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					“Growing communities one idea at a time”




BUSINESS PLAN
                Working Guide
                Community Futures Tawatinaw Region
                       10611-100 Avenue
                    Westlock, Alberta T7P 2J4

                                         (780) 349-2903

                        Toll Free: (888) 349-2903
Fax: (780) 349-6542                                                        E-Mail: info@cftr.ab.ca
                                                  www.cftr.ab.ca




      This publication was produced in part through financial assistance provided by Western Economic Diversification Canada




       Community Futures Tawatinaw Region                                                                                      1
The “Business Plan Working Guide” is a basic guide to preparing a business
plan. More information may be required for some types of businesses but this
document will be a helpful tool to people who have little or no experience in
preparing business plans.

                            THE BUSINESS PLAN

A business plan provides a complete description of the business operations,
including detailed descriptions of the products and services, the market; the skills
and expertise of the people involved; owner equity; and financial projections.


A business plan should act as your guide as to how you will carry out all aspects
of the business. The information you gather in your plan will ensure that you have
all the knowledge you need to operate the business successfully. It will also help
you determine the profitability of the business, and will help prevent financial
problems in the future.


When seeking financial assistance from lenders, one of the first documents they
need to see is a business plan for the new business venture or a revised business
plan for an existing business operation.   The effort you put into completing the
plan demonstrates the effort you are willing to put into the business. Therefore,
a well-prepared business plan (with the lender‟s needs in mind) will greatly
enhance your success in obtaining financing or investment dollars.


Use this Business Plan Working Guide to assist you with preparing your own
business plan.




              Community Futures Tawatinaw Region                                       2
CFTR also has several sources of information in its “Resource Library” to assist
entrepreneurs and business owners with business planning.


The preparation and submission of a business plan will not, in itself, guarantee
that your business proposal will qualify for funding assistance from Community
Futures Tawatinaw Region or any other lending institution.




             Community Futures Tawatinaw Region                                    3
                                  TABLE OF CONTENTS

                                         Business Plan Outline


1.0 Executive Summary .............................................................................. Page 7


2.0 Background Information About the Business & Industry ................. Page 7

 2.1 Background Information About Business ................................................ Page 7
 2.2 List Strengths and Weaknesses………………………………………....Page 8
 2.3 Background Information on the Industry................................................. Page 8


3.0 Background Information About the
      Business Owner(s)/Management .......................................................... Page 8


  3.1 Principal‟s Profile .................................................................................. Page 8
  3.2 Management Profile ............................................................................... Page 8
  3.3 Management Skills Analysis .................................................................. Page 9
  3.4 Professional Advisor .............................................................................. Page 9


4.0 Land, Buildings &Equipment/Vehicles ............................................... Page 9


  4.1 Location of Business ............................................................................. Page 9
  4.2 Land & Building(s) ............................................................................... Page 9
  4.3 Required Equipment, Stock (inventory) and Vehicles ....................... Page 10


5.0 Operations............................................................................................. Page 10


   5.1 Hours of Operation .............................................................................. Page 10
   5.2 Supplier and Materials ........................................................................ Page 10



                   Community Futures Tawatinaw Region                                                            4
   5.3 Production Costs ................................................................................. Page 10
   5.4 Inventory Control ................................................................................ Page 11
   5.5 Human Resources................................................................................ Page 11
   5.6 Organizational Structure ..................................................................... Page 11
   5.7 Products & Services ............................................................................ Page 11


6.0 The Market ........................................................................................... Page 11

6.1 Market Location and Size ....................................................................... Page 12
6.2 Market Demand ....................................................................................... Page 12
6.3 Target Market .......................................................................................... Page 12
6.4 Major Competitors ................................................................................. Page 12

7.0 Marketing & Promotion ...................................................................... Page 13


 7.1 Marketing Strategy ................................................................................ Page 13
 7.2 Features and Benefits of the Products and Services ............................. Page 13
 7.3 Creating a Professional Image in the Community ................................ Page 14
 7.4 Promotion .............................................................................................. Page 14
 7.5 Pricing ................................................................................................... Page 15
 7.6 Sales and Distribution ........................................................................... Page 15
 7.7 Credit Policy.......................................................................................... Page 15
 7.8 Unique Selling Proposition ................................................................... Page 16
 7.9 Creating Promotion and Advertising Materials .................................... Page 16

8.0 Growth Potential .................................................................................. Page 16


  8.1 Possible Future Expansion ................................................................... Page 16


9.0 Exit Strategy ......................................................................................... Page 17


                   Community Futures Tawatinaw Region                                                                 5
10.0 Schedule of Events .............................................................................. Page 17
   10.1 Projected Time Lines & Action Steps to Be Completed .................. Page 17

11.0 Summary of Critical Risks and Assumptions .................................. Page 17
  11.1 Listing of Risks and Assumptions and What To Do About These ..... Page 17
12.0 Financial Statements & Analysis ........................................................ Page 17
  12.1 Projected Costs of the Business Venture ............................................ Page 18
  12.2 Total Amount of Funding Required and Where It Will Come From .. Page 18
  12.3 Repayment of Borrowed Money & At What Interest Rate ................. Page 18
  12.4 Collateral ............................................................................................. Page 18
  12.5 Possible Future Financing Requirements ............................................ Page 18
  12.6 Current Financial Statements .............................................................. Page 18
  12.7 Cash Flow Budget .............................................................................................Page 19
  12.8 Financial Forecast Assumptions....................................................................Page 22


Appendices ..................................................................................................... Page 24




                   Community Futures Tawatinaw Region                                                                     6
                                        Business Plan

1.0   Executive Summary
      The Executive Summary provides a brief description of the most important points of the
      business plan. In most cases, this portion of the plan is prepared after the rest of the
      business plan has been completed, as it gives an overall picture of your business
      proposal.

      In this section, a summary of the business is expected. A brief explanation of the
      businessproducts/services, management, market, location and financing requirements is
      included.

      How much money is required to start/expand this business and what will it be used for?
      Where will you obtain the money, including how much equity you are putting in as well
      as financing you will obtain? (Equity may include cash and/or equipment, vehicles,
      land or buildings to be used in the business.)

      NOTE: If you are expanding an existing business, describe both its present performance and the
      improved level of business that is expected to result from the expansion.

      This is a summary of the business proposal and should convince the lender that the entire
      business plan is worth reading. The summary should describe the key elements of your
      business plan in one or two pages. Information should include:

            1) Description of the business, i.e. products, services, and market
            2) A brief description of the management involved in the business
            3) The amount of money you are committing to the project and the amount of funding
               from other sources as well as how the money will be used
            4) How you intend to get the money and how you intend to pay it back
            5) Summary of how much income you expect the company to earn & sources of income


2.0   Background Information About the Business & Industry
      2.1      Background information about the business

               1) Past history of the company (if applicable), highlights of progress to date.
               2) Legal status intended for the business (indicate whether the business is a sole
                   proprietorship, partnership, or limited company).
               3) Gives dates of proposed start up and incorporation.

               Community Futures Tawatinaw Region                                           7
                4) List the principal people involved in the business, their areas of expertise, their
                    addresses, contact numbers and their contribution to the business (management
                    skills, industry experience, money, etc.)


      2.2       List Strengths and Weaknesses of the Business

      2.3       Background information on the industry

                1) Your view of the current status and prospects for the industry.
                2) Are most of the businesses in this industry very busy and profitable? Explain.
                3) Given an overview of the main competitors and how they are performing in the
                    industry, including growth in sales, profits and current market share (This may not
                    be available, but some general statistics are put out in Alberta Retail and Service
                    Trade Statistics: Statistics Canada; and some information will be available from
                    Community Futures Tawatinaw Region).
                4) Explain effects of major economic, social, technological, or regulatory trends on the
                    industry.
                5) Explain environmental impact (if any) from this type of business.


3.0   Background Information About the Business
      Owner(s)/Management

      The management experience, talent and integrity of the business owner(s)/manager are vital to
      the success of any business.

      3.1 Describe the principals/owners involved in the business
               Describe each person‟s knowledge, training and experience in the industry and in
                management
               Their percentage ownership
               Include a listing of the Board of Directors if applicable –explain how they can benefit
                the company;
               List investors in the company, if any.


      3.2       Management Profile
                This section will indicate who will be responsible for the management of the business,
                List each business title/position, the person filling that position (if known),

                Community Futures Tawatinaw Region                                            8
               Outline duties and responsibilities of each individual on the management team

               Include a personal resume for each individual in key management positions

      3.3   Management Skills Analysis
            In this section, analysis all of the management skills (including financial management,
            record keeping, marketing, time management and organizational skills, commitment &
            determination, ability to solve problems, communication skills, people skills, etc.). Be
            completely honest.

               List the strengths and weaknesses of each person on the management team with
                respect to his/her “management skills”, and include ways to overcome the
                weaknesses.

      3.4   Professional advisors
               It is important to list the legal, accounting, insurance and banking organizations you
                have selected to provide you with advice and business services (name of
                organization, mailing address, street location/town, name of contact person, contact
                numbers, such as phone, fax, email, etc.)
               Also list any other advisors or mentors and contact information.


4.0   Land, Buildings, and Equipment/Vehicles
      4.1   Location of Business:

               Provide legal description of the business site; civic address and/or general
                description of location

               How easy will it be to reach your customers, hire employees and get licensing,
                zoning approval and compliance with any other government legislation?

               Describe the location of the business with respect to warehousing/storage, visibility,
                access, etc.

               What are the advantages and disadvantages of the site?


      4.2   Land & Building(s)
             Provide details as to the amount of land required, costs, site plan, including
               installation of services.

               Describe facilities to be used; if a loan is required to purchase land or buildings, an
                appraisal will be required. (attach to business plan) Check with our office prior to
                incurring any appraisal costs.


            Community Futures Tawatinaw Region                                           9
               State whether land/facilities will be leased, purchased, developed, etc. Include costs,
                timing of development/construction, terms of lease (if applicable), etc.

               Description of Building Construction or Existing Structure
                If a new building is being constructed, include firm prices and/or estimates where
                necessary. Items such as location, zoning, fire protection, type of construction,
                heating system, electrical system, fire inspection, etc. will be necessary.


      4.3   Required Equipment, Inventory and Vehicles

               Indicate what major purchases will be made and from where

               List all current machinery and equipment and any required to be purchased (type,
                make, model, value, etc.)

               Describe current vehicle(s) to be used in the business and any required to be
                purchased for the business (type, make, model, value, etc.)

               Describe current tools and any required to be purchased for the business

               Describe start up inventory/current stock and any that must be purchased before
                business start up


5.0   Operations

      5.1   Hours of operation (and work flow if manufacturing a product)

               When will you be selling your product or providing your services?

               Will you make yourself available after business hours?


      5.2   Supplies and Materials

               Have you researched where you will get your raw materials and supplies? You
                should contact several different vendors with regard to quality, surety of supply,
                credit terms available, reputation of the company, knowledge of the sales staff,
                warranty, quantity discounts, etc.


      5.3   Production Costs

               This section will provide information concerning all costs necessary to produce the
                product or service. This list will include such items as manufacturing processes,
                quality control, raw materials, freight costs, etc.

            Community Futures Tawatinaw Region                                         10
      5.4    Inventory Control Procedures

                Describe your minimum and maximum inventory requirements, recognizing the
                 financing costs, insurance, storage and obsolescence costs of excessive inventories.

                Describe how you will maintain inventory control

      5.5    Human Resources/Staffing

                List all non-management positions and provide brief job descriptions for each;
                 include full time as well as part time help that will be required

                List hours/days of work for each position and rate of pay
                Break down labor costs per month, including payroll deductions
                Discuss availability of local labor force to fill positions
                Discuss types of training that will be needed and cost to business


      5.6    Organizational Structure

                Draw an organizational chart showing all those involved in operating the business,
                 including owner, manager, staff, contractors, etc. and who each reports to.


      5.7    Products and Services

             Completely and concisely describe the products you will be selling; then describe all the
             various types of services to be provided by the business.

                Include photographs if possible of products
                Include photographs if possible of machinery, equipment or vehicles used to provide
                 services


6.0   The Market
      Without adequate sales, your business cannot survive. Therefore, market research, knowledge
      and understanding are very important. Demonstrate your understanding of your market.


      The market location and size should be addressed, based on a review of statistical data and
      from discussions with potential distributors, sales representatives, and other people in the
      industry and customers. Your “market” consists of all the people who might become your
      customers. Your “market share” consists of people who do become your customers. If you

             Community Futures Tawatinaw Region                                       11
require assistance with this section, please talk to the Community Futures Tawatinaw Region
about information available to help with market analysis.
6.1    Market Location & Size
       Describe based on a review of statistics available and discussions with potential
       distributors, sales representatives, people in the industry and customers…include where
       the customers will come from and your anticipated market share (percentage of the total
       “market”).

       Local Economic Development Officers and Community Futures Tawatinaw Region
       may have data about the market.

6.2    Market Demand

       Describe where your product/service fits into the market. Is there room in the industry
       for the product or service? Is there a “want” or “need” for the product/or service?

6.3    Target Market
       Target market describes the potential customer types including their unique
       characteristics…age, gender, marital status, income level, education, needs, interests,
       location, when they are likely to need the product/service, etc. If the customers are
       likely to be other businesses, describe them by size, location, and needs.

       Describe potential customer group “types” by primary market (those customer types
       who will be the main source of income for your business); secondary market (those
       customer types who will be very important to your business success but the business
       will not be totally dependant on these types of customers; and tertiary market (customer
       types who are seasonal or may present a future opportunity for sales).

       It is very important to the success of your business to know a lot about the types of
       customers who will likely buy from you…Try to narrowly define the “type” of
       customer you feel will be interested in your product or service…not everyone will be
       your customer!

       Identify any major customers who have made or are willing to make purchase
       commitments (letters of intent; contracts for work, etc.).


6.4    Major Competitors
       Name and describe your competitors…. Often your business will be competing with
       businesses out of your immediate region. Rate the products and services of competitors
       on the basis of price, performance, service warranties, market share, customer
       satisfaction, experience in the industry and other important considerations you can think
       of. Review the strengths and weaknesses of your competitors. If they are doing well
       and have loyal customers, explain how you expect to break into the market and succeed.

       Community Futures Tawatinaw Region                                        12
             If there aren‟t any competitors, does this mean that there is not likely enough customers
             to support this type of business?

             Discuss what you would do if more competition moved into your market area.


7.0   Marketing & Promotion
      Provide projections of sales and market share and describe how your plan will achieve your
      projected sales. Provide a copy of any market studies, surveys, letters of intent, etc.

      7.1    Marketing Strategy

             Keep in mind the six "O's" of organizing Customer Buying Behavior
                 ORIGINS of purchase: Who buys it?
                 OBJECTIVES of purchase: What do they need to buy? What do they want to
                    buy (from discretionary income)?
                 OCCASIONS of purchase: When do they buy it?
                 OUTLETS of purchase: Where do they buy it? Where is it convenient for them
                    to buy it?
                 OBJECTIVES of purchase: Why do they buy it?

             "Unless the proposition appeals to customers’ INTEREST, unless it satisfies their
             DESIRES or NEEDS, and unless it shows them a GAIN----they will not buy!"

             Marketing is more than just advertising. Your marketing strategy determines how you
             promote your products or services and your firm, while trying to create a perception of
             value among your customers. This could include areas such as customer service,
             warrantees, personal selling, discounts, special sales, community involvement and
             support, in addition to advertising.

                Review the strengths and weaknesses of the business and management. This will
                 help you come up with a strategy (or plan) for marketing your business. You will
                 need to personally tell customers (or potential customers) about the strengths of the
                 business and management as well as include this information in advertising and
                 promotion materials.


      7.2    Features & Benefits of the Products & Services

                Identify the features and benefits of your products and then your services. This will
                 help you see what things you can emphasize in your advertising/marketing. How
                 are they unique (new or different from the competition)? Why should people buy


             Community Futures Tawatinaw Region                                        13
          from you instead of from someone else? What are the unique benefits of buying
          from you?

7.3   Creating a Professional Image In The Community

      What type of image do you want for your business? Think about what you want people
      to say about your business and about you as a business owner in the community.

      What will you do to create and maintain a positive image in the community? Some
      suggestions include:

         Use a corporate logo, corporate colors and other identifiers to create an identity for
          your business.
        Offer consistent service, hours of work, etc.
        Use professional signage (Signage created with a sheet of plywood & a five inch
          paint brush is not professional and will not create a good image)
        Ensure that everyone in the workplace is clean and appropriately dressed
       Keep vehicles and equipment clean and well repaired
       Ensure that there is a training program for proper telephone etiquette and customer
         service
       Support at least one charity or cause in the community
       Mix with and support other businesses in the community
       Be courteous with the competition
       Be honest and ethical at all times

      What specific things could you do to ensure that you and your business develops and
      maintains a good corporate image?


7.4   Promotion

      Advertising and other means of promotions are very important to the success of any
      business, especially in the first years of operation.
      Describe your plans to bring the products/services to the attention of prospective
      customers. Provide details on the methods and cost of promotions: include logos, signs,
      letterhead and business cards, trade show fees, public displays, flyers, newspaper ads,
      radio ads, discounts, sponsorships, and any other applicable costs pertaining to
      promotion.


      Make sure the advertisements you create are consistent with the image of your product
      or service. Remember the more care and attention you devote to your marketing plan,
      the more successful your business will be.

         How will you identify and contact potential customers? How will you tell your
          customers about your products and services and convince them to buy from you?

      Community Futures Tawatinaw Region                                         14
         Do you know how to reach your customers (Do they read the local newspaper? Do
          they listen to the radio? If so, at what time? Where do they meet or “hang out”?)
         How will you monitor your advertising and promotions to determine what methods
          are most cost effective?

      Every business, no matter what type or how small, must spend money on promotion
      (Promotion is a standard cost involved in operating any business) so establish a
      monthly and yearly promotion budget.


7.5   Pricing

         Establish prices to be charged for products or services.

         How did you determine the pricing structure or formula?

         Describe your pricing strategy to maintain and increase business…At these prices,
          can you maintain an acceptable profit margin to operate the business?

         Comparisons to competitor‟s prices – justify any pricing that is above or below your
          major competition.

         Market acceptance of your price – are customers willing to pay what you are
          charging?


7.6   Sales and Distribution

      Outline how/where/when you plan to sell and distribute your product or services. Are
      you selling directly to the customer or will you be a wholesaler?

      If you will be hiring sales people, give job descriptions for sales force and salary or
      wage schedules. What special sales training will be provided?

7.7   Credit Policy

      Describe your credit policies and selling terms:
         What methods of payment will you accept? (ie: Cash, Cheque, VISA, M/C….)
         Will you off in-house credit accounts? What are the terms? (limit, repayment,
          interest)
         What percent of sales will be financed through in-house credit accounts.
      Why are these important to your Business Success?



      Community Futures Tawatinaw Region                                         15
      7.8   Unique Selling Proposition

            What makes your product or service unique or more valued from other similar
            businesses?

               Discuss any “unique selling propositions” that you may have and the significance of
                these to your customers.
               Outline policies and methods of handling service problems/complaints
               Include any service and warranty policies


      7.9   Creating Promotion & Advertising Materials
            Describe the layout and information to appear in advertising and promotion materials.


               Review Section 6 and Section 7 of your business plan to determine what type of
                information should appear in promotion and advertising materials.

               Use this information to create text for promotion and advertising materials…pick
                out the strengths of the business and management team; highlight the selling
                features of the products and services; create awareness of the „benefits‟ of the
                products and services to customers.

             With the use of appropriate graphics, including the business logo, create promotion
                and advertising materials for the business. Remember – the most important
                messages (text) should be larger and bolder than other parts of the promotion piece.

               Attach copies of business cards; brochures; advertisements; news releases;
                photographs of signage and business operations, etc. in the business plan, if
                available


8.0   Growth Potential

      8.1   Possible Future Expansion
            Describe any plans for future expansion of the business, including:
               increase in staff; increase in labor costs
               purchase of new equipment, etc.; costs
               increase in production and sales over three years
               potential new markets
               new products and services

            Community Futures Tawatinaw Region                                        16
9.0   Exit Strategy
      9.1 Describe at what stage or time frame do you anticipate leaving the business.
      9.2 How do you see this happening? Sell, pass on to family, close?
      9.3 What would need to be in place to do so?

10.0 Schedule of Events
      10.1   Projected Time Lines & Action Steps to Be Completed

             A well-prepared and realistic schedule for planning, developing and starting up the
             business is an important function of management.

              A schedule of events shows the projected dates on which each action step is to be
             completed in the business planning process/start up/expansion process.

             Include such items as completing the detailed business plan, arranging for financing,
             getting insurance, licenses; building a shop; purchasing a vehicle; signage and other
             promotional materials; inventory and fuel; hiring staff, setting up a bank account for the
             business, etc.


11.0 Summary of Critical Risks and Assumptions
      11.1   Listing of Risks and Assumptions and What To Do About These

             The development of every business involves risks and some assumptions. It is the
             responsibility of management to identify these and take steps to reduce risk and
             validate/correct assumptions.

             It is best to identify these and discuss them in an open manner during the business
             planning process. Determine which potential risks or assumptions would be most
             critical to the success of the business venture.
             Then, outline action steps the owner will take to help minimize the impact of these on
             the business.


12.0 Financial Statements & Analysis
      One of the most important parts of any business plan is the financial information. Therefore,
      this type of information must be researched carefully and verified for accuracy.


      You would be wise to undertake a preliminary financial analysis of the business venture to
      determine likelihood of viability of the business prior to expending much time and energy into
      developing the full blown business plan.



             Community Futures Tawatinaw Region                                        17
Describe, in detail, the type and amount of funding required.


It is also important to include the amount and type of equity the individual is contributing to the
business venture. This may be in the form of cash (usually a minimum of 10% is required by a lender
but, depending on the lending institution and the nature of the business, a larger portion of owner equity may be
required) or it may be in the form of equipment, vehicles or land that the individual already owns
and can contribute for business use.


Included for your assistance in the “Fill in the Blanks” Business Plan is a sample format of
Business Plan Project Costs which is common to most business proposals. Fill in the
appropriate amounts as they relate to your particular business.


12.1    Projected Costs of the Business Venture
        Estimate the projected costs of the business venture based on sound research, statistics,
        industry standards, etc.

12.2 Total Amount Of Funding Required And Where It Will Come From
        Give considerable thought to the amount of funding required….keep estimates
        conservative so that there can be a realistic expectation of the business being able to pay
        back the debt.

        Owner commitment is critical…how much can you put into the business of your own
        money to prove that you will be committed to repaying the loan and ensuring that the
        business is successful?

12.3    Repayment of Borrowed Money & At What Interest Rate
        Provide details of when and how the business could repay the borrowed funds. Check
        with lending institutions and Community Futures Tawatinaw Region to get advice on
        this matter.

12.4    Collateral
        What can you offer as “security” or collateral to the lender? The value of equipment,
        land, vehicles, and inventory is considerably less than market value….very often this is
        less than 50% of market value!

         Community Futures Tawatinaw Region can give you advice on estimating a realistic
        value on items to be pledged as collateral.

12.5    Possible Future Financing Requirements
        Clearly explain any anticipated future financing that may be required (financial
        assistance to cover start up costs, operating costs, bridging financing, etc.)



        Community Futures Tawatinaw Region                                                    18
12.6   Current Financial Statements (for existing business)
       If the business has been in business for awhile (whether or not under a previous owner),
       you must provide year end financial statements to the prospective lender, including
       information about accounts receivable and accounts payable.

       If the business has only been in business a short period of time, then at least provide
       detailed monthly financial statements.

       (Place copies of financial statements in the business plan appendices)


12.7 Cash Flow Budget
       A cash flow projection statement helps you predict expenses and income including cash
       requirements to keep the business operating. Be realistic in cash flow projections.
       Estimate income conservatively, be generous with expenses.

       A Cash flow chart has been provided with specific headings as outlined below. Some rows
       may not be applicable for your business, so make any necessary adjustments as required.
       The first column of the chart is for start-up costs, costs that will only be incurred once.
       The next column will be for the first month of operation.

       For each amount estimated, include notes on assumptions made, sources of estimates, etc.

       Line 5: Sales – this is the total amount of income you estimate you will take in
              each month. Most businesses find that income varies from month to
              month. Therefore, your figures should reflect this. Also include an
              estimate of the percentage of sales that will be collected in 30 days, the
              percentage collected in 60 days and those collected in 90 days.

       Line 6: Contributing equity – This is the amount of cash equity that you have
               personally put into the business. This will most often be a one-time
               entry in your first month of business.

       Line 7: Loans - If you take possession of borrowed money during the month,
              show this amount. Again, this will normally be a one-time entry in your
              first month of business.

       Line 8: Cost of goods sold - If you have a retail business this figure will be
              your cost of the goods you intend to sell (cost of inventory or raw
              materials necessary to achieve that month‟s sales). This may be based
              on a percentage of sales, if you are selling a product for which you
              already know the mark-up or profit margin. NOTE: This only applies
              if you are selling products…not services.

       Line 9: Other Cash Received – List any other sources of cash inflow.

       Line 12: Total Cash In – Totals of lines 4 to 9.


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Line 17: Accounting & Legal – Get estimates from an accountant and lawyer
       indicating what they estimate your expenses will be. Legal fees may
       only occur in the initial start up phase while accounting fees may be
       incurred monthly. Includes: monthly bookkeeping services, year-end
       financial statements, incorporation fees, Search & Registration of trade
       name or partnership.

Line 18: Advertising – Contact agencies that will provide your advertising
       (newspapers, radio, television, Flyers (including postage), Signage
       (business cards, indoor & outdoor signs, vehicle signs), etc.) and get an
       estimate on the costs. The cost of running a regular advertisement may
       be a monthly/bi-monthly figure while items such as business cards,
       signage, etc. would normally be a figure in your start-up column.


Line 19: Bank Charges – A good rule of thumb to follow for the purposes of
       estimating this figure is the following:
             Home Based business - $25 monthly
             Service oriented business (trucking, electrical etc.) $50 - $100
             Retail Outlet - $250 - $300

Line 20: Business License/Vehicle Licenses/Permits - This figure should
       include municipal, provincial, and town licenses, vehicle licensing and
       permits. This figure would probably occur in the first month of
       operation. This could also include various annual permits for specific
       industries (trucking, professional associations etc.)

Line 21: Delivery/Freight – Estimate the monthly cost in having your goods
       delivered to you. Talk to the persons whom you expect to provide this
       service as well as to persons in a similar type of business to arrive at this
       figure.

Line 22: Insurance – This figure should include: equipment coverage, vehicle
       coverage, stock coverage, Commercial general liability insurance and
       Key man life insurance. This may be a figure in your first month of
       business, or your insurer may be willing to pro-rate your premiums over
       the year.

Line 23: Loan Payment – If you have borrowed money to finance your
       business, this is where your monthly loan payment is shown.

Line 24: Miscellaneous: There are always items that crop up unexpectedly
       and an amount should be allowed for this. Perhaps $100 would be a
       figure to use, but this would be dependant on the volume of business
       you expect to do.




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Line 25: Office/Shop Supplies: - This figure would include paper supplies
       (Letterhead, paper, invoices, envelopes, receipts, stamps etc). Also
       included (if applicable) would be gloves, hand cleaner, coffee supplies
       etc.

Line 26: Property Taxes – This would be filled in only if the business owns
       property.

Line 27: Rent – If you are renting space for your business to operate in,
       indicate the monthly amount.

Line 28: Repairs and Maintenance: Estimate the amount you think you will
       spend on keeping equipment and property in good operating condition.

Line 29: -Telephone - In the first month of operation include your connection
       charges for telephone lines and the internet (if applicable). In the
       remaining months estimate your monthly telephone/fax and internet
       charges, including line charges and long distance.

Line 30: Utilities - This figure will include monthly utility costs such as
       power, heat, water. There may be initial connection charges in the first
       month of operation.


Line 31: Vehicle Expense: this figure will include fuel, oil, maintenance and
       repairs and lease payments (if any). If vehicle expenses will be a large
       part of your expenses you may want to consider separating the
       expenses. Note: Utilized only if vehicle is owned by company (actual
       cash outlayed by company).

Line 32: Wages – management: This will be the amount that you intend to
       pay yourself. There is often no wage drawn in the first 2 or 3 months of
       operation. Business plan should be strong enough to be able to support
       a minimum management wage of $1500/month.

Line 33: Wages – employees: - This will include the total amount you intend
       to pay your employees and could well vary from month to month
       depending upon the type of business you operate.

Line 34: Wage Benefits – This amount is generally considered to be 8% of
       your payroll figure, management wages + employee wages (unless you
       offer a benefit package, in which case this would be somewhat higher).
       Small business owners do not pay EI for themselves, just Canada
       Pension and WCB if applicable, and EI for any employees.

Line 37: Total Cash Out – Total of lines 17 to 34.

Line 38: Surplus or Deficit – Total Cash In (line 12) subtract Total Cash Out
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                         (line36)

                Line 41: Opening Cash Balance – the amount of money you start with at the
                       beginning of each month.

                Line 42: Closing Cash Balance – the amount you started with plus or minus
                       the amount of cash made or lost during the month. The closing balance
                       becomes the next month‟s opening balance.

       Because this cash flow forecast is to be used as an aid for planning future business needs, it is
       sometimes best to put it away for a few days and then study it again to see if it still makes
       sense.


       It is important that the cash flow is completed on an on-going basis and is revised as the
       business situation changes. After each month has been completed, put the actual cash flow
       figures next to the planned figures and compare them. If the planned figures vary considerably
       from the actual, it may be necessary to rethink the position of the business. A cash flow assists
       in financial planning, inventory purchases and formulating credit policies. It also serves as an
       early indicator when expenses are getting out of control. Maintaining and monitoring the
       cash flow budget is one of the most important tools an owner/manager has to manage his
       business.
12.8   Financial Forecast Assumptions
       When completing a cash flow forecast, you must base your figures on sound, reliable research.
       To improve the quality of your financial presentation, explain how and why you arrived at the
       major figures on your forecast, whether for a new or existing business. Listed below are some
       suggested key areas of operation that will need to be substantiated.

       1.       Sales:
                It is very important to the survival of your business that you can accurately estimate the
                sales your business will make. You must convince the readers of your business plan
                that your sales figures are realistic. You can do this in a variety of ways, including:
                listing the number of customers served or products sold per day or month to attain your
                projected sales; using past sales figures for your business (or similar businesses);
                providing letters of intent which are signed letters from prospective customers proving a
                reasonably high level of sales; and/or providing the results of your test-marketing
                efforts.

       2.       Materials/Inventory (Cost of Goods Sold)
                This describes how you calculated the direct cost of buying and / or producing the items
                you are selling. This only applies if you are selling products…not services.


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3.   Labor
     This describes how you estimated labor costs for the business, including number of
     employees, rate of pay, hours/days of work each month and contract terms, if applicable

4.   Selling Expenses
     State how you came up with costs for expenses like advertising, travel, etc.

5.   Administrative and Financial Expenses

     State the basis for amounts shown in each expense category such as fuel, repairs and
     maintenance, insurance, rent, etc. Ensure your interest and bank charges reflect the
     proposed debt (bank loan)

6.   Other income
     Clearly explain any items in this area and state whether they are extraordinary or
     ongoing.

7.   Drawings/Salary
      Ensure you include management salary and/or the total amount of cash withdrawals by
     the owner/manager or any partners. Minimum recommended management salary is
     $1,500 per month.

8.   Cost of equipment/vehicles
     You must be able to prove the value of the purchases as well as the mechanical
     condition of the equipment and vehicles.




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                              APPENDICES

                 (Attachments at the end of the Business Plan)
    Attach copies of all support documents including, but not limited to:

   Personal resumes
   Personal networth statements
   Journeyman certificates, other diplomas or certification, etc.
   Certificate of Incorporation, if a limited company
   Partnership agreement (if applicable)
   Business license, development and/or building permit, etc.
   Provincial licensing, if applicable
   Insurance quotes (comprehensive business, vehicle, etc.)
   Quotes on building, equipment and vehicle costs
   Mechanical inspections on heavy equipment and vehicles
   Lease agreement
   Contracts for work
   Year end financial statements, including accounts payable and accounts receivable
   Monthly financial statements




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ent and vehicle costs
   Mechanical inspections on heavy equipment and vehicles
   Lease agreement
   Contracts for work
   Year end financial statements, including accounts payable and accounts receivable
   Monthly financial statements




       Community Futures Tawatinaw Region                                      24

				
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