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Homework answers / question archive / Chad Frank and Kyle Carson both in their 20's worked for one of the largest package delivery services in the world but their jobs on the package-sorting line were just jobs Chad and Kyle wanted more from their work than their current jobs could offer that what led them to buy a local auto detailing business, Precision Auto Detailing they could work together their regular job from 6pm to 10 pm and devote the early part of the day to running their own company they invested $6,000 in the business that just bought them some tools and equipment (most of it old) a lease on a building in a high traffic location and a small base of established customers some of who were local car dealers
Chad Frank and Kyle Carson both in their 20's worked for one of the largest package delivery services in the world but their jobs on the package-sorting line were just jobs Chad and Kyle wanted more from their work than their current jobs could offer that what led them to buy a local auto detailing business, Precision Auto Detailing they could work together their regular job from 6pm to 10 pm and devote the early part of the day to running their own company they invested $6,000 in the business that just bought them some tools and equipment (most of it old) a lease on a building in a high traffic location and a small base of established customers some of who were local car dealers. Chad and Kyle kept both the part-time workers the other owner hired and began making sales calls to the other car dealers in the area to try to earn their business They offered pick-up and delivery of the cars they cleaned and they always inspected the cars before they were returned to their owners their strategy was to give top quality service and convenience for a fair price their prices ranged from $100 for basic detailing to $250 for the top of the line specialty cleaning which resembled an auto restoration job within 8 months the sale were growing rapidly due to the personal selling efforts of the new owners and the quality of the work of the company gave to its customers Chad and Kyle knew they had to buy new equipment and after the customer inquiries they were thinking of buying the equipment to offer a spray-on truck bed liner service the bedliner eqiupment is $30,000 initially but retail prices to customers for this service would start at $350 and up depending on the size of the truck and options selected the business is profitable since they bought it but they have been giving all the profits back in the company they retained earnings but not enough to sustain the fast growth that the company is getting they disgusted at a family gathering that they need money but do not know where to go for it or what they need to get it they thought of going to a bank for a loan and they have never did this before someone suggested a business plan because no bank will give a loan without a business plan so you send them an email explain why they need business plan, outline the elements you would recommend for them to include in their plan, what do bankers, lenders, or investors want to see in a business plan, what advice can you give them when they are ready to present their plan.
please see the attached file.
Explain why Kyle and Chad need a business plan.
A business plan is a summary of how a business owner, manager, or entrepreneur intends to organize an entrepreneurial endeavor and implement activities necessary and sufficient for the venture to succeed. It is a written explanation of the company's business model.
Business plans are used internally for management and planning and are also used to convince outsiders such as banks or venture capitalists to invest money into a venture.
Prepare an outline of the elements you would recommend these two young entrepreneurs include in their business plan.
Content of a business plan
A business plan can be seen as a collection of sub-plans including a marketing plan, financial plan, production plan, and human resource plan.
The business plan has many forms. There is however a format that is typical:
* Executive summary
o explains the basic business model
o gives rationale for the strategy
1. Profile of company
2. Details regarding Management and performance
a. Number of employees
b. Annual sales figures
c. Location of facilities
d. Form of ownership including
3. background of key personnel including
4. Marketing Strategy
5. Production and manufacturing planning
6. Financial Planning
7. Human resources Planning
8. Evaluation and Control
http://en.wikipedia.org/wiki/Business_plan as retrieved on 19 Nov 2006 10:03:47 GMT.
What do bankers, other lenders, or investors want to see in a business plan?
Bankers, Lenders and other investors will look for:
* How the company will be managed and owned
* Product(s) and/or service(s) you will offer
* Materials and resources you'll need
* Potential strengths and weaknesses of your company
* Your company's short and long-term plans
* The market and industry into which your business is directed (including suppliers, customers, competitors, threats, opportunities)
* Marketing, sales and production plans
* Operating costs
* Amount, sources and types of financing it may require, including personal resources you may need to tap into
 Sales and cash flow forecasts
 Forecast on profitability, Net present value and Internal rate of return.
(www.b-plans.com)
What advice would you offer Kyle and Chad when they are ready to present their business plan to a banker?
Business plan is a document that will convincingly demonstrate that your business can sell enough of your products or services to make a satisfactory profit and be attractive to potential lenders. As a selling document, the business plan takes on a new meaning.
First.
The most important thing that the business plan must do is sell you on the business.
Second
The business plan must sell others on the business. A business plan is meant to sell yourself to all the stakeholders.
Third
The business plan gives you confidence and control. The plan helps you identify potential problems and opportunities before it is too late to do anything about them.
Fourth
Bankers are mostly interested in getting their loans repaid. Accordingly they want to be certain that one will be able to keep up a loan repayment schedule. Thu one has to show the cash flow schedule.
