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The Business Plan. Topics and concerns.

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Executive Summary
Vision and Mission
 
Present Situation  
Vision and Mission Goals
Objectives  
Company Overview
 
Legal Business Description  
Management Team  
Board of Directors  
Strategic Alliances
Product Strategy
 
Current Product
Research and Development
Production and Delivery
Market Analysis
Market Definition
Customer Profile
Competition
Risk
Marketing Plan
Sales Strategy
Distribution Channels
Advertising and Promotion
Public Relations
Financial Plan
Assumptions
Financial Statements
Capital Requirements
Exit/Payback Strategy
Conclusion
Supporting Documents

Executive Summary

  

[ ] This section is an abstract of your company's present status and future direction.

Keep it to 1-3 pages.

 

[ ] Because it gives the reader an overview of your business and indicates how your business plan is organized, the Executive Summary is usually written after all the other sections of your business plan are completed.

 

Vision / Mission

 

In 19[xx], Lawson Consulting was [formed / created] to [describe the purpose of your activities].

Overall, our company can be characterized as a [x] (high-profile retail merchant, aggressive distributor or x, quality manufacturer of x--the business and image for your customers to see).

[ ] Examples of purpose: produce or distribute [x], take advantage of [x], fill the void of [x]

[ ] Include company vision and mission statements covering your line of products or services: What kind of company do you intend to be? What is your desired company image?

Background

 For many years people have [x].

[ ] How people managed to do without [your product / service].

The "state of the art"/condition of the industry today is such that [x].

[ ] Explain your present situation in the industry vis-a-vis competition or technology, etc.

[ ] How and where a similar product or service is now being used.

[ ] Describe the [concept / opportunity / niche] in your marketplace to exploit as you build your business to the next level, etc.

We have just started / completed the design / development / testing / introduction of (product / service) -- a novel and proprietary [x] (example: soap for cleaning vinyl, retail store, construction tool, etc.)

The legal form of Lawson Consulting is [Sole Propietorship / General or Limited Partnership / Corporation / Subchapter S-Corporation], located in [list primary business address as well as satellite locations].

[ ] Explain choice of form.

By 19[xx] our operation was producing $[x] (sales, units, products), and has operated at [financial condition -- profitable, break-even, etc.] ever since. Revenue projected for fiscal year 19[xx] without enternal funding is expected to be $[x]. Annual growth is projected to be [x]% per year through 19[xx].

Now, Lawson Consulting is at a point where [what you need or want to do next].

[] Explain your place in the industry vis-a-vis competition or technology, etc.

Objectives

[ ] Near term and long term.

Revenue projected for fiscal year 19[xx] without external funding is expected to be $[x]. Annual growth is projected to be [x]% per year through 19[xx]. We feel that within [x] years Lawson Consulting will be in a suitable position for [further expansion, an initial public offering or profitable acquisition]. Our objective, at this time, is to propel the company into a prominent market position.

Capital Requirements

 According to the opportunities and requirements for Lawson Consulting described in this business plan, and based on what we feel are sound business assumptions, our [initial / first year / total] capital requirements are for $[x] by [date], 19[xx].

 To accomplish this goal we have developed a comprehensive plan to intensify and accelerate our marketing and sales activities, product development, services expansion, engineering, distribution and customer service. To implement our plans we require a [loan / investment] totaling $[x] for the following purposes:

 [ ] Choose the activities pertinent to your goals:

Build manufacturing facilities and ramp up production and inventory to meet customer demands.

Maximize sales with an extensive campaign to promote our products / services.

Add retail outlets, regional marketing / sales offices, print a direct-mail catalog.

Reinforce Customer Support services to handle the increased demands created by the influx of new orders and broader coverage of existing accounts.

Augment company staff to support and sustain prolonged growth under the new marketing plan.

Increase Research and Development to create additional follow-on products as well as to further fine-tune our competitive advantages.

We anticipate additional investment requirements of $[x] and $[x] in [x] [months / years] and [x] [months / years] to allow us to increase production capacities to meet market demand.

Management Team

 Our management team consists of [x] men and women whose backgrounds consist of [x] years of marketing with [list company names], and [x] years of corporate development with [list company names].

 Our management team also includes [x] men and women with [x] years of engineering and design with Lawson Consulting, a chief financial officer with [x] years of accounting, administrative, merger and acquisition, banking experience with Lawson Consulting.

 [ ] Strong company backgrounds pertinent to your management team's functions are good references to demonstrate a solid background and assure a higher probability of future success.

In-House Management

  [x], President

[x], Vice President of Marketing

[x], Vice President of Sales

[x], Vice President of Finance

[x], Vice President of R&D

[x], Vice President of Operations

[x], Controller

 

Outside Management Support [hourly / project basis]

  [x], Accountant / CPA

[x], Corporate Attorney

[x], [Type of Consultant]

Additionally, our outside management advisors provide tremendous support for management decisions and creativity.

Product Strategy

 Current Product

 [ ] Give your concept description and desirability of your product or service.

Lawson Consulting currently offers [x] products: [List products and resources].

[x], our principal product, consists of [x].

Overall our existing product line is [give status: introductory, growth, maturity or growth stage].

Our product technology consists of [x].

Research and Development

 In response to demonstrated needs of our market, new [products / services] are being developed to include [x], [x], and [x]. These new [products / services] are especially useful to [describe prospective customers] who can now easily [x]. Launches are planned for [month], 19[xx] and [month], 19[xx].

 In addition to our existing products / services we have developed / plan to introduce [x] follow-on products / services, (product) is a [x] and is especially useful to [x] (prospective customers) who can now easily [x].

 Other product / services include [x].

 Production and Delivery

 The key factors in our [production or service] delivery include [x]. Our current [product or service] is produced at [location or by x supplier]. Because of [x], our future facility will need to [expand / move / etc.]. Our biggest advantage is [x].

 Market Analysis

 [ ] Give a brief summary of your existing and projected marketplace.

Market Definition

The [x] market is growing rapidly. The market for these products amounted to $[x] million in 19[xx]representing a [x]% growth over $[x] million in 19[xx].

According to the [research firm / industry report / trade journal], the overall market for the [x] industry [worldwide / nationwide / in this region] is projected to be $[x] [billion / million] by the end of 19[xx].

The area of biggest growth in the [x] market is in the area of "[x]".

Currently, the market distribution is shared by [x] participants, with [top competitor] considered the market leader.

In the next [x] to [x] years it is estimated that there will be more than [x] [thousand / million] of [product]s distributed by Lawson Consulting. The market potential for [product] in these quantities with a current retail price of $[x] per unit is approximately $[x] [thousand / million]. This translates to Lawson Consulting's market share of [x]% of the overall market by 19[xx].

Customer Profile

Lawson Consulting's target market includes [types of customers]. The typical customer of our products is someone who is in the [x] field, and who currently uses [product] for [give application / purpose].

[ ] Who are your customers? Where are they and how do you reach them?

[ ] Are they buying your product / service from someone else?

[ ] How will you educate customer to buy from you?

A partial list of [actual] customers includes:

[x]

[x]

[x]

Competition

Companies that compete in this market are [Competitor 1], [Competitor 2] and [Competitor 3]. All companies charge competitive prices: [list examples and range of prices].

Key factors of [list top factors] have resulted in the present competitive position in the industry.

Compared to competitive products (or the closest product available today) our (product/service) can/will [x].

The ability to [x] is a capability unique to (Company)'s products/services.

[ ] How would your customers compare your product with those of competitors?

[ ] Advantages product or service has -- its improvements over existing products or services.

Our strategy for meeting/dominating the competition is [lower price, bigger / better, -- your unique selling proposition].

Risk

The top business risks that Lawson Consulting faces as it begins to [enter / expand in] the [x] market are:

 

[ ] Give a 1 to 2 line description of your top 2 or 3 business risks.

 

An environmental risk that may cause some concern is [top environmental risk].

 

 

Marketing Plan

 

Responses from customers indicate that our [product / service] is enjoying an excellent reputation and we fully intend to continue this trend. Inquiries from prospective customers suggest that there is considerable demand for it. Relationships with leading OEMs (Original Equipment Mfgs.), retailers, Fortune 500/1,000 companies, major accounts, manufacturers and distributors substantiate the fitness of Lawson Consulting for considerable growth and accomplishment in our industry / area.

 

Lawson Consulting's marketing strategy is to aggressively enhance, promote and support the fact that our products [list your unique features, benefits, established market position / presence].

 

Sales Strategy

 

Because of [product]'s special market characteristics], [seasonal / geographic / etc., as mentioned in your Market Analysis section], our sales strategy includes [x]

 

[ ] Examples: appealing to walk-in retail customers, reaching executives by direct mail, demonstrating your product in manufacturing facilities, etc.

 

[ ] Briefly describe how your sales strategy will address specific market / environmental conditions.

 

Distribution Channels

 

Lawson Consulting's marketing strategy incorporates plans to sell our [product] through several channels.

 

[ ] Give a 1 to 2 line description of your major channels of distributing your product or service.

 

The determining factors in choosing these channels are [x].

 

Our mix of distribution channels will give us the advantages of [list advantages] over our competition.

 

A partial list of Lawson Consulting's major current [distributors / retailers] includes:

 

[x], [x] and [x].

 

Advertising and Promotion

 

Our advertising and promotion strategy is to position Lawson Consulting as the leading [manufacturer / service provider / distributor] in the market.

 

We will utilize the following media and methods to drive our message home to our customers:

 

[ ] Give a 1 to 2 line description of your top means of advertising and promoting your company and products to your customers (classified ads, color catalog, etc.).

 

For the next [x] [months / years], advertising and promotion will require $[x].

 

[ ] Figure about 10% to 20% of sales $$$ the first year, depending on your industry.

 

On an ongoing basis we will budget our advertising investment as [x]% of total sales.

 

Public Relations

 

During 19[xx], Lawson Consulting will focus on the following publicity strategies:

 

[ ] Give a 1 to 2 line description of your top 2 or 3 publicity strategies or areas of focus.

 

We will track, wherever possible, the incremental revenue generated from our advertising, promotion and publicity efforts. We anticipate at least $[x] of sales will be generated directly from our promotions, and possibly an additional $[x] of indirect increase in sales through our various channels.

 

 

Financial Plan

 

Exit / Payback

 

The attached financial projections indicate that the exit of [investor] will be achievable in [x] years. The exit settlement will be in the form of [x].

 

[ ] -OR-

 

The increase in profits generated by [x] will allow us to have the funds to repay the loan in [x month / years].

 

 

Conclusion

 

Lawson Consulting enjoys an established track-record of excellent [support / service] for our customers. Their expressions of satisfaction and encouragement are numerous, and we intend to continue our advances and growth in the [x] marketplace with more unique and effective [product or service].

 

[ ] Add any personalized concluding remarks that you feel would augment the initial impression given by this Executive Summary.

 

Vision/Mission

 

 Present Situation

 

[] Describe the current condition of the business--a present-day "snapshot." If in the concept stage, tell what you are doing now to build the foundation of the business.

 

[] Clearly describe the one current dominant driving force of your business:

Product/service offered?

Satisfying a market need?

Manufacturing?

Profit and income?

Technology?

Client/customer base?

 

[] Briefly take stock of your present situation regarding all of the following areas--just one page or two should be sufficient.

 

Company

 

Lawson Consulting was founded in 19[xx] and is presently in its [start-up/R&D/growth] stage. Lawson Consulting can best be described as currently being in the business of [x]. In recent times our key strengths have been [customer service/state-of-the-art technology/strong management team/innovative marketing].

 

[] Take a couple of lines to elaborate on this description if you feel it is necessary.

 

Management

 

Most of our management team is in place, however, we require a [Finance/Production/Marketing] manager to complete our team by [x], 19[xx]. Also, we are currently hiring [x] employees to [x] [job titles to fill].

 

Products and Services

 

At present our [product] is in the [design/early development/test market/mature] stage. Our current product line/service is in need of [needs extension/reorganization/upgrade/paring down].

 

Market Environment

 

The marketplace is undergoing rapid changes/has been stagnant for [x] years. We are now poised to [x].

 

[] Time factors influencing your ability to make money with current products.

 

Pricing and Profitability

 

Current prices are [holding/eroding/increasing] and profits are

[holding/eroding/increasing].

 

Customers

 

Current customers are using our [x] for [x] [uses]. They are requesting that we [make improvements/introduce a new model].

 

Distribution

 

We have [x] service centers, retailers, manufacturer's representatives, sales people working out of [x] offices, territories in [x] states, countries.

 

Financial Status

 

[] Summary data from your financial statements should be plugged in below. Please refer to the Financial Plan section.

 

Current cash available is $[x].

 

Our Current Ratio is: Assets/Liabilities = [x].

 

Our Quick Ratio is:

 

(Cash and Equivalents + Accounts Receivable + Notes Receivable) divided by Total Current Liabilities = [x].

 

 

Vision and Mission

 

[] Where do you want to go with the business? What do you want to be? What direction(s) will the company be taking?

 

[] What do you want for yourselves (personally and financially) 5-10 years from now?

 

[] Clearly describe your future dominant driving force(s):

Product/service offered?

Satisfying a market need?

Manufacturing?

Profit and income?

Technology?

Client/customer base?

 

[] Be creative here, yet your description believable, understandable, motivating and achievable.

 

Vision

 

By 19[xx] Lawson Consulting will be a highly visible company known as the best [x] in the [x] industry. We will have developed [x] and marketed these products in the [x] channels, becoming a/the leader in [x]. Sales will exceed $[x] and Lawson Consulting will actively be promoting [x].

 

[] Show how your company will fit you, your staff and your industry.

 

[] You and your staff may want to write both your Vision and Mission Statement completely from scratch. They should capture the spirit and uniqueness of your business.

 

Mission Statement

 

In order to achieve our Vision, Lawson Consulting commits to the following:

 

Lawson Consulting's Mission is to provide innovative, practical and top-quality products that [save time and improve the way people do] [x]. We believe our first responsibility is to the [x] who use our products and services. Our strong financial position will enable us to [x]. In carrying out our day-to- day business we strive to:

1. Treat our employees with [x].

2. Follow the philosophy that our customers are [x].

3. Be considered as [x] in our community.

Through a long-term commitment to this mission, we will be known as a company that [x]. Our customers, vendors, and employees see Lawson Consulting as offering [x] [benefits, feelings, knowledge, results, etc.].

 

Goals

[] If you are writing this business plan to assist your company with its ongoing operations, you should be thorough and list as many major goals as are necessary to address the requirements called out by your Vision and Mission Statement.

 

[] If you are trying to obtain funding with this business plan, you may want to focus on the top two or three financial or business development goals that will need to be achieved through the additional funding. Delete the goals that you do not need.

[] Primary goals can cover the following areas:

Profits

Products

Quality

Growth

Fields of Interest

Community

 

In order for Lawson Consulting to attain its vision in the manner described in our mission statement, the following primary strategic goals need to be achieved:

 

Corporate: By [x], 19[xx] Lawson Consulting will [Corporate goal(s)]. We will become a [x] [acquired by a large company, publicly traded company] for $[x] per share.

 

Products: By [x], 19[xx] Lawson Consulting will develop [Product-related goal(s)]. We expect to replace [competitive/existing products or services] by [x]% by 19[xx].

 

Market: By [x], 19[xx] Lawson Consulting will reach [Customer-related goal(s)]. We will have an active customer base of over [x] To reach these customers we plan to add [x] (retailers, distributors, service centers) per month/year and we will have a total of [x] (retailers, distributors) by 19[xx]. We will expand our marketing efforts to the regions of [x] and generate additional revenue as high as [x]% more than current levels.

 

Sales: By [x], 19[xx] Lawson Consulting will [Sales-related goal(s)]. Our products will be prominently displayed in over [x] retail stores and influential establishments, with salespeople and consultants being knowledgeable and supportive of our products and company.

  For 19[xx] total sales will exceed $[x].

For 19[xx] total sales will exceed $[x].

For 19[xx] total sales will exceed $[x].

For 19[xx] total sales will exceed $[x].

 

Operations: By [x], 19[xx] Lawson Consulting will produce [Operations/Production-related goal(s)]. Compared to past performance of [x] [product/service name, type] in the [x] industry we intend to [x].

 

[] Match your performance expectations to industry conditions and/or explain how and why your operation will be different.

 

Finance: By [x], 19[xx] Lawson Consulting will [Finance-related goal(s)]. We will carefully evaluate and plan investments and budget expenses to generate a consistent [x]% pretax profit. Based on a [x]% market share for our [x] product by 19[xx], we estimate our return on investment to be [x]%.

 

[] How much return will be generated and by when?

 

[] Illustrate that you have planned for investors to receive their return on investment--go public in 5 years, be acquired in 4 years, dividends, etc.

 

[] Based on intended activities, indicate how much the company will be worth in future years.

 

[] If you have other significant company goals, list them.

 

By [x] of 19[xx] Lawson Consulting will [x]

 

[] List other major goal(s) to include:

1. Understand customers, competition and industry

2. Product/service/channel/customer congruency

3. Product/service life cycles

4. Growth by fields of interest

5. Balance people/management/business goals

6. Transition from single-point to distributed management

7. Operate at 50 vs. 15 employees

8. Develop values and culture

9. Hire the best people

 

We feel confident that the above goals can be reached. [x] of our managers come from environments where they experienced [x] [managing a large organization, a rapid growth high-tech development team] and [x].

 

[] Relate previous track record of managers to demonstrate feasibility of actually achieving your goals given the experience of the people involved.

 

Objectives

[] Optional: Depending on the depth and target audience you want to reach with this business plan, you may or may not need to include this section on the specific objectives or tactics your company will carry out to reach the strategic goals listed above.

 

[] If you do not wish to go to this level of detail, delete this section. Otherwise, obtain the required information (from your management team, if applicable) and fill out the following.

 

During the next year in order to help attain the primary goal of [list first primary goal from above] Lawson Consulting's organization will carry out the following specific objectives:

 

1. [x] by [Month], 19[xx].

2. [x] by [Month], 19[xx].

3. [x] by [Month], 19[xx].

During the next year in order to help attain the primary goal of [list next goal from above], Lawson Consulting's organization will carry out the following objectives:

1. [x] by [Month], 19[xx].

2. [x] by [Month], 19[xx].

3. [x] by [Month], 19[xx].

 

[] If you want to outline the objectives for more than two of the goals listed, copy the above text for each goal.

 

Other objectives we have set for ourselves include [x].

 

[] Make sure they fit with the goals set previously.

 

 

Company Overview

  

[] For an overview of Company Overview, refer to page 5-1 in the BizPlanBuilder Reference Guide.

 

Legal Business Description

 

Company Name

 

The legal name of Lawson Consulting is [list full name of company as listed on your registration with your local government].

 

[] Include dba (doing business as) in the legal name of the company.

 

Legal Form of Business

 

The legal form of Lawson Consulting is [Sole Proprietorship/General or Limited Partnership/Corporation/Subchapter S-Corporation, Limited Liability Company).

 

[] Explain choice of form.

 

Business Location

 

The business location of Lawson Consulting is [list primary business address as well as satellite locations].

 

[] Corporate Headquarters

 

[] Business office

 

[] Other business locations

 

Government Regulations

 

Because Lawson Consulting is operating in the [x] industry we are under the regulation of the [x].

 

The manufacture and sale of [x] is regulated by both federal and state authorities. Lawson Consulting has obtained all required federal and state permits, licenses, and bonds to operate its facilities. There can be no assurance that Lawson Consulting's operation and profitability will not be subject to more restrictive regulation or that the Lawson Consulting's operations and profitability will not be subject to more restrictive regulation or increased taxation by federal, state, or local agencies.

 

[] List licenses and permits required.

 

[] How would you describe your company's relationship with the government agency?

 

[] How will this agency regulate your business?

 

Our management team consists of [x] men and women. Their backgrounds consist of [x] years of marketing with [x] years of corporate development with [x], [x] people with [x] years of engineering and design with [x], a chief financial officer with [x] years of accounting, administrative, merger and acquisition and banking experience with [x].

 

 

[] Fortune 1000 company backgrounds mentioned here add credibility to your management team.

 

[] Good company backgrounds pertinent to your management team's functions are good references. This demonstrate a solid management background and assures a probability of future success.

 

[] See Stock Allocation later in this section for details.

 

 

Management Team

 

Officers and Key Employees Age Stock

 

[x], President [x] [x]

 

[x], Vice President of Marketing [x] [x]

 

[x], Vice President of Sales [x] [x]

 

[x], Vice President of Finance [x] [x]

 

[x], Vice President of R&D [x] [x]

 

[x], Vice President of Operations [x] [x]

 

[x], Controller [x] [x]

 

[x], Corporate Attorney [x] [x]

 

Of the [x] people who make up the corporate staff, there are [x] founders who hold the following positions:

 

[x]

 

[x]

 

[x]

 

Each founder has been provided with [x]% of the original stock issue.

 

Stock Allocation

 

[x] shares of Lawson Consulting common stock has been authorized by the state of [state]. At this time [x] shares are outstanding, and have been allocated as shown above.

 

Stock vests over [x] years for the date of employment. In addition, we plan to allocate [x] shares of common stock for Employee Incentive stock options.

 

Responsibilities

 

[] List short job descriptions for the people in key positions in your company.

 

[] Go to the library and see the Department of Labor's Dictionary of Occupational Titles for more descriptions and details.

 

[] Add or delete from the following list as applicable.

 

[] Incorporate specific goals from the Vision\Mission section, to promote accountability to their goals.

 

[x], President/CEO

 

Develops and maintains the vision of the company. Oversees marketing, product development, production and finance, customer service, etc. Approves all financial obligations. Seeks business opportunities and strategic alliances with other companies and organizations. Plans, develops, and establishes policies and objectives of business organization in accordance with board directives and company charter. Directs and coordinates financial programs to provide funding for new or continuing operations in order to maximize return on investments, and increase productivity.

 

[x], Vice President of Marketing

 

Manages market planning, advertising, public relations, sales promotion, merchandising, and facilitating staff services. Identifies new markets and corporate scope and market research. Oversees market research and analysis as well as evaluation of competition. Identifies and set strategy for reaching foreign markets.

 

Goals include:

 

Implement in-store merchandising support in [x] stores in the U.S. by [month/yr].

 

[x], Vice President of Sales

 

Directs staffing, training and performance evaluations to develop and control sales program. Manages sales distribution by establishing sales territories, quotas, and goals and advises dealers and distributors concerning sales and advertising techniques. Analyzes sales statistics to formulate policy and to assist dealers in promoting sales. Manages sales office activities including customer/product/service.

 

[x], Vice President of Finance

 

Manages working capital including receivables, inventory, cash and marketable securities. Performs financial forecasting including capital budget, cash budget, pro forma financial statements, external financing requirements, financial condition requirements.

 

Current goal is to establish a line of credit for $[x] by [month/date/year].

 

[x], Vice President of R&D

 

Directs and coordinates activities concerned with research and development of concepts, ideas, specifications, and applications for organization's new products or services. Oversees product development, including quality control, physical distribution, product and packaging design, new product development and improvements on existing products.

 

[x], Vice President of Operations

 

Directs manufacturing, raw materials procurement and management, field service, repair, and shipping/receiving function. Oversees the company's facilities.

 

[x], Controller

 

Directs financial affairs of an organization. Prepares financial analysis of operations for guidance of management. Prepares reports which outline company's financial position in areas of income, expenses, and earnings, based on past, present and future operations. Directs preparation of budgets and financial forecasts. Arranges for audits of company's accounts.

 

Outside Support

 

Additionally, our outside management advisors provide tremendous support for management decisions and creativity.

 

[x], Accountant/CPA

 

[x], Corporate Attorney

 

[x], [Type of] Consultant

 

[] Resumes of additional key employees should be provided in the Supporting Documents.

 

[] An organizational chart describing needed business functions and relationships may also be included in Supporting Documents.

 

[] Recommended Reading: The Greatest Management Principle in the World, by Michael LeBoeuf, Ph.D.

 

Management Team Backgrounds

 

[] Include each person's actual resume in the Supporting Documents.

 

[] Duplicate this section for each executive officer.

 

[x], President

 

[x] Degree, University of [x]

 

[x]'s professional experience includes many different areas in the [x] industry.

 

[He/she] has been involved in [x], and [x]'s [design/management/sales/marketing] experience covers many diverse areas.

 

[He/she] required [x]'s knowledge of [example: electronics and mechanical design] to develop [x] that are used to [example: gather information from outer space]. At Lawson Consulting, as a [x], [x] was involved in the development of [x].

 

After learning the basic techniques of [example: COBOL programming], [x] worked with [example: automated accounting systems].

 

While working for [x], [x] was involved with [x]. There he/she developed [x].

 

[x] enjoyed considerable success as [x], however, he became interested in [x]. With ideas in mind, [x] conducted a feasibility study to determine the viability of a product capable of [x]. When he found that such a [x] was worthwhile and could be developed, [x] formed Lawson Consulting.

 

[] Provide here a brief description of each person's background. Relate it to their functions in the new organization.

 

The strength of the Lawson Consulting management team stems from the combined expertise in both management and technical areas. This has produced outstanding results over the past [x] years.

 

[] Indicating a complementary cross section of areas of expertise is crucial to getting a favorable response from your potential investors.

 

The leadership and alignment characteristics of Lawson Consulting's management team have resulted in the establishment of broad and flexible goals designed to meet the ever-changing demands of the quickly moving marketplace requiring our products. This is evident when the team responds to situations requiring new and innovative capabilities.

  

Board of Directors

 An outside Board of Directors, including highly qualified business and industry professionals/experts, will assist our management team in making appropriate decisions and taking the most effective action; however, they will not be responsible for management decisions.

 

[] Use this page to highlight the backgrounds of your Board of Directors.

 

[] Put each person's actual resume in the Supporting Documents.

 

 

Staffing

 

[] Discuss additional staffing requirements based on needed talents.

 

Lawson Consulting development team recognizes that additional staff is required to properly support marketing, sales, research, and support functions.

 

Currently, Lawson Consulting is composed of [x] people; [x] will be required to meet the demands of the projected market over the next five years.

 

[] List projected staff needed.

 

Management

 

Marketing

 

Sales

 

Engineering

 

Customer Relations

 

Administration

 

Manufacturing

 

Assembly

 

Skilled Labor

 

Repair

 

Field Service Technicians

 

Maintenance

 

 

Strategic Alliances

 

[] There are many ways to reach the top of an oak tree; (a) start climbing, (b) sit on an acorn, (c) make friends with a big bird... this is a list of BIG Birds.

 

Lawson Consulting has formed some very important relationships with major companies in the [x] industry. The following is a list of existing relationships:

 

OEM Relationships

 

OEMs (Original Equipment Manufacturers) [example: an automobile manufacturer installs your tires on their cars] provide another source of income, yet with less product recognition. The major advantage of selling through OEMs is to provide a way to rapidly penetrate market.

 

These relationships also provide Lawson Consulting with worldwide coverage through established sales forces.

 

We have signed OEM agreements with:

 

[x], our [product] is part of their [x].

 

[x].

 

[x].

 

An OEM agreement is being negotiated with [x] and [x].

 

Joint Marketing Agreements

 

Joint marketing with established companies will produce revenues, credibility, and market presence.

 

Lawson Consulting is pursuing joint marketing agreements with other organizations to further the name of Lawson Consulting's products in the [x] market. Our plans include having them market our [x] products within their product line.

 

We plan to offer the [other company's product] to augment our product line.

 

Lawson Consulting currently has a joint marketing relationship with [x], and we are in the process of engaging in agreements with [x], [x], and [x].

 

Third Party Supplier Agreements

 

We feel we require [additional features/components] to enhance the attractiveness of [product] to customers.

 

Because we do not have the resources to [develop/produce/install], we rely on [x] manufacturers for the development of many types of [additional features/components]. [Air conditioning systems, graphic equalizers] is one such example of valuable [x].

 

Lawson Consulting has an established Third Party Supplier relationship with:

 

[x], suppliers of [x]

 

[x]

 

Additional Third Party Supplier agreements are being negotiated with [x].

 

Joint Development Efforts

 

Lawson Consulting has been involved with joint development efforts with [x] and [x]. Financial and technical responsibilities are/were shared when doing joint development with [x].

 

A joint development project with [x] has been discussed, but has not yet begun. Also, this project has been discussed and would receive technical input from [x], [x], and [x].

 

Product Strategy

 

 

 

Current Product

 

Proprietary information is available to investors upon signature of a Non-Disclosure Agreement.

 

[] What are the characteristics of your product or service?

 

[] Describe how your product works or how the service is used.

 

[] How has your product or service evolved over the past two years?

 

Lawson Consulting currently offers [x] products: [list of products or services].

 

[x], our principal product, consists of [x]. Overall our existing product line is [give status]. Development of [new products, existing product upgrades, spin-off products] is in progress and future products are planned.

 

The first product developed by Lawson Consulting is called [product 1], and was introduced in 19[xx] in order to [purpose].

 

Since then, we introduced [product 2] in 19[xx], and then [brief history of your product line up to today].

 

Proprietary Technology

 

Our products are protected under the following:

 

[] Patents, copyrights, trademarks, etc.

 

[] Contact the U.S. Department of Commerce, Patent and Trademark Office, Washington, D.C. 20231 for more information.

 

[] General Patent and Trademark Information: [703] 557-INFO.

 

[] Status Information for a Particular Trademark: [703] 557-5249.

 

[] General Copyright Information: [202] 479-0700.

 

For our [x] technology/capability we have [licensing, royalty] with [x] as follows: [give general terms of agreements].

 

Return on Investment

 

For most customers, [product] will pay for itself in terms of [x] within [x] months, because of [x].

 

[] ROI possibilities include:

Fewer rejects or breakdowns

Faster turnover of inventory

Improved efficiency

Improved convenience

Lower warranty costs

Advantages of a better-quality end product

Advantages in costs savings in other areas

 

Regarding cost savings, [product] will save our customers money in terms of [x].

 

[] Reduced labor costs, lowered reject rate, reduced downtime, lowered inventory costs, improved convenience and displaced employee activity.

 

Our customers can generate more profits in terms of [x].

 

[] Heightened productivity, improved product performance, increased capacity and concentrating on their own business.

 

For Lawson Consulting our [product/product line] has shown, and is showing, a positive return on the investment that has been made. [Product/product line] has shown a [x]% ROI during the last [period], based on net profits divided by the total investment made.

 

Useful Features/Benefits

 

[] How do they differ from similar products or services?

 

[] What customer reactions may be anticipated due to these characteristics?

 

[] Explain how you will satisfy customer needs and wants.

 

All products from Lawson Consulting have [particular characteristics unique to your company]. The capability for [x] is a particularly unique feature enjoyed by Lawson Consulting and our customers.

 

These combined capabilities provide [specific customer benefits]. This, in turn, can be used for [more specific customer benefits].

 

[] Benefits could include: entertainment, improved appearance, better health, overload reduction, stress relief, reduced project time.

 

[Product 1] provides [features] that [specific customer benefits].

 

[Product 2] provides [features] that [specific customer benefits].

 

In addition, [x].

 

[] Why customers will buy it from you.

 

[] Prove that sales will be made.

 

[] Prove that you can convince people to buy.

 

[] Quantify where possible.

 

[Product] is an extremely [x], requiring [x]. For example: one of [Product]s features is its ability to [x]. [Product] allows users to [x].

 

[x] is another powerful feature. This includes [x]. [x] saves a tremendous amount of time when [x].

 

Compared to traditional [x], [product] is approximately [x].

 

In addition, [product] does not require [x].

 

[] Describe the major unique value-added characteristic your product line/process provides to the customer and how this translates to a competitive advantage for your company.

 

The major benefits of the combination of all Lawson Consulting products are improved [x] through [x], and [x].

 

Product Life Cycles

 

[] Explain life cycle of product/service. Is it in the introduction, growth, maturity or decline stage?

 

[] For increased understanding, it is recommended that you create a simple chart covering the life cycles of your products/services.

 

[] Where are your products on this chart? If several products are in different life cycle positions, indicate each separately.

 

[] Describe the time factors influencing your ability to make money, and the effects of economic cycles. Include contingencies.

 

[] What conclusions do you draw from the life cycle positions? Are they up to date? Are there any early warnings of obsolescence?

 

The life cycle for [product line] can best be described as follows: [describe life cycle position].

 

[Product 1], due to our recent efforts to [x], is in a strong position. We feel that for the next [period] it will continue to [x] and generate profits at or above expected levels.

 

[Product 2] will need to be [improved/upgraded] within [x] [months/years] in order to insure that it does not move into its decline stage.

 

Overall, we conclude that our products will continue to be viable in the marketplace during the next [x] [months/years] and that Lawson Consulting's future planning and product-related activities will insure a strong market presence.

  

Research and Development

 

Much of the time and effort at Lawson Consulting during the past [x] [year/period] has been spent on research and [product/process] development. During 19[xx] Lawson Consulting spent approximately [x]% of sales revenues on R&D. Our plans for 19[xx] and beyond call for an [increase/decrease] in R&D spending to [x]% of sales.

 

Lawson Consulting is regularly examining roles that new products will play in the growth of the company. In order to promote the speed and effectiveness of our future new product development efforts, Lawson Consulting management is committed to the following: [list your commitments].

 

[] New product development commitments by management could include: beefing up the R&D staff, reorganizing to empower development team(s), placing a bigger emphasis on training, better market research, more formal product selection criteria, providing upgraded resources, raising quality standards.

 

These commitments will span over a period of [x] [months/years] and cost in the range of $[x].

 

Testing

 

[x] products listed in the Current Product section have been tested for ability to be manufactured and are [currently ready, will be ready] by [x] to market.

 

Based on our pilot production experience with [product], the following tasks/operations were tested to validate feasibility of manufacturing:

 

Task/Operation (Sample) % of Time

 

Product technology and methods xx%

 

Key parts and vendors xx%

 

Processing sequence and repeatability xx%

 

Capital equipment and vendors xx%

 

Specifications and control measures xx%

 

Production lead-time and volume standards xx%

 

Total 100%

 

Pilot testing indicates standard unit production will be [x] hours per [x] units. Processes have been validated to ensure optimally cost-effective, quality output.

 

Final tests were successful with regard to [all, most, etc.] evaluation criteria. Results are available if need-to-know is indicated for proprietary information. Testing was conducted during the period [x] through [x] using [x] facilities.

 

Volume testing will be accomplished by [x].

 

[] How this will be accomplished and when.

 

[] Use milestone chart to indicate ramp-up tasks, resources, and milestones.

 

[] Specify equipment, facilities, labor, etc., required in terms of quantity, number, and cost.

 

The following product/process requires additional pilot testing prior to volume testing: [list or otherwise indicate].

 

These products are expected to be ready for market over the following [x] [month/yr] period: [x], [x], and [example; when other products are generating sufficient cash flow to support additional product development].

 

Product Selection Criteria

 

[] Describe how and why your company arrives at its product development decisions.

 

[] Factors that should be covered in your selection criteria include: financial benefit to company, relatively low investment requirements, positive return on investment, fit with present strategy, feasible to develop and produce, relatively low risk, time to see intended results.

 

Because marketing is [our single largest/a large] expense and it is where [most/much] of our effort is applied, focus on our customer is a very important criteria. The idea is to keep our customers forever by continually offering them a valuable product or service, thereby diminishing our costs of reaching and appealing to them. Wise product selection is therefore critical to Lawson Consulting's success.

 

We at Lawson Consulting realize that the cost of development projects is getting increasingly expensive. To assure the best possible product decisions we have implemented the following criteria for evaluating and selecting projects:

 

[] Include any of the following criteria that apply to your situation, or add your own.

 

[] Can you meet the needs of the customer and solve a specific problem?

 

Lawson Consulting provides products to assist customers with [x]. Our [x] products help reduce time, effort and expense by [x]%, and easily retail for $[x] $[x] each.

 

[] Can your product be implemented using off-the-shelf parts?

 

Lawson Consulting can implement product or service using [off-the-shelf parts].

 

[] What is the size of your potential reachable market?

 

Lawson Consulting will investigate how many people are likely to use or benefit from the [x] products. We use market research to estimate the numbers of potential customers, and how many we can reach.

 

[] Do we have to comply to new laws or government programs?

 

New laws or government programs that may impact our product are [x]. Lawson Consulting will comply with these regulations by [x].

 

[] Can we adapt to or capitalize upon needs/business concepts?

 

[] Would it make sense to add the product to our catalog; to send product literature to our existing customer base?

 

Lawson Consulting will add new [product or service] to our [product line, catalog, product literature] to address a new opportunities in [x].

 

[] Per Sun Tzu's The Art of War, as our product we must choose our competitors and the playing field carefully. Go where the competitors are not. Be first. Avoid "me too" products and competitors. If a similar product exists, can our product be superior in its functionality, presentation or marketing?

 

[] Look at potential sales, growth, profits, and time for payback of development costs.

 

[] What barriers must be overcome for a potential new product entry?

 

[] Does the existing item have an existing perceived value. What would cost elsewhere, or what other means could be used to accomplish the same task? 

We will use outside material providers when they have [a body of knowledge/materials] useful to expedite the development of a Lawson Consulting product. They are selected based upon their expertise, active participation, reputation and success in their field, plus overall quality of their materials. When beneficial, we seek to blend the [materials/ideas/components] of several [suppliers/authors/inventors] to create an optimum hybrid product yielding the most benefits to our customers. These 3rd parties are generally compensated by [a lump sum cash purchase/an earn-out basis/royalty].

 

It is our philosophy that a product must be improved by at least [x]% every [x] months in order to maintain its competitive position, market value and price point. We must maintain our ability to [x] as the environment, our customers' needs, and our capabilities change.

 

Planned Products

 

Lawson Consulting plans to continually develop new products and enhance existing products. In response to demonstrated needs of our market, new products or services being developed in the near future include [x], [x], and [x].

 

Additional concepts/plans for follow-on [next generation] products include [x].

 

[] Discuss plans for your next generation of products/services.

 

[] Discuss add-on services for future customer needs.

 

[New product 1] development [will begin/has begun] on [date] 19[xx], and will require the following resources [staffing, materials, tooling, capital equipment, technology, new processes]. The targeted release of [new product 1] is for [month], [19[xx].

 

[New product 2] development [will begin/has begun] on [date] 19[xx], and will require the following resources [staffing, materials, tooling, capital equipment, technology, new processes]. The targeted release of [new product 2] is for [month], [19[xx].

 

[] If you feel it would be beneficial, add details of your development plans, including milestone dates, for each of the new products mentioned above.

 

Exhibits

 

[] If pertinent, include drawings of the product to be manufactured or a detailed description of the service to be offered.

 

[] Include tests made, the data and results, if available.

 

[] Show a master Pert chart of product plans.

 

For additional details, the following product-related documents are included in Supporting Documents. [List of documents.]

 

 

Production and Delivery

 

[] Description of the proposed organizational location, make vs. buy, facilities, and logistics.

 

[] Emphasis must be on the productive use of capital, labor, and material resources, manufacturing processes, vendor relations, experience and distribution requirements. Statements are needed which indicate initial volume and expansion requirements as well as product/process complexity, uniqueness, and costs.

 

Production

 

The process used to produce [product] begins with [full description].

 

Key factors in the [manufacturing/service delivery] process are [x].

 

Raw/prefabricated materials, components, and subassemblies required for production are [x].

 

[] List and describe capital equipment, material, and labor requirements.

 

[] Are prices negotiable?

 

[] Are the above items readily available?

 

[] List Quality/Technical specifications.

 

[] List Inventory requirements.

 

[] Identify hazardous materials or other significant safety factors.

 

Our key suppliers include: [list]

 

[] Are alternate sources/materials available?

 

Costs

 

We take advantage of economies of scale by [x].

 

[] Quantity discounts, package deals.

 

[] Indicate resource capacity and expected utilization over time, any installation and maintenance costs, and vendor availability, if applicable.

 

[] Describe the business by listing production rates, capacity constraints, or required quality assurance and safety programs.

 

In comparison to other companies, Lawson Consulting's products are [reproduced/completed] quickly and economically by [how process/techniques accomplish this].

 

Comparative analysis shows these figures to be [x].

 

[] Higher, lower, or in line with competitors?

 

This is due to the fact that [x], our overall costs will remain [x].

 

[] Are your products more efficiently produced (due to manufacturing costs, energy savings, leaner management)?

 

[] Is your product of better quality?

 

[] Is your quality control program more thorough?

 

[] Are parts made in-house or subcontracted?

 

[] What new tooling is required for production and what are the estimated costs?

 

[] Quality Control (Investors will want to know that warranty costs will be identified and reasonable).

 

At Lawson Consulting we will [fabricate, assemble, subcontract, etc.] the following [key parts, components, subassemblies, etc.]:

 

[] List parts, etc., with vendors, lead-time, costs, etc.

 

Facilities

 

The manufacturing facility [is/will] be located in [x].

 

This location [provide/will provide] needed space for [initial/current] production and expansion to meet projected demand over the next [periods]. Our current production capacity, including internal and external production, is [x] units per [week/month/year].

 

Due to anticipated increases in demand up to [x] units per [week/month/year], additional facilities will be needed by [month], 19[xx]. Selection of the future site includes the following considerations:

 

[] Room and cost for expansion

 

[] Land and construction costs

 

[] Transportation cost and route access common carrier, company owned, pooling agreement with [x] freight forwarders

 

[] Risks and insurance

 

[] Packaging and material costs and availability (suppliers?)

 

[] Labor pool availability, skills, costs

 

[] Local ordinances, licensing, and permit requirements

 

[] Government assistance (roads, training, exemptions, etc.)

 

[] Government restrictions and requirements (OSHA, NLRB, etc.)

 

[] Community attitudes toward business and manufacturing

 

[] Continued operating costs (utilities, communications, etc.)

 

The acquisition cost for land and improvements is $[x] which will be allocated in [x] increments over a period of [x] years. Lawson Consulting already owns/has access to/requires [x].

 

Within our facility, an efficient production process hinges on proper layout of [x].

 

[] It may be helpful to include a layout of proposed plant and manufacturing flow chart in Supporting Documents.

 

Equipment will be deployed as follows:

 

[] List equipment, number, capacity, space requirements cost, etc.

 

[] Provide rough illustrations of equipment layout and process flow diagrams.

 

This equipment is used in the processes as described and configured above to ensure yield, lead-time, and costs are sufficient to provide projected gross margin.

 

Additional questions:

 

[] Where will distribution centers be located?

 

[] What packaging and handling equipment will be used and who will supply it?

 

[] What special equipment, if any, will be needed? i.e., trucks, tractors, etc.

 

[] Will warehouses be used? If so, where and what size? What inventory levels will be carried? Equipment? Labor? Competition?

 

Staff

 

Line employees include [x]. Staff employees include [x].

 

[] List current and required number of people and their skills.

 

[] How and when will they be trained?

 

[] Who will hire and manage them?

 

[] Discuss procedures and measures of effectiveness and productivity.

 

To protect proprietary interests and information, the following policies will be enforced (work with attorney to develop this section).

 

Packaging and Transportation

 

These last steps in the manufacturing process are important in establishing the desired image to the consumer. Of the standard packaging treatments available, the best choice for Lawson Consulting's needs is [custom boxes, bubble pack, shrink wrap, poly bags]. And, since this is a readily available process, considerable savings can be made.

 

[Type of packaging] is more widely used, but in order to convey a unique selling image/position we [are considering/will begin/have begun] using [another type].

 

Our competitors use [type of packaging] as well, but by using distinctive graphics, [photos included in Supporting Documents] our unique identity will be maintained.

 

Product Fulfillment

 

Product fulfillment is an important part of customer satisfaction. Lawson Consulting utilizes [our x group/an external resource named x] to monitor and manage the delivery, billing, repair, warranty and repair of our products to ensure customer satisfaction and repeat sales.

 

To improve on operating efficiencies, we plan to use [x] fulfillment company. Their facility is "state of the art" and their customer record is excellent. We can avoid hiring more employees, expanding our telephone and computer systems as well as save on shipping costs.

 

During the past [x] [months/years] this [group/vendor] has demonstrated outstanding abilities to [x]. Their capacity is expected to be sufficient to handle our fulfillment needs for the next [x] years.

 

Transportation will be [truck/train/air cargo].

 

[] How does your product ultimately reach your customer?

 

[] How many steps are involved?

 

[] Which is the weakest link, and how will you address that?

 

[] If using your own fleets, will the vehicles receive same graphics quality as the product itself?

 

[] Is this the same method your competitors use?

 

Comparative costs show that [x].

 

[] How do your packaging and transportation costs look in comparison to the competition?

 

Shipping Terms

 

Since 19[xx] Lawson Consulting has managed its shipping department as a profit center. Lawson Consulting products are shipped to our [distributors/end-users] via [F.O.B./F.O.B Delivered/F.O.B. Buyers Factory/Other]. We use the following as our primary carriers:

 

Ground: [x]

 

Second Day: [x]

 

Overnight: [x]

 

During the last [period] we have taken advantage of several discount programs, including [x] to lower our average shipping cost by [x] %. Future volume increases will allow us to take advantage of the following discounts, [list potential discounts], thus further lowering our average shipping cost.

 

Other unique services provided by our shipping department include: [List services.]

  

Market Analysis

  

 

Market Definition

 

[] This section describes the existing and projected marketplace in which you will introduce your company and products.

 

Industry Analysis

 

The [x] market is growing at a rapid rate. The market for these products amounted to $[x] million in 19[xx]--representing a [x]% growth over $[x] million in 19[xx].

Referenced sources agree that the major trend is for [x]. The trend has been toward the development of [products] and, hence, the latest development of distributed or shared resources.

 

Independent market research indicates that there is currently only [x] [product] for every [x] customers. The [market/industry], as a whole, is looking toward [manufacturers/suppliers/retailers/experts] for use in the expansion of existing [applications/product lines/services].

 

The overall [x] market for the [x] industry is projected to be $[x] million/billion by the end of 19[xx]. The overall market potential for [product category] is estimated to be $[x] million by 19[xx], and the [additional products] portion of this market is estimated to be $[x] million.

 

The area of greatest growth in the [x] market is in the area of [x].

 

[] Source: Industry Analysts, Census, Trade Journal Studies

 

Market Segment

 

Key points in defining the market segment for [product] are [x], [x], and [x].

 

[] By product feature, by lifestyle of target consumers, by geographical location, by season, etc.

 

[] Include charts where appropriate.

 

Currently, the market is shared by [x] participants.

 

[] How is the market distributed among major participants?

 

[] What are the share gain and loss trends?

 

[] Summarize your view of the trends and implied opportunities.

 

Users of [product] are looking for quality and productivity improvements. [Past/current/recent/lack of] development of [product] has resulted in the need to [changes, corrections, applications of new technologies]. This innovation is called "[x]", and allows [product] to operate efficiently as [x].

 

[] For an existing business (your own or a recent acquisition) review:

Sales History

Market Share & Position

Industry Trends

Profits

Marketing Methods

 

The stability of this market segment is [volatile, uncertain, solid, etc.], based on [x] product category performance over the past two years.

 

[] What do industry forecasters predict for the next two years?

 

The major market segments are:

 

[Segment 1]

 

[Segment 2]

 

[] List, by broad category, the types of customers you are likely to sell to. (Retailers, Electrical Contractors, Mail-order catalogs, etc.)

 

The [x] segment of the market is generally based on [products] with retail prices in the range of $[x] to $[x]. The vast majority of sales in this category will be handled by [OEM's, Retailers, Manufacturer's Representatives]. The minority of sales will be through direct channels.

 

Over the past [x] years, [similar product manufacturers or service providers] companies have proven that meaningful features can be developed for this class of [product]: [x], [x], and [x]. These companies have primarily focused on the use [manufacturing technique, special materials, recipes, chemicals, machinery] to improve the quality of [x] in a [product]. These products have been successfully distributed in many areas of the industry. Competitive products in this market are [produced/provided] by [competitor 1], [competitor 2], and [competitor 3].

 

In the next [x] to [x] years it is estimated that there will be more than [x] [thousand/million] of [product]s distributed by Lawson Consulting. The market potential for [product] in these quantities--with a current retail price of $[x] per unit--is approximately $[x] million. This translates to a market share of [x]% of the overall market.

 

[] Source: Industry Analysts, Census, Trade Journal Studies

 

Of the [x] customers, approximately [x]% will [buy/use want/expect] [x] to help them to [deliver their work, maintain x, expedite their production, reduce costs]. [x] of these [products] will have a [x] capability, and about [x] of those [products] will require [other features].

 

[] Repeat the above information for as many market segments as are required.

 

Strengths

 

[] In covering your strengths, be sure to place at least as much emphasis on marketing as on your product, if not more.

 

In terms of product strength, [product] has several distinct advantages over the competition. First is its marked advancement in [x] technology.

 

[] How else is the product/service favorably differentiated from the competition?

 

[] In actual performance?

 

[] In quality and reliability?

 

[] In production efficiencies?

 

[] In breadth of line and/or options?

 

In marketing, our most powerful assets are [x].

 

[] In segmentation?

 

[] In distribution?

 

[] In pricing?

 

[] In awareness/image?

 

In the corporate arena, Lawson Consulting is supported by [x].

 

[] What are the corporate strengths?

Size

Financial resources

People

Reputation

Business Relationships

 

Weaknesses

 

There is/are [x] handicaps inherent in our product. The only notable marketplace disadvantages are [x] and those are because [explanation].

 

By 19[xx] we should be able to position ourselves in order to [x] and thereby reduce this weakness considerably.

 

Corporate weaknesses, at this time, consist only of [x]. However, we are taking steps to [x] which we feel should alleviate this problem.

 

Environmental threats [declining markets, trade barriers, consumer trends, changing economy] include [x].

 

Other known threats include [x].

 

Opportunities

 

The upside potential for [x] and [our products] in [each of the currently addressed markets] over the next two years is [x].

 

Based on [existing conditions], introduced in the Product Strategy section in the analysis above, it is apparent that [justify potential with logical rationale].

 

Unexploited Opportunities

 

An altogether new application for this product would be tapping [x] markets.

 

Further opportunity for our product exists in [x] market(s).

 

[] Can the current line of products and technological capabilities be leveraged effectively?

 

[] What is the estimated cost of entry, time-frame, and risk?

 

Still another possibility for development involves [x].

 

[] Alternative distribution, technology licensing, creating up/down market brands, etc.

 

 

Customer Profile

 

[] Use information from industry reports, census data, trade journal studies, etc.

 

[] Knowing exactly who you're selling to is crucial to obtaining favorable response from your investors--they know that all the sales talent in the world is wasted unless it's directed at the proper person.

 

[] What kind of profile does your customer fit?

Innovator

Early Adopter

Early Majority

Late Majority

Laggard

 

[] What current economic factors influence your customer's spending?

 

[] Who is buying products or services?

By Demographics: age, income, sex, family, location, occupation

By Psychographics: lifestyle, motives, needs, interests (sports, etc.), purchase history (recent buyers of your product)

 

[] Who influences the final decision to purchase?

 

The most typical customer for our product is someone who is in the [x] field, and who currently uses [product] for [give/application/purpose].

 

It is likely that potential customers are going to be familiar with [similar products, products that your new one will replace, your type of product] and that they will readily accept our new [x], provided that we [approach/educate/contact].

 

Complementary products already in use by our customers are [other products that work with yours] and are seen as a tremendous help in [compelling customers to acquire our product/use our product].

 

It is easy to understand why the people are motivated to buy [x] because [x].

 

[] What motivates people to buy your product? (example; practical and emotional reason)?

 

[] Ask your customers--telemarketing, warranty cards, ad inquiries, etc.

 

[] How are the key competitors perceived?

 

[] How do these people perceive your company and products? and how will they receive your [new] product?

 

[] How sensitive are they to pricing differences?

 

Demographics

 

[] On a separate page, list different types of customers, title, power, viewpoint, position, emotional and practical influences, and education.

 

[] Listed below is a sample template to list the demographics of your customers. You may want to include several types of customers in your demographics to include Homemaker, Young Married Couple, Wealthy Rural Family, Older Couple, or Elderly.

 

[] Psychographics--you may wish to include a psychological profile of your target customer.

 

Corporate Executive

 

Title: [President, VP Finance, VP Manufacturing, Office Manager, Advertising Manager]

 

Power: [Permitter, Decision Maker, Influencer, Technical Consultant, Initiator]

 

Viewpoint: [Big Picture, Financial, Department, Personal]

 

Position: [Responsibilities--daily activities]

 

Emotional Influences: [Status, power, empire building]

 

Practical Influences: [Saving money, efficiency]

 

Education: [Ph.D., MBA, College, Technical School, High School]

 

Limitations: [Geographical, Purchasing Approval]

 

Young Professional

 

Age: [25-35]

 

Income: [Medium to high]

 

Sex: [Male or Female]

 

Family: [Bachelor or married]

 

Geographic: [Suburban]

 

Occupation: [White collar]

 

Attitude: [Innovator]

 

Customer List

 

[] On a separate page, list your major existing customers alphabetically.

 

[] If appropriate, state their application of your product.

 

 

Competition

 

[] Discuss your key competitors with regard to product or service, price, location, promotion, management, and financial position.

 

[] Look in your telephone book's yellow pages.

 

[] Look in the industrial directories at your local library. Search on-line databases that provide competitive profiles of other companies.

 

[] Read industry magazines and look for advertisers.

 

[] False or incomplete information here translates as dishonesty and negligence to investors, bankers, etc.

 

[] Do not delude yourself (or your investors) regarding competition.

 

[] If you are well-known in your industry, survey your competitor's order line anonymously and ask how their product are better than yours.

 

Lawson Consulting's product[s] offer [x] in [x] situations.

 

Companies that compete in this market are [competitor 1], [competitor 2], and [competitor 3]. All companies mentioned charge competitive prices [list examples and range of prices].

 

The major strengths and weaknesses of our competitors are [example: price, location, quality].

 

The major competitors' objectives and strategies are [list].

 

The major competitors' most likely response to current [economic, social, culture, demographics, geographics, political, governmental, technological, and competitive trends] affecting our industry will be [list response of competitors].

 

Our products or services are positioned relative to our major competitors by [example: price, delivery, location].

 

New firms entering and old firms leaving this industry affect our product (list how this affects your product].

 

Key factors of [list top factors] have resulted in the present competitive position in this industry.

 

Sales and profit ranking of major competitors in the industry have changed over recent years. These rankings have changed because [list reasons for ranking change].

 

The nature of supplier and distributor relationship in this industry is [the supplier and distributor effect on your product].

 

Competitive threats today come from [other companies, industries, new/entrenched technologies, foreign countries], and [x].

 

Lawson Consulting's products perform in virtually all situations where [your features, benefits, your customers are likely to be].

 

The ability to [what it can do] with full capability on [list of applications, machinery, people] is unique to Lawson Consulting's products.

The ability to [what it can do] is unique to this product, and our research indicates its performance is superior to anything else on the market today.

 

In all comparisons, Lawson Consulting's products provide more features and have superior performance than do competitive products. In most cases, the number of differences is substantial. A complete technical comparison is available.

 

[] Put all comparisons and test results in Supporting Documents.

 

[x]'s [competitive] product does not provide the same capabilities in a situation where [describe circumstances].

 

This is the only way [your product] and [their product] compete.

 

The [competition] advertises in [x], [x], and [x] publications.

 

[] Discuss results--if they advertise consistently and continuously there, then it must be working.

 

[Competitor] products only operate in a [limited, etc.] way.

 

[] - OR -

 

This market segment is not shared with any direct competitors. Competition does exist, however, in the [industries, countries]. Competitors in this area are [x], [x], and [x].

 

[] To perform an in depth analysis of your major competitors, complete the chart below. Columns have been provided to describe up to three competitors. If needed, add more columns.

 

Competitive Roundup

 

The following chart illustrates how Lawson Consulting's product compares to the competition in several different key areas.

 

Competitive Roundup--Company

 

Product [x] [x] [x]

 

Company [x] [x] [x]

 

Estimated 19[xx] Sales $[x] $[x] $[x] $[x]

 

Estimated Share of Market [x]% [x]% [x]%

 

Estimated Advertising Budget $[x] $[x] $[x]

 

Rank: 1=Weak to 5=Strong

 

Product Line [x] [x] [x]

 

Quality [x] [x] [x]

 

Technology [x] [x] [x]

 

Advertising Effectiveness [x] [x] [x]

 

Sales Force Excellence [x] [x] [x]

 

Distribution [x] [x] [x]

 

Manufacturing Efficiency [x] [x] [x]

 

Standing in Industry [x] [x] [x]

 

Future Potential [x] [x] [x]

 

Seriousness of Competition [x] [x] [x]

 

Number of Employees [x] [x] [x]

 

Greatest Strength [x] [x] [x]

 

Key Weakness [x] [x] [x]

 

Competitive Roundup--Product

 

Price [x] [x] [x]

 

Size [x] [x] [x]

 

Capacity [x] [x] [x]

 

Ease of Use [x] [x] [x]

 

Installation [x] [x] [x]

 

Range [x] [x] [x]

 

Appearance [x] [x] [x]

 

Quality [x] [x] [x]

 

Design [x] [x] [x]

 

Useful Life [x] [x] [x]

 

Trade-in Value [x] [x] [x]

 

Technology [x] [x] [x]

 

Responsiveness [x] [x] [x]

 

State-of-the-Art [x] [x] [x]

 

24-Hour Availability/Support [x] [x] [x]

 

Technical Expertise [x] [x] [x]

 

Repair Service [x] [x] [x]

 

Efficiency [x] [x] [x]

 

Guarantee/Warranty [x] [x] [x]

 

Complete [x] [x] [x]

 

On-Time Capability [x] [x] [x]

 

Upgrades [x] [x] [x]

 

Observations and Conclusions

 

It appears, from the above information, that [x].

 

[] Are there market niche opportunities we have overlooked?

 

[] Are our resources being deployed against the most serious competitors?

 

[] If significant, place competitors' advertisements and brochures in the Supporting Document, or have them available upon request.

 

 

Risk

 

Business Risk

 

[] Progress always involves risk; you can't steal second base and keep your foot on first. -- Frederick Wilcox

 

Cost Structure

 

Lawson Consulting opened a [x] in [month/year]. This new [facility/division] doubled our capacity and increased our potential capacity by a factor of [x]. In conjunction with this expansion, Lawson Consulting significantly increased our marketing expense and overhead. Although Lawson Consulting's [products] were well accepted by the market at former levels of production, there is no assurance that we will be able to continue successfully marketing our increased production. If the market acceptance of our increased production slows, margins and profitability may suffer. While we operated profitably in the first [x] months ended [date] (unaudited), Lawson Consulting is unable to predict whether its operating results for the full fiscal year ending [date] will be profitable.

 

Lawson Consulting had planned to add equipment to further increase production capacity over a period of time from cash flow. However, market opportunities for Lawson Consulting products have encouraged us to accelerate our expansion plans. Lawson Consulting believes the net proceeds from an [investment/loan] and cash flow from operations will be sufficient to allow Lawson Consulting to meet the expected growth in demand for our products. However, there is no minimum investment which must be raised. There can be no assurance that sufficient capital will be raised or that future product sales will meet our growth expectations. Should either of these fail to occur, Lawson Consulting may elect to (i) reduce the expansion to a level consistent with our former slower growth plan, or (ii) pursue other financing alternatives. Implementation of either of the foregoing options could delay or diminish Lawson Consulting's growth and adversely affect our profitability.

 

Competition

 

Lawson Consulting competes with national [product] companies, several of whom dominate the [product] market, and are based primarily in [list states]. Lawson Consulting and Lawson Consulting have greater sales, and financial, production, distribution, and marketing resources than Lawson Consulting. Although we believe that in [state] most of the our market share has come from displacement of the brands of the [x] companies, there can be no assurance that competition in the future will not increase from the national brands or from present or new regionally-based [product] companies, many of which, like Lawson Consulting, have recently completed or are planning significant [facility/capacity] expansions. Furthermore, if the market for [product] continues to grow, the major national [product] companies will likely devote greater resources to this segment.

 

Industry Growth

 

The sale and consumption of [product] has increased dramatically over the past [x] years and Lawson Consulting and other [product makers/providers] are increasing their capacity in order to meet this growth. There can be no assurance, however, that the growth will continue at the present rate, or at all, and the demand for [product] may not keep up with increases in supply, in which case Lawson Consulting may face heightened competition and be unable to sell sufficient quantities of our product to maintain our volume and profit margin.

 

Product Liability

 

Lawson Consulting has [x] Liability Insurance and will continue such coverage if available at a reasonable cost. However, future increases in insurance premiums could make it prohibitive for us to maintain adequate insurance coverage. A large damage award against Lawson Consulting, not adequately covered by insurance, would adversely affect our financial position.

 

[] Other risks that may affect your business include profit margin, seasonality, volatility of industry, substitution, limited suppliers, dependence on major customer and the performance of your management team. To evaluate the risk factors for your business, see Elements of Risk on the following page .

 

Environmental Risk

 

Economic

 

The economic risks affecting Lawson Consulting are [x]. The best strategy for Lawson Consulting is [diversification, offering numerous products or services to multiple market segments].

 

Weather

 

Lawson Consulting has provided [planning, good management, x insurance coverage] to protect against catastrophic weather such as fire, floods or drought. Despite these precautions, a major natural disaster could affect our business by causing [x].

 

Legal & Government

 

The State and Local ordinances or zoning laws that may impact our product are [x]. Lawson Consulting will staying abreast of legal issues facing [industry] through [industry publications] and [x].

 

Elements of Risk

 

[] This table shows an example of how risk may be evaluated, where it stems from, and which areas are most dangerous. It allows you to compare your exposure, given various assumptions. This is a suggested list of risk. Add other risk elements specific to your product.

 

[] The total Overall Risk should always total 100%.

 

[] Assign degrees of risk to each area; low=1, medium=5 or high=10. Next assign a risk percentage to each area; 0% 100%. The total risk percentage of all areas must not exceed 100%. Finally, multiply the element of risk factor X the weight percentage to calculate the degree of risk. The elements of risk that receive the highest totals should receive the most explanation in your business.

 

Elements Degree Weight Total

of Risk of Risk of Risk in %

 

Business Risk

 

Cost Structure [x] [x] [x]

 

Competition [x] [x] [x]

 

Industry Growth [x] [x] [x]

 

Product Liability [x] [x] [x]

 

Profit Margin [x] [x] [x]

 

Seasonality [x] [x] [x]

 

Complementary Industry [x] [x] [x]

 

Substitution [x] [x] [x]

 

Suppliers [x] [x] [x]

 

Customers [x] [x] [x]

 

Personnel and Management [x] [x] [x]

 

Environmental Risk

 

Economic [x] [x] [x]

 

Weather [x] [x] [x]

 

Legal & Gov't [x] [x] [x]

 

Overall Risk [x] 100% [x]

 

Rationale

 

[] List information to support your risk assumptions.

 

 

 

 

 

 

 

Marketing Plan

 

 

[] For a more detailed overview of Marketing Plan, refer to page 8-1 in the BizPlanBuilder Reference Guide.

 

[] Strategy: The science of planning and directing large-scale operations, specifically of maneuvering forces into the most advantageous position prior to taking action.

 

[] Carefully designing this portion of your business plan will enable you to respond appropriately to business conditions and opportunities.

 

Lawson Consulting's marketing strategy is to enhance, promote and support the fact that our products [list your unique features, benefits, established market position/presence].

 

The overall marketing plan for our product is based on the following fundamentals:

 

[] Type of business you want to be in.

 

[] Segment of the market[s] you plan to reach.

 

[] Distribution channel to be used to reach market segment: retail, jobbers, wholesalers, brokers, door to door, mail order, party plan, etc.

 

[] Share of the market we expect to capture versus time.

 

To prove the value of [product] we can [x].

 

[] Show each application.

 

[] Demonstrate effects.

 

[] Add credibility with scientific reports and studies.

 

The lack of [product features/benefits] in every day [specific business/professional/manufacturing/shipping/living/household situations] is demonstrated by [x].

 

[] Based on studies of [x].

 

[] Most of the country [and world] are [describe their situations/circumstances].

 

[] Describe why: [they have problems, continue without your products].

 

Sales Strategy

 

[x] should be treated as a [long-term/short-term] product.

 

[] If more than one, indicate for each long or short-term.

 

[] Important! How long before product pays for itself?

 

As such, the target market segments to focus on are [specific customers]. Because of [product]'s special market characteristics, [seasonal/geographic/etc., as mentioned in your Market Analysis] our sales strategy [includes/incorporates]:

 

[] Briefly discuss how your sales strategy will address specific market/environmental conditions].

 

Positioning

 

[] How customers perceive your company and product, relative to competition.

 

[] Product/Business/Industry leadership.

 

[] Recommended reading: Positioning by Al Ries and Jack Trout.

 

[] A User Focus Group may provide product information needed to position your product.

 

Our [product, or similar/competition's product] is seen by the consumer as [customer's perception of your product].

 

Its unique advantages [technical, quality, performance] can be exploited to arrive at a winning position in the consumer's mind.

 

In terms of market segmentation advantages, we can use [upscale consumers, ethnic appeal, etc.] to arrive at a winning position here.

 

Repositioning our [product] as [example: from a cost to an investment, vacation becomes an "escape from civilization," etc.].

 

To be effective, [other products, services, people] depend on the presence of our [product].

 

We can reposition our competitors by [x].

 

[] What can be said/shown about a competitor's product that will change your customers' minds (about the competitor's product--not yours)?

 

The resulting Selling Basis for our product, then, is [x].

 

[] This is your fundamental strategy for all of the advertising you do.

 

[] Test the Unique Selling Basis to make sure that it is:

Meaningful

Believable

Motivating

Memorable

Simple

Logical

Unique

 

Pricing

 

[] How do we set prices? Is there a policy?

 

[] Is our pricing competitive?

 

[] Is there perceived value (it costs more therefore it must be better) inherent in higher prices?

 

[] Are prices based on costs--standard markup?

 

[] Why are they higher or lower than competing prices?

 

[] How elastic (the effect of pricing on demand for product) is the market for these products? How does consumer preferences affect elasticity?

 

[] See also Break-Even Analysis under Financial Projections in Chapter 9 of the BizPlanBuilder Reference Guide.

 

The prices for our products are determined first and foremost by [competition, costs, suppliers, manufacturers, package deals].

 

It is important to know that [sliding scales, volume, regulated, competitive, perceived value], pricing is essential to our market profile.

 

Compared to the competition, our prices are [x].

 

[] List examples of competitive pricing.

 

[] Put copies of price comparisons and reports in the Supporting Documents.

 

Different seasonal aspects of our market affect our pricing because [example: selling seasons].

 

We feel that our customers will pay $[x] because [purchasing rationale]

 

Margin Structure

 

Retail

 

[] Ask friends/customers in retail management about quantities they are likely to buy. What discounts would entice them to order more?

 

Distributor

 

[] Ask regarding quantities their customers are likely to order and their Gross Profit Margins/Percentages.

 

Manufacturer's Representative

 

[] What percentage commissions do they make? Usually between 5 and 20%.

 

Direct Sales

 

[] Determine cost of each sale--time and expense involved, package deals.

 

Discounts

 

We can take advantage of volume purchases by [x].

 

[] Volume discount is applicable if scheduled order is placed (For example; 1,200 units ordered for a year=100 units per month.)

 

[] Are there discounts for paying cash or within [x] days?

 

Cooperative advertising--manufacturer pays 2-10% of purchases toward your advertising of their product.

 

We plan to review our pricing and product/service margin every [x] [months].

 

[] Should a new pricing policy be investigated? Are potential profits being lost?

 

Current Selling Methods

 

[] Activities used in selling your product or service

 

[] Methods to promote product or service: direct calling, telephone, advertising, mail, radio, television, or other

 

[] Sample brochure or dummy, advertisements, announcements, or other promotional literature should be placed in the Supporting Documents.

 

[] Margins of safety allowed in sales forecasts.

 

[] Recommended Reading: How to Master the Art of Selling, by Tom Hopkins, International Market Press.

 

[] See Advertising and Promotion, Selling Tactics, and Distribution sections for detailed action plans.

 

Marketing Responsibilities

 

[] Define who will be make these decisions:

New business development

Dealer support and OEM support

Sales-producing tools

Corporate graphics standard

Brand-name recognition

Direct response promotion

Telemarketing--scripts/training

Product position and identification

 

Next Steps

 

Based on the strategic plan, decisions that must be made now include [x].

 

The information needed to make those decisions is [x].

 

[] Data, research results, etc.

 

Key decisions to be made in the near term [next six months] are [x].

 

[] Include decisions to be made after six months, but before the next fiscal budgeting process.

 

The information needed to make both of these decisions with confidence includes [x].

 

[] Primary research projects (topic, time frame, budget).

 

[] Secondary research studies (topic, vendor, time frame, cost).

 

The most sensible research recommendations are to [x].

 

[] List questions you need immediate answers to.

 

[] Use data collected from a focus group.

 

[] Before proceeding further, review the marketing strategy statements you have made so far against the following tests:

 

[] Are the strategies consistent with your evaluation of the marketplace and your capabilities?

 

[] Is the return on marketing investment sufficient to justify the risks? What are the chances of a competitor executing a similar strategy? In that case, what would happen?

 

[] Are the strategies consistent with the political environment within the company?

 

[] Have you made sure your strategies are based on facts, and not assumptions?

 

[] Does the overall strategy leave you critically vulnerable to a shift in market behavior? Are all your eggs in one basket?

 

[] Is your appraisal of the competition open-minded and honest?

 

[] Is your strategy legal?

 

[] Is the success of your strategy based on your ability? What are the chances of failure?

 

[] Have you thoroughly examined alternative strategies? Do you have a sound, logical rationale for your recommendations?

 

Distribution Channels

 

Lawson Consulting's marketing department plans to sell our [product] through several channels.

 

The determining factors in choosing these channels are [x].

 

[] Customer profile

 

[] Geography

 

[] Seasonal variations

 

[] Efficient use of funds

 

[] Feasibility of using channels of similar products already on the market

 

Key competition uses the same [x] distribution channels. Our mix of distribution channels will give us the advantages of [list advantages] over our competition.

 

A partial list of Lawson Consulting's major current customer include:

 

[] List the top 5 to 10 customers.

 

Our distribution channels include:

 

Executive Sales

 

[] This type of selling is usually most appropriate for very expensive products or services [executive jets, yachts and large estates come to mind] where it is important to deal principal to principal when negotiating the sale.

 

Because our customers tend to be top corporate managers, it is important that our company president and senior managers present our product to our customers.

 

Direct Sales

 

The majority of Lawson Consulting sales will be handled internally through direct sales by our staff.

 

Lawson Consulting anticipates hiring [x] additional sales representatives to [cover additional territories, retailers, distributors, markets, sell specific products].

 

[] Include Organizational chart in Supporting Documents.

 

We have chosen to use a direct sales force because our products require considerable customer education and post-sales support--directly from the company. Our price point, pricing structure and profits are such that our costs of sales warrants "person-to-person" selling strategy.

 

Manufacturer Representatives

 

Because manufacturers' representatives carry several product lines that are compatible with ours, we feel that it would be appropriate to select manufacturers representatives carrying [x], and ...[complementary and compatible products--automotive products to parts stores, marine supplies to boat dealerships, etc.].

 

Also, manufacturers selling [dissimilar products yet appropriate to their customers' customer--publishers selling computer software to bookstores...]

 

[] Contact customers and retailers and ask them whom they would recommend to represent your product. (Firms and people they respect and use.)

 

[] See also Advertising and Promotion, Direct Mail to locate appropriate reps for your firm.

 

Distributors

 

One of the key elements designed into the Lawson Consulting marketing plan is the targeting of our distributors. We will select distribution channels already in existence and staffed with professionals possessing appropriate backgrounds and clientele.

 

Lawson Consulting products are very pertinent to the nature of distributor's business and to the well-being of their customer base. Also, it is significantly less difficult for us to reach these people and educate about the benefits available in using [product].

 

This strategic marketing approach takes full advantage of the fact that these professionals are already involved with parallel products and services. They already have a track record of experience.

 

By operating within these distribution channels in this manner, we can maintain control of our market. In addition, we can generate growth at a reasonable pace and obtain excellent sales results.

 

[] Distributors must mark up your prices 15-30% to their retailers. Your sales revenue will have to be reduced in order to allow distributors their profit margin.

 

[] Consider using advertising and direct mail to locate appropriate distributors.

 

Retailers

 

[] What Dealers Want From Manufacturers:

Price Point--attractive and reasonable

Profit Margin--worthy of sales emphasis

Technical Support--accurate and immediate response

Quality--design, construction and packaging

Advertising and Public Relations--customer awareness and demand

Effective Sales Materials--ease and expedite sales process

Competitive Advantages--features and benefits

Stocking and Delivery--available when needed

Market Stability--maintain profit margins and market position

 

Possible Retail and Wholesale Outlets include:

 

[] The SIC Code (Standard Industrial Code) referenced in the table below is available at your library.

 

Store type Total SIC Code

 

Department Stores 23,275 5311

 

Garden Supply Stores 16,496 5261B

 

Hardware Stores 40,140 5251

 

Giftware Wholesalers 3,524 5199G

 

Electrical Equipment Wholesaler 41,313 5063

 

Total 124,748

 

[] Collect mailing list catalogs--look at all the possible outlets for your product or service.

 

[] Look in your Telephone Directory's Classified Advertising under Mailing Lists.

 

[] Complete the chart above--the list may prove to be a valuable resource for resellers.

 

[] List any national or regional chains or independent stores that currently carry could carry your product.

 

OEMs

 

With Original Equipment Manufacturers (OEMs) we can incorporate our [product] into their product line by [explain how your product can be included within theirs--they sell your outboards with their boats, your windshield wipers with their cars].

 

For manufacturers of [their biggest system/product] we can sell [product] as part of their [x].

 

We can also provide a private-label line as an additional product for [x] distributors.

 

[] See Joint Marketing Agreements in the Company Overview section, to include in your Marketing Plan.

 

Direct Response Mail

 

We will be exploring the benefits of incremental, coordinated direct mail programs in the [example: last two quarters of 19[xx]. We anticipate a strong profit potential as we strengthen our direct response capabilities. We will be approaching this scientifically, as we improve our customer targeting ability. We propose [example: two 50,000 piece campaigns, each preceded by a 5,000 piece test].

 

All direct mail activities this year will be directed to our existing customer base. In addition, we will [example: test external lists].

 

Telemarketing

 

[] Look in your telephone directory under Direct Mail for mailing houses. Some also handle inquiries, and others provide an 800 number.

 

We will use an [in-house/contract] telemarketing service to perform the following functions.

 

Provide outside sales support

 

[] Literature mailing

 

[] Follow-up calls

 

[] Order entry

 

Respond to inquiries

 

[] Order entry

 

[] Literature mailing

 

[] 800# Order/Support Hotline

 

[] Marketing research

 

Generate New Business

 

[] Contact distributors, retailers, customers.

 

[] Schedule appointments.

 

[] Write a comprehensive telephone script that everyone can use when responding to inquiries.

 

[] Carefully address each issue [questions, objections, etc.]

 

[] Write out your responses as you would say to them.

 

[] Practice with a tape recorder, or call your own answering machine --keep adjusting it until you would.

 

[] Distribution opportunities.

 

[] If available, include a chart of CDI/BDI (Category Development Indices/Brand Development Index) performance.

 

[] What is our ACV (All Commodity Volume) distribution? The competition's?

 

International Market

 

[] It is important to consider your worldwide opportunities from the start.

 

[] List target countries in order of priority

Rationale

Language

Usage of product

 

[] See Advertising and Promotion, Selling Tactics, and Distribution sections for detailed plans of action.

 

Method

 

The primary means of distribution will be [x].

 

[] How your products are (can be) distributed.

 

[] Make a chart to show how they get to the end-user consumer.

 

Additional channels planned are [x]. An important advantage to these alternate channels is flexibility.

 

By using more than one method, Lawson Consulting will have more control and also more to respond to special needs and circumstances.

 

Other features of our secondary channels are low cost, quick start-up, increased capacity.

 

Coverage

 

Regional target areas are [where you will begin sales].

 

Reports indicate that these areas generate the highest level of consumer interest.

 

Because our distribution network is [already set up or in use, easy to implement, cost-efficient, etc.] we can enjoy [national/international] delivery immediately.

 

This, in turn, will reduce shipping time and increase customer satisfaction.

 

To date, [many of, [x] of, none of] our competitors are able to achieve this.

 

Product Roll-out Program

 

We have selected from [x] key market areas.

 

[] Areas based on proximity--easy to sell into, contact, deliver to, have customers come to.

 

Manufacturers' Representatives we have chosen are:

 

Name Territory Type

 

[ABC Sales] [Western U.S.A.] [Marine Supplies]

 

Distributors we have chosen are:

 

Name Customer Base Type

 

[DEF Distribution] [4,500] [Sailboat Dealers]

 

Retailers we have chosen are:

 

Name Number of Outlets Type

 

[GHI Stores] [31, So. California] [Sailboat Dealer]

 

There are [x] number of dealers in each region.

 

[] See Advertising and Promotion section under Direct Mail for ideas on locating dealers, wholesalers.

 

[] List regions in order of roll-out sequence.

 

[] List key distributors, retailers, etc. in each as top priority.

 

Trade Incentives

 

[] Allowances, Co-op Accruals, Warehouse Flushing Promotions, etc.

 

Customer Service

 

Our customers emphasize that service and support is one of their major concerns. They are constantly impressed with the support we provide. Hot-line service is currently available to all customers enrolled in a maintenance/support program.

 

We intend to provide free pickup and delivery for customers in the [x] areas by using [our own trucks/couriers]. The purpose for this service is to assure customer satisfaction and loyalty allowing us to increase sales as well as maintaining a high profile within our service area.

 

Another service to add value is to provide warehousing of customer inventory. This allows us to book larger orders and provide faster order response.

 

Support to manufacturers' representatives will allow them to perform efficiently as a sales force. We intend to treat the manufacturers' representatives as an extension of the Lawson Consulting direct sales force, and they will be given the same support as the Lawson Consulting internal sales staff.

 

Technical backup to OEM support groups is currently supplemented by Lawson Consulting. The OEM staffs respond to the needs of their customers, and when they encounter a support issue that requires more information, they may direct their customer to Lawson Consulting or they may contact Lawson Consulting to obtain the necessary information.

 

Technical support to marketing and sales functions will be strengthened. Pre- and post-sales situations involving the application, presentation, and demonstration of [products] will be supported by [staff].

 

Returns and Adjustments Policy

 

At this time, general trade customs for handling returns are [describe how returns are generally handled]. We will use the following policies:

 

"If for some reason [x] is not right for your business you may return it for a full refund within 30 days of receipt of product. You must call [enter phone number] for a Return Authorization number [RA#]. Refunds are made only on the price of the package plus applicable taxes and do NOT include shipping costs."

 

"Credit card refunds are credited to your account and cash/check payments are refunded within 30 days of receipt of returned merchandise in good condition with RA#."

 

We intend to [follow/depart from] industry custom by implementing a returns and adjustments policy whereby [explain your plan and how it will work]. Our reasons for [following/departing from] customary procedures are [give reasons--advantages, benefits for you and your customers].

 

Advertising and Promotion

 

[] Tools and methods to increase our customers' awareness of our product(s).

 

[] Your purpose: Enhance, promote, and support the fact that your products perform better

 

[] Remember: Advertising and promotion is an investment, not a cost.

 

[] Recommended reading: Ogilvy On Advertising, by David Ogilvy.

 

Lawson Consulting recognizes the key to success at this time requires extensive promotion. This must be done aggressively on a wide scale. To accomplish our sales goals, we require an extremely capable advertising agency and public relations firm. Lawson Consulting [plans to advertise/advertise in major trade magazines] such as [x]. Upon funding, an agency shall be selected and, with their assistance, a comprehensive advertising and promotion plan will be drafted. Advertising will be done independently and cooperatively with Distributors, OEM's, retailers and companies with whom Lawson Consulting has joint marketing/sales relationships.

 

Objectives

 

Position Lawson Consulting as the leading [maker, servicer] in the market.

 

Increase company awareness and brand name recognition among business managers and [x] retailers, buyers, customers.

 

Generate qualified sales leads and potential new distributors for field sales organization.

 

Develop, through market research, significant information to create immediate and long-term marketing plans.

 

Create product advertising programs supporting the [better taste, lower fat, more fun] position.

 

Coordinate sales literature, demonstration materials, telemarketing programs, and direct response promotions in order to [x].

 

[] Describe how your advertising/promotion objectives fit together to maximize the impact of your overall promotional campaign.

 

Media Objectives

 

Gain awareness of company among industry groups, engineers, buyers, and customers and owners.

 

Establish an image of Lawson Consulting as a organization that is professional, completely reliable, and highly positioned in the market.

 

Maximize efficiency in selection and scheduling of published ads in publications to cover [x] and [x] markets.

 

Media Strategy

 

Select primary business publications with high specific market penetration.

 

Schedule adequate frequency of ads to impact market with corporate image and product messages.

 

Where possible, position advertising in or near [articles on industry, product reviews, front cover, center spread] and appropriate editorials.

 

Utilize U.S. editions of [consumer, trade, specialty publications].

 

Take advantage of special high-interest issues of major publications when possible.

 

Maximize ad life with monthly and weekly publications.

 

To get the most out of our promotional budget, our media coverage will be to focus on a [x] audience.

 

[] Recap your customer profile from the Market Analysis section.

 

[] Select specific a group that buys your product or service.

 

We will develop an advertising campaign built around [product innovation, high-performance, competitive advantages], beginning with a "who we are" statement and supporting it with ads that reinforce the [x] message. Additionally, we will develop a consistent reach and frequency throughout the year.

 

Due to the nature of our product, it is necessary to run [full-page 4-color ads/only 1/4 page B&W ads].

 

Advertising Campaign

 

The best way to reach our potential customers is to develop an intense advertising campaign promoting our basic premise--"[your selling basis, theme, position in market]".

 

To maintain/establish our [x] company image, the delivery and tone of our statements will be [understated elegance, hard driving excitement, excellence, glamour, reality, slice-of-life].

 

Ads will convey the look and feel of a [describe your image] company.

 

Research indicates that [direct mail, direct response, TV, radio] type of advertising has not yet been used by any of our competitors.

 

The consumer mindset, as described in Marketing Strategies is [x].

 

[] See also Customer section.

 

Ideally, after becoming familiar with our product, the consumer will [x].

 

[] Specify actual consumer action--call our toll-free 800 number and place their order using their credit card, call for a brochure, attend our tradeshow booth, etc.

 

[] Being specific here will set the stage for developing appropriate ads.

 

To eliminate the biggest objections to immediate action, our advertisements must address [known/anticipated objections, difficulties with product acceptance, how to own/use product immediately].

 

Because [product] is so [innovative/unique/etc.,], it is important to develop a promotional campaign that is consistent and easy to understand.

 

Accordingly, Lawson Consulting has created a system of research and response to insure the maximum benefit from advertising dollars.

 

[] Develop an ad history: One way to measure publication effectiveness is to count the number of responses/inquiries and/or purchases per 1,000 readers [paid circulation]--given a particular ad. Vary your ads (size, message, etc.) and measure the differences. Now you can calculate the number of responses per your investment in advertising.

 

Preliminary Media Schedule

 

Circulation Budget Ad Size

 

[Magazine, TV, Radio] 50,000 $1,500 1/4 Page

 

[x] 450,000 $4,400 1/2 Page

 

Total 500,000 $5,900 3/4 page

 

Anticipated Response [ex: 1/1,000] 500 responses at $11.80 each.

 

[] List publications.

 

[] Editorial dates--when they will run special issues. (Special Issue: Office Automation, etc.) that will enhance your ads.

 

[] Obtain a copy of Standard Rate and Data Sheet.

 

We expect to achieve a reach of [total circulation/audience], and to maintain that for a period of at least [months].

 

Due to the [seasonal, geographical, etc.] nature of our audience, we plan to [how you will counter these issues].

 

In regard to competitor's advertising, it is necessary to [x].

 

[] Explain how your message will contrast with theirs.

 

[] What if they run similar ads?

 

Promotion

 

In addition to standard advertising practices, we will gain considerable recognition through [x].

 

[] Trade programs (trade advertising for product)

 

[] Press releases (if product is justifiably new and innovative).

 

[] Include budget and rationale.

 

[] See also Public Relations section.

 

[Product] has already been installed at [companies, customers, stores, government agencies]. Our products will be placed/offered in additional [x]'s at substantial discounts.

 

The number of trade shows attended will be increased from [x] to [x] each year. These shows will be attended independently and with companies with which Lawson Consulting has joint marketing/sales or OEM agreements.

 

Reports and papers will be published for trade journals and technical conferences.

 

[Product] will be displayed as a service in a [retail store, manufacturing, professional] environment--a showcase for Lawson Consulting's products and an ongoing [test, market test, product development, promotional] environment.

 

Consumer will be encourage to [call 800#, clip the coupon, come to store, call for a demo].

 

Incentives

 

[] Describe any activities or plans you have in this area.

 

[] Consider the appropriate use of advertising specialties like coffee mugs, t-shirts, imprinted gifts and gadgets.

 

[] Look in your Telephone Directory's Classifieds under Advertising Specialties and request some catalogs for ideas.

 

Direct Mail

 

[] Describe any activities or plans you have in this area.

 

[] Go to your local Post Office and request copies of The Mailer's Guide. It contains abridged information on bulk mailing permits, mail classification items, customer service programs, and useful information.

 

[] Collect mailing list catalogs--look at all the possible outlets for your product.

 

[] Look in your Telephone Directory's Classified Advertising under Mailing Lists.

 

In addition to using direct mail to distribute our products, we will exercise our direct customer communications through [example: product upgrades, information updates], and [example: the creation of a quarterly newsletter]. The direct mail objective is fully for profit.

 

List Management

 

Given the growing potential of [example: channel alternatives to the retail store], we are building our capabilities in database marketing. We have brought our customer list in house for this first phase, as we develop our database sophistication. Our registration cards and periodic customer surveys will help us understand our customer, and measure the success of our marketing, sales and product activities. Profile overlays or other lists that we buy will fill in our awareness gaps. This in-house presence will provide our sales and tech support teams with tools that streamline their operations, while they update our customer knowledge on a daily basis. We plan to develop [a customer information system] that will aid sound will help us make sound decisions by providing historical answers to the marketing questions we pose.

 

Corporate Capabilities Brochure

 

To portray Lawson Consulting as the leading supplier of state-of-the-art dynamic [x] we have developed a company brochure included in Supporting Documents.

 

[] Recommended contents for brochure noted above.

 

Introduction/background

 

[] Importantly, a distinction between the "new" [x] and other products.

 

[] Statement of business philosophy.

 

[] Statement on technology and list of "firsts."

 

Facilities

 

[] A photographic tour.

 

Company Profile

 

[] Sales--portray full selling team, including Representatives and Distributors as a savvy, dedicated support group with one overriding mission: customer satisfaction.

 

[] Marketing--emphasize expertise and drive of marketing team in their role of market research, product development, new product management, etc., providing improved product ideas to the user.

 

High-Tech Companies

 

[] Manufacturing--In-depth view of sophisticated manufacturing with special emphasis on performance, inspection, advanced methods, capacity.

 

[] Technical Support/Quality Assurance--Portray the QA and technical support staff as highly competent and dedicated group of individuals concerned with customer satisfaction, and with elimination and/or improvement of substandard (x)'s.

 

[] Product Development--Present super high-tech image of the R&D group and their facilities. State-of-the-art image is critical. Product innovation use is critical. Use photos of "secret" products undergoing tests, etc.

 

Sales Support Collateral Materials

 

Lawson Consulting has developed a variety of collateral materials to support our sales efforts. These items include: [list]

 

Sell [Product]

 

[] Audio/Video Introductory Tape

 

[] News Releases--List appropriate ones.

 

[] Brochures

 

Attract and Support Distributors

 

[] Letter of Introduction

 

[] Business Plan--Brief outline describing objectives, strategy, tactics to align resellers with you.

 

[] Questions and Answers--Address common questions.

 

[] Some Ideas--Other thoughts to be planted in reseller's minds--align their thinking with yours (collect their input from successful experiences).

 

[] Samples of these materials are included in the Supporting Documents.

 

Help Distributors Sell [x]

 

[] Presentation Binder

 

[] Data Sheets, Price Lists

 

Advertising Budget

 

For the next [months/years] advertising and promotion will require $[figure about 10 to 20% of sales the first year]. On an ongoing basis we will budget our advertising investment as [x]% of total sales.

 

This figure is necessary because of [the specific goals you must meet].

 

[] What is the optimum spending level for advertising and promotion?

 

[] How does this compare with industry averages?

 

Our Spending vs. Industry Average

 

Advertising

 

Sales Promotion

 

Trade

 

Consumer

 

Other [specify]

 

Compared to industry average we are investing [more/less] in [Trade, Consumer, etc.] promotion because [x].

 

[] Do the "heavy spenders" perform better?

 

[] What are your conclusions on spending for advertising in this category?

 

Outside Advertising Suppliers

 

[] Include some of the following references:

Advertising Agency

Public Relations Agency

Direct Mail

Mailing House

Direct Response Firm

Fulfillment House

Graphic Designer

Display Designer

Packaging Supplier

Demonstrations--Guides, Literature

Market Research Focus Groups

Sales Literature, Tools

Marketing/Planning Consultant

Premiums Suppliers

Telemarketers

Direct Response Advertising Firm

Printers

 

Public Relations

 

[] This section can assist tremendously as you prepare to introduce your venture to its various public segments.

 

Our publicity efforts are intended to accomplish the following:

 

Position Lawson Consulting at the leading edge in providing [product for industry or market segment].

 

Increase Lawson Consulting reputation and name/brand recognition among managers/buyers/customers in [prospective companies/industries/markets].

 

Communicate on a regular basis with three target publics:

 

[] Editors of major trade, business and local publications

 

[] Key management personnel in the existing customer companies

 

[] Organization of employees and sales representatives

 

Publicity Strategy

 

During 19[xx] Lawson Consulting will focus on the following publicity strategies:

 

Develop a sustained public relations effort, with ongoing contact between key editors and top-level personnel.

 

Develop a regular and consistent product update program for the major target media, keeping key editors abreast of [x] enhancements and [x] new product introductions.

 

Develop an internal newsletter that can cover key sales successes, significant marketing and manufacturing events, technical support and product development stories. Internally, the newsletter would be targeted at all company personnel and sales representatives; externally the piece would be targeted at key customers and prospects.

 

Develop a minimum of four technical articles written by key executives or engineers to be placed in [list publications] within the next [x] months.

 

Establish contact with editorial staff for the purpose of being included in product "round-ups"--product comparisons in [publications such as Consumer Reports], where competing products are compared. This exposure builds credibility and market acceptance.

 

[] See Bacon's Publicity Checker at your local library for a directory of publications and editors who cover your industry.

 

Produce a complete company backgrounder on Lawson Consulting to be used as the primary public relations tool for all target media editorial contact. This will also be effective for inclusion in press kits, dealer kits and sales packages. The backgrounder would include sections on the following broad subjects:

 

[] Overview of the Market: size; characteristics.

 

[] The Market in 19(xx), present and future.

 

[] The Company

History

Management Philosophy

Brief sketches of Top Executives

 

[] The Products

Market Niches

 

Major Sales Announcement

 

Major contract agreements representing sales volumes of over $[x] will be written up and released to selected media as soon as practical after the signing of papers. Ideally, these will be joint announcements. Concurrently, a shortened version of the release will be mailed to all internal and external sales organizations.

 

Press Release

 

Lawson Consulting [is developing/will develop] a series of press releases on the entire [product line/service area]. Prepare press releases for each new product introduction, technical development, participation in a major event, [awards/recognition] for [product/personnel excellence/performance, etc.].

 

[] Include an 8x10 black-and-white glossy photo of your product or of an interesting demo of your service--editors are likely to pick up your news release sooner with a photo.

 

Editorial Visitation

 

Over the next [x] months we will [host/invite] the most influential reporters and editors from [publication and/or broadcast media names] for a visit to Lawson Consulting. During the visit, each of the editors would receive a complete facility tour, product briefing, and an opportunity to interview the chairman, president, product designer and marketing manager. If logistics or timing is a problem with the interviews, then these could possibly be arranged at the major trade shows.

 

Trade Show

 

Lawson Consulting has participates in three kinds of trade shows: 1) [x], 2) [x] and 3) [x]. In the past, we have concentrated on shows geared to [x]. Now that [x], it's time to expand our horizons to shows that [x].

 

In [19xx], instead of [x], Lawson Consulting will concentrate on [x]. In deciding on the Lawson Consulting plan for trade shows, the following factors have been taken into consideration:

 

Target audience of the show--[will this get the message to our target market].

 

Geographic location--[a good mix of shows around the country].

 

Time frame--[preferably no more than one show a month].

 

Past experience--[if any with the show].

 

Participation in someone else's booth.

 

Keep our 'influencer' shows going.

 

Based on the above considerations, these shows have been chosen for [19xx]:

 

[x]

 

[x]

 

Internal/External Newsletter

 

We [currently/plan to] produce [a four-page, black-and-white, 2-color/4-color] newsletter to serve as an informational piece for internal personnel, the sales force, and key customers. It includes sections covering each major department or organization within Lawson Consulting and a message from the executive staff. It also highlights major developments, such as [key sales stories, successful customer applications/uses/installations, significant marketing events, and product development news].

 

Publicity Revenues

 

We anticipate at least $[x] of sales will be generated directly from our publicity, and possibly and additional $[x] of indirect increase in sales throughout our various channels.

 

 

 

 

 

 

Financial Plan

 

 

[] You should have a completed set of projected financial statements before you edit this financial plan narrative for use in your business plan. 

 

Assumptions

 

[] Describe the assumptions you made to develop your financial statements (your business assumptions, not the numbers you entered into the financial spreadsheets).

 

The financial projections are based on the assumption that the additional [equipment/facility/product lines] will generate an increase in profits of [$][x][%] within [years/months].

 

The new equipment will reduce costs by $[x], thereby increasing our profit margin by [x]%.

 

Cost of Goods Sold will be reduced by [x]% by taking advantage of volume discounts.

 

We plan to have a working prototype by [month], 19[xx]. Field testing of the product is to start by [month], 19[xx] and be completed by [month], 19[xx]. Initial market penetration is anticipated to be $[x] at a margin of [x]%, and increase to $[x] at the end of the first year and $[x] by the end of the fifth year.

 

[] It is usually assumed that your costs, including labor, will increase by the general inflation rate. Hopefully, costs will also be decreased by volume discounts and better negotiations with suppliers. If costs are shown to be level or decreasing, comment on that fact and the underlying reasons.

 

General inflation rates are assumed to be [x]% per year.

 

 

Financial Statements

 

[] Keep in mind that projected financial statements do not stand on their own. Anyone reviewing your financial statements will also expect to read a discussion that supports the projections that you made (your research on your market, competition, etc.).

 

[] Discuss briefly the summary/analysis results for each of the financial statements that you provide in the Supporting Documents section of your business plan. Growth rates for sales and any large expense items should be discussed. Economies of scale should be noted. Any large fluctuation in a category should be explained. Volume-adjusted measurements are helpful to add perspective to the discussions. These include income subtotals as a percent of sales; inventory, accounts receivable and accounts payable levels in days; return on equity; etc.

 

[] The basic question to ask yourself is: "What would I want to know to evaluate a business proposal before I would consider investing my own money?" If you have answered all the questions that you would have as an investor, you are probably prepared for lenders or outside investors.

 

The following table highlights the primary income-related items:

 

[] If you have an established business, your operating results from any prior years should be included in the following table.

 

[] The sales dollars, gross profit dollars, operating income dollars and net income dollars come respectively from the Total Sales, Gross Profit, Income from Operations, and Net Income After Taxes lines of your Income Statement for years 1 - 5.

 

Year 19[xx] 19[xx] 19[xx] 19[xx] 19[xx]

 

Sales $[x] $[x] $[x] $[x] $[x]

 

% Growth [x]% [x]% [x]% [x]%

 

Gross Profit Dollars $[x] $[x] $[x] $[x] $[x]

 

% Growth [x]% [x]% [x]% [x]%

 

Operating Income Dollars $[x] $[x] $[x] $[x] $[x]

 

% Growth [x]% [x]% [x]% [x]%

 

Net Income Dollars $[x] $[x] $[x] $[x] $[x]

 

% Growth [x]% [x]% [x]% [x]%

 

[] The growth percents over prior years should be manually calculated by taking each year's amount minus the previous year's amount, then dividing by the previous year's amount.

 

Income Ratios:

 

Year 19[xx] 19[xx] 19[xx] 19[xx] 19[xx]

 

Gross Profit Margin [x]% [x]% [x]% [x]% [x]%

 

Operating Income Margin [x]% [x]% [x]% [x]% [x]%

 

Net Income Margin [x]% [x]% [x]% [x]% [x]%

 

Return on Equity [x]% [x]% [x]% [x]% [x]%

 

[] Values for the ratios listed above can be obtained from the Ratio Analysis section of the Integrated Financials Spreadsheet. If you did not use the Integrated Financials Spreadsheet to project your financial statements, you will need to manually calculate any ratios you plan to include.

Gross Profit Analysis

 

The Gross Profit Analysis in the Supporting Documents section shows monthly sales revenue, cost of goods sold and gross profit values for each of our product lines for the first year.

 

Budget

 

[] The budget is primarily for internal purposes. You may not want to include your budget in your business plan package; instead, include a monthly Income Statement that summarizes your expenses into categories. During your presentation, have the budget available (in case your potential lender or investor asks to see it), and be prepared to discuss it.

 

Income Statements

 

[] Comment on any large items or changes, such as R&D or marketing expenses that are large in your first few months (especially as a percentage of sales revenue), but taper off over time.

 

There are two Income Statements in the Supporting Documents section. One reflects the first year by month, and the second shows annual values for five years.

 

Balance Sheets

 

[] Comment on any large or unusual items, such as other current assets, other assets, other accounts payable, or accrued liabilities.

 

There are two Balance Sheets in the Supporting Documents section. One reflects the first year by month, and the second shows annual values for five years.

 

Break-Even Analysis

 

The Break-Even Analysis in the Supporting Documents section indicates that the break-even point will be reached in [month], 19[xx]. Sales are projected to be $[x] above break-even in [month], 19[xx]. The contribution margin for the first year is [x]% representing $[x].

 

Cash Flows Statements

 

There are two Statements of Changes in Financial Position (Cash Flows Statements) in the Supporting Documents section. One reflects the first year by month, and the second shows annual values for five years.

 

 

Capital Requirements

 

[] State what your capital requirements are.

 

The [initial/first year/total] capital required is $[x]. We require additional investments of $[x], $[x], $[x] and $[x] in [years/months], [years/months], [years/months] and [years/months] respectively, to enable us to increase our production capacities to meet market demand.

 

[] Describe the operating requirements for the five years that have been projected in your financial statements. Your operating working capital is defined as your accounts receivable plus your inventory minus your accounts payable; this can be calculated for each of the five years from the values on your Balance Sheet for years 1 - 5. 

After analyzing our working capital, we estimate our operating working capital requirements as $[x], $[x], $[x], $[x] and $[x] for years one through five, respectively. We will need to borrow $[x] to finance working capital for a period of [months/years], the remainder to be financed through cash from operations.

 

[] Recap the total short term and long term loan requirements for the five-year period, and for each of the five years.

 

In order to purchase [additional facilities/equipment/inventory], an estimated total of $[x] loan financing is required for the five-year period. The annual requirements for each year are estimated as $[x], $[x], $[x], $[x] and $[x] respectively.

 

[] Discuss the level of safety for this loan or investment.

 

The level of safety is [normal/low/high] for this [industry/type of investment]. Our confidence in achieving the attached financial projections within [x]% is [high/average/90%]. In addition to the operation of the business, additional protection is provided by [x] as collateral. In a [worst case/liquidation/unforeseen] situation, the realizable value of the collateral would be $[x], reducing the amount "at risk" to $[x]. With a projected return of $[x], this represents a return of [x]% of the amount 'at risk'.

 

How Funds Will Be Used

 

[] Describe specifically how the loan and/or investment funds will be used.

 

The [loan/equity investment] proceeds will be used to [purchase/buy/build/develop/gain/acquire/finance] [equipment/facilities/working capital].

 

 

Exit/Payback Strategy

 

[] Define how much time you will require before you can pay back the loan or investors can convert their equity; in other words, when will 'exit' be possible.

 

[] Describe how repayment will be done, or the strategy for how investors' equity will be converted to cash (i.e. a public stock offering, sale of the business, etc.).

 

[] Your financial projections should indicate that the loan/investment funds will help generate the profits and cash required for payback and exit. Discuss any significant increases in profits/cash flows that are expected as a direct result of financing, and how these increases help to pay back the funds.

 

The financial projections indicate that exit of [investor] will be achievable in [x] years. The exit settlement will be in the form of [x].

 

The increase in profits generated by [x] will allow us to have the funds to repay the loan in [months/years].

 

 

Conclusion

 

[] This is the time and the place to ask for the cash. Be concise, be direct, be professional, be sincere, and ask for either a signature or a list of additional items to be provided or steps to be completed to get a signature. DO NOT BE VAGUE.

 

Based on the attached financial projections, we believe that this venture represents a sound business investment.

 

In order to [start/continue/proceed] we are requesting a [loan/investment] of $[x] by [date], 19[xx]. 

 

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