Do I Need A Business Plan? Coalition to Support Iowa’s Farmers November 17, 2016 Ames, Iowa

What is a Business Plan Roadmap A formal statement of business goals Reasons they are attainable Plans for reaching them Likely will contain background information about the organization or team attempting to reach those goals.

Why Prepare a Business Plan? Forces you to look at the whole business Focuses attention on important questions Helps clarify and communicate your goals and objectives Becomes a means of assigning priorities Becomes a framework for daily decision making, and better management Look at business in objective manner Serves as feasibility study Defines present status and future possibilities Helps you prepare for success Can be a strong reality check Often required by lenders Helps identify strengths and weaknesses Only useful if you use it. 90 % of new businesses fail in first 2 years due to lack of planning Provides information needed to communicate with others Write it yourelf

Why Prepare a Business Plan? Helps maintain a “proactive” business attitude Serves as a benchmark to track performance Stimulates development of new/future business opportunities Becomes a tool to access capital, acquire business partners, attract employees Having a ROAD MAP increases your chance of success Look at business in objective manner Serves as feasibility study Defines present status and future possibilities Helps you prepare for success Can be a strong reality check Often required by lenders Helps identify strengths and weaknesses Only useful if you use it. 90 % of new businesses fail in first 2 years due to lack of planning Provides information needed to communicate with others Write it yourelf

Tips for Creating a Business Plan Create a vision for your company A budget is not the same thing as a plan Know your customers Know your competition Be prepared to take risks Before you get into the details, look at the big picture. Develop your mission statement and define goals and priorities. A budget is the product of many elements. Creating a business plan isn’t about avoiding risks, it is understanding risk.

Tips for Creating a Business Plan Get a second opinion (and third, etc.) Expect the unexpected Don’t forget what makes you unique. What’s the point Don’t skip the plan Before you get into the details, look at the big picture. Develop your mission statement and define goals and priorities. A budget is the product of many elements. Creating a business plan isn’t about avoiding risks, it is understanding risk.

Components of a Business Plan Cover Page Georges Fish Farm Comprehensive Business Plan for Success

Components of a Business Plan Cover Page Executive Summary First page of your plan, summarizes entire document, write last

Executive Summary Description of company’s history Company’s objectives / goals / mission statement Description of goods or services What market you will compete in What is your competitive advantage Projected growth Describe key management Funding requirements Where did company come from --- What differentiates 2. ----

Components of a Business Plan Cover Page Executive Summary Table of Contents

Components of a Business Plan Cover Page Executive Summary Table of Contents Description of Business First page of your plan, summarizes entire document, write last

Description of Business What Type of Business Is It Status – Start-up, Expansion, Merger Legal Description of Business History of Business Products and/or Services Offered Market Analysis Sole proprietorship, LLC, corp., etc Where did company come from and why – need? Opportunity? Include competitive advantages, challenges such as government regs, packaging, pricing, new products, Local, national international, niche? Size of market and where is it, what % do you need?, growth potential, Target markets, How, print, internet, radio, billboards, direct mail, trade shows, alliances Why are you located there? Market, raw materials/ financial benefits. Know who your competition is, what your competition is doing Personnel is everything, passion

Market Analysis & Research You must learn… Who How Where What When Why How often How much

Description of Business What Type of Business Is It Status – Start-up, Expansion, Merger Legal Description of Business History of Business Products and/or Services Offered Market Analysis Marketing Plan/Strategy Sole proprietorship, LLC, corp., etc Where did company come from and why – need? Opportunity? Include competitive advantages, challenges such as government regs, packaging, pricing, new products, Local, national international, niche? Size of market and where is it, what % do you need?, growth potential, Target markets, How, print, internet, radio, billboards, direct mail, trade shows, alliances Why are you located there? Market, raw materials/ financial benefits. Know who your competition is, what your competition is doing Personnel is everything, passion

The “P’s of Marketing” Product Price Promotion Placement People

Description of Business What Type of Business Is It Status – Start-up, Expansion, Merger Legal Description of Business History of Business Products and/or Services Offered Market Analysis Marketing Plan/Strategy Location Competition Management and Operational Team Sole proprietorship, LLC, corp., etc Where did company come from and why – need? Opportunity? Include competitive advantages, challenges such as government regs, packaging, pricing, new products, Local, national international, niche? Size of market and where is it, what % do you need?, growth potential, Target markets, How, print, internet, radio, billboards, direct mail, trade shows, alliances Why are you located there? Market, raw materials/ financial benefits. Know who your competition is, what your competition is doing Personnel is everything, passion

Management Team Business Background Experience Educational Background Personal Data Responsibilities Salaries and Benefits Additional Resources Pertinent to this industry? Management experience Formal and informal Be careful Who is responsible for what Industry competitive, benefits 30-40% Additional resources – insurance, attorneys, accountants, consultants, Small Business Administration, local business information centers, Chamber of Commerce, Universities/ colleges, federal , state and local agencies, WWW, Bankers

Description of Business What Type of Business Is It Status – Start-up, Expansion, Merger Legal Description of Business History of Business Products and/or Services Offered Market Analysis Marketing Plan/Strategy Location Competition Management and Operational Team Personnel Sole proprietorship, LLC, corp., etc Where did company come from and why – need? Opportunity? Include competitive advantages, challenges such as government regs, packaging, pricing, new products, Local, national international, niche? Size of market and where is it, what % do you need?, growth potential, Target markets, How, print, internet, radio, billboards, direct mail, trade shows, alliances Why are you located there? Market, raw materials/ financial benefits. Know who your competition is, what your competition is doing Personnel is everything, passion

Personnel Current and Future Needs What Skills Availability Salaries/Wages Benefits How many and what skills, full time/part time

Description of Business What Type of Business Is It Status – Start-up, Expansion, Merger Legal Description of Business History of Business Products and/or Services Offered Market Analysis Marketing Plan/Strategy Location Competition Management and Operational Team Personnel Funding through Loans/Investments Sole proprietorship, LLC, corp., etc Where did company come from and why – need? Opportunity? Include competitive advantages, challenges such as government regs, packaging, pricing, new products, Local, national international, niche? Size of market and where is it, what % do you need?, growth potential, Target markets, How, print, internet, radio, billboards, direct mail, trade shows, alliances Why are you located there? Market, raw materials/ financial benefits. Know who your competition is, what your competition is doing Personnel is everything, passion

Components of a Business Plan Cover Page Executive Summary Table of Contents Description of Business Financial Information First page of your plan, summarizes entire document, write last

Financial Information Projected Financial Statements Income Statements Cash Flow Statements Balance Sheets – Current Cash Position Assumptions Break Even Analysis Sources and Uses Projections – use industry averages and tweak from there, a lot of research is required, cost analysis, market opportunities, use Small Business Development Centers Income Statements – Profit and Loss Statements Cash Flow Statements – Receipts and Disbursements Balance Sheets – Current Cash Position and owners equity some business 1.5 – 2 x annual receipts Assumptions Capital Costs – land buildings, equipment Start-up or one-time expenses – legal fees, licenses Define Unit production and selling costs, cost of sales, Monthly sales for period of time – selling swim wear, sweet corn, snow blowers, etc. Estimate fixed expenses, rent, salaries, marketing expenses, Inventory both incoming and outgoing Credit policies, 30 day net. Income taxes

Components of a Business Plan Cover Page Executive Summary Table of Contents Description of Business Financial Information Supporting Documents First page of your plan, summarizes entire document, write last

Supporting Documents Resumes Credit information Letters of Intent Letters of Support Leases, Purchasing and Marleting Agreements Legal Documents Demographics Resumes of management Quotes or estimates Credit LOI

Components of a Business Plan Cover Page Executive Summary Table of Contents Description of Business Financial Information Supporting Documents Summary First page of your plan, summarizes entire document, write last

Components of a Business Plan Cover Page Executive Summary Table of Contents Description of Business Financial Information Supporting Documents Summary Resources First page of your plan, summarizes entire document, write last

Summary Tie Up Any Loose Ends Operational Tool

Components of a Business Plan Cover Page Executive Summary Table of Contents Description of Business Financial Information Supporting Documents Summary Resources First page of your plan, summarizes entire document, write last

Writing a GOOD Business Plan Create a Vision Be Honest Document Financial Projections Court Your Customers Respect your Competition Be Willing to Take Risks Get Other’s Opinions Expect the Unexpected Remember What Makes Your Business Unique Continuously Revise Old Goals and Set New Ones Create a Business Plan and Follow It Outline a clear vision and set of values and build upon that Use industry info, personal experience Your customer is right, he is king and treat him as such Competition can be source of info Risk is not a bad word AS LONG AS it is preceded by the word “Calculated”, Understand and manage risk There is experience in all fields – use it Have contingency plans for everything – Emergency Action Plans, adapt for changes What makes you successful?

Thank You Outline a clear vision and set of values and build upon that Use industry info, personal experience Your customer is right, he is king and treat him as such Competition can be source of info Risk is not a bad word AS LONG AS it is preceded by the word “Calculated”, Understand and manage risk There is experience in all fields – use it Have contingency plans for everything – Emergency Action Plans, adapt for changes What makes you successful?