A solid Business Plan is a road map for creating a successful business but it is also necessary to attract the funds required to grow the business. Most business plans are not well prepared and fail to describe the company's potential, which leads to inadequate or no financing.

Many entrepreneurs believe that they can craft a Business Plan saving time and money. They fail to grasp many business issues and their plan looks like a "do-it-yourself" project and often fails to get financing. No one is expert at all aspects of business, and individually neither are we. However calling upon our Group's resources we can craft a Business Plan that gets the desired results - financing.

Our Group utilizes 3-types of business plans, each is designed for a specific purpose:

• Finance Plan: This plan is calculated to secure financing from a bank or other lending institution.
  
  
• Stock Plan: This plan is much different from a Finance Plan and has been created so that it can be "wrapped" by legal documents to create a Private Placement Offering Memorandum to sell stock or securities.
  
  
• Strategic Plan: An action plan consisting of GOALS, STRATEGIES, and TACTICAL ACTION PLANS that needs to be accomplished during the next 12 months in order to achieve the company's stated goals.
  
  

FINANCE PLAN

A Finance Plan is designed to educate lenders about the product/service and to demonstrate the company's current or future ability to repay the loan. Finance Plans have positive statements by management and the financial statements are focused on the ability of the company to repay the requested loan.

Managers and entrepreneurs often fail to appreciate that a finance plan can be updated and is not static. The company may have one plan for its launch phase funded in part by one or several lenders. With growth, the company can often consolidate its lenders into one or two and increase its borrowings. There are many types of loans that may be used to assist a company during its growth cycle. Knowing which lending sources are right for your company's business stage is one of our areas of expertise.

STOCK PLANS

Entrepreneurs and managers who first see a Stock Plan, or Private Placement Offering Memorandum (PPM), are sometimes in shock. Stock Plans are void of positive statements (legally referred to as "forward looking" statements e.g. believe, may, expect, goal, estimate, and continue are examples). Stock Plans are designed to present the good, the bad, and the ugly about the company. After reading a Stock Plan that has been wrapped with legal disclosures, entrepreneurs and managers wonder who would buy their company's stock? Stock Plans are designed to protect both the potential investor and the company from nasty surprises and potential lawsuits over failure to disclose issues. They are generally 30 to 80 pages in length.

Stock Plans focus on the product or service, management team, market size and potential market share, development costs, intellectual property protections, competition, funds required, and exit strategy. Many times entrepreneurs and managers focus too much on the product or service and fail to appreciate the cost of creating sales, sustaining growth, and the importance of the management team.

Company's that are successful raising money by selling their stock usually did so by selling multiple rounds of stock. It required them to set specific goals to be achieved with "X" dollars and then making those goals, and repeating this process. Investors are taking a large risk and they want to reduce their risk by having management focus on achievable realistic results before getting additional funds. The entrepreneurs and the management team must understand the financial model that supports the plan. Management isn't required to be accountants but they have to understand the basics and how changes impact performance.

Working with management and your accountants we can help you develop a realistic financial model and coach you on the interrelationships among the key elements of the model. Our Group's principals have raised millions of dollars in equity sales.

STRATEGIC PLANS

Strategic Plans should be created and used by all companies. Strategic Plans are the management team's identified key factors and action items that must be completed by realistic target dates to make the company successful.

The biggest Strategic Plan failures in occur when goals are unrealistic, the plan is not communicated to the entire company (everyone has a part to play in its success or failure), and the failure of management to do timely reviews to assure that the action plans are being completed.

Setting stretch goals is acceptable, but goals that are believed by the team members to be unachievable or achievable only if a miracle occurs crushes morale. Imagine if one of your company's goals is to be more responsive to customer inquires but no plans are devised or communicated to all of the employees who may interact with customers. Do you think this goal will be successful? Many plans are completed at year-end and not truly reviewed after the first quarter.

We developed and utilize a priority reporting tool for members of the Tactical Action Teams that takes just minutes to update each week. It can be quickly compiled into a division, group, or company-wide report. This tool allows managers to see what was accomplished or not accomplished and why and what the teams will be working on at two future dates. Fast, simple, and packed with only the critical information needed to effectively manage.

For more detailed information please refer to our newsletter 3 TYPES OF BUSINESS PLANS in NEWSLETTERS.