Table of Contents
Copyright 2007 by Ernst & Young. All rights reserved
Published by John Wiley & Sons, Inc., Hoboken, New Jersey
Published simultaneously in Canada
This book formerly appeared as The Arthur Young Business Plan Guide
Copyright 1987 by Arthur Young.
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Library of Congress Cataloging-in-Publication Data:
Ford, Brian R.
p. cm.
Includes bibliographical references and index.
ISBN-13: 978-0-470-11269-4 (pbk.)
ISBN-10: 0-470-11269-7 (pbk.)
1. New business enterprisesPlanning. 2. Business planning. I. Bornstein, Jay. II. Pruitt, Patrick T. III. Siegel, Eric S. Ernst & Young business plan guide. IV. Title. V. Title: Ernst and Young business plan guide.
HD62.5.S556 2007
658.4012dc22 2006101462
Acknowledgments
The authors wish to thank the following people for their invaluable counsel and assistance on this book:
Jon Zonderman, who has helped us with each edition by increasing the readability of the work, providing wise counsel, and being a good and patient friend
Evelyn J. Ford
Sharon Bornstein
Diane Pruitt
Michael McMahon
Carl Frugundorf
Maria Pinelli
Debbie Kissire
Chris Bruner
Donald Key
SPECIAL THANKS
Eric Siegel has a special place in all of our hearts. He was instrumental in the earlier editions of this book and brought his considerable experience consulting with entrepreneurs and growth companies to those works.
Preface
This book has a heritage back to the early 1980s, the time of Reaganomics, entrepreneurship, and a renewed sense of spirit in our country. It was prepared for the thousands of people starting businesses. At the time, there were few resources available to entrepreneurs to help them develop their first business plan. This book was written to fill that void. It has been published in many languages around the world and has been well received.
In order to broaden the appeal, this new edition has been prepared for entrepreneurs who are in the planning stages of starting, expanding, or acquiring a business. We provide a step-by-step process for preparing a business plan. The instruction goes beyond simply discussing what is required in such a proposal. It explains why certain information is required, how it may be best presented, and the sensitivities of both the preparer and reviewer.
Since the first edition was published in 1988, the authors have heard from many entrepreneurs about the importance of this straightforward approach to the business plan, which not only helps entrepreneurs tell their stories but creates the discipline to be sure each story is complete and has all the elements necessary to enhance its success. While not the original intent, we have also heard from many that it helps mature business leaders present a plan for capital resources within larger companies.
We believe the discipline of a start-up business plan is not radically different from the planning associated with a new business venture within a large organization. In response, from the advice of investors and from entrepreneurs who have used this book, one of our efforts on this edition is to provide more of the investors perspective. Second, readers suggested that while we helped entrepreneurs with the business plan and helped them anticipate the needs of the potential investor, we could go somewhat further to better explain the investors outlook. The whys of what should be in a business plan are now emphasized more.
Many entrepreneurs underestimate the importance of writing a business plan. They underestimate how much having a good business plan can help a business raise money to start or expand, plan for the future, and keep tabs on how it is currently progressing. In this book, we not only stress these important aspects of business plans, but help the entrepreneur think through and prepare a business plan that serves all three purposes.
Launching a business venture is a serious undertaking. While statistics on the failure rate of new businesses vary, all suggest a high incidence, particularly in the first few years. Acquisitions of existing businesses or product lines and expansions of present operations enjoy a significantly higher success rate, due to the lesser degree of uncertainty. However, even in these circumstances, issues are complex and stakes are high.
In light of this, entrepreneurs must act in whatever manner will improve these odds. In almost every instance, this suggests the meticulous creation and adherence to a business plan. The exercise of writing a business plan forces the entrepreneur to examine each element of his or her prospective venture closely. It is expected that many cracks and flaws will be identified and addressed through this process.
Where such problems cannot be addressed and where their ramifications are significant, the fact that they have been identified affords the entrepreneur an opportunity to abandon the venture before resources have been committed.