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© 2007 Paragon
Advisory Pty Ltd
Business Plan
The three rules of plans:
1. Research is better than supposition
2. Less is better than more
3. Graphs and tables are better than text
The overwhelming aim of the business plan is to convince us to release a seven figure sum of money to be managed by you to grow your business. This document should provide a cogent argument based on referenced facts that this business plan can be achieved by you and your team, with assistance from us and new hires into the business.
Table of Contents
1.
Executive Summary
- Two to three page overview:
- The product and the market it sells into.
- Why people purchase the product
- Who are the key managers of the business
- Brief overview of turnover and profit
- How much money is needed, and at what valuation
2. Product
- What are the products of the business
- What do they sell for?
- How is price determined?
- What margins do they make?
- What is the sales cycle time: from contact to order to delivery to payment?
- How are they distributed (locally and overseas) and why was this method chosen?
- What advertising and promotion is used?
- How are the products manufactured and where?
3. Market
- Who are the competitors to the products, and what is their market share and how do they maintain it? What are their price points and distributors?
- What is the total addressable market in each market segment chosen by the company?
- How will this grow (or shrink) in coming years, and by how much and why?
- What are the trends in the marketplace?
- Is the market price or feature driven?
- How is the price set in the marketplace, ie what factors drive it up and down?
- Which competitors will lose market share when your product gains market share, and why will they not be able to respond?
4. Management
- Who are the senior managers and what is their experience base?
- Who are the directors and what is their experience base? How much time do the directors spend in the business?
- What holes are there in the management team, both now and as the company grows over the next three years?
5. Financials
- The last two completed years and this years Profit & Loss, Balance Sheet and Cash Flow Statement. This year’s finances should be on a monthly basis of budget and actual for P&L and cash flow. Any unusual items, intangible assets and non-arms length transactions should be detailed as notes to the accounts.
- KPIs for the business and achievement to them in past years.
- Current valuation of the business, and the rationale behind this.
6. Plan
- What funding is requested, and when is it needed?
- What are the activities planned for the coming years, and in particular, the major milestones that will demonstrate the company is on-track?
- What are the forecasts for B/S, P&L and Cash flow for the next 3 years (preferably 5 years)
- What are the staffing levels planned for the same period, and in what areas will staff expansion occur?
- What capital expenditure is planned for the same period?
- What are the major risks, and how will the company mitigate them?
- Whatever can be provided to increase our confidence that this plan can be executed successfully.
- Who are the three most likely purchasers of the business if the business is to be sold in 3 – 5 years time, and why will they be likely purchasers?
7. Supporting Information
- Curricula Vitae of key people
- Industry and market studies
Level 1, 121 Greenhill Road
UNLEY SA 5061
Tel (08) 8271 0160
Fax (08) 8373 5075
enquiry@paragonadvisory.com.au