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Successful Business Planning

Process & Product

February 21, 2006

Mel BravermanCooperative Development Services

www.cdsus.coopmelbrave@msn.com

608 243 3255

Successful Business Planning

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Process and ProductProcess and Product

We tend to focus on the product-a written business plan

If the process to produce the business plan is inadequate-the business plan may also be inadequate

Having a plan that is accepted without the ability to achieve that plan is in no one’s interest

Good process enhances the ability to achieve what your plan states!

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Feasibility Vs PlanningFeasibility Vs Planning Feasibility informs us to what is possible Planning shows how the possible will be

achieved Market feasibility gives us potential sales-our

top line Business planning shows a systematic

approach to achieve these potential sales Areas of focus to determine feasibility prior to

producing the business plan:– Market– Financial– Organizational– Design

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Moving Ahead to Business PlanningMoving Ahead to Business Planning

Once feasibility of the areas previously mentioned is determined we begin to build

the business plan

The business plan has two main purposes:

1. A document to attract investors (member loans and lending institutions)

2. A document that charts the course for the co-op to follow to success

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Overview of the planning processOverview of the planning process

Gather Useful Planning Info Initial Planning Session(s) Strategy Session(s) Writing the Plan

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Gather Useful InformationGather Useful Information

Vision

Mission Statements

S.W.O.T. Analysis Environmental Analysis

Summary of Member Surveys

Community Information

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Initial Planning Session(s)Initial Planning Session(s)

The goal of the initial sessions is to bring a number of voices into the process

Over time there will be a distillation of the information gathered from these initial sessions

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Initial Planning Session(s)Initial Planning Session(s)

Stakeholders (Board, Management, Key Community People)

Distribute information to all attendees prior to the first session Have an experienced facilitator Stay open to many points of view Get everyone involved Build organizational team Hear many voices in the beginning Work towards buy-in Review mission Define shared values

Create vision

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Strategy Session(s)Strategy Session(s)

Board or Committee

Review initial planning session

Finalize vision

Distill information into specific strategies

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Who Will Write the Business PlanWho Will Write the Business Plan

Determine if it will be written by volunteers or by a professional

If it is to be written by volunteers – do they have the necessary skill set and time?

If it is to be written by a professional - what is the experience of this person

If it is to be written by a professional make sure you budget to pay for this service

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The Product-Business Plan OverviewThe Product-Business Plan Overview

General Approach:

Areas to Address

Marketing

Operations

Management

Financial Projections

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Marketing-The Plan’s CoreMarketing-The Plan’s Core

Plan for taking concept to reality Define your market: current & potential

customers, niches Explain how your products & services will

meet market demands Include industry market research -

growth, technology, government, health Detail sales projections & assumptions

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Operations-Facility & EquipmentOperations-Facility & Equipment

Describe physical facility & equipment needs including costs

Determine location, hours of service, inventory level needs

Project future needs

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Management ( Talent )Management ( Talent )

Sell your team & its’ abilities to operate the retail cooperative

Key personnel-Board and Management Relevant experience & education Complete resume for key personnel Technical consultants/advisors available

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Financial ProjectionsFinancial Projections

The culmination of your marketing & operation plans

Income statement - 5 years, first year by month, then quarterly

Cash flow projections - 5 years Pro forma balance sheets for start-up & every

year thereafter Key financial ratios Sources/Uses

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General Business Plan OutlineGeneral Business Plan Outline

I. Cover Sheet

II. Organizational Info

III. Table of Contents

IV. Executive Summary

V. The Business

VI. The Industry

VII. The Market

VIII. Personnel

IX. Business Objectives

X. Potential Risks

XI. Financial

XII. Supporting Documents

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General Business Plan OutlineGeneral Business Plan Outline

I. Cover SheetA. Title

B. Presented to

C. Date

D. Applicant

II. Organizational InformationA. Mission

B. Vision

C. Beliefs

III. Table of Contents

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General Business Plan OutlineGeneral Business Plan Outline

IV. Executive SummaryA. Brief Description of the Business

– Where you operate, what you do

B. The Opportunity– Your market & strategy, the industry, competition,

C. Financials– Sales projections, profit & growth potential, current

financing

D. People– Introduce key personnel & talents

E. The Offering– Needs, wants, and plans for money

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V. The BusinessA. Type

– Start-up, existing, retail

B. Legal Structure– Cooperative, non-profit

C. General Information– Location, products/services, approach (price, quality,

service)

D. History of Project– Beginning, significant events

E. Opportunity– Sales volume, profitability projections, market share

General Business Plan OutlineGeneral Business Plan Outline

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General Business Plan OutlineGeneral Business Plan Outline

VI. The Industry

A. Present Status

B. TrendsEconomic, legal, technological, social, political,

demographic

C. Direction Industry is Moving

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General Business Plan OutlineGeneral Business Plan Outline

VII. The MarketA. Who is Your Customer

– Consumer, business, government, industry

B. What is the need for your product/service– Health, price, environment

C. Geographic Customer Base Coverage– Distance, time, traffic patterns

D. Demographic Target– Age, income, education, family status, employment, sex

E. Psychographics– Sports, diet, alternative healing

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General Business Plan OutlineGeneral Business Plan Outline

VII. The Market

F. Quantify the Market– Size, trends, local issues

G. Marketing Strategy– Advertising plan, promotions, competitive focus (price,

service, etc.), marketing channels & methods

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General Business Plan OutlineGeneral Business Plan Outline

VIII. PersonnelA. Organizational Chart

B. Major Responsibilities of Key Managers

C. Board of Directors

D. Resumes of Key Management/Board

E. Strengths & Weaknesses

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General Business Plan OutlineGeneral Business Plan Outline

IX. Business ObjectivesA. Business Objectives

– S.M.A.R.T.

B. Profit Targets– Annual

C. Financial Ratios– R.O.I. & R.O.E.

D. Sales Growth Rate– Annual

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General Business Plan OutlineGeneral Business Plan Outline

X. Potential RisksA. Risks and Plan to Address Risks

XI. FinancialA. Projected Income Statement

– 5 Years with assumptions

B. Projected Balance Sheet– 5 Years with assumptions

C. Cash Flow Statement– First year thru third year quarterly, fourth & fifth year

annual

D. Sources/Uses

E. Break-Even Analysis

E. The Offering– Capitalization, terms, sources & fund uses, payback

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General Business Plan OutlineGeneral Business Plan Outline

Supporting Documents

Industry graphs Historical sales comparisons Credit reports Copies of lease Organizational information Business development schedule

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Thank You - Questions?Thank You - Questions?