This section should summarize the key elements of the plan critical to the success of the venture. This is the first exposure the lender will have to your idea, so the executive summary is more than just a condensation of the plan. The length may be 1-3 pages. Often the executive summary will be written after most of the business plan has
been completed.
Points to discuss include:
1. Business Description
Include name, address, plant or store description and brief history.
2. Product
Give a description of the product or service. What differentiates your product from existing products? What features of your product will give you a competitive edge in the marketplace? What is the product’s current state of development: do you need further R&D; do you have blueprints but no prototypes; is a prototype built and ready for production? What type of protection do you need: patents, trademark or copyright?
3. Market Data and Marketing Plan
Who are the customers? Where are they located? What market niche will you serve? Who is your competition? What is the market (sales) potential? How will you sell or market your products?
4. Management
Discuss the key persons involved in the business and summary of relevant expertiseor past business.
Include these additional items if the business plan is for the purpose of borrowing money (This sample does not contain points 5-9.):
5. Summary of sources and uses of funds.
6. Loan repayment and break-even summary.
7. Explanation of why you need the money and how you will use it – be specific.
8. Explanation of the steps you will take if company is in a turnaround situation.
9. Discuss how you intend to repay the loan.
Sample Executive Summary
Business Description
Cattle Producers Marketing Coop is a cooperative of 20 cattle farmers located in south central Iowa. The general manager of the cooperative, who is also a member and cattle farmer, is Bailey B. Line. Mr. Line is responsible for organizing the group three years ago when he decided to market his own products. The initial group consisted of three neighbors located within a 5-mileradius, but has since grown to 26 members in the three-county area of York, Jameson and Walnut counties. The group markets 85,000 head of cattle a year primarily to the TDA packing company. The group started with minimal sales of $10,000 the first year, beginning at a few local farmers markets. Marketing Coop now has 12 regular institutional accounts and 144 families that purchase product each month. Negotiations are presently underway with the nearby large special foods market that has potential to sell $100,000 worth of MarketingCoop products annually.
See enclosed copies of letters from All Foods Markets, Inc., WhiteTablecloth Restaurant, the Brady family and others.
The Cattle Producers Marketing Coop cooperative gains sales through three avenues of commodity sales of live cattle, volume sales of free-range beef products and sale of beef products with service. Since its beginnings, Marketing Coop has used Larry and Linda’s Locker Plant for slaughter and processing for all meat products. Larry and Linda’s is a federally inspected plant located in Bordertown, IA.
Borrowing Money
Cattle Producers Marketing Coop is seeking to expand sales of beef products. The coop is purchasing on contract the processing facility, Larry and Linda’s Locker Plant in Bordertown. The coop is seeking financing for equipment to place into an expansion of the facility. The new equipment will allow production of beef products to increase 25 percent, allowing increased sales to satisfy existing and anticipate demand. An equipment list is included in the financing section of this plan.
A 10-year loan at 8 percent interest is desired for financing of the equipment. Members of the cooperative have contributed $260,000 cash as equity. The money will be split equally among the purchase of the equipment and as down payment on the contract purchase of Larry and Linda’s Locker Plant.
The financing for equipment is needed to meet increased demand for product. Some of the demand exists today and some is anticipated from increased marketing efforts. The expansion will increase capacity 25 percent, sufficient to meet demand for at least eight to 10 years, based on a controlled growth plan of this business. Cattle Producers Marketing Coop plans to increase sales to $500,000 by 2005.
Product
Currently, the company offers three basic lines:
- Its trademark free-range ground meat, roasts and steaks. These productsare available tray ready, guaranteed lean and certified as 100 percent freeof hormones, preservatives, antibiotics or chemicals.
- Traditional raised and free-range cooked products sold at farmers marketsand events and festivals in Iowa and Nebraska.
- Commodity grade live cattle as a means of handling producer overrun andas a method of moving cattle that required antibiotics during the growingprocess.
Also offered is a growing assortment of handmade items ranging from grandfather clocks of native oak and walnut to homespun yarns with natural dyes to original oil and watercolor paintings of local scenes.
Market Data and Marketing Plan
Marketing Coop has set the following marketing objectives and goals, which are the drivers for the planned expansion:
- Improve the general net worth and well-being of the member/owners by providing a fair and steady market for the food, fiber and other handcraftedproducts raised and manufactured on their farms.
- Increase sales to more than $500,000 over the next five years.
- Maintain gross margins at or above 18 percent while adding product lines.
- By 2003, be firmly established in processed and specialty markets.
- Establish the company as a name that customers of all descriptionassociate with quality.
Marketing strategies have been set to help accomplish these goals. The strategies are broadly stated and so may appear to lack substance. The management team is in the process of establishing necessary tactics to implement the goals and accomplish the strategies.
- Delivering high quality products that set themselves apart from others intaste and value.
- Providing service, support and a slightly better price to our customers and dealers.
- Maintaining gross margin at 18 percent or better.
- Adding new products into the mix to maintain customer interest and boost sales volume.
Management
The management team is an experienced group of professionals who will add value to the business. Bailey Line will be general manager with responsibility for the organization of the coop group of producers and the processing plant. An experienced team will be used to manage the processing plant. Larry Cutter, the current owner of the processing business, will be the plant manager responsible for the purchasing function and for operation of the processing facility. His wife, Linda Cutter, will be the marketing manager. Linda brings experience in sales, in understanding of meats and meat quality and in customer service to the marketing function. All accounting and financial oversight will be provided by Tina Total. Ted Tobias will be the quality manager. He is experienced with government requirements such as HACCP, OSHA and EPA. He has responsibility to assure quality product is produced. He will also work with producers on a supplier quality program.