1. Money
Sample Business Plan

The following business plans are examples of what a completed business plan might look like. Use the instructions and information included in The Business Plan for Independent Inventors to fill out your own business plan.

Also available: Sample Business Plan for American Management Technology (AMT)

Example of a Start-up Plan For Elsewares

Start-up Expenses

Legal $300

Marketing consultants $1,000

Business and liability insurance $600

1st month's pmt+deposit $2,500

Design costs $3,500

Other $0


Total Start-up Expense $7,900

Start-up Assets Needed

Cash requirements $7,000

Start-up inventory $16,000

Other Short-term Assets $1,000

Total Short-term Assets $24,000

Long-term Assets $140,000


Total Assets $164,000

Total Start-up Requirements: $171,900

Left to finance: $0

Start-up Funding Plan


Luke Walsh $10,900

Lisa Isermann $2,900

Other $0

Total investment $13,800

Short-term borrowing

Unpaid expenses $0

Short-term loans $10,000

Interest-free short-term loans $1,000

Subtotal Short-term Borrowing $11,000

Long-term Borrowing $148,000

Total Borrowing $159,000

Loss at start-up ($8,800)

Total Equity $5,000

Total Debt and Equity $164,000

Checkline $0

7.0 Financial Plan

Elsewares is seeking a $300,000.00 financial package based on a note due in five years but amortized over 15 years. The note will be personally guaranteed by the Greenbaums' assets. By amortizing the note over fifteen years, the company will be afforded the opportunity to establish a healthy track record which will enable the company to seek alternate financing for the balance. In light of that strategy, Elsewares proposes the following payback schedule:

Months 1-12: No payback of principal or interest

Months 13-24: 15% interest plus 10% net profit

Months 25-48 10% interest plus 15% net profit

Months 49-60 10% interest plus 20% net profit

It should be noted that the owners of Elsewares do not intend to take any profits out of the business until the long term debt has been satisfied. Whatever profits remain after the above debt payments will be used to finance growth, mainly through the acquisition of additional inventory.

7.1 Key Financial Indicators

The most important indicator in our case is inventory turnover. We have to make sure that our inventory of drawstring bags and any other packaging products turns over a minimum of five times to avoid a negative impact on our cost of goods sold and on our cash flow.

Collection days is very important. We do not want to let our average collection days get above 45 under any circumstances. This could cause a serious problem with cash flow, because our working capital situation is chronically tight. It may be necessary to

implement a variety of payment terms with different distributors depending on their payment history. In extreme cases, prepayment of orders may be the only extendible terms. We will rely heavily on our subscription to the ASI Credit Service for this valuable pre-sale information.

We must maintain gross margins of 90 percent at the least, and hold marketing costs to no more than 20 percent of sales.

5.0 Management Team

Elsewares is organized into three main functional areas: product sourcing, sales & marketing; production & shipping; and finance & administration.

Edie Greenbaum: President and founder. Mrs. Greenbaum ran the financial department for a start up retail operation whose sales rose to just under one million dollars in seven years. She has also spent the last year and a half heading up the sales department of an ASI listed advertising specialties supplier. Mrs. Greenbaum holds a B.A. from U.C.L.A., is married and the mother of one child.

Gary Greenbaum: Co-founder Mr. Greenbaum ran the day to day operations of the previously mentioned retail operation as a partner with Mrs. Greenbaum. Mr. Greenbaum holds a B.A. from Franklin & Marshal College, is married and the father of one child.

Marvin Rosenbaum: Consultant. Mr. Rosenbaum has been associated with the Advertising Specialties industry for just under 25 years and hold the credentials of a C.A.S. or Certified Advertising Specialist. Over the years, Mr. Rosenbaum has been hired by both suppliers and distributors who are either starting a new company as we are or who are attempting to penetrate the advertising specialties market with products they are already distributing to other markets. Mr. Rosenbaum has been responsible for the successful entry of many companies into this industry and has maintained extensive business contacts with many of the industry leaders. Mr. Rosenbaum is married and the father of two children.

 6.0 Personnel Plan

The cornerstone of the personnel plan is to maximize production and minimize the labor burden on the companies operating expenses. Pursuant to that goal, the initial payroll will consist of the following disbursements:

Until increases in sales can support additional salaries, Edie Greenbaum will oversee the operations of Elsewares in an unsalaried position. Mrs. Greenbaum will be responsible for the day to day operations including personnel company policies, and overseeing the sales & marketing and marketing departments.

The sales & marketing department will be headed by Marvin Rosenbaum who has been hired as an independent consultant at a per diem of $200. Mr. Rosenbaum will be responsible for initiating new leads with the ASI distributor network and for re-establishing existing contacts with distributors with whom he has had a previous business relationship. Mr. Rosenbaum will also oversee the network of commissioned based sales reps that will call on distributors in their preassigned territories. The sales department will be supplemented by Edie Greenbaum who will also be responsible for calling on distributors as directed by Mr. Rosenbaum.

At a salary of $36,000 per year, Mr. Greenbaum will be responsible for running the customer service department which will include handling phone orders and catalogue requests. Additionally, Mr. Greenbaum will be responsible for running the company's computer operations and is expected to play an important role in sourcing new products.

Until increases in sales justify the additional staffing of this department, Mr. Greenbaum will be responsible for assorted secretarial duties in addition to the previously mentioned duties. We are projecting the division of this department into two positions at approximately the fourteenth month of business. Mr. Greenbaum will then shift his duties to marketing & sourcing and a new employee will take over the customer service department and its related duties.

Elsewares will rely on part time help for its imprinting, warehousing & shipping labor requirements. We have budgeted $500 per week to that end. Naturally, as the need arises, this all encompassing areas will be split into two departments. A full time production person will run the imprinting department while a second person will be hired to handle both shipping and receiving. We are projecting the need for this additional labor burden at approximately the eleventh month of business.

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