Sample Business Plan

Here is an abbreviated example of a serious business plan. It is provided to give you a feeling for the style of writing that is used in a business plan, and is not intended to be a comprehensive guide of what should be covered in a good plan.

The humorous content of this business plan example is supplied only for the readers interest. For optimum effectiveness, care should be taken to minimize the humorous content in an actual proposal.

Free Sample Business Plan Examples
Table Of Contents

Statement of Funding Proceeds

Executive Summary

Description Of The Business

The Market

Marketing Strategy

Business Location

Licenses/Permits/Registrations

Insurance/Bonding/Employee Benefits

Management

Personnel

Financial Data

Appendix

Statement Of Funding Proceeds

Children's World has developed a line of toys that are superior to all other products that exist on the market today. In order to service our identified target markets with these superior toys, significant capital infusion is required.

Specifically, the required $15,000,000 will be allocated appropriately to:

Marketing and Advertising $ 1,500,000

Salaries -0-

Facilities 50,000

Capital Equipment 450,000

Research and Development 1,000,000

Operational Expenses 2,000,000

Inventory 10,000,000

Total $15,000,000

 Executive Summary

Children's World is the major player in the global gift giving industry. Originally founded as a sole proprietorship in 1930, the marketing tactics employed by Children's World had grown to the level of being a family legend by 1940. Annual toy production of Children's World exceeded 86,000,000 units at this time, and major expansion plans were developed. However, due to a slight downturn in the global economy, these plans have been shelved as projected profit levels have fallen to a near break even point in 1993.

To revitalize the company, a rigorous program of research and development was undertaken in the early 1950's. The first major breakthrough of which is ready for production. To be able to make maximum use of our proprietary breakthrough technology, Children's World needs to upgrade its existing facilities, as well as reevaluate the company's sleigh delivery system It is anticipated that a late model Cessna Citation could be modified to meet the operating requirements of Children's World. In addition, several used cargo planes will need to be acquired to facilitate the development of large stockpiles of toys at strategic global locations. A central hub system is being considered.

Additional manufacturing upgrades are planned to facilitate the projected increases in manufacturing output. Some of the upgrades include the replacement of manual lathes with automated CNC machines, the installation of spray booths using the latest in electrostatic technology, computerized conveyor and sorting systems, and an upgrade in the Statistical Process Control (SPC) area of the Quality Assurance Department.

As can be seen, Children's World is now at a point where they need to seek outside funding to refurbish/renovate their production facilities, upgrade their global navigational equipment, establish a more visible image, and to establish an extensive line of credit to cover seasonal inventory expenses.

This loan will be backed by the full assets and inventory of the Children's World company. As the attached Balance Sheet indicates, these assets have a current valuation of $5,000,000. In addition, of the $15,000,000 requested, $10,450,000 will be spent on inventory and capital equipment which will also be used as collateral for the note. As the attached cash flows indicate, Children's World should be able to service the debt incurred by this loan application. It is anticipated that the Return On Investment (ROI) thrown off from this loan will be 200% adjusted on a yearly basis. Timing of the loan and the market entry of the product will be critical, however, with the maximum value occurring from a November entry.

Description Of The business

Our Mission at Children's World is: "To provide toys and games of exceptional quality, in a timely manner, priced at or below our competition, to enhance the profits of our company."

Background

Children's World is a sole proprietorship that was founded in 1930. It is wholly owned by Mr. and Mrs. Sanford Theodore Clause. For the past 50 years, Children's World has experienced an increase in the public awareness of our year end close-out (where we give away surplus inventory). Because of this practice, the public has begun to think of us on a seasonal basis as a philanthropic organization.

To alleviate this problem, we have just completed the development phase of a novel and proprietary product line that will once again place Children's World in the minds of the public on a daily basis. By 1940, our operation had produced 86,000,000 toys, and has operated profitably ever since. However, revenue projections for fiscal year xxxx, without external funding for the introduction of this new product line, is expected to be down to a break even level ($1,100). With the funding for the renovations, advertising, and new product line our profits are expected to reach $30,000,000. Annual growth is projected to be 21% per year through the year 2100.

Concept

The "state of the art" of the industry today dictates that toys are produced without ever being touched by human hands. Our new revolutionary product line capitalizes on the fact that our toys have traditionally been hand built by our local elf community. Although our production methods are slow in comparison to other manufacturers, our quality levels are high while our costs are kept very modest.

This new product line incorporates a rare, refined essence (known only to our advanced Research And Development Dept.) that causes a strong attraction to be formed between the toy and the customer who first sees the toy. This essence is well known in the animal community. For instance, it is the reason why ducklings bond to the first animal they see after emerging from their shell (commonly called "imprinting"). These ducklings will not physically allow themselves to be separated, to any significant distance, from the "parent" animal for approximately six months.

After lengthy collaboration with the local duck community, and extensive field testing (test population will not be disclosed), our top notch R&D staff has been able to identify and synthesize the essence and increase its strength. When incorporated into our line of toys, this essence will create a bond between the recipient and the toy that will last for one full year! During this time, like the ducklings, the recipient who first sees the toy will not want to be separated from the toy to any significant distance (typically less than fifteen feet).

Getting the Money Needed to Starting a New Small Business. Now that You have computed your first capital requirements, where are
you going to receive the money? The primary source is your personal savings. Then relatives, friends, or other people might be
found who would like to"venture" their savings in your business. Before getting too big a share of money from outside sources,
remember that you ought to have personal control of sufficient to guarantee yourself ownership.

After you can show that you have carefully exercised your fiscal Requirements and can demonstrate experience and integrity, a
lending institution may be willing to finance a part of your working requirements. This could possibly be done on a short term
basis of from 60 days to up to one year. Any institution that has money to lend is mainly concerned with safety. The safety might
be a business advantage, but if you're just starting the ideal security is usually your home or some other private asset.

The next thing the lender will want to see is some sort of Business program. If you finish a business plan - which includes a cash
flow forecast - that the lender will observe you have completed some serious and realistic thinking about your company and be more
likely to consider your request.

Be familiar with your banker. In selecting a banker consider Progressiveness, mindset toward your company, credit services
provided, and also the dimensions and management policies of the lender. Is the bank progressive? The physical look of the bank
may provide you some indication. When the employees are pretty youthful, interested in your problems and active in civic affairs
that the bank is likely to be innovative. The character of the lender's advertisements might also be an indicator to its
progressiveness.

To be effective the banker should be interested in Assisting You to Become a better manager, and develop a lasting relationship
that will mean rewarding business for you as well as the bank over time.

Will the bank offer you the kind of credit you need? By Way of Example, If seasonal accumulations of stock become an issue will
the lender create a loan against public or field warehouse receipts? If your funding is tied up in accounts receivable throughout
your hefty selling year, will the bank accept these receivables as security for a loan? Will the lender contemplate a term loan?

In the end, understand the size and direction policies of the bank. Will Your maximum conditions fall nicely inside the
lender's"legal limit"? If you plan to do some export business, does it have a currency department? In the event that you or your
dealers sell on installment conditions does the lender have facilities for managing installment paper? How profoundly is the
lender concerned with the rise and prosperity of your regional community?

When you handle your banker, then sell yourself. Whether or not you Want a bank loan, also make it a practice to stop by your
banker at least once every year. Openly discuss your plans and problems. It is the bank's business to not betray a confidence. If
you require financial assistance carefully prepare, in written form, complete information that'll present a thorough understanding
of your entire proposition. Many business-people or prospective business operators destroy their chances of getting financial aid
by neglecting to present their proposition properly.

Trade creditor or gear manufacturer, Companies from which you Purchase equipment or merchandise may also provide capital to you in
the form of extended credit. Manufacturers of store fixtures, cash registersindustrial machinery frequently have financing plans
under which you may purchase in an installment basis and cover out of future earnings. You need not cover the merchandise at once.
If products are for resale, no security aside from repossession rights of these unsold merchandise is involved. But too extended a
use of credit may prove expensive. Usually cash discounts are offered when a bill is paid within 10, 30, or 60 days. By way of
instance, a duration of sale offered as"2-10; net 30 days" signifies a cash discount of two percent will be awarded if the invoice
is paid within 10 days. If not paid in 10 days, the whole amount is due in 30 days. If you don't take advantage of the money
discount, you are paying 2% to use money for 20 days, or 36 percent per year. This can be high interest. Avoid it.

Among the main causes of failures among businesses is Inadequate funding. If you do enter business, remember it is your
responsibility to provide, or obtain from other people, adequate money to supply a firm foundation for the business.

Sharing Ownership With Others. Now that you have decided what Business to start and about how much funds will be required, you
might find it necessary to join with one or more associates to launch the enterprise.

If you lack specific management or technical skills that are of Major importance to your preferred business a spouse with these
abilities may prove a satisfactory means to cover the deficiency. If you are extremely skilled in your special area but lack
direction training and abilities, you might look for a partner with a background in direction. If you might need more start-up
money, then sharing the possession of the business is 1 way to get it. Fantastic care should be taken in deciding upon a partner.
Personality and temperament, as well as ability to render financial or technical assistance, influence the success of a pa333ship.

A partnership may be a mixed blessing. A spouse who places in time Or cash has got a right to expect a share in running the
business.

In a venture the accountability for the debts of the firm is Unlimited, just as it is in a single proprietorship. This means the
owners are Personally responsible for the company's debts, even in excess of the sum they Have invested in the business. In a
corporation the liability of the owner is limited To the amount they pay for their shares of stock. A partnership, like one
proprietorship, lacks continuity. Thus, the Company terminates upon the Death of the owner or a spouse, or on the withdrawal of a
partner.

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