Appendix 16 Sample Business Plan 508c.pdf

United States Department of Agriculture

Prospectus for Campground and Related Granger-Thye Concessions Chequamegon-Nicolet National Forest

Appendix 16: Sample Business Plan i

Business Plan Sample

For Campground Concessions

A Proposal in Response to the Campground Prospectus for:

on the National Forest

Name of Company:

Address:

Company contact:

Phone:

ii

Contents

Part 1: The Business

1. Purpose and Goals:

2. Description of the Business:

3. Legal Structure:

4. Location of Your Business:

5. Market and Customers:

6. Competitive Analysis:

7. Management:

8. Personnel:

Part II: Financial Data

1. Capital-Equipment List:

2. Start-Up Expenses:

3. Sources and Uses of Financing:

Part III: Historical Financial Reports for Existing Business

1. Each applicant is required to submit all four items listed below

Part IV: Supporting Documents

1. Each applicant is required to submit all five items listed below

Part V: Appendices Legal Organization:

1. Sole Proprietorship

2. General Partnership:

3. Corporation:

4. Limited Partnership

5. Limited Liability Company (LLC)

Table 1. List of owners Table 2. Competitive Analysis Table 3. Capital Equipment List Table 4. Start-Up Expenses Table 5. Sources of Financing Table 6. Uses of Financing Table 7. Cash Flow Projection (or Cash Flow Budget) by Month: Year One Table 8. Start-Up Balance Sheet Table 9. Income Projection by Month: Year One

Appendix 16: Business Plan Sample

Part 1: The Business

1. Purpose and Goals:

A. What is your purpose in pursuing this business?

B. Define your business goals for the next year and what you foresee five years from now:

2. Description of the Business:

This section should describe the nature and purpose of the company, background on your industry, and what opportunities you see for your services.

A. Brief description of the business:

B. Briefly describe your knowledge of this industry:

C. List the products and services you will provide:

3. Legal Structure:

There are several ways in which your business can be legally organized.

A. How your company is legally organized? (Check appropriate box).

• Sole Proprietorship

• General Partnership

• Corporation "C" Corp or "S" Corp Limited Partnership

• Limited Liability Company (LLC)

• Other

B. Why is this legal organization most appropriate for your business?

C. Does your operation require a state registration number? YES. NO.

(If “Yes”, include a copy of the registration in the Supporting Documents.)

Include any appropriate information, including shareholder or partnership agreements, in the Supporting

Documents, and complete the following list of owners:

Table 1. List of owners

Name Address Social Security Number

(SSN)

Percent Ownership

4. Location of Your Business:

Describe the planned geographical location of the business and discuss the advantages and disadvantages of the site location in terms of wage rates, labor availability, closeness to customers or suppliers, access to transportation, state and local taxes, laws, and utilities.

Describe your approach to overcoming any problems associated with the location.

A. Planned geographical location:

B. Discuss advantages or disadvantages of the site location:

C. Describe your approach to overcoming any problems:

5. Market and Customers:

The purpose of this section is to present sufficient facts to convince the evaluation team that your service has a substantial market and can achieve success in the face of competition. Discuss who the customers are for your service. Where are the major purchasers for the service?

A. Describe your anticipated target market (e.g., age, income, hobbies, regional, national, international):

B. Describe the size of the current total market and potential annual growth:

C. Discuss your advertising campaign in terms of how, when, and where you will advertise, and estimated annual cost:

6. Competitive Analysis:

Make a realistic assessment of the strengths and weaknesses of your competitors. Compare the competing services on the basis of image, location, price, advertising, and other pertinent features. Discuss your key competitors and explain why you think that you can capture a share of their business. Discuss what makes you think it will be easy or difficult to compete with them.

A. Identify your key competitors:

B. Discuss their strengths and weaknesses.

C. Compare your product or service on key areas. For each area of comparison rank yourself and your selected competitors on a scale of 1 (high) to 5 (low). Remember: no ties.

Table 2. Competitive Analysis

Area of Comparison You Competitor A Competitor B Competitor C Competitor D

Image

Location

Price

Advertising

Service

Uniqueness

Other

D. Why do you think you can compete with your competitors and capture a share of the market?

7. Management:

The evaluation team is looking for a committed management team with the proper balance of technical, managerial, and business skills and experience which supports your proposal. Be sure to include complete resumes for each key management member in the Supporting Documents section.

(Use additional pages and attach as necessary)

A. List owners and key management personnel and their primary duties. If any key individuals will not be onboard at the start of the venture, indicate when they will join the staff.

B. Discuss any experience when the above people have worked together that indicates how their skills complement each other and result in an effective management team.

C. List the advisors and consultants that you have selected for your venture. Capable, reputable, and well- known supporting organizations can not only provide significant direct and professional assistance, but also can add to the credibility of your venture.

Accountant

Attorney

Banker

Insurance Broker

Advertising

Others

8. Personnel:

Explain how you plan to recruit, develop, and maintain your workers. List the number of employees you will have, as well as their job titles and required skills. (Use additional pages as necessary)

A. Identify essential employees, their job titles, and required skills:

B. Identify the source and your plan to recruit essential employees:

C. Discuss any training or retraining that you plan for your employees. Also, discuss any necessary first- aid certification or recertification, etc.:

Part II: Financial Data

1. Capital-Equipment List:

Capital equipment is defined as assets which have useful lives of more than one year. Examples include machines, equipment, vehicles, livestock, tack, gear, and computers. Describe the equipment, the quantity, whether the equipment is new or used (N/U), the expected useful life, and the cost. This includes equipment purchased from existing businesses.

Table 3. Capital Equipment List

Equipment Quantity New/Used Life Cost

Total Cost of Capital Equipment $0.00

2. Start-Up Expenses:

Start-up expenses are the various costs it takes to open your doors for business:

Table 4. Start-Up Expenses

Item Cost

Total cost of capital equipment

Beginning inventory of operating supplies

Legal fees

Accounting fees

Other professional fees

Licenses and permits

Remodeling and repair work

Deposits (public utilities, etc.)

Advertising

Insurance

Bonds

Advance permit fees

Other expenses:

Total Start-Up Expenses $

3. Sources and Uses of Financing:

A. Sources of Financing:

Table 5. Sources of Financing

Item Cost

Investment of cash by owners

Investment of cash by shareholders

Investment of non-cash assets by owners

Investment of non-cash assets by shareholders

Bank loans to business: short term (one year or less)

Bank loans to business: long term (more than one year)

Bank loans secured by personal assets

Small Business Administration loans

Other sources of financing (specify)

Total Sources of Financing $

B. Uses of Financing

Table 6. Uses of Financing

Item Cost

Buildings

Equipment

Initial inventory

Working capital to pay operation expenses

Noncash assets contributed by owners (use same amount as in

Sources, above)

Other assets (specify)

Total Uses of Financing $

C. Monthly Cash Flow Projection:

The cash flow projection is the most important financial planning tool available to you. The cash flow projection attempts to budget the cash needs of a business and shows how cash will flow in and out of the business over a stated period of time. A cash flow deals only with actual cash transactions. Depreciation, a noncash expense, does not appear on a cash flow. Loan repayments (including interest), on the other hand, do, since they represent a cash disbursement.

NOTE: The Cash Flow Projection chart on the following page is required to be completed and submitted in the existing format.

Table 7. Cash Flow Projection (or Cash Flow Budget) by Month: Year One

A B C D E F G H I J K L M N

1 Oct. Nov. Dec. Jan. Feb. March April May June July Aug. Sept. Total

2 Cash Receipts

3 Sales Receivables

4 Wholesale

5 Retail

6 Other Services

7 Total Cash Receipts

8 Cash Disbursements

9 Cost of Goods

10 Variable Labor

11 Advertising

12 Insurance

13 Legal and Accounting

14 Delivery Expenses

Fixed Cash

Disbursements*

16 Mortgages (Rent)

17 Term Loan

18 Line of Credit

19 Other

Total Cash Disbursements

22 Net Cash Flow

Cumulative Cash Flow

*Fixed Cash Disbursements

A B C D E F G H I J K L M N

27 Utilities

28 Salaries

Payroll Taxes and

Benefits

30 Office Supplies

Maintenance and cleaning

32 Licenses

33 Boxes, Paper, etc.

34 Telephone

35 Miscellaneous

36 Total FCD/Year

37 FCD/Month

39 Cash on Hand

40 Opening Balance

41 + Cash Receipts

42 -Cash Disbursements

43 Total = New Balance

D. Start-Up Balance Sheet:

Balance sheets are designed to show how the assets, liabilities, and net worth of a company are distributed at a given point in time.

NOTE: The following Start-up Balance Sheet is required to be completed and submitted in the existing format.

Table 8. Start-Up Balance Sheet

Item Cost

Assets:

Current Assets $

Fixed Assets $

Less Accumulated Depreciation $

Net Fixed Assets $

Other Assets $

Total Assets $

Footnotes:

Liabilities: $

Current Liabilities $

Long-Term Liabilities $

Total Liabilities $

Net Worth or Owner’s Equity (Total assets minus total Liabilities) $

Total Liabilities and Net Worth

Footnotes:

E. Start-Up Income Statement Projection:

Income Statements (also called Profit and Loss Statements) complement balance sheets. The income statement provides a moving picture of the company during a particular period of time. For most businesses (and for most bankers), income projections covering one to three years are more than adequate.

If you are in a start-up situation, look for financial-statement information and income ratios for businesses similar to yours. The Robert Morris Associates' Annual Statement Studies and trade association publications are two possible sources.

NOTE: The following Income Projection Statement is required to be completed and submitted in the existing format.

Table 9. Income Projection by Month: Year One

A B C D E F G H I J K L M N

1 Oct. Nov. Dec. Jan. Feb. March April May June July Aug. Sept. Total

3 Sales

4 Wholesale

5 Retail

6 Total Sales

8 Cost of Material

9 Variable Labor

10 Cost of Goods Sold

12 Gross Margin

14 Operating Expenses

15 Utilities

16 Salaries

Payroll Taxes and

Benefits

18 Advertising

19 Office Supplies

20 Insurance

Maintenance and

Cleaning

22 Legal and Accounting

23 Delivery Expenses

24 Licenses

25 Boxes, Paper, etc.

26 Telephone

27 Depreciation

A B C D E F G H I J K L M N

28 Miscellaneous

29 Rent

Total Operating

Expenses:

32 Other Expenses

33 Interest (Mortgage)

34 Interest (Term Loan)

Interest (Line of Credit)

Total Other

Expenses:

37 Total Expenses:

Net Profit (Loss) Pre- Tax

Part III: Historical Financial Reports for Existing Business

1. Each applicant is required to submit all four items listed below.

1. Balance sheet (past three years)

2. Income statement (past three years)

3. Tax returns (past three years)

4. Current credit report from major credit bureau

Part IV: Supporting Documents

1. Each applicant is required to submit all five items listed below.

1. Personal resumes of business owners, officers, and partners

2. Personal financial statements of business owners, officers, and partners

3. Bank or investor letters of intent to finance project

4. Copies of business leases pertinent to this business

5. Copies of all pertinent existing permits or licenses applicable to this business (Submit only the face pages of all current concession permits)

Part V: Appendices

Legal Organization:

The more popular legal organizations and their reasons are outlined below

1. Sole Proprietorship

A sole proprietorship is a business owned by one person. This form of business is regulated by the state only in that some states requires you to register your trade name to do business as a sole proprietor. You do not have to register with the state if you are operating your business under your own full legal name.

(Note: You must be licensed where required, and pay all appropriate taxes.)

Advantages:

• Simple to start.

• Easy to dissolve.

• Owner makes all management decisions.

• Pay only personal income tax; business entity not taxed separately.

Disadvantages:

• Unlimited liability (owner legally liable for all debts, claims and judgments). Difficulty in raising additional funds.

• No one to share the management burden.

• Impermanence (company can't be sold or passed on; however, you may sell or pass on assets of the company).

2. General Partnership:

A partnership is an association of two or more persons to carry on as co-owners of a business for profit.

Some states require that you register your name if it is a trade name (not your full legal name). You must file state and Federal ``information returns,'' but business income and losses flow through to the partners' personal taxes. The business pays no separate income taxes. Partners may share the profits of the business

(and the losses) on an equal basis, or may pro rate the proceeds as set forth in a Partnership Agreement.

Whichever way you determine to share in the business, you need to have a written Partnership Agreement outlining the ownership, responsibilities, and eventualities of dissolution or liquidation for the business.

Advantages:

• Simple to start.

• Fairly easy to dissolve.

• Additional sources of capital from partners. Broader management base.

• More opportunity for each partner to specialize. Tax advantages: no separate income tax.

• Limited outside regulation, compared to a corporation.

Disadvantages:

• Unlimited financial liability for all general partners (some partners' personal debts can even be charged to the business).

• Difficulty in raising outside capital. Divided authority.

• Continuity problems (business dies when any partner leaves or dies, unless succession has previously been spelled out in a Partnership Agreement. Partnership terminates in the event of a personal bankruptcy on the part of any partner).

• Difficult to find suitable (compatible) partners.

• One partner may be responsible for the actions of another partner, regardless of whether that partner had prior approval.

3. Corporation:

There are two types of corporations generally recognized today: a regular "C'' corporation, organized under the laws of the state in which you do business; and an "S'' Corporation, so designated by the IRS and not necessarily recognized by your state.

A corporation is a business entity separate and distinct from its owner(s) or shareholder(s). You must file incorporation papers with the state of your choice. The corporation must file annual reports with the

Secretary of State, and may have to file separate quarterly income tax returns. The corporation exists forever, can be bought and sold, and is regulated by the state.

"C'' Corporation Advantages:

• Limited liability (as long as you act like a corporation which means having a separate checking account and phone number, paying interest on any borrowed money, keeping up a corporate record book, filing annual reports, meeting with your Board of Directors at least annually, etc.).

• Easier to bring in additional capital. Ownership is transferable.

• Company has continuous, perpetual existence.

• Possible tax advantages (seek adequate advice from a tax professional).

• Gives you more sense of permanence, thus more ``weight,'' in the business world.

“C'' Corporation Disadvantages:

• More expensive to organize. Highly regulated.

• Extensive record-keeping requirements.

• Double taxation (corporation pays its own income taxes; if you pay yourself a salary or a dividend, you also pay personal income taxes).

• Shareholders/Board of Directors may counter your management decisions.

"S'' Corporation Advantages

• Filing a Subchapter Selection with the Internal Revenue Service allows you to be taxed on your corporate profits through your personal tax return.

• You still maintain the limited liability of a corporation.

• If you have additional personal income against which to deduct company losses, or if your personal tax rate is lower than the corporate tax rate, this form may be advantageous for you. Again, please seek professional tax advice to make this determination.

“S'' Corporation Disadvantages

• There are some restrictions on "S" corporations, mainly in how you can sell your shares. You can have a maximum of 35 shareholders, all of whom must be U.S. citizens, and be individuals (not corporations).

• You must request permission from the IRS to be an "S" corporation, and generally, must maintain the calendar year as your fiscal year.

4. Limited Partnership

In a Limited Partnership, there are two kinds of partners: general partners, who carry full liability; and limited partners, who carry limited liability. Limited partners must make known, through filing with the

Secretary of state that they indeed are limited partners, and they may not participate in the day-to-day management of the business. Again, as in the "S'' Corporation, profits from Limited Partnerships are taxed through each partner's personal tax return. Limited partnerships are popular in industries where a great deal of ``up-front'' money is needed for projects that are expected to produce a high return, such as in real estate, energy, movie production, and sports teams.

5. Limited Liability Company (LLC)

While wearing the corporate form, essentially, an "LLC" is similar to a Limited Partnership, except the general partner also carries limited liability. Profits are taxed through individual owners' personal tax returns. The advantage of this form over an "S'' Corporation is that other corporations may be owners, and the "LLC" may also hold 100% ownership in subsidiary companies.

Be aware that LLC is a relatively new business form. Legal precedents have not been set to outline clearly all the legal and tax ramifications of this form of organization. If interested in becoming an “LLC” you are strongly urged to seek competent, professional legal and tax advice.