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Small Business Administration MP-32

Managing and Planning Series
Copyright 1993 !inda Pinson and "erry "innett. All rights reser#ed. $o part may %e reprodu&ed
transmitted or trans&ri%ed 'ithout the permission o( the authors. SBA retains an irre#o&a%le
'orld'ide none)&lusi#e royalty-(ree unlimited li&ense to use this &opyrighted material. *hile
'e &onsider the &ontents o( this pu%li&ation to %e o( general merit its sponsorship %y the U.S.
Small Business Administration does not ne&essarily &onstitute an endorsement o( the #ie's and
opinions o( the authors or the produ&ts and ser#i&es o( the &ompanies 'ith 'hi&h they are
All of SBA's programs and services are extended to the public on a nondiscriminatory basis.
!egal Stru&ture 2
+es&ription o( the Business 2
Produ&ts or Ser#i&es 3
!o&ation 3
Management 3
Personnel 3
Methods o( ,e&ord -eeping 3
.nsuran&e /
Se&urity /
Summar y 0
1arget Mar2et 0
Competition 0

Methods o( +istri%ution 0
Ad#ertising 3
Pri&ing 3
Produ&t +esign 3
1iming o( Mar2et 4ntry 3
!o&ation 5
.ndustry 1rends 5
Summary o( 6inan&ial $eeds 5
Sour&es and Uses o( 6unds Statement 9
Cash 6lo' Statement 7Budget8 9
1hree-year .n&ome Pro9e&tion 1:
Brea2-e#en Analysis ;raph 10
A&tual Per(orman&e Statements 1<
Balan&e Sheet 1<
Summary 21
Personal ,esumes 22
Personal 6inan&ial Statement 22
Credit ,eports 22
Copies o( !eases 22
!etters o( ,e(eren&e 22
Contra&ts 22
!egal +o&uments 23
Mis&ellaneous +o&uments 23
Ma2ing ,e#isions 23
.mplementing Changes 23
Anti&ipating Pro%lems 2/
1here are t'o main purposes (or 'riting a %usiness plan. 1he (irst and most important
is to ser#e as a guide during the li(e o( your %usiness. .t is the %lueprint o( your %usiness and
'ill ser#e to 2eep you on the right tra&2. 1o %e o( #alue your plan must %e 2ept &urrent. .(
you spend

the time to plan ahead many pit(alls 'ill %e a#oided and needless (rustrations 'ill %e
eliminated. Se&ond the %usiness plan is a re=uirement i( you are planning to see2 loan (unds. .t
'ill pro#ide potential lenders 'ith detailed in(ormation on all aspe&ts o( the &ompany>s past and
&urrent operations and pro#ide (uture pro9e&tions.
1he te)t o( a %usiness plan must %e &on&ise and yet must &ontain as mu&h in(ormation
as possi%le. 1his sounds li2e a &ontradi&tion %ut you &an sol#e this dilemma %y using the
-ey *ord approa&h. *rite the (ollo'ing 2ey 'ords on a &ard and 2eep it in (ront o( you
'hile 'riting?
W!" W!#$ W!%&% W!%' W!( H") H") M*+!
Ans'er all o( the =uestions as2ed %y the 2ey 'ords in one paragraph at the %eginning
o( ea&h se&tion o( the %usiness plan. 1hen e)pand on that statement %y telling more a%out ea&h
item in the te)t that (ollo's.
1here is no set length to a %usiness plan. 1he a#erage length seems to %e 3: to /:
pages in&luding the supporting do&uments se&tion. Brea2 the plan do'n into se&tions. Set up
%lo&2s o( time (or 'or2 'ith target dates (or &ompletion. @ou may (ind it e((e&ti#e to spend t'o
e#enings per 'ee2 at the li%rary 'here the re(eren&e materials needed 'ill %e &lose at hand. .t
ta2es dis&ipline time and pri#a&y to 'rite an e((e&ti#e %usiness plan.
@ou 'ill sa#e time %y &ompiling your list o( supporting do&uments 'hile 'riting the
te)t. 6or e)ample 'hile 'riting a%out the legal stru&ture o( your %usiness you 'ill realiAe the
need to in&lude a &opy o( your partnership agreement. *rite partnership agreement on your list
o( supporting do&uments. *hen &ompiling that se&tion o( your plan you 'ill already
ha#e a list o( ne&essary do&uments. As you go along re=uest any in(ormation that you do not ha#e
su&h as &redit reports.
*ith the pre#ious &onsiderations in mind you are ready to %egin (ormulating your
plan. ,ead through this entire pu%li&ation to get an o#erall #ie' o( the %usiness planning pro&ess.
1he (irst page o( your %usiness plan 'ill %e the &o#er sheet. .t ser#es as the title page
o( your plan. .t should &ontain the (ollo'ing in(ormation?
$ame o( the &ompany
Company address
Company phone num%er 7in&lude area &ode8
!ogo 7i( you ha#e one8
$ames titles addresses phone num%ers 7in&lude area &ode8 o( o'ners
Month and year in 'hi&h the plan is issued
$ame o( preparer

1he (ollo'ing e)ample 'ill ser#e as a guide.
332 4ast Main Street
Bur2e B@ 1::31
72:38 02<-/319
"ohn Smith President 72:38 51/-:221
32/ South Street
"amesto'n $@ 1::51
Mary Bla2e Bi&e President 72:38 3</-1213
5< *est A#enue
Bur2e $@ 1::31
"ames !ysander Se&retary 72:385/2-1</5
/23 Potrero A#enue
"essup $@ 1:<:2
1andi Ciggins 1reasurer 72:38 51<-:2:1
321 $ason Street
Adams $@ 1:<:/
Plan prepared Septem%er 1992
%y Corporate D((i&ers
The statement of purpose is also &alled the mission statement or executive summary . .( your
lender 'ere to read only this in(ormation he or she 'ould 2no' the name and nature
o( your %usiness its legal stru&ture the amount and purpose o( your loan re=uest and your plan
(or repayment. Use the 2ey 'ord approa&h mentioned earlier. Be &on&ise and &lear. 1he
statement o( purpose is &ontained on one page. Although it is positioned a(ter the &o#er sheet it is
most e((e&ti#ely 'ritten a(ter the plan has %een &ompleted. At that time all the in(ormation
and (inan&ial data needed are a#aila%le.
.( you are 'riting your plan (or a lender %e spe&i(i& a%out the use o( (unds. Support the
amount re=uested 'ith in(ormation su&h as pur&hase orders estimates (rom suppliers rate
sheets and mar2eting results. .n&lude this in(ormation in the supporting do&uments se&tion.
Address the =uestion o( loan repayment. @ou 'ant to sho' the lender your &ompany>s a%ility to
meet payments o( interest as 'ell as prin&ipal. Some in#estors li2e to see t'o 'ays out i.e.
t'o di((erent sour&es o( repayment. *hen you ha#e ans'ered the 2ey 'ord =uestions you
are ready to present that in(ormation in one or t'o &on&ise paragraphs. A sample statement o(

ABC CD,PD,A1.D$ an S-Corporation esta%lished in 1950 is a
tool and die &ompany that manu(a&tures spe&ialiAed parts (or the
aerospa&e industry and is lo&ated at 332 4ast Main Street Bur2e
$.@. 1he &ompany is see2ing gro'th &apital in the amount o(
E0:::: (or the purpose o( pur&hasing ne' and more modern
e=uipment and (or training e)isting personnel in the use o( that
ne' e=uipment.
6unding is needed in time (or the e=uipment to %e deli#ered and in
pla&e %y 11 "anuary 1993. 1here is a t'o-month period %et'een
order pla&ement and deli#ery date.
1he moderniAed e=uipment 'ill result in a 30 per&ent in&rease in
produ&tion and a 20 per&ent de&rease in the unit &ost. ,epayment
o( the loan and interest &an %egin promptly 'ithin 3: days o(
re&eipt and &an %e (urther se&ured %y real estate 'hi&h is o'ned
%y the &ompany and 'hi&h has a 199: assessed #aluation o(
1he (irst ma9or se&tion o( your plan &o#ers the details o( your %usiness. Begin this
se&tion 'ith a one-page summary addressing the 2ey elements o( your %usiness. 1he (ollo'ing te)t
'ill e)pand on ea&h area presented in the summary. Use the 2ey 'ord system to help you 'rite
&on&isely. Address all o( the topi&s as they relate to your %usiness in an order that seems logi&al
to you. .n&lude in(ormation a%out your industry in general and your %usiness in parti&ular. Be
prepared to %a&2 up statements and 9usti(y pro9e&tions 'ith data in the supporting do&uments
L%,#- S$&*+$*&%
State the reasons (or your &hoi&e o( legal stru&ture. .( you are a sole proprietor you
may in&lude a &opy o( your %usiness li&ense. .( you ha#e (ormed a partnership in&lude a &opy o(
your partnership agreement in the supporting do&uments se&tion. @our agreement should
in&lude pro#isions (or partners to e)it and (or the dissolution o( the &ompany. .t must spell out
the distri%ution o( the pro(its and the (inan&ial responsi%ility (or any losses. 4)plain the
reasoning %ehind the terms o( the agreement. .( you ha#e (ormed a &orporation e)plain 'hy this
legal (orm 'as &hosen and ho' the &ompany 'ill operate 'ithin the &orporate stru&ture and
in&lude a &opy o( the &harter and arti&les in the supporting do&ument se&tion.

.( you plan to &hange your legal stru&ture in the (uture ma2e pro9e&tions regarding
'hy you 'ould &hange 'hen the &hange 'ould ta2e pla&e 'ho 'ould %e in#ol#ed and ho' the
&hange 'ould %ene(it the &ompany.
D%.+&/0$/"' "1 $!% B*./'%..
1his is the se&tion o( the plan in 'hi&h you go into greater detail a%out your %usiness.
Ans'er the 2ey 'ord =uestions regarding the %usiness>s history and present status and your
(uture pro9e&tions (or resear&h and de#elopment. Dutline your &urrent %usiness assets and
report your in#entory in terms o( siAe #alue rate o( turno#er and mar2eta%ility. .n&lude industry
trends. Stress the uni=ueness o( your produ&t or ser#i&e and state ho' you &an %ene(it the
&ustomer. Pro9e&t a sense o( 'hat you e)pe&t to a&&omplish three to (i#e years into the (uture.
P&"2*+$. "& S%&3/+%.
;i#e a detailed des&ription o( your produ&t (rom ra' materials to (inished item. *hat
ra' materials are used ho' mu&h do they &ost 'ho are your suppliers 'here are they
lo&ated and 'hy did you &hoose themF .n&lude &ost %rea2do'ns and rate sheets to %a&2 up your
statements. Although you may order (rom one main supplier in&lude in(ormation on alternate
suppliers. Address ho' you &ould handle a sudden in&rease o( orders or a loss o( a ma9or
@ou may hear a lender re(er to the 'orst &ase s&enario. 1his means that the lender
'ants you to %e a%le to anti&ipate and sol#e potential pro%lems. .t is also to your ad#antage to thin2
in terms o( alternati#es and to prepare (or the une)pe&ted so that your %usiness &an &ontinue to
run smoothly. Some %usinesses (ail %e&ause they %e&ome too su&&ess(ul too soon.
1here(ore it is also good to plan (or the %est &ase s&enario. .( you are inundated 'ith orders your
%usiness plan should &ontain in(ormation needed to hire sta(( and &onta&t additional suppliers.
.( you are pro#iding a ser#i&e tell 'hat your ser#i&e is 'hy you are a%le to pro#ide it
ho' it is pro#ided 'ho 'ill %e doing the 'or2 and 'here the ser#i&e 'ill %e per(ormed. 1ell
'hy your %usiness is uni=ue and 'hat you ha#e that is spe&ial to o((er to your &ustomers. .( you
ha#e %oth a produ&t and a ser#i&e that 'or2 together to %ene(it your &ustomer 7su&h as 'arranty
ser#i&e (or the produ&ts you sell8 %e sure to mention this in your plan. Again the 2ey 'ords &ome
into use. !ist (uture ser#i&es you plan to add to your %usiness. Also anti&ipate any potential
pro%lem areas and 'or2 out a plan (or a&tion.
@ou should state any proprietary rights su&h as &opyrights patents or trademar2s in
this se&tion.
.( lo&ation is important to your mar2eting plan you may (o&us on it in the mar2eting
se&tion. 6or e)ample i( you are opening a retail shop your &hoi&e o( lo&ation 'ill %e determined
%y your target mar2et. .( you are a manu(a&turer and ship %y &ommon &arrier your lo&ation is
not dire&tly tied to your target mar2et so you &an dis&uss lo&ation in the %usiness se&tion.
@ou may

%egin this topi& 'ith a senten&e su&h as GABC Corporation is housed in 20::: s=uare
(eet o( 'arehouse spa&e lo&ated at 332 4ast Main Street Bur2e $@. 1his site 'as &hosen
%e&ause o( a&&essi%ility to shipping (a&ilities good se&urity pro#isions lo' s=uare (ootage &osts
and pro)imity to sour&es o( supplies.G
$o' e)pand on ea&h reason (or &hoosing that lo&ation and %a&2 up your statements
'ith a physi&al des&ription o( the site and a &opy o( the lease agreement. ;i#e %a&2ground
in(ormation on your site &hoi&e and list other possi%le lo&ations. @ou may 'ant to in&lude &opies o(
pi&tures layouts or dra'ings o( the lo&ation in the supporting do&ument se&tion.
Use the 'or2sheet on page / as a guideline (or 'riting a lo&ation 7site8 analysis. Co#er
only those topi&s that are rele#ant to your %usiness. .( you need assistan&e &onta&t the SBA
resour&e &enter nearest you 7see .n(ormation ,esour&es8.
1. Address?
2. $ame o( realtorH&onta&t person?
3. S=uare (ootageH&ost?
/. Cistory o( lo&ation?
0. !o&ation in relation to target mar2et?
<. 1ra((i& patterns (or &ustomers?
3. 1ra((i& patterns (or suppliers?
5. A#aila%ility o( par2ing? 7in&lude diagram8
9. Crime rate (or area?
1:. Iuality o( pu%li& ser#i&es 7e.g. poli&e (ire prote&tion8
11. $otes on 'al2ing tour o( area?
12. $eigh%oring shops and lo&al %usiness &limate?
13. Joning regulations?
1/. Ade=ua&y o( utilities 7get in(ormation (rom utility &ompany representati#es8?

10. A#aila%ility o( ra' materialsHsupplies?
1<. A#aila%ility o( la%or (or&eK
13. !a%or rate o( pay (or the area?
15. Cousing a#aila%ility (or employees?
19. 1a) rates 7state &ounty in&ome payroll spe&ial assessments8?
2:. 4#aluation o( site in relation to &ompetition?
1his se&tion des&ri%es 'ho is %ehind the %usiness. .( you are a sole proprietor tell
a%out your a%ilities and in&lude your resume. Be honest a%out areas in 'hi&h you 'ill need help
and state ho' you 'ill get that help. *ill you ta2e a mar2eting seminar 'or2 'ith an
a&&ountant or see2 the ad#i&e o( someone in ad#ertisingF
.( you ha#e (ormed a partnership e)plain 'hy the partners 'ere &hosen 'hat they
%ring to the &ompany and ho' their a%ilities &omplement ea&h others. 4)perien&e %a&2ground and
=uali(i&ations 'ill %e &o#ered in their resumes in the supporting do&uments se&tion.
.( your %usiness is in&orporated gi#e detailed in(ormation on the &orporate stru&ture
and o((i&ers. .n&lude a resume (or ea&h o((i&er and des&ri%e ea&h one %y ans'ering the
(ollo'ing =uestions? *ho are theyF *hat are their s2illsF *hy 'ere they &hosenF *hat 'ill they
%ring to the organiAationF
*ho 'ill %e doing the 'or2F *hy are they =uali(iedF Co' 'ill they %e hiredF *hat is
their 'ageF *hat 'ill they %e doingF Dutline the duties and 9o% des&riptions (or all
personnel. 4)plain any employee %ene(its. .( you are inundated 'ith orders (or your produ&t or
items to %e ser#i&ed do you ha#e a plan (or in&reasing personnelF
M%$!"2. "1 R%+"&2 K%%0/',
1ell 'hat a&&ounting system 'ill %e used and 'hy the system 'as &hosen. *hat
portion o( your re&ord 2eeping 'ill %e done internallyF *ho 'ill %e responsi%le (or 2eeping those
re&ordsF *ill you %e using an outside a&&ountant to ma)imiAe your pro(itsF .( so 'ho 'ithin your
&ompany 'ill %e s2illed at reading and analyAing (inan&ial statements pro#ided %y the
a&&ountantF .t is important not only to sho' that your a&&ounting 'ill %e ta2en &are o( %ut that you 'ill
ha#e some means o( using your (inan&ial statements to implement &hanges to ma2e your
&ompany more pro(ita%le. A(ter reading this se&tion the lender should ha#e &on(iden&e in your

a%ility to 2eep and interpret a &omplete set o( (inan&ial re&ords.
.nsuran&e is an important &onsideration (or e#ery %usiness. Produ&t lia%ility is a ma9or
&onsideration espe&ially in &ertain industries. Ser#i&e %usinesses are &on&erned 'ith
personal lia%ility insuring &ustomers> goods 'hile on the premises or during the transporting o(
those goods. .( a #ehi&le is used (or %usiness purposes your insuran&e must re(le&t that use.
.( you o'n your %usiness lo&ation you 'ill need property insuran&e. Some types o( %usinesses
re=uire %onding. Partners may 'ant li(e insuran&e naming ea&h other as the %ene(i&iary.
Consider the types o( &o#erage appropriate to your %usiness. 1ell 'hat &o#erage you ha#e 'hy you
&hose it 'hat time period it &o#ers and 'ho the &arrier is. -eep your insuran&e in(ormation
A&&ording to the U.S. Cham%er o( Commer&e more than 3: per&ent o( %usiness
(ailures result (rom employee dishonesty. 1his &on&erns not only the(t o( mer&handise %ut also the(t
o( in(ormation.
Address the issue o( se&urity as it relates to your %usiness. 6or e)ample i( you are
disposing o( &omputer printout data a small paper shredder may %e &ost-e((e&ti#e. Anti&ipate
pro%lem areas in your %usiness identi(y se&urity measures you 'ill put into pra&ti&e tell 'hy you
&hose them and 'hat you pro9e&t they 'ill a&&omplish. +is&uss this area 'ith your insuran&e
agent. By installing se&urity de#i&es you may %e a%le to lo'er &ertain insuran&e &osts along 'ith
prote&ting your %usiness.
@ou ha#e no' &o#ered all the areas 'hi&h should %e addressed in the %usiness se&tion.
Use the 2ey 'ords %e thorough anti&ipate any pro%lem areas and %e prepared 'ith solutions
and analyAe industry trends and %e ready to pro9e&t your %usiness into the (uture. *hen you
ha#e &ompleted the %usiness se&tion you are ready to %egin de#eloping the mar2eting
se&tion. _____________________________________________________________________
1he se&ond ma9or se&tion o( your %usiness plan &o#ers the details o( your mar2eting
plan. A good mar2eting plan is essential to your %usiness de#elopment and su&&ess. .n&lude
in(ormation a%out the total mar2et 'ith emphasis on your target mar2et. @ou must ta2e the time to
identi(y your &ustomers and (ind the means to ma2e your produ&t or ser#i&e a#aila%le to them.
1he 2ey here is time. .t ta2es time to resear&h and de#elop a mar2eting plan %ut it is time 'ell
spent. Most o( the in(ormation you need 'ill %e (ound in your pu%li& li%rary and in the
pu%li&ations o( the U.S. +epartment o( Commer&e the U.S. Small Business Administration 7SBA8 and
the U.S. Census Bureau. ,emem%er that you need a &lear understanding o( 'ho 'ill pur&hase
your produ&t 'ho 'ill ma2e use o( your ser#i&e 'hy they 'ill &hoose your &ompany and
ho' they 'ill (ind out a%out it.

Begin this se&tion 'ith a one-page summary &o#ering the 2ey elements o( your
mar2eting plan. 1he (ollo'ing te)t 'ill e)pand on ea&h area presented in the summary. Ba&2 up
statements and 9usti(y pro9e&tions 'ith data in the supporting do&uments se&tion. Again the 2ey 'ord
approa&h 'ill help you to thoroughly &o#er ea&h area. 1he topi&s may %e &o#ered in any order
that seems logi&al to you.
T#&,%$ M#&5%$
1he target mar2et has %een de(ined as that group o( &ustomers 'ith a set o( &ommon
&hara&teristi&s that distinguish them (rom other &ustomers. @ou 'ant to identi(y that set
o( &ommon &hara&teristi&s that 'ill ma2e those &ustomers yours. 1ell ho' you did your
mar2et resear&h. *hat 'ere your resour&es and your resultsF *hat are the demographi&s o(
your target mar2etF *here do your &ustomers li#e 'or2 and shopF +o they shop 'here they li#e
or 'here they 'or2F .( you are in the %usiness o( #ideo &assette re&order 7BC,8 repair ho'
many BC,s are o'ned 'ithin a &ertain radius o( your shopF *ould in-home ser#i&e %e &ost-
e((e&ti#e and a %ene(it to your &ustomersF Ba&2 up your (indings 'ith U.S. Census Bureau reports
=uestionnaires and test mar2eting results. State ho' you (eel you &an ser#e this mar2et
in terms o( your resour&es strengths and 'ea2nesses. 6o&us on reasona%le %elie#a%le and
o%taina%le pro9e&tions regarding the siAe o( your potential mar2et. 7See .n(ormation ,esour&es.8
+ire&t &ompetition is a %usiness o((ering the same produ&t or ser#i&e to the same
mar2et. .ndire&t &ompetition is a &ompany 'ith the same produ&t or ser#i&e %ut 'ith a di((erent target
mar2et. 4#aluate %oth types o( &ompetitors. @ou 'ant to determine the &ompetitors> images. 1o
'hat part o( the mar2et are they trying to appealF Can you appeal to the same mar2et in a %etter
'ayF Dr &an you (ind an untapped mar2etF
Use the 'or2sheet to &ompile organiAe and e#aluate in(ormation on your &ompetition.
@our analysis o( this in(ormation 'ill help you plan your mar2et entry. *hat is the
&ompetition>s &urrent mar2et share 7'hat per&ent o( the total &ustomer %ase is theirs8F Can you tap
into this share or 'ill you need to &ar#e out your o'n mar2et ni&heF
.tem 1 2 3
1. $ame o( Competitor7s8?
2. !o&ation?
3. Produ&ts or ser#i&es o((ered?
/. Methods o( distri%ution
7'holesale retail mar2eting
reps personal selling
&orporate sales8?
0. .mage
Promotional materials?
Methods o( ad#ertising?
Positioning 7&ustomers>
per&eption o( =uality o(
produ&t or ser#i&e8?
<. Pri&ing stru&ture?
3. Per(orman&e 7past and present8?
5. Mar2et share 7%y num%er type and lo&ation o( &ustomers8?
9. Strengths 71he strengths o( the &ompetition %e&ome your strengths8?
1:. *ea2nesses 7!oo2ing at the 'ea2nesses o(
the &ompetition &an help you (ind 'ays o(
%eing uni=ue and o( %ene(iting the &ustomer.8?
A(ter &ompleting this se&tion you or your lender 'ill 2no' 'ho your &ompetitors are
'here they are lo&ated 'hat produ&ts or ser#i&es they o((er ho' you plan to &ompete ho'
your &ustomers &an a&&ess your %usiness and 'hy you &an pro#ide a uni=ue and %ene(i&ial
ser#i&e or produ&t.
M%$!"2. "1 D/.$&/6*$/"'
+istri%ution is the manner in 'hi&h produ&ts are physi&ally transported to the
&onsumer or the 'ay ser#i&es are made a#aila%le to the &ustomer. +istri%ution is &losely related to your
target mar2et.
4sta%lish the pur&hasing patterns o( your &ustomers. .( you are selling a produ&t do
your &ustomers pur&hase %y dire&t mail %uy through &atalogues or ma2e in-store pur&hasesF
*ill you sell dire&tly or through a manu(a&turer>s representati#eF .( you are shipping the
produ&t 'ho 'ill a%sor% the shipping &osts and 'hat &arrier 'ill %e usedF Use the 2ey 'ords to ans'er
=uestions regarding your distri%ution plan. Ba&2 up your de&isions 'ith statisti&al reports rate
sheets (rom shippers &ontra&ts 'ith manu(a&turer>s representati#es or any other supporting
do&uments. .( you are in#ol#ed in a ser#i&e %usiness 'ill you pro#ide in-shop ser#i&eF *ill you
ma2e ser#i&e &alls and i( so ho' 'ill mileage &osts %e handledF *hat is your planned response
time to (ill your &ustomers> needsF

!ist the pros and &ons o( the #arious methods o( distri%ution and gi#e reasons (or your
&hoi&es. -eep in mind the 'orst &ase s&enarios mentioned a%o#e. Present alternati#es. 6or
e)ample i( United Par&el Ser#i&e your ma9or shipper 'ere to go on stri2e ho' 'ould you
distri%ute your produ&tsF .( your mo%ile ser#i&e #an 'ere to %rea2 do'n do you ha#e a #ehi&le 'hi&h
&ould %e used as %a&2upF Pro#ide (or a smooth %usiness (lo'.
Ad#ertising presents the message to your &ustomer that your produ&t or ser#i&e is good
and desira%le. 1ailor your ad#ertising to your target mar2et. @our mar2eting resear&h 'ill
ha#e spelled out 'hi&h tele#ision and radio stations and 'hi&h pu%li&ations are o( interest to
your target mar2et. 1hose are the ones you 'ill use. AnalyAe your &ompetitors> ad#ertising
in these pu%li&ations. Be ready to %a&2 up your de&isions. .n&lude &opies o( your promotional
materials su&h as %ro&hures dire&t mail ad#ertisements and (lyers. 1ell the lender 'here you 'ill
put your ad#ertising dollars 'hy you &hose those methods ho' your message 'ill rea&h your
target mar2et 'hen your ad#ertising &ampaign 'ill %egin ho' mu&h your plan 'ill &ost and
'hat (ormat your ad#ertising 'ill ta2e.
@our pri&ing stru&ture is &riti&al to the su&&ess o( your %usiness and is determined
through mar2et resear&h and analysis o( (inan&ial &onsiderations. Basi& mar2eting strategy is to
pri&e 'ithin the range %et'een the pri&e &eiling and the pri&e (loor. 1he pri&e &eiling is
determined %y the mar2etK it is the highest &ost a &onsumer 'ill pay (or a produ&t or ser#i&e and is
%ased on per&ei#ed #alue. *hat is the &ompetition &hargingF *hat is the =uality o( the produ&t
or ser#i&e you are o((eringF *hat is the nature o( the demand and 'hat is the image you are
pro9e&tingF 1he pri&e (loor is the lo'est amount at 'hi&h you &an o((er a produ&t or ser#i&e meet
all your &osts and still ma2e your desired pro(it. Consider all &osts -- ra' materials o((i&e
o#erhead shipping #ehi&le e)pense ta)es loan and interest payments and o'ner dra's are a
(e'. 1he pro(ita%le %usiness operates %et'een the pri&e &eiling and the pri&e (loor. 1he
di((eren&e allo's (or dis&ounts %ad de%t and returns. Be spe&i(i& a%out ho' you arri#ed at your pri&ing
stru&ture and lea#e room (or some (le)i%ility.
Positioning -- predetermining the per&ei#ed #alue in the eyes o( the &onsumer -- &an %e
a&&omplished through promotional a&ti#ities. 1o %e su&&ess(ul you must de&ide 'hat
your produ&t or ser#i&e o((ers that your &ompetitor>s does not and promote it as the uni=ue
%ene(it. Bery (e' items on the mar2et ha#e uni#ersal appeal your produ&t or ser#i&e &annot %e
all things to all people. Co'e#er i( you position your produ&t or ser#i&e properly prospe&ti#e
pur&hasers or users 'ill immediately re&ogniAe its %ene(its to them.
P&"2*+$ D%./,'
Pa&2aging and produ&t design &an play a ma9or role in the su&&ess o( your %usiness. .t>s
(irst &at&hes the &ustomer>s eye. Consider the tastes o( your target mar2et in the
ultimate design o( your produ&t and your pa&2age design. +e&ide 'hat 'ill %e most appealing in terms
o( siAe shape &olor material and 'ording. Pa&2aging attra&ts a great deal o( pu%li& attention.
Be ad#ised o( the 6air Pa&2aging and !a%eling A&t 'hi&h esta%lished mandatory la%eling
re=uirements. 1he U.S. 6ood and +rug Administration 76+A8 has stri&t pro&edures (or
the la%eling o( items (alling 'ithin its 9urisdi&tion. 1he pa&2aging guidelines &an %e
o%tained (rom the 6+A or (ound in the li%rary.
Use 2ey 'ords to ans'er =uestions regarding your produ&t design and pa&2aging.
.n&lude s2et&hes or photographs. Also in&lude in(ormation on any proprietary rights su&h as
&opyrights trademar2s or patents.
T/4/', "1 M#&5%$ E'$&(
1he timing o( your entry into the mar2etpla&e is &riti&al and ta2es &are(ul planning and
resear&h. Ca#ing your produ&ts and ser#i&es a#aila%le at the right time and the right pla&e
depends more on understanding &onsumer readiness than on your organiAational s&hedule. 1he
manner in 'hi&h a ne' produ&t is re&ei#ed %y the &onsumer &an %e a((e&ted %y the season the
'eather and holidays. 4arly "anuary and Septem%er are the %est times to mail (lyers and &atalogs
as &onsumers seem to %e more re&epti#e to mail order pur&hasing in those months. 1he
ma9or gi(t sho's are held in the summer months 7"une "uly August8 and again in "anuary and
6e%ruary. Most 'holesale %uying ta2es pla&e at these sho's. $o#em%er and +e&em%er are not
good months (or introdu&ing ne' ser#i&e %usinesses unless they relate in some 'ay to the
holiday season. Spring is a %etter time to introdu&e a ser#i&e. 1rade 9ournals and trade
asso&iations in your (ield &an pro#ide the in(ormation you need on the timing patterns o( your
industry. 1ell the lender 'hen you plan to enter the mar2et and ho' you arri#ed at your de&ision.
.( your &hoi&e o( lo&ation is related to your target mar2et &o#er it in this se&tion o(
your %usiness plan. !ist the reasons (or your &hoi&e. *hat is the &hara&ter o( the neigh%orhoodF +oes
the site pro9e&t your %usiness imageF *here is the &ompetition in the areaF *hat is the tra((i&
patternF *hat are the terms o( the leaseF *hat ser#i&es i( any does the landlord pro#ideF *hat
is the o&&upan&y history o( your lo&ationF +id any &ompanies in the area go out o( %usiness
'ithin the past (e' monthsF .( so try to (ind out i( it 'as related to lo&ation. .s the area in 'hi&h
you plan to lo&ate supported %y a strong e&onomi& %aseF *hat alternate sites 'ere &onsideredF
1hese are some o( the =uestions to %e &onsidered. ,e(er to !o&ation in the %usiness
se&tion (or additional in(ormation.
I'2*.$&( T&%'2.
Be alert (or &hanges in your industry. $e' te&hnology may %ring ne' produ&ts into the
mar2etpla&e that 'ill generate ne' ser#i&e %usinesses. ,ead trade 9ournals and
industry reports in your (ield. Pro9e&t ho' your mar2et may &hange and 'hat you plan to do to 2eep
up. _____________________________________________________________________

@ou are no' ready to de#elop the third area o( your plan. 6inan&ial re&ords are used to
sho' past &urrent and pro9e&ted (inan&es. .n this se&tion 'e 'ill &o#er the ma9or do&uments
you 'ill 'ant to in&lude in your %usiness plan. 1hey 'ill &onsist o( %oth pro (orma 7pro9e&ted8
and a&tual (inan&ial statements. @our 'or2 'ill %e easier i( these are done in the order presented.
Summary o( 6inan&ial $eeds
Appli&ation o( !oan 6unds
Cash 6lo' Statement 7Budget8
1hree-year Pro9e&tion
Brea2-e#en Analysis
A&tual Per(orman&e Statements?
Balan&e Sheet
.n&ome 7Pro(it and !oss8 Statement
!oan Appli&ationH6inan&ial Cistory
S*44#&( "1 F/'#'+/#- N%%2.
.( you are applying (or a loan your lenders and in#estors 'ill analyAe the needs o(
your %usiness. 1hey 'ill distinguish among the three types o( &apital to %e used as (ollo's?
Woring capital -- Used to meet (lu&tuating needs that are to %e repaid through &ash during the
%usiness>s ne)t (ull operating &y&le generally one year.
!ro"th capital -- Used to meet needs that are to %e repaid 'ith pro(its o#er a period o( a (e'
years. .( you see2 gro'th &apital you 'ill %e e)pe&ted to sho' ho' the &apital 'ill %e
used to in&rease your pro(its enough to %e a%le to repay the loan 'ithin se#eral years 7usually
not more than se#en8.
#$uity capital -- Used to meet permanent needs. .( you see2 e=uity &apital it must %e raised (rom
in#estors 'ho 'ill ta2e the ris2 in return (or some &om%ination o( di#idend returns
&apital gains or a spe&i(i& share o( the %usiness.
-eeping the a%o#e in mind you must no' prepare a summary o( (inan&ial needs. 1his
do&ument is an outline telling 'hy you are applying (or a loan and ho' mu&h you need.
.. ABC Corporation is see2ing a loan to in&rease

its gro'th &apital in the (ollo'ing areas o(
A. 4=uipment 7ne' and more modern8
B. 1raining o( personnel in operation o( a%o#e.
... 6unds needed to a&&omplish a%o#e goal 'ill %e
A. See GUse o( 6undsG (or distri%ution o(
(unds and %a&2up statement.
U.%. "1 F*'2. S$#$%4%'$
1he potential lender 'ill re=uire a statement o( ho' the money you intend to %orro'
'ill %e used. .t 'ill %e ne&essary (or you to tell ho' you intend to disperse the loan (unds.
Ba&2 up your statement 'ith supporting data.
@ou must %e sure that your supporting data &an %e easily (ound %y the loan o((i&er 'ho
is e)amining your appli&ation. .( you do not ha#e your in(ormation 'ell organiAed and
retrie#a%le your appli&ation may %e re(used (or the simple reason that the material &annot %e
(ound. .t 'ill %e ne&essary to ha#e a 'ell 'ritten ta%le o( &ontents.
1. +.SP4,SA! D6 !DA$ 6U$+S
ABC Corporation 'ill use anti&ipated loan (unds in
the amount o( E0:::: to moderniAe its produ&tion
e=uipment. 1his 'ill ne&essitate the pur&hase o(
t'o ne' pie&es o( e=uipment and the training o(
present personnel in the operation o( this
2. BAC-UP S1A14M4$1
a. 1he e=uipment needed is as (ollo's?
718 Cigh-speed 6-3/ Atlas Press
7pur&hase pri&e -- E329::8
728 S31 "a'ors2i 4%%er 7pur&hase
pri&e -- E25::8
%. 1he training is a#aila%le (rom the manu(a&turer
as a three-'ee2 intensi#e program 7&ost? 1:
employees L E12:: M E12:::8.

&. 1he remaining E23:: 'ill %e used (or the (irst
monthly installment on loan repayment -- a
period o( lo' produ&tion due to employee
d. 1he e=uipment 'ill result in a 30 per&ent
in&rease in produ&tion a 20 per&ent de&rease in
unit &ost and a net pro(it in&rease su((i&ient
to repay the loan and interest 'ithin three years
'ith a pro(it margin o( 10 per&ent.
$ote? ,e(er to page 13N o( the produ&tion plan o( ABC
Corporation. See pages 23 and 25N o( the mar2eting se&tion (or
mar2et resear&h and pro9e&ted trends in the industry.
*hen 'riting your %usiness plan %e sure that your produ&tion plan
in&ludes a des&ription o( the e=uipment ho' the 'or2 'ill %e
done %y 'hom and at 'hat &ost.
1he mar2et resear&h 'ill sho' pro9e&ted needs (or your produ&t
and thus sho' ho' in&reased produ&tion 'ill results in in&reased
sales and ultimately in the &apa%ility to ena%le you to repay the
7N1he page num%ers are hypotheti&al and do not re(er to page
num%ers in this %oo2.8
C#.! F-") S$#$%4%'$ (B*2,%$)
Cash (lo' statements are the do&uments that pro9e&t 'hat your %usiness plan means in
terms o( dollars. 1hey sho' &ash in(lo' and out(lo' o#er a period o( time and are used (or
internal planning. .( you ha#e %een in %usiness (or some time 'or2sheets &an %e put together
(rom the a&tual (igures o( in&ome and e)penses o( pre#ious years &om%ined 'ith pro9e&ted
&hanges (or the ne)t period. .( you are starting a ne' %usiness you 'ill ha#e to pro9e&t your (inan&ial
needs and dis%ursements. @our pro(it at the end o( the year 'ill depend on the proper %alan&e
%et'een &ash in(lo' and out(lo'. 1he &ash (lo' statement identi(ies
O *hen &ash is e)pe&ted to %e re&ei#ed.
O Co' mu&h &ash 'ill %e re&ei#ed.
O *hen &ash must %e spent to pay %ills and de%ts.
O Co' mu&h &ash 'ill %e needed to pay e)penses.

.t also allo's the manager to identi(y the sour&e o( ne&essary &ash i.e. 'ill it &ome
(rom sales and ser#i&es rendered or must it %e %orro'edF Be sure that your pro9e&tions ta2e into
a&&ount re&ei#a%les and ho' long it 'ill ta2e your &ustomer to pay. 1he &ash (lo' statement
deals only 'ith a&tual &ash transa&tions and not 'ith depre&iation and amortiAation o( good'ill or
other non&ash e)pense items.
A &ash (lo' statement &an %e prepared (or any period o( time. .t is re&ommended that
you mat&h the (is&al year o( your %usiness. .t should %e prepared on a monthly %asis (or the ne)t
year and re#ised not less than =uarterly to re(le&t a&tual per(orman&e in the pre&eding three
months o( operations.
.n preparing your &ash (lo' statement it might %e use(ul to &ompile se#eral indi#idual
%udgets. 1hey &ould %e as (ollo's?
1. Cost o( sales %udget.
2. 6i)ed e)penses %udget.
3. Baria%le e)penses %udget.
1'o 'or2sheets &an %e used in de#eloping a &ash (lo' statement?
Sources of cash "orsheet -- Contains all the (inan&ing sour&es (or the %usiness.
%ash to be paid out "orsheet -- .denti(ies ho' mu&h &ash is e)pe&ted to %e spent to pay
e)penses and o%ligations.
&ote? Pro9e&tions in the t'o 'or2sheets must %e made (or the same time period 7monthly
=uarterly or annually8.
Dn&e you ha#e &ompleted the t'o 'or2sheets you are ready to trans(er the
in(ormation into your &ash (lo' statement. @ou 'ill need to thin2 your 'ay through ea&h month
pro9e&ting 'hat amount (rom ea&h &ategory o( the 'or2sheets 'ill %e appropriate to 'hat month. 6or
e)ample i( your total sales amount to E1::::: you 'ill ha#e to pro9e&t the indi#idual amounts
that 'ill pro%a%ly o&&ur in ea&h month.
7Cash 6lo'ing .nto @our Business8
Cash on Cand E __________
Sales __________
Ser#i&e .n&ome __________
+eposits on sales or ser#i&es __________

Colle&tions on a&&ounts re&ei#a%le __________
Mis&ellaneous in&ome
.nterest in&ome __________
Sale o( long-term assets __________
!oans 7%an2s (inan&e &ompanies SBA et&8 __________
D'ner in#estments 7sole proprietor or partnership8 __________
Contri%uted &apital 7&orporation8 __________
Benture &apital __________
1otal Cash A#aila%le __________
7Cash 6lo'ing Dut o( @our Business8
Start-up &osts
Business li&ense 7annual e)pense8 ___________
+BA (iling (ee 7one time &ost8 ___________
Dther start-up &osts
___________________ ___________
___________________ ___________
___________________ ___________
.n#entory pur&hases
Cash out (or items (or resale or ser#i&es ___________
Baria%le e)penses 7&ontrolla%le8
Ad#ertising __________
6reight __________
Pa&2aging &osts __________
Parts and supplies __________
Sales salaries __________
Mis&. dire&t e)penses __________
1otal dire&t e)penses ___________
6i)ed e)penses 7o#erhead8
.nsuran&e __________

!i&enses P permits __________
D((i&e salaries __________
,ent e)pense __________
Utilities __________
Mis&. indire&t e)penses __________
1otal indire&t e)penses __________
Assets 7long-term pur&hases8
Cash to %e paid in &urrent period __________
D'ner e=uity
Cash to %e 'ithdra'n %y o'ner __________
1otal &ash to %e paid out E__________
Completing @our Cash 6lo' Statement
1he #erti&al &olumns o( a &ash (lo' statement represent the t'el#e months pre&eded
%y a total &olumn. CoriAontal ro's on the statement &ontain (igures (or the sour&es o( &ash and
&ash to %e paid out &opied (rom the t'o pre#ious 'or2sheets and (rom indi#idual %udgets.
1he (igures are pro9e&ted (or ea&h month re(le&ting the (lo' o( &ash in and out o( your
%usiness (or a one-year period. Begin 'ith the (irst month o( the %usiness &y&le and pro&eed as
1. Pro9e&t the %eginning &ash %alan&e. 4nter under the (irst month o( the %usiness
2. Pro9e&t the &ash re&eipts (or the (irst month.
3. Add %eginning &ash %alan&e and &ash re&eipts to determine total &ash a#aila%le.
/. Pro9e&t the dire&t indire&t and interest e)penses (or the (irst month.
0. Pro9e&t monies due on ta)es long-term assets and loan repayments. Also pro9e&t
any amounts to %e dra'n %y o'ners.
<. 1otal all e)penses and dra's. 1his is total &ash paid out.
3. Su%tra&t total &ash paid out (rom total &ash a#aila%le. 4nter the result under &ash
%alan&eHde(i&ien&y. .( the result is negati#e %e sure to %ra&2et this (igure.
5. Pro9e&t loans to %e re&ei#ed and e=uity deposits to %e made. Add to &ash %alan&eH
de(i&ien&y to get ending &ash %alan&e.
9. Carry (or'ard the ending &ash %alan&e (or "anuary as 6e%ruary>s %eginning &ash
1:. ,epeat the pro&ess through the last month o( the %usiness &y&le.
1o &omplete the total &olumn pro&eed as (ollo's?
1. 4nter the %eginning &ash %alan&e (or the (irst month in the (irst spa&e o( the total
2. Add the monthly (igures (or ea&h &ategory horiAontally and enter the result in the

&orresponding total &ategory.
3. Compute the total &olumn in the same manner as ea&h o( the indi#idual months. .(
you ha#e %een a&&urate in your &omputations the +e&em%er ending &ash %alan&e
'ill %e e)a&tly the same as the total ending &ash %alan&e.
&ote? .( your %usiness is ne' you 'ill ha#e to %ase your pro9e&tions solely on mar2et
resear&h and industry trends. .( you ha#e an esta%lished %usiness you 'ill also use your
(inan&ial statements (rom the pre#ious ta) years.
A $uarterly budget analysis should %e used as a re&ord to &ompare your &ash (lo' statement 7or
%udget8 'ith your %usiness>s a&tual per(orman&e. .ts purpose is to let you 2no'
'hether or not you are operating 'ithin your pro9e&tions and to help you maintain &ontrol o( all
phases o( your %usiness operations. .( your analysis sho's that you ha#e gone o#er %udget in some
areas you 'ill ha#e to &ompensate %y ad9usting your &ash (lo' statement 'ith (uture &uts in
those or other areas. .( properly used a &ash (lo' statement &an pro#e to %e an in#alua%le tool to help
you rea&h your (inan&ial goals.
@our &ash (lo' statement &an %e &ompiled on a month-%y-month %asis and then
&ompared 'ith a&tual monthly per(orman&e. 1he SBA>s 6orm 11:: 7/-528 is #ery use(ul in this regardK
(or a (ree &opy &onta&t your lo&al SBA o((i&e. Prepared in this manner your statement &an
pro#ide an annual pro9e&tion (or your ne)t (is&al year.
T!&%%7(%#& I'+"4% P&"8%+$/"'
1he three'year income pro(ection is a pro (orma in&ome statement 7pro(it and loss statement (or
more in(ormation see .n&ome Statement page 158. 1he di((eren&e is that the three-
year pro9e&tion only in&ludes in&ome and dedu&ti%le e)penses 'hile the &ash (lo'
statement in&ludes all sour&es o( &ash and &ash to %e paid out.
1here are #arious opinions as to 'hat period o( time should %e &o#ered in estimating
in&ome and e)penses i.e. 'hether it should %e on an annual or monthly %asis. .( this in&ome
pro9e&tion is (or the purpose o( o%taining a loan tal2 to the lender a%out his or her spe&i(i&
re=uirements. .( the pro9e&tions are (or your o'n use a three-year pro9e&tion is suggested 'ith annual
rather than monthly pro9e&tions.
Sour&es o( .n(ormation
.n(ormation (or a three-year in&ome pro9e&tion &an %e (ound in your &ash (lo'
statement sales (ore&ast and indi#idual %udgets and your %usiness and mar2eting analyses i( you are
ne' in %usiness. Again i( you are an esta%lished %usiness you 'ill also %e a%le to use past
(inan&ial statements to help determine (uture pro9e&tions (or your %usiness. Be sure to ta2e into
a&&ount (lu&tuations anti&ipated in &osts e((i&ien&y o( operation &hanges in the mar2et and any
other (a&tors. .n&reases and de&reases in in&ome and e)penses are only realisti&. 1hese
&hanges should %e re(le&ted in any pro9e&tions. ,emem%er too that industry trends &an &ause
de&reases in %oth in&ome and e)penses. An e)ample o( this might %e the &omputer industry 'here
&ompetition has in&reased greatly and standardiAation o( &omponents has &aused a de&rease in %oth
the &ost

and the sales pri&e o( &ertain items.
B&%#57%3%' A'#-(./.
1he %rea2-e#en point is the point at 'hi&h a &ompany>s e)penses e)a&tly mat&h its
sales or ser#i&e #olume. .t is the point at 'hi&h the %usiness 'ill neither ma2e a pro(it nor in&ur
a loss. 1he %rea2-e#en point &an %e &al&ulated in either mathemati&al or graph (orm. .t &an %e
e)pressed in total dollars or re#enue e)a&tly o((set %y total e)penses or in total units o(
produ&tion 7&ost o( 'hi&h e=uals e)a&tly the in&ome deri#ed %y sales8.
1o apply a %rea2-e#en analysis to a %usiness operation t'o types o( e)penses must
(irst %e pro9e&ted? (i)ed &osts and #aria%le &osts. 6i)ed &osts do not #ary 'ith sales or output.
Baria%le &osts #ary in dire&t proportion to the output. 1he greater the #olume o( sales the higher
the &ost. 6or purposes o( the %rea2-e#en analysis ma2e sure to in&lude &ost o( sales in your
#aria%le &osts (igure.
Sour&es o( .n(ormation (or a Brea2-e#en Analysis
All o( your (igures &an %e deri#ed (rom your three-year pro9e&tion. .n (a&t %y no' you
should %e a%le to see that ea&h (inan&ial do&ument in your %usiness plan %uilds on the ones done
pre#iously. .t should %e a simple matter to retrie#e the (igures to plug into the
(ollo'ing (ormula.
An e)ample o( &al&ulating the %rea2-e#en point using a mathemati&al (ormula is
sho'n %elo'.
B-4 point sales 7at %rea2-e#en point8 M (i)ed &osts
Q R1 - #aria%le &osts e)pressed as S o( total salesT
1erms used?
B-4 point sales M #olume o( sales at %rea2-e#en point
6i)ed &osts M (i)ed e)penses depre&iation interest
Baria%le &osts M &ost o( sales and #aria%le e)penses
Sales re#enues M in&ome (rom sales o( goodsHser#i&es
o#er a spe&i(ied period
Balues used?
B-4 point sales 7S8 M F
6i)ed &osts M E20:::
Baria%le &osts M E/0:::
Sales re#enues M E9::::
S 7at %rea2-e#en point8 M 1-7E/0:::H9::::

S M __E20:::__
S M __E20:::__
.0:S M E20:::
S M E0:::: 7%rea2-e#en point in terms o( re#enue e)a&tly o((set %y total
A (irm>s sales at %rea2-e#en point &an %e plotted as in the (ollo'ing %rea2-e#en
analysis graph.
Using the same (igures as in the a%o#e (ormula dra' three lines in the graph?
horiAontal line at point representing (i)ed &osts 7208K total e)penses 71C M 6C Q BC8 line (rom le(t end
o( (i)ed &ost line sloping up'ard to point 'here total 7(i)ed plus #aria%le8 &osts on #erti&al
s&ale 738 meet total sales re#enues on the horiAontal s&ale 798K total re#enues 7sales8 line (rom Aero
through a point des&ri%ing total re#enues 7sales8 on %oth s&ales 798.
1he point on the graph 'here the total e)penses line interse&ts the total sales re#enues
line is the %rea2-e#en point. 1his %usiness estimates that it 'ill %rea2 e#en 'hen sales #olume
rea&hes E0::::. 1he triangular area %elo' that point represents &ompany losses. 1he
triangular area a%o#e and to the right o( the point represents potential pro(it.
A+$*#- P%&1"&4#'+% S$#$%4%'$.
A&tual per(orman&e statements are those (inan&ial statements re(le&ting the a&ti#ity o(
your %usiness in the past. .( you are a ne' %usiness o'ner you ha#e no %usiness history.
@our (inan&ial se&tion 'ill end 'ith the pro9e&ted statements and a personal (inan&ial
history. .( you are an esta%lished %usiness you 'ill in&lude the (ollo'ing a&tual per(orman&e
Balan&e sheet
Pro(it and loss 7in&ome8 statement
Business (inan&ial history or loan appli&ation
Balan&e Sheet
1he balance sheetis a (inan&ial statement usually prepared at the &lose o( an a&&ounting period
that sho's the (inan&ial position o( the %usiness as o( a (i)ed date. .t is a pi&ture o(
your (irm>s (inan&ial &ondition at a parti&ular moment. By regularly preparing this statement you
'ill %e a%le to identi(y and analyAe trends in the (inan&ial strength o( your %usiness and thus
implement timely modi(i&ations.

All %alan&e sheets must &ontain three &ategories -- assets lia%ilities and net 'orth --
that ha#e %een esta%lished %y a system 2no'n as generally a&&epted a&&ounting prin&iples. 1he
three are related in that at any gi#en time a %usiness>s assets e=ual the total &ontri%utions %y its
&reditors and o'ners.
Assets M Anything your %usiness o'ns that has monetary #alue.
)iabilities M +e%ts o'ed %y the %usiness to any o( its &reditors.
&et "orth *capital+ M An amount e=ual to the o'ner>s e=uity.
1he relationship %et'een these terms is simply illustrated in the (ollo'ing a&&ounting
A..%$. 9 L/#6/-/$/%. : N%$ W"&$!
4)amined as su&h it %e&omes apparent that i( a %usiness possesses more assets than it
o'es to &reditors its net 'orth 'ill %e a positi#e #alue. Con#ersely i( a %usiness o'es more
money to &reditors than it possesses in assets the net 'orth 'ill %e a negati#e #alue.
1he %alan&e sheet also must (ollo' an a&&epted (ormat. By so doing anyone reading
the %alan&e sheet &an readily interpret it.
All assets are di#ided under three headings?
%urrent assets -- Assets that &an %e &on#erted into &ash 'ithin one year o( the date on the
%alan&e sheet.
)ong'term investments -- Sto&2s %onds and spe&ial sa#ings a&&ounts to %e 2ept (or at
least one year.
,ixed assets -- 1he resour&es a %usiness o'ns and does not intend (or resale 7land
%uildings e=uipment automo%iles et&.8.
!ia%ilities are di#ided into &urrent and long-term lia%ilities?
%urrent liabilities -- 1hose o%ligations paya%le 'ithin one operating &y&le.
)ong'term liabilities -- Dutstanding %alan&e less &urrent portion due 7e.g. mortgage
$et 'orth is do&umented a&&ording to the legal stru&ture o( the %usiness?
Proprietorship or partnership -- 4a&h o'ner>s original in#estment plus earnings a(ter

%orporation -- 1he sum o( &ontri%utions %y o'ners or sto&2holders plus earnings
retained a(ter paying di#idends.
As o( _________________________ 19_____
Assets !ia%ilities
Current assets Current !ia%ilities
Cash __________ A&&ounts Paya%le __________
Petty Cash __________ $otes Paya%le __________
A&&ounts ,e&ei#a%le__________ .nterest Paya%le __________
.n#entory __________ 1a)es Paya%le
6ed. in&ome ta) __________
Short-term .n#est- State in&ome ta) __________
ments __________ Sel(-employment __________
Sales ta) 7SB48 __________
Prepaid e)penses __________ Property ta) __________
!ong-term in#est- Payroll a&&rual __________
ments __________ !ong-term lia%il-
6i)ed assets %ilities
!and __________ $otes paya%le __________
Buildings __________
1otal lia%ilities __________
.mpro#ements __________ ______________________________
4=uipment __________ $et 'orth 7o'ner e=uity8
6urniture __________ Proprietorship __________
or Partnership
Automo%ilesH 7name>s8 e=uity __________
#ehi&les __________ 7name>s8 e=uity __________

Dther assets Corporation
Capital sto&2 __________
1. __________ Surplus paid in __________
,etained earnings__________
2. __________ _____________
3. __________ 1otal net 'orth __________
_____________ _____________
1otal lia%ilities
1otal assets __________ and net 'orth _____________
*Total assets "ill al"ays e$ual total liabilities and total net "orth+
.n&ome Statement
1he in&ome 7pro(it and loss8 statement sho's your %usiness (inan&ial a&ti#ity o#er a
period o( time usually your ta) year. .n &ontrast to the %alan&e sheet 'hi&h sho's a pi&ture o(
your %usiness at a gi#en moment this statement &an %e li2ened to a mo#ing pi&ture 'hi&h
sho's 'hat has happened in your %usiness o#er a period o( time. 1he in&ome statement is an
e)&ellent tool (or assessing your %usiness. @ou 'ill %e a%le to pi&2 out 'ea2nesses in your
operation and plan 'ays to run your %usiness more e((e&ti#ely and there%y in&rease your pro(its. 6or
e)ample you may (ind that some hea#y ad#ertising you did in Mar&h did not e((e&ti#ely
in&rease your sales. .n (ollo'ing years you may de&ide to use your ad#ertising (unds more
e((e&ti#ely %y using them at a time o( in&reased &ustomer spending. Along the same #ein you might
e)amine your in&ome statement to see 'hat months ha#e the hea#iest sales #olume and plan your
in#entory a&&ordingly. Comparison o( the in&ome statements (rom se#eral years 'ill gi#e you an
e#en %etter pi&ture o( the trends in your %usiness. +o not underestimate the #alue o( this
parti&ular tool 'hen planning your ta&ti&s.
1he in&ome statement sho's 'here your money has &ome (rom and 'here it 'as spent
o#er a spe&i(i& period o( time. .t should %e prepared not only at the end o( the (is&al year %ut
at the &lose o( ea&h %usiness month. .t is one o( the t'o prin&ipal (inan&ial statements
prepared (rom the ledgers and re&ords o( a %usiness. All pro(it and loss statements &ontain in&ome and
e)pense a&&ount %alan&es. 1he remaining asset lia%ility and &apital in(ormation pro#ides the
(igures (or the %alan&e sheet.
At the end o( ea&h month the a&&ounts in the general ledger are %alan&ed and &losed.
Balan&es (rom the re#enue a&&ounts and the e)pense a&&ounts must %e trans(erred to your pro(it
and loss statement.

A pro(it and loss statement must also (ollo' an a&&epted (ormat and &ontain the
(ollo'ing &ategories?
$et sales 7gross sales returns and allo'an&es8.
Cost o( goods sold 7see .,S 6orm 1:/: S&hedule C (or &omputation8.
;ross pro(it 7net sales &ost o( goods sold8.
Selling e)penses 7dire&t &ontrolla%le #aria%le8.
Administrati#e e)penses 7indire&t (i)ed o((i&e o#erhead8.
1otal e)penses
.n&ome (rom operations 7gross pro(it total e)penses8
Dther in&ome 7interest in&ome8
Dther e)penses 7interest e)pense8
$et pro(it 7loss8 %e(ore in&ome ta)es
.n&ome ta)es 7(ederal state sel(-employment8
$et pro(it 7loss8 a(ter in&ome ta)es
1'o sample in&ome statements are sho'n (or your use. 1he (irst is di#ided into 12
months. 6ill it in monthly a(ter %alan&ing your ledgers. At the end o( the year this (orm 'ill pro#ide
an a&&urate pi&ture o( your (inan&ial a&ti#ity. 1he se&ond (orm &an %e used (or your
monthly and annual pro(it and loss statements.
7Also 2no'n as Pro(it and !oss Statement8
6or the year ___ " 6 M A M " " A S D $ +
1. $et Sales _ _ _ _ _ _ _ _ _ _ _ _
2. Cost o( Sales _ _ _ _ _ _ _ _ _ _ _ _
3. ;ross pro(it 71 minus 28 _ _ _ _ _ _ _ _ _ _ _ _
1. Baria%le e)p. 7&ontrolla%le8
a. Ad#ertising _ _ _ _ _ _ _ _ _ _ _ _
%. 6reight _ _ _ _ _ _ _ _ _ _ _ _
&. Pa&2aging &osts _ _ _ _ _ _ _ _ _ _ _ _
d. Parts P supplies _ _ _ _ _ _ _ _ _ _ _ _
e. Sales salaries _ _ _ _ _ _ _ _ _ _ _ _
(. Mis&. dire&t e)penses _ _ _ _ _ _ _ _ _ _ _ _
g. !egal (ees _ _ _ _ _ _ _ _ _ _ _ _

2. 6i)ed e)penses 7o#erhead8
a. .nsuran&e _ _ _ _ _ _ _ _ _ _ _ _
%. !i&enses P permits _ _ _ _ _ _ _ _ _ _ _ _
&. D((i&e salaries _ _ _ _ _ _ _ _ _ _ _ _
d. ,ent _ _ _ _ _ _ _ _ _ _ _ _
e. Utilities _ _ _ _ _ _ _ _ _ _ _ _
(. Mis&. indire&t e)penses _ _ _ _ _ _ _ _ _ _ _ _
g. _ _ _ _ _ _ _ _ _ _ _ _
1D1A! 4UP4$S4S _ _ _ _ _ _ _ _ _ _ _ _
.$CDM4 6,DM DP4,A1.D$S
7gross sales minus e)penses8 _ _ _ _ _ _ _ _ _ _ _ _
D1C4, .$CDM4S 7interest8 _ _ _ _ _ _ _ _ _ _ _ _
D1C4, 4UP4$S4S 7interest8 _ _ _ _ _ _ _ _ _ _ _ _
.$CDM4 B46D,4 1AU4S _ _ _ _ _ _ _ _ _ _ _ _
.$CDM4 1AU4S _ _ _ _ _ _ _ _ _ _ _ _
$41 .$CDM4 _ _ _ _ _ _ _ _ _ _ _ _
6or the period %eginning _________ and ending _________
1. $et sales 7gross--
returns L allo'an&e8 __________
2. Cost o( Sales
a. .n#entory 7"an. 18 __________
%. Pur&hases __________
&. Cost o( goods a#aila%le
(or sale R7a8Q7%8T __________
d. +edu&t in#entory 7+e&.318 __________
3. ;ross pro(it on sales __________
1. Baria%le e)penses 7&ontrol-
a. Ad#ertising __________
%. 6reight __________
&. Pa&2aging &osts __________
d. Parts P supplies __________
e. Sales salaries __________
(. Mis&. dire&t e)penses __________

2. 6i)ed e)penses 7o#erhead8
a. .nsuran&e __________
%. !i&enses P permits __________
&. D((i&e salaries __________
d. ,ent e)pense __________
e. Utilities __________
(. Mis&. indire&t e)penses __________
1otal e)penses __________
.n&ome (rom operations 7gross
pro(it less e)penses8 __________
Dther in&ome __________
1. .nterest in&ome __________
Dther e)penses __________
1. .nterest e)penses __________
$et pro(it 7loss8 %e(ore ta)es __________
.n&ome ta)es _________
$et pro(it 7loss8 a(ter in&ome ta)es __________
Business 6inan&ial Cistory
1he (inan&ial history is the last o( the (inan&ial statements re=uired in your %usiness
plan. .t is a summary o( (inan&ial in(ormation a%out your &ompany (rom its start to the present.
.( you are a ne' %usiness you 'ill ha#e only pro9e&tions (or your %usiness. .( you are
applying (or a loan the lender 'ill re=uire a personal %alan&e sheet. 1his 'ill %e o( %ene(it in
that it 'ill sho' the lender the manner in 'hi&h you ha#e &ondu&ted your personal %usiness and
%e an indi&ation as to the pro%a%ility o( su&&eeding in your ne' %usiness.
.( you are using your %usiness plan to apply (or a loan your %usiness (inan&ial history
and the loan appli&ation are the same. 1his do&ument should %e &ompleted last %ut pla&ed (irst
in the (inan&ial se&tion o( your plan. *hen you indi&ate that you are interested in o%taining a
%usiness loan the institution &onsidering the loan 'ill supply you 'ith an appli&ation. 1he
(ormat may #ary slightly. *hen you re&ei#e your loan appli&ation %e sure to re#ie' it and thin2
a%out ho' you are going to ans'er ea&h item. Ans'er all =uestions and %y all means %e &ertain
that your in(ormation is a&&urate and that it &an %e #eri(ied i( the need should arise.
.n(ormation $eeded and Sour&es
As you &omplete your %usiness (inan&ial history or loan appli&ation it should %e&ome
immediately e#ident 'hy this is the last (inan&ial do&ument to %e &ompleted. All o( the
in(ormation needed 'ill ha#e %een &ompiled in earlier parts o( your plan and in the

(inan&ials. 1o help you 'ith your (inan&ial history the (ollo'ing is a list o( in(ormation
usually in&luded and the sour&e you 'ill re(er to (or that in(ormation?
Assets- liabilities and net "orth -- @ou should %e a%le to re&ogniAe these three as %alan&e sheet
terms. ;o %a&2 to your %alan&e sheet and %ring these (igures (or'ard.
%ontingent liabilities -- 1hese are de%ts you may &ome to o'e in the (uture 7e.g. de(ault on
&osigned note or settlement o( a pending la'suit8.
.nventory details -- .n(ormation a%out in#entory is deri#ed (rom your in#entory re&ord. Also the
%usiness se&tion should ha#e a summary o( your &urrent poli&ies and methods o(
.ncome statement -- 1his is re#enue and e)pense in(ormation. +epending on the period o( time
to %e &o#ered you 'ill trans(er the in(ormation (rom your most re&ent annual pro(it
and loss statement or (rom a &ompilation o( se#eral i( re=uired %y the lender.
/eal estate holdings- stocs and bonds -- ,e(er %a&2 to the %usiness portion o( your plan. @ou
may also ha#e to go through your in#estment re&ords (or more &omprehensi#e
Sole proprietorship- partnership or corporation information -- 1here are generally three separate
s&hedules on the (inan&ial history one (or ea&h (orm o( legal stru&ture. @ou 'ill %e
re=uired to (ill out the one that is appropriate to yours. .n the %usiness se&tion you 'ill ha#e
&o#ered t'o areas that 'ill ser#e as the sour&e o( this in(ormation -- legal stru&ture and
management. @our supporting do&uments may also &ontain some o( the in(ormation that you 'ill need.
Audit information -- ,e(er %a&2 to your %usiness se&tion under re&ord 2eeping. @ou may also %e
as2ed =uestions a%out other prospe&ti#e lenders 'hether you are see2ing &redit 'ho
audits your %oo2s and 'hen they 'ere last audited.
.nsurance coverage -- @ou 'ill %e as2ed to pro#ide detailed in(ormation on the amounts o(
di((erent types o( &o#erage 7i.e. mer&handise e=uipment pu%li& lia%ility earth=ua2e
automo%ile et&.8. @our %usiness se&tion &ontains &o#erage in(ormation that &an %e
%rought (orth to the (inan&ial history.
1he (inan&ial do&uments &o#ered in this se&tion 'ill pro%a%ly %e su((i&ient (or %oth
your o'n use and that o( potential lenders. Some lenders may not re=uire all do&uments and
other lenders may re=uire additional do&uments. 1he important thing to note in &ompiling any
(inan&ial statements is that the in(ormation must %e &orre&t and that you must ha#e re&ords to
support your (igures.
,emem%er you &an use the in(ormation in your %usiness plan not only to aid you in
dealing 'ith a lender %ut also to assist you on an on-going %asis. .( you ha#e done your home'or2
the (inan&ial do&uments you ha#e prepared 'ill %e in#alua%le to you in the assessment o(
your operation and may #ery 'ell %e the determining (a&tor in 'hether or not you su&&eed
in your
$o' that you ha#e &ompleted the main %ody o( your %usiness plan you 'ill need to
in&lude a separate se&tion (or any additional re&ords that should %e in&luded to support your
plan. Supporting do&uments are the re&ords that %a&2 up the statements and de&isions made
in the three main parts o( your plan. As you are &ompiling the (irst three se&tions it is a good
idea to 2eep a separate list o( the supporting do&uments that you mention or that &ome to
mind. 6or instan&e dis&ussion o( your %usiness lo&ation might indi&ate a need (or demographi&
studies lo&ation maps area studies leases et&. .( you are &onsidering applying (or a loan to
pur&hase e=uipment your supporting do&uments might %e e)isting e=uipment pur&hase
agreements or lease &ontra&ts. By listing these items as you thin2 o( them you 'ill ha#e a (airly
&omplete list o( all o( your supporting do&uments %y the time you rea&h this part o( your tas2. @ou
'ill %e ready to sort them into a logi&al se=uen&e and add any ne' ones that &ome to mind.
1he (ollo'ing are se#eral do&uments that you 'ill 'ant to in&lude.
P%&."'#- R%.*4%.
.( you are a sole proprietor in&lude your o'n resume. .( your %usiness is a partnership
there should %e a resume (or ea&h partner. .( you are a &orporation in&lude resumes (or all
o((i&ers o( the &orporation. A resume need not and should not %e a lengthy do&ument. Pre(era%ly
it should %e &ontained on one page (or easy reading. .n&lude the (ollo'ing &ategories and
Wor history -- $ame o( employers or %usinesses 'ith dates o( employment. Begin 'ith most
re&ent. .n&lude duties and responsi%ilities.
#ducational bacground -- $ames o( s&hools and dates you attended them degrees earned
(ields o( &on&entration.
Professional affiliations and honors
Special sills -- e.g. relate 'ell to others a%le to organiAe 'illing to ta2e ris2s et&.
P%&."'#- F/'#'+/#- S$#$%4%'$
1he o'ner7s8 should in&lude a statement o( personal assets and lia%ilities. 1his
in(ormation &an %e &ompiled in the same manner as a %alan&e sheet. Use the same (ormat and list all
assets and lia%ilities to determine net 'orth. .( you are a ne' %usiness o'ner your personal
(inan&ial statement 'ill %e a part o( the (inan&ial do&ument and may %e a standard (orm supplied
%y the potential lender.
C&%2/$ R%0"&$.

Credit ratings are o( t'o types %usiness and personal. @ou &an as2 your suppliers or
'holesalers to supply you 'ith letters o( &redit. Personal &redit ratings &an %e o%tained through
&redit %ureaus %an2s and &ompanies 'ith 'hom you ha#e dealt on a %asis other than &ash.
C"0/%. "1 L%#.%.
.n&lude all lease agreements &urrently in (or&e %et'een your &ompany and a leasing
agen&y. Some e)amples are the lease agreement (or your %usiness premises e=uipment
automo%iles et&.
L%$$%&. "1 R%1%&%'+%
1hese are letters re&ommending you as a reputa%le and relia%le %usiness person 'orthy
o( %eing &onsidered a good ris2. 1here are t'o types o( letters o( re(eren&e? %usiness re(eren&es
or those 'ritten %y %usiness asso&iates suppliers and &ustomersK and personal re(eren&es or
those 'ritten %y non%usiness asso&iates 'ho &an assess your %usiness s2ills 7not (riends or relati#es8.
.n&lude all %usiness &ontra&ts %oth &ompleted and &urrently in (or&e. Some e)amples
are &urrent loan &ontra&ts papers on prior %usiness loans pur&hase agreements on large
e=uipment #ehi&le pur&hase &ontra&ts ser#i&e &ontra&ts and maintenan&e agreements.
L%,#- D"+*4%'$.
.n&lude all legal do&uments pertaining to your %usiness. Some o( these are arti&les o(
in&orporation partnership agreements &opyrights trademar2 registrations patents
insuran&e poli&ies property and #ehi&le titles et&.
M/.+%--#'%"*. D"+*4%'$.
1hese are all the do&uments 7other than the a%o#e8 that are re(erred to %ut not
in&luded in the %usiness and mar2eting se&tions o( your %usiness plan. A good e)ample 'ould %e those
re&ords related to sele&ting your lo&ation that may ha#e %een (inaliAed as the result o(
de#eloping a lo&ation plan. A potential lender 'ho may %e parti&ularly interested in your lo&ation
in(ormation 'ill %e a%le to (ind the lo&ation plan in your supporting do&uments and e)amine your
demographi& studies maps area studies on &rime rate in&ome et&.
Please note? All supporting do&uments need not %e in&luded in e#ery &opy o( your %usiness plan.
@ou need to in&lude only that in(ormation you thin2 'ill %e needed %y the potential
lender. 1he rest o( the in(ormation should %e 2ept 'ith your &opy o( the plan and %e easily
a&&essi%le should it %e re=uested %y the lender.
@our plan should %e put together in a pro(essional manner. 1o &reate a (a#ora%le
impression it

should %e as (ollo's?
Appearance-- Use a plasti& spiral %inding or &o#ers pur&hased (rom your lo&al stationery store.
Use %lue %ro'n or %la&2 &o#ers. Ban2ers are usually &onser#ati#e.
)ength-- Be &on&iseO Usually you should ha#e no more than 3: to /: pages in&luding your
supporting do&uments. *hen you are 'riting ea&h se&tion thin2 o( it as %eing a
summary. .n&lude as mu&h in(ormation as you &an in a %rie( statement. A potential lender does
not 'ant to ha#e to 'ade through #olumes o( 'ords to get the in(ormation needed.
Presentation-- +o your %est to ma2e your plan loo2 presenta%le. Co'e#er do not go to the
unne&essary e)pense o( paying (or typesetting and high-po'ered &omputer graphi&s.
1hese might %e &onsidered (ri#olous %y some lenders a (irst impression that might indi&ate
you 'ould not use their loan 'isely.
Table of contents -- Be sure to in&lude a ta%le o( &ontents in your %usiness plan. .t 'ill (ollo' the
statement o( purpose. Ma2e it detailed enough so the lender &an lo&ate any o( the areas
addressed in the plan. .t must also list the supporting do&uments.
&umber of copies -- Ma2e &opies (or yoursel( and ea&h lender you 'ish to approa&h. -eep tra&2
o( ea&h &opy. +o not try to 'or2 'ith too many potential lenders at one time. .( your
loan is re(used %e sure to retrie#e your %usiness plan.
*hen you are (inished your %usiness plan should loo2 pro(essional %ut the lender
should 2no' that it 'as done %y you. .t 'ill %e the %est indi&ation a lender 'ill ha#e to 9udge your
potential (or su&&ess. Be sure that your %usiness plan represents your %est e((orts.
M#5/', R%3/./"'.
.( your %usiness plan is going to %e e((e&ti#e either to the %usiness or to a potential
lender it 'ill %e ne&essary (or you to update it on a regular %asis. Changes ne&essitating re#isions
&an %e attri%uted to three sour&es? &hanges 'ithin the &ompany &hanges originating 'ith the
&ustomer and te&hnologi&al &hanges. $egle&ting to allo' (or these &hanges 'ill doom your
operation to de&reased pro(its and pro%a%le (ailure.
I40-%4%'$/', C!#',%.
As the o'ner you must %e a'are o( &hanges in your industry mar2et and &ommunity.
6irst you must determine 'hat re#isions are needed. @ou 'ill ha#e to &ompare your plan 'ith
the &hanges dis&ussed a%o#e. @ou &an use your employees to help 2eep tra&2 o( %usiness trends
appli&a%le to their e)pertise. Co'e#er the (inal 9udgment as to re#isions 'ill rest 'ith you the
o'ner. @ou may ma2e errors %ut 'ith e)perien&e your per&entage o( &orre&t de&isions 'ill
in&rease and your re'ard 'ill %e higher pro(its.

A'$/+/0#$/', P&"6-%4.
1ry to see ahead and determine 'hat possi%le pro%lems may plague you. 6or e)ample
you may ha#e to deal 'ith &osts that e)&eed your pro9e&tions. At the same time you may
e)perien&e a sharp de&line in sales. 1hese t'o (a&tors o&&urring simultaneously &an portend disaster
i( you are not ready (or them. Also %e &autious 'hen things are too good. 1he in&reased pro(its
may only %e temporary. A produ&t or ser#i&e that is in demand this year may not %e popular ne)t
year. @ou might thin2 a%out de#eloping an alternate %udget %ased on possi%le pro%lems.
A'areness o( &hanges in your industry and re#ision a&&ording to those &hanges 'ill %ene(it you
greatly. _____________________________________________________________________
Bo%ro' 4d'in 4. Pioneering &e" Products0 A Maret Survival !uide . Come'ood .!? +o'
"ones-.r'in 1953.
Breen ;eorge and A. B. Blan2enship. 1o'.t'2ourself Mareting /esearch . $e' @or2?
M&;ra'-Cill 1952.
Cli((ord +enis and ,alph *arner. The Partnership Boo . Ber2eley? $olo Press 1959.
;oldstein Car#ey. 3p 2our %ash ,lo" . !os Angeles? ;ran#ille Pu%li&ations 195<.
Cus&h 1ony and !inda 6oust. That's a !reat .dea . Da2land CA? ;ra#ity Press 195<.
!a#in Mi&hael ,. Business .nformation0 4o" to ,ind it- 4o" to 3se it . Phoeni) AJ? Dry)
Press 1953.
!e#inson "ay Conrad. !uerilla Mareting0 Secrets for Maing Big Profits from 2our Small
Business. Boston? Coughton-Mi((lin 195/.
Dgil#y +a#id. 5gilvy on Advertising . $e' @or2? Bintage Boo2s 1950.
Pinson !inda and "erry "innett. Anatomy of a Business Plan . 1ustin CA? Dut o( @our
Mind...and .nto the Mar2etpla&e 1959. Also a#aila%le 'ith a so(t'are pa&2age
Automate @our Business Plan that applies prin&iples o( the te)t.
Pinson !inda and "erry "innett. Mareting0 /esearching 6 /eaching your Target Maret .
1ustin CA? Dut o( @our Mind...and .nto the Mar2etpla&e 1955.
Pinson !inda and "erry "innett. 5ut of 2our Mind...and .nto the Maretplace . 1ustin CA? Dut
o( @our Mind...and .nto the Mar2etpla&e 1955.
Pinson !inda and "erry "innett. /ecordeeping0 the Secret to !ro"th 6 Profit . 1ustin CA? Dut
o( @our Mind...and .nto the Mar2etpla&e 1959.

S&hmenner ,oger *. Maing Business )ocation 1ecisions . 4ngle'ood Cli((s $"? Prenti&e-
Call 1952.
*orthington Anita and ,o%ert 4. *orthington. Staffing a Small Business0 4iring-
%ompensating- and #valuating . +en#er CD? Dasis Boo2s 1953.
U;S; S4#-- B*./'%.. A24/'/.$&#$/"' (SBA)
1he SBA o((ers an e)tensi#e sele&tion o( in(ormation on most %usiness management
topi&s (rom ho' to start a %usiness to e)porting your produ&ts.
SBA has o((i&es throughout the &ountry. Consult the U.S. ;o#ernment se&tion in your
telephone dire&tory (or the o((i&e nearest you. SBA o((ers a num%er o( programs and ser#i&es
in&luding training and edu&ational programs &ounseling ser#i&es (inan&ial programs and
&ontra&t assistan&e. As2 a%out
V S%5/#0 %ounselors to America7s Small Business a national organiAation sponsored %y
SBA o( o#er 11::: #olunteer %usiness e)e&uti#es 'ho pro#ide (ree &ounseling
'or2shops and seminars to prospe&ti#e and e)isting small %usiness people. 6ree
online &ounseling and training at '''.s&ore.org .
V Small Business 1evelopment %enters *SB1%s+- sponsored %y the SBA in partnership
'ith state go#ernments the edu&ational &ommunity and the pri#ate se&tor. 1hey
pro#ide assistan&e &ounseling and training to prospe&ti#e and e)isting %usiness people.
V Women7s Business %enters *WB%s+- sponsored %y the SBA in partnership 'ith lo&al
non-go#ernment organiAations a&ross the nation. Centers are geared spe&i(i&ally to
pro#ide training (or 'omen in (inan&e management mar2eting pro&urement and the
6or more in(ormation a%out SBA %usiness de#elopment programs and
ser#i&es &all the SBA Small Business Ans'er +es2 at 1-5::-U-AS--
SBA 7523-03228 or #isit our 'e%site '''.s%a.go# .
O$!%& U;S; G"3%&'4%'$ R%."*&+%.
Many pu%li&ations on %usiness management and other related topi&s are a#aila%le (rom
the ;o#ernment Printing D((i&e 7;PD8. ;PD %oo2stores are lo&ated in 2/ ma9or &ities and
are listed in the @ello' Pages under the %oo2store heading. 6ind a WCatalog o( ;o#ernment
Pu%li&ations at http?HH&atalog.gpo.go#H6
Many (ederal agen&ies o((er *e%sites and pu%li&ations o( interest to small %usinesses.
1here is a
nominal (ee (or some %ut most are (ree. Belo' is a sele&ted list o( go#ernment
agen&ies that pro#ide pu%li&ations and other ser#i&es targeted to small %usinesses. 1o get their
pu%li&ations &onta&t the regional o((i&es listed in the telephone dire&tory or 'rite to the
addresses %elo'?
F%2%&#- C/$/<%' I'1"&4#$/"' C%'$%& (FCIC)
1he C.D o((ers a &onsumer in(ormation &atalog o( (ederal pu%li&ations.
C"'.*4%& P&"2*+$ S#1%$( C"44/../"' (CPSC)
Pu%li&ations ,e=uest
*ashington +C 2:2:3
1he CPSC o((ers guidelines (or produ&t sa(ety re=uirements.
U;S; D%0#&$4%'$ "1 A,&/+*-$*&% (USDA)
12th Street and .ndependen&e A#enue S*
*ashington +C 2:20:
1he US+A o((ers pu%li&ations on selling to the US+A. Pu%li&ations and programs on
entrepreneurship are also a#aila%le through &ounty e)tension o((i&es nation'ide.
U;S; D%0#&$4%'$ "1 C"44%&+% (DOC)
D((i&e o( Business !iaison
1/th Street and Constitution A#enue $*
*ashington +C 2:23:
+DC>s Business !iaison Center pro#ides listings o( %usiness opportunities a#aila%le in
the (ederal go#ernment. 1his ser#i&e also 'ill re(er %usinesses to di((erent programs and
ser#i&es in the +DC and other (ederal agen&ies.
U;S; D%0#&$4%'$ "1 H%#-$! #'2 H*4#' S%&3/+%. (HHS)
Su%stan&e A%use and Mental Cealth Ser#i&es Administration
1 Cho2e Cherry ,oad
,o&2#ille M+ 2:503
Celpline? 1-5::-'or2pla&e. Pro#ides in(ormation on 4mployee Assistan&e Programs
+rug Al&ohol and other Su%stan&e A%use.
U;S; D%0#&$4%'$ "1 L#6"& (DOL)
4mployment Standards Administration
2:: Constitution A#enue $*
*ashington +C 2:21:
1he +D! o((ers pu%li&ations on &omplian&e 'ith la%or la's.
U;S; D%0#&$4%'$ "1 T&%#.*&(
.nternal ,e#enue Ser#i&e 7.,S8
10:: Pennsyl#ania A#enue $*
*ashington +C 2:23:
1he .,S o((ers in(ormation on ta) re=uirements (or small %usinesses.
U;S; E'3/&"'4%'$#- P&"$%+$/"' A,%'+( (EPA)
Small Business Dm%udsman
12:: Pennsyl#ania A#enue $*
*ashington +C 2:/5:
Cotline? 1-5::-3<5-0555
1he 4PA o((ers more than 1:: pu%li&ations designed to help small %usinesses
understand ho' they &an &omply 'ith 4PA regulations.
U;S; F""2 #'2 D&*, A24/'/.$&#$/"' (FDA)
0<:: 6ishers !ane
,o&2#ille M+ 2:503-:::1
Cotline? 1-555-/<3-<332
1he 6+A o((ers in(ormation on pa&2aging and la%eling re=uirements (or (ood and
(ood-related produ&ts.
F"& M"&% I'1"&4#$/"'
A li%rarian &an help you lo&ate the spe&i(i& in(ormation you need in re(eren&e %oo2s.
Most li%raries ha#e a #ariety o( dire&tories inde)es and en&y&lopedias that &o#er many
%usiness topi&s. 1hey also ha#e other resour&es su&h as
T&#2% #.."+/#$/"' /'1"&4#$/"'
As2 the li%rarian to sho' you a dire&tory o( trade asso&iations. Asso&iations pro#ide a
#alua%le net'or2 o( resour&es to their mem%ers through pu%li&ations and ser#i&es su&h
as ne'sletters &on(eren&es and seminars.
Many guide%oo2s te)t%oo2s and manuals on small %usiness are pu%lished annually. 1o
(ind the names o( %oo2s not in your lo&al li%rary &he&2 Boo2s .n Print a dire&tory o(
%oo2s &urrently a#aila%le (rom pu%lishers.
M#,#</'% #'2 '%).0#0%& #&$/+-%.
Business and pro(essional magaAines pro#ide in(ormation that is more &urrent than that
(ound in %oo2s and te)t%oo2s. 1here are a num%er o( inde)es to help you (ind spe&i(i&
arti&les in periodi&als.
V I'$%&'%$ S%#&+! E',/'%.

.n addition to %oo2s and magaAines many li%raries o((er (ree 'or2shops (ree a&&ess to
&omputers and the .nternet lend s2ill-%uilding tapes and ha#e &atalogues and
%ro&hures des&ri%ing &ontinuing edu&ation opportunities.