So You Want To Go Into Business!?

Presented to

The Future Entrepreneurs and Business Leaders

of the Senior Class

of Hudson Falls High School

Presented byJohn S. Kvocka

May 11, 2007

Who is this Guy???

• New York City Born and Raised• Education: BS and MBA St. John’s University, NYC• Spent 36 years in the Corporate World and as a Senior Exec for some Big

outfits, traveled the world extensively• Consultant to Business in Planning, Leadership and Management• Certified Franchise Consultant• Taught part-time as an adjunct professor at 2 Colleges• Married 33 years, one son (and 2 dogs)• Live in Queensbury last 14 years• Entrepreneur for last several years, Own an English Pub with my son and

some Real estate properties• Volunteer work • Avid Sports Fan, Car Nut and Oldies Music freak!

The Business Plan(For a Start-up Business)

• Why have a Plan?

• Who am I doing it for?

• What’s in a Plan?

Table of Contents

• Executive Summary

• General Company Description

• Products & Services

• Marketing Plan

• Operational Plan

• Management & Organization

Table of Contents continued

• Personal Financial Statement

• Start-Up Expenses and Capitalization

• Financial Plan

• Appendices

• Refining the Plan

Executive Summary• Write this Section LAST!

• Covers everything you would include in a 5 minute interview

• Fundamentals of the business…product, service to be provided

• Who will be your customers? Who are the owners?

• What does the future hold for your business and your industry?

• Enthusiastic, professional, complete and concise.

• If for a loan, how much, for what, and how will it make your business profitable? (So it can be repaid!)

General Company Description

• What is the business, what will you do?

• Vision, Mission, Values

• Company Goals and Objectives

• Your Business Philosophy

• To whom will you market your products?

• Describe Industry (Growth? Changes? How will you take advantage of them?)

• Your most important strengths & competence—to make company succeed—your competitive strengths, experience and skills

• Legal form of ownership—Partnership, Corporation, LLC and why this form selected?

Products and Services

• Describe in depth your products and services (Technical specifications, drawings, photos, sales brochures and related belong in the Appendices)

• What factors will give you competitive advantages or disadvantages? Examples include level of quality or unique or proprietary features.

• What are the pricing, fee, or leasing structures of your products or services?

Marketing Plan

• This area requires careful, systematic research, not just “gut feel”

• Two kinds of data are needed: Primary and Secondary• Secondary research means using published

information: industry profiles, trade journals, newspapers, magazines, census data, demographics

• Primary research means gathering your own data: traffic counts, yellow pages, surveys, visits to competitors, interviews. Professional market research is also a method, but is expensive.

• Be specific, giving statistics, numbers and sources

Marketing Plan continued

• Economics—regarding your industry, size of market? Your share of market, current demand, trends, growth potential, barriers to entry you face—costs, acceptance, brand recognition, training and skills, technology, unions, other barriers…and of course how will you overcome these barriers?

• How could changes in technology, government regs, the economy and industry changes affect your company?

Marketing Plan continued

• Product –Describe your products and services from your customers’ point of view

•Features and Benefits—most important features, what is special? Benefits—what will product do for the customer? Note differences and what after-sale services will be provided? Also include various policies regarding delivery, warranty, service contracts, support, refund policy

•Customers—who are targeted customers, their characteristics, geographic locations (demographics)? Give their profile—Age, gender, location, income level, social class and occupation, education and other factors specific to your industry. For business customers—their industry, location, size of firm, quality, technology and price preferences, etc.

Marketing Plan continued

• Competition—What products and companies will compete with you? List your major competitors. In what areas, products, customers and locations will they compete? Or across the board? Will you have indirect competitors providing alternative products/services to customers?

• How will you compare with the competition?• Draw up a competitive analysis table to compare various factors to

show how you present your business side by side with key competition. Customize as appropriate to your industry. List things such as product selection, price, quality, service, reliability, stability, expertise, reputation, location, appearance, etc. Prioritize factors by importance and be very honest in your assessments.

• Niche—in one short paragraph define your niche, your unique corner of the market.

Marketing Plan continued

• Strategy—outline your market strategy that is consistent with your niche.

• Promotion—how will you get the word out to customers? Advertising, media – why, how often? Other methods to stimulate business? What image do you want to project, how do you want your customers to see you? Other considerations such as logo design, brochures, signage, etc. A system to identify and contact repeat customers?

• Promotional Budget—start-up, ongoing numbers?

Marketing Plan continued

• Pricing—explain your method of setting prices, does it fit with competitive situation? Are you higher, lower, same and why? How much is price a factor given your position in the market?

• Location—this may be an extremely critical decision depending upon the nature of your business. Physical needs to be described later in the Operational section.

Operational Plan

• Production—How and Where are your products or services produced? Explain methods, techniques, quality control, customer service, inventory control, product development

• Location—What qualities do you need in a location? Space, type of building, zoning, power and utilities, access, proximity to transportation, parking, etc. Include a drawing or layout. Include cost estimates for the location-construction, fit-up, rent, insurance, utilities, maintenance, etc.

Operational Plan continued

• Legal Environment—Licensing, bonding, health, workplace/environmental regs, zoning, building code, insurance coverage, trademarks, patents, copyrights, etc.

• Personnel—Number of employees, type of labor, where and how to find, quality and skills of staff, pay structure, training, tasks to be done, schedules.

• Inventory—Kind, value, rate of turnover, seasonal considerations, storage, order lead times, etc.

• Suppliers—Key suppliers, names, addresses and description of products furnished, costs, terms.

• Credit—dealings with customers, payment terms, etc.

Management and Organization

• Day to day management—experience and competencies of responsible person

• Organizational structure—chart• Position descriptions for Key employees• Resumes of Owners and Key Management• Professional and Advisory support—Board of

Directors, Attorney, Accountant, Insurance Agent, Banker, Key Advisors

Personal Financial Statement

• Include personal financial statements for each Owner with Assets and Liabilities held outside the business and personal Net Worth.

Start-Up and Capitalization

• Provide estimates of all start-up expenses. Be conservative and allow a cushion for unforeseen items. Identify potential contingency requirements as well.

• Explain how you arrived at these estimates• Give sources and amounts of proposed loans and

identify amounts contributed by each investor and percent of each one’s ownership in the business.

Financial Plan

• 12 Month Profit and Loss and Cash Flow Projection—identify key assumptions and risks. Also outline actions to be taken in the event projections do not meet expectations. Use both narrative and numeric presentation.

• Provide a 3 Year Forecast along with the first year statement, in similar form.

• These statements will show whether your initial and ongoing cash flow is adequate to sustain the business and repay any loans made.

Appendices

• Include any pertinent back-up documents referred to in the Plan or data that will supplement and support statements made or information used in development of the Plan.

• Examples: Brochures, industry studies, maps, blueprints, magazine or other articles, leases, contracts, letters of support from customers, market research studies, list of assets for collateral for a loan.

Refining the Plan

• For Raising Capital—amount of loan, how funds will be used, what will it accomplish (make it stronger?), requested repayment terms, collateral offered, along with any existing liens against collateral.

• For Investors—funds needed short-term, needed in 2-5 years, how will funds be used, and what accomplished, estimated return on investment, exit strategy for investors, percent ownership obtained

Refining the Plan

• For Type of Business• Plan will be modified according to

Manufacturing, Service, High Tech, Retail• Further details pertinent to type of business will

enhance the Plan and make it more suitable and specific

• The Plan should remain a dynamic tool for use by the management and owners on an ongoing basis! It should be updated periodically!

ANY QUESTIONS?