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BUSINESS PLAN
[date business plan issued]
Contact: [name], CEO [or President]
[address]
[phone no. & fax no.]
[email]
[web site]
The information contained in this business plan is confidential and proprietary to [NAME OF
COMPANY] (the “Company”) and is intended only for the persons to whom it is transmitted by the
Company or its representatives. Any reproduction of this document, in whole or in part, or the
divulgence of any of its contents without the prior written consent of the Company, is prohibited.
This is a business plan. It does not imply and shall not be construed as an offering of securities. Persons
interested in pursuing an investment should contact their professional advisors.
2
Business Plan Copy No. _______
2
Confidentiality Agreement
The undersigned reader acknowledges that the information provided by [NAME OF
COMPANY] in this business plan is confidential. Therefore, the undersigned reader
agrees not to disclose any of such information without the express written permission
of [NAME OF COMPANY].
It is hereby acknowledged by the undersigned that the information to be furnished in
this business plan is in all respects confidential in nature (other than such information
which is already in the public domain through other means) and that any disclosure or
use of same by the undersigned may cause serious harm or damage to [NAME OF
COMPANY].
Upon request, this document is to be immediately returned to [NAME OF COMPANY].
Signature
Print Name
Date
2
TABLE OF CONTENTS
Confidentiality Agreement.......................................................................................................................................1
TABLE OF CONTENTS............................................................................................................................................2
EXECUTIVE SUMMARY..........................................................................................................................................1
I. COMPANY OBJECTIVES.....................................................................................................................................2
II. THE COMPANY....................................................................................................................................................2
III. DESCRIPTION OF PRODUCTS & SERVICES............................................................................................4
IV. MARKET ANALYSIS & MARKETING PLAN.............................................................................................4
V. MANAGEMENT & ORGANIZATION............................................................................................................6
VI. FINANCIAL PLAN..............................................................................................................................................7
APPENDIX “A”
[support documents]..................................................................................................................................15
2
[NAME OF COMPANY]
BUSINESS PLAN
EXECUTIVE SUMMARY
(NOTE: The Executive Summary is the section of the business plan in which you give an overview of the business,
its present status and future direction, and highlight the key points and the purpose of your business plan. This
section should be written after the rest of the business plan, and should not exceed 3 pages in length that’s why
it’s called a “summary”.)
Company Background
[for existing companies]
[NAME OF COMPANY] (the “Company”) is a [describe, e.g. “a corporation incorporated under the laws of
the State/Province of ___________”] which has been engaged in the business of designing, manufacturing,
distribution and marketing of [describe the clothing lines] in the _________ area for the past ____ years.
[for new companies:]
[NAME OF COMPANY] (the “Company”) is in the process of being formed/created as a [describe, e.g. “a
corporation incorporated under the laws of the State/Province of ___________”], for the purpose of designing,
manufacturing, distribution and marketing of [describe the clothing lines] in the _________ area.
The Company will be managed by a team of _____________ individuals with a total of _______ years
experience in the field of ________________, a chief financial officer with _____ years of accounting and
administrative experience, and _________ [list].
Mission
[capsule version of the company’s vision / mission statement]
Objectives
[briefly describe the shortterm and longterm objectives of the company with respect to sales, profits,
growth, etc]
The Market
[briefly outline the market and available customer base in the area, the number of competitors already
servicing that market, and the reason(s) why customers will choose your business over the competitors]
Capital Requirements
Initial capital funding of $_____________ is required for _________________________. $_______________
of this amount will be provided by the principal shareholder(s).
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I. COMPANY OBJECTIVES
(NOTE: This section sets out the corporate objectives, mission statement, current phase of your business, and the
company’s goals and objectives for future growth.)
1.1 Goals & Objectives
The Company’s goals are:
• ____ production clients by the end of Year 1, increasing to ______ production clients by
the end of Year 3;
• gross margin of at least ____%;
• positive net worth by the end of Year ___;
• [other]
1.2 Past Achievements
[describe the company’s past successes in the industry – if the company has no track record, cite past achievements
in the industry by senior management]. The Company has established a qualified management team with a
combined total of ______ years of experience in the ________________ industry. The Company’s current
clients include ____________________. We have developed tactical alliances with _________________.
1.3 Vision / Mission Statement
The Company seeks to [establish a presence/leverage its position] in the ___________ apparel industry
by designing, manufacturing and marketing its private label product lines, and by providing creative
concepts together with the expertise required to design, manufacture, import and distribute apparel
products to increase brand recognition and sales.
1.4 Keys to Success
The Company’s keys to success can be defined as follows:
II. THE COMPANY
(NOTE: Use this section to describe the history, structure, purpose, operations, board of directors, outside
consultants and strategic alliances of the business. If you are starting up a new company, describe the proposed
structure, and set out the reasons for starting up the business.)
2.1 History & Background
The Company was incorporated on _____________ [date] in the [State/Province] of __________. The head
office of the Company is located at [address].
To date, the Company has issued ___________ shares of common stock [provide details on all shares of stock
issued and outstanding]. The following table sets out the current shareholders and the number of shares
owned by each:
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The remainder of the issued and outstanding common shares are retained by the Company for [future
distribution / allocation under the Company’s employee stock option plan / etc].
The Company currently has outstanding shareholder loans in the aggregate sum of
$___________________. The following table sets out the details of the shareholder loans:
2.2 Directors
The Company’s Board of Directors, which [will be/is] made up of highly qualified business and
industry professionals/experts, [will be a valuable asset to the Company and instrumental to its
development by assisting/assists] our management team in making appropriate decisions and taking
the most effective action; however, they [will not be/are not] responsible for management decisions. The
following persons [will make up the/are the current] Board of Directors of the Company: [list each person
on the Board]
Name of Person
business & educational background, past industry experience, other companies in which the
person played a key role
Name of Person
business & educational background, past industry experience, other companies in which the
person played a key role
2.3 Outside Consultants & Professional Advisors
At present, no outside consultants or professional advisors have been retained. [if outside consultants have
been retained, list them and their credentials:] The Company’s outside consultants and professional advisors
provide tremendous input and support to enable management to make wellinformed, creative and
appropriate decisions:
• [accountant/cpa]
• [legal counsel]
• [others]
2.4 Strategic Alliances
[List strategic alliances which assist the company in providing high quality service and establishing/maintaining
its reputation, and which give the company an additional competitive edge]
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III. DESCRIPTION OF PRODUCTS & SERVICES
(NOTE: In this section, describe your current products and services, the unique features, prices, etc that you offer,
current and future R&D plans, enhancements, production and distribution strategies. Include data on proprietary
processes, patents, copyrights, etc, which make your products unique.)
3.1 Facilities & Operations
[describe the company’s office(s), square footage, location, etc, and whether the company owns or leases
its office(s)]
[describe technology, computer systems, other equipment the company has at its disposal]
3.2 Products & Services
The Company is in the business of designing, manufacturing, distribution and marketing of [describe
the clothing lines].
Design Services. The Company works with its clients to define the client’s marketing and sales objectives.
From this process, a merchandised collection of apparel and accessories is designed and developed to
meet those objectives. Once the client has approved the concepts, designs, colors, fabrics, target prices,
production volumes and time lines, the technical design process begins, and detailed specification sheets
are created for each product and style. The Company oversees the prototype development with the
manufacturer.
Product Lines. Product lines designed and developed by the Company include the following: [describe]
3.3 Future Plans
Active Sportswear. The Company is seeking to take advantage of opportunities in the active sportswear
market by creating a teeshirt brand. To that end, we are negotiating a contract with ______________,
who will provide us with innovative teeshirt designs and finished products. Approximately $_________
of the capital raised will be allocated for product marketing, production and printing / silk screening.
First year sales projections of this line are $______________, increasing to $______________ in Year 3.
IV. MARKET ANALYSIS & MARKETING PLAN
(NOTE: Use this section to identify your current market (if an existing business) and/or your target market (for
new or expanding businesses), the growth potential of the market, market share, competitors and their products
and services, factors which impact your business (such as seasonal sales, niche markets, etc). This section will also
be where you outline your marketing plan (sales, advertising, PR).)
4.1 Industry Analysis
[Market research will be required for this section. Discuss the industry in general, and specifically in your area,
growth or lack of growth, current trends, etc]
Recent market research shows that the demand for brand name clothing and accessories has increased
nationally at the rate of ___% per year over the past ___ years. Currently name brands sell _________
times better than generic lines of the same products. This trend has resulted in fewer quality non
branded products available to consumers at lower prices. The Company can take advantage of the
opportunity to fill this void, to create quality private label lines at reasonable prices.
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4.2 Target Market
[set out demographics for your target market age range, gender, education level, income level, etc to create a
profile of your target market segments.]
The Company’s target markets can be separated into the following segments:
• ___________ apparel companies who are seeking to broaden their product range or
create new lines to complement their existing product lines.
• retail distribution outlets who are seeking to complement their brand name lines with
private label designer lines;
• [other]
Retail Distribution Outlets. The second target market is the retail distribution outlet which wants to bring
in private label designer lines designed exclusively for their stores. These products will allow them to
build equity in their brand names by selling private label lines which have high gross margins and
which offer a higher level of quality priced lower than nationally advertised brands.
[other – describe]
The Company’s goal is to attract clients which will generate production orders of at least $____________
per year.
4.3 Competitors
[Discuss the company’s competitors in the local market, how much of the market share they hold, their strengths
and weaknesses in comparison with the company]
FreeLance Designers. These are often individuals who were previously on staff with brand name
companies, who have leveraged their past experience to service a number of clients on a freelance basis.
The Company’s advantage over these competitors is that we offer our clients the ability to use one
source for the entire process, from design through manufacturing.
Private Label Manufacturers. Many large retail distributors have inhouse private label development
departments. There are opportunities for the Company to supply items which these manufacturers are
unable to supply.
4.4 Competitive Edge
Due to [the Company’s] experience and expertise in the industry, we are able to foresee market trends,
giving us the ability to be first to market with new and innovative products to address those trends. In
addition, product life cycle is short in the clothing industry, and new products are quickly imitated. The
Company can offer a means for clients to respond quickly to imitators and to new innovations.
Each of our target markets recognizes the advantages of design and production outsourcing. It allows
them to be adaptable and to respond quickly to industry swings, and to avoid the costs of extra
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personnel and production equipment. The Company can handle all stages of design, development and
production, providing our clients with the benefit of having only one source to deal with throughout the
process.
4.5 Market Needs
[discuss the market needs of your target markets, and how you will meet them]
Retail distributors look to private label manufacturing to provide basic commodity items at reasonable
prices which they can pass on to their customers. They compensate for lower gross margins per item by
selling in high volume. [set out how the company will meet this need]
[other]
4.6 Marketing Strategy
[describe marketing platforms and strategies that the company will use to achieve its goals]
Currently all of the Company’s marketing has been through word of mouth referrals. The Company is
seeking to focus its marketing efforts to specifically focus on its target customer segments by proactively
approaching them with merchandised concepts for complete lines of products and accessories.
[describe planned marketing efforts, eg trade shows, brochures, sales presentations, etc]
4.7 Pricing Strategy
The Company’s revenues will come from several streams: design consulting fees, royalty payments,
manufacturing commissions, and direct sales.
Design consulting fees will be charged at the rate of $___________ per ______. Royalty fees range from
___% to ___% of gross product sales and are based on _______________.
Manufacturing commissions are earned by managing the production of apparel, and range from ___% to
___% of the FOB cost. The amount of the fees are based on _____________________.
Product pricing will be as follows: [set out product markup structure and retail cost to consumer]
V. MANAGEMENT & ORGANIZATION
5.1 Management Team
The strength of the Company’s management team stems from the combined expertise in both
management and technical areas. [if appropriate: This has produced outstanding results over the past ____
years. The leadership characteristics of the management team have resulted in the establishment of
broad, flexible goals designed to meet the everchanging demands of our quickly moving marketplace.]
Name of Person, President (include professional designations, degrees, etc)
business & educational background, past industry experience, other companies in which the
person played a key role
[include a section for each member of the team resumes / CVs of each director and manager should be
included with the supporting documents]
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5.2 Organizational Structure
[Name of person] is the Chief Operating Officer of the Company. [describe the remainder of the organization
structure, departments and department heads, etc].
5.3 Personnel Plan
[set out the initial personnel numbers, and expectations for increased or decreased staff requirements over the first
3 years of operations]
The Company [will employ/currently employs] _______ office staff, _______________________ [others
list]. We anticipate hiring an additional _____________ staff within ___ days of initial capital funding.
The additional personnel will be required to ________________________.
VI. FINANCIAL PLAN
(NOTE: Use this section to describe (for existing businesses) or project (for new or expanding businesses) your
company’s capital requirements, projected profits or losses for the next 15 years, the intended use of proceeds from
your fund raising efforts, if raising money through investors.)
6.1 Sales / Revenue Forecast
TOTAL SALES / REVENUES
Direct Cost of Sales
Design consulting
Manufacturing
SUBTOTAL DIRECT COST OF SALES
6.2 Implementation Milestones
The following implementation milestones identify the expectations of the Company, as well as setting
out our startup plan.
Other
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TOTAL: $
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6.3 StartUp Requirements
STARTUP EXPENSES
Legal costs
Consultants
Rent
Insurance
Utilities
Expensed equipment
Marketing activities
Development costs
Other
Total StartUp Expenses
StartUp Assets Required
Cash Balance on Starting Date
Other Current Assets
Total Current Assets
Longterm Assets
Total Assets
TOTAL REQUIREMENTS
FUNDING
Investment
Investor 1
Investor 2
Other
Total Investment
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Total Current Liabilities
Longterm Liabilities
TOTAL LIABILITIES
LOSS AT STARTUP
TOTAL CAPITAL
TOTAL CAPITAL AND LIABILITIES
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6.4 Projected Profit and Loss
OPERATING EXPENSES
Payroll
Sales and Marketing and Other Expenses
Depreciation
Leased Equipment
Utilities
Insurance
Rent
Research & Development
Travel Expenses
Commissions
Payroll Taxes
Other
Total Operating Expenses
Profit before Interest and Taxes
Interest Expense
Taxes Incurred
Net Profit
Net Profit / Sales
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6.5 Projected Cash Flow
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interestfree)
New Longterm Liabilities
Sales of Other Current Assets
Sales of Longterm Assets
New Investment Received
Subtotal Cash Received
EXPENDITURES
Expenditures from Operations
Cash Spending
Payment of Accounts Payable
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Longterm Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Longterm Assets
Dividends
Subtotal Cash Spent
Net Cash Flow
CASH BALANCE
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6.6 Projected Balance Sheet
Longterm Assets
Longterm Assets
Accumulated Depreciation
Total Longterm Assets
TOTAL ASSETS
LIABILITIES AND CAPITAL
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Total Current Liabilities
Longterm Liabilities
TOTAL LIABILITIES
CAPITAL
Paidin Capital
Retained Earnings
Earnings
TOTAL CAPITAL
TOTAL LIABILITIES AND CAPITAL
NET WORTH
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6.7 Business Ratios
The following table contains important ratios for the _________ industry, as determined by the Standard Industry Classification (SIC)
code, _________.
RATIO ANALYSIS Year 1 Year 2 Year 3 Industry Profile
Sales Growth
Percent of Total Assets
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Longterm Assets
TOTAL ASSETS
Current Liabilities
Longterm Liabilities
TOTAL LIABILITIES
NET WORTH
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
PreTax Return on Net Worth
PreTax Return on Assets
Business Vitality Profile
Sales Per Employee
Survival Rate
Additional Ratios
Net Profit Margin
Return on Equity
Activity Ratios
Accounts Receivable Turnover
Collection Days
Inventory Turnover
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liabilities to Liabilities
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt / Total Assets
Acid Test
Sales / Net Worth
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APPENDIX “A”
[support documents]
(NOTE: Include such things as director / senior management resumes, financial statements, designs, copy of the
lease, press clippings, budgets, market research, all other relevant documentation)