JOHANES LIM CONSULTING

The Complete Fundraising Workbook

• While there is no new technology discovered here, the methods are proven and you will surely benefit from using them. This is a general funding workbook. Get out your pencil and fill in each section as you go. Each chapter will guide you by asking you questions and giving you a place to arrive at your answers (it might need minor adjustment to suit your funding needs). When you are finished you will be able to remove the questions and your business plan will be complete, ready to submit to your potential funding sources, either bank or venture capital.
• The statistics show that 90% of all new businesses fail. We believe that is a direct result of the failure to plan. Take the opportunity to plan and increase your chances of success.
• "Failing to plan, is planning to fail."

1.Plan For Success

• Capitalizing your business is a full time endeavor. Developing your business plan is the single most important step you can take toward your success. To maximize your potential to receive capital, it is vital that you develop a business plan that will guide your company and allow outsiders to picture where you are going and how you plan to get there. Take great care in preparing your plan, it is the road map that will lead you where you want to go.
• Lenders or Investors, which way do I go? They tend to look at transactions from very different perspectives. Lenders are mostly concerned with "Can you repay?". While investors are more interested in "How far can you go?" There are certain items of information common to both. That will be the information to be disclosed at the start.

Statement of Purpose

• Who is asking for the money?
• How much money is needed?
• What is the money needed for?
• How will the funds benefit the business?
• Why does this loan or investment make business sense?
• How will the funds be repaid?

Executive Summary
This is it! Grab them here and you may never lose them. This summary is an overview description of your product or service, its market, your niche, the management, the mission, company structure, pro forma highlights, funding request, use of funds and proposed terms. No more than two pages, sell the sizzle not the steak.


EXECUTIVE SUMMARY WORK SECTION
Give a brief yet concise explanation of the following items. Remember, you will fully detail and support each of these later on in your plan, so keep it short.

• Desired Amount:
• Desired Terms:
• Company Name:
• Industry Type:
• Time in Business:
• Principals:
• Use of Funds:
• Collateral Offered:

Narrative

• Briefly describe what your company is all about.

History

• Your reader needs a summary of how this venture came to be. Where did the idea come from? How did it evolve? Who is responsible? Be concise; give dates, background, etc. Paint a short picture from how you started, to where you are today.

Mission Statement

• One sentence defining what the Company is all about. Think about it and "make it mean something". Don't just write a bunch of flowery words.

Stage

• Clearly identify what stage of funding you are at. Is your business a start-up, initial growth, positioning for going public, seeking a strategic partner, looking for near future acquisition or sale?

Market Niche

• It is important for any funding source to know where you fit in the economic food chain. What niche is your business exploiting that will make it jump over your competition? What are you doing that is better, faster, or newer than what everyone else is doing? For this part you must be very detailed. Remember the investors know nothing about your business. You must prove to them you know what you are doing or are about to do.

Market Research

• This is yours or a third parties research that supports your determination that there is a market and a need for your product or service. This will form the back bone of support for the price points and revenue assumptions contained in your pro forma projections indicating to investors or lenders how your company can turn a substantial profit.

Financial Overview

• Here is where you briefly highlight, graph and preview your outstanding financial projections. This provides a glimpse into where your gross sales, net income, net worth, etc. should be in years one , two and three. Remember this is only an overview. It should contain no details or support information. That will come later in your financial pro forma section.

Players:

• Funding Sources are going to want to know with whom they are dealing. Important issues become; what are the qualifications, experience, goals and most of all the character of those in the management of this venture?

Personal

• Lenders and Investors are both concerned with whether or not you have what it takes to be successful. Highlight information that demonstrates you have the ability to make this business a success. Detail your education, past successes or failures that made you stronger. Indicate how you started this business and what makes you believe it will be a success.

Character

• Who are you? Take a deep look inside. Character is not only about winning. It's about getting up again and again when you've been knocked down. Will you panic in a crisis? Will you run for cover when things get rough? Are you the Captain that brings the ship in against all odds? Character is staying power!
• To be a successful entrepreneur you must not only be able to start well, but you have to be able to finish strong. For most, running a business is a hard road and not an easy one. Search your soul. If you don't have this kind of character, do yourself and others a favor and don't even start.

Management

• Good management is essential. Funding Sources desire to see that you understand your market and have the skills to succeed. Are you a stand alone player, or are there others helping you? If alone, do you plan to keep it that way? Who will comprise your management team? Give detailed resumes of all those involved, along with a description of the vital roles they will play in the business' success. If your management skills or your team is weak, take on the task of building it up in order to support your own success, as well as the success of your funding request.

Third Party Professionals

• Listen to "GOOD" advice, and forget "BAD" counsel. Carefully seek out and select professionals who can help you. Do your homework in advance of your need to avoid delays. These legal, financial, tax, marketing, etc., professionals may be willing to advise your company for a piece of the glory to come or can act as consultants once you have the money to pay them.

Survivorship

• What plans have you made to ensure your business will continue to survive without you? Have you trained someone to take over? Is there going to be key man insurance in place for the possibility of illness, disability or death? Without you, can the business continue to survive? Describe how your management team will be able to step up and work the plan.

Table of Contents
Section One: The Business
A. Description of Business
B. Product/Service
C. The Market
D. Location of Business
E. The Competition
F. Management
G. Personnel
H. Application and Expected Effect of Loan
I. Summary
Section Two: Financial Data
Section Three: Financing Proposal
Section Four: Exhibits
Section Five: Supporting Documents

Section One: The Business

A. Description of Business

• What business are you in?
• What is the status of the business? (startup, expansion, takeover)
• What is the business form? (Proprietorship, Partnership, Corporation)
• Why is your business going to be profitable? (or continue to grow)
• When will (did) your business open?
• What hours of the day and days of the week will (are) you in operation?
• Is your business seasonal?

B. Product/Service

• What are you selling? (not "what are your products or services?")
• What are the benefits (as opposed to the features) of what you are selling?
• How do your products and /or services differ from competing products and/or services?
• If your product is new or state-of-the-art or otherwise unique, what makes it different? Desirable?
• If your product or service line is not special, why would people buy from you?

C. The Market

• What are your markets?
• Which ones are buying from you now?
• What products are they buying?
• Who are the people who are buying from you?
• How would you characterize your markets? (growing, steady, declining)
• Why do these people buy from your company?
• Why do they buy from you and not the competition?
• What are they buying from you? On what cycle?
• How can you find more buyers like these?
• What is the size of your market?
• What percent of each market do (or will) you have?
• What is each market's growth potential?
• As each market grows, will your share increase?
• Is the market competitive or not? If not, why not?
• How will you attract and keep these markets?
• How can you expand your markets?
• See Exhibits for Annual Sales Forecasts

D. Location of Business

• Where are you located?
• What are the physical features of your building? What should you have?
• Do you lease or own your space?
• What renovations are needed, and how much will they cost?
• Does zoning in your area permit your kind of business?
• What other kinds of businesses are in your area?
• Why did you pick this site over others?
• Why is this the right location for your business? Where should it be?
• How will this choice of location affect your operating costs?
• Are any demographic or other market shifts taking place?

E. The Competition

• Who are your five nearest competitors?
• How is their business? (steady, increasing or decreasing)
• How are their operations similar and dissimilar to yours?
• What have you learned from watching their operations?
• How will your operation be better than theirs?

F. Management
1. Personal history of the Principals

• Who is on the management team?
• What is your business background?
• What management experience have you had?
• What education (including both formal and informal learning experiences) has a bearing on your managerial abilities?
• What are your ages, special abilities and interests, reasons for going into business, where do you live and have lived, etc.
• Are you physically up to the job?
• Why are you going to be successful in this venture?
• What is your personal financial status?

2. Related work experience

• What is your direct operational experience in this kind of business?
• What is your managerial experience in this kind of business?
• What other managerial experience have you had? (different businesses, clubs, teams, civic or religious organizations, etc.)

3. Duties and responsibilities

• Who does what?
• Who reports to whom?
• Who makes final decisions?

G. Personnel

• What are your current needs?
• What skills will your employees need in the near future? In five years?
• What are your plans for hiring and training personnel?

H. Application and Expected Effect of Loan

• How much money do you need?
• For what purposes will it be used?

I. Summary

• Summarize ideas developed in the preceding sections.
• Make sure the different parts of the analysis make sense, support each other logically and coherently, and project probable success.

Section Two: Financial Data (forms attached)
List additional financial documents to be found in the Exhibits section.
A. Sources and Uses of Funds
B. Capital Equipment List
C. Balance Sheet
D. Break-Even Analysis
E. Projected Income Statement
1. Three Year Summary
2. Detail by Month, 1st year & Quarter, 2nd and 3rd years
F. Cash Flow Projections
1. Three Year Summary
2. Detail by Month, 1st year & Quarter, 2nd and 3rd years
G. Budget Deviation Analysis
H. Historical Records (Balance Sheets, Income Statements and Tax Returns for past 3 years.

I. Summary

• Explain basic assumptions used in their preparation.
• Provide other comments necessary to understand the documents
• Position the documents in the Exhibits section.

Section Three: Financial Proposal

• Explain fully your proposal to the lender.

Section Four: Exhibits (as required and/or appropriate)

Section Five: Supporting Documents

• For example: Brochures & advertising materials, industry studies, blueprints & plans, maps & photos of locations, magazine or other articles, lists of equipment owned or to be purchased, copies of leases & contracts, letters of support from future customers, other materials which support the assumptions in this plan.

Subsidiary Schedules Form
Sources of Funds
Owners Investment
A.
B.
Total Owners Investment
Bank Loans
A.
B.
Total Bank Loans
Other Loans
Total Other Loans
Total Sources

Uses of Funds
Buildings/Real Estate
Land/Improvements
Construction
Remodeling
Leasehold Improvements
Total Buildings/Real Estate
Capital Equipment
Furniture
Equipment
Fixtures
Machinery
Total Capital Equipment
Administrative Costs
Deposits
Prepaid Insurance
Goodwill
Total Administrative Costs
Opening Inventory
A.
B.
C.
D.
Total Inventory
Pre-opening Expenses
Accounting & Legal
Advertising
Car/Delivery/Travel
Insurance
Interest
Outside Services
Payroll Taxes
Rent
Repairs & Maintenance
Supplies
Taxes
Telephone
Utilities
Wages
Misc.
Total Pre-opening Expenses
Owners Withdrawal
Working Capital Requirement
Contingency Fund

Summary Schedule Form

Sources of Funds
Owners's Investment
Bank Loans
Other Loans
Total Sources

Uses of Funds
Building/Real Estate
Capital Equipment
Administrative Costs
Opening Inventory
Preopening Expenses
Owner's Withdrawal
Working Capital Requirement (from Cash Flow Projection)
Contingency Fund (amount required to make Cash Flow Projection breakeven)
Total Uses

Security and Collateral Form
Collateral for Loans .......... Value .......... Description
Note: Value is lower of cost or market value
Total Collateral
Signers for Loans (Requires all major owners)
Guarantors for Loans (Other than owners)