Você está na página 1de 42

Legal Requirements

There are a number of legal requirements that you need to understand when setting up your own company. You will also need to decide on your company name, your agreement terms with other business partners, and other legal requirements. It sounds daunting, but you will find lots of advice available from local business links and the Inland Revenue. Local solicitors and accountants can often help, too. Some of the things that you need to consider are: Forming your business You will need to decide whether you will operate as a sole trader, a limited company, partnership or a limited liability partnership. Insurance What insurance will you need? The possibilities include fire insurance, consequential loss, health and sickness and public liability to name but a few. An insurance broker or your bank can help you decide. VAT Whether or not you should register for VAT will depend on the company's expected turnover. Your local VAT office will advise. Inland Revenue You are required to advise the Inland Revenue that you have started trading and there are penalties if you do not. Call the Inland Revenue or visit their website for more info. Company name Your company name needs to be registered at Companies House if you are forming a limited company. It is also advisable that sole traders and partnerships check their trading name to ensure that no-one else is using it. National Insurance You will be liable for National Insurance Contributions - check with your local Inland Revenue Office. Licences Some businesses require licences to operate (e.g. child minders, nursing homes, pubs etc). Speak to your local Licensing Department and the Environmental Health Department to check. Data Protection if you are capturing personal details and keeping them on a computer then it is very likely you will have to register with the Information Commissioner's office. Call or visit their website at www.ico.gov.uk for free advice. Legal advice Take legal advice to ensure you haven't missed anything that you weren't even aware of.

Legal Requirments for starting a business

To operate a business legally one needs to meet all the laws for operating a business in your country and local community. In the United States that means the laws of the federal government, state governments of every state in which you do business, and in many

locales, even city and/or county laws governing business operation. While this may sound intimidating, there are multiple sources of helpful information
Ads by Google

private money investors


find a business angels or private investor for your business in india www.private-equity-india.com

All of the U.S. states have business resource offices that provide information on the legal requirements for operating a business in that state. Note that you need to meet the legal requirements for every state in which you will be conducting business. This applies to internet transactions if you are going to be mailing a product into a particular state. Most states consider that a form of doing business in their states. For the U.S. government, most businesses are going to need an Employer Identification Number even if they don't have employees. The Internal Revenue Service (IRS) provides clearly written documentation of what is required in terms of reporting. Other agencies may also have legal requirements. If you have employees, you will also have labor laws that you will need to follow. The Small Business Administration operates local offices in every state. These offices can be a great source of information about other local regulations you may need to be following. For businesses operating in other countries, there are a wide variety of regulations. Check withinternational resources for locating the regulations that may apply for the country you are in or would like to do business in. Not only are there laws and regulations governing the actual registration of the business and the business name, but there may also be licenses and permits needed to operate certain types of businesses. For instance, a restaurant may need health department or liquor licensing, a hair stylist may need to be licensed within their profession, or a child care service may need to have special permits from social service or educational agencies. You can find out more about such regulations from your state business resource offices. You also may want to trademark your business name and/or logo. Take a look at Patents, Copyrights, and Trademarks to find out how to protect that valuable name you worked so hard to choose. The one step we have ignored so far, but that is an integral part of your legal structure is what kind of business do you want to have? Your choices are a sole proprietorship, a businesspartnership, a limited liability company (LLC) or a corporation. Follow the simple How to Choose the Legal Form of a Business if you have no idea which would be right for you. The legal structure you choose is not permanently binding, but there can be complications in changing so consider it carefully. One final step you may want to take to provide a good legal base for your business - and that is to identify a good attorney that you can use should you need legal advice. Establishing a relationship now can be good for opening opportunities in the future as well as having

someone well versed in your business goals as an advisor as your business develops. To find a good attorney, ask your banker, your accountant or other professionals in your field for recommendations. Then put together a list of questions and interview more than one finalist to see who is a good fit for you and your business.

Executive Summary We are currently in a highly lucrative market in a rapidly growing economy. The current trend towards an increase in the number of entrepreneurs and competition amongst existing companies presents an opportunity for an increased demand for market information and services that will enable companies to stay ahead of the pack. Our services will be positioned very carefully: they will be of extremely high quality, relevant, timely and accurate, tailored to the clients' needs so as to enable them to make the right decisions, in turn leading towards growth of their companies, benefiting the overall economy. Palms and Bonds offers the expertise that a proactive-oriented and market-opportunity seeking company needs to develop and enter new product distribution and new market segments in new markets. We intend to provide a number of necessary services to the business community and to the public. These can be summed up in two main divisions -- Business and Training Services. Our business services can be taken as marketing research, market research reports, project-based consulting, business and marketing plans, plan consulting and writing, high-level retainer consulting and company registration. Our training services include workshops and seminars on such topics as sales and marketing, as well as in-house training of receptionists, secretaries, and sales and marketing personnel. Our marketing strategy will be based mainly on ensuring that customers know what needs the services are able to fulfill, and making the right information available to the right target customer. We intend to implement a market penetration strategy that will ensure that we are well known and respected in our respective industry. We will ensure that our services' prices take into consideration people's budgets, and that these people appreciate the services, know that it exists, and where to find it. The marketing will convey the sense of quality in every picture, every promotion, and every publication. Our promotional strategy will involve integrating advertising, events, personal selling, public relations, direct marketing and Internet marketing, details of which are provided in the marketing section of this plan. Our target markets will range from persons in the corporate towers, small or medium businesses, to home institutions needing information on their particular area of concern. The common bond will be the appreciation of the importance of quality information that will enable correct decisions to be made, holding all things equal. Palms and Bonds prides itself on its analytical ability, its value-added service, competitive fees, its high standards of quality and its adaptability to changes in the market and in the method of its practice. Palms and Bonds intends to provide the client with more than just information and planning tools. We intend to provide quality information that is customized to the client's needs, in the process assisting them on how best to use the available information. By employing our services, our clients are assured of consultants dedicated to finding the right answers for their business and enabling them to benefit long after we have finished our work. We are in this line of work because we like efficiency and because we understand and believe in problem solving and market/marketing research. As we grow we want to grow right. For example we recognize that we have to be in constant touch with our stakeholders to ensure market knowledge at all times. This is the nature of the channels we deal with. Also, we intend to build our management team correctly. We need the right people in the right place at the right time if we are to ensure optimum growth. We intend to develop our team so that our people can grow as the company grows -- a mutually beneficial relationship. In a nutshell, we don't just intend to market and sell our service, but to market and sell customized information, solutions and a total-quality environment. This will ensure we establish a reputable corporate image. Note: All displayed currency values represent Botswanan Pula (P).

1. 2. 3. 4. 5. 6. 7. 8.

Need actual charts? We recommend using Business Plan Pro as the easiest way to create graphs for your own business plan. Edit this sample plan 1.1 Objectives Our business strategy will revolve around the need to provide quality information to our various target clients/customers, in the process fully satisfying their needs. This shall be undertaken through recruitment of a professional marketing research and business consultancy team and the production of good quality reports designed to cater to the client's needs. These reports/proposals shall be professionally done so as to be reflective of our intended image and reputation. We shall position ourselves as a quality service provider that strives to provide accuracy, relevancy and specific information. We intend to establish a good rapport with all the relevant government agencies and private institutions that may in turn refer us to aspiring entrepreneurs. With time our presence on the World Wide Web will increase the knowledge of our services to the various market segments we shall be targeting. This is particularly so with foreign firms looking at establishing themselves in Botswana, hence providing them easy access to local information. In such a case Web presence is a natural objective in reaching the appropriate potential customers. We also intend to have brochures that will enable clients to have an understanding of the types of services we offer and advantages of doing so. In addition to well-done brochures, company profiles and business cards often have a triggering effect on clients contemplating investing in Botswana. These will undoubtedly generate increased sales of our products. 1.2 Keys to Success The keys to Palms and Bonds success will undoubtedly be effective market segmentation through identification of several niche markets and implementation strategies. Along these lines the company intends to implement personal selling and direct marketing strategies to the target markets. Our personal selling marketing strategies will rotate around keeping in touch with investment and finance bodies for major clients and word-of-mouth for more individual investors. our key success factors will include the following: Excellence in fulfilling the promise: completely confidential, reliable, trustworthy expertise and information. This dictates that we have the latest technology and software. Uncompromising commitment to the quality of the work: that is, quality data, information and solutions. Developing visibility to generate new business leads. Leveraging from a single pool of expertise into multiple revenue generation opportunities: retainer consulting, project consulting, market research, and market research published reports. Successful niche marketing: we intend to find and target the quality-conscious customer in the right channels, making sure that the customer will find us through aggressive marketing. Timeous response to clients orders: we cannot afford to delay the client's order for whatever reason as this will have a negative bearing on our image and reputation, including future business. We need to be continually communicating with the client. Marketing know-how: in an increasingly competitive market there is need to aggressively market our business and the services we provide so as to be continuously at the top of our prospective and current clients minds. Entrepreneurial Flair: market volatility and increasing duplication of business ideas advocates that we continuously keep abreast of new trends and our competitors.

1.3 Mission Palms and Bonds offers clients reliable, quality information and proposals for business development, market development, and channel development that will maximize business development. A true alternative to in-house resources we offer a very high level of practical experience, know-how, contacts, and confidentiality. At Palms and Bonds we are able to provide comprehensive solutions to our clients' problems that will foster business development. Clients must know that working with Palms and Bonds is a more professional, less risky way to develop new areas even than working completely in-house with their own people. Palms and Bonds must also be able to maintain financial balance, charging a competitive and realistic value for its services, and delivering an even higher value to its clients. Initial focus will be development of the local market clientele. Our mission statement is: "We endeavor to understand our customers' business so well as to be able to offer comprehensive solutions to their problems." Company Summary Palms and Bonds is a relatively new company providing high-level expertise in local business development, market identification and development, channel development, distribution strategies, and marketing strategies for all types of products and services. It will focus initially on providing and satisfying two kinds of markets: Providing market research to local clients looking at developing their businesses for the increasingly competitive markets, be they new or established.

1.

2.

Providing market research services to foreign investors looking at investing in the local markets. As it grows it will take on people and consulting work in related markets. It will also look for additional leverage by establishing relationships and representations with international market research organizations. 2.1 Company Ownership Palms and Bonds is a Private Limited company. Its fiscal year is the calendar year. Messrs. TTT. and SSS. equally own the company. 2.2 Start-up Summary Total start-up capital and expenses covered (including legal costs, logo design, stationery and related expenses) came to approximately P49,600. Start-up assets required and utilized included personal computers, vehicles, office furniture, and other office equipment. Please find below the start-up table. Note: All displayed currency values represent Botswanan Pula (P).

Need actual charts? We recommend using Business Plan Pro as the easiest way to create graphs for your own business plan. Edit this sample plan

Start-up Funding
Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment Mr. T. Mr. S. Other Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) $35,000 $35,000 $0 $0 $70,000 ($49,600) $0 $0 $0 $0 $0 $0 $20,400 $0 $20,400 $20,400 $49,600 $20,400 $70,000

Total Capital Total Capital and Liabilities Total Funding

$20,400 $20,400 $70,000

Need real financials? We recommend using Business Plan Pro as the easiest way to create automatic financials for your own business plan. Edit this sample plan

Start-up
Requirements Start-up Expenses Legal Stationery etc. Brochures Sales Calls Expensed equipment Rent Staff training Communications system Other Total Start-up Expenses Start-up Assets Cash Required Other Current Assets Long-term Assets Total Assets Total Requirements $20,400 $0 $0 $20,400 $70,000 $1,200 $2,000 $3,000 $1,200 $20,000 $1,200 $5,000 $5,000 $11,000 $49,600

y y y y

1. 2. 3.

Services Palms and Bonds offers expertise in market research, channel distribution, channel development, and market development that allow clients to choose their preferred relationship: these include retainer consulting relationships, project-based consulting, sales representation and market representation, project-based market research, published market research, information forum events, business plans, and marketing plans. Palms and Bonds offers the expertise a proactive-oriented and market-opportunity seeking company needs to develop and enter new product distribution and new market segments in new markets. We intend to provide a number of necessary services to the business community and to the public. These can be summed up in two areas -Business and Training Services. Our business services can be taken as high-level retainer consulting, market research reports, project-based consulting, business and marketing plans, plan consulting and writing, and company registration. Our training services include workshops and seminars on such topics as sales and marketing, as well as in-house training of receptionists, secretaries, and sales and marketing personnel. 3.1 Service Description Our business planning services include: assisting companies with the research and structuring of comprehensive, written business and marketing plans; providing a written business plan package, which delivers a complete, detailed business plan to the client, specifically designed to meet their needs, that is, FAP applications, bank loans, NDB loans, restructuring, new product development, market expansion, etc. In many cases, small businesses often consider next year's budget an acceptable business plan. Any investor or banker will disagree and insist on much more information prior to making a financial decision regarding funding a business. We want to provide the opportunity for businesses, which have potential to receive the funding that would help them become solid employers. Market research: (Discussion omitted in this sample business plan) Retainer consulting: (Discussion omitted) Cash Flow Analysis: (Discussion omitted) Project consulting: (Discussion omitted) 3.2 Sales Literature The business will begin with a general corporate brochure establishing the positioning. This brochure was developed as part of the start-up expenses including the business cards and Company Profile, mainly for the large organizations that often recommend services to potential investors. Compliment slips are also on the cards so as to raise awareness of the company and its services. Literature and mailings for the initial market forums will be very important. 3.3 Technology Palms and Bonds will maintain the latest market research software and Windows capabilities including: Complete email facilities on the Internet for working with clients directly through email delivery of drafts and information. Complete presentation facilities for preparation and delivery of multimedia presentations on Windows machines, in formats including on-disk presentation, live presentation, or video presentation. Complete desktop publishing facilities for delivery of regular retainer reports, project output reports, marketing materials, and market research reports. 3.4 Future Services In putting the company together we have attempted to offer enough services to allow us to always be in demand by our clients. However, economics has provided us with a new era of opportunities for the small business in which we can only guess at the needs. The most important factor in developing future services is market need. Our understanding of the needs of our target market segments is one of our competitive advantages. It is critical to our effort to develop the right new services. We also have what we call a "core service engine" (market research) that will be the foundation of future products. In the future, Palms and Bonds will broaden its coverage by expanding into additional markets (e.g., the whole of southern Africa) and additional product areas. However in doing so we will strive to ensure that it is compatible with the existing services. Now we have the possibility of new money being loosened for entrepreneurs and that means there will be a substantial increase in the number of feasibility studies and business plans. This provides additional business for virtually every area of business service we provide. We are also studying the possibility of newsletter or electronic newsletter services (for the international market), or perhaps special on-topic reports, pending further research on client needs. Market Analysis Summary We are today experiencing a rapid growth in the economy of unsurpassed nature. This has been brought about by amongst other things, the relaxation of foreign exchange policies and macro economic policies geared towards

y y y

attracting foreign investors into the country. The fiscal and monetary policies of the government geared towards maintaining growth with social justice have largely contributed towards this, evidenced by our economy averaging a growth rate of 7% since 1990 -- very high by international standards. The current drive and emphasis by the government on diversification of the industrial base away from the minerals sector presents an opportunity for Palms and Bonds to make a valuable contribution towards achieving this goal. This will result in implementation of modern market research techniques and transfer of knowledge. Having undertaken a thorough and comprehensive research of the market we realized that there was a need for a specialized market research firm that focuses on producing market research reports that are tailored to the clients needs. Though there are business consultancy firms currently on the market, some of whom have been in existence for a relatively long period of time, we believe that there is a market need for one (ourselves in this instance) that particularly focuses on market research. We intend to provide services of extremely high quality -- something that cannot be overemphasized in the international arena with the current drive towards globalization. We appreciate that entering such a market is not a bed of roses and intend to implement an aggressive marketing strategy, well supported by the other business functions. The above prognosis influenced our decision to enter the business consultancy industry. 4.1 Market Segmentation Palms and Bonds will be focusing on local businesses and foreign investors looking at investing in the country. These will be small, medium, and large-sized companies looking for a total service and quality work. Our most important group of potential customers are foreign investors. These are potential investors who want to have a feel and understanding of the local markets and the opportunities, and constraints they present to them. They do not want to waste their time or risk their money looking for bargain information or questionable expertise. As they go into markets looking at new opportunities, they are very sensitive to risking their company's name and reputation. Large corporations: one of our most important market segment is the large organization looking at penetrating new or existing markets. These companies will be calling on Palms and Bonds for development functions that are better spun off than managed in-house, for market research, and feasibility studies. Medium-sized growth companies: particularly in rapidly expanding markets, Palms and Bonds will offer an attractive development alternative to the company that is management constrained and unable to address opportunities in new markets and new market segments. Small-sized companies: in an increasingly competitive environment entrepreneurs are becoming more cautious in the markets they seek to enter and on establishing new market opportunities. They are often seeking for prior research to be done to identify possible markets that are suited to their resources and capabilities. Hence the most likely types of businesses to require our services would include: New businesses seeking investment or start-up capital New firms looking at investing in the country Existing companies which are expanding or introducing a new product/ service. The table below summarizes the total market potential.

Need actual charts? We recommend using Business Plan Pro as the easiest way to create graphs for your own business plan. Edit this sample plan

Market Analysis
Year 1 Potential Customers Small sized companies Medium sized companies Professional firms Large sized companies Financial institutions Other Total Growth 2% 200 204 208 212 216 Year 2 Year 3 Year 4 Year 5 CAGR 1.94%

8% 9% 1% 14% 3% 7.60%

1,200 900 100 70 150 2,620

1,296 981 101 80 155 2,817

1,400 1,069 102 91 160 3,030

1,512 1,165 103 104 165 3,261

1,633 1,270 104 119 170 3,512

8.01% 8.99% 0.99% 14.19% 3.18% 7.60%

Need real financials? We recommend using Business Plan Pro as the easiest way to create automatic financials for your own business plan. Edit this sample plan 4.2 Target Market Segment Strategy Our marketing strategy will be based mainly on making the right information available to the right target customer. We will ensure that our services' prices take into consideration people's budgets, and that these people appreciate the service and know that it exists, including where to find it. The marketing will convey the sense of quality in every picture, every promotion, and every publication. There is already a sense of segment strategy in the way we define our target market. We are choosing to compete in areas that lend themselves to local competition, service and channel areas that match our strengths, and avoid our weaknesses. Our strategy calls for the development of relationships with investment bodies, attorneys, accountants and financial institutions to support our business with referrals. Interviews with commercial loan officers have indicated that there is a serious need for a professional firm like ours to help their clients in market/marketing research, and development of comprehensive and concise business and marketing plans. 4.2.1 Market Needs Palms and Bonds intends to provide the client with more than general market information. We intend to provide accurate, relevant, specific and timely information that will enable our clients to make more accurate decisions. This information we intend to be available to our clients at competitive rates. We understand that our target markets need more than just information but information that will enable them to make more informed decisions. Our target client wants information that is relevant to their needs and easily understandable so as to make the right decisions. We don't just intend to provide a service, but to provide one of unparalleled nature relative to the market. 4.2.2 Market Trends Our intended markets are increasingly growing towards recognizing the difference between poor quality business consultancy service and that of high quality. This development is an important trend for us as it represents our target market, and hence opportunity. We now are having an increasing number of people who appreciate quality information and the importance of having comprehensive and concise market and business plans undertaken. Another trend is the one toward greater use of specialized and focused consultants, instead of in-house resources. Companies are looking for out-sourcing (but unfortunately few offer such a service) and, in general, a preference for variable costs instead of fixed costs.

4.3 Positioning Statement Although there are a number of attorneys and accountants who write or assist in writing a business plan, the reality is that these professionals provide invaluable services in the areas in which they specialize, but lack the imagination to write a comprehensive and effective business plan. The attorneys tend to dwell on the legal aspects and contractual arrangements while accountants sweat over the balance sheets, cash flow statements, product costs and income statements. Additionally, these vitally necessary professionals cannot afford to spend the many hours necessary to work on a business plan when they could be earning much more per hour concentrating on their particular field of expertise. Our expertise lies in the ability to listen to a business owner and perceive their vision for their company over the next few years. We can envision what the business person is looking for in the future, then put it in writing and at a cost they can live with. 4.4 Service Business Analysis The consulting "industry" is pulverized and disorganized, with many smaller consulting organizations and individual consultants for every one of the few dozen well-known companies. These other organizations often offer a service, which is not to the client's satisfaction. In addition they often claim to offer a service, which they are not fully capable of providing satisfactorily. Consulting participants range from major international name-brand consultants to hundreds of individuals. One of Palms and Bonds' challenges will be establishing itself as a real consulting company, specializing in market research, positioned as a relatively risk-free corporate purchase. The business consulting industry may be segmented by economics and needs patterns. This incorporates some of the service type differences, but in a more practical sense: Mainline Services: these include marketing/market research undertaken through advertising, direct mail, referrals and sales literature. Essentially these will be customized to the client's needs. Ancillary Services: these include services such as trading licenses and company formation, which tend to be similar with not much to differentiate amongst providers except speed of execution. We intend to have an extremely efficient and 'state-of-the-art' business centre that will cater to our clients' needs. Service provider decisions don't tend to be major decisions/events covering relatively insignificant amounts. 4.4.1 Distributing a Service Consulting is sold and purchased mainly on a word-of-mouth basis, with relationships and previous experience being, by far, the most important factor. The major name-brand houses have locations in the main mall, and executive-level managers or partners develop new business through industry associations, business associations, chambers of commerce and industry, etc., and in some cases social associations such as country clubs. The medium-level houses tend to be general in terms of services and specific in terms of target market -- targeting FAP seeking clients/individuals. They are not easily able to leverage their business through distribution, which we intend to be one of our competitive advantages. 4.4.2 Competition and Buying Patterns The key element in purchase decisions made at the Palms and Bonds client level is trust in the professional reputation and reliability of the consulting firm. The most important factor in this market is the quality of the service. The majority of the investment referrals said they were not satisfied with the current plans often submitted for their approval as they were of poor quality. 4.4.3 Main Competitors There are numerous companies operating in Gaborone who classify themselves as "business consultants". However, upon contacting these, it appears that the vast majority of these companies are bookkeeping and secretarial services companies. There are some companies that provide services similar to those offered by us and that is good, but none of them specialize in market/marketing research. The following are some of our main competitors: The high-level prestige management consulting firms Strengths: Prime locations managed by owner-partners with a high level of presentation and understanding of general business. Enviable reputations, which make purchase of consulting an easy decision for a manager, despite the very high prices. Weaknesses: General business knowledge doesn't substitute for the specific market, channel, and distribution expertise of Palms and Bonds, focusing on local markets and products/services. Also, fees are extremely expensive, and work is generally done by very junior-level consultants, even though sold by high-level partners. General Business Consultancy firms Strengths: Expertise in certain functional areas particularly bookkeeping. Palms and Bonds intends not to compete with general business consultancy firms in these markets. Weaknesses: The inability to spread beyond a specific focus, or to rise above a specific focus, to provide actual marketing and market research expertise, experience, and wisdom beyond the specifics. The most significant competition is no consulting at all, companies choosing to do market research, business development and channel development in-house. Strengths: No incremental cost except travel; also, the general work is done by the people who are entirely responsible, the planning is done by those who will implement it.

1.

2.

3. 4. 5.

Weaknesses: Most managers are terribly overburdened already, unable to find incremental resources in time and people to apply to incremental opportunities. Also, there is a lot of additional risk in market and channel development done in-house from the ground up. Finally, retainer-based antenna consultants can greatly enhance a company's reach and extend its position into conversations that might otherwise never have taken place. Attorneys and Accounting firms Strengths: Able to provide sound accounting or legal advice and services with the plans being done by the partners. Weaknesses: They often lack the imagination to write a comprehensive and effective business plan. The attorneys tend to dwell on the legal aspects and contractual arrangements while accountants sweat over the balance sheets, cash flow statements, product costs and income statements. Very little market research, if any, is often undertaken, and often ineffectively. 4.4.4 Business Participants At the highest level are the few well-established major names in management consulting. Most of these are organized as partnerships established in major markets around the world, linked together by interconnecting directors and sharing the name and corporate wisdom. Some evolved from accounting companies and some from management consulting. These companies charge very high rates for consulting, and maintain relatively high overhead structures and fulfillment structures based on partners selling and junior associates fulfilling. (Discussion omitted in this sample plan) 4.4.5 Competitive Comparison We have sought to identify competition in terms of companies that satisfy the same client needs that we intend to. Our competitors are few in our main service, and, including Government agencies, numerous in our ancillary services. There will be a need to strongly differentiate ourselves from these other businesses. However on a broader scale our competition comes in several forms: The most significant competition is no market research consulting at all, companies choosing to do market research, business development and channel development in-house. Their own managers do this on their own, as part of their regular business functions. Our key advantage in competition with in-house development is that managers are already overloaded with responsibilities, they don't have time for additional responsibilities in new market development or new channel development. Also, Palms and Bonds can approach alliances, investment bodies, and channels on a confidential basis, gathering information and making initial contacts in ways that the corporate managers can't. The high-level prestige management consulting: XXX and international firms. These are essentially generalists who take their name-brand management consulting into specialty areas. Their other very important weakness is the management structure that has the partners selling new jobs, and inexperienced associates delivering the work. We compete against them as experts in our specific fields, and with the guarantee that our clients will have the top-level people doing the actual work. The third general kind of competitors are the various trading and Investment bodies. These companies are formidable competitors for published market research and market forums, but cannot provide the kind of high-level customized consulting that Palms and Bonds will provide. The fourth kind of competition are the business consultancy firms, which undertake business plans for various organizations. For example: LLL, MMM, NNN, and OOO Consultancy. The fifth kind of competition are the numerous "fly-by-night" business consultants that claim to offer the same services as we do. Often they offer a below par service with no qualified personnel. Strategy and Implementation Summary Our marketing strategy emphasizes focus. This will be the key. We are a relatively small company and hence must focus on certain kinds of services with certain kinds of users. Initially Palms and Bonds will focus on the local market and in the market research and training fields. The target customers will include key decision-makers in the large, medium and small-sized organizations in a start-up and growth periods. We are currently building image and awareness through consistency and distinctiveness in our service provision. We intend to focus on delivering quality service and end product that in turn produces good referrals, which can then generate revenue. We intend to always have a relatively heavy personal selling component to our marketing. Hence we intend to always be active in personal relationships with clients and strategic allies keeping abreast of their needs and wants. We are focusing advertising on several key media. 5.1 SWOT Analysis We are presently in a highly lucrative market in a rapidly growing economy. We foresee our strengths as the ability to respond timeously to the market dictates and to provide custom designed market research services to our clients. In addition through aggressive marketing and quality management we intend to become a well respected leader in our respective industry. Our key personnel have a wide and thorough knowledge of the local and international markets and expertise, which will go a long towards penetrating the market. However, we acknowledge the fact that few companies are aware of the actual importance of market research and marketing and its contribution to the whole business strategy. Below are the summarized strengths, weaknesses, opportunities, and threats.

y y y y

y y y y y y y y y y y y

y y y y y y y y y y y y

5.1.1 Weaknesses Lack of a solid well-established network in the market research arena. The introduction of new organizational practices and personnel who have not previously worked together presents a challenge to the organization. Establishment on the Internet will produce technological challenges. 5.1.2 Opportunities Specific niche. Appreciation for high quality, accurate, unbiased and relevant information. The introduction of the International Financial Services Centre (IFSC) presents a vast opportunity, as both foreign and local firms will be looking for information, which may assist on entering their respective markets. Current growth of the economy in comparison to other economies presents an opportunity for an increased number of foreign investors to invest in the markets. The current drive towards localization is causing an increasing number of local individuals to invest and start their own businesses. The new generation of entrepreneurs, corporations, professionals, business owners has a far greater appreciation for the need for adequate planning and relevant information. Internet marketing and sales -- though still in its infancy. Increasing number of foreign firms, especially from South Africa looking at penetrating the local markets. Financial assistance given by the government on the credibility of business plans. However the results of the review of the FAP by the Botswana Institute of Development Policy Analysis need to be taken into consideration as it could be scrapped or replaced by a new scheme. Existence of well-established government organs that deal directly with aspiring entrepreneurs -- local and foreign, presents us with a networking opportunity. 5.1.3 Threats The present growth in the economy may result in increased numbers of business consultants, leading to increased competition and confusion amongst clients. This competition could emerge from a variety of given sources including: Established mass-market consultants' development of new lines and vertically integrating so as to be totally in control of all services required by the client. New marketing strategies and tactics by established companies. Existing competition. The current plethora of 'fly-by-night' business consultancy firms in existence. Other start-up companies generated by healthy economic growth nation-wide. Existence of well established government organs that deal directly with aspiring entrepreneurs, both local and foreign. 5.1.4 Strengths Strategic market segmentation and implementation strategies. Diversified market segments. Ensures the lack of dependency on one particular market. Combination of skills in directorship. The directors intend to jointly develop business strategy and long-term plans, having wide experience in market and product know-how, and strong financial management and business know-how. Establishment and maintenance of a well-known business name. An aggressive and focused marketing campaign. A marketing plan with clear goals and strategies. 5.2 Macro-environment At a large scale, market research demonstrates that the business consultancy market we intend to enter is growing and changing. Generally there is a trend toward executive turnover in medium to large companies today. That is, corporate restructuring, privatization, and increased small business development providing for a younger more ambitious market in the executive and small business sector. Research indicates that this new generation of executives being more educated and aware of the global environment assesses and implements information to a much higher degree than past trends have indicated. This is exacerbated by the increase in competition in all industries making it necessary for individuals to have relevant information at their fingertips. Therefore with the emergence of this generation of individuals, the appreciation of quality information and business solutions/ recommendations that provide for and enables the company to grow, dictates that our service lines will be popular. The current drive by the government towards a more diversified economy presents an opportunity for our business to propel and excel in our intended markets, benefiting from the support of the concerned institutions and trade bodies. In addition with the country increasingly becoming an economic hub we foresee the demand for high quality information to be on the rise. Through undertaking of our business activities professionally we foresee that it should not be too difficult to gain market acceptance provided we deliver the final product timeously and of good quality, at competitive prices. Furthermore Small, Medium and Micro Enterprises are well recognized as a potentially important source of employment generation apart from the diversification that they inevitably result in. They in turn reflect the declining

importance of centralized mass production, along with technical change, the growth of information technology and the growth of the service sector. Employment in Botswana by the type of Employer

Government Large Employer Medium Employer Small Employer Micro Employer

36% 32% 4% 14% 14%

Source: BIDPA estimates 5.3 Competitive Edge Our competitive edge will be our dominance of market information, customer orientation and traditional hard work. Although there are many "supposed" business consultants we intend to offer more than just a professional service but mesh well the various crafts together harmoniously. Though we shall be serving different market segments we intend to focus on the individual or group who wants high quality information and plans customised to their needs. In the case of marketing and business plans they should be able to work harmoniously/beautifully in the intended environment, both on a macro and micro scale. Though our clients might range from large corporations, small or medium businesses, institutions or resellers what is important to the customer is total satisfaction with the end product matched to their capabilities and resources. 5.4 Sales Strategy The sales forecast monthly summary is included in the appendix. The annual sales projections for three years are included in the table below. It should be noted that as we become established and known on the market we project sales to increase at a faster rate than the initial year. Note: All displayed currency values represent Botswanan Pula (P).

Need actual charts? We recommend using Business Plan Pro as the easiest way to create graphs for your own business plan. Edit this sample plan

Need actual charts? We recommend using Business Plan Pro as the easiest way to create graphs for your own business plan. Edit this sample plan

Sales Forecast
Year 1 Sales All services Other Total Sales Direct Cost of Sales All services Other Subtotal Direct Cost of Sales $366,300 $0 $366,300 Year 1 $79,500 $0 $79,500 $612,000 $0 $612,000 Year 2 $117,000 $0 $117,000 $734,400 $0 $734,400 Year 3 $140,400 $0 $140,400 Year 2 Year 3

Need real financials? We recommend using Business Plan Pro as the easiest way to create automatic financials for your own business plan. Edit this sample plan 5.5 Marketing Strategy One core element of our strategy will be that of differentiation from our competitors. In terms of marketing, we intend to sell our company as a differentiated strategic ally, not just our services. In price, we intend to offer reasonable and competitive prices in comparison to competition and we need to be able to sustain that. Market penetration through lower prices shall be undertaken where need be whilst premium pricing in the case of high quality services targeted at the upper-end of the market. Our service marketing will recognize more that our product. Service and establishing

y y y y y

long relationships with clients will be key to our future service marketing. We primarily intend to sell a relationship more than services. Our service marketing will emphasize the benefits of conducting adequate planning and the use of quality information and identification of 'windows of opportunity'. We intend to sell access to market knowledge and quality. This will come out in our advertising, delivery and collateral such as sales literature and business cards. Our service marketing's most important challenge will be the problem of being accepted and appreciated on the market as a provider of quality marketing research services and business plans. Hence we intend to not only meet client's expectations but to exceed them. We intend to focus on the individual or group who wants information that may not be readily available, specially customized to their requirements. However not wanting to limit our horizons in the initial period we intend to serve other clients requiring services such as company registration and trading licenses. In all cases we intend to provide a thorough understanding and appreciation of the service to the client as well as follow up to ensure customer satisfaction. We also intend to inform the customer on how best to maintain and/or improve their market positions. 5.5.1 Pricing Strategy Palms and Bonds will be competitively priced in relation to the dictates of the market. The pricing fits with the general positioning of Palms and Bonds as providing high-level quality expertise. We intend our income structure to match our cost structure, so as to ensure that the salaries/consultants fees we pay to assure good reports and service are balanced by the fee we charge. We will make sure that we charge for the service, workmanship and any delivery with our aim being to achieve a gross profit margin of at least 50%. Naturally services targeted at the higher end of the market will have higher mark ups as these clients are less price sensitive. All in all we intend our prices to be extremely competitive on the market. Consulting will be based on Pula per hour per project in the initial year for project consulting, market research, and retainer consulting. With time and as we become known on the market we foresee an increase in our consultancy fee -- tempered by market dictates. Market research reports should be competitively priced which will, of course, require that reports be very well planned, focusing on very important topics, and well presented. 5.5.2 Promotion Strategy Our promotion strategy will be based primarily on informing potential customers of our existence and making the right information available to our target customer. Since we shall be targeting different segments the promotional tools and messages may vary slightly to match the intended market. However in all cases the marketing will convey the sense of quality and professionalism in every picture, every promotion and every publication. In such a market we cannot afford to appear in or produce second-rate material with poor labels that make our services look less than they are. Hence we intend to leverage our presence using quality brochures and other sales literature, including promotional material such as pens, complimentary slips and stickers. We intend to spread the word about our business through the following: Advertising (Discussion omitted) Personal Selling (Discussion omitted) Public Relations (Discussion omitted) Direct Marketing (Discussion omitted) Internet Marketing (Discussion omitted). 5.6 Strategic Alliances In today's volatile and competitive environment it is becoming increasingly essential for organizations to concentrate on their core activities so as to gain and maintain a competitive advantage. This brings out the advantage of undertaking strategic alliances with organizations that the firm may benefit from and vice versa. At this writing, strategic alliances with ZZZ and YYY are possibilities, given the content of existing interest and discussions. We are also looking at establishing alliances with several accounting and legal firms, which often come into contact with our target market. Given the background of prospective partners, we might also be talking to United States and South African companies in the near future. Management Summary The management team mainly comprising the shareholders has wide expertise and broad knowledge of the services and markets, which if well planned for, will enable the business to realize its goals and objectives. As we grow, we will take on additional consulting help and personnel. Management style will reflect the participation of the shareholders. The company intends to respect its community and treat all employees well. We will develop and nurture the company as community. We do not intend to be very hierarchical. 6.1 Organizational Structure Palms and Bonds shall be managed by working partners. The company, simply because of its size, will function more as a partnership than a corporate organization, in the early stages. With such a group, it will be simple to communicate with and support one another. As the company grows there will be more structure to the organization,

with new employees being assigned a supervisor or subordinate. When the company is at its full staff potential, it will operate as any closely held organization, but maintain the personal interest in each employee's personal and family welfare and their contributions to the business. In the beginning we assume four partners: (Discussion omitted in this sample plan). 6.2 Management Team Palms and Bonds business requires a very high level of knowledge, analytical ability and expertise, which means that it will not be easily leveragable in the common consulting company mode in which partners run the business and make sales, while associates fulfill. Partners will necessarily be involved in the fulfillment of the core business proposition, providing the expertise to the clients. The initial personnel plan is still tentative. It should involve three to five partners, one to three consultants, with good staff support, an office manager, and a secretary. Later, we intend to add more partners, consultants, and sales staff. Partners' resumes were included as an attachment to this plan, but have been omitted in this sample plan. 6.3 Personnel Plan The detailed monthly personnel plan for the first year is included in the appendix. The annual personnel estimates are included here. We believe this plan is a acceptable compromise between fairness and expedience, and meets the commitments of our mission statement. We do not intend to be a large organization or "top heavy" as our industry does not require our doing so. We want the company to stay lean and flexible so that we can respond to a client's needs quickly. To do this, we will use outside consultants whose fees, in most cases, will be passed on to the client, indirectly, through our fees. However as we expand and increase in size (increase in the number of projects received) we do expect to increase our personnel. We intend to compensate our personnel well, so as to retain their invaluable expertise and to ensure job satisfaction and enrichment through delegation of authority. Our compensation will include health care, generous profit sharing, plus a minimum of three weeks vacation. In-house training shall be continuous with regular external training being undertaken particularly following any new developments in the market. This is to ensure that we are continuously able to anticipate our client's problems and needs and provide them with solutions -- a proactive approach, which is so essential in our line of business. We acknowledge the fact that successful recruiting, motivation and discipline procedures are keys to the growth of the organization. Hence we intend to promote and maintain good labour relations, strong morale and high quality work per employee through undertaking the following: (Discussion omitted). Note: All displayed currency values represent Botswanan Pula (P).

Personnel Plan
Year 1 Partners Internal Consultants External Consultants Office Manager Personal Assistant Secretarial Staff Research Staff Other Total People Total Payroll $0 $16,000 $26,000 $9,000 $9,200 $3,600 $4,500 $9,000 0 $77,300 Year 2 $72,000 $16,000 $18,000 $18,000 $9,000 $6,000 $3,600 $0 0 $142,600 Year 3 $82,800 $16,000 $20,700 $20,700 $10,356 $6,900 $4,140 $0 0 $161,596

1. 2. 3. 4.

y y

Financial Plan We want to finance growth mainly through cash flow and equity. We recognize that this means we will have to grow more slowly than we might like. The most important factor in our case is collection days. We can't push our clients hard on collection days, because they are in larger companies and will normally have marketing authority, not financial authority. Therefore we need to develop a permanent system of receivables financing, using one of the established financial companies in that business. In turn we intend to ensure that our investors are compatible with our growth plan, management style and vision. Compatibility in this regard means: A fundamental respect for giving our customers value, and for maintaining a healthy and congenial workplace. Respect for realistic forecasts, and conservative cash flow and financial management. Cash flow as first priority, growth second, profits third. Willingness to follow the company and contribute valuable input to strategy and implementation decisions. Of these only the last two are flexible. 7.1 Important Assumptions The financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. The monthly assumptions are included in the appendix. From the beginning, we recognize that collection days are critical, but not a factor we can influence easily. At least we are planning on the problem, and dealing with it. Interest rates, tax rates, and personnel burden are based on conservative assumptions. Some of the more important underlying assumptions are: We assume a strong economy, without major recession. We assume, of course, that there are no unforeseen changes in economic policy to make our clients' products immediately obsolete. The table below summarizes key financial assumptions, including 30-day average collection days, sales entirely on invoice basis including the 30% deposit policy, expenses mainly on net 30 basis, 30 days on average for payment of invoices, and present-day interest rates.

General Assumptions
Year 1 Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other 1 10.00% 10.00% 25.42% 0 Year 2 2 10.00% 10.00% 25.00% 0 Year 3 3 10.00% 10.00% 25.42% 0

Need real financials? We recommend using Business Plan Pro as the easiest way to create automatic financials for your own business plan. Edit this sample plan 7.2 Key Financial Indicators The following benchmark chart indicates our key financial indicators for the first three years. We foresee major growth in sales and operating expenses, and a bump in our collection days as we spread the business during expansion. Collection days are very important. We do not want to let our average collection days get above 30 under any circumstances. This could cause a serious problem with cash flow, because our working capital situation is chronically tight. However, we recognize that we cannot control this factor easily, because of the relationship with our clients.

Need actual charts? We recommend using Business Plan Pro as the easiest way to create graphs for your own business plan. Edit this sample plan 7.3 Break-even Analysis The following table summarizes our break-even analysis. With fixed costs at a bare minimum, we don't really expect to reach break-even until several months into the business operation. The break-even assumes variable costs of 20 percent of revenue. This assumption is probably too high, and therefore conservative, because, at least in the beginning, most of our cost of fulfillment is actually the compensation of the consultants. Note: All displayed currency values represent Botswanan Pula (P).

Need actual charts? We recommend using Business Plan Pro as the easiest way to create graphs for your own business plan. Edit this sample plan

Break-even Analysis
Monthly Revenue Break-even Assumptions: Average Percent Variable Cost Estimated Monthly Fixed Cost 22% $9,244 $11,807

7.4 Expense Forecast Initial marketing expenses were relatively high as we sought to become known on the market. This was brought about by the development of sales literature, advertising expenses, function expenses including lunches and dinners with interested stakeholders. As our market share increases and capital is generated, further marketing programs and the expansion of those in existence at the time will be undertaken, to ensure market development. The expenses generated by our marketing strategies will be high in the initial stages of design and implementation. However with time these programs will start generating revenue for the business, which we shall in turn reinvest. The fruits of the above are soon to be gained. 7.5 Projected Profit and Loss Our projected profit and loss is shown on the following table, with sales increasing from more than P366,000 the first year to P612,000 the second, and P734,400 in the third year. Profits may not seem that impressive, but are relatively good for a start-up firm in our business. Hence we do expect to more than break-even in the first year of operation. As with the break-even, we are projecting very conservatively regarding cost of sales and gross margin. Our cost of sales should be much lower, and gross margin higher, than in this projection. Initially, we will depend on our internal consultants for most of fulfillment, which is why costs should be lower than shown, although occasionally we shall engage the services of outside consultants as discussed in our personnel plan. We prefer to project conservatively so that we make sure we have enough cash. Note: All displayed currency values represent Botswanan Pula (P).

Need actual charts? We recommend using Business Plan Pro as the easiest way to create graphs for your own business plan. Edit this sample plan

Need actual charts? We recommend using Business Plan Pro as the easiest way to create graphs for your own business plan. Edit this sample plan

Need actual charts? We recommend using Business Plan Pro as the easiest way to create graphs for your own business plan. Edit this sample plan

Need actual charts? We recommend using Business Plan Pro as the easiest way to create graphs for your own business plan. Edit this sample plan

Pro Forma Profit and Loss


Year 1 Sales Direct Cost of Sales Other Total Cost of Sales Gross Margin Gross Margin % Expenses Payroll Sales and Marketing and Other Expenses Depreciation Public Relations Utilities $77,300 $15,030 $0 $2,400 $1,800 $142,600 $12,000 $0 $2,400 $1,800 $161,596 $14,400 $0 $3,600 $2,400 $366,300 $79,500 $0 $79,500 $286,800 78.30% Year 2 $612,000 $117,000 $0 $117,000 $495,000 80.88% Year 3 $734,400 $140,400 $0 $140,400 $594,000 80.88%

Insurance Rent Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales

$0 $14,400 $0 $0 $110,930 $175,870 $175,870 $0 $44,148 $131,723 35.96%

$0 $18,000 $0 $0 $176,800 $318,200 $318,200 $0 $79,550 $238,650 39.00%

$0 $19,200 $0 $0 $201,196 $392,804 $392,804 $0 $99,838 $292,966 39.89%

7.6 Projected Cash Flow Cash flow projections are critical to our success. The first year monthly cash flow chart appears below and the monthly figures are shown in the appendix. The annual cash flow figures are included here. Note: All displayed currency values represent Botswanan Pula (P).

Need actual charts? We recommend using Business Plan Pro as the easiest way to create graphs for your own business plan. Edit this sample plan

Pro Forma Cash Flow


Year 1 Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $77,300 $139,989 $217,289 $142,600 $229,073 $371,673 $161,596 $275,803 $437,399 $0 $0 $0 $0 $0 $0 $0 $297,270 Year 1 $0 $0 $0 $0 $0 $0 $0 $565,697 Year 2 $0 $0 $0 $0 $0 $0 $0 $711,333 Year 3 $91,575 $205,695 $297,270 $153,000 $412,697 $565,697 $183,600 $527,733 $711,333 Year 2 Year 3

Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance

$0 $0 $0 $0 $217,289 $79,981 $100,381

$0 $0 $0 $0 $371,673 $194,024 $294,406

$0 $0 $0 $0 $437,399 $273,934 $568,340

7.7 Projected Balance Sheet The balance sheet shows healthy growth of net worth, and strong financial position. Note: All displayed currency values represent Botswanan Pula (P).

Pro Forma Balance Sheet


Year 1 Assets Current Assets Cash Accounts Receivable Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable $17,289 $18,966 $23,000 $0 $0 $0 $169,411 Year 1 $0 $0 $0 $409,738 Year 2 $0 $0 $0 $706,739 Year 3 $100,381 $69,030 $0 $169,411 $294,406 $115,333 $0 $409,738 $568,340 $138,399 $0 $706,739 Year 2 Year 3

Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth

$0 $0 $17,289 $0 $17,289 $70,000 ($49,600) $131,723 $152,123 $169,411 $152,122

$0 $0 $18,966 $0 $18,966 $70,000 $82,123 $238,650 $390,773 $409,738 $390,773

$0 $0 $23,000 $0 $23,000 $70,000 $320,773 $292,966 $683,739 $706,739 $683,739

Need real financials? We recommend using Business Plan Pro as the easiest way to create automatic financials for your own business plan. Edit this sample plan 7.8 Business Ratios The following table provides important business ratios for the consulting industry, as determined by the Standard Industry Classification (SIC) Index code 8742, Management Consulting Services.

Ratio Analysis
Year 1 Sales Growth Percent of Total Assets Accounts Receivable Other Current Assets Total Current Assets Long-term Assets Total Assets Current Liabilities 40.75% 0.00% 100.00% 0.00% 100.00% 10.21% 28.15% 0.00% 100.00% 0.00% 100.00% 4.63% 19.58% 0.00% 100.00% 0.00% 100.00% 3.25% 24.40% 46.70% 74.90% 25.10% 100.00% 42.80% 0.00% Year 2 67.08% Year 3 20.00% Industry Profile 8.60%

Long-term Liabilities Total Liabilities Net Worth Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Receivable Turnover Collection Days Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios

0.00% 10.21% 89.79%

0.00% 4.63% 95.37%

0.00% 3.25% 96.75%

17.20% 60.00% 40.00%

100.00% 78.30% 42.29% 2.14% 48.01%

100.00% 80.88% 41.89% 0.98% 51.99%

100.00% 80.88% 40.77% 0.98% 53.49%

100.00% 0.00% 83.50% 1.20% 2.60%

9.80 9.80 10.21% 115.61% 103.81% Year 1 35.96% 86.59%

21.60 21.60 4.63% 81.43% 77.66% Year 2 39.00% 61.07%

30.73 30.73 3.25% 57.45% 55.58% Year 3 39.89% 42.85%

1.59 1.26 60.00% 4.40% 10.90%

n.a n.a

3.98 56 9.10 27 2.16

3.98 73 12.17 29 1.49

3.98 84 12.17 27 1.04

n.a n.a n.a n.a n.a

Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout

0.11 1.00

0.05 1.00

0.03 1.00

n.a n.a

$152,122 0.00

$390,773 0.00

$683,739 0.00

n.a n.a

0.46 10% 5.81 2.41 0.00

0.67 5% 15.52 1.57 0.00

0.96 3% 24.71 1.07 0.00

n.a n.a n.a n.a n.a

1. 2. 3.

Controls The local business consultancy market has been growing steadily over the last several years. With this in mind we intend our marketing programs to expand accordingly. The introduction of quality sales and marketing literature will enable Palms and Bonds to effectively market to potential customers with a positive image and impression. We project sales to increase accordingly, as we continue establishing a reputation for ourselves, especially in the market research area. With time a presence on the internet and participation in local and regional conferences and trade shows will be key milestones to expanding sales and marketing potentials through the utilization of new channels and identification of potential customers. Throughout the year we intend to undertake regular evaluations of our business and marketing programs so as to ensure that we are in line with our intended objectives. In summary we intend to undertake the following: Tracking and follow-up: we intend to have the discipline, as an organization, to track results of the business plan and make sure that we implement. Market segment focus: we intend to have the discipline to maintain the market segment focus. Saying no: though difficult initially we intend to be able to say no to special deals that take us away from the target focus and are unprofitable. 8.1 Implementation Programs Palms and Bonds will start to establish alliances with reputable and reliable suppliers of information. We will continue preparing our sales literature mainly in-house with the assistance of a reputable printing organization agency. We also intend to engage the services of well qualified consultants. Thereafter there shall be delegation of responsibility for maximum effectiveness. 8.2 Contingency Planning We intend to watch our results very carefully. We may need to concentrate less on certain services than others, if we intend to get the margin up or clients become difficult to attract. We might be able to avoid the straight competition with the major companies by focusing more on the previously mentioned services -- market and marketing research. Appendix

Sales Forecast
Month 12 Month Month Month Month Month Month Month Month Month Month Month

10

11

Sales

All services

0% $8,500 $6,800 $10,800 $16,800 $25,800 $34,800 $40,800 $40,800 $40,800 $46,800 $46,800

$46,800

Other

0%

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Sales

$8,500 $6,800 $10,800 $16,800 $25,800 $34,800 $40,800 $40,800 $40,800 $46,800 $46,800

$46,800

Direct Cost of Sales

Month Month 1 2

Month Month Month Month Month Month Month Month Month 3 4 5 6 7 8 9 10 11

Month 12

All services

$1,250 $1,500

$2,250 $3,000 $5,000 $9,500 $9,500 $9,500 $9,500 $9,500 $9,500

$9,500

Other

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Direct Cost of Sales

$1,250 $1,500

$2,250 $3,000 $5,000 $9,500 $9,500 $9,500 $9,500 $9,500 $9,500

$9,500

Need real financials? We recommend using Business Plan Pro as the easiest way to create automatic financials for your own business plan. Edit this sample plan

Personnel Plan
Month Month Month Month Month Month Month Month Month Month Month 1 2 3 4 5 6 7 8 9 10 11

Month 12

Partners

0%

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Internal Consultants

0%

$0

$0

$0

$0

$0

$0

$0

$0 $4,000 $4,000 $4,000

$4,000

External Consultants

0%

$0

$0

$0 $2,000 $2,000 $2,000 $2,000 $2,000 $4,000 $4,000 $4,000

$4,000

Office Manager

0%

$0

$0

$0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

$1,000

Personal Assistant

0%

$600

$600

$600

$600

$800

$800

$800

$800

$800

$800

$800

$1,200

Secretarial Staff

0%

$0

$0

$0

$400

$400

$400

$400

$400

$400

$400

$400

$400

Research Staff

0%

$0

$0

$0

$500

$500

$500

$500

$500

$500

$500

$500

$500

Other

0%

$0

$0

$0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

$1,000

Total People

Total Payroll

$600

$600

$600 $5,500 $5,700 $5,700 $5,700 $5,700 $11,700 $11,700 $11,700

$12,100

General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11

Month 12

Plan Month

10

11

12

Current Interest Rate

10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

10.00%

Long-term Interest Rate

10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

10.00%

Tax Rate

30.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%

25.00%

Other

Pro Forma Profit and Loss


Month 10 Month 11

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9

Month 12

Sales

$8,500

$6,800 $10,800 $16,800 $25,800 $34,800 $40,800 $40,800 $40,800 $46,800 $46,800

$46,800

Direct Cost of Sales

$1,250

$1,500

$2,250

$3,000

$5,000

$9,500

$9,500

$9,500

$9,500

$9,500

$9,500

$9,500

Other

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Cost of Sales

$1,250

$1,500

$2,250

$3,000

$5,000

$9,500

$9,500

$9,500

$9,500

$9,500

$9,500

$9,500

Gross Margin

$7,250

$5,300

$8,550 $13,800 $20,800 $25,300 $31,300 $31,300 $31,300 $37,300 $37,300

$37,300

Gross Margin %

85.29%

77.94%

79.17%

82.14%

80.62%

72.70%

76.72%

76.72%

76.72%

79.70%

79.70%

79.70%

Expenses

Payroll

$600

$600

$600

$5,500

$5,700

$5,700

$5,700

$5,700 $11,700 $11,700 $11,700

$12,100

Sales and Marketing and Other Expenses

$1,500

$1,230

$1,230

$1,230

$1,230

$1,230

$1,230

$1,230

$1,230

$1,230

$1,230

$1,230

Depreciation

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Public Relations

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

Utilities

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

Insurance

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Rent

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

Payroll Taxes

0%

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Other

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Operating Expenses

$3,650

$3,380

$3,380

$8,280

$8,480

$8,480

$8,480

$8,480 $14,480 $14,480 $14,480

$14,880

Profit Before Interest and Taxes

$3,600

$1,920

$5,170

$5,520 $12,320 $16,820 $22,820 $22,820 $16,820 $22,820 $22,820

$22,420

EBITDA

$3,600

$1,920

$5,170

$5,520 $12,320 $16,820 $22,820 $22,820 $16,820 $22,820 $22,820

$22,420

Interest Expense

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Taxes Incurred

$1,080

$480

$1,293

$1,380

$3,080

$4,205

$5,705

$5,705

$4,205

$5,705

$5,705

$5,605

Net Profit

$2,520

$1,440

$3,878

$4,140

$9,240 $12,615 $17,115 $17,115 $12,615 $17,115 $17,115

$16,815

Net Profit/Sales

29.65%

21.18%

35.90%

24.64%

35.81%

36.25%

41.95%

41.95%

30.92%

36.57%

36.57%

35.93%

Pro Forma Cash Flow


Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11

Month 12

Cash Received

Cash from Operations

Cash Sales

$2,125

$1,700

$2,700

$4,200

$6,450

$8,700 $10,200 $10,200 $10,200 $11,700 $11,700

$11,700

Cash from Receivables

$0

$213

$6,333

$5,200

$8,250 $12,825 $19,575 $26,250 $30,600 $30,600 $30,750

$35,100

Subtotal Cash from Operations

$2,125

$1,913

$9,033

$9,400 $14,700 $21,525 $29,775 $36,450 $40,800 $42,300 $42,450

$46,800

Additional Cash Received

Sales Tax, VAT, HST/GST Received

0.00%

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Current Borrowing

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Other Liabilities (interest-free)

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Long-term Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Investment Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Cash Received

$2,125

$1,913

$9,033

$9,400 $14,700 $21,525 $29,775 $36,450 $40,800 $42,300 $42,450

$46,800

Expenditures

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Expenditures from Operations

Cash Spending

$600

$600

$600

$5,500

$5,700

$5,700

$5,700

$5,700 $11,700 $11,700 $11,700

$12,100

Bill Payments

$179

$5,359

$4,812

$6,350

$7,283 $11,048 $16,535 $17,985 $17,935 $16,535 $17,985

$17,982

Subtotal Spent on Operations

$779

$5,959

$5,412 $11,850 $12,983 $16,748 $22,235 $23,685 $29,635 $28,235 $29,685

$30,082

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Principal Repayment of Current Borrowing

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Other Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Long-term Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Purchase Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Purchase Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Dividends

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Cash Spent

$779

$5,959

$5,412 $11,850 $12,983 $16,748 $22,235 $23,685 $29,635 $28,235 $29,685

$30,082

Net Cash Flow

$1,346 ($4,047)

$3,620 ($2,450)

$1,717

$4,778

$7,540 $12,765 $11,165 $14,065 $12,765

$16,718

Cash Balance

$21,746 $17,699 $21,319 $18,869 $20,586 $25,363 $32,903 $45,668 $56,833 $70,898 $83,663

$100,381

Need real financials? We recommend using Business Plan Pro as the easiest way to create automatic financials for your own business plan. Edit this sample plan

Pro Forma Balance Sheet


Month 10 Month 11

Month 1 Month 2 Month 3

Month 4 Month 5

Month 6

Month 7

Month 8

Month 9

Month 12

Assets

Starting Balances

Current Assets

Cash

$20,400

$21,746

$17,699

$21,319

$18,869

$20,586

$25,363

$32,903

$45,668

$56,833

$70,898

$83,663

$100,381

Accounts Receivable

$0

$6,375

$11,263

$13,030

$20,430

$31,530

$44,805

$55,830

$60,180

$60,180

$64,680

$69,030

$69,030

Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Current Assets

$20,400

$28,121

$28,961

$34,349

$39,299

$52,116

$70,168

$88,733 $105,848 $117,013 $135,578 $152,693

$169,411

Long-term Assets

Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Accumulated Depreciation

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Assets

$20,400

$28,121

$28,961

$34,349

$39,299

$52,116

$70,168

$88,733 $105,848 $117,013 $135,578 $152,693

$169,411

Liabilities and Capital

Month 1 Month 2 Month 3

Month 4 Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Current Liabilities

Accounts Payable

$0

$5,201

$4,601

$6,112

$6,921

$10,498

$15,936

$17,386

$17,386

$15,936

$17,386

$17,386

$17,289

Current Borrowing

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Other Current Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Current Liabilities

$0

$5,201

$4,601

$6,112

$6,921

$10,498

$15,936

$17,386

$17,386

$15,936

$17,386

$17,386

$17,289

Long-term Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Liabilities

$0

$5,201

$4,601

$6,112

$6,921

$10,498

$15,936

$17,386

$17,386

$15,936

$17,386

$17,386

$17,289

Paid-in Capital

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

$70,000

Retained Earnings

($49,600) ($49,600) ($49,600) ($49,600) ($49,600) ($49,600) ($49,600) ($49,600) ($49,600) ($49,600) ($49,600) ($49,600)

($49,600)

Earnings

$0

$2,520

$3,960

$7,838

$11,978

$21,218

$33,833

$50,948

$68,063

$80,678

$97,793 $114,908

$131,723

Total Capital

$20,400

$22,920

$24,360

$28,238

$32,378

$41,618

$54,233

$71,348

$88,463 $101,078 $118,193 $135,308

$152,123

Total Liabilities and Capital

$20,400

$28,121

$28,961

$34,349

$39,299

$52,116

$70,168

$88,733 $105,848 $117,013 $135,578 $152,693

$169,411

Net Worth

$20,400

$22,920

$24,360

$28,238

$32,378

$41,618

$54,233

$71,348

$88,463 $101,078 $118,193 $135,308

$152,122

LEGAL REQUIREMENTS OF YOUR BUSINESS


Before starting a business, the legal environment of your establishment should be researched. There are many laws, rules, and regulations that must be followed to start and run your business. Almost every aspect of your business is under some form of legal ruling. Specific forms, licenses and other documentation must be filed with state and local government offices in order to begin. Without this documentation, you may be prevented from opening. It is important for you to take a close look at California's legal business requirements. Aspects of Business under Legal Guidelines Major aspects of business governed by business law can be divided into the following areas: legal structure, business name, trademarks and patents, licensing and permits, contracts and legal liability. Legal Structure What legal structure will your business take? This decision is of primary importance because laws governing many aspects of the business vary depending on its legal structure. The four main categories are: sole proprietorship, partnership, Limited Liability Company and corporation. These four types of business entities are discussed in the chapter on "Structuring Your Business". Business Name Even though a business name has no magic that will guarantee success, the name is nevertheless very important to a new business. As a small business prospers and grows, the public will begin to recognize and associate the name with the product or service. There is a body of law that specifically governs the business name. For example, if a business contains anything other than the actual names of the owners, then it is classified as a "firm name" or a "fictitious name." If the legal structure of the business is a corporation, then it must be incorporated and the business name must reflect this fact. The Fictitious Business Name Statement must be filed within 30 days of the date you open your business. The statement is valid for five years. There is a fee for initial filing and a charge for renewal. The chosen business name is valid in the county where you file, and must not be similar to any other business as to mislead the public. It must not violate any federally protected names. The

fictitious name must also be printed in the newspaper for four consecutive weeks. Your local newspaper may be willing to assist in this process. To file your fictitious name or find out if the name you have chosen is still available, contact: San Luis Obispo County Clerk Recorder 1055 Monterey Street, Room D120 San Luis Obispo CA 93408 (805) 781-5245 OR 5955 Capistrano Suite B Atascadero CA 93422 (805) 461-6041 Trademarks and Patents A trademark is a symbol that identifies a specific product. If your business sells services, then the trademark is the one that you use in advertising; it will enable the public to set you apart from your competition. Both trademarks and service marks can be registered for your protection. You can do this by going to www.uspto.gov. A patent grants a monopoly right to produce, use, sell, or gain profit from a specific invention. Patents are extremely important in business. There is a specific body of patent law that protects the rights of the registrant. Patent lawyers are usually listed separately in the telephone directory. In fact, general practice lawyers usually refer most inquiries about patents to these specialists. Licenses and Permits Several federal, state and local licenses and permits are required for starting a new business. Before you even apply for a license, you must first find out the land use requirements, zoning requirements and detailed building code requirements for your type of business, and should do so before signing a rental, lease, or purchase agreement. Requirements may vary for each incorporated city in the county, and the county itself. For assistance call the appropriate number shown in the Resources chapter. Permits required for new businesses are different depending on the type of business. The most common licenses and permits include: a business license, building permit, sales permit, State ID and sales tax schedule, and occupational license. Business License Business licenses are issued by individual cities within the county, or by the county in county areas. These must be posted on the business premises for public inspection. The fee varies depending on the type of business. If you are going to locate your business in more than one city, a separate business license is required for each city and/or county. For county areas: County of San Luis Obispo Tax and License Collector County Government Center, Room D290 1055 Monterey Street San Luis Obispo CA 93408 (805) 781-5832 For city offices, please see the Resources chapter. Home Occupation Permit To set up a business in your home, you first need to make sure that the proposed use of the property

is consistent with the zoning. To check the zoning, you first must know the Assessor's Parcel Number of the property. If you are the property owner, this can be obtained from your property tax statement. If you are a renter or lessee, your landlord will have this number. If this number is not readily available, contact (you will need the exact address of the property): County Assessor's Office County Government Center, Room D360 1055 Monterey Street San Luis Obispo CA 93408 (805) 781-5643 Fax (805) 781-5641 Once you have obtained the Assessor's Parcel Number, go to your local City or County Planning Department to 1) check the zoning and 2) to obtain information regarding allowable home occupations. For the city offices see the Resources chapter. For the County of San Luis Obispo, go to: County of San Luis Obispo Planning Department 976 Osos Street, Room 200 San Luis Obispo CA 93408 (805) 781-5600 Fax (805) 781-1242 www.sloplanning.org Sign Permit If you are planning to place a sign on the exterior of your business, you need a Sign Permit. Regulations regarding the types of signs and placement depend on the zoning for the parcel and the type of business. The Sign Permit application requires you (the business owner) or your sign contractor to submit drawings indicating the advertising message, location, dimensions, construction, electrical wiring and components and the method of attachment. The fee for the permit depends usually on the value of the sign. Start your permit process with the planning people at the addresses and phone numbers shown above, the Planning Departments of the County or City in which you will be located. (Resources chapter). Building Permit If you are planning to construct your place of business, or do any major remodeling, you must have a building permit. Special permits may be required for parking, food preparation, fire safety, discharge of pollutants, etc. If you are building within city limits, there are specific forms that must be filed. For more information, contact your Planning Department: see the (Resources chapter. If you are building outside a city, specific forms must be filed with the county. For further information on county building permits, contact: County of San Luis Obispo Planning Department 976 Osos Street Room 200 San Luis Obispo CA 93408 (805) 781-5600 Seller's Permit If you are planning to sell items that are subject to state sales tax, you must also apply for a seller's

permit for each place of operation. This "resale number" will eliminate the need to pay sales tax when you purchase items for resale in your business. A personal Statement of Financial Condition and estimations of monthly sales and expenses may be required with new applications. There is no fee required for a sales permit; however, under certain conditions a security deposit may be required. To apply contact: California State Board of Equalization 4820 McGrath Suite 260 Ventura CA 93003-7778 (800) 400-7115 State ID and Withholding Schedule If you will be an employer, you must obtain a state employer identification number and employees withholding schedule from: State Employment Tax District Office 4111 Broad Street San Luis Obispo, CA 93401 (888) 745-3886 (805) 788-2600 www.edd.ca.gov If you are applying for a Fuel Tax Permit or Sales Tax Permit, you are automatically registered with the Employment Development Department. Registration must be within fifteen days of the first payment of wages. No fee is required for registration. Occupational Licenses There are many occupations that require licensing in California. For information on this subject, contact: Department of Consumer Affairs Sacramento CA (800) 952-5210 www.dca.ca.gov Please see Business Tax Certificates under the chapter on "Understanding Taxes" for additional information on licenses and permits. Contracts A contract creates legal rights and duties between people. Business contracts can be divided into three groups: commercial contracts, employment contracts, and real estate transactions.

y y

Commercial Contracts: The laws of commercial contracts originate from many sources, but the most important law concerning commercial contracts is the Uniform Commercial Code. It is a comprehensive commercial law adopted by every state, covering the sale and purchase of goods. It does not apply to services. Employment Contracts: Employment contracts are governed by labor laws. An entire chapter of the legal profession specializes in this very complex and constantly changing arena. Real Estate Transactions: Real estate transactions involve the lease or purchase of land or property for your business premises. Contact a reputable real estate person, or ask advice from a bank or title company. Liability A business has three types of liabilities: product liability, legal liability, and

employment liability. Product Liability Product Liability is a business' responsibility to ensure that the product it sells is safe for the public to use. It also covers warranties a business offers for its products. You must make sure that you understand your responsibility, as a business owner, to the legal environment. This is a constantly changing area of U.S. law. You must become aware of its implications to your business before you start. For information concerning the legal liability of your business, you should contact your attorney.

Legal Liability: Legal liabilities are the obligations a business owes to the government, such as abiding by the business law, the contract law, the tax law, the permit and licensing requirements. Legal liability also includes the protection against deceptive trade practices listed under the Uniform Deceptive Trade Practices Act. Employment Liability: Employment liability is tied closely to employment contracts and labor laws. There is an entire body of law which regulates the number of hours worked, minimum wage, health benefits, discrimination, undocumented alien workers, termination of employment, retirement benefits, vacation, insurance, union contracts, etc.

Injury and Illness Prevention Program California's worker safety law requires businesses with 10 or more employees to have a written comprehensive safety program that identifies work place hazards. Employers also must have a safety training program, a way for workers to identify hazards with no fear of reprisal and a person responsible to implement the plan. Employers with fewer than 10 workers must comply with the law, but do not need all of the regulations in writing. Penalties for violators range from fines, to closing down operations, to jail time. For free assistance with your program, call: Department of Industrial Relations Cal/OSHA Consultation Service 1901 N. Gateway Blvd., Suite 102 Fresno CA 93727 (800) 963-9424 (559) 454-1295 www.dir.ca.gov Americans with Disabilities Act (ADA) This comprehensive legislation provides civil rights protection in employment, transportation, public accommodations, and more to individuals with disabilities. Employers must comply with several provisions under this law. For ADA technical assistance, information, referral, training, and consultation on complying with the Act, contact: The Pacific Disability and Business Technical Assistance Center (800) 949-4232 Fax (510) 285-5614 www.pacdbtac.org or The Equal Employment Opportunities Commission (800) 669-3362 www.eeoc.gov Where to Find Help

Business laws are very complex and all encompassing, as you probably noticed from reading the above discussion. In fact, business law covers such a vast area of our legal environment, a legal specialty has developed in "business law" and those lawyers who specialize in this area are known as business lawyers. To find a competent business lawyer who can handle all your business needs contact the San Luis Obispo Bar Association or get referrals from Trade Associations, or personal friends. Your business attorney should be with you from the start of planning your business through reviewing your business plan.. While their services are not inexpensive the consequence of making legal errors in starting and running your business can be very costly.

Business Plan
Definition: A written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement A business plan is also a road map that provides directions so a business can plan its future and helps it avoid bumps in the road. The time you spend making your business plan thorough and accurate, and keeping it up-to-date, is an investment that pays big dividends in the long term. Your business plan should conform to generally accepted guidelines regarding form and content. Each section should include specific elements and address relevant questions that the people who read your plan will most likely ask. Generally, a business plan has the following components: Title Page and Contents A business plan should be presented in a binder with a cover listing the name of the business, the name(s) of the principal(s), address, phone number, e-mail and website addresses, and the date. You don't have to spend a lot of money on a fancy binder or cover. Your readers want a plan that looks professional, is easy to read and is well-put-together. Include the same information on the title page. If you have a logo, you can use it, too. A table of contents follows the executive summary or statement of purpose, so that readers can quickly find the information or financial data they need. Executive Summary The executive summary, or statement of purpose, succinctly encapsulates your reason for writing the business plan. It tells the reader what you want and why, right up front. Are you looking for a $10,000 loan to remodel and refurbish your factory? A loan of $25,000 to expand your product line or buy new equipment? How will you repay your loan, and over what term? Would you like to find a partner to whom you'd sell 25 percent of the business? What's in it for him or her? The questions that pertain to your situation should be addressed here clearly and succinctly. The summary or statement should be no more than half a page in length and should touch on the following key elements:
y

Business concept describes the business, its product, the market it serves and the business' competitive advantage.

y y

Financial features include financial highlights, such as sales and profits. Financial requirements state how much capital is needed for startup or expansion, how it will be used and what collateral is available. Current business position furnishes relevant information about the company, its legal form of operation, when it was founded, the principal owners and key personnel. Major achievements points out anything noteworthy, such as patents, prototypes, important contracts regarding product development, or results from test marketing that have been conducted.

Description of the Business The business description usually begins with a short explanation of the industry. When describing the industry, discuss what's going on now as well as the outlook for the future. Do the necessary research so you can provide information on all the various markets within the industry, including references to new products or developments that could benefit or hinder your business. Base your observations on reliable data and be sure to footnote and cite your sources of information when necessary. Remember that bankers and investors want to know hard facts--they won't risk money on assumptions or conjecture. When describing your business, say which sector it falls into (wholesale, retail, food service, manufacturing, hospitality and so on), and whether the business is new or established. Then say whether the business is a sole proprietorship, partnership, C or Sub chapter S corporation. Next, list the business' principals and state what they bring to the business. Continue with information on who the business' customers are, how big the market is, and how the product or service is distributed and marketed. Description of the Product or Service The business description can be a few paragraphs to a few pages in length, depending on the complexity of your plan. If your plan isn't too complicated, keep your business description short, describing the industry in one paragraph, the product in another, and the business and its success factors in two or three more paragraphs. When you describe your product or service, make sure your reader has a clear idea of what you're talking about. Explain how people use your product or service and talk about what makes your product or service different from others available in the market. Be specific about what sets your business apart from those of your competitors. Then explain how your business will gain a competitive edge and why your business will be profitable. Describe the factors you think will make it successful. If your business plan will be used as a financing proposal, explain why the additional equity or debt will make your business more profitable. Give hard facts, such as "new equipment will create an income stream of $10,000 per year" and briefly describe how. Other information to address here is a description of the experience of the other key people in the business. Whoever reads your business plan will want to know what suppliers or experts you've spoken to about your business and their response to your idea. They may even ask you to clarify your choice of location or reasons for selling this particular product.

Market Analysis A thorough market analysis will help you define your prospects as well as help you establish pricing, distribution, and promotional strategies that will allow your company to be successful vis--vis your competition, both in the short and long term. Begin your market analysis by defining the market in terms of size, demographics, structure, growth prospects, trends, and sales potential. Next, determine how often your product or service will be purchased by your target market. Then figure out the potential annual purchase. Then figure out what percentage of this annual sum you either have or can attain. Keep in mind that no one gets 100 percent market share, and that a something as small as 25 percent is considered a dominant share. Your market share will be a benchmark that tells you how well you're doing in light of your marketplanning projections. You'll also have to describe your positioning strategy. How you differentiate your product or service from that of your competitors and then determine which market niche to fill is called "positioning." Positioning helps establish your product or service's identity within the eyes of the purchaser. A positioning statement for a business plan doesn't have to be long or elaborate, but it does need to point out who your target market is, how you'll reach them, what they're really buying from you, who your competitors are, and what your USP (unique selling proposition) is. How you price your product or service is perhaps your most important marketing decision. It's also one of the most difficult to make for most small business owners, because there are no instant formulas. Many methods of establishing prices are available to you, but these are among the most common.
y

Cost-plus pricing is used mainly by manufacturers to assure that all costs, both fixed and variable, are covered and the desired profit percentage is attained.

y y

Demand pricing is used by companies that sell their products through a variety of sources at differing prices based on demand.

y y

Competitive pricing is used by companies that are entering a market where there's already an established price and it's difficult to differentiate one product from another.

y y

Markup pricing is used mainly by retailers and is calculated by adding your desired profit to the cost of the product.

You'll also have to determine distribution, which includes the entire process of moving the product from the factory to the end user. Make sure to analyze your competitors' distribution channels before deciding whether to use the same type of channel or an alternative that may provide you with a strategic advantage.

Finally, your promotion strategy should include all the ways you communicate with your markets to make them aware of your products or services. To be successful, your promotion strategy should address advertising, packaging, public relations, sales promotions and personal sales. Competitive Analysis The purpose of the competitive analysis is to determine:
y y y y

the strengths and weaknesses of the competitors within your market. strategies that will provide you with a distinct advantage. barriers that can be developed to prevent competition from entering your market. any weaknesses that can be exploited in the product development cycle.

The first step in a competitor analysis is to identify both direct and indirect competition for your business, both now and in the future. Once you've grouped your competitors, start analyzing their marketing strategies and identifying their vulnerable areas by examining their strengths and weaknesses. This will help you determine your distinct competitive advantage. Whoever reads your business plan should be very clear on who your target market is, what your market niche is, exactly how you'll stand apart from your competitors, and why you'll be successful doing so. Operations and Management The operations and management component of your plan is designed to describe how the business functions on a continuing basis. The operations plan highlights the logistics of the organization, such as the responsibilities of the management team, the tasks assigned to each division within the company, and capital and expense requirements related to the operations of the business. Financial Components of Your Business Plan After defining the product, market and operations, the next area to turn your attention to are the three financial statements that form the backbone of your business plan: the income statement, cash flow statement, and balance sheet. The income statement is a simple and straightforward report on the business' cash-generating ability. It is a scorecard on the financial performance of your business that reflects when sales are made and when expenses are incurred. It draws information from the various financial models developed earlier such as revenue, expenses, capital (in the form of depreciation), and cost of goods. By combining these elements, the income statement illustrates just how much your company makes or loses during the year by subtracting cost of goods and expenses from revenue to arrive at a net result, which is either a profit or loss. In addition to the income statements, include a note analyzing the results. The analysis should be very short, emphasizing the key points of the income statement. Your CPA can help you craft this. The cash flow statement is one of the most critical information tools for your business, since it shows how much cash you'll need to meet obligations, when you'll require it and where it will come from. The result is the profit or loss at the end of each month and year. The cash flow statement carries

both profits and losses over to the next month to also show the cumulative amount. Running a loss on your cash flow statement is a major red flag that indicates not having enough cash to meet expenses-something that demands immediate attention and action. The cash flow statement should be prepared on a monthly basis during the first year, on a quarterly basis for the second year, and annually for the third year. The following 17 items are listed in the order they need to appear on your cash flow statement. As with the income statement, you'll need to analyze the cash flow statement in a short summary in the business plan. Once again, the analysis doesn't have to be long and should cover highlights only. Ask your CPA for help. The last financial statement you'll need is a balance sheet. Unlike the previous financial statements, the balance sheet is generated annually for the business plan and is, more or less, a summary of all the preceding financial information broken down into three areas: assets, liabilities and equity. Balance sheets are used to calculate the net worth of a business or individual by measuring assets against liabilities. If your business plan is for an existing business, the balance sheet from your last reporting period should be included. If the business plan is for a new business, try to project what your assets and liabilities will be over the course of the business plan to determine what equity you may accumulate in the business. To obtain financing for a new business, you'll need to include a personal financial statement or balance sheet. In the business plan, you'll need to create an analysis for the balance sheet just as you need to do for the income and cash flow statements. The analysis of the balance sheet should be kept short and cover key points. Supporting Documents In this section, include any other documents that are of interest to your reader, such as your resume; contracts with suppliers, customers, or clients, letters of reference, letters of intent, copy of your lease and any other legal documents, tax returns for the previous three years, and anything else relevant to your business plan. Some people think you don't need a business plan unless you're trying to borrow money. Of course, it's true that you do need a good plan if you intend to approach a lender--whether a banker, a venture capitalist or any number of other sources--for startup capital. But a business plan is more than a pitch for financing; it's a guide to help you define and meet your business goals. Just as you wouldn't start off on a cross-country drive without a road map, you should not embark on your new business without a business plan to guide you. A business plan won't automatically make you a success, but it will help you avoid some common causes of business failure, such as undercapitalization or lack of an adequate market. As you research and prepare your business plan, you'll find weak spots in your business idea that you'll be able to repair. You'll also discover areas with potential you may not have thought about before--and ways to profit from them. Only by putting together a business plan can you decide whether your great idea is really worth your time and investment.