Business Development Job Description Sample
Business Development Job Description Sample
Selling Your Business - More Than a Price Tag By Albert Guevara
With so much time, money and energy invested, you want to ensure that the fruits of your labor are duly rewarded.
Before you take the plunge, take stock of the marketplace. Is the economy too sluggish or credit too tight? Decide if this is the most opportune time to sell and if your company is ready.
Put yourself in the buyer's seat to determine the sale ability of your business. It is important to realistically assess its value and strategically target prospective buyers who can benefit from the purchase.
Pay close attention to how the sale may affect your financial and personal situation, and what impact it will have on your employees, suppliers and family. The implications may run the gamut from legal to moral to financial. The sale is bound to take an emotional toll on you.
Look very closely at your reasons for selling, the most common of which are health, boredom, workload, business problems and money. Consider alternatives that may be better for you -- franchising; developing a partnership; merging with a similar company; going public; and absentee ownership or partial retirement, two situations which would enable you to devote less time to the business. Perhaps one of these is the solution.
If after careful soul-searching and analysis, the motives for selling your company appear to be genuine, then carefully develop a comprehensive selling plan. It should include the evaluation, preparation, pricing, marketing and actual selling of the business; negotiations; and closing the sale. Following your plan and surrounding yourself with competent advisors can help you avoid common pitfalls and unpleasant surprises, and result in a smooth transition of ownership.
A Little Objectivity Never Hurts
Selling a business is a complex undertaking. As most of your assets may be wrapped up in the venture, you want to ensure you can sell it for what it's worth. Consider using a professional consultant to eliminate some of the worry and provide expertise you do not possess.
A professional can bring to bear the objectivity often missing in your own analysis firm. Investment bankers, merger and acquisition firms and business brokers can provide the needed services; business brokers generally deal with businesses worth $1 million or less. It is wise to get references for intermediaries and to select someone who is familiar with small businesses overall, and particularly with firms similar to your own.
Identifying a buyer is only part of the reason for securing a consultant. If you have gone through the process of selling a home, you know that a professional consultant will help you identify and negotiate with a potential buyer and posture the business for sale -- cleaning up law suits, updating financials, ensuring that records reflect the true nature of the company, and maintaining key personnel through the negotiation period and longer. It is far more difficult to sell a business than to buy one.
Also, the importance of using attorneys cannot be understated. They are able to handle issues which, if ignored, can nullify the transaction. Professional legal counsel is critical to completing the deal at a fair price with reasonable conditions and terms and a minimum amount of business risk.
As well, if you are going to sell your business and then continue to run it, never negotiate on your own because at the end of the day, the buyer will be your boss.
It is also a good idea to engage the services of an accountant to provide tax advice and address the tax repercussions of the sale.
Consultants not only help identify prospective buyers and orchestrate the transaction, but they can serve as intermediaries protecting your confidentiality, and help arrange financing. These services, however, do not come cheaply. Be prepared to pay a fixed fee, hourly rate, out-of-pocket expenses, a percentage of the sales price, or some combination.
Marketing 101 Stands its Ground
The four P's of marketing -- product, price, promotion and packaging -- make sense even when you are selling a business. But before concentrating on these areas, take into account two other P's: be prepared to invest time in selling your business, and remember that patience will become one of your greatest virtues. Realistically, the process will take anywhere from six months to two-and-a-half years, so don't be lured into thinking that a deal will materialize overnight. The negotiations themselves may take as long as six months.
Also make sure your expectations and objectives are realistic or you are bound to encounter frustration.
Key Selling Factors
Similar to anything else on the market, the product has to be attractive to potential buyers. And in the case of a business, the less risk attached to it, the more a buyer is apt to be interested.
Timing is everything. Follow a suggestion based on the law of supply and demand -- buy when everyone else is selling and sell when everyone else is buying. The less strategic times to sell -- when the business is doing poorly; is involved in a lawsuit; is expecting an increase in revenue or profits, making postponement more advantageous; and when the economy is in a recession or the particular industry is experiencing a downturn. A sound economic decision to sell is if you can net seven or eight times your annual compensation.
Always negotiate from a position of strength, which is much easier to do if your company is prosperous. The best time to sell is when you don't have to.
Designing an informal rating scale for key selling factors will give you an idea of how well your business may fare in the marketplace.
Your company's history -- how long you have successfully run the business and how effectively the business has met objectives -- will influence potential buyers. The more solidly you present the firm, the more appealing it will be. Don't forget that the goodwill your company has built up also counts for some points.
People are the core of the business. You need to rate your staff's competence, their morale, and whether or not they will remain once the venture is sold. If the business is overly reliant on you as the owner, it may be necessary to train or hire a successor or offer to stay on, at least temporarily.
Products and services are often the business. Consider quality, price, reputation, delivery, service and competitiveness. Be realistic about this evaluation, basing the rating on how prospective buyers would objectively perceive your products and services.
Undoubtedly, a potential buyer will want to know how well the enterprise has performed financially. Take into consideration the firm's capabilities, history, potential and the objectives achieved. Above all, ensure you can substantiate the performance you claim.
Keeping orderly records and books instills confidence in a prospective buyer. It's not worth trying to hide financial details. Very likely they will come to light and endanger your own credibility and chances of selling. Raise capital in order to get the company out from under any financial burdens. Do not attempt to sell your business in a distressed state, because it's difficult to pull off a fast sale at a fair price.
The condition of facilities and equipment certainly influences the sale of your operation. In rating them, consider their functionality, competitiveness and ability to move the business into the future. Just as if you were selling a house, strive to make the work environment as attractive and comfortable as possible to potential buyers. This may entail repainting; cleaning windows, furniture and equipment; or even making repairs.
Existing long-term agreements with customers and vendors are also a selling point, as they instill confidence in your consistent ability to provide high quality products or services, and pay bills.
Your relationship with lenders is an important criterion in the analysis of your business. Financial strength with lenders is an indication of the security and profitability of the company.
Very similar to the considerations involved in buying a house, location, location, location is important to potential buyers. A prime location -- with available parking, accessibility, well-maintained surroundings and nearby transportation -- can be a strong drawing card, as well as agreeable terms for leasing space, options to buy and opportunities to expand. A prospective buyer wants to feel assured that the business is suitably situated to help ensure its continued efficient operation.
Will your business survive the decade or will its products and services be replaced by tomorrow's iPod and next year's environmentally correct garbage bag? If long-term growth looks more like short-term life, then you may be in trouble. On the other hand, if your industry and specific marketplace are healthy, these growth opportunities can become strong selling points.
It is necessary to rate your competitive advantage in terms of price, products and service. This may well be the time to develop a new competitive strategy.
Play off the strengths of your venture, take the weaknesses under consideration, and decide if it is worth making changes that may pay off when the business is on the market. Identical to any other commodity, a company has to be attractive to both a buyer's pocketbook and entrepreneurial spirit.
So What's It Really Worth?
Based on a thorough analysis of your assets, you now need to place a price tag on your enterprise. Make sure you have clarified in your mind precisely what you plan to sell. That can include assets, stock, real estate, franchises, a part of the business, and your time as measured through employment, training or consulting.
Unfortunately, establishing a fair market value for your business is not always an easy task. There is often a discrepancy between what you think the company is worth and the price at which it will actually sell.
The appraisal process can be approached in a variety of ways. Methods of evaluation run the gamut from the following informal guidelines to rigid mathematical calculations made by professional appraisers.
In determining the value of a company, focus on four aspects: the condition of the existing lease; the location of the business; the replacement value of its equipment, fixtures and furniture; and the actual numbers on the books. Often multiples of income and earnings, about three to five times, can generate a realistic selling price. You have to sell what's really there. Sell the steak, not the sizzle. Prospective buyers want the facts - including balance sheets, and profit and loss statements.
Remember a prospective buyer is looking at your business much the same way you did when you started it. Buyers don't want to pay so much that they only buy themselves a job. They want to be able to recover their investment and fulfill their dreams and expectations.
Undertake a self-appraisal of your assets -- lease, location, physical equipment and inventory (at wholesale prices); consider the amount of receivables and the value of the business based on three to six months of business income; and finally, take a look at comparable companies. Studying similar businesses is valuable, but also get a professional appraisal of assets, especially if they are highly marketable. If not, a discounted cash flow analysis -- based on a realistic projection of sales, expenses, investment needed for growth, and working capital requirements - is recommended.
Many sellers have grandiose notions about the selling price. As a small business owner, you must be careful not to have rigid ideas about the company's worth. I have seen some owners assume an inflated view of their enterprises, but I have also worked with owners who have erred in the other direction by initially undervaluing them.
Today it's all about cash flow, cash flow, cash flow because the credit market is tight. Acquisitions are becoming more strategic than financial.
In more of a textbook approach, financial records and a calculation of assets can provide a good foundation for an evaluation. The following guidelines offer the basics and do not discuss all considerations which may affect the numbers.
First, determine the adjusted tangible net worth of your business by placing a dollar value on tangible assets minus liabilities.
Second, calculate your company's net income -- the difference between earnings taken over several years and your expenses, including costs of goods and services, wages and operating costs.
Third, estimate the value of your business as an investment. In short, this number represents the return on your adjusted tangible net worth if it were invested in something else of comparable risk at prevailing interest rates.
Fourth, calculate your firm's excess earning power. This number is net income minus earning power (which is the investment worth plus your salary as the owner).
All of these calculations -- adjusted tangible net worth, net income and excess earning power -- produce a net base value or the value of all of the business' tangible assets.
The evaluation of intangible assets is a subjective and more difficult task. Intangible factors include location; technological resources and special skills; trademarks, patents and copyrights; new products and services; earnings trends within your industry; growth potential; personnel; competition in the marketplace; and customer goodwill.
Although it is hard to place a monetary value on intangibles, one suggestion is to multiply the excess earning power figure explained above by a factor of three. Add this to your net base value, and you have just placed a price tag on your business.
Now the question is whether or not a prospective buyer can afford your company, and here, effective marketing is crucial to cutting the deal.
Packaging/Promotion Prescribe Perception
As in the case of successfully selling any other product, it is crucial to define your potential market and develop a plan for targeting it. The marketing plan should encompass packaging to make your business look as appealing as possible and promotion so prospective buyers will perceive your business as you desire them to.
First, define your market. There are a variety of potential buyers in the marketplace -- individuals, vendors or suppliers, employees, competitors, companies and investment firms. Qualify these buyers to determine which are most valid, and whose objectives you can best satisfy. Clearly identifying the needs of qualified buyers will enable you to emphasize the appropriate features and benefits of your business that best match these needs.
Focus on buyers who already know your business. This could lead to a higher selling price, as well as reduce the time involved in selling it.
Remember that while prospective buyers are analyzing you and your company, it is equally key for you to research their abilities, business and personal qualifications, and financial situations as well.
Once you have preliminarily qualified a buyer, provide a brief description of the business (including general financial highlights, the benefits that would accrue the buyer, and an indication of the financial requirements a buyer should expect to meet). It is important at this point to maintain confidentiality through a formal agreement. News about the impending sale of your business can stir up rumors, fragment your relationships with customers and suppliers, and destroy the morale of employees.
A more comprehensive analysis of the firm should follow if a prospective buyer turns out to be really interested and can afford to buy the business. This is your company's packaging, and as with other packages, needs to distinguish your enterprise from the competition. Preliminary discussions often accompany the business analysis.
The analysis should include an introduction; a description of the proposed transaction; an overview of the business, including its history, products and services, facilities and equipment, operations, markets and competition; a review of the organizational structure, management and staff; a financial analysis; and growth expectations and marketing strategies.
Promotion goes hand in hand with targeting potential buyers, and is the vehicle for gaining their attention.
Advertising in the business opportunity section of a local newspaper, the Internet, or in The Wall Street Journal, or placing blind ads in the classifieds, will reach the general public. Advertising in specific trade publications can narrow down your audience. Direct mail, telemarketing (especially when an intermediary is used to maintain confidentiality), and networking are other possible channels of promotion.
In addition, an astute consultant should be able to provide names of potential buyers who have previously indicated interest in a business in your specific industry.
Structuring the Deal
Prior to an offer being made, you and the prospective buyer must establish a structure for the deal -- the amount of payments, when they are paid and in what form they are made. As the owner, you can affect affordability, which is a key issue at this point.
Methods of payment may include cash; stock; notes payable, in which the seller agrees to carry back a note for part of the purchase price which is repaid, with interest, by the buyer; an earn-out situation, in which the buyer agrees to pay additional money if the company earns a certain amount of predetermined profit; and consulting and employment contracts. A non-compete clause may also be part of the deal, in which the seller agrees not to compete within some appropriate geographic limits for some reasonable period of time.
Present a deal that is structured the way you think will make the most sense to a prospective buyer while achieving your own objectives as well.
When you feel it's time to push for an offer, remember to make it easy for the buyer to transact the deal. An official offer should contain a description of what the buyer intends to purchase; the date, expiration date and closing date of the offer; the price; the terms; the repayment schedule; down payment, if applicable; and any contingencies. A non-refundable deposit usually accompanies the offer.
It's a Matter of Compromise
The negotiation stage can be a tricky one. When a deal is on the table, an agreement will happen somewhere in the middle but not without a lot of stress and strain. The more sellers think about their businesses, the higher a value they place on them, which is often unrealistic. Their expectations are too high. Buyers, on the other hand, who are facing a credit crunch, want to make a wise investment without overpaying. So the dilemma becomes how to bridge the gap.
The answer is compromise. Given the current economic climate, the posture of banks toward financing such transactions is tight, so you need more creative ways of financing than in the past. An earn-out or a note payable are recommended.
As you move into the negotiation process, be prepared to counter any buyer objections such as too high an asking price or an unsuitable location. Based on your previous analysis of your company's strengths and weaknesses, you should be able to anticipate some of these objections, and make reasonable concessions, if necessary, to keep the negotiations moving.
Establish credibility, maintain integrity, persuasively play up the returns of the transaction, and reduce any perceived risk associated with buying your business. Negotiations can be a win-win situation if both parties benefit from the results.
By keeping things in perspective, you are bound to come close to meeting your expectations. At the same time, realize that if the deal doesn't go through, other prospective buyers exist in the marketplace.
Signing on the Dotted Line
Once an acceptable offer has been made, your attorney will begin drawing up the final documents. Additional deposit money may be put up at this time. Under what is termed the "due diligence" process, the buyer now has an opportunity to review all the company's records, books, facilities, contracts and, if the offer contained such contingencies, to talk with employees, customers, suppliers and others. At this point, you must refrain from entertaining any other offers.
Unfortunately, closing the transaction does not always run smoothly. A checklist of what needs to be done -- such as transfer of banking arrangements and utilities, customer lists, a breakdown of funds to be disbursed, and clearance of outstanding liens -- and who is responsible can often mitigate any problems that may arise.
When the final papers are signed, you now have time to pursue other interests or take that long-awaited, three-month vacation in Hawaii. But if you still have the entrepreneurial spirit that initially motivated you to start up a company, you may well find yourself on the other side of the table -- as the prospective buyer of a business.
In summary, using a broker for the right reasons -- such as sales visibility, thorough canvassing of the market, and scouting for qualified buyers -- makes good sense when selling a business. However, it's important not to abdicate your position as the principal voice during negotiations. No one is better prepared to represent your interests, particularly if you clearly understand your own needs. Be realistic in your expectations as to what the business is worth. It's also critical not to sell under pressure. A mutually satisfactory sale requires both time and patience. Bringing in a broker from the beginning is money well spent.
A Sample Short Business Write-up
A beautifully appointed French restaurant in Fairfield County is available for sale.
The restaurant seats 70 people and is open for dinner 6 days a week. The chef and
the restaurant's cuisine have received numerous awards. An excellent lease has 5 years to run.
The owner is sacrificing her restaurant because of illness. The owner's cash flow has averaged more than $70,000 for the last 2 years.
Picture yourself greeting your guests and welcoming them into your own establishment.
Everything is in place, ready for you. You can expand your business to provide luncheons, and add substantially to your income.
The buyer should be able to provide at least half of the $200,000 asking price in cash.
A Sample Business Opportunity Ad
Beautiful French Dinner Restaurant for Sale
Seats 70. Profitable. Everything ready for your
touch. You can add lunch for even more volume.
Long lease makes you secure to build your business.
Priced fairly, terms available to qualified buyer. The Steps of Marketing and Selling a Business (Time in Months: Low to High)Preparation (1-12) Packaging/documentation (1-3) Prospecting, qualifying, initial visit (1-3) Negotiations to letter of intent (1-6) Due diligence (1-3) Drawing final contracts, preparation for closing, final closing (2-3) Total (6-30)
Albert Guevara is a veteran small business marketing consultant serving the Small Business Owner/Operator and Independent Professional. Through his on hands service and published articles, he has served thousands by providing dynamic, innovative, unique strategies and tools to increase traffic, sales, and profits for his Clients. Visithttp://www.albertguevara.com for more.
About the Author
FLASHBACK - July 14, 2011
Legislators were undecided yesterday whether to approve a recently-completed Criminal Code for the Commonwealth and instead sought more time to review the 600-page comprehensive proposal from the Attorney General's Office.
Business Development Job Description Sample
How to Get a Good Job : Putting Together a Resume
Don't Start A Business Without Reading This Article
Thinking of going into business ? A very wise thought, and a certain way of fulfilling your dreams of financial independence - saying goodbye to the tyranny of the poor paypacket, and being shackled to the millstone of time-based toil. However very many dreams are quick to become nightmares . Save yourself the long sleepless nights and read these few lines.
It can not be said too many times that success in business comes as a result of planning. You need to have a detailed, written plan that shows you what your ultimate goal is, the reason for your goal, and to enumerate each milestone that must be passed in order to reach your goal.
A business plan is a written definition of, and an operational plan for achieving your goal. It is the tool which defines your basic product, income objectives and specific operating procedures. You must have a business plan if you aim for yoir business to attract investors, obtain financing and hold onto the confidence of your creditors, particularly in times of cash flow shortages.
The business plan is a long range "map" to guide your business to the goal you've set for it. This plan details the what, why, where, how and when, of your business .Your financial proposal is a request for money based upon your business plan - your business history and objectives.Understand the differences. They are closely related, but they are not interchangeable.
Writing and putting together a "winning" business plan takes study, research and time, so don't try to do it all in just one or two days. Dpn't sit atyour computer and bang it out in thirty minutes. Coax it all out gently from your brain. Start with a loose leaf notebook, plenty of paper, pencils, pencil sharpener, and several erasers. Get your mind "in gear" and begin thinking about the business plan. As you do this, you will note that your mind begins to race at more than 10,000 thoughts and ideas per minute . Aren't you glad you are not at your computer ? So, it's a good idea to leave off the writing for a few days, and just carry a pocket notebook and jot down the business ideas as they come to you - ideas for sales promotion, recruiting distributors, and any other thoughts on how to operate and/or build your business. Later, when you're actually working on your business plan, you can take out this "idea notebook" - evaluate your ideas, rework them, refine them, and integrate them into the overall "big picture" of your business plan. If the idea of doing this has you fazed and feeling quite hopeless, never mind you can invest a little money in buying a sample business plan which relates to your business . (See Article Reference)
The best business plans for even the smallest businesses run 25 to 30 pages or more, so you'll need to "title" each page and arrange the different aspects of your business plan into "chapters." The format should pretty much run as follows:
- Title Page
- Statement of Purpose
- Table of Contents
- Business Description
- Market Analysis
- Business Location
- Management
- Current Financial Records
- Explanation of Plans For Growth
- Explanation of Financing for Growth Documentation
- Summary of Business & Outlook for The Future
- Listing of Business & Personal References
This is a logical organization of the information every business plan should cover. There are reasons for structuring your business plan. Having a set of "questions to answer" about your business forces you to take an objective and critical look at your ideas. Putting it all down on paper allows you to change, erase and refine everything to function in the manner of a smoothly oiled machine. You'll be able to spot weaknesses and strengthen them before they develop into major problems. Overall, you'll be developing an operating manual for your business - a valuable tool which will keep your business on track, and guide you in the profitable management of your business.
It is assumed that the business is your idea, and not a fad activity, so it is very important that YOU do the planning. This is YOUR business plan, so YOU develop it, and put it all down on paper just the way YOU want it to read. out of other people is advice ; talk with,listen to, and observe, other people running similar businesses; enlist the advice of your accountant and attorney - but at the bottom line, don't ever forget that it has to be YOUR
BUSINESS PLAN! Remember too, that statistics show the greatest causes of business failure to be poor management and lack of planning - without a plan by which to operate, no one can manage; and without a direction in which to aim its efforts, no business can attain any real success.
On the very first page, which is the title page, put down the name of your business - GREAT BIZ; business address underneath. Now, skip a couple of lines, and write in all capital letters: PRINCIPAL OWNER - followed by your name if you're the principal owner. On your finished report, you would want to center this information on the page, with the words "principal owner" offset to the left about five spaces.
Example:
GREAT BIZ
1234 SW Great Ave. Greatville, USA 00000
PRINCIPAL OWNER: Your Name
That's all you'll have on that page, except the page number...
-1-
Following your title page is the page for your statement of purpose. This should be a simple statement of your primary business function, such as:
We are a service business engaged in the business of selling business success manuals and other information by mail.
The title of the page should be in all capital letters across the top of the page, centered on your final draft - skip a few lines and write the statement of purpose. This should be direct, clear and short - never more than two (2) sentences in length.Then you should skip a few lines, and from the left hand margin of the paper, write out a subheading in all capital letters, such as:
EXPLANATION OF PURPOSE.
From, and within this subheading, you can briefly explain your statement of purpose, such as: Our surveys have found most entrepreneurs to be "sadly" lacking in basic information that will enable them to achieve success. This market is estimated at more than 100 million persons, with at least half of these people actively "searching" for sources that provide the kind of information they want, and need.
With our business, advertising and publishing experience, it is our goal to capture at least half of this market of information seekers, with our publication, MONEY MAKING MAGIC! Our market research indicates we can achieve this goal, and realize a profit of $1,000,000 per year within the next 5 years...
The above example is generally the way you should write your "explanation of purpose," and in subtle definition, why you need such an explanation. Point to remember: Keep it short. Very few business purpose explanations are justifiably more than a half page long.
Next comes your table of contents page. Don't really worry about this one until you've got the entire plan completed and ready for final typing. It's a good idea though, to list the subjects (chapter titles) as I have, and then check off each one as you complete that part of your plan. By having a list of the points you want to cover, you'll also be able to skip around and work on each phase of your business plan as the idea or the interest in organizing that particular phase, stimulates you. In other words, you won't have to make your thinking or your planning conform to the chronological order of the "chapters" of your business plan - another reason for the loose leaf notebook...
In describing your business, it's best to begin where your statement of purpose leaves off. Describe your product, the production process, who has responsibility for what, and most importantly, what makes you product or service unique - what gives it an edge in your market. You can briefly summarize your business beginnings, present position and potential for future success, as well.
Next, describe the buyers you're trying to reach - why they need and want or will buy your product - and the results of any tests or surveys you may have conducted. Once you've defined your market, go on to explain how you intend to reach that market - how you'll alert these prospects to your product or service and induce them to buy. You might want to break this chapter down into sections such as... publicity and promotions, advertising plans, direct sales force, and dealer/distributor programs. Each section would then be an outline of your plans and policies.
Moving into the chapter on competition, identify who your competitors are their weaknesses and strong points - explain how you intend to capitalize on those weaknesses and match or better the strong points. Talk to as many of your "indirect" competitors as possible - those operating in different cities .One of the easiest ways of gathering a lot of useful information about your competitors is by developing a series of survey questions and sending these
questionnaires out to each of them. Later on, you might want to compile the answers to these questionnaires into some form of directory or report on this type of business.It's also advisable to contact the trade associations and publications serving your proposed type of, business. Forinformation on trade associations and specific trade publications, visit your public library, and after explaining what you want, ask for the librarian's help.
The chapter on management should be an elaboration on the people operating the business. Those people that actually run the business - their job titles, duties, responsibilities and backfilled resume's. It's important that you "paint" a strong picture of your top management people because the people coming to work for you or investing in your business, will be "investing in these people" as much as your product ideas. Individual tenacity, mature judgement under fire, and innovative problem-solving have "won over" more people than all the AAA Credit Ratings and astronomical sales figures put together.
People becoming involved with any new venture want to know that the person in charge - the guy running the business knows what he's doing, will not lose his cool when problems arise, and has what it takes to make money for all of them. After showing the "muscle" of this person, go on to outline the other key positions within your business; who the persons are you've selected to handle those jobs and the sources as well as availability of any other help you might need.
If you've been in business on any kind of scale, the next chapter is a picture of your financial status - a review of your operating costs and income from the business to date. Generally, this is a listing of your profit & loss statements for the past six months, plus copies of your business income tax: records for each of the previous three years the business has been an entity.
The chapter on the explanation of your plans for the future growth of your business is just that - an explanation of how you plan to keep your business growing - a detailed guide of what you're going to do, and how you're going to increase your profits.These plans should show your goals for the coming year, two years, and three years. By breaking your objectives down into annual milestones, your plans will be accepted as more realistic and, be more understandable as a part of your ultimate success.
Following this explanation, you'll need to itemize the projected cost and income figures of your three year plan. It'll take a lot of research, and undoubtedly a good deal of erasing, but it's very important that you list these figures based upon thorough investigation. You may have to adjust some of your plans downward, but once you've got these two chapters on paper, your whole business plan will fall into line and begin to make sense. You'll have a precise "map" of where you're headed, how much it's going to cost, when you can expect to start making money, and how much.
Now that you know where you're going, how much it's going to cost and how long it's going to be before you begin to recoup your investment, you're ready to talk about how and where you're going to get the money to finance your journey. Unless you're independently wealthy, you'll want to use this chapter to list the possibilities and alternatives.
Make a list of friends you can approach, and perhaps induce to put up some money as silent partners. Make a list of those people you might be able to sell as stockholders in your company - in many cases you can sell up to $300,000 worth of stock on a "private issue" basis without filing papers with the Securities and Exchange Commission. Check with a corporate or tax attorney in your area for more details. Make a list of relatives and friends that might help you with an outright loan to furnish money for the development of your business.
Then search out and make a list of venture capital organizations. Visit the Small Business Administration office in your area - pick up the loan application papers they have - read them, study them, and even fill them out on a preliminary basis - and finally, check the costs,determine which business publications would be best to advertise in, if you were to advertise for a partner or investor, and write an ad you'd want to use if you did decide to advertise for monetary help.
With a listing of all the options available to your needs, all that's left is the arranging of these options in the order you would want to use them when the time comes to ask for money. When you're researching these money sources, you'll save time by noting the "contact" to deal with when you want money, and whenever possible, by developing a working relationship with these people.
In your documentation section, you should have a credit report on yourself. Use the yellow pages or check at the credit department in your bank for the nearest credit reporting office. When, you get your credit report, look it over ant take whatever steps are necessary to eliminate any negative comments. Once these have been taken care of, ask for a revised copy of your report and include a copy of that in your business plan.
If you own any patents or copyrights, include copies of these. Any licenses to use someone else's patent or copyright should also be included. If you own the distribution, wholesale or exclusive sales rights to a product, include copies of this documentation. You should also include copies of any leases, special agreements or other legal papers that might be pertinent to your business.
In conclusion, write out a brief, overall summary of your business - when the business was started, the purpose of the business, what makes your business different, how you're going to gain a profitable share of the market, and your expected success during the coming 5-years.
The last page of your business plan is a "courtesy page" listing the names, addresses and phone numbers of personal and business references - persons who have known you closely for the past five years or longer - and companies or firms you've had business or credit dealings with during the past five years.
And, that's it - your complete business plan. Read it over once a day for a week or ten days. Take care of any changes or corrections, and then have it reviewed by an attorney and then, an accountant. It would also be a good idea to have it reviewed by a business consultant serving the business community to which your business will be related. Now you're ready to have it printed and published for whatever use you have planned for it - distribution amongst your partners or stockholders, as the business plan for putting together a winning financial proposal, or as a business operating manual.
Print it out in good quality paper. Go to a stationery store, and pick up an ordinary, inexpensive bind-in theme cover for each copy of your business plan. Have the holes punched in the pages of your business report to fit these binders and then slip each copy into a binder of its own.Now you can relax, take a break ant feel good about yourself. You have a complete and detailed business plan with which to operate a successful business of your own. A plan you can use as a basis for any financing proposal you may want to submit. And a precise road-map for the attainment of real success.
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