The following business plans are examples of what a completed business plan might look like. Use the instructions and information included in The Business Plan for Independent Inventors to fill out your own business plan. Sample Business Plan for American Management Technology (AMT)
1.0 Executive Summary
By focusing on its strengths, its key customers, and the underlying values they need, American Management Technology will increase sales to more than $10 million in three years, while also improving the gross margin on sales and cash management and working capital.
This business plan leads the way. It renews our vision and strategic focus: adding value to our target market segments, the small business and high-end home office users, in our local market. It also provides the step-by-step plan for improving our sales, gross margin, and profitability.
This plan includes this summary, and chapters on the company, products and services, market focus, action plans and forecasts, management team, and financial plan.
1. Sales increasing to more than $10 million by the third year.
2. Bring gross margin back up to above 25%, and maintain that level.
3. Sell $2 million of service, support, and training by 1998.
4. Improve inventory turnover to 6 turns next year, 7 in 1996, and 8 in 1997.
AMT is built on the assumption that the management of information technology for business is like legal advice, accounting, graphic arts, and other bodies of knowledge, in that it is not inherently a do-it-yourself prospect. Smart business people who aren't computer hobbyists need to find quality vendors of reliable hardware, software, service, and support. They need to use these quality vendors as they use their other professional service suppliers, as trusted allies.
AMT is such a vendor. It serves its clients as a trusted ally, providing them with the loyalty of a business partner and the economics of an outside vendor. We make sure that our clients have what they need to run their businesses as well as possible, with maximum efficiency and reliability.
Many of our information applications are mission critical, so we give our clients the assurance that we will be there when they need us.
1.3 Keys to Success
1. Differentiate from box-pushing, price-oriented businesses by offering and delivering service and support -- and charging for it.
2. Increase gross margin to more than 25%.
3. Increase our non-hardware sales to 20% of the total sales by the third year.
2.0 Company Summary
AMT is a 10-year-old computer reseller with sales of $7 million per year, declining margins, and market pressure. It has a good reputation, excellent people, and a steady position in the local market, but has been having trouble maintaining healthy financials.
2.1 Company Ownership
AMT is a privately-held C corporation owned in majority by its founder and president, Ralph Jones. There are six part owners, including four investors and two past employees. The largest of these (in percent of ownership) are Frank Dudley, our attorney, and Paul Karots, our public relations consultant. Neither owns more than 15%, but both are active participants in management decisions.
2.2 Company History
AMT has been caught in the vise grip of margin squeezes that have affected computer resellers worldwide. Although the chart titled Past Financial Performance shows that we have had healthy growth in sales it also shows declining gross margin and declining profits.
The more detailed numbers in Table 2.2 include other indicators of some concern The gross margin % has been declining steadily, as we see in the chart. Inventory turnover is getting steadily worse.
All of these concerns are part of the general trend affecting computer resellers. The margin squeeze is happening throughout the computer industry worldwide. Past Performance
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