Table Of Content

bB Edward G. Rogoff y E a Co-Author of d “The Entrepreneurial Conversation” w n a r k d G a . R b o g l o f e f • SB e c u o n ds E i dn i t i oe n s s P l a n s Foreword by Jeff Bezos Founder & CEO, Amazon.com Bankable Business Plans Second Edition Edward G. Rogoff Foreword By Jeff Bezos Founder & CEO, Amazon.com Copyright ©2007 by Edward G. Rogoff For more information, contact Rowhouse Publishing, 1375 Broadway, Suite 600, New York, NY 10018-7060, (877) 363-9866. Find us on the Internet at www.bankablebusinessplans.com. ALL RIGHTS RESERVED. No part of this work covered by the copyright may be reproduced or used in any form or by any means—graphic, electronic, or mechanical, including photocopying, recording, taping, Web distribution or information storage and retrieval systems—without the written permission of Edward G. Rogoff. Brief excerpts, as submitted from Annual Statement Studies by The Risk Management Association ©2006, reprinted with permission of The Risk Management Association. Library of Congress Cataloging in Publication Data: Rogoff, Edward G., 1951- Bankable business plans / Edward G. Rogoff; foreword by Jeff Bezos. — 2nd ed. p. cm. Includes bibliographical references and index. LCCN 2007921044 ISBN-13: 978-0-9791522-0-7 ISBN-10: 0-9791522-0-8 1. Business planning. 2. New business enterprises— Finance. 3. Business enterprises—Finance. I. Title. HD30.28.R644 2007 658.4’012 QBI07-600083 Printed in Canada The names of all companies or products mentioned are used for identiﬁcation purposes only and may be trademarks or registered trademarks of their respective owners. The author and publisher disclaim any afﬁliation, association, connection with, sponsorship of, or endorsement by such owners. Book and Cover design by Jack Mayer In memory of my father… who made the best plans. This page intentionally left blank xi Acknowledgments xv Foreword Jeff Bezos, Founder and CEO, Amazon.com xix Preface 1 Part I The Power Of A Bankable Business Plan 3 What A Bankable Business Plan Is And How It Can Help You Start A Successful Enterprise 4 Bankable Business Plans Serve A Specific Purpose 7 Your Business Plan Is An Extension Of You 14 Entrepreneurship Is A Team Sport vi Bankable Business Plans 17 Part II The Ten Essential Action Steps 19 Action Step 1 Define Your Company: What Will You Accomplish For Others…And Yourself? What Will Your Business Accomplish For… 21 Your Customers? 21 Your Investors? 23 Your Lenders? 24 Your Suppliers? 25 Your Employees? 27 You? 29 Action Step 2 Identify Your Company’s Initial Needs: What Will You Require To Get Started? 32 The Major Expenses 33 Real Estate 33 Employees and Employee Benefits 34 Startup and Capital Costs 34 Advertising and Promotion 37 Action Step 3 Choose A Winning Strategy: What Will Distinguish Your Product Or Service From Your Competition? 38 Create A Powerful Competitive Advantage 44 Use A SWOT Analysis To Determine The Competitive Advantage Of An Existing Business 45 Plan Ahead: Anticipate An Exit Strategy 45 Match Your Strategy To Any Type Of Industry 46 Emerging Contents vii 49 Maturing 52 Stagnant and Declining 53 Fragmented 54 Industries with Dominant Leaders 57 Action Step 4 Analyze Your Market: Who Will Want Your Product Or Service? 60 Research Your Potential Market Thoroughly 65 Target Your Market Like A Bull’s-Eye 66 Test Before You Launch 69 Action Step 5 Develop A Strong Marketing Campaign: How Will You Reach Your Customers And What Will You Say To Them? 72 The Four Ps 72 Product 74 Price 75 Place 78 Promotion 83 Action Step 6 Build A Dynamic Sales Effort: How Will You Attract Customers? 87 Get An Order Today—Or Yesterday 87 Make Sales A Priority For Everyone 88 Never Delegate Yourself Completely Out Of Sales 89 Create The Right Ethical Environment 89 Be Highly Organized 90 Compensate Based On Long-term Performance 91 Your Sales Force Can Be Your Competitive Advantage viii Bankable Business Plans 93 Action Step 7 Design Your Company: How Will You Hire And Organize Your Workforce? 96 Structuring Your Company 96 Product Organization 97 Geographical Organization 97 Functional Organization 98 Matrix Organization 99 Hybrid Organization 99 Means Of Control 99 Human Resource Management 103 Legal Structures 105 Matching The Legal Structure With Your Investors 106 Franchises 107 Action Step 8 Target Your Funding Sources: Where Will You Find Your Financing? 111 Potential Sources Of Financing 115 How Banks Decide On Loans 119 Action Step 9 Explain Your Financial Data: How Will You Convince Others To Invest In Your Endeavor? 121 The Essential Financial Statements 125 The Six Key Financial Assumptions 128 How To Create Statements 131 Financial Statements For Lightning Larry’s, Inc. 139 Action Step 10 Use The RMA Data: Check Your Answers Against The Answer Key Contents ix 140 Working With The RMA Data 143 The Answer Key Revealed 146 It Really Is That Simple 148 RMA Data Pages – Retail Florists 153 Part III Putting It Into Action 155 What A Business Plan Should look Like 156 The Physical Qualities 159 The Actual Layout 167 Have Outsiders Read It 168 How Long Should It Take Me? 169 How To Create A Time Line 170 The Primary Components 172 Examples Of Time Lines 177 Demonstrate That You Can Manage Contradictions 177 Keep It Simple…Yet Detailed 179 Focus On Growth…Even In Mature Industries 181 Reassure Investors…Even With Competition All Around 182 Commit To Your Plan…But Be Willing To Pursue Other Good Opportunities 185 Present Yourself In The Best Light 188 The Text Of Your Business Plan 190 Your Résumé