Business Plan Template

Business Plan for

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Company Name

Primary Contact

Physical Address

Telephone

URL
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Email address of primary contact
Table of Con ten ts

Executive Summary - pg. 4

Products and Services - pg . 7

Marketing Plan - pg. 8

Operational Plan - pg . 11

Management Team - pg. 12

Personal Financial Statement - pg. 13

Startup Expenses - pg . 14

Financial Plan - pg. 15

business.com
Executive Sun1mary
Th is section should include an overview of the company, products, and services.

It should answer questions such as:

What will be your primary product or service?
Who is your target audience?
Who are the owners?
What are the finer details of the industry?
What is the market size?

The executive summary should be concise, precise, and complete. If you are using the business plan to apply for a
loan, include how the money will be used.

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Executive Stllnmary
What does your company do? What industry are you joining? These are the types of questions to answer in the company
description section of your business plan. Start the company description with a mission statement. Using no more than
50 words, define the company's goals and culture. You don't have to include a mission statement, but if you do, this is
the place for it.

Company Goals
Goals, both short and long term, should be included here. This shows others what you are hoping to accomplish
over a particular period of time. For example, you may have a short term goal of obtaining 20 percent market
share.

Business Philosophy
What is most important to your business? What is your philosophy for achieving success? You need to clarify your
philosophy, as it gives others a clear idea of the direction you are taking the compa ny.

Industry Description
What is the history of the industry? Is it growing? Who are the primary competitors? How will you position the
company to overcome the competition? It is imperative to show your knowledge of the industry you are joining .

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Executive Summary (cont.)
Company Strengths
This section is a place to discuss what sets your company apart from others. Answer questions such as:
What are the strengths of the company?
What are the strengths of the owners?
What background experience and knowledge do you bring to the company?
How will the strengths fit in with the market?

Legal Form
This should include one of the following:
Sole proprietor
Partnership
Corporation
Limited liability corporation (LLC)
Also make note of why you selected a particular legal form of ownership.

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Products & Services
Use this section to describe, in depth, the products and/or services the company will offer.
This can include a variety of additional information, such as:

Technical specifications
Illustrations
Photos
Marketing and sales material
Market research

Inc lude information on why the products and/or services are beUer than what is already on the market. This can include
factors such as quality, price, and unique features.
Other information for this section includes:

Pricing structure
Fees
Competitive advantages and disadvantages
Product comparison

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Marketing Plan
Due to the depth of this section, most companies create a separate business plan and marketing plan . However, it is
sti ll important to include an abridged version of the marketing plan in your business plan. It doesn't matter what your
product or service brings to a particular market, you cannot succeed unless others know about it. This all begins with a
detailed marketing plan backed up by in depth research.

Below are five factors to include in your marketing plan :

1. Market Research
Primary research
Secondary research

With primary research, you gather and present your own data. With secondary research, you rely on published
information, such as from industry journals, trade magazines, census data, and online studies.
2. Economics
Focus on th ese points:
Market size
Current demand within target market
Primary competitors, including market share
Growth potential
Barriers to entry

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Marketing Plan (con t.)
3. Customers
Identify your target custom er, including their location, characteristics, and buying habits.
For each group, you must create a demographic profile that includes:
Ag e
Gender
Location
Income
Occupation
Educa ti on
Any other details specific to you r indu stry

4. Competition
Answer these two prim ary questions:
What products andlor services will provide competition?
Which companies will provide competition?

When answeri ng these questions, be as specific as possible:

List product and service types.
List major competitors, including names and addresses.

Overall , discuss how and why your products and services compare with the competitors detailed above.

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Marketing Plan (cont.)
5. Strategy
As the name implies. this discusses how you will market your products and services.

This section can include:

Promotions
Advertising
Budget
Marketing methods at different stages of the company: start-up, growth , etc.

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. • • " , " . ' , I ':.",.
Operational Plan
- - - - - - - - - -- - --
This is an opportunity to discuss the day to day operation of the business, including employees, processes,
location, equipment, and other related details.

Your operational plan should focus on these details:

Production: how and where products and/or services are produced.

Location: the type of building, amount of space required, and if all employees will work on site.

Legalities: permits, zoning, licensing, industry regulations, insurance coverage, trademarks, patents,
and copyrights.

Personnel: number of employees, type of employees, existing staff, pay structure, employee
responsibilitie~,
and the use of contractors/freelancers.

Inventory: type of inventory, cost of inventory, rate of turnover, and lead time for ordering.

Suppliers: list of key suppliers, including type, responsibilities, pricing , and history.

- - - - - -- --

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Management Team
Th is section shou ld address all details associated with the management team, such as:

The responsibilities of each member of the management team.

The experience and knowledge of each person.
The plan if one or more member of the management team leaves the company.

If the company has mu ltiple members of the management team, create an organ izational chart explaining the
responsibility of each person.

You can also list supporting individuals, which can include:

Board of directors
Advisory board
Accountant
Legal team
Insurance agent
Banker
Mentors
Consultants

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Personal Financial Statement
Each owner and stockholder should supply personal financial statements showing a list of assets
and liabilities outside of the business. This should also include his or her net worth.

Since owners often use personal assets to finance a business, this shows how much money each
person can provide.

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Startup Expenses
Even before you open your doors for business, you will face a vari ety of expenses. II is essential to
estimate these expenses, including the source of funding.

Due to the tendency to overspend, every business should add a line for contingencies. If you spend
the money, you have already accounted for it. If you don't, you will be left with an excess of cash.

Note: your contingency amount should be 10 to 20 percent of your total startup expenses.

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Financial Plan
The fi nancial plan should include the following:
12 month profit and loss projection
Five year profit and loss projection
Cash flow projection
Projected balance sheet
Break even calculation

While there is no guarantee that things will go as planned, this wi ll help estimate the fi nancial futu re
of your company.

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 Projected Inconle Statement: Year 1 (B)' Month) and ChaI!ges to Cash
Yearly
1 2 3 4 5 6 7 8 9 10 11 12 Total
Income
Sales
<Less Cost of Goods>*
GI"OSS Profit Margin
Operating ElI.."penses
SaJary/W ages
PaYI'oll Taxes
Employee Benefits
Rent
Telephone
Utilities
CadDelivery
SuppJies
Marketing
Legal!Accounting
Insurance
Property Tax
Interest
Other
Depreciation*
Total Operating Expenses
Net Profit Before
IncolTIe Taxes

Changes to Cash
Less Soc Sec & Income Tax
Less PrincipaJ on Loan
Less Owner?s Draw
(Take home)
Plus Depreciation

Total Changes to Cash

'~Cost of Goods: Costs associated With the units so1d such as cost at- inventory, raw material, shipping, storage, packaging and production related labor.
"'Depreciation: For tax purposes, an altowable deduction made tor a loss ill assets' value ('wear, age).
 MONTHLY BUDGET WORKSHEET

Monthly Expense Budget Actual Monthly E~ense2 Budget2 Actual2

Deductions $ $ Personal & Health $ $
Savinqs (to set aside) $ $ Clothing_ $ $
Child Support, Alimony etc. $ $ Toiletries & Care Products $ $
Other: $ $ Haircuts $ $
Housinq $ $ Gym & ~ort Club Dues $ $
Rent or Mortqaqe payment $ $ Health, Life, etc. Insurance $ $
Utilities $ $ Doctor & Dentist Visits $ $
Home Insurance & Taxes $ $ Prescription & OTC Drugs $ $
Other: $ $ Other: $ $
Debt Payment $ $ Education $ $
Credit Card Payments (min) $ $ Tuition $ $
Other Loans: $ $ Books & Fees $ $
Food $ $ Supplies $ $
Groceries $ $ Other: $ $
Dining Out $ $ Entertainment $ $
Coffee & Bar $ $ Tickets for Shows & Games $ $
Other: $ $ Books & Magazine subscr. $ $
Transportation $ $ DVDs, CDs, Video Games $ $
Car Payment $ $ Other: $ $
Car Insurance + Taxes $ $ Miscellaneous $ $
Car Maintenance $ $ Charity, Gifts & Offerings $ $
Gas $ $ Pet Supplies & Vet $ $
Public Transit, Parkinq , Tolls $ $ Entertaining Guests $ $
Other: $ $ Cash not Accounted for $ $
Family $ $ Other: $ $
Day Care & Babysitting $ $
Activities & Lessons $ $
Allowances & Child Support $ $
Other: $ $
Summary Calculation $ $
Month~ Net Income $ $
- Expenses Total $ $
Monthly Spendable Income $ $
 Why Have Personnel Policies & Procedures?
by Marcia Moore, MSSW, Demand Media
www.smallbusiness.chron.com

Company policies and procedures make an

organization run smoothly. Policies are general
guidelines that regulate employee actions in a
company. Procedures are customary methods of
handling activities and can be more specific than
pol icies. For example, a policy may state that an
employee is entitled to expense reimbursement
for certain business items. Procedures establish
a specific method (required form, coding of
expenses, date for submission, and person
responsible for expense reports) for submitting
an expense report.

Purpose of Personnel Policies and Procedures

Developing clearly written policies and procedures that are documented, updated, and
followed brings structure to an organization and assists in the day-to-day decision-making processes.
Policies and procedures need to be adaptable to the needs of the company and enforced across the
organization . Policies and procedures also serve as an internal control method so managers cannot take
free license to make creative or unauthorized decisions.

Types of Policies
Policies provide several types of information that new and established employees need to know. New
employees need to understand such factors as dress requirements, breaks and lunch practices, working
hours, electronic equipment use, treatment of company property, and confidential information. All
employees must understand policies in regards to vacation, sick time, leaving early, holiday pay, medical
leaves, and benefits. Supervisors and managers have policies that explain discipline processes ,
coaching, and counseling employees.

Relationship of Policies and Procedures

There is a relationship between policies and procedures . For each clearly defined policy, there needs to
be a written communication on how to apply the policy, how it is enforced , whom it affects, and who is in
charge. Policies and procedures need to be accessible to all employees. Some companies develop
manuals or handbooks to provide to employees. Other companies may keep the information in a software
package accessible by computer. For example, if an employee reviews the policy on applying for a
vacation , a procedure should be available to explain the necessary steps.
 Policy and Procedures Owners
Policy and procedures owners are held accountable for the timely review, updating, and distribution of
this information. In some companies, the human resources department, which usually handles employee
business, is responsible for the development of policies and procedures as well as supporting their
enforcement. In smaller companies, a supervisor or manager may be responsible for maintaining the
documents.

Policies Required by Law

Some policies are required based on legal responsibility. Title VII of the Civil Rights Act of 1964 require
that companies provide a work environment that is free from any form of sexual harassment. Based on
this requirement, some companies have established a "zero tolerance" sexual harassment policy that can
lead to immediate termination in some cases. The Equal Employment Opportunity Act prohibits
companies from discriminating against any present or potential employee on the basis of race, sex,
religion, country of origin, and color. In response, companies have strict policies for recruiting, selecting,
and treating employees.
HR Policy Statement
This handbook is intended to provide you with a general understanding of our basic
Human Resource policies. You are encouraged to familiarize yourself with our policies,
as they will answer many common questions concerning your employment with us.
Our HR Policies cannot anticipate every situation or answer every question about
employment. They are not an employment contract and are not intended to create
contractual obligations of any kind. Neither the employee nor the company is bound to
continue the employment relationship if either chooses, at its will, to end the relationship
at any time. (Note: "Employment at will" statements are more enforceable in some
states than in others. Having this statement cannot hurt, however do not try to apply it if
the state in which you are located does not recognize "employment at will".)
In order to retain necessary flexibility in the administration of policies and procedures,
the company reserves the right to change, revise, or eliminate any of the policies andlor
benefits described in this handbook at any time.
Company Overview
(Note: This must be customized for your business, so what follows is only used to
motivate your thinking.)
_______ was formed on _ month/year_. Our Company started because
Our typical customer's are_ __
and we do our best to
provide them the products and services they need at a competitive price.
The name pays homage to the fundamental philosophy we have utilized
in building our businesses. We believe in "mutual success." We build mutually beneficial
professional alliances with our customers, suppliers, and our employees that help all to
grow and prosper.
Our main business office is located _-,-_..,..' and we have satellite offices
From all of our locations, we want to provide superior
customer service, _ _ _ _ _ _ , and _ _ _ __
Probationary Period
The probationary period is intended to give new employees the opportunity to
demonstrate their ability to achieve a satisfactory level of performance and to determine
whether the new position meets their expectations. The company uses this period to
evaluate employee capabilities, work habits, and overall performance. Either the
employee or the company may end the employment relationship at will at any time
during or after the probationary period, with or without cause or advance notice.
All new and rehired employees work on a probationary basis for the first 90 calendar
days after their date of hire. Any significant absence will automatically extend a
probationary period by the length of the absence. If the company determines that the
designated probationary period does not allow sufficient time to thoroughly evaluate the
employee's performance, the probationary period may be extended for a specified
period.
Performance Evaluations and Compensation
Performance evaluations are conducted at the end of an employee's probationary
period, to discuss job responsibilities, standards, and performance requirements.
Additional formal performance reviews are conducted to provide both the company and
employees the opportunity to discuss job tasks, identify and correct performance
deficiencies, encourage and recognize strengths, and discuss positive, purposeful
approaches for meeting goals.
The performance of all employees is generally evaluated according to an ongoing 12-
month cycle.
Merit-based pay adjustments may be given to recognize truly superior performance and
shall be at the sole discretion of the company.
Benefits
Employees who have passed their probationary period are provided the following
benefits. A number of the programs (such as Social Security, workers' compensation,
state disability, and unemployment insurance) cover all employees in the manner
prescribed by law.
The following benefit programs are available to employees:
Holidays
Vacation
Benefits
Sick Leave
(Note: Add other benefits here by listing them if you offer them)
Holidays
The company will grant holiday time-off to employees on the holidays listed below: (
Note: paid or unpaid)
New Year's Day (January 1)
Memorial Day (last Monday in May)
Independence Day (July 4)
Labor Day (first Monday in September)
Thanksgiving (fourth Thursday in November)
Christmas (December 25)
(Note: Add other holidays here by listing them if you offer them)
Vacation
Vacation time-off with pay is available to employees to provide opportunities for rest,
relaxation, and personal pursuits. The amount of paid vacation time an employee
 receives each calendar year will be communicated at the beginning of the calendar
year.
Paid vacation time can be used in minimum increments of one day. To take vacation,
employees must request advance approval. Requests will be reviewed based on a
number of factors, including business needs and staffing requirements.
Vacation time-off is paid at the employee's base pay rate at the time of vacation. It does
not include overtime or any special forms of compensation.
In the event that available vacation is not used by the end of the year, employees will
forfeit the unused time as permitted by law.
(Note: If you have a vacation formula based on length of service, add it here)
Sick Leave
A reasonable amount of sick leave will be provided for;
Sick time-off may be either paid or unpaid and will be granted solely at the discretion of
the company. Sick leave is not automatic and will be granted only when absences are
due to personal, legitimate illness or injury. Sick leave cannot be used for work related
injuries--those are handled under Workers' Compensation state laws.
If an employee is absent for three or more consecutive days due to illness or injury, a
physician's statement may be requested verifying the disability and its beginning and
expected ending dates. Such verification may be requested for other sick leave
absences as well and may be required as a condition to receiving sick leave benefits.
Termination
Unfortunately, termination of employment is an inevitable part of personnel activity
within any company, and many of the reasons for termination are routine.
Since employment with the company is based on mutual consent, both the employee
and the company have the right to terminate employment at will, with or without cause,
at any time. Employees will receive their final pay in accordance with applicable state
law.
It is not possible to list all the forms of behavior that are considered unacceptable in the
workplace. The following are examples of infractions of rules of conduct that may result
in disciplinary action, up to and including termination of employment:

• Theft or inappropriate removal or possession of company property

• Falsification of timekeeping records, the application form, or any other company
• records
• Working under the influence of alcohol or illegal drugs
• PosseSSion, distribution, sale, transfer, or use of alcohol or illegal drugs in the
• workplace, while on duty, or while operating employer leased or owned vehicles or
• equipment
• Fighting or threatening violence in the workplace
• Negligence or improper conduct leading to damage of employer leased or owned
• property or customer property
• Insubordination or other disrespectful conduct
• Sexual or other unlawful harassment
• Possession of dangerous or unauthorized materials, such as explosives or firearms,
• in the workplace
• Excessive absenteeism or any absence without notice.
• Unauthorized disclosure of business "secrets" or confidential information
• Unsatisfactory performance or conduct
• Gambling in the workplace or on company premises
• Failure to immediately report a work-related injury
• Misuse of company funds/moneylequipmentlproperty

Any employee found to be operating a company leased or owned motor vehicle while
under the influence of alcohol or illegal drugs will be immediately terminated.
Alcohol & Drug Use Testing
The company is committed to providing a safe, efficient, and productive work
environment for all employees. In keeping with this commitment, employees and job
applicants will be asked to provide body substance samples (e.g., blood, urine, hair) to
determine the use of alcohol/drugs. The company will attempt to protect the
confidentiality of all test results. Alcohol/drug tests will be conducted in any of the
following situations:
PRE-EMPLOYMENT - As a prequalification to assuming any position, prospective
employees are required to be screened for alcohol/drug use. (Note: It is highly
recommended that you use a hair test to screen potential new employees. The hair test
gives you 90 days of history of any drugs ingested by the applicant and is fool proof in
that the only way to "beat" this test is to have no hair. Urine and blood tests can be
defeated a number of ways [do an Intemet search on "how to beat a drug test" for an
eye opener]. Plus, blood and urine sampling only gives you a three day look-back
instead of the 90 days for hair tests. The last thing you want to do is hire someone who
has a drug problem and the only way you can be relatively certain of this is to do a hair
sampling.)
POST-EMPLOYMENT - Current employees will undergo urine and/or blood
drug/alcohol testing after any of the following incidents:

• An on-the-job injury;
• An on-the-job accident with a motor vehicle;
• When there is reasonable suspicion that an employee may be under the influence of
alcohol or drugs, following a serious or potentially serious incident in which safety
precautions were violated or unusually careless acts were performed;
• Where there is reasonable cause to believe the employee is impaired. Reasonable
cause shall be defined as those circumstances, based on objective evidence about
the employee's conduct in the workplace that would cause a reasonable person to
believe that the employee is demonstrating signs of impairment. Examples of
objective evidence include, when an employee shows signs of impairment such as
difficulty in maintaining balance, slurred speech, erratic or atypical behavior, or any
other appearance of impairment;
• When an employee returns to work from a layoff of more than sixty (60) consecutive
calendar days; and
 • When an employee returns from any leave (including medical and occupational injury
leave) of more than sixty (60) consecutive calendar days;
• Random drug/alcohol testing where allowed by federal, state or local laws.

The company implements as a condition of employment an employee drug testing

program and reserves the right to test for drugs at any time during the course of
employment as allowed by applicable federal and state laws. Subject to any limitations
imposed by law, a refusal to provide a body substance sample under the conditions
described above will result in termination of employment even if this is the first such
occurrence.
Use of Company Computers
It is each employee's responsibility to safeguard proprietary company information.
Never give your User 10 or Password to anyone. Employees are expected to exit and
log off all systems at the end of every business day or when a workstation is left
unattended for an extended period of time.
It is forbidden to copy or install any illegal software onto company computers.
The company provides access to Electronic Mail and the Internet as business tools.
These facilities represent considerable commitment of company resources for
telecommunications, networking, software, storage, etc. All existing company policies
apply to your conduct when sending and receiving electronic mail and accessing
websites through the Internet. The display of any kind of sexually explicit image or
document on any company system is a violation of our policy on sexual harassment. In
addition, sexually explicit material may not be archived, stored, or distributed using
company-owned computing resources. If you receive an inappropriate electronic mail,
you should delete it immediately and notify the sender of our policy.
The following list identifies each system that monitors activity and the type of
information it monitors:
Computers - the network operating system records the following:

• Date and time of login/logoff, and the location of the computer used to access
network.
• Date and time a software application is accessed, documents accessed, and how
much is typed. In addition, the system allows network administrators to access all
documents and to restore some deleted documents.
• Date and time Internet is accessed, location of the computer used to access Internet,
websites visited, searches performed, and search engines used.
• Electronic mail (e-mail) - the system allows network administrators to access all e-
mail files and messages composed, sent, or received by employees.
• Online research - the system records date, time, and duration of access, user
identification number, and searches performed.

Telephones - the telephone system records telephone numbers dialed from each
telephone, and the system allows the company to access voicemail messages received
by employees.
 The company reserves the right to retrieve, monitor, or review any information in its
electronic or communications systems, including deleted messages or files as allowed
by federal and state laws. If the company reasonably believes that employee(s) is/are
engaged in illegal activity or misconduct, the company may use electronic monitoring to
produce evidence of that activity, without prior notice to the employee(s).

Non-Disclosure
The protection of confidential business information and trade secrets is vital to the
interests and the success of the company. Such confidential information includes, but is
not limited to, the following examples:

• Customer lists
• Financial information
• Marketing strategies
• New materials research
• Proprietary product processes
• Research and development strategies
• Technological data
• Technological prototypes

Employees who are exposed to confidential information may be required to sign a non-
disclosure agreement as a condition of employment. Any employee who discloses trade
secrets or confidential business information will be subject to disciplinary action, even if
he or she does not actually benefit from the disclosed information.

(NOTE: THE FOLLOWING TWO DOCUMENTS SHOULD NOT BE INCLUDED IN THE

POLICY HANDBOOK BUT SHOULD BE AGREEMENTS THAT ARE PRESENTED
TO A POTENTIAL EMPLOYEE ALONG WITH HIS/HER OTHER TERMS AND
CONDITIONS OF EMPLOYMENT UPON HIRE AND SHOULD BE PART OF THE
HIRING PROCESS DOCUMENTATION.)
Confidentiality Agreement
agrees to keep secret and retain in the strictest confidence all
confidential matters which relate to the Company, including, without limitation, customer
lists, client lists, trade secrets, pricing policies and other business affairs of the
Company learned by him or her from the Company and to not disclose any such
confidential matter to anyone outside the Company, whether during or after his or her
period of employment with the Company, except as may be required in the course of a
legal or governmental proceeding. Upon request by the Company, -,-_ _-,-_----,
agrees to deliver promptly to the Company upon termination of his or her employment
with the Company, or at any time thereafter as the Company may request, all Company
memoranda, notes, records, reports, manuals, drawings, designs, computer files in any
media and other documents (and all copies thereof) relating to the Company's business
and all property of the Company, which he or she may then possess or have under his
or her control.
Signed and agreed to this _ _ _ _ _ day of _ _ _ _ _ _ _ , 20_
BY:
Employee
BY:
Company
Non-Compete Agreement
_______ agrees that at no time during his or her employment nor for a period
of one (1) year immediately following the termination of his or her employment will
_ _ _ _ _ _ for himself or herself or on behalf of any other person, partnership,
company or corporation, directly or indirectly, provide consulting or other services to, be
employed by, or own, manage, operate or control any entity engaged in a business
similar to the business engaged in by the Company at the time of such termination of
employment.
_______ agrees that, at all times during his or her employment and for a period
of one (1) year immediately following the termination thereof, he/she will not directly or
indirectly employ or seek to employ any person or entity employed at that time by the
Company, or otherwise encourage or entice such person or entity to leave such
employment.
Signed and agreed to this day of , 20_,
BY:
Employee
BY:
for the Company
(Note: States differ on the enforceability of non-compete agreements. If fact,
some states do not allow them at all. If you have made entering into a non-
compete agreement a condition of employment, you are in better shape than if
you have not. Also, in some states the "simi/ar" business test is quite strict and
in other states, one year is not considered reasonable. Therefore, before you try
to enforce a non-compete agreement, you are urged to seek local legal counsel.)
 tifOW TO PREPARE A LOAN PACKAGE
www.sba.com

So You Think You Need a Loan

Getting a business loan is an age-old problem . Most entrepreneurs find it to be one of the
greatest struggles they face. While the process can be time consuming and even frustrating ,
your chances of being successful are greatly increased, if you are informed and well prepared .
Being informed means doing your homework and understanding the borrowing process. Being
prepared means putting together a meaningful loan package that addresses the most common
questions a lender will ask. Questions such as: What is the specific purpose of the loan ? How
much of a loan are you requesting? When and how long will you need the funds? How will the
loan be repaid? What collateral can be used to secure the loan? Will you provide a personal
guaranty? Answers to these questions, as well as supporting documentation are essential to the
lending decision and will shape your lender's response. Let's look at each of these items.

Loan Purpose
Clearly defining the purpose of a loan request is critical. A lender will review your financial
requirements based primarily on two types of capital infusions, working capital and growth
capital.

-Working capital is used to meet fluctuating needs that will be repaid during the
company's next full operating cycle , generally one year.

-Growth capital is used to meet needs that will be repaid with profits over a select period
of time, usually not more than seven years, although some financing options may
provide a longer loan maturity. If seeking growth capital , you will be expected to show
how the money will be used to increase profits sufficiently to repay the loan in the
agreed-upon time frame.

Loan Amount
How much of a loan do you need to support specific business needs? This is the question you
should address, NOT, how much can I borrow? Clearly defined business needs should be
tightly aligned with the amount of financing you are requesting. How accurately and convincingly
you speak to this will often determine your lender's interest in your request and set the tone for
further dialog . Remember, 100% financing is not an option and never ask to borrow money you
don't need.

Loan Maturity & Terms

A lender will want to know how long you need the borrowed funds . The reality, however, for
working capital or asset-based loans is that the loan maturity will be tied to the amount of time
needed to satisfy specific cash flow issues or the life expectancy of the asset being purchased.
For instance, working capital loans or lines of credit would have short-term maturities, typically
less than one year. An asset-based or equipment loan, perhaps to purchase a business vehicle
or machinery, could have a maturity tied to the lifecycle of the asset. This type of loan typically
would have a maturity of three to seven years . The key exception would be SBA guaranteed
loans. Such loans could have maturities greater than ten years.

Repayment
Loan repayment is important to a lender. You should give serious and careful consideration to
how your business will repay a requested loan. A lender will examine past and projected
financial statements to determine if your company can and will generate sufficient cash flow to
service new debt, with on time payments. Remember, the lender will be looking for documented
evidence and assurance that a given loan can and will be paid on-time and in full. A lender's
concerns are no different than your-own . If you were going to lend money to a friend or
acquaintance, you would want assurances that the debt will be satisfied as agreed.

Collateral
Collateral is another major piece of the financing pie. Lenders find comfort in using collateral to
secure a loan . Remember, it's all about lowering risk. The question will be asked so you might
as well prepare yourself. What collateral do you have, or will you acquire with loan proceeds,
that is available to secure your loan request? Examples of collateral include: real estate,
inventory, savings, stock, equipment and motor vehicles . For instance, a lender may secure a
working capital loan with inventory and accounts receivable. In another example, a lender may
secure an asset loan with the asset or equipment being acquired. In both cases , the lender
would probably ask for a personal guarantee as well. Lenders can be very creative in using
collateral to secure a loan. Consider all of your options. To prepare yourself, identify available
collateral, estimate its value and be prepare to provide supporting documentation to justify its
worth

Personal Guaranty
It is almost a certainty that you will be asked to provide a personal guaranty, if you borrow
money for a small business. It matters NOT, that your business may be incorporated. As we
said earlier, it's all about lowering risk. A personal guarantee means that you are willing to
pledge your personal assets to protect the lender, in a situation where you are unable to re-pay
the loan.

Components of a Loan Package

Let's now consider what a loan request package should look like. It is important to point out loan
packaging is not an exact science. In fact, loan packaging means different things to different
people. A good package will tell a compelling story and answer most, if not all questions, a
lender may have about your business and loan request. It will provide enough information and
documentation so that your loan request is clearly understood and that your lender could
discuss and defend it before a loan committee. There are three major components of a loan
package, with some components containing multiple parts. Again , this is not an exact science
and different lenders require different things. However, for our discussion and general purposes,
we will focus on the following components : statement of purpose, business plan and financial
statements.
Statement of Purpose
The statement of purpose is a critical component of the loan package and is sometimes
developed within a letter to a specific lender or is otherwise labeled the "executive summary"
and is attached to the business plan. How it is done is up to you . What's important is that it be
well written and informative, as it's likely to be the first thing the lender reviews . It should include
information about the request in terms of amount, purpose, duration , repayment and available
collateral. It also should include a brief description about the business and include a crisp
narrative outlining the positive effects the loan will have on the business. Finally, this statement
of purpose should include one or several paragraphs describing the amount of capital invested
by the owners.

Business Plan or Plan Excerpts

Having a comprehensive, well thought out business plan is essential to the financing process.
You need a business plan before a lender will provide a loan. In fact, without one, even
approaching a lender may be pointless. A good loan package will include a current business
plan or key excerpts from your plan. In addition to the statement of purpose, just discussed, and
financial statements, which will be discussed in the next section, your loan package should
include a current business plan or plan excerpts, with at least the following sections:

• Business description & vision

• Market definition and analysis
• Description of products and services
• An overview of your organization and management
There are many business plan templates available on the internet which may assist you in
finding the format most appropriate for your business.

Financial Statements
Financial statements are a critical and necessary component of a loan request package. They
tell a story about the financial capacity and performance of a business. A well prepared package
will include four types of statements: cash flow statement, income statement, balance sheet and
personal financial statement.

Cash Flow Statement

A cash flow statement is used to monitor and project incoming and outgoing cash , typically on a
monthly basis. It helps you and your lender determine how much cash your business will have
on hand at any point in time. If your business has or will have a negative cash position , it means
that at a given point in time you have more money going out than coming in and you will
probably not be able to pay your bills. Obviously, this type of information will get a lender's
attention. Your package should include a current twelve month cash flow statement, projected
for at least six months out. All cash projections should be realistic and supported.

Income Statement
The income statement is a measure of how a business has performed over a specific period of
time, usually six months or one year. It measures all income less all expenses to arrive at the
amount of profit or loss generated by the business for the period. If your business is a new
venture, your loan package should include a projected income statement, projected for twelve
months out. If you are an existing business with a history, include income statements for the last
three years , if available. Your lender may also request a current interim income statement.

Balance Sheet
The balance sheet represents the basic accounting equation: assets minus liabilities, equals net
worth . It is a snap shot of business financial capacity at a specific point in time . If you are a new
business, your loan package should include a balance sheet representing assets and liabilities,
as of your planned opening date, and another, projected for twelve months after your opening
date. If an existing business, include balance sheets for the last three years, if available.

Personal Financial Statement

A personal financial statement is a simple balance sheet measuring net worth . It identifies
personal assets and debts to help a lender determine a borrower's net worth . This statement is
important to the overall loan request, because it helps the lender evaluate a borrower's financial
capacity and ultimately the value of the personal guaranty.

Loan Packaging Tips

We have talked about what a lender will want to know and what should be in a loan package.
Let's now consider some helpful tips in pulling it all together. The loan package should :

• Be brief, to the point and easy to read. This is important.

• It should emphasize the management strength of your business. Convince the
lender that you and your team have the skills, passion and expertise to be
successful.
• Your loan package should present attractive projections that paint a realistic
picture with substantiated assumptions
• Throughout the package you should weave in the theme: "this is how you will get
your money back." Lenders want to know how and will they will get their money
back.
• Importantly, proofread what you prepare. Better yet, have someone else go
through it for spelling, grammar and style.
• And finally, learn from your mistakes. If you get rejected from one lender, find out
why and FIX the problem.

Loan Packaging Tips

After you submit your loan request to a lender, how will it be evaluated? Your lender will review
your request using three key cred it factors. But first, it's important to point out -- that lenders are
in the business to make money and the way they make money is by making loans. However, a
loan officer's career is based on not making mistakes. The bottom line ...... you have to
convince the lender that you and your business are a good risk . Your character, capacity and
collateral , among other credit factors , will be considered by the lender in making a loan decision.

Character is actually a check on your financial status and personal credit history, including your
previous loan payment record . The theory is -- people are creatures of habit - if you have repaid
prior debts on time and in full , you will likely pay this requested loan on time . Also considered is
experience in the type of business you are trying to finance, including level of responsibility,
education and business management training .

Financial capacity is about having sufficient cash flow to pay-off a loan . This underlies the
importance of preparing a cash flow statement with future cash projections before presenting
your loan request to a lender. Doing so indicates that you are knowledgeable about the cash
coming into your business and being spent. In the lender's mind, it shows that you are
"financially aware" and that you may be better able to avoid a cash shortage that would
jeopardize making monthly loan payments.

Lastly, while cash flow is the primary source of loan repayment, lenders will want a back-up or
secondary source, as an "exit of last resort," should your business not prove profitable.
Collateral is that secondary source and it is important to the lender because it lowers risk.
Remember, it's all about lowering risk so the lender feels confident the loan will be paid on time
and in full.

Next Steps
Put what you have learned into action .

Step 1. Identify potential or eXisting financial needs for your business.

Step 2. Test the waters by talking with a local lender about types of loans available to small
businesses.

Step 3. Talk with a mentor, business coach or SBA representative about all available small
business loan products.

Step 4. Prepare a draft loan package and review it with a lender, mentor or business coach .

Additional Assistance
Many resources are available to assist you . The following resources can help you bu ild a
foundation of knowledge .

SSA has over 60 district offices located throughout the country to help you start and grow your
business.

There are more than 1,000 Small Business Development Center locations around the country.
SBDC's provide management assistance to current and prospective small business owners.

SCORE is a powerful source of free and confidential small business advice to help build your
business. More than 10,000 SCORE volunteers are available to share their wisdom and lessons
learned in business.

The Small Business Training Network is a powerful virtual campus.

And finally, Women's Business Centers assist women in achieving their dreams by helping
them start and run successful businesses. Some 90 WBCs are located around the country.
Other Resources

Other specific and very helpful resources include: SBA's financing information section on the
web; SBDC-Net; a free online business planning course; SCORE's business tools and
templates; and an agency checklist of required documents for SBA loan guarantees.
 CERTIFYING AGENCIES

Office of Small Business Assistance School District of PBe

(OSBA)
MIWBE Certification
SBE Certification 3300 Forest Hill Blvd., Suite A-106
50 S. Military Trail, West Palm Beach, FI 33406
Suite 202 Contact: Michelle Andrewin
West Palm Beach , FL 33415 Director, Office of Diversity in Business
Phone: 561-616-6840 Practices
Fax: 561-616-6850 Phone: 561 -434-8508
Website: www.pbcgov.com/osba Fax: 561-434-7405
E-Mail:
Office of Economic and Small Business [email protected]·12.fl .us
Development Website: www.palmbeach.k12 .fl.us/mwbe

DBE Certification City of West Palm Beach

115 S. Andrews Avenue, Room A680
Ft. Lauderdale, FL 33301 SBE Certification
Phone: 954-357-6400 200 Second Street
Fax: 954-357-5674 West Palm Beach , Florida 33401
. Website: www.broward .org/econdev Contact: Aisha Darrough
Small Business Compliance Specialist
Phone: 561-822-2103
Office of Supplier Diversity Fax: 561-822-1564
E-Mail: adarrough@wpb .org
State of Florida Website: www.wpb.org/procurement
MIWBE Certification
Florida Dept. of Mgmt. Services South Florida Water Management
4050 Esplanade Way, Suite 380 District
Tallahassee, FI 32399-0950
Phone: 850-487-0915 Small/Minority Business Development
Fax: 850-922-6852 Initiative
Website: www.osd .dms .state.fl.us 3301 Gun Club Road
West Palm Beach , Florida 33406
Contact: Sandra Hammerstein
Phone: 561-682-6446
Fax: 561-682-5446
E-Mail:_shammer@sfwmd .gov
Website: www.sfwmd .gov/sbe
 ~ M'" ".CHWU""

~ Q,~~~8.
SMALL BUSINESS IS BIG BUSINESS

The Office of Small Business Assistance is responsible for monitoring conditions

affecting small businesses within the marketplace that can provide goods and services
to Palm Beach County, thus creating an environment that encourages the growth and
development of small businesses in Palm Beach County.

MISSION The mission of the Palm Beach County Office of Small Business Assistance
(OSBA) is to provide County departments and local businesses with excellent customer
service, professional assistance and technical responsiveness to promote the economic
growth, expansion and increased productivity of small business enterprises in Palm
Beach County in accordance with established compliance policies and guidelines.

CORE SERVICES: OSBA's primary services are certification, contract compliance,

training, and referral to resources for financial or technical assistance . These programs
are tailored to support the growing number of small businesses in Palm Beach County
in developing the skills they need to start and operate an efficient and profitable
business.

The Small Business Enterprise Program is an aggressive attempt on the part of the
Board of County Commissioners to ensure that all businesses are afforded an
opportunity to participate in our free enterprise system, while providing technical
assistance and business resources to Palm Beach County small businesses.

Annual Goal
The annual SBE Goal for County procurement of construction, professional services
and commodities shall be a minimum of fifteen percent (15%). The annual goal shall be
applied to the procurement of all goods, services or construction unless otherwise
approved by the County Administrator.

BENEFITS OF BECOMING SBE CERTIFIED

o Networking opportunities at events such as Prime Time, Small Business Week

and Matchmaker Conferences.
 0' Listings in Palm Beach County's On-line Directory of Certified Small
Businesses.

0' Preference given to SBE's bidding as Primes when responding to procurement

opportunities for goods and services.

0' Additional points awarded to SBE Primes when responding to Request for
Proposals.

Eligibility

To become eligible for the Small Business Enterprise Program a business must be:

• Domiciled in Palm Beach County (Domiciled in Palm Beach County means the
business holds a valid Palm Beach County Business Tax Receipt and has a
permanent place of business in Palm Beach County).
• Perform a commercially useful business function for Palm Beach County
Procurement purposes.
• Demonstrate that it meets the size requirements as set forth in the Palm Beach
County Code, as amended .
• Be independently owned and operated

How to Become a Certified Vendor

1. Register as a Vendor with the Palm Beach County Purchasing Department

https:/Ipbcvssp.co.palm-beach .fl .us/webapp/vssp/AltSelfService .

2. Submit a completed application for SBE certification to OSBA.

-OR-

1. Register as a Vendor with the Palm Beach County Purchasing Department

https:/Ipbcvssp .co.palm-beach .fl .us/webapp/vssp/AltSelfService.

2. Submit an Inter-local Certification Coversheet from one of the Partner Agencies :

(School District of Palm Beach County and/or City of West Palm Beach) along
with a completed Palm Beach County SBE certification application.

Vendor Registration

OSBA requires a vendor registration number which is obtained from the Palm Beach
County Purchasing Department. To register as a new Palm Beach County Vendor or
activate an existing vendor account, you must do so by registering via the Palm Beach
County Vendor Self Service System at: https:/Ipbcvssp .co.palm-
beach .fl .us/webapp/vssp/altselfservice.
Certification Application

Applications are available at 50 S. Military Trail, Suite 202, West Palm Beach , FL
33415.

Applications can be downloaded and printed from OSBA's website at the following
address: http://www.pbcgov.org/osba. Look under the Certification Program header for
the link to the application.

Applications can be mailed upon request.

Certification Processing Cost & Time

The cost of certification is $150.00 and must be in the form of a cashier's check or
money order payable to the PBC Board of County Commissioners and must be included
with the application. The payment is non-refundable and the application will not be
processed without payment. It takes up to 90 business days to process a completed
application.

Expedited certification is available at a cost of $300.00. The Proper payment and an

expedited review form must be submitted with an application a minimum of fifteen (15)
business days prior to the RFQIIFB/RFP opening or submission date.
 BUSINESS RESOURCES
AGENCY SERVICES PHONE WEBSITE
PROVIDED
Center, for Entrepreneurial' institute 56.1.4'78.233'1 , www.ceoventures.org
Enterprise I program tI1at Jilrovides easy
0~portunit~ I aCli:ess to in-h0use general
(<i:E0) formerl}\ I and specific subject matter
Business Loan I experts at low or no 1i:0st to
I,Fund of the Palm the business customer.
Beaches I Areas of expertise include,
' but are not limited to,
' accounting , business
I I
management, business
I development, relationship 1
marketing, branding ,
customer service , business \
structuring and strategy. I
I "

CONSUMER Investigate, negotiate, and 561 .712-6600 WWW·l2bcgov.com/l2ublicsafet

AFFAIRS mediate consumer ~/consumeraffairs
complaints against
businesses with a goal of
avoiding any future conflicts
and misunderstandings. We
protect consumers and
businesses from unlawful,
deceptive and unfair trade
practices by the
enforcement of existing
Ordinance laws and
regulations .
IllEPARTMENlT Licensing and regulating I 850.487.1395 www.Mvfloridalicense.com/d
OF BUSINESS
: ,AND
businesses and
pr0fessionals in the State of I 1Qm:
PR<i>F,ESSIONAL. Pl0rida , such as
: IRE6ULA:JiICDN €0smetologists,
(IllBPR) veterinarians , real estate
agents and pari-mutuel
wagering facilities.
Florida Licensing for security firms, 800.435.7352 www.freshfromflorida .com
Department of plant/agriculture industry,
Agriculture and food industry, etc.
Consumer
Services
GLOBAL I Business Coaching and 561 .894.4500 www.globalbusinessdevelol2
BUSINESS WorKshops, Leadership mentcenter.com
IllEVELOPMENi!"
<i:ENi!"ER
I Sales and Service Tra ining,
Virtual CDffice and
I

Adm inistrative Services j .,.

 --
Palm Beach State Assist small businesses 561.862.4726 sbdc@!1almbeachstate.edu
College Small with financial, marketing,
Business production, organization,
Development engineering and technical
Center problems and feasibility
(SBDC) studies. Special SBDC
programs and economic
development activities
include international trade
assistance, technical
assistance, procurement
assistance, venture capital
formation and rural
development.

r 'Paragon FIL Rarag iin services inc;;lude; 561.282 .1888 I www.!1aragonfl.org

bl!Jt a~e not limited to,
fimanc;;ial assistance, t001s, 1

I
suppert alild adv.0cacy for
lDl!Jsinesses from
umeersewed
c0mmuriities.
I
I
I ~
I
PBC Planning, Roadside Vendor Permits, 561 .233.5000 www.!1bcgov.com/!1zb
Zoning and Certificates of Competency
Building for Specialty Trades ,
Contractor Certification, etc.
:'IPB€'IDepa'rtm'ent Bends, 6~arits , Leans, 561 .23(3.3600) www,!1bcgov.com/des
of Economic I liaxes, 8rogram
I. 'Sustainabilitv (!)'eerdinatien ,,etc;;.
PBC Tax Business Tax Receipts 561 .355 .2272 www.!1bctax.com
Collector (Previously named and select 4
Occupational License) etc
S(f;ORE Sma lll business advice, 561'1.BB3.1€l72' www.score .org -
business mentoring,
resou r.ee"t0els templates, 1
State of Florida State of Florida business 850.245.6052 www.sunbiz.org
Divisions of filings. (i.e. LLC, Inc.,
Corporations Fictitious Names)

liEIllI'(f;enter. I Teehnic;;al suppom, 5611 .26§.3790 www.tedcenter.org

i Infermati0n 11iechn0Iogy,
~eal IEstate [)evelepment,
liraining, Business
I
,
I
Nefwerking arne Access to
I
F;,unein'o,
Department of General tax administration 800 .352 .3671 www.Dor.m~florida,com
Revenue and property tax oversight