228 | HOW TO WRITE A BUSINESS PLAN
t
he business plan for DAY INTER-
NATIONAL, INC., that follows
is roughly based on a real plan,
although I have changed some details,
including the financial projections. And
because of space limitations, I have omitted
a number of charts and exhibits contained
in the appendix to the original plan.
Founders of the company asked for
$75,000 to bring their product to market.
They expected sales of nearly a million
dollars by the end of the second year of
operations. Here are some of the strengths
and weaknesses of their business plan.
Sales Projections
The best part of the plan is the discussion
of sales projections, because it gives you a
sense of the support you’ll have to provide
if you plan to introduce a new product.
Note the effort they put into developing
a logical sales revenue forecast. Since
most new products introduced into the
marketplace do not sell well enough to
produce a profit, investors and lenders
want to see solid data to support a claim
that your product will be different.
Also, they plan for two different prod-
ucts using the same technology. The first
is aimed at the commercial market and is
reasonably costly; the second targets the
consumer market and carries a somewhat
lower price.
The founders of DAY INTERNATIONAL,
INC., believe that a successful business
needs more than one product to survive.
While there are some exceptions to that
rule, diversification can achieve powerful
benefits if one product meets resistance in
the marketplace.Items Excluded
This plan does not cover several important
items I think should be included:- marketing and advertising. DAY
INTERNATIONAL, INC., plans to
have their distributors and sales
representatives handle a great deal of
these activities. Were this my business,
I would pay a little more attention to
marketing. I’ve learned that a new
small business that leaves marketing
to someone else often courts disaster.
The reason for this is simple: When a
product is new, no sales representatives
or wholesale or retail outlets have
much of a stake in its success. Until
they do, they are unlikely to do much
to push it.
• Business accomplishments.
While Eleanor in Appendix A sells
herself first and her business second,
Frederick Jones and Phillip Court, the
principals in DAY INTER NATIONAL,
INC., concentrate on selling their new
technology and the manufacturing