Private Communications Corporation's sample business plan
私人通讯公司的商业计划样本
Market Analysis市场分析
Market definition市场定义
PCC competes in the arenas of online and Internet communications that facilitate the creation of personal relationships and/or allow for interactive communication between users. With proprietary on-line services, these arenas might include chat rooms, bulletin boards, and e-mail. On the Internet, they include Internet Relay Chat, e-mail, and various Web sites. The WWW sites of particular interest include those dedicated to real-time chat,
those that support chat as an additional feature of the site, and those that serve to create online matches between users.
Total market size总市场规模
Whereas the Web was essentially a novelty in the consumer marketplace just a year ago, the penetration of the Web during the last 12 months has been extraordinary. Although estimates vary, most authorities agree that the market consists of between 15 and 35 million Internet users. Where these users go, what they look for, and how long they spend on the Web are open questions that no one has yet been able to satisfactorily answer.
Whatever the exact numbers and habits may be, there is almost unanimous consensus that the Internet is here to stay, and that the "cyberspace" it harbors will become an integral part of modern day communications and social interactions as we move into the 21st century.
Proprietary online service usage专有在线服务使用
While there is considerable variance in the estimated numbers of Internet users, usage of proprietary on-line services is more widely known through posted subscribership.
Currently, the combined customer base of America Online, CompuServe and The Microsoft Network, the three largest OSPs, is in excess of 12 million. As for actual usage, AOL's may be fairly typical of the other services—40 million hours per month generated by its over eight million customers. All three OSPs offer proprietary content available only to subscribers, as well as complete access to the World Wide Web.
Target Segment of the Market目标市场
The initial target for PCC's Product are users of online chat rooms and dating match services. These consumers share the desire to communicate with new acquaintances, and appreciate being able to remain anonymous and "selectively reachable" unless or until they feel the need to raise the level of intimacy.
Market need市场需求
By working longer hours, marrying later in life, and frequently moving to new locations, people have found it more difficult to build local social networks in their communities. At the same time, the Internet has made a virtual community of the entire world itself, so that people from different countries and cultures can now find and enjoy relationships with others who share their interests. Chat room discussions, computerized bulletin board postings, and online personal ads and matching services are all utilized as a method to
meet people and build relationships. And yet, to move the relationship to a more personal and intimate level, most people still feel the need to step away from the new technology and move their relationship to an old technology—the telephone. Taking that step, however, currently requires one party to abandon one of the most striking and comfortable features of the Internet—anonymity.
As the consumers' embrace of the Internet and newly developed telecommunications media has grown, so too have their concerns over privacy and confidentiality. The Internet has made accessible powerful databases that contain some of the most private information about individuals. With just a phone number, even a lay person can learn volumes of personal data about somebody, while malicious hackers or stalkers can arm themselves with enough information to become extremely threatening or dangerous.
Estimated segment size估计市场份额大小
The market opportunity for PCC's communication services depends heavily on how one estimates current Internet and on-line services usage in general, and the use of chat room and dating match services in particular. AOL estimates that 40% of its users visit its proprietary online chat rooms, a number that is likely similar for the other major services.
A conservative estimate of the non-OSP Internet users who access chat rooms or utilize dating services is 10%. This yields a potential target market of 4.8 million 0SP users, and 2.3 million ISP users (using a conservative 35 million Internet users minus the 12 million OSP users) for a total of 7.1 million target customers. With the current growth of Internet usage estimated at 50% per year, this number will reach over 20 million by 2000.
Furthermore, chat seems to be growing even faster than the Internet as a whole, as sites institute chat rooms as a way to create a "community" of regular visitors. Even such commercial sites as Budweiser have recently added chat rooms as a way to draw visitors.
One analyst at Montgomery Securities estimates that by 2000, there will be 7.9 billion hours of online chat (Red Herring, July 1996). Dating services are also growing, with the largest, Match.com, claiming 100,000 members. Assuming they have 50% of the market, this segment alone currently has 200,000 highly qualified target customers.
Key Idea: Purpose of the marketing plan
关键理念：营销计划的目的
Key Idea 
You've examined the business environment. You've studied the competition. You know  your target market. You've discovered the opportunity. You have a product or service to sell. How do you bring your product and your market together? How can you encourage customers to buy from you? Typically, the most effective way is to develop, act on, and monitor a marketing plan. The marketing plan describes how you intend to sell your product or service, how you will motivate the customer to buy. The purpose of developing and
including the marketing plan in the business plan is twofold:
• The process of designing a coherent marketing plan that is an integral part of the overall business plan will help you and your team pretest ideas, explore options, and  determine effective strategies for the company's success.
• The result of a well-conceived and coherent marketing plan will convince your
business plan reader of your own competency.
The plan should reflect the mission and basic business philosophy of the company. It should also incorporate and use the results of your market research.
What separates successfully implemented ideas from just good ideas that go nowhere? 
Develop the marketing plan制定营销计划
To ensure that your marketing plan is coherent, that it pulls together all the elements of the business opportunity and philosophy, begin the process of developing your marketing plan by looking at the key factors that affect the marketing of your product or service.
• Concentrate on the opportunity—the customer problem that your product or service is solving. You may be fixing a weakness in the competitors' services by offering customized service or guarantees on products that aren't available elsewhere. You may have discovered how to make low-fat foods taste like high-fat foods. As you develop the specific marketing strategies, keep in mind the opportunity in terms of the customer.
• Review your marketing objectives. At what level of sales will you reach the breakeven point? When do you anticipate reaching that point? How long will it take to reach the next sales milestone? For example, your objectives might be to reach the breakeven in six months from the time of initial sales, to achieve a growth rate for sales of 10% per year, and to capture 10% of the target market in five years. What strategies can you design to fulfill these objectives?
• Focus on the buying behavior of the customer. When, where, why, and how do they buy this product or service? What needs are being fulfilled for them? What factors are important to the consumer in choosing this type of product or service (for example, price, quality, value, benefits, etc.)? For a busy customer, service and time savings may be more important than the lowest price.
• Determine the value of each customer to your business. Weighing the cost to acquire a customer with the long-term value of that customer helps you decide on the appropriate marketing strategies to use. For example, if each customer is worth winning and keeping, then the more expensive marketing strategies of relationship-oriented direct sales might be worth the cost. If, on the other hand, you are trying to reach a wide range of customers, then less expensive strategies, such as mass mailings of sales promotions, can be more effective. To determine the value of a customer, consider the following questions:
    ◦ Are you building an annuity business, such as magazine subscriptions
       that  continue for years, or does your business provide a quick, 
       one-time service?
    ◦ Do customers buy your product often as a consumable or 
       inexpensive entertainment, or is your product durable, only 
       purchased occasionally during a lifetime?
    ◦ Do you need to build brand loyalty, or is your product/service the only 
       one that will fill  the customers' needs?
    ◦ Is the process of buying the product/service relationship-oriented,   
        requiring  direct sales, or is it transaction-oriented and easily adapted 
        to direct mail marketing or online selling?
Develop marketing strategy mix The marketing strategies describe the way your marketing objectives will be achieved. Your strategic choices define how you will make the target market aware of your product, how you will motivate the customer to purchase your product, how you will build customer loyalty for your product, and how you will achieve the projected return on sales. Your marketing strategies determine the way you position your product in the market relative to your competitors' products.
The strategies, or marketing mix, will be the most effective combination of the classic four Ps of marketing—product, price, place, and promotion—for your business. These four components of a marketing plan are:
• Product/service. Make sure that your product or service is consistent with both your company philosophy and the target market needs. For example, if the company philosophy is to provide the highest quality accounting services, then those services must be the most accurate and comprehensive available to wealthy customers who require accurate and comprehensive services for their financial portfolios.
• Price. At what price point will you offer your product or service? Will there be an established price, or will it be tiered or variable depending on consumer demand? Your pricing decisions will depend, on the one hand, on the price sensitivity of your market and the market's perceived value of your product. On the other hand, total costs and required profit margin also affect the price of the product. Pricing is difficult to predict. You will have a 
range of prices available determined by costs and expected contribution margins, but within
that range, price adjustments can occur in response to consumer demand.
• Place. The term place indicates the physical movement of products—how the product will be transported from the plant to the end user. What channels of distribution will be used?
How will the product be merchandised? In what kind of retail store or location? These decisions depend on the type of product, the costs of distribution, the customer needs or demands, and they should be made in conjunction with other operating and marketing considerations.
• Promotion. Promotion involves creating consumer awareness of the product. It is the communication function of marketing, communicating with the customer about the benefits of the products. Promotion includes activities such as these:
    ◦ Word of mouth. This selling tool is the cheapest and most effective kind 
      of promotion—satisfied customers spreading the word. However, it is
      unpredictable and difficult to control. If the word is positive, then your  
      sales will increase, but a negative message is difficult to overcome.
    ◦ Sales promotion. In this case, you control the message by spreading the 
        word to the consumer through coupons, samples, and demonstrations. 
         A relatively low-cost program, sales promotion can reach a wide audience.
    ◦ Direct sales. Direct selling is more expensive than the general approach of 
       sales promotions, but it is an important tool for developing relationships 
        with customers  while motivating them to buy. The tactics used in direct 
        sales range from individual sales calls to mass telemarketing.
     ◦ Advertising. Advertising influences the consumer through paid persuasive
         messages delivered to the target market. This sales approach can be  
          expensive, but the payoff is successfully building a brand image and 
            brand loyalty.
Depending on your resources and whom you are trying to reach, select the interrelated mix of marketing strategies appropriate for your product or service and your target market.
Your marketing plan should fit with all the other pieces of the business plan, and it should show how the specific marketing objectives will be achieved. The marketing plan should also be a dynamic plan. Use it to monitor progress and modify it as needed to reflect changing circumstances.
Private Communications Corporation's sample business plan
私人通讯公司的商业计划样本
Marketing Plan营销计划
PCC's marketing plan is based upon the recognition that the customer may not always be the end user. The end user is the individual who is using the Internet or OSP to forge relationships that he or she wishes to take to a more personal level, but who is still concerned about anonymity or security. The customer, however, in some cases is the site or organization that provides the means for the forging of the end user's relationship. By encouraging the promotion of the Product by ISPs, OSPs, chat room sites, and online dating services, PCC gains access to their customers, who represent highly qualified prospects for the Product. This gives the Company two benefits: a less expensive and more efficient way to reach the end user; and a lock on the primary distribution channels that will help erect barriers to entry.
Positioning定位
To site partners, the Company is positioning the product as a value-added service for their members that can also significantly enhance their revenue stream. With ad revenue still a far cry from that of traditional media, and with the cutthroat pricing of the OSPs and ISPs, many service and content providers are hungry for additional revenue, and are actively seeking partners that can provide it.
To end users, the Company is positioning the Product as a means to preserve one's anonymity, and thus guarantee security, while furthering relationships with new acquaintances encountered on-line. The Product facilitates these relationships without the pressure of a premature commitment, and without requiring the user to make a snap decision about the risk of revealing personal information to a stranger. It also gives  parents a safe way to allow their children to engage in the same type of off-line personal relationships with new friends made online, without the risk of encountering adults with questionable intentions.
Pricing定价
The product is priced at only a moderate premium over standard long-distance telephone service, with a per-minute cost of between $.59 and $.79 incurred by the receiver of the call. This price is low enough that the customer should not feel restrained to release his or her number to prospective callers, and will not constantly be "watching the clock" while using the service.
There are monthly subscription plans that offer free blocks of time, discounted calls, and free access to premium features. Monthly plans will encourage regular usage of the service, as customers are likely to use the service at least enough to consume their "free" time. PCC is pursuing a value pricing strategy, because it is the best way to create a community of long-term users who will incorporate the service into their daily lives instead of viewing and using it as a luxury entertainment product.
Remuneration to partners may take the form of revenue sharing, payment of a bounty for new subscribers, or guaranteed levels of paid advertising.
Customer value proposition客户价值主张
PCC is offering customers a superior benefit at a low cost. With the Company's service, customers can receive phone calls at their preferred location, on a schedule of their own convenience, with the flexibility to change or cancel their number at any time, and remain completely anonymous—all for nearly the same cost as making a standard long-distance telephone call. At the same time, these phone calls fill a need similar to that provided by chat rooms, but offer the additional value of being a more intimate and interactive form of communication. At the other end of the live/interactive spectrum, existing telephone services such as psychic talk and romance chat are significantly more expensive to use, often costing over $3 per minute.
Strategic site and online service provider partners realize value by incurring a significant revenue stream at no, or very little, direct cost. Additionally, because site users will recognize value in the Product, hosting and promoting the Product becomes a means of differentiation for the site or service provider.
Distribution分布
The Product is targeted at Internet and online users. Therefore the primary means of distribution will be via the directReach™ on-line informational and registration site. Users will be drawn to the site via banners and partner links. Other methods of reaching end users may include offering the Product in conjunction with a site's primary service, so that customers would, for example, obtain a directReach™ account when they establish a dating account or open an Internet access account with an ISP.
Customers are also able to join the service through a toll-free automated phone line. People wary of paying by credit card over the Internet could use this method, as could those drawn to the service via non-Internet means. In addition, all people calling a directReach™ member will be given the option of learning about the service, and becoming a member themselves, at the time they place their call.
Advertising and promotion广告和促销
Advertising and promotion will be a three-phase process, involving public relations, Web and print advertising, partner acquisition, and brand imaging. Outside advertising and PR agencies will be utilized as much as possible in order to further ensure the creation and presentation of an overall coherent and professional message.
Phase I Phase I is expected to last 10 to 12 weeks and involves acquisition of customers through print and Web advertising. Web banner ads will be placed on sites that offer chat services, with a click-through link to the directReach™ Web site. The directReach™ home page will present information about the service features, usage, and benefits, as well as an online registration form. Ads and site copy will strive to educate readers on the importance of maintaining personal security by not giving out phone numbers to strangers and will stress the three key benefits of the service. Moreover, the Internet ads will extol the excitement gained by moving an online chat to an off-line phone call. PR is also a major emphasis during Phase I, with special attention placed on targeting Internet publications and mainstream press with information about PCC's unique service.Press kits with promotional material and free trials of the Product will be sent to key reviewers and writers.
Phase II Phase II will begin concurrently with Phase I and involves acquisition of strategic partners. Primary targets are those establishments that already have relationships with the target user: OSPs, ISPs, and sites hosting chat rooms and dating match services.Since potential partners may want proof of the concept before engaging in an agreement with PCC, Phase I must successfully demonstrate the reliability of the Product.
Phase III Phase III begins immediately after the successful implementation of Phases I and II and involves an emphasis on the branding of the service, through newspaper and Internet advertising, billboard displays, and additional generation of media coverage. This type of promotion will be ongoing, with the primary purpose of strengthening the brand in order to build a solid customer base and deter the entrance of potential competitors. Significant resources will also be dedicated to building customer loyalty, through live operator service with well-trained and professional customer service representatives;
promotions and incentives for frequent users; and new and customized calling services. It is important that the brand consistently conveys a message of legitimacy and professionalism, from advertising to customer service to product reliability.
Operations plan overview运营计划概述
The operations plan gives an overview of the flow of the daily activities of the business and the strategies that support them. There should be enough information to show the reader that you understand and have planned for the daily execution of the business, but the plan should not be too technical or so comprehensive that the reader is either unable or unwilling to plow through it.
The primary purpose of the operations plan section is to show that you are focused on the critical operating factors that will make the business a success.
Operations is the work of the business; it is the transforming of the ideas or the raw materials into products or services to be sold to the customer. The operations plan has to be as dynamic as the process of production itself; to continue as a vital guide for the action of the company, this internal plan can never lie quietly on some dusty shelf. It should be developed and used and modified as often as needed.
Breakeven point盈亏平衡点
The operations section of the business plan should give the reader the critical success factors affecting how the company creates value for the stakeholders of the business. The most important of these factors is the breakeven point; that is, the point at which unit sales equal operating costs. The breakeven point determines how many units of the product must be sold to break even, to cover the cost of production, so that the following units will produce a profit. It identifies the point at which the business will begin to make money.
In this example, the breakeven point is at 150 units sold. After that point, the business will have more revenues than operating costs, a major step toward profitability.
Key success factors关键成功因素
Other key success factors might include:
• Advantages in sourcing materials. You may have acquired the rights to inexpensive raw materials or discovered a cheaper way of transporting the goods to your facilities. For example, you might have made a deal with the United States Post Office or the local phone company to deliver your message to every household in a certain area.
• Technological innovations in the manufacturing or distribution process.
Technological improvements in manufacturing or in transferring information and data or in organizing distribution systems can lower costs or increase productivity. For example, you may be able to achieve efficient distribution through computerized warehouses communicating with a fleet of delivery trucks.
• A favorable geographical location. Depending on the type of business, location can mean success or failure—proximity to customers, competitors, suppliers, labor supply may be the critical variables. For example, a good location for a food processing plant would be near the growers who raise the crops, and a good location for a computer games arcade might be near a local high school or college.
• Access to skilled employees or inexpensive labor. Can you offer recent college graduates internships that would provide the company with inexpensive skilled labor and a pool of experienced employees in the future? Can you provide in-house training to ensure the skilled work force you need? Can you draw from a large labor pool willing to accept lower wages?
• An effective pricing strategy. You may be able to adjust pricing to the needs of individual market segments or match high prices with unique service features. With the technological efficiencies gained in production, you could offer lower prices and still maintain profitable margins.
Describe each member描述每个成员
I invest in people, not ideas.
–Arthur Rock, venture capitalist
The importance of the team团队的重要性
Every investor knows that it's the management team, the people, that make a business work. You and your team are the glue that brings the pieces together into a finely formed, dynamic unit.
Without the right people, no unique opportunity will move from concept to reality. So, the management summary is an important section of the business plan—one that many of your readers will turn to first.
Describe each member of the management team
描述管理团队的每个成员
The reviewing committee members may already have some acquaintance with you, and, for all types of readers, your résumés will be included in an attachment to the business plan. But here you should answer the more pointed questions those readers—whether they be potential investors, lenders, or internal reviewers—will ask:
• Where have they worked? What has been their career path, inside the company or beyond? Readers want to know how much experience team members have in the company, in the industry—or related industries—and who their contacts are. Do they have experience that relates directly to this proposed business?
• What have they accomplished? What are their achievements? Do they have a record of successfully completing projects? In other words, have they shown that they can take an idea and produce results?
• What is their reputation in the business community? Are they known to be idea people who rarely settle down to finish one project before being diverted by another? Do they have a reputation for integrity, living up to their claims? Are they known to be hard working and
dedicated to their work?
• Are they realistic about the business's chances for success? Are they capable of recognizing risks and responding to the problems that will inevitably occur? Are their critical assumptions viable? Who on the team will be robust in his or her vision? Who will give the word of caution?
• What knowledge, skills, and special abilities do they bring to the business? Do they have a balanced blend of experience, a range of skills, a depth of knowledge? Is the team complete, or do they need to bring someone else in with additional skills or attributes?
• How committed are they to this venture? Will they stick with it during the rough times? Have they worked together before on projects? A newly formed collection of people that hasn't been tested as a team is generally considered a more risky proposition than a team that has worked together in the past, a team that has overcome internal conflicts and external problems to attain a defined goal.
• What are the motivations of each member of the team? What do they hope to achieve? Is each member of the team there by chance or by choice? If they choose to be on board, then what benefits do they hope for? If they are simply assigned members, what motivation do they have to participate and strive for team success?
Key Idea: Describe the team关键理念：描述团队
Key Idea
The management summary is your chance to let the reader know how each of the team members will work to form an effective and successful team, which, in turn, will result in a successful and profitable business. Show how this is the right team to manage the risks and to capitalize on the opportunities by affirming the team's strengths. Describe how the skills, knowledge, and experience of the individual team members balance the team as a whole.
In this section you can also acknowledge and address the team's perceived weaknesses.
Recognize the management gaps that may exist, such as technical skills or marketing experience. Let the reader know how you plan to deal with these weaknesses or gaps by training a team member, hiring a new person with the needed skills, or contracting the services of a consulting firm.
Finally, you'll want to express the team's management philosophy. Develop a management philosophy that provides guidelines for the behavior and decision-making process of each team member. A clear statement of management philosophy offers an expression of company values and serves as an example of the team's cohesiveness.
One of your organization's greatest strengths is your management team. Learn how to highlight their experience and philosophy to reinforce your business plan.
Key Idea: Consider a reader's point of view
关键思想：考虑读者的观点
Key Idea
Different readers of your business plan will have different points of view as they approach the financial plan:
• The investment committee member reviewing your proposal wants to know whether the venture can achieve the company's hurdle rate (the minimum rate of return expected of all projects).
• The investor considering buying into the venture wants to know what kind of return on investment the business will achieve.
• The lender deciding whether to lend money wants to know about the borrowing capacity of the company, its ability to service debt.
• Perhaps most important, you need to know whether your financial objectives will be achieved, whether all your planning and efforts are going to pay off in the end. 
The financial plan is a critical section of your business plan because it translates all the other parts of the business— the opportunity, the operating plan, the marketing plan, the management team—into anticipated financial results.
This is where you show your readers the current status and future projections of the company's financial performance. The financial picture you paint here represents your best estimate of the risks involved and the return on investment, the tangible evidence of commercial success.
The financial plan is a critical section of your business plan. Learn the keys to adapting the plan for your specific reader in order to achieve maximum impact.
Capital requirements资本要求
Whether your project is a business expansion or a new venture, the readers of your business plan will want to know what capital investment is required.
How much money do you need to raise, how much do you expect from them, and how do you intend to use the money?
For Private Communications Corporation's financial plan, Laszlo opens by stating the capital requirements—how much money they are seeking—and how the money will be used (for system development, marketing expenses, partner acquisition programs, etc.).
Private Communications Corporation's sample business plan
私人通讯公司的商业计划样本
Financial Plan财务计划
Capital requirements资本要求
The Company is presently seeking to raise the sum of Two Hundred and Fifty Thousand Dollars ($250,000). Based on current projections, the Company believes that these proceeds, together with Eighty-Four Thousand Dollars ($84,000) the Company has already raised in its initial round of financing, will be sufficient to achieve its business plan.
After the first six months of operation, the Company will be able to fund all operation, marketing, and product development costs internally.
The Company intends to use the $334,000 during the first six months of operation, as shown below:
• $45,000 for system development and programming
• $200,000 for marketing expenses
• $89,000 for working capital to fund future product development, promotion, and partner acquisition programs
Summary financial projections
财务预测摘要
The financial plan portrays a projection of first year sales of $11.74 million, gross margins over 60%, and net margins of approximately 42% before tax. The Company expects to be profitable after the first six months of operation, and remain profitable from that point on.
Other expenses are budgeted as a percentage of revenues based upon similar industry ratios. Given these projected numbers, the Company anticipates being profitable and cash flow positive within six months of Product launch.
Assumptions假设
The financial projections are based upon current industry estimates of Internet and proprietary OSP subscribers, primary and secondary market research data, and estimates of the Product's market penetration and sales growth. More detailed information on the assumptions can be found in the attached statements, which have been prepared for years 1997 through 2001. These statements include projected income statements, balance sheets, and cash flows. See Table A in the Sample Business Plan under Apply/Tools for a detailed breakdown of assumptions.
Revenues include those resulting from registration of new accounts and sales of additional calling minutes. Cost of goods sold, while calculated on a per-minute rate, includes all services associated with buying, selling, and billing the customer for long distance time, as well as all fees and charge-backs associated with credit card billing.
Marketing and sales expenses include costs associated with advertising, PR, and
promotions, as well as those from revenue sharing with strategic partners. The company will not carry any inventory, and will operate with minimal overhead, due to the nature of the business.
Financial Projections财务预测
In this section, you should highlight and explain the importance of the significant figures from the pro forma income statements—revenue, operating profit, operating margin, net income, net margin—over a period of three to five years. State when you expect the company to become profitable.
The pro-forma financial statements are projected statements—what you believe will be the future income. They represent your most honest analysis of the financial progress of the business. The income statement, also know as the profit and loss statement, shows the profit margins. The balance sheet provides a picture of the business's assets, equities, and liabilities at a specific point in time.
In addition to the income statement summary, most of your readers will be concerned with the cash-flow statement. Including a summary of the flow of cash, showing the times of peak need and peak availability, will demonstrate that your plan has accounted for the variability of cash flows.
In the following example, Private Communications Corporation's the cash flow is presented on an annual basis, but you may have to break the analysis down to a quarterly or monthly basis.
Assumptions假设
State your assumptions about the estimated industry and market growth rates. Then give your assumptions about the internal variables of the business, such as the variable and fixed costs,growth rate of sales, cost of capital, and seasonal cash flow fluctuations.
Your assumptions are the underpinning of your financial plan. They should be realistic, within the bounds of industry experience. Include a more detailed set of assumptions as an attachment. Be sure to document your assumptions. Give your sources, evidence, expert opinions, and your own logic for choosing a certain growth rate or cost for distribution.
The financial projections are based upon current industry estimates of Internet and proprietary OSP subscribers, primary and secondary market research data, and estimates of the Product's market penetration and sales growth. More detailed information on the assumptions can be found in the attached statements, which have been prepared for years 1997 through 2001. These statements include projected income statements, balance sheets, and cash flows. See Table A in the Sample Business Plan under Apply/Tools for a detailed breakdown of assumptions.
Revenues include those resulting from registration of new accounts and sales of additional calling minutes. Cost of goods sold, while calculated on a per-minute rate, includes all services associated with buying, selling, and billing the customer for long distance time, as well as all fees and charge-backs associated with credit card billing.
Marketing and sales expenses include costs associated with advertising, PR, and
promotions, as well as those from revenue sharing with strategic partners. The company will not carry any inventory, and will operate with minimal overhead, due to the nature of the business.
Breakeven analysis for sales
销售盈亏平衡分析
The breakeven point is the time when the business is neither losing nor gaining money. This is the pivotal moment when the business begins to be profitable. Will it take six months or two years for the business venture to reach its breakeven? The reader of your business plan will want to know when and at what level of sales the breakeven point will occur.
The breakeven point for sales is calculated as follows:
where fixed costs are those costs that don't change as sales go up or down (for example, rental of facilities) and variable costs vary in proportion to sales (for example, raw materials). This calculation could be included in the attachments.
Probability of risk/reward
风险/回报概率
Risk is the uncertainty of the future. Even the most careful planning and judicious assumptions cannot predict what will happen tomorrow or next month or next year. Planning at all levels— understanding the business environment, developing the operations plan and the marketing plan—is the best way to reduce a venture's level of exposure to risk, but risk can never be
completely eliminated.
There is real risk in any venture—the risk of failure and the possibility of reward. Your readers will want to know your assessment of the level of risk. They want to know how you plan to avoid the risk of failure and how you plan to increase the chances for success. A risk/reward probability graph can quickly show your readers the likelihood of failure, of achieving the predicted levels of return, and the chance of phenomenal success.
The risk/reward graph shows investors the probability of possible outcomes. The risk of losing everything is very low, as is the chance of a very high return. The most likely outcome is indicated by the area under the bell curve, ranging from an acceptable (perhaps) return of 15% to the most likely return of 30% and a possible 45% rate of return. Depending on the fundamental riskiness of
the venture (drilling for oil is riskier than opening a retail clothes store), the investor will require different rates of return to balance the possibility of loss (an investor investing in oil drilling would expect a high return to compensate for the risk of loss).
Financial returns财务回报
Investors also want to know the expected financial returns—typically either the return on investment (ROI) or the internal rate of return (IRR). For an internal project, the financial return should exceed the company's hurdle rate—the minimum rate of return expected of all projects. For a risky start-up business, investors generally require a higher return to compensate for the higher level of risk of loss.
To calculate the ROI, divide net operating income by total investments. For example, $45,000/ $300,000 = 0.15 or 15% ROI. The higher the ROI, the more efficient the company is in using its capital to produce a profit.
To calculate an IRR of 50%—the return an investor might expect for a risky investment—use the following formula: FV = Investment x (1+0.5)n  where FV is future value, investment is the dollar amount of the investment, and n is the number of years to receive the return.
The complete set of financial information—assumptions, income statements, cash-flow statements, balance sheets, statement of sources and uses—should be included in the attachments.
Overview概述
This section provides interactive exercises so you can practice what you've learned. These exercises are self-checks only; your answers will not be used to evaluate your performance in the topic.
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