location is chosen.
CompetitionAnalyze the competition. Use a simple “strengths and weaknesses” approach to determine what makes you different. This will be important in determining your advertising message.
Customer DemographicsIdentify your customer demographics – their characteristics, such as age, gender, income levels, location, etc.
AdvertisingDescribe your advertising plans. Identify your choice of media.
8
Preparing a Business Plan
PricingDiscuss the approach you will use to set selling prices. Don’t rely on low price to gain market share. It is too easy for the competition to meet your price with the result that everyone makes less money.
InventoryIf your business requires inventory, describe how you will manage it to avoid ”stock-outs” and tying up working capital in excess inventory.
Sales ProjectionMany people find this to be the hardest part of the plan. Projecting future events is always hard, but the person who has done the research and who will execute the plan strategies is best qualified to make the projections. Be conservative with your assumptions.
In a plan for an existing business, sales projections should be based on past results of the business projected into the future, adjusted for any planned changes.
In a start-up business the projection has to be based on research and experience of the owners. The key is to make projections in terms of the basic units of the business. A pressure washing business would use number of jobs per day. A bed and breakfast would use percent of occupancy per night. A service business is selling time. The projection might be based on billable hours. Seasonality of sales should be incorporated into the forecast. Appendices A, B, and C show examples of how sales projections for different service businesses might be developed. The SCORE® web site, www.score.org/, contains a template gallery which can be very useful in preparing a sales forecast.
Following is an example of the marketing plan section of the plan for the retail business in the executive summary. The sales forecast has been prepared using the SCORE® template.
Sample Marketing PlanProduct Not Just Sneakers has the opportunity to be sole distributor in the market area for Old Balance, a well-recognized line of mid-price shoes designed for walking and leisure activities. Mr. Venture has identified suppliers for related items on a non-exclusive basis.StrategyNot Just Sneakers will offer a line of attractive, functional, good quality casual footwear at prices well below products aimed at a younger market with pumps, springs and designer styles at ever-escalating prices. Pricing will be competitive with, but not lower than, comparable products of other brands. Not Just Sneakers will seek a competitive edge based on a quality product, individual attention, careful fitting and customer satisfaction.Business LocationA retail property is available in downtown Clermont. Parking is adequate. The building is in good condition and zoning is correct. Impact fees have been paid by the previous occupant. The property will be leased initially with the possibility of a purchase at some future time.
Clermont has been chosen because it is expected to grow rapidly. Metro Orlando has been one of the nation’s fastest growing regions and Clermont is one of the closest
9
Preparing a Business Planresidential areas to Orlando. Moreover, the decline of the citrus industry has provided an ample supply of land in the South Lake area for residential development, much of it targeted to senior citizens.
CompetitionCasual shoes comparable to Old Balance can be found at Kmart and Payless Shoes, both located on SR 50 east of US 27. There is no competing merchant in the downtown area.
Customer DemographicsAccording to the Economic Development Commission of Mid-Florida, Lake County has the highest percentage of population over age 45 in the Metro-Orlando market area (Lake, Orange, Seminole and Osceola counties). This is the market segment that will be targeted by Not Just Sneakers.
AdvertisingAdvertising will be focused on the over-50 segment of the population, both male and female. Not Just Sneakers will have a moderate size ad in the yellow pages. The “Grand Opening” campaign will utilize daily and weekly newspapers. All customers will be asked how they heard about Not Just Sneakers and records will be kept to build a body of market information. Management expects to try various media such as church bulletins, daytime radio spots, coupon books, etc. to develop an on-going, cost effective advertising program.
Sales ProjectionsSales projections are based on experience of Mr. Venture, observation of competitors and discussion with supplier representatives. The average sale will be $75 with products priced to yield a 45% gross margin. The sales forecast is as follows:
Not Just Sneakers Year One12-month Sales Forecast
Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec TotalSales per day 10 10 10 10 9 8 8 8 9 10 10 10 112Days per mo. 26 23 26 26 26 25 25 25 25 26 26 26 Unit Sales per mo 260 230 260 260 234 200 200 200 225 260 260 260 2849Sale price @ unit 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 $ Sales per mo. 19,500 17,250 19,500 19,500 17,550 15,000 15,000 15,000 16,875 19,500 19,500 19,500 213,675
Not Just Sneakers Year Two12-month Sales Forecast
Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Sales per day 12 12 12 12 11 10 10 10 11 12 12 12 136
10
Preparing a Business PlanDays per mo. 26 23 26 26 26 26 26 26 26 26 26 26 Unit Sales per mo 312 276 312 312 286 260 260 260 286 312 312 312 3500Sale price @ unit 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 $ Sales per mo. 23,400 20,700 23,400 23,400 21,450 19,500 19,500 19,500 19500 23,400 23,400 23,400 262,500
InventoryInventory planning will be based on the sales projection initially. Future purchases will be on a sales replacement basis. The plan is to have an average of 3 months sales on hand or a 4 times turnover each year. First year sales are $213,675 with 45% gross margin. Cost of sales is 55% of sales or $117,521. One fourth of $117,521 is $29,380.
III. Financial PlanPersonal Financial StatementA lender will ask for a statement of your personal assets and liabilities as well as copies of tax returns. The lender will also ask for permission to pull your credit report. It is important that you know your credit score and be prepared to discuss any problems. A template for a personal financial statement is available at the SCORE® web site.
Start up costsIn some businesses, there are significant costs that are incurred before any sales are generated. It is important that funding be available to provide for these costs. The summary of startup costs on the next page for Not Just Sneakers was prepared from a SCORE template.
FundingThis is the punch line. It answers the question- “Where will the money come from? It is unrealistic to expect that a lender will put up all of the money and take all of the risk. There is no universal rule, but most lenders will want the owner to invest at least 20-25% of the funds.
An investor may be willing to take a larger share of the risk, but he will want something in return – usually a share of the ownership. This can lead to problems in the future such as disputes as to how the business should be run.
In the SCORE® template, funding is shown with startup costs to show where the money will come from to get the business started.
Not Just Sneakers
Sources of Capital
Owners' Investment (name and percent ownership)Hiram Venture 100% $ 20,000
11
Preparing a Business PlanBank LoansBank 1 $ 33,000 Total Sources of Capital $ 53,000
Startup Expenses
Decorating and Installation $ 11,000
Location and Admin ExpensesRental $ 600Utility deposits 400 Legal and accounting fees 2,000 Prepaid insurance Pre-opening salaries 3,335Other __________________ Total Location and Admin Expenses $ 6,335
Opening Inventory $ 29,380
Advertising and Promotional ExpensesAdvertising $ 3,000
Reserve for Contingencies $ 2,000
Working Capital $ 1,000 _______________________Total Startup Expenses $ 52,715
Summary: Sources of CapitalOwners' and other investments $ 20,000Bank loans $ 33,000 Other loans Total Source of Funds $ 53,000
Startup Expenses $ 52,715
Cash flowThe essence of a financial plan is the projected cash flow. It is the means to explain where the money will come from, how it will be spent and how loans will be repaid.
A SCORE® template has been used to organize and take the “number crunching” out of the cash flow projection to allow the owner to concentrate on the assumptions.
To understand a cash flow projection, think of a business checking account where all receipts are deposited and all expenditures are paid. Expenditures are all inclusive – expenses of running the business, owner’s drawing of funds, loan payments, anything that requires cash.
Attached are first and second year cash flow projections for Not Just Sneakers.
12
Preparing a Business Plan
The concept is simple-cash in and cash out. There are 14 columns – pre-start, 12 months and total year. There can be any 12 months, depending on the timing of the business.
Cash Flow (2009)Pre-
Startup EST
Jan--09
Feb. 09
Mar. 09
Apr. 09
May-09
Jun-09 Jul-09 Aug-
09Sep-09
Oct-09
Nov-09
Dec-09 Totals
Cash on Hand (beginning of month)
285 11,413 9,570 11,46
812,38
211,35
0 8,843 7,743 6,647 7,429 9,809 10,748
CASH RECEIPTS
Cash Sales 19,500
17,250
19,500
19,500
17,550
15,000
15,000
15,000
16,875
19,500
19,500
19,500
213,675
Loan/ other cash in 53,000
TOTAL CASH RECEIPTS
53,000 19,500
17,250
19,500
19,500
17,550
15,000
15,000
15,000
16,875
19,500
19,500
19,500
213,675
Total Cash Available (before cash out)
53,000 19,785
28,663
29,070
30,968
29,932
26,350
23,843
22,743
23,522
26,929
29,309
30,248
213,675
CASH PAID OUT
Purchases (merchandise)
10,725 9,488 10,72
510,72
5 9,653 8,250 8,250 8,250 9,281 10,725
10,725
106,797
Gross wages (exact withdrawal)
2,322 2,322 2,322 2,322 2,322 2,322 2,322 2,322 2,322 2,322 2,322 2,322 27,864
Payroll expenses (taxes, etc.)
348 348 348 348 348 348 348 348 348 348 348 348 4,176
Supplies (office & oper.)
100 100 100 100 100 100 100 100 100 100 100 100 1,200
Advertising 1,000 1,000 750 500 500 500 500 500 500 500 500 500 7,250
Accounting & Legal 300 300 300 300 300 300 300 300 300 300 300 300 3,600
Rent 600 600 600 600 600 600 600 600 600 600 600 600 7,200
Telephone 200 200 200 200 200 200 200 200 200 200 200 200 2,400
Utilities 300 300 300 300 300 300 300 300 300 300 300 300 3,600
Insurance 200 200 200 200 200 200 200 200 200 200 200 200 2,400
Interest 220 216 212 209 205 202 198 194 191 187 184 180 2,398
Bank Charges 232 232 232 232 232 232 232 232 232 232 232 232 2,784
SUBTOTAL 0 5,822 16,543
15,052
16,036
16,032
14,957
13,550
13,546
13,543
14,570
16,011
16,007
171,669
Loan principal payment
550 550 550 550 550 550 550 550 550 550 550 550 6,600
Other startup costs 52,715
Owners' Withdrawal 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000
TOTAL CASH PAID OUT
52,715 8,372 19,093
17,602
18,586
18,582
17,507
16,100
16,096
16,093
17,120
18,561
18,557
202,269
Cash 285 11,41 9,570 11,46 12,38 11,35 8,843 7,743 6,647 7,429 9,809 10,74 11,69
13
Preparing a Business PlanPosition (end of month)
3 8 2 0 8 1
Cash Flow (2010)Jan-10
Feb. 10
Mar. 10
Apr. 10
May-10
Jun-10 Jul-10 Aug-
10Sep-10
Oct-10
Nov-10
Dec-10 Totals
Cash on Hand (beginning of month)
11,691 14,990 13,448 16,094 17,259 16,477 14,822 14,243 13,668 15,046 17,306 18,496
CASH RECEIPTS
Cash Sales 23,400 20,700 23,400 23,400 21,450 19,500 19,500 19,500 21,450 23,400 23,400 23,400 262,500
TOTAL CASH RECEIPTS
23,400 20,700 23,400 23,400 21,450 19,500 19,500 19,500 21,450 23,400 23,400 23,400 262,500
Total Cash Available (before cash out)
35,091 35,690 36,848 39,494 38,709 35,977 34,322 33,743 35,118 38,446 40,706 41,896 262,500
CASH PAID OUT
Purchases (merchandise) 10,725 12,870 11,385 12,870 12,870 11,797 10,725 10,725 10,725 11,797 12,870 12,870 142,229
Gross wages (exact withdrawal)
2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 33,600
Payroll expenses (taxes, etc.)
400 400 400 400 400 400 400 400 400 400 400 400 4,800
Supplies (office & oper.)
100 100 100 100 100 100 100 100 100 100 100 100 1,200
Advertising 500 500 500 500 500 500 500 500 500 500 500 500 6,000
Accounting & Legal 300 300 300 300 300 300 300 300 300 300 300 300 3,600
Rent 600 600 600 600 600 600 600 600 600 600 600 600 7,200
Telephone 200 200 200 200 200 200 200 200 200 200 200 200 2,400
Utilities 300 300 300 300 300 300 300 300 300 300 300 300 3,600
Insurance 200 200 200 200 200 200 200 200 200 200 200 200 2,400
Interest 176 172 169 165 162 158 154 150 147 143 140 136 1,872
Bank Charges 250 250 250 250 250 250 250 250 250 250 250 250 3,000
SUBTOTAL 16,551 18,692 17,204 18,685 18,682 17,605 16,529 16,525 16,522 17,590 18,660 18,656 211,901
Loan principal payment 550 550 550 550 550 550 550 550 550 550 550 550 6,600
Owners' Withdrawal 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 36,000
TOTAL CASH PAID OUT
20,101 22,242 20,754 22,235 22,232 21,155 20,079 20,075 20,072 21,140 22,210 22,206 254,501
14
Preparing a Business PlanCash Position (end of month)
14,990 13,448 16,094 17,259 16,477 14,822 14,243 13,668 15,046 17,306 18,496 19,690
Some of the numbers can be recognized from earlier sections of the plan. In the pre-start column, receipts are the funding of the business. Total payments are the start up costs. Receipts for each month are taken from the sales projection.
For each month, inventory replacement is calculated from the sales of the previous month. All other payments are based on the owner’s best estimate of what payments will be. Nothing is left out.
Estimated payments are based on the research that has been done. In a new business, “cash is king”. When there is a choice between leasing or buying an asset, leasing is usually preferred because it requires less cash. When you’re out of cash, you’re out of business.
VI. Business Plan SummaryThe summary wraps up the principal features of the plan, emphasizing its strong points.
Sample Business Plan Summary
The owner is thoroughly experienced in the retailing of footwear. He has devoted a great deal of time and effort to preparing this plan.
The Marketing Plan is detailed and realistic. It reflects personal experience combined with careful research.
The financial plan is based on assumptions believed to be conservative. The cash flow projection illustrated ample capacity to repay the debt.
The owner’s equity of 38% gives him a substantial stake in the success of the business.
This is a business opportunity that will be rewarding for both the borrower and the lender.
15
Preparing a Business Plan
Appendices
Appendix ASales Projection for a Bed and Breakfast
The Bed and Breakfast has 5 rooms. The price is $95 per room per night. For ease of estimating it is assumed that there are 30 nights in each month.
The sales projection uses the template called Sales Forecast (12 Mos.) from the template gallery at: http://www.score.org/template_gallery.html.
The basic unit for the projection is the estimated number of rooms rented per month.
Sales Forecast (12 Months)
Bed and Breakfast
Fiscal Year Begins Jan-0912-month Sales Forecast
Jan-09 Feb-09Mar.09 Apr-09 May-09 Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Annual Totals
Rooms 60 75 90 105 90 75 60 60 60 75 90 105 945Price / Room 95.00 95.00 95.00 95.00 95.00 95.00 95.00 95.00 95.00 95.00 95.00 95.00 Sales / Month 5,700 7,125 8,550 9,975 8,550 7,125 5,700 5,700 5,700 7,125 8,550 9,975 89,775
The total possible number of room /nights is 150 in any month. The number grows from a low point of 60 in the first month to a high of 105 in December. Also, there is a seasonal pattern in Central Florida with summer months being slow and winter months being higher. It is reasonable to expect that the second year will be better as the business is established. But there will never be a month with full 100% occupancy.
16
Preparing a Business Plan
Appendix BSales Forecast (12 mos.)Lawn Service
The average lawn is assumed to take 2 hours and the business is capable of doing 4 lawns in a day. They plan on working 20 days a month, on average. The average price for a lawn is $125.The sales forecast is shown below.
Fiscal Year Begins Jan-09
12-month Sales Forecast
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09 Jul-09
Aug-09
Sep-09
Oct-09
Nov-09 Dec-09
Annual Totals
# Lawns 32 32 32 40 48 48 56 56 56 48 40 32 520Sale price @ unit 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 Cat 1 TOTAL 4,000 4,000 4,000 5,000 6,000 6,000 7,000 7,000 7,000 6,000 5,000 4,000 65,000
Here the seasonal pattern is different from the Bed and Breakfast. Business is slow in winter and picks up in the summer months.
17
Preparing a Business Plan
Appendix CRestaurant
This restaurant has 20 tables, 4 seats per table. They are open 7 days. Owners estimate 2 turns for lunch and 2 turns for dinner. Average lunch is $15 and average dinner is $30.
Sales Forecast (12 Months)Restaurant
Fiscal Year Begins Jan.0912-month Sales Forecast
Jan.09 Feb09Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09 Sep-09 Oct-09 Nov-09
Dec-09
Annual Totals
# Lunches 64 80 96 112 96 80 64 64 64 80 96 112 1008Sale price @ unit 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 Cat 1 TOTAL 960 1,200 1,440 1,680 1,440 1,200 960 960 960 1,200 1,440 1,680 15,120 #Dinners 64 80 96 112 96 80 64 64 64 80 96 112 1008Sale price @ unit 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 Cat 2 TOTAL 1,920 2,400 2,880 3,360 2,880 2,400 1,920 1,920 1,920 2,400 2,880 3,360 30,240
Monthly totals: All Categories 2,880 3,600 4,320 5,040 4,320 3,600 2,880 2,880 2,880 3,600 4,320 5,040 45360
Note that the seasonal pattern is similar to Bed and Breakfast.
18