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By Sharon Monahan, President, The Business Guide Incorporated

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Hello and thank you for purchasing this e-book. My name is Sharon Monahan. I am president of The Business Guide Incorporated, a business consultancy firm specializing in helping our clients obtain government funding. In addition to our consultancy service, we also operate The Business Guide to Government Programs. This is a website dedicated to monitoring federal and provincial financial assistance programs for new and existing businesses. If you ordered this book from our website, you already know this, if not, you can find the site at www.businessguide.net. Upon graduating from university, I was employed with the federal government for 14 years from 1983 to 1997. During that time as a program officer and regional program consultant, I was personally involved in the assessment and approval of millions of dollars in non-repayable contributions to program applicants. Although I found this rewarding, I decided to try my hand in the private sector. I resigned my position with Human Resources Development Canada, applied for and received government funding to start “The Business Guide Incorporated”. Since I joined the private sector, I have helped numerous clients obtain government funding. There are those however who either can’t afford or do not want the assistance of a professional consultant. I therefore decided to put this e-book together as a kind of doit-yourself kit. It is based on my years of experience in the public service and more recently in the private sector. In the coming pages you will find information not available elsewhere. If you adhere to it, it will increase your chances of making a successful application for funding. I can’t however guarantee that you will receive funding as only the departments/agencies to which you apply can make that decision. Be wary of anyone that does offer such a guarantee. This e-book is divided into three parts. The first part examines how to apply for funding, the second part is an application assessment checklist and the third is a business plan template. Once you have read through and understood the first section, complete the assessment checklist. It is the same criterion that is used by government officials in many departments/agencies and it will give you an idea of which part(s) of your proposal may need more work. It is like having your proposal assessed before you submit it for funding. When you have made the necessary adjustments and are ready to apply, you will need to know which funding programs are available. You should then consider subscribing to our website at www.businessguide.net. When you do, the price of this e-book will be deducted from the cost of your subscription. 2 This material is copyrighted. It may be printed, by the purchaser, for their own use. Any other reproduction or distribution without the express written consent of The Business Guide Incorporated, is strictly prohibited. © The Business Guide Incorporated


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Finally when you identify the program(s) best suited to your needs and if required as part of the application process, you can use part three of this e-book, the business plan template to complete your proposal. If at any time during or after you’ve read this e-book, you have a question, just email me at president@businessguide.net I or one of my staff will get back to you as soon as possible. In the interim, I wish you all the best in your business endeavors. Enjoy.

Sharon Monahan President, The Business Guide Incorporated

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Table of Contents Part One .............................................................................................................................. 5 Introduction..................................................................................................................... 5 First Impressions Count .................................................................................................. 6 The Assessment Criteria ................................................................................................. 7 Competitive Impact......................................................................................................... 8 Net Economic Benefit..................................................................................................... 8 Economic Viability ......................................................................................................... 9 Sustainable Employment .............................................................................................. 10 Return on Investment.................................................................................................... 10 Priority Sectors.............................................................................................................. 11 Partnerships................................................................................................................... 11 Know Your Environment.............................................................................................. 11 Political Environment ............................................................................................... 11 Bureaucratic Environment ........................................................................................ 12 Part Two............................................................................................................................ 13 Proposal Assessment Checklist..................................................................................... 13 Ownership/Management ........................................................................................... 13 Competitive Impact / Net Economic Benefit............................................................ 14 Economic Viability ................................................................................................... 14 Return on Investment................................................................................................ 14 Priority Sector ........................................................................................................... 15 Partnerships............................................................................................................... 15 Political Support........................................................................................................ 15 Total Points ............................................................................................................... 16 Part Three.......................................................................................................................... 17 Business Plan Template ................................................................................................ 17

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Part One Introduction Whether you agree or not, Canadian governments, at all levels, are actively involved in the business community. Each year they award hundreds of millions of dollars to small, medium and large enterprises in the hopes of stimulating local economies, fostering economic development and creating employment. How successful they have been is anyone’s guess. Governments have never conducted a thorough cost-benefit analysis of their labor market interventions. It is reasonably safe to assume however that they have had their share of successes as well as those they would prefer to forget. Among the private sector there generally seems to be two schools of thought on this subject and they are indeed at opposite ends of the spectrum. There are those who take great pride in proclaiming that they have accomplished everything on their own with no help from government. Others are more than willing to use government money repeatedly to finance their ventures. These two groups do not have to be mutually exclusive. One may take great pride in his or her accomplishments and avail of government financing to bring their plans to fruition. I have spent fourteen years with the federal government, in the realm of economic development. I have developed, assessed and contracted more funding proposals than I sometimes care to remember. As a taxpayer, only you may decide whether you agree with the principle of government involvement in private industry. As a businessperson, however, let me tell you that you are missing a tremendous opportunity if you chose not to take advantage of the literally hundreds of millions of dollars made available by governments, to the business community, each year. I will not be trying to convince you why government should or should not be involved in financing private sector initiatives. Trust me. As long as there are geographic disparities in employment levels, industry downturns and generally high unemployment levels, governments will continue to be involved in economic development. As a businessperson this can spell opportunity for you and your business. This e-book will demonstrate how you can make the most of this opportunity. You’ll discover how you can get the money you need to start that business you’ve always wanted or to proceed with that planned expansion.

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Based on my years of experience in the industry, I have ascertained that most people believe getting government funding is a three-step process: 1. Finding out what programs are available and what costs they cover. 2. Determining the eligibility criteria; and 3. Submitting the proposal.

Step one alone can be a nightmare because there are so many ever changing programs, that one can never be sure if they are overlooking the one program that could make all the difference. Researching them can be time consuming and confusing as the information is usually fragmented and often outdated. That’s one of the reasons why I developed "The Business Guide to Government Programs" website. Steps two and three are obvious and necessary if you hope to obtain the money you need. What is not so obvious is that there is an important step missing here, the step that will have the most influence on whether or not your funding proposal is successful. It is "Determining the Assessment Criteria". The assessment criteria is what the economic development officer (each department and agency seems to have a different name for this person), rates your proposal against when deciding whether it is worthy of funding. It includes things such as net economic benefit analysis, competitive impact statements, viability/sustainability analysis and a myriad of other things, all of, which play an important part in the final decision regarding your proposal. We will look at these criteria in more detail further on. For now lets talk about first impressions.

First Impressions Count Many people mistakenly believe that, if they are eligible for funding they will get it. All they have to do is apply. Nothing could be further from the truth. Every government program, which I know of, has a set of assessment criteria, used to determine whether a proposal is suitable for funding. These criteria are seldom communicated to applicants because they simply don’t ask. Let’s face it. If you know what your proposal will be assessed against before you apply, you stand a much better chance of getting approved. So how should one go about getting the required information? You begin by making an appointment to visit the local office of the department or agency you are applying to. I can not over emphasize the importance of this step. Nothing can replace the

Never do a blind submission. When your proposal lands on someone’s, desk they should be familiar with it and have been expecting it.

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effectiveness of personal contact in this situation. If this is not possible, phone. Never do a blind submission. When your proposal lands on someone’s, desk they should be familiar with it and have been expecting it. Otherwise you are asking too much from your proposal. Let me explain. Any funding proposal is designed to do two things, inform the reader and provide a rational as to why you should receive funding. The best business plans in the world are nothing more than words on paper. That’s ok for providing information but you should never rely solely on them to provide the funding rational. Most economic development officers decide early in the game, whether or not they like your proposal. Call it their predisposition. If they are positively predisposed, you are merely asking your business plan to reinforce their first impression. If they are negatively predisposed then you are asking your proposal to convince them to provide you with funding. It is much more difficult to convince someone than it is to reinforce his or her initial inclination. The problem with blind submissions is that you don’t know what the officers’ predisposition is and therefore what you are asking your proposal to do, reinforce or convince? By visiting the office before you apply for funding, you not only get the required information regarding the assessment criteria but you get a feel for the officers’ initial impression and you have a tremendous opportunity to positively influence it. They get to hear about your proposal and they see how excited and determined you are about the proposed venture. Remember they are assessing you and your idea so you want them to meet you, and if possible, like you.

The Assessment Criteria Once you have determined what programs are available, what ones you are eligible for, and made your initial contact with the department or agency you need to find out what criteria your proposal will be assessed against. It’s time to examine these criteria in more detail. With any government program, there are always two sets of criteria, the eligibility criteria and the assessment criteria. Most people concentrate on the first and don't give any thought whatsoever to the second. Eligibility criteria are always widely publicized by the departments while assessment criteria rarely are. It is the assessment criteria that ultimately determine whether or not your application is successful. And it is the criteria which applicants have known very little about, until now.

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Competitive Impact One of the first criteria any proposal is assessed against is competitive impact or more specifically, the potential for adverse competitive impact on an existing business. You have to realize that government departments are very concerned about receiving bad publicity. Senior bureaucrats are very nervous about embarrassing their political masters. Remember that each department or agency is ultimately responsible to a minister, who is an elected official. The last thing any senior bureaucrat or politician wants to see is a businessperson running to the local media claiming that the government has put him out of business by funding his or her competitor. For this reason each application is examined for its potential of having an adverse impact on an existing business.

Net Economic Benefit Closely related to competitive impact is another criteria called net economic benefit. If funding your proposal creates new jobs and wealth in the local labor market at the expense of an existing business, then there is deemed to be no net economic benefit. Any resultant benefit to the local economy that was achieved by funding you was offset by the loss experienced by the existing operation. If there were no net economic benefit, then why would the government get involved? As an applicant you must demonstrate that your proposal will not adversely affect any existing operation and that it will result in a net economic benefit to the local economy. You can do this in one of two ways: You can demonstrate how your business is unique in the products and services it offers having no competitors and therefore no one to adversely affect. If you are not distinct from your competitors, you are better off trying to demonstrate that there is sufficient demand for your products and services to warrant another entrant in the marketplace. If you chose to demonstrate the uniqueness of your product be warned that price and or quality comparisons are generally not accepted as unique characteristics. You can’t claim that your product is unique because it is cheaper than your competitors or because it is of an inferior quality.

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I remember having a client who wanted funding to open a men’s clothing store. He wanted to claim that his only competitors were high end and that his clothing line would be cheaper and of relatively inferior quality. The bottom line though is that all the establishments were selling men’s clothing and if someone bought one of his suits they would probably not buy one from one of the existing establishments. When demonstrating uniqueness focus on the intrinsic characteristics of the product or service. What does it offer that no other product or service can? As I mentioned earlier, the other option is to demonstrate that the demand for your non unique product or service exceeds the markets ability to supply. By entering the marketplace you will be bringing in more buyers and not adversely affecting anyone. To continue with our retail example above, suppose the present retailers were selling their entire inventory and customers were forced to wait for new shipments or were ordering from out of town or province. This demonstrates untapped potential and your entrance would likely result in new customers which is good for everyone, your competitors included. Whatever approach you take, the bottom line here is don't ignore these criteria, address them up front and with confidence.

Economic Viability Another important assessment criterion is economic viability. Simply stated it means does the proposal make sense? Will it be profitable? One way this is determined is by examining the projected financial statements. How realistic are the sales projections and what are they based on. Was primary or secondary research conducted? How do the projected sales figures compare with industry standards? Not only do the sales figures have to be realistic, so do the associated costs. It's been said those if you want to test the viability of your proposed venture, cut your projected sales in half and double your expenses. If it is still profitable then proceed. While this is somewhat of an exaggeration, I think it gets the point across. The bottom line here is be realistic. Unlikely sales volumes or large sales increases in short time periods are hard to substantiate and cast a shadow of doubt over your entire proposal. Other areas examined in determining economic viability are the expertise of the applicants in the particular field of business being proposed. If you’re going to open a restaurant, you better know something about the industry, if you don't, you better surround yourself with people who do by hiring the expertise or by establishing an advisory board for example. 9 This material is copyrighted. It may be printed, by the purchaser, for their own use. Any other reproduction or distribution without the express written consent of The Business Guide Incorporated, is strictly prohibited. © The Business Guide Incorporated


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The financial background of an applicant is usually examined as well. How deep are your pockets? It is assumed that if an individual is in financial difficulty personally they may drain the business of its equity and leave it cash strapped, thereby impairing its viability. For this reason many government department and agencies conduct credit checks on applicants.

Sustainable Employment Closely related to economic viability is the criterion of sustainable employment. Governments are involved in economic development for one reason, to create jobs, sustainable jobs. That means jobs that continue following their involvement. Therefore your proposal should demonstrate how you would generate enough revenue to maintain the projected employment levels. Once again the financial statements are usually the best indication of sustainability. If you will not be generating enough revenue to eventually maintain the positions on your own, then the jobs to be created will not be permanent and will not have a significant enough impact on the local economy to warrant an investment of taxpayers dollars. This is one reason applicants are often asked for three year projections.

Return on Investment Government officials also examine your proposal in terms of its R.O.I., i.e. return on investment. More and more, departments and agencies are viewing their financial contributions towards proposed ventures as investments. And indeed they are. They are investments in the economy. Officials divide the proposed number of jobs to be created into the requested contribution. If the cost per job is too high, they won't invest, as it is not cost effective. The proposal is said to have a poor R.O.I. There is no magic number above which a department or agency won't go in terms of a cost per job, but you should try to keep it below $10-$15,000. Higher paying jobs, which require greater skill levels, and jobs within certain sectors of the economy are generally considered a better investment.

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Priority Sectors Another way in which your proposal is assessed is whether or not it is operating in a priority sector. Every few years provincial and federal governments identify certain sectors of the economy as growth sectors. Examples of two existing ones are technology and the environment. If your business is operating in a growth sector, you stand a much better chance of being approved. If it is not, then try to somehow relate your proposal to one of these sectors. For example your business may not be directly involved in the Technology sector, but the jobs you will be creating in your company may be for IT professionals. Therefore you could argue that your proposal should receive priority.

Partnerships The final assessment criterion I will examine is partnerships. No department or agency wants to be the sole funding source of your initiative. The more people that form part of the financial equation the better. If you approach a department and you already have some financial assistance secured from a financial institution, this lends credence to your proposal. If you already have support from another department or agency and a bank, that's even better. You should also be investing some equity yourself. It shows that you are willing to share some of the risk and that you are committed to the venture. Few things are less appealing than a proposal that relies solely on government financing.

Know Your Environment When applying to government departments and agencies, for financial assistance, it is very important to be cognizant of the environment in which you are operating. Although there are some similarities, it is not at all like dealing with a bank (some may say that is a good thing). Here are some of the important things to keep in mind:

Political Environment All government departments have political masters i.e. Ministers. This means that there are political considerations involved with much of the decision making that takes place. Don’t misinterpret my meaning here. I am not referring to political interference. I can quite honestly say that in my years of experience within the public sector I saw no evidence of political interference. I am referring to legitimate political considerations such as: 11 This material is copyrighted. It may be printed, by the purchaser, for their own use. Any other reproduction or distribution without the express written consent of The Business Guide Incorporated, is strictly prohibited. Š The Business Guide Incorporated


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• • •

each constituency being treated equitably with regard to budgetary allocations. elected officials being involved and informed as to what is happening in their riding. the potential for controversy involved with any funding decision.

For these reasons and more, politicians are more than pleased to lend their support to proposals provided of course they otherwise make sense. As an applicant you should therefore seek the written support from your provincial and federal representative. This not only lends credence to you proposal but it may also expedite the assessment process. This is why our "Business Guide to Government Programs" (one final plug) provides complete contact information for all provincial and federal elected officials. If you are going to apply for government financial assistance, ask them for their support. You’ve got nothing to lose.

Bureaucratic Environment Always remember you are dealing with bureaucrats and as in any bureaucracy, the wheels can only turn so fast. There are usually several individuals involved with making funding decisions. This is done to protect the public purse. What ever you do, don’t let this frustrate you or if it does, don’t take it out on the person with whom you are dealing. Public servants have had a rough ride over the last several years. It has become politically popular to downsize and to ask those remaining to do more with less. Most haven’t had a salary increment in years and despite the public perception, most civil servants are hard working conscientious individuals. The bottom line here is treat them, as you should anyone, with dignity and respect. It will make the whole application process a lot less painful and hopefully more fruitful. I hope I have shed some light on the machinations of the public sector and perhaps this will help you obtain the financing you require. I wish you all the best of luck in your future endeavors and if I can be of assistance in the future, you know where to reach me. If you have a business idea in mind, I recommend that you next proceed to the Proposal Assessment Form.

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Part Two Proposal Assessment Checklist Assessment criteria vary somewhat depending upon the program and or department/agency, to which you are applying. There are however several major criteria which are common to most programs. These are the ones you have reviewed. We have put together this checklist, based on these common criteria, which will help you determine the strengths and weaknesses of your business idea and consequently your chances of receiving funding. Simply answer the questions, and then total your score. You will then have a good indication of how you should proceed. As well, you will know which parts of your proposal may need more work if you are to secure funding. Be honest, have fun and good luck.

Ownership/Management Question 1 - I have extensive experience in the field of endeavor.

• • •

Strongly Agree………………….2 pts Agree Somewhat………………..1 pt Disagree………………………...0 pts

Question 2 - I have been formally educated in the field of endeavor.

• • •

Strongly Agree……………….….2 pts Agree Somewhat………………...1 pt Disagree………………………....0 pts

Question 3 - I have A Solid Credit History

• • •

Strongly Agree………………….4 pts Agree Somewhat……………......2 pts Disagree………………………...0 pts

Note: This applies to the business owners only, not senior management.

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Competitive Impact / Net Economic Benefit Question 4 - My Proposal will not have an adverse effect on existing operators.

• • •

Strongly Agree…………………..4 pts Agree Somewhat………………...2 pts Disagree…………………………0 pts Note: Be Honest. This element is key.

Economic Viability Question 5 - Financial forecasts are realistic and show the business to be profitable.

• • •

Strongly Agree………………….4 pts Agree Somewhat……………......2 pt Disagree…………………….…..0pts Note: Another key element

Return on Investment Question 6 - Each new job I will be creating requires a government investment of approximately $15,000 or less. • • •

Strongly Agree………………….2 pts Agree Somewhat……………......1 pt Disagree………………………...0 pts

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Priority Sector Question 7 - My business is in a sector identified as a priority by government or I will be hiring individuals trained to work in a priority sector. • • •

Strongly Agree………………….2 pts Agree Somewhat……………......1 pt Disagree…………………………0 pts

Partnerships Question 8 -There are others contributing to the cost of the initiative beside the dept/agency I am applying to. • • •

Strongly Agree…………………..2 pts Agree Somewhat………………...1 pt Disagree…………………………0 pts

Note: Add 1 bonus pt. if you are contributing 20% equity

Political Support Question 9 - I have the written support of my federal and provincial elected representatives. • • •

Strongly Agree………………….2 pts Agree Somewhat…………..…...1 pt Disagree…………………….…..0 pts

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Total Points In our opinion, the probability of your receiving government financial assistance for your business is: • • • •

Very Good, if you scored 21 - 25pts. Get your proposal in today. Good, if you scored 16 - 20 pts. You could apply for funding now, but a little extra work might pay off. Risky, if you scored 11 - 15 pts. You’ve got work to do. You need to address the weak points of your proposal Poor, if you scored 0 - 10 pts. Look for another idea.

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Part Three Business Plan Template As mentioned previously, when you identify the program(s) best suited to your needs and if required as part of the application process, you can use this business plan template to complete your proposal. Before you apply for any program, make certain of the application requirements. You don’t want to complete a business plan, if it is not necessary. Again, if you have any questions along the way, let us know.

Title Page Put a picture of your corporate logo on the front. Then, leave enough room for the following information.

[Company Name]

Month, 20xx

This document is confidential. It is not for re-distribution.

[Name of Contact] [Title] [Address] [City, Province, Postal Code] [Phone] [E-mail] [Company home page URL]

This is a business plan. It does not imply an offering of Securities.

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Table of Contents Here's a sample Table of Contents. Be sure to modify the page numbers when you’ve finished your Business Plan. Executive Summary Mission Company Overview Legal Business Description Strategic Alliances Product Current Product Research and Development Production and Delivery Market Market Definition Customer Profile Marketing Plan Sales Strategy Distribution Channels Advertising, Promotion, PR Competition Risk/Opportunity Management Team Capital Requirements Exit/Payback Strategy Financial Plan Assumptions Financial Statements Conclusion Exhibits

1-1 2-1 3-1 3-2 3-3 4-1 4-2 4-3 4-4 5-1 5-2 5-3 5-4 5-5 5-6 5-7 6-1 7-1 8-1 9-1 9-2 10-1 10-2 10-3 10-4 11-1

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Executive Summary If the executive summary doesn’t succeed, your business plan will never sell government agencies/departments. I recommend that you write the summary first and use it as a template for the plan as a whole. Since one of its primary functions is to capture the funder’s attention, the summary should be no longer than two pages. The shorter the better.

Mission Our company's mission is to [describe your ultimate goal, or insert your mission statement].

Company [The Company] started in [date] and [describe what your business does, such as retail sales, distributor of office supplies, provider of financial services]. It is a [legal form of your company, such as a Partnership, Sole Proprietorship, Corporation]. Our principal offices are located at [x].

Business We make [describe product, or service that you make or provide]. Our company is at the [seed, start-up, growth] stage of business, having just [developed our first product, booked our first order etc]. In the most recent [period], our company achieved sales of [x], and showed a [profit, loss, break-even]. With the anticipated financing, our company expects to achieve [x] in sales and [x] in pretax profits in 20[xx] and achieve [x] in sales and [x] in pretax profits in 20[xx+1]. We can achieve this because the funds will allow us to [describe what you will do with the funds, such as:

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a) marketing for your new product, b) build or expand facilities to meet increased demand, c) add retail locations or others means of distribution, d) increase research and development for new products or to improve existing ones.

Product or Service [The company] produces the following products [list products here briefly, in order of highest sales or significance in product line]. Alternatively, [The company] delivers the following services [list services here briefly, in order of highest sales or significance in product line]. Presently, our [product or service] is in the [introductory, growth, maturity] stage. We plan to follow this [product or service] with extensions to our line, which include [x, y, and z]. Critical factors in the [production of our product, or delivery of our service are [x, and y]. Our [product or service] is unique because [x, y, or z] and/or we have an advantage in the marketplace because of our [patent, speed to market, brand name].

The Market We define our market as [list goods manufactured and/or sold]. This market was approximately [$x] at [wholesale or retail] last [period available], according to [site resource], and is expected to grow to [$x] by the year [x], according to [site resource]. Who are your customers? Where are they, and how do you reach them? Are they buying your product / service from someone else? How will you educate customers to buy from you?

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Competition We compete directly with [name competition] or we have no direct competition, but there are alternatives to our [product or service] in the marketplace. Our [product or service] is unique because of [x] and/or we have a competitive advantage because of our [speed to market, established brand name, low cost producer status].

Risk/Opportunity The greatest risks we have in our business today are [market risk, pricing risk, product risk, management risk]. We feel we can overcome these risks because of [x]. The opportunities before us are significant; we have the opportunity to [dominate a niche in the marketplace, become a major force in the industry] if we can [x].

Management Team Our team has the following members to achieve our plan with a combined [x] years of experience; [y] years in marketing, [y] years in product development, and [y] years in [other disciplines].

Capital Requirements We seek [$] of additional [equity, debt, or financing] which will enable us to [describe why you need the funds, and why the opportunity is exciting]. We can provide and exit for this [loan, investment] within [x] years by [a dividend of excess profits, recapitalizations, sale of company, or public offering].

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Financial Plan At this point the investor must have a clear idea of where your business stands today. Provide a snapshot of your financial position.

Last Year This Year Next Year Year Two Sales: Gross profit: Pre-tax:

Balance Sheet Summary Assets: Liabilities: Book Value: In [x] years we will provide an exit, which we expect to be in the form of [sale to a competitor, initial public offering, distribution of profits] or perhaps [z]. We expect to be able to achieve this in [b months / years].

Mission Mission Statement Our goal is to become [describe your ultimate goal, or insert your mission statement; example; the leading manufacturer and marketer of branded hockey sticks or the first name in breakfast cereals]. We aspire to carry a reputation in the marketplace for developing and delivering [time saving, better-way products sold at a fair price for uses in the {x} market]. We can achieve this by [cutting edge product development, close understanding of market trends and needs, innovative and profitable merchandising and packaging].

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To accomplish our goal, [your company name] needs [capital, management talent, larger, more efficient facilities]. In pursuit of our goal, we resolve to treat stakeholders, customers, and the community with [description of the reputation your company seeks]. These groups see our company as providing [describe benefits to each group of being associated with your company].

The Company [The Company] started in [date] and [describe what your business does]. The legal name of the business is [x]. It is a [legal form of your company, such as a Partnership, Sole Proprietorship or Corporation]. Our principal offices are located at [list primary address as well as any other facilities]. We have approximately [x] square feet of office space and [x] square feet of [factory or warehouse]. Our current capacity is [x] units per month.

Licenses and Permits - If appropriate. [Your Company Name] operates in the [x] industry, or [uses controlled substances in the manufacturing process or delivery of service], and falls under the jurisdiction of the [name government agency]. [Your Company Name] has all necessary permits to operate, and has an up-to-date record of inspections. These permits include [list briefly here].

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Strategic Alliances Partnerships are generally appealing to funders. Explain how you work with others to improve your performance. [Your Company Name] has developed important and profitable strategic alliances with the following: [describe each company, it's position in the marketplace, the details of the alliance, and what risks are involved in the alliance]. You may also have a strategic relationship with a number of suppliers List those and the details as well.

The Business [Your Company Name] is a [manufacturer, distributor, marketer, service provider] of [describe your product or service]. Our company is at the [seed, start-up, growth] stage of business, having just [developed our first product, hired our first salesman, booked our first national order].

Product or Service Explain how your product works or how the service is used. What marketplace needs are addressed by your product? What value do you add to the product? [The company] produces the following products [list products here, in order of highest sales or significance in product line]. Be sure to refer readers to product pictures, diagrams, patents, and other descriptive material. Or, alternatively, [The company] delivers the following services [list services here briefly, in order of highest sales or significance in product line]. Be sure to refer readers to brochures and material describing your service. Presently, our [product or service] is in the [introductory, growth, maturity] stage. We first developed our [product or service] in 20[xx] and have made [x] improvements and redesigns since then. 24 This material is copyrighted. It may be printed, by the purchaser, for their own use. Any other reproduction or distribution without the express written consent of The Business Guide Incorporated, is strictly prohibited. Š The Business Guide Incorporated


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Provide a history of product developments, introductions, and improvements leading up to the present day. Table form may be appropriate.

Unique features or proprietary aspects of Product This is a crucial paragraph. Investors must see something unique, proprietary, or protected about your product or service. Our products are unique because of [of secret ingredient, our patented process, our proprietary manufacturing process]. Others in the market are able to provide somewhat similar [products or services], but we are able to differentiate ourselves in the market because of [x]. We have [applied, been granted, licensed] a patent for [x], an abstract of which can be found in appendix [x]. We have integrated this into our process which others will not be able to duplicate. Our lead product, [x] addresses the following customer needs [x] and delivers [x] benefits to customers. Tell about the unique value-added characteristics your product line or process provides to customers and how these characteristics translate into a competitive advantage for your company.

Research and Development – If applicable Our research and development is headed by [name of person]. Last [period], our R&D yielded the following products and innovations [list products or innovations]. [Your Company name] has spent [% of revenue] in the past year in R&D, and plans to spend [% or $] in the next [period].

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New Products Responding to market needs, we plan to follow [product or service] with extensions to our line, which include [x, y, and z]. Our target introduction dates for these products are [x, y, and z], which corresponds with [a major trade show, industry event]. In addition, we plan to introduce the following new products in the upcoming season [x, y, and z].

Production Our [product, service] is [manufactured in house, assembled in house from components from various vendors, (service) provided by our staff, or subcontracted to field consultants]. [Raw materials, sub-assemblies, components] used in our products are readily available from a variety of manufacturers who can meet our quality standards. Critical factors in the [production of our product, or delivery of our service are [x, and y]. Explain capital equipment, material, and labor requirements. Are the above items readily available? Uniqueness Our [product or service] is unique because [x, y, or z] and/or we have an advantage in the marketplace because of our [patent, speed to market, brand name].

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The Market We [expect to compete, are competing] in the [define niche] of the [define industry]. We believe the major future trend in the industry will be toward [X] Market research suggests this market will [grow/shrink] to [$x] by the year [20xx]. We expect the niche in which we compete to [grow, shrink, remain stagnant] during this time. The major forces affecting this change will be [x]. The area of greatest growth within the industry will be [x].

Market Segment We define our market segment as [goods and services made and/or sold]. This segment has been [volatile, steady] in the last few years. Industry experts [name them] forecast [x] for the industry in the next few years. A typical customer for our product is a person who currently may use [alternative product or service] for [what purpose]. They are motivated to buy our product because of [its value, its quality, its usefulness]. We know this from [customer responses, trade show input, ad inquiries] and feel our customers perceive our products as [good value, superior performance]. Our product, does, however, have the following weaknesses [x]. We are working to position our product as [x] in order to reduce this vulnerability. Marketing Our marketing plan is based on the following fundamentals We expect to penetrate the [x] segment of the market[s] and achieve this by using the [retail, mail order, multi-level marketing, internet] as our primary distribution channel[s]. In time, we plan to capture [%] share of the market.

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Position We will position our product as [good value for price, top quality,] which is a position not presently being addressed by the competition. One demographic group in particular, the [x] has a particular need for this product, and we tailor our positioning accordingly.

Pricing Our pricing strategy is [describe policy such as penetration, skim the cream etc]. We arrive at our pricing based on [cost, gross margin objectives, market prices, perceived value]. Customers seem willing to pay as much as [x] because of [explain reasoning].

Distribution The distribution channels we use for our product are [wholesalers, cataloguers, mass merchant retailers]. These make sense for delivering our product to the end user because [customer profile, geography, seasonal swings]. The competition uses the [wholesalers, cataloguers, mass] channel. Our channel will prove more advantageous because [x]. Our major current customers include [list three or four]. The attached chart [see appendix z] demonstrates how our product reaches the customer.

Advertising, promotion, trade shows [Your Company Name] has developed a comprehensive advertising and promotion strategy, which will be implemented by the best possible firm when funding is completed. We expect to have a presence in the trade press. We will produce our own ads and be a part of ad campaigns of our JV partners. Our publicity plan is to

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seek stories and coverage that will [enhance our reputation, introduce us to buyers]. We plan to promote our product through [on site product sampling, demonstrations at high profile events, give-aways at fund raisers]. The objective of all our promotions is to [expand the audience, position our product as a premium]. [Your company name] participates in the following trade shows [list trade shows, briefly describe organization that sponsors it and who attends, and describe presence there]. We have a regular [describe display].

Competition Do not delude yourself (or your investors) about your competition. This is a key element of consideration in obtaining government funding. Look in your telephone book's yellow pages. Read industry magazines and look for advertisers. We have no direct competition, but there are alternatives to our [product or service] in the marketplace. or We compete directly with [name competitors]. Provide some level of detail on each competitor how it may or may not impact your business. The competition [does, doesn't] [use the same means of distribution; advertise in the same trade journals]. Our [product or service] is unique because of [x] and/or we have a competitive advantage because of our [speed to market, established brand name, low cost etc.].

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Risk/Opportunity Business Risks Knowing your risks and having a strategy is a must for obtaining government funding. Some of the major risks facing our development include [limited operating history; limited resources; market uncertainties; production uncertainties; limited management experience]. Select the ones that apply.

Opportunities Although our business today has its share of risk, we feel we can overcome these risks because of [x]. We will address market risk by [x]. If we are able to overcome these risks, our company has the opportunity to [dominate a niche in the marketplace, become a major force in the industry]. We feel our brand could become know as the [x]. We think we can achieve this goal in the next [x] years.

Management Team Our team has the following members to achieve our plan. [x] men and women who have a combined [x] years of experience; [y] years in marketing, [y] years in product development, and [y] years in [other disciplines]. Delete those that are not appropriate. Officers and Key Employees

Age

Stock

[A], President [B], Vice President of Marketing [C], Vice President of Sales 30 This material is copyrighted. It may be printed, by the purchaser, for their own use. Any other reproduction or distribution without the express written consent of The Business Guide Incorporated, is strictly prohibited. Š The Business Guide Incorporated


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[D], Vice President of Finance [E], Vice President of R & D [F], Vice President of Operations [G], Controller [H], Corporate Attorney

Ownership The company has authorized [x] shares of common stock, of which [x] are issued and outstanding. The following persons or organizations are significant owners of the company: Name

# Shares Held

% Ownership

Professional Support We have strung together a team of professionals, including: [Corporate Attorney] [Accounting Firm] [Other Consultants]

Board of [Advisors, Directors] We have also secured the assistance and support of the following business and industry experts to help in the decision-making, strategizing, and opportunity pouncing process Highlight your board members, detailing where and why they add strategic importance, what experience they have and what contacts they can contribute.

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Capital Requirements Needless to say, this is important -- state what your capital requirements are. We seek [$] of additional [equity, financing] to fund our growth for the next [two years, year, etc]. At that time, we will need an additional [$x] to reach a positive cash flow position. The initial stage of funding will be used to [complete development, purchase equipment, introduce and market our new/next product line, fund working capital, acquire a competitor]. Here is a breakdown of how the funds will be spent.

Purchase equipment Market our new/next product line Fund working capital

[$x] [$x] [$x]

Define how much time you will require to pay back the loan unless you are applying for a grant.

Conclusion Based on our projections, we feel a [loan, grant] our Company is a sound business investment. In order to proceed, we are requesting an [loan, grant] of $[x] by [date].

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Financial Plan Income statements We recommend that financial statements be monthly for the first year or two, then quarterly thereafter. Incorporate year to date figures if they exist.

Assumptions It is important to indicate the assumptions on which your forecasts are based such as: Sales will increase with the introduction of the [new line, improved line]. We plan to introduce these products roughly on the following schedule: [detail here]. And we expect to be able to sell at the rate of [x] units per month within [x] months of introduction. Cost of good sold will decrease as a percentage as we are able to buy more efficiently in the marketplace and use our new equipment to produce more units at lower cost. Keep in mind that projections do not stand on their own. The rationale of how you prepared the numbers is important to government officials.

Balance Sheet Summary Comment on any large or unusual items, such as other current assets, other accounts payable, or accrued liabilities. Cash Flow and Break Even Analysis These are critical statements, even more so than the Balance Sheets and Income Statements. Cash, and how much you have at the end of the day, is everything to investors. We have assumed that our suppliers will be willing to grant us terms of [x] until we reach monthly purchases of [x]. At that time, we have assumed that our terms will be stretched to [x] days. 33 This material is copyrighted. It may be printed, by the purchaser, for their own use. Any other reproduction or distribution without the express written consent of The Business Guide Incorporated, is strictly prohibited. Š The Business Guide Incorporated


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We have also assumed that we can collect our billings within [x] days. We can reach break even by the [x] month. Sales are expected to be at the [$x] level by that date.

Exhibits Exhibits give a better feel for the company behind the numbers. Be sure to include illustrative material such as: • • • • • • •

Product literature and brochures Media coverage Clips from industry publications Relevant patents Market research data Past advertising campaigns Useful photographs of facilities, warehouses etc.

That’s it. This covers the major components of a business plan and should be sufficient for most government departments or agencies. Ask for help if you need it, especially with the financial statements. This also concludes the e-book. I sincerely hope you find it beneficial and wish you the best of luck with your endeavors. If you need to quickly find the government funding programs that are available to you; be sure to visit us at http://www.businesssguide.net. And remember, the price of the ebook will be deducted from the cost of your website subscription.

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Getting Business Grants