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Posts Tagged ‘plan’

Raise Money Capital ? The Basics of Finding Money and Preparing a Business Plan

Startup Company Funding

People go to investors because they’re looking to start a business and need to find money for their startup company funding.  Starting a new business takes courage. But as they say, courage doesn’t pay the bills. Generally, People who have entrepreneurship ideas want to start their own business and fall into two categories. Here are the important questions you need to know and must ask yourself if you’re looking for investors and funding a startup.

The first group consists of people who know exactly what they want and are simply looking for the opportunity or resources to do it. The second consists of people who want to start their own business but don’t really have any definite ideas of what they like to do, and their business skills may be lacking.

What I’ve done is I’ve asked a number of these people the same questions over and over. What are the responsibilities of ownership? I ask them what’s involved in owning a business and what are the roles that you’ll have to play? Set goals. What do you guys want from your business? If they want to succeed, how will they know if they get there? Knowing what they want out of their business permeates every other decision that they’re going to make when they start a new business. It affects which business they choose, how they evaluate their business, and what their chances are for success.

I also have to ask these people, what is the impact on their everyday life going to be? How can they evaluate their skills and make good judgments about whether they’re ready to own their own business? Try knowledge about basic business concepts. Are you good in accounting, marketing, and finance? Do you have any experience and are you willing to farm this out? It’s a good place to start if they already know that they want to start their own business.

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The Importance of Having a Business Plan

One of the most frequently asked questions by business owners is about their business plan ideas. There seems to be a lot of anxiety. Is it long enough? Is it good enough? Does it contain the information that the investors want to see and does it really tell the story?

From my 30 years of experience and knowing what investors want to see, plan on spending between 80 to perhaps 200 hours on your business plan. A word of caution, of course, is don’t try to make it perfect. It will never happen. So, don’t try to make it so.

Let’s condense this into the simplest terms. The basics. How long should your plan be? What I like to see and what our investors like to see is between 25 and 30 pages. No more and certainly no less. You have to tell the story. And if you have to ask yourself who needs a business plan, then don’t plan on getting funding.

Types of plans. Mini-plans, working plans, financing plans, presentation plans. But before you start anything, plan your plan. Determine your objectives. How will you use your plan? The elements of a business plan? Very simple. They don’t vary much.

Executive summary, business description, your market strategies, your competitive analysis, how you’re going to develop your business, operations, management, and of course, above all, the financial components.

Above all, they have to be very specific and get to the point. I’ve seen hundreds and hundreds of business plans over the years, and the ones that grab me are the ones that tell the story quickly and succinctly. Remember, it’s quality not quantity.

Preparing Your Business Plan

A lot of people looking for investors actually have a game plan or a lot of business plan ideas. And although it’s not so much a business plan, it’s a game plan a with business plan format. But what I have to encourage them is that I want to see your business plan outline because that’s what angel investors, private investors, and the venture capital funding guys want to see.

So, you’ve decided to start your new business. Congratulations, that’s fabulous. But you have to create a business plan as your next logical step in this whole evolution. Smart entrepreneurs plan not because their accountants tell them or because their financial people say it’s a must. They plan to give them the roadmap for success.

Sure, there are successful business owners out there who had no business plan, and they stumbled along and certainly made some money for themselves, and that’s great. But I will tell you that 98% of people that walk in our doors have to have a very cogent business plan. You have to plan for your future. You need to create a road map for your success. What do you really want to get out of your business plan? It may help establish your business credentials for financing purposes. Investment by future partners? Certainly investment by the angel investors and venture capital funding groups.

So, if you’re just starting out in business, the business plan is going to help you organize every piece of the puzzle, and it’s going to come together to make your business grow and be a success, hopefully. Your well-established business plan is going to grow your business. If you’re a larger company, it could take a business-as-usual rut and turn it right around.

And if you think of it, your business plan is probably going to be the most efficient, effective, and the most important document you may ever produce.

Don Dodge, Joe Kraus, Paul Buchheit, Seth Priebatsch Have an idea and want to start a company? Learn how to attract investors, and what they want to see before writing a check. Hear from entrepreneurs who have raised money and VCs who have funded them.

Free Car Wash Business Plan

Free Car Wash Business Plan for Loans

Obtaining Business Financing

 

When obtaining a business loan for a car wash business, it is imperative that you have a properly structured business plan that will assist you in showcasing how you intend to operate your Car Wash, how the business will operate, how you intend to market the business, the anticipated financial results of your company, and how you intend to repay your debt obligations. This sample loan business plan will provide you with the framework that you need in order to acquire a business loan for starting or expanding this type of business.

 

Executive Summary

 

Introduction

 

When obtaining a business loan for a car wash, it is imperative that your business plan has a clear and concise executive summary that provides an outline of what are seeking to accomplish, how much capital you are seeking to raise, the management biography of the business owner, and an overview of the anticipated profit and loss statements of the business. Here is an example of how the title paragraph should be written:

 

Car Wash, Inc. (“the Company”) is seeking a business loan of 0,000 in order to launch the operations of a car wash that will be based in San Francisco, California. The Company was founded in (Insert Year). The business was founded by Mr. John Doe.

 

Products and Services

 

In the next segment of the business loan and business planning document, you should showcase the products and services that you will be providing to the general public. For instance:

 

The Car Wash will provide customers with the ability to quickly have their cars exteriors and interiors cleaned by the Company’s professionally trained staff. The business will not have an automated drive through car wash, but rather individuals will wash and clean the car by hand. The business will generate revenues through the services rendered by the Company’s staff as well as through the sale of car care products.

 

Business Loan Terms

 

Now it is time to discuss the anticipated terms of the business plan that you are seeking. An example paragraph of how this is stated:

 

At this time, Mr. Doe is seeking a conventional business loan in the amount of 0,000. The interest rate, loan terms, and loan covenants are to be determined during negotiation. However, this business plan assumes that the business will receive a seven year business loan with a seven percent interest rate due on the outstanding principal balance.

Management Biography

 

Now that the summary of the business has been provided, it is time to provide a brief overview of the owner of the business. An example paragraph summing up the owner is as follows:

 

Mr. Doe is a highly experienced business person that has years of experience regarding the direct ownership and management of business. He will be able to effectively bring the operations of the Car Wash to profitability while ensuring that the business loan’s payments and its covenants are met at all times.

Financial Statements

 

The most important thing to your lender when applying for a business loan is how you intend to repay the bank. In this section of the business plan, you should provide an overview of the finance’s of the business discussing the anticipated revenues, expenses, and profits/losses. You can also discuss the applicable collateral within the business plan that will be used to secure your business financing.

 

Expansion Plans

 

One of the most important aspects of your business plan is how you intend to expand the business over a three to five year period. Banks and finance companies always want to see that the business will experience a moderate to strong level of growth. This is especially true in business lending because as your business grows the cash flow that secures your business loan will decrease proportionality against your monthly credit obligations. An example of how this is stated is as follows:

 

The Car Wash will continue to expand through organic means including increasing the Company’s advertising budget via the reinvestment into the after tax cash flows of the business. Additionally, if the business is highly successful then the Company may seek to establish additional Car Wash locations after the third year of operations.

 

 

The Financing

 

Use of Business Loan Proceeds

 

In this section of the business plan you should focus on how the proceeds of the business loan will be used. An example of this would be as follows:

 

Car Wash Establishment – ,000
Car Wash Equipment and FF&E – ,000
Working capital – ,000

 

Management Equity

In this section of the business plan you should discuss the percentage ownership of the business among the owners of the business. For example:

 

Mr. Doe will own 100% of Car Wash, Inc.

 

Board of Directors

 

When applying for business financing, the bank will also want to know who serves as the board of directors. For small businesses, usually the owner serves as the director of the business. An example of how this is worded:

 

Mr. Doe will be the sole director of Car Wash, Inc.

 

Exit Strategy

 

Any bank or financing company is also going to want to know what you intend to do with the business over a set period of time. Many business owners will develop and expand a business with the intent to sell the company to a third party at a later time. When drafting this part of the business plan you should focus on what you intentions are in regards to potentially selling the business. This is often worded as:

 

Mr. Doe would most likely sell the Car Wash to a third party for a significant earnings multiple. Car wash businesses usually sell for approximately one to three times earnings given the financial strength of the business. In this event, the business would be sold by a business broker and the business loan sought in this plan would be repaid according to the covenants of the business loan agreement.

 

Products and Services

 

When developing a business plan that is appropriate for obtaining a business loan or other business credit facility you need to clearly showcase the services or products that you will be offering to the general public. An example of how this section is worded goes as follows:

 

As stated in the executive summary, the Car Wash will provide general car cleaning (of both the interior and exterior of a vehicle) to the general public within its San Francisco based market. The business will generate significant high margin revenues from these services.

 

Additionally, the business will generate additional streams of revenue from the sale of car care products that customers can use at home.

 

Industry and Market Analysis

 

The Current State of the Economy

 

It is important to let your financial institution know that you are well apprised of the financial situation of the general economy when you are applying for a business loan. This is especially true in today’s environment where lending has become more difficult and will remain more difficult in the foreseeable future. Specifically, you should gear this section of the business plan analysis towards the industry that you are operating within. For example:

 

The current economy has remained difficult over the past few years. However, Car Wash businesses typically operate with a strong state of economy stability as these businesses provide a broad level of car cleaning services with a relatively low pricing point. As such, the Car Wash will be able to remain profitable and cash flow positive at all times despite the current state of the economy.

 

The Car Wash Industry

 

In addition to providing your business loan officer with an understanding of the general economy, it is important that you showcase that you have an equal understanding of the industry in which you are operating within. As such, you will need to provide you business loan institution of a brief overview of your industry and any potential changes that may affect the way that your company does business. An example of how an industry overview is as follows:

 

There are over 13,600 car washing establishments in the United States. These businesses produce over billon dollars a year in gross receipts. Additionally, the business employs over 124,000 people, and generates payroll figures of .2 billion dollars a year. The industry has experienced a tremendous rate of growth over the last ten years. The car washing industry from 2000 to 2005 experienced growth of more than 18% over the five year period. This industry is one of the fastest growing industries in the United States.

 

 

 

Target Market

 

In this section of the business loan application and business plan analysis, you should focus on the demographics of your localized market (or national market if applicable). This section should discuss how many people live in your area, the anticipated number of people that would require the use of Car Was businesses, the median household income of people living in the area, poverty line statistics, and any applicable laws that would apply to your operation of the Car Wash.

 

Competition

 

Many people that are developing new businesses or expanding existing businesses often feel that their business does not have any competition or limited competition at best. However, this is almost never the case. Unless you have re-invented the wheel – you will have competition. When applying for a business loan, you should clearly showcase your competition in your business plan. This is especially important to your banker as they will be able to gauge your ability to be successful in your targeted market. Many business loan underwriters will aggressively confirm that competitive nature of your local market and your local industry.

 

When drafting this section of the plan you should heavily discuss the competitive advantages that you intend to have over your competition.

 

Marketing Plan

 

In addition to all of the above information that we have covered, your business loan officer is also going to want to know how you intend to market your business to the general public. Most people do not quite understand how to effectively market their business outside of prominent signage or flyer distribution. When applying for a business loan (again in this difficult lending climate), your banker is going to want to see that you have a clear methodology of how you intend to market your services or products to the general public. In this section of the business plan – we will overview how to showcase your services/products to the general public.

 

Marketing Overview Example

 

The Car Wash will place prominent signage on the facility to draw a significant amount of foot traffic.
The business will maintain listings in the Yellow Books.
The Car Wash will also maintain an internet website that showcases the Company’s operations, hours of operation, and relevant contact information.

 

Marketing Strategies Overview

Additionally, you will be required to further drill down (in your business plan) how you intend to implement your strategies when you launch or expand your business’s operations. In this section of the business loan and business plan documents, you should amplify the bullet points from the section above. For instance:

 

The Car Wash, Inc. intends to use a number of strategies that will create instant traffic and customer flow to the Company’s location. These strategies include not only using prominent facility and road signage, but also distributing flyers to people that fall into he Company’s targeted demographics. The business will also regularly take out advertisements in localized newspapers that showcase the Company’s hours of operations, car washing services, and specials that are occurring within the Car Wash’s location on a regular basis..

 

The business will also maintain a highly informative website that showcases the Car Wash’s services, its hours of operation, service information, licensure information, and other relevant information in regards to the Company’s services. This website will be listed on major search engines such as Google as many people now use the internet to locate local businesses.

 

The Financial Plan

 

Beyond any other part of your business loan application or business plan, the financials section of these documents are what matters most when applying for a business loan or any other type of credit facility. Ultimately, this section of the business plan showcases not only what your anticipated profitability will be, but also how you intend to repay the funds that you have borrowed through your business financing facility. An example of how this section is structure is as follows:

 

Assumptions

 

Car Wash, Inc. will have an average annual growth rate of 10% per year.
Mr. Doe will acquire 0,000 through a business loan in order to launch the operations of the business.

 

Proforma Financials for a Business Loan

 

Now it is time to showcase how you intend to repay your loan, generate a profit, and increase the book value of your business over a three to five year period. BusinessPlansForLoan.com has developed an easy to use financial model that you can use when drafting out the financial model for your business plan and business loan application. Through your business loan application, you will be required to have the following:

 

Profit and Loss Statement for your Car Wash
Cash Flow Analysis for the Car Wash
Balance Sheet for the Car Wash
Business Loan Amortization Tables

Free Consignment Store Business Plan

Free Consignment Store Business Plan for Loans

Obtaining Business Financing

 

When obtaining a business loan for a consignment store business, it is imperative that you have a properly structured business plan that will assist you in showcasing how you intend to operate your Consignment Store, how the business will operate, how you intend to market the business, the anticipated financial results of your company, and how you intend to repay your debt obligations. This sample loan business plan will provide you with the framework that you need in order to acquire a business loan for starting or expanding this type of business.

 

Executive Summary

 

Introduction

 

When obtaining a business loan for a consignment store, it is imperative that your business plan has a clear and concise executive summary that provides an outline of what are seeking to accomplish, how much capital you are seeking to raise, the management biography of the business owner, and an overview of the anticipated profit and loss statements of the business. Here is an example of how the title paragraph should be written:

 

Consignment Store, Inc. (“the Company”) is seeking a business loan of 0,000 in order to launch the operations of a consignment store business that will be based in San Francisco, California. The Company was founded in (Insert Year). The business was founded by Mr. John Doe.

 

Products and Services

 

In the next segment of the business loan and business planning document, you should showcase the products and services that you will be providing to the general public. For instance:

 

The Consignment Store will provide customers with the ability to consign clothing and other items through the Company’s retail location. The business will receive a fee equal to 40% of the consigned products sold through the Consignment Store’s location. The business will specialize in the sale of clothing and other related small retail products.

 

Business Loan Terms

 

Now it is time to discuss the anticipated terms of the business plan that you are seeking. An example paragraph of how this is stated:

 

At this time, Mr. Doe is seeking a conventional business loan in the amount of 0,000. The interest rate, loan terms, and loan covenants are to be determined during negotiation. However, this business plan assumes that the business will receive a seven year business loan with a seven percent interest rate due on the outstanding principal balance.

Management Biography

 

Now that the summary of the business has been provided, it is time to provide a brief overview of the owner of the business. An example paragraph summing up the owner is as follows:

 

Mr. Doe is a highly experienced business person that has years of experience regarding the direct ownership and management of business. He will be able to effectively bring the operations of the Consignment Store to profitability while ensuring that the business loan’s payments and its covenants are met at all times.

Financial Statements

 

The most important thing to your lender when applying for a business loan is how you intend to repay the bank. In this section of the business plan, you should provide an overview of the finance’s of the business discussing the anticipated revenues, expenses, and profits/losses. You can also discuss the applicable collateral within the business plan that will be used to secure your business financing.

 

Expansion Plans

 

One of the most important aspects of your business plan is how you intend to expand the business over a three to five year period. Banks and finance companies always want to see that the business will experience a moderate to strong level of growth. This is especially true in business lending because as your business grows the cash flow that secures your business loan will decrease proportionality against your monthly credit obligations. An example of how this is stated is as follows:

 

The Consignment Store will continue to expand through organic means including increasing the Company’s advertising budget via the reinvestment into the after tax cash flows of the business. Additionally, if the business is highly successful then the Company may seek to establish additional Consignment Store locations after the third year of operations.

 

 

The Financing

 

Use of Business Loan Proceeds

 

In this section of the business plan you should focus on how the proceeds of the business loan will be used. An example of this would be as follows:

 

Consignment Store Establishment – ,000
Opening Inventory – ,000
Working capital – ,000

 

Management Equity

In this section of the business plan you should discuss the percentage ownership of the business among the owners of the business. For example:

 

Mr. Doe will own 100% of the Consignment Store.

 

Board of Directors

 

When applying for business financing, the bank will also want to know who serves as the board of directors. For small businesses, usually the owner serves as the director of the business. An example of how this is worded:

 

Mr. Doe will be the sole director of Consignment Store, Inc.

 

Exit Strategy

 

Any bank or financing company is also going to want to know what you intend to do with the business over a set period of time. Many business owners will develop and expand a business with the intent to sell the company to a third party at a later time. When drafting this part of the business plan you should focus on what you intentions are in regards to potentially selling the business. This is often worded as:

 

Mr. Doe would most likely sell the Consignment Store to a third party for a significant earnings multiple. Consignment Stores usually sell for approximately one to three times earnings given the financial strength of the business. In this event, the business would be sold by a business broker and the business loan sought in this plan would be repaid according to the covenants of the business loan agreement.

 

Products and Services

 

When developing a business plan that is appropriate for obtaining a business loan or other business credit facility you need to clearly showcase the services or products that you will be offering to the general public. An example of how this section is worded goes as follows:

 

As stated in the executive summary, the Consignment Store will specialize in the retail sale of items on behalf of individuals within the Company’s target market. The business will charge a fee equal to 40% of the sale of each consigned item. The business will use a number of means in order to generate sales through the Company’s store. This includes listing items on EBay and other popular websites so that the business can generate substantial sales outside of the Company’s retail location.

 

 

Industry and Market Analysis

 

The Current State of the Economy

 

It is important to let your financial institution know that you are well apprised of the financial situation of the general economy when you are applying for a business loan. This is especially true in today’s environment where lending has become more difficult and will remain more difficult in the foreseeable future. Specifically, you should gear this section of the business plan analysis towards the industry that you are operating within. For example:

 

The current economy has remained difficult over the past few years. However, Consignment Stores typically operate with a strong state of economy stability as these businesses are often used as a last resort among people that are seeking to sell their clothing or other retail items in exchange for a significant percentage of the value of the merchandise.  As such, the business should be able to remain profitable and cash flow positive in any economic environment.

 

The Consignment Store Industry

 

In addition to providing your business loan officer with an understanding of the general economy, it is important that you showcase that you have an equal understanding of the industry in which you are operating within. As such, you will need to provide you business loan institution of a brief overview of your industry and any potential changes that may affect the way that your company does business. An example of how an industry overview is as follows:

 

In the United States there are over 17,000 businesses that specialize in the sale of consignment apparel to the general public. Among these businesses, the aggregate receipts generated from the sale of used merchandise are approximately billion dollars per year. The industry employs more than 97,000 people and provides gross payrolls of .2 billion dollars.

 

 

 

Target Market

 

In this section of the business loan application and business plan analysis, you should focus on the demographics of your localized market (or national market if applicable). This section should discuss how many people live in your area, the anticipated number of people that would require the use of Consignment Stores, the median household income of people living in the area, poverty line statistics, and any applicable laws that would apply to your operation of Consignment Stores.

 

Competition

 

Many people that are developing new businesses or expanding existing businesses often feel that their business does not have any competition or limited competition at best. However, this is almost never the case. Unless you have re-invented the wheel – you will have competition. When applying for a business loan, you should clearly showcase your competition in your business plan. This is especially important to your banker as they will be able to gauge your ability to be successful in your targeted market. Many business loan underwriters will aggressively confirm that competitive nature of your local market and your local industry.

 

When drafting this section of the plan you should heavily discuss the competitive advantages that you intend to have over your competition.

 

Marketing Plan

 

In addition to all of the above information that we have covered, your business loan officer is also going to want to know how you intend to market your business to the general public. Most people do not quite understand how to effectively market their business outside of prominent signage or flyer distribution. When applying for a business loan (again in this difficult lending climate), your banker is going to want to see that you have a clear methodology of how you intend to market your services or products to the general public. In this section of the business plan – we will overview how to showcase your services/products to the general public.

 

Marketing Overview Example

 

The Consignment Store will place prominent signage on the facility to draw a significant amount of foot traffic.
The business will maintain listings in the Yellow Books.
The Consignment will also maintain an internet website that showcases the Company’s operations, hours of operation, and relevant contact information.
The business will also using popular sites such as EBay in order to generate additional sales from outside of the retail location.

 

Marketing Strategies Overview

Additionally, you will be required to further drill down (in your business plan) how you intend to implement your strategies when you launch or expand your business’s operations. In this section of the business loan and business plan documents, you should amplify the bullet points from the section above. For instance:

 

The Consignment Store intends to use a number of strategies that will create instant traffic and customer flow to the Company’s location. These strategies include not only using prominent facility and road signage, but also distributing flyers to people that fall into he Company’s targeted demographics. The business will also regularly take out advertisements in localized newspapers that showcase the Company’s hours of operations, consignment store services, and specials that are occurring within the store on a regular basis.

 

The business will also maintain a highly informative website that showcases the Consignment Store’s services, its hours of operation, consigned product listing information, licensure information, and other relevant information in regards to the Company’s services. This website will be listed on major search engines such as Google as many people now use the internet to locate local businesses. The business will also use major sites such as EBay to generate sales of items consigned through the Company’s location.

 

The Financial Plan

 

Beyond any other part of your business loan application or business plan, the financials section of these documents are what matters most when applying for a business loan or any other type of credit facility. Ultimately, this section of the business plan showcases not only what your anticipated profitability will be, but also how you intend to repay the funds that you have borrowed through your business financing facility. An example of how this section is structure is as follows:

 

Assumptions

 

Consignment Store, Inc. will have an average annual growth rate of 10% per year.
Mr. Doe will acquire 0,000 through a business loan in order to launch the operations of the business.

 

Proforma Financials for a Business Loan

 

Now it is time to showcase how you intend to repay your loan, generate a profit, and increase the book value of your business over a three to five year period. BusinessPlansForLoan.com has developed an easy to use financial model that you can use when drafting out the financial model for your business plan and business loan application. Through your business loan application, you will be required to have the following:

 

Profit and Loss Statement for your Consignment Store
Cash Flow Analysis for the Consignment Store
Balance Sheet for the Consignment Store
Business Loan Amortization Tables

As part of the 2011 Entrepreneurship Conference. A seasoned operator turned VC leads an interactive session with one entrepreneur who “crushed the pitch” to investors and one entrepreneur who was nimble in the evolution of his business. Chapters: 1. Introduction: The VC-Entrepreneur Lifecycle www.youtube.com 2. Matthew Monahan: CEO of Inflection www.youtube.com 3. Terry Austin, CEO Guardian Analytics www.youtube.com 4. Searching for an Entrepreneurial Company www.youtube.com 5. Evolving with the Times www.youtube.com 6. Hiring Strategy www.youtube.com 7. The Venture Process: Insight www.youtube.com 8. Starting the Business www.youtube.com 9. Three Years Without Raising Any Money www.youtube.com 10. How Entrepreneurial Companies Succeed www.youtube.com 11. Developing Relationships www.youtube.com 12. Getting the Right Introductions www.youtube.com 13. The Four Rules of Venture Capital www.youtube.com 14. The Financial Model www.youtube.com 15. Due Diligence www.youtube.com 16. Transitioning the Business www.youtube.com 17. “Launching a Product is Really Tough” www.youtube.com 18. No Sleep Leads to a Successful Launch www.youtube.com 19. The Number Two Family History Website www.youtube.com 20. Starting a Security Company with a Twist www.youtube.com 21. Fraud Prevention Changing with the Criminals www.youtube.com Related Links: www.gsb.stanford.edu www.gsb.stanford.edu www.youtube.com www.econference.org http www.shv.com http www.inflection.com
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More Venture Capital Term Sheet Sample Articles

Get Your Business Plan in Place before Looking for Venture Capital

To have a successful venture capital raise campaign, be sure you have solid Business Plan in place. As experienced an Business Consultant with a background in private equity and business finance, I see many business plans, marketing plans and strategic plans that simply don’t meet muster. Give yourself the best chance possible by spending some time and effort in this area. Also, having a good Executive Summary and Investment Overview for an initial introduction to your business opportunity will serve you well.

When trying to raise VC funds, it really helps to understand how Venture Capital works, and what a VC firm expects. This article will give you important insights into venture capital so you can develop an effective venture capital campaign. You can go after venture capital in any growth phase, and the VC firm expects to participate in equity through owning stock, options, warrants and convertible debt or stock.

Researching venture capital firms is absolutely essential to figure out precisely what they look for and expect in an investment, exactly what their investment parameters entail, and what the VC firm specializes in. Typically the fund will have a detailed website which will clearly explain their Fund Objectives. You will also find this critical information on their Offering Prospectus / Memorandum to their investors. Below I have outlined the different objectives of a VC fund to give you an idea what you need to find in your research.

Investment Objectives

? Rate of Return expectations.
? Long- term or short- term capital appreciation.
? Early, Middle or Late Stage Companies.
? Sectors concerned in.
? High growth potential.
? Liquidity Options.
? Expertise, Experience & repute of the Fund.
? Advisory Board Members.
? Members of the Fund.

Investment Criteria

? Evaluate in terms of Management, Product, Markets, Financials, and Business Stage.
? Highly competent and motivated management team.
? Proprietary Product or service that: meets a strong market need: Favorable price and cost relationship.
? A market which has a favorable mix of Size, Growth, Competitive Barriers and the potential for high volume sales.
? Management:
o People are the most important ingredient in a Company’s success
o Balanced Team
o Superior Skills
o Team leader with a track record
o Ability to keep on and attract talent
o Understands Planning & Control
o Can make difficult decisions
o Can work with professional advisors
o Accept assistance from the Fund Members
o allegiance to the Venture
o Clearly understands the Funds’ expectation on liquidity, rate of return and investment objectives.
o Above all, integrity, character, accountability and high business ethical motive

Market

? Young, flourishing fast and provides opportunity
? Defined market niche.
? Dominance in that niche.
? Niche market should be small enough not to attract big company competitors, yet has a strong potential for expansion.
? Realistic Marketing Plan.
? Marketing Team leadership should have encompassing industry contacts with sales people, sales reps and distributors.

Stage

? Mostly early stage but will consider later stage with high growth opportunities.
? Consider small public companies as well as private.
? Spin offs as a result of re-structuring and rejuvenation.

Venture capital wants to balance control with the amount of investment risk in a deal. Here are two ways VC firms asses and determine investment risk.

The Risk / Return Evaluation

– At the Product or Service Level:

? Level 1: Idea Stage. Not Operable. Market Assumptions.
? Level 2: Pilot/ Test Stage. Market refined.
? Level 3: Fully Developed. Few Customers. Market defined.
? Level 4: Satisfied Customers. Market Established.

– At the Management Level:

? Level 1: Entrepreneur.
? Level 2: Few Founders.
? Level 3: Partial Management Team.
? Level 4: Full Management Team. Highly Experienced.

Note: The higher the Level from both Determinants (Product or Service & Management), the less Risk for a higher Return. 4/4 would be most desirable and cost the Entrepreneur the least. 1/1 would be the least desirable and cost the Entrepreneur the most. A 2/2 or 3/3 are good Level Combinations to shoot for prior to approaching Venture Capital if financially feasible.

The Present Value / Future Value Evaluation

– Scenario: Expected ROI is 35% per year, without inflation, over 5 years. Present Value of Earnings is .5M. Future Value Earnings in 5 years is M.

? VC Equity Share is calculated: .5M divided by M = 30%.
? Maximum Investment is 10 times first year gross (expected) earnings, which in this example is about 0,000.
? Conclusions: M maximum investment for 30% of the Company at 3/3 Level over a 3 year period. A 1/1 Level, Seed/Start Up Investment would be a 45-50% Equity Stake, with an expected ROI of 60%.

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Draper Fisher Jurvetson and Cisco to Hold Global Business Plan Competition

Companies Partner to Encourage Entrepreneurship; Winner to Receive 0,000 Investment

Leading early-stage venture capital firm Draper Fisher Jurvetson (DFJ) and Cisco today announced that each company will utilize its extensive global reach to jointly launch a global business plan competition for students aimed at fostering innovation and entrepreneurship. The competition will rely on Cisco TelePresenceTM, which enables collaboration through a live, face-to-face network communications experience, to allow finalists from around the world to present their business plans in real time to a joint panel of DFJ and Cisco executives based in San Jose.

This is the first time the competition is aimed at a global market, a milestone made possible by both DFJ’s Global Network and Cisco TelePresence. Cisco TelePresence helps break down the barriers of distance by creating a collaborative experience where participants feel as though they are sitting in the same room even though they may be located thousands of miles apart. The competition seeks to find new technology-oriented ideas from aspiring college and university student entrepreneurs around the world. Sixteen finalists will be announced on June 19, 2009. The winner, who will be announced on June 30, 2009, will receive a minimum of 0,000 seed money. The winner will also receive professional feedback and mentorship from both DFJ and Cisco. 

“For the past four years, DFJ has held only regional competitions. We are excited to partner with Cisco and expand this opportunity globally to include regions covered by our DFJ Global Network,” said Tim Draper, managing director, DFJ. “Our 16 Global Network Partners are ideally positioned to host this type of competition, given our Network’s unparalleled extensive reach to countries across four continents. We believe that technology has no borders and that there are talented entrepreneurs everywhere who want to change the world, and we look forward to partnering with them.”

“Cisco is proud to partner with DFJ and to continue our long-standing strategy of investing globally in the innovation economy,” said Hilton Romanski, vice president of corporate development at Cisco. “This is a unique and important competition, and one that underscores our commitment to support great ideas despite difficult markets and challenging fundraising conditions. Cisco’s own roots, as a start-up in the early 1980s, help us appreciate that great companies are often founded in tough times. Cisco continues to believe in the potential and power of great ideas and entrepreneurs, and we look forward to utilizing Cisco TelePresence, our innovative and market-leading collaboration technology solution, to make this global competition possible.”

Overall, Cisco has approximately .3 billion in venture capital investments under management and has been an early and active investor in major markets such as the U.S., China, India, Israel, Russia and Europe. Cisco is a strategic investor in start-ups and venture funds around the world and focuses on partnering with young, innovative companies.

Competition finalists will be selected on various criteria including the quality of the management team, technical innovation, addressable market size, competitive positioning, barriers, capital efficiency and financial projections. Click here to find out more about the competition. Prior business plan competitions have produced great successes, including DFJ-backed winners DirectHit, which was acquired by AskJeeves in 2000 for 2 million, and Webline Communications, acquired by Cisco for 5 million in 1999.
About Draper Fisher Jurvetson

Draper Fisher Jurvetson (“DFJ”) backs extraordinary entrepreneurs everywhere who set out to change the world. DFJ achieves its mission through its DFJ Global Network of Partner Funds. Together, DFJ and the Network manage over B and have made more than 600 investments on four continents. With a 24-year history of success across diverse sectors and market conditions, DFJ has led the way investing in emerging technologies, from the Internet and life sciences to clean energy and nanotechnology. DFJ has been proud to back over 500 companies across many sectors including such industry changing successes such as Hotmail (acquired by MSFT), Baidu (BIDU), Skype (acquired by EBAY), United Online (UNTD), Overture (acquired by YHOO), Athenahealth (ATHN), EnerNOC (ENOC), TicketsNow (acquired by TicketMaster), Feedburner (acquired by Google), Interwoven (IWOV), Four11 (acquired by YHOO), Parametric (PMTC), and Digidesign (acquired by AVID). 
About Cisco Systems

Free Liquor Store Business Plan

Free Liquor Store Business Plan for Loans

Obtaining Business Financing

 

When obtaining a business loan for a liquor store business, it is imperative that you have a properly structured business plan that will assist you in showcasing how you intend to operate your Liquor Store, how the business will operate, how you intend to market the business, the anticipated financial results of your company, and how you intend to repay your debt obligations. This sample loan business plan will provide you with the framework that you need in order to acquire a business loan for starting or expanding this type of business.

 

Executive Summary

 

Introduction

 

When obtaining a business loan for a Liquor Store, it is imperative that your business plan has a clear and concise executive summary that provides an outline of what are seeking to accomplish, how much capital you are seeking to raise, the management biography of the business owner, and an overview of the anticipated profit and loss statements of the business. Here is an example of how the title paragraph should be written:

 

Liquor Store, Inc. (“the Company”) is seeking a business loan of 0,000 in order to launch the operations of a Liquor Store business that will be based in San Francisco, California. The Company was founded in (Insert Year). The business was founded by Mr. John Doe.

 

Products and Services

 

In the next segment of the business loan and business planning document, you should showcase the products and services that you will be providing to the general public. For instance:

 

The Liquor Store will provide its customers with a broad array of wines, beers, and spirits for sale to the general public. At all times, the Liquor Store will comply with all applicable state and federal laws regarding the sale of alcohol to the general public. The business anticipates that it will generate gross margins of 40% on all alcoholic beverage products sold through the liquor store.

 

The third section of the business plan will further discuss the operations of the business.

 

Business Loan Terms

 

Now it is time to discuss the anticipated terms of the business plan that you are seeking. An example paragraph of how this is stated:

 

At this time, Mr. Doe is seeking a conventional business loan in the amount of 0,000. The interest rate, loan terms, and loan covenants are to be determined during negotiation. However, this business plan assumes that the business will receive a seven year business loan with a seven percent interest rate due on the outstanding principal balance.

Management Biography

 

Now that the summary of the business has been provided, it is time to provide a brief overview of the owner of the business. An example paragraph summing up the owner is as follows:

 

Mr. Doe is a highly experienced business person that has years of experience regarding the direct ownership and management of business. He will be able to effectively bring the operations of the Liquor Store to profitability while ensuring that the business loan’s payments and its covenants are met at all times.

Financial Statements

 

The most important thing to your lender when applying for a business loan is how you intend to repay the bank. In this section of the business plan, you should provide an overview of the finance’s of the business discussing the anticipated revenues, expenses, and profits/losses. You can also discuss the applicable collateral within the business plan that will be used to secure your business financing.

 

Expansion Plans

 

One of the most important aspects of your business plan is how you intend to expand the business over a three to five year period. Banks and finance companies always want to see that the business will experience a moderate to strong level of growth. This is especially true in business lending because as your business grows the cash flow that secures your business loan will decrease proportionality against your monthly credit obligations. An example of how this is stated is as follows:

 

The Liquor Store will continue to expand through organic means including increasing the Company’s advertising budget via the reinvestment into the after tax cash flows of the business. Additionally, if the business is highly successful then the Company may seek to establish additional Liquor Store locations after the third year of operations.

 

 

The Financing

 

Use of Business Loan Proceeds

 

In this section of the business plan you should focus on how the proceeds of the business loan will be used. An example of this would be as follows:

 

Liquor Store Establishment – ,000
Opening Inventory – ,000
Working capital – ,000

 

Management Equity

In this section of the business plan you should discuss the percentage ownership of the business among the owners of the business. For example:

 

Mr. Doe will own 100% of the Liquor Store.

 

Board of Directors

 

When applying for business financing, the bank will also want to know who serves as the board of directors. For small businesses, usually the owner serves as the director of the business. An example of how this is worded:

 

Mr. Doe will be the sole director of Liquor Store, Inc.

 

Exit Strategy

 

Any bank or financing company is also going to want to know what you intend to do with the business over a set period of time. Many business owners will develop and expand a business with the intent to sell the company to a third party at a later time. When drafting this part of the business plan you should focus on what you intentions are in regards to potentially selling the business. This is often worded as:

 

Mr. Doe would most likely sell the Liquor Store to a third party for a significant earnings multiple. Liquor Stores usually sell for approximately one to three times earnings given the financial strength of the business. In this event, the business would be sold by a business broker and the business loan sought in this plan would be repaid according to the covenants of the business loan agreement.

 

Products and Services

 

When developing a business plan that is appropriate for obtaining a business loan or other business credit facility you need to clearly showcase the services or products that you will be offering to the general public. An example of how this section is worded goes as follows:

 

The Liquor Store will carry an extensive and diverse inventory of wines, beers, and spirits. Primarily the Company will focus on the sale of wine as it produces the highest margins for the business. At all times, the business will have appropriate checks in place to ensure that people under the age of 21 do not buy alcoholic products from the Liquor Store.

During the holiday seasons, the business will generate additional revenues from the sale of gift baskets that contain wine, chocolates, and other goods. This will substantially increase the revenues of the Liquor Store during the holiday season.

 

 

Industry and Market Analysis

 

The Current State of the Economy

 

It is important to let your financial institution know that you are well apprised of the financial situation of the general economy when you are applying for a business loan. This is especially true in today’s environment where lending has become more difficult and will remain more difficult in the foreseeable future. Specifically, you should gear this section of the business plan analysis towards the industry that you are operating within. For example:

 

The current economy has remained difficult over the past few years. However, Liquor Stores and drinking establishments tend to fair well during difficult economic climates. As such, the Liquor Store will be able to remain profitable and cash flow positive in any economic climate.

 

The Liquor Store Industry

 

In addition to providing your business loan officer with an understanding of the general economy, it is important that you showcase that you have an equal understanding of the industry in which you are operating within. As such, you will need to provide you business loan institution of a brief overview of your industry and any potential changes that may affect the way that your company does business. An example of how an industry overview is as follows:

 

On a nationwide basis, there are more than 45,000 stores that specialize in the sale of liquor, wine, beer, and other spirits to the general public. On an annual basis, these businesses aggregate generate more than billion of revenue and employ more than 200,000 people. This is a mature industry and the future expected growth rate of the business is expected to mirror that of the general economy.

 

Target Market

 

In this section of the business loan application and business plan analysis, you should focus on the demographics of your localized market (or national market if applicable). This section should discuss how many people live in your area, the anticipated number of people that would require the use of Liquor Stores, the median household income of people living in the area, poverty line statistics, and any applicable laws that would apply to your operation of Liquor Stores.

 

Competition

 

Many people that are developing new businesses or expanding existing businesses often feel that their business does not have any competition or limited competition at best. However, this is almost never the case. Unless you have re-invented the wheel – you will have competition. When applying for a business loan, you should clearly showcase your competition in your business plan. This is especially important to your banker as they will be able to gauge your ability to be successful in your targeted market. Many business loan underwriters will aggressively confirm that competitive nature of your local market and your local industry.

 

When drafting this section of the plan you should heavily discuss the competitive advantages that you intend to have over your competition.

 

Marketing Plan

 

In addition to all of the above information that we have covered, your business loan officer is also going to want to know how you intend to market your business to the general public. Most people do not quite understand how to effectively market their business outside of prominent signage or flyer distribution. When applying for a business loan (again in this difficult lending climate), your banker is going to want to see that you have a clear methodology of how you intend to market your services or products to the general public. In this section of the business plan – we will overview how to showcase your services/products to the general public.

 

Marketing Overview Example

 

The Liquor Store will place prominent signage on the facility to draw a significant amount of foot traffic.
The business will maintain listings in the Yellow Books.
The Liquor Store will also maintain an internet website that showcases the Company’s operations, hours of operation, and relevant contact information.

 

Marketing Strategies Overview

Additionally, you will be required to further drill down (in your business plan) how you intend to implement your strategies when you launch or expand your business’s operations. In this section of the business loan and business plan documents, you should amplify the bullet points from the section above. For instance:

 

The Liquor Store intends to use a number of strategies that will create instant traffic and customer flow to the Company’s location. These strategies include not only using prominent facility and road signage, but also distributing flyers to people that fall into he Company’s targeted demographics. The business will also regularly take out advertisements in localized newspapers that showcase the Company’s hours of operations, liquor store products, and specials that are occurring within the store on a regular basis.

 

The business will also maintain a highly informative website that showcases the Liquor Store’s products, its hours of operation,  liquor product listing information, licensure information, and other relevant information in regards to the Company’s services. This website will be listed on major search engines such as Google as many people now use the internet to locate local businesses.

 

The Financial Plan

 

Beyond any other part of your business loan application or business plan, the financials section of these documents are what matters most when applying for a business loan or any other type of credit facility. Ultimately, this section of the business plan showcases not only what your anticipated profitability will be, but also how you intend to repay the funds that you have borrowed through your business financing facility. An example of how this section is structure is as follows:

 

Assumptions

 

Liquor Store, Inc. will have an average annual growth rate of 10% per year.
Mr. Doe will acquire 0,000 through a business loan in order to launch the operations of the business.

 

Proforma Financials for a Business Loan

 

Now it is time to showcase how you intend to repay your loan, generate a profit, and increase the book value of your business over a three to five year period. BusinessPlansForLoan.com has developed an easy to use financial model that you can use when drafting out the financial model for your business plan and business loan application. Through your business loan application, you will be required to have the following:

 

Profit and Loss Statement for your Liquor Store
Cash Flow Analysis for the Liquor Store
Balance Sheet for the Liquor Store
Business Loan Amortization Tables

Watch this video and comment now: capitalmatchpoint.com , Hosted by Mark Bass, MBA, The Capital MatchPoint, 770.433.8250, capitalmatchpoint.com… Entrepreneurs seeking capital from investors frequently find that the financial projections they provide are broken down and analyzed using ratios. Every investor has their own idea of what is important and what ratios best reflect that aspect of performance. Many times the task of keeping up with these and understanding them proves tedious and time consuming for an entrepreneur that has a business to run. I advise entrepreneurs faced with sorting out this type of information to think of ratios in five broad categories. First of all there is profitability ratios. This category includes ratios such as return on equity, return on assets, earnings per share, return on sales and, In short these ratios express net income in terms of a percentage when divided by a chosen return criteria. Next there are solvency ratios. These help an investor determine the ability of your company to meet near term financial obligations. The most popular solvency ratio is called the quick ratio which is the sum total of your cash, marketable securities and accounts receivable (from your balance sheet) divided by current liabilities (also from your balance sheet and typically defined as obligations due within 30 days). Activity ratios give investors a sense as to how fast assets turnover within your company. This also gives important insight into cash …

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