Edward G. Rogoff Co-Author of “The Entrepreneurial Conversation” Foreword by Jeff Bezos Founder & CEO, Amazon.com Bankable Business Plans by Edward G. Rogoff • Second Edition 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 e Risk Management Association ©2006, reprinted with permission of e 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 e names of all companies or products mentioned are used for identification purposes only and may be trademarks or registered trademarks of their respective owners. e 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. is 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 A ction 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 Y our 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 A ction 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 D emonstrate 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 [...]... a test ahead of time Bankable Business Plans are for Starting, Growing, or Buying a Business Whether you’re starting a new business, growing an established business, or buying an existing business, you need to create a strong and bankable business plan Even though the circumstances may vary and certain strategies and funding sources may be more effective than others, your basic business plan will still... spot a formula plan Your business concept, and the work you accomplish to bring it to life, will make your plan compelling, and motivate Part I others to support your efforts Bankable Business Plans will show you how to create a unique, exciting, convincing, and thorough description of your proposed venture Bankable Business Plans Follow Good Business Thinking Creating a business is a process that... this book is about creating a unique, effective business plan based on your enthusiasm for your venture and your willingness to The Power Of A Bankable Business Plan learn about your industry The only real skills you need to create a bankable business plan are your passion and your perseverance in learning how to do it effectively Bankable Business Plans Focus On Financial Issues Most other books... satisfaction to you A bankable business plan is distinguished by certain characteristics: it serves a specific purpose, it doesn’t follow formulas, it does follow good business thinking, it can be created regardless of your skills, it focuses on financial issues, and it can be used for starting, growing or buying a business Bankable Business Plans Serve A Specific Purpose A good business plan is simply... Bankable Business Plans 195 Make A Great In-person Presentation 196 Context 197 Content 199 Code 203 Outlines And A Sample Business Plan 204 Outline For A Simple Business Plan 206 Outline For A Complex Business Plan 223 S & J Advertising Business Plan 237 RMA Data – Advertising Agencies 243 Resources 251 Index This... distributors • Create an operational template for the successful management of your business Most books and programs about creating business plans skip this step of defining the plan’s main purpose, which results in plans that don’t address the specific concerns of potential lenders, investors, or partners Bankable Business Plans will enable you to define and accomplish this primary objective, while expressing... central purpose: to guide you through the process of creating a bankable business plan, so you can obtain the resources you need to start, build, or buy a business My extensive experience in writing my own successful business plans, helping other entrepreneurs create effective plans, and advising funding sources on how to evaluate submitted plans, has taught me that a strong plan is built on a single... from any other business plan—and it will be yours alone Bankable Business Plans Can Be Created Regardless of Your Skills Many books and software packages assume that their readers are highly computer literate, with extensive knowledge of Windows, word processing, and spreadsheet programs These are excellent skills to have and can save you tremendous amounts of time, but Bankable Business Plans is written... partners xx Bankable Business Plans I have personally raised more than $100 million from angels, banks, and venture capitalists to finance my own enterprises by writing bankable business plans that demonstrated how my ventures met the needs of my funding sources This book will enable you to greatly increase your chances for success In these pages, I will also impart my expertise as a business academician... even if they’re uncertain about the next step My job is to channel their passions into that next step: writing a strong business plan And that’s exactly what I am doing for you in this book Bankable Business Plans will help you create not only a strong business plan, but a bankable business plan–one that attracts financial support by meeting the needs of bankers, partners, and investors By addressing . Conversation” Foreword by Jeff Bezos Founder & CEO, Amazon.com Bankable Business Plans by Edward G. Rogoff • Second Edition Bankable Business Plans Second Edition Edward G. Rogoff Foreword By Jeff Bezos Founder. 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. The Text Of Your Business Plan 190 Your Résumé x Bankable Business Plans 195 Make A Great In-person Presentation 196 Context 197 Content 199 Code 203 Outlines And A Sample Business Plan