appendices and exhibits in business plan sample

What to Include in Your Business Plan Appendix

Candice Landau

4 min. read

Updated March 4, 2024

While not required, a well-structured business plan appendix goes a long way toward convincing lenders and investors that you have a great business idea and a viable business.

This article will cover what to include in your appendix and best practices to make it a useful part of your business plan . 

• What is a business plan appendix?

A business plan appendix provides supporting documentation for the other sections of your business plan .  

The appendix typically comes last and includes any additional documents, spreadsheets, tables, or charts that don’t fit within the main sections of your plan. 

What goes in the appendix of a business plan?

In general, here is some of the information you might include in your business plan appendix:

• Charts, graphs, or tables that support sections of your business plan
• Financial statements and projections
• Sales and marketing materials
• Executive team resumes
• Credit history
• Business and/or personal tax returns
• Agreements or contracts with clients or vendors
• Licenses, permits , patents, and trademark documentation
• Product illustrations or product packaging samples
• Building permit and equipment lease documentation
• Contact information for attorneys , accountants, and advisors

You may include some, all, or none of these documents in your appendix. It depends on your business needs and who you share your business plan with. 

Similar to your executive summary , adjusting what’s in your appendix may be helpful based on the intended audience.

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Business plan appendix best practices

Here are a few tips to help you create an appendix that supports your business plan.

Make it easy to navigate

If your appendix is more than a few pages long or contains a variety of documents, you may want to consider adding a separate table of contents.

Don’t forget security

If you share confidential information within the business plan appendix, you will also want to keep track of who has access to it. 

A confidentiality statement is a good way to remind people that the content you share should not be distributed or discussed beyond the agreed parties. You can include it as a separate page or as part of your business plan cover page .

Make the appendix work as a separate document

Given that the appendix is the last part of the business plan, it’s quite likely your readers will skip it. 

For this reason, it’s important to ensure your business plan can stand on its own. All information within the appendix should be supplementary. 

Ask yourself: if the reader skipped this part of my plan, would they still understand my idea or business model ? If the answer is no, you may need to rethink some things.

Connect the appendix to sections of your business plan

Make sure that anything you include in the appendix is relevant to the rest of your business plan. It should not be unrelated to the materials you’ve already covered. 

It can be useful to reference which section of your plan the information in your appendix supports. Use footnotes, or if it’s digital, provide links to other areas of your business plan.

Keep it simple

This is good general advice for your entire business plan. 

Keep it short. 

You don’t need to include everything. Focus on the relevant information that will give your reader greater insight into your business or more detailed financial information that will supplement your financial plan.

Free business plan template with appendix

Remember, your appendix is an optional supporting section of your business plan. Don’t get too hung up on what to include. You can flag documents and information you believe are worth including in your appendix as you write your plan . 

Need help creating your business plan? 

Download our free fill-in-the-blank business plan template with a pre-structured format for your appendix. 

And to understand what you should include based on your industry—check out our library of over 550 business plan examples .

Business plan appendix FAQ

How do you write an appendix for a business plan?

Gather relevant documents like financial statements, team resumes, and legal permits. Organize them logically, possibly mirroring your business plan’s structure. If long, include a table of contents, ensure each item is relevant, and focus on keeping it simple. If you’re sharing sensitive information, add a confidentiality statement.

Why is a business plan appendix important?

An appendix provides supporting evidence for your business plan. It keeps your main plan more concise, enhances credibility with additional data, and can house all-important business documents associated with your business.

What additional information would appear in the appendix of the business plan?

The following can appear in your appendix:

• Financial projections
• Marketing materials
• Team resumes
• Legal documents (like permits and patents)
• Product details (like prototypes and packaging)
• Operational documents (like building permits)
• Professional contact information. 

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Candice Landau is a marketing consultant with a background in web design and copywriting. She specializes in content strategy, copywriting, website design, and digital marketing for a wide-range of clients including digital marketing agencies and nonprofits.

Table of Contents

• What goes in the appendix?
• Best practices
• Free template

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What is an Appendix in a Business Plan?

Appendix is an optional section placed at the end of a document, such as a business plan, which contains additional evidence to support any projections, claims, analysis, decisions, assumptions, trends and other statements made in that document, to avoid clutter in the main body of text.

What is Included in an Appendix of a Business Plan?

Appendix commonly includes charts, photos, resumes, licenses, patents, legal documents and other additional materials that support analysis and claims made in the main body of a business plan document around market, sales, products, operations, team, financials and other key business aspects.

The appendix is the perfect place to showcase a wide range of information, including:

• Supporting documentation: References and supporting evidence to substantiate any major projections, claims, statements, decisions, assumptions, analysis, trends and comparisons mentioned throughout the main body of a business plan.
• Requested documentation: Information, documents or other materials that were specially requested by the business plan readers (e.g., lenders or investors) but are too large to place in the main body of text.
• Additional information: Any other materials or exhibits that will give readers a more complete picture of the business.
• Visual aids: Photos, images, illustrations, graphs, charts, flow-charts, organizational charts, resumes.

After reviewing the appendices, the reader should feel satisfied that the statements made throughout the main body of a business plan are backed up by sufficient evidence and that they got even fuller picture of the business.

How Should You Write a Business Plan Appendix? (Insider Tip)

The fastest way to pull the Appendix chapter together is to keep a list of any supporting documents that come to mind while you are in the process of writing the business plan text.

For example, while writing about the location of your business, you may realize the need for a location map of the premises and the closest competitors, demographic analysis, as well as lease agreement documentation.

Recording these items as you think of them will enable you to compile a comprehensive list of appendix materials by the time you finish writing.

Remember to keep copies of the original documents.

Template: 55 Business Plan Appendix Content Samples

For your inspiration, below is a pretty exhaustive list of supporting documentation that typically gets included in the business plan appendix. But please do not feel like you have to include everything from the list. In fact, you definitely shouldn’t!

The purpose of the appendix is to paint a fuller picture of your business by providing helpful supporting information, not to inundate yourself or the readers of your business plan. So, take care to only include what is relevant and necessary .

Company Description

1. Business formation legal documents (e.g., business licenses, articles of incorporation, formation documents, partnership agreements, shareholder agreements)

2. Contracts and legal agreements (e.g., service contracts and maintenance agreements, franchise agreement)

3. Intellectual property (e.g., copyrights, trademark registrations, licenses, patent filings)

4. Other key legal documents pertaining to your business (e.g. permits, NDAs, property and vehicle titles)

5. Proof of commitment from strategic partners (e.g., letters of agreement or support)

6. Dates of key developments in your company’s history

7. Description of insurance coverage (e.g. insurance policies or bids)

Target Market

8. Highlights of relevant industry and market research data, statistics, information, studies and reports collected

9. Results of customer surveys, focus groups and other customer research conducted

10. Customer testimonials

11. Names of any key material customers (if applicable)

Competition

12. List of major competitors

13. Research information collected on your competitors

14. Competitive analysis

Marketing and Sales

15. Branding collateral (e.g., brand identity kit designs, signage, packaging designs)

16. Marketing collateral (e.g., brochures, flyers, advertisements, press releases, other promotional materials)

17. Social media follower numbers

18. Statistics on positive reviews collected on review sites

19. Public relations (e.g., media coverage, publicity initiatives)

20. Promotional plan (e.g., overview, list and calendar of activities)

21. List of locations and facilities (e.g., offices, sales branches, factories)

22. Visual representation of locations and facilities (e.g., photos, blueprints, layout diagrams, floor plans)

23. Location plan and documentation related to selecting your location (e.g., traffic counts, population radius, demographic information)

24. Maps of target market, highlighting competitors in the area

25. Zoning approvals and certificates

26. Detailed sales forecasts

27. Proof of commitment from strategically significant customers (e.g., purchase orders, sales agreements and contracts, letters of intent)

28. Any additional information about the sales team, strategic plan or process

Products and Services

29. Product or service supporting documentation – descriptions, brochures, data sheets, technical specifications, photos, illustrations, sketches or drawings

30. Third-party evaluations, analyses or certifications of the product or service

31. Flow charts and diagrams showing the production process or operational procedures from start to finish

32. Key policies and procedures

33. Technical information (e.g., production equipment details)

34. Dependency on third-party entities (e.g., materials, manufacturing, distribution) – list, description, statistics, contractual terms, rate sheets (e.g., sub-contractors, shippers)

35. Risk analysis for all major parts of the business plan

Management and Team

36. Organizational chart

37. Job descriptions and specifications

38. Resumes of owners, key managers or principals

39. Letters of reference and commendations for key personnel

40. Details regarding human resources procedures and practices (e.g., recruitment, compensation, incentives, training)

41. Staffing plans

42. Key external consultants and advisors (e.g., lawyer, accountant, marketing expert; Board of Advisors)

43. Board of Directors members

44. Plans for business development and expansion

45. Plan for future product releases

46. Plan for research and development (R&D) activities

47. Strategic milestones

48. Prior period financial statements and auditor’s report

49. Financial statements for any associated companies

50. Personal and business income tax returns filed in previous years

51. Financial services institutions’ details (name, location, type of accounts)

52. Supporting information for the financial model projections, for example:

• Financial model assumptions
• Current and past budget (e.g., sales, marketing, staff, professional services)
• Price list and pricing model (e.g., profit margins)
• Staff and payroll details
• Inventory (e.g., type, age, volume, value)
• Owned fixed assets and projected capital expenditure (e.g., land, buildings, equipment, leasehold improvements)
• Lease agreements (e.g., leases for business premises, equipment, vehicles)
• Recent asset valuations and appraisals
• Aged debtor receivable account and creditor payable account summary
• Global financial considerations (exchange rates, interest rates, taxes, tariffs, terms, charges, hedging)

53. Debt financing – documentation regarding any loans, mortgages, or other debt related financial obligations

54. Equity financing – capital structure documentation (e.g., capitalization table, 409A, investor term sheets, stock and capital related contracts and agreements)

55. Personal finance – information regarding owners’ capital and collateral (e.g., Personal Worth Statement or Personal Financial Statement, loan guarantees, proof of ownership)

Related Questions

How do you finish a business plan.

Business plan is finished by summarizing the highlights of the plan in an Executive Summary section located at the beginning of the document. The business plan document itself is finished by an Appendix section that contains supporting documentation and references for the main body of the document.

What is bibliography?

A bibliography is a list of external sources used in the process of researching a document, such as a business plan, included at the end of that document, before or after an Appendix. For each source, reference the name of the author, publication and title, the publishing date and a hyperlink.

What are supporting documents included in a business plan appendix?

Supporting documents in a business plan appendix include graphs, charts, images, photos, resumes, analyses, legal documents and other materials that substantiate statements made in a business plan, provide fuller picture of the business, or were specifically requested by the intended reader.

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When you finish writing your business plan, you want it to make sense when someone, probably an investor or a shareholder in your business, reads it. That’s where the exhibits and appendices section comes in!

Often overlooked, the appendix section is an integral part of any business plan. Let’s imagine you are writing your business plan to woo some investors. In that case, the quality of the exhibits and appendices section in your plan will matter a lot.

The appendix offers your target readers great insights about your plan. Ideally, you should use this section to convince the investors that you have a robust business concept.

If you want your potential investors to take your business concept seriously you must invest a lot of time and research to prepare a great exhibits and appendices section for your business plan.

In this guide, we will cover everything you need to know to complete a convincing exhibits and appendices section in a business plan.

Key Takeaways

• Before completing the exhibits and appendices section in a business plan, think of what you want to achieve with your plan. This way, you know what supporting documents to include
• Key documents to include in this section are financial statements – cash flow, income statements, balance sheets, and general financial projections, market analysis, company information and background, and marketing materials and plan
• Provide detailed documentation to make it easy to convince any reader to take the desired action
• Add a table of contents for ease of navigation from one section to the other

What Is a Business Plan Exhibits and Appendices Section?

The appendix, which is the last part in a business plan, offers supporting documentation for critical components in your plan. For instance, here you include any market research analysis you’ve done and financial statements.

Additionally, if there are any charts and tables, you should capture them in the exhibits and appendices section.

You can, as well, include other information in this section such as resumes, credit history, and intellectual property documentation. However, the limit of what to capture in the appendix section should be informed by the audience you are targeting.

What’s the Purpose of the Exhibits and Appendices Section in a Business Plan?

The exhibits and appendices section in a business plan has a defined purpose. It offers evidence and supporting documentation for your business concept.

For instance, while you can include charts and graphs in the body of your business plan, they are best captured in detail in the exhibits and appendices section.

How to Complete the Exhibits and Appendices Section in a Business Plan?

Now that you know the importance of having an appendix section, the next step is learning how to complete it successfully.

The most important success factor when completing a business plan appendix is knowing what goes into this section.

Here are some of the supporting documents to include in this section:

1.   Financial Projections

If you are writing a business plan for loan applications or raising capital, you better have clear and strong financial projections. Include detailed monthly, quarterly and annual cash financial projections in the appendix section.

The most critical financial information to focus on here include income statements, balance sheets, and cash flow statements.

2.   List of Customers

When preparing a business plan for expansion purposes, you will need to include a list of customers. Such information gives a potential investor and shareholders a clear snap chat of your present clientele base.

3.   Market Analysis

Analyzing the target market is a critical step when preparing a business plan. Whether you are starting out or expanding, you need a clear understanding of the market you are entering . Include all the relevant information about your market in the appendix section.

Some of the aspects to consider here include a clear definition of the industry, a brief description of the potential customers and competitors.

Additionally, add any potential risks you might have identified during the market research. Such information helps you make the right decisions towards achieving the set goals.

4.   Marketing Materials and Plan

How do you plan to market your business concept? What materials will you need? The exhibits and appendices section is a great place to expand the marketing section you have already covered in your plan.

Here, you need to attach a detailed marketing plan. It helps convince your readers that you have a clear understanding of your target audience, where to put marketing efforts, as well as how you intend to create awareness of your business concept.

Best Practices When Completing the Exhibits and Appendices Section in a Business Plan

Crafting a successful exhibits and appendices section isn’t as easy as it sounds.

Here are a few best practices to guide you as you complete the appendix section in your business plan:

• Include a table of contents : When the appendix section covers several documents, it is advisable to include a table of contents. This way, it helps a reader access the different sections easily.
• Confidentiality Statement : where you include legal documents, intellectual property applications or diagrams, and credit history documents, ensure that you have a Confidentiality Statement. It reminds anybody reading the business plan that they should not share or disclose such information with your consent.
• Short and Simple : You have covered a lot of information about your concept in the other sections of the business plan. Ensure that you keep this section as short and simple as possible. However, it is important to provide all the necessary information to support your business plan.

Final Thoughts

As a business owner, you want to write a business plan that gets read and convinces the readers –whether they are investors or shareholders – to take some action. The exhibits and appendices section is a great place to make this possible by including all the necessary information to back up any claims in the preceding sections of your business plan.

Whereas it is important to keep the appendix section as short as possible, it is equally necessary to ensure that it covers enough documents to support your business concept. Are you stuck writing the exhibits and appendices section in your business plan? Leave us a comment below.

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What should you include in your business plan appendices?

So you're crafting a comprehensive business plan for your business but you are not sure about what should go in the main body of the document and what should go in the appendices? You're in the right place.

Our guide helps you decide what should go in appendices so that you can complete your business plan. Ready? Let’s get started!

In this guide:

What is the objective of the appendices section of your business plan?

What information should i include in the appendices section of my business plan.

• How long should the appendices section of your business plan be?
• Best tips for business plan appendices
• Example of appendices in a business plan

The primary objective of the appendices section is to offer proof or supporting documentation for key claims of your business plan.

This section gives readers the ability to learn more about particular facets of your company or to check the data used to make claims. It also enables you to keep the body of your business plan to the point and clutter free.

Need a convincing business plan?

The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.

The appendices section is strategically placed at the end of the business plan to increase the validity and substance of your proposal.

You could include any of the following in this section of your business plan:

Additional financial records

While your business plan already contains substantial financial data, including additional material can offer further insight to potential investors and financial institutions:

• Inventories
• Asset valuations
• Credit profile synopsis
• Historical tax filings
• Exisiting loan contracts

Monthly financial statements

It’s likely that only the yearly figures will be shown in the financial plan section of your business plan which means that if the reader wants to look deeper into the monthly figures, this has to be included in the appendices.

You can also include historical monthly management accounts if you have them.

Organizational overview and team details

You could also include further information about your management team and the business structure by covering:

• A visual representation of your business’ organizational structure
• Details about your corporate structure (list of subsidiaries and percentage owned, share certificate, certificate of incorporations, etc.)
• Curriculum vitae (CV) of the members of your management team
• Floor plans of your premises

Legal documentation

Legal documents are frequently included in business plan appendices. These help demonstrate your business’ reliability to your readers and may include:

• Incorporation papers
• Permits, trademarks, licenses, and patents
• Shareholder agreements
• Rental agreements and leases
• Vendor contracts
• Equipment specifications

Market data & competitive analysis

Businesses that face intense industry competition may need to provide additional information. You could provide in-depth information about your competitors, including their strengths, weaknesses, market share, and positioning.

You could also include market research data or industry reports that back up your analysis.

Images of products and services

Including images of your products and services in the appendices section provides a visual representation that helps stakeholders better understand what your business offers. 

Words alone sometimes fall short in conveying your products or services unique features, design, and value

Visuals can also bridge communication gaps and make it easier for your audience to grasp complex concepts (for example, if you were a technological business producing goods). 

Potential investors, partners, and other stakeholders can quickly comprehend the nature of your products or services by viewing images, leading to a more comprehensive understanding of your business proposition.

Other supplementary resources

There are many additional resources that you can add. These help the reader in understanding the specifics of your business:

• Expanded marketing collateral
• Complementary financial analysis
• Architectural renditions for properties

How long should the appendices section of your business plan be? 

The length of the appendices section in your business plan is flexible and should be guided by the principle of providing only pertinent and meaningful information. While there is no set limit, this section typically spans from a few pages to around 20 pages. 

Remember to only include items that really help the reader understand your business plan and concept. Appendices should not be confused with a dataroom which comes later in the investment process and has strong confidentiality protections in place which business plans often lack.

Think about who will read your plan. Some stakeholders, like investors or lenders, might prioritise financials. Others, like partners or staff involved in your business, might care more about contracts or market research.

Tips for your business plan appendices

By adhering to a few simple yet effective practices, you can ensure that your appendices section adds value and clarity to your business plan. Let's discuss these best practices in more detail:

Create a table of contents

If your appendices section is lengthy and involves a range of documents, consider including a well-structured table of contents. This helps readers locate specific information swiftly, resulting in a smoother reading experience.

Include a confidentiality statement

Protecting sensitive information included in your business plan appendices, such as credit history records or legal documents, is essential. 

Include a confidentiality statement to remind readers of the private nature of certain documents. This acts as a gentle yet firm directive, underlining the need for discretion and permission before sharing or discussing confidential data.

Remember that, unless you signed a non-disclosure agreement with the recipient (which is extremely rare), there is no garantee that your business plan won't end-up in the hands of a competitor. Avoid sharing sensitive proprietary files, and if needed ask advice from a qualified lawyer.

Example of appendices in a business plan 

Below is an example of how the appendices section of your business plan might look like. As you can see, it includes a maturity profile and a monthly breakdown of the cash flow forecast.

This example was taken from one of  our business plan templates .

Crafting a concise and compelling business plan is vital in obtaining funding from banks or investors. Utilising your business plan appendices helps provide depth without overwhelming the document body. 

It also underlines your commitment to business and should, therefore, be included in any business plan.

Also on The Business Plan Shop

• Business Model vs. Business Plan
• 7 tips for writing an effective business plan
• How to write the suppliers section of your business plan

Know someone who needs help writing up the appendices section of their business plan? Share this article with them and help them out!

Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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What to include in a Business Plan Appendix?

Free Business Plan Template

• May 2, 2024

A business plan appendix is a great way to add depth to your business plan without making it unbearably long and boring.

However, not everyone needs it. And even when you do, it’s important to understand what this section entails and how you can make it useful.

Well, we will figure that out in this blog post.

But before that, what exactly is an appendix in a business plan?

What is a business plan appendix?

A business plan appendix is the last section of your business plan that contains supplementary information and documents to support the claims your plan makes.

This may include a couple of technical documents, detailed financial statements, charts, spreadsheets, and other additional documents that were too detailed or extensive to include within the main sections.

It’s like a reference point for readers who want to gather detailed insights about the information you presented in your business plan.

Let’s understand what the business plan appendix includes in brief detail:

What to include in the appendix of a business plan?

Depending on your business needs and the intended audience for your business plan, the appendix section may include some of these documents.

• Supplementary information
• Legal documents
• Organizational and personnel details
• Additional financial documents
• Achievements and testimonials

Let’s understand what the appendix business plan includes in brief detail:

1. Supplementary information

Here, you can include documents to support and elaborate on some information mentioned in other sections of your business plan.

Some examples of supplementary information include,

• Charts, graphs, and tables used in the analysis
• Sales and marketing material
• Website and social media documentation
• Raw data, research methods, and research protocols
• Questionnaires and survey instruments
• Product blueprints and images
• Technical and user documentation
• Detailed competitor analysis
• Property designs

2. Legal documents

Adding legal and compliance documents to your appendix will demonstrate your adherence to regulations and legal standards. Such transparency will help win the trust of your stakeholders and potential investors.

Here are a few examples of the kinds of legal documents you can add.

• Incorporation papers
• Licenses and Permits
• Intellectual properties, i.e. trademarks, copyright, patents.
• Building permits and rental agreements
• Supplier and vendor contracts
• Equipment documentation
• stock certificates

3. Organizational and personnel details

In this section, you will offer information that will let readers have a peek into the workings of your company and the people behind it. Some of these documents include

• Organizational chart
• Job descriptions and hiring procedures
• Resumes for executive positions
• Certifications and degrees
• Affiliates such as attorneys or accountants

4. Additional financial documents

The main body of your financial plan already includes adequate financial information. However, depending on your audience, they might need access to certain additional information such as:

• List of assets within the business
• Credit history
• Business and personal tax returns
• Spreadsheets of financial projections
• Historical and current financial statements
• Equity structure and debt repayment plan
• SBA (Small Business Administration) loan agreements and business loans.

5. Achievements and testimonials

Lastly, you can include proof of achievements that can help establish your brand’s credibility and performance. This is a great place to highlight:

• Media and press clippings
• Testimonials and success stories
• Expert endorsements
• Awards and achievements

And those are pretty much all the things you will include in your plan. Let’s now create an appendix suited for your business plan.

Tips and best practices for business plan appendix

Before you kickstart writing your appendix, we have a few tips to help you make this section more enriching.

1. Make it scannable

Keep the contents of your appendix simple and easy to navigate. If you are planning to add a variety of documents,  consider adding a table of contents to help readers find what they need easily.

2. Relate to the business plan

Everything you include in your appendix should be relevant to the contents and elements of your business plan .

You can add footnotes or a link by referencing the supplementary documents to the business plan information it supports.

3. Include the confidentiality statement

If you are adding financial statements or any legally classified information, add a confidentiality statement. This is an effective way of ensuring that the parties with access to confidential information don’t share it with anyone else.

4. Keep the appendix supplementary

When you write a business plan ensure that the document stands on its own without relying on the appendix. Your readers are likely to skip this section, so you don’t want to risk having inadequate information in the main body.

Your appendix should only cover supplementary and supporting information, not any core detail that the reader must quintessentially know.

Start preparing your business plan with the appendix

Now, don’t get caught up trying to figure out what to include in your appendix. Focus on writing your business plan, and you will eventually get a gist of supporting documents essential for your plan.

However, what if you need help writing your business plan in the first place? In that case, a business planning app or sample business plans would help.

For instance, Upmetrics’ AI business plan generator can help create compelling business plans from scratch in less than 10 minutes.

All you have to do is answer some tailored business questions, and an AI assistant will do everything else for you.

Build your Business Plan Faster

with step-by-step Guidance & AI Assistance.

Frequently Asked Questions

Is the appendix important in a business plan.

Yes, the appendix is an important section of your business plan. Although it’s not compulsory, adding an appendix will help your investors and other audiences gather the required information in in-depth detail. An appendix helps you prove the viability of claims made in different sections of your plan.

How do you write an appendix for a business plan?

Follow these steps to write your appendix section:

• Gather all the supplementary documents you want to include in this section.
• Organize them logically based on the structure of your plan or their content nature, i.e. financial documents, legal documents, marketing materials, etc.
• Label the documents and present them neatly in a professional stack without creating clutter.
• Add footnotes and links to the relevant business plan sections and create a table of contents to make the information easily scannable.

Do I need a table of contents for the appendix?

It’s recommended to have a table of contents especially if you are adding multiple long documents supporting different sections of your business plan information.

Are there any online resources for creating a business plan appendix?

Business plan templates are the best resources for creating a clear and impactful appendix section. Most business plan templates online have a section for appendix which can be easily edited to suit your needs.

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Essential Appendix in Business Plans: Key Examples & Importance

20 February 2024

Welcome to our comprehensive exploration of the often overlooked yet indispensable component of business plans: the appendix. In the realm of entrepreneurship, crafting a robust and persuasive business plan is paramount to success. However, while much emphasis is placed on the main body of the plan, the appendix remains a hidden gem, brimming with potential to elevate your document from ordinary to extraordinary.

Table of Contents

Appendix in Business Plan

An appendix in a business plan serves as a vital repository of supplementary information, enriching the core content with comprehensive details. It’s akin to the backstage of a theatrical performance, housing essential materials that bolster the narrative presented on stage. Within the business context, the appendix encapsulates various facets crucial for stakeholders’ deeper understanding and assessment.

Appendix of a Business Plan

The appendix of a business plan acts as an expansive reservoir, accommodating an assortment of documents essential for comprehensive understanding and evaluation. It functions as an annex, seamlessly integrating supplementary materials that augment the primary narrative. Within this annex, stakeholders discover a wealth of information ranging from intricate financial analyses to intricate market research findings.

Appendix Business

The appendix business segment within a business plan serves as a reservoir of supplementary materials indispensable for stakeholders’ comprehensive understanding and evaluation. It functions as an archive, housing a diverse array of documents ranging from financial projections to legal agreements, market research findings to organizational charts. This segment enriches the core content, offering stakeholders a deeper dive into the venture’s operational intricacies and strategic underpinnings.

Supporting Documents Example

In a business plan, supporting documents serve as tangible evidence substantiating the venture’s viability and potential. These documents encompass a broad spectrum, ranging from financial statements to market research findings, legal agreements to organizational charts. For instance, a supporting documents example might include detailed financial projections demonstrating revenue forecasts, expense breakdowns, and cash flow analyses. Additionally, it could entail market research reports elucidating target demographics, competitive landscapes, and industry trends.

What is Appendix in Business Plan

The appendix in a business plan constitutes a critical segment housing supplementary materials essential for stakeholders’ comprehensive understanding and evaluation. Essentially, it serves as an annex, encapsulating a diverse array of documents ranging from financial projections to market research findings. Its purpose is to enrich the core content, providing stakeholders with deeper insights into the venture’s operational intricacies and strategic underpinnings.

Appendix Business Plan Example

An appendix business plan example serves as a tangible demonstration of the supplementary materials essential for enriching the core content of a business plan. It encompasses a diverse array of documents, including financial projections, market research findings, legal agreements, and organizational charts. By showcasing these materials in a structured manner, the example elucidates the depth and breadth of information housed within the appendix, offering stakeholders a comprehensive understanding of the venture.

Why Should You Include Supporting Documents in Your Business Plan?

The inclusion of supporting documents in a business plan is imperative for several compelling reasons. Firstly, these documents serve as tangible evidence substantiating the venture’s viability and potential, instilling confidence in stakeholders. Secondly, they provide a deeper dive into the operational intricacies and strategic underpinnings, fostering a nuanced understanding.

Which of the Following Should Be Included in the Supporting Documents Section of a Business Plan?

The supporting documents section of a business plan should encompass a diverse array of materials essential for stakeholders’ comprehensive understanding and evaluation. This includes but is not limited to, detailed financial projections, market research findings, legal agreements, organizational charts, resumes of key personnel, and any pertinent licenses or permits. By integrating these materials in a structured manner, the supporting documents section enriches the core content, offering stakeholders deeper insights into the venture’s intricacies and potential.

The Purpose of Including Supporting Documents in a Business Plan Is To

The purpose of including supporting documents in a business plan is multifaceted and pivotal for the plan’s efficacy. Primarily, these documents serve as tangible evidence substantiating the venture’s viability and potential, instilling confidence in stakeholders. Additionally, they provide a deeper dive into the operational intricacies and strategic underpinnings, fostering a nuanced understanding. Moreover, they enhance transparency and credibility, showcasing meticulous planning and thorough research. Ultimately, the inclusion of supporting documents bolsters the business plan’s efficacy as a comprehensive blueprint for success.

Conclusion:

In wrapping up, it’s evident that the appendix plays a crucial role in enhancing the effectiveness and completeness of your business plan. Through meticulous inclusion of supporting documents, such as financial projections, market research data, and legal documents, you bolster the credibility and clarity of your plan. This not only instills confidence in potential investors and stakeholders but also serves as a valuable reference point for your own strategic decision-making.

Frequently Asked Questions (FAQs) About Business Plan Appendices

What is the appendix in a business plan, and why is it important?

The appendix in a business plan is a supplementary section that includes additional information, documents, and data supporting the main content of the plan. It is crucial as it provides comprehensive details that strengthen the credibility and feasibility of your business proposal.

What should be included in the supporting documents section of a business plan?

The supporting documents section of a business plan should encompass a range of materials, such as financial statements, market research reports, legal agreements, resumes of key team members, permits, licenses, and any other relevant documentation that bolsters the claims and assertions made in the main body of the plan.

Why should you include supporting documents in your business plan?

Including supporting documents in your business plan is essential for several reasons. Firstly, it adds credibility by providing tangible evidence to support your claims and assertions. Secondly, it enhances clarity and transparency, ensuring that stakeholders have access to all pertinent information. Lastly, it demonstrates thoroughness and professionalism, reflecting positively on your competence as an entrepreneur.

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What to Include in Your Business Plan Appendix?

Back to Business Plans

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on September 13, 2023 Updated on December 12, 2023

Launching a business involves countless tasks, and one of the crucial early hurdles is writing a business plan. Many entrepreneurs who aren’t looking for funding think they can skip this step, but that’s never a good idea. 

A sharp business plan is essentially a business owner’s commitment to and preparation for the road ahead, and if you’re seeking funding from an investor or lender, having a comprehensive appendix of documents that support your plan can really provide a boost.

But what documents should you include? Lucky for you, this guide explains the key elements of a business plan appendix.

• The Role of the Appendix in the Business Plan

In your business plan, you likely made many claims about various aspects of your business, and the appendix provides documentation to back up those claims. 

Of course, if your reader actually gets to your appendix, you’ve done well and captured their interest. Be sure to only include documents that support your business plan claims.

• Components of the Business Plan Appendix

The following components should be included if you have them, which depends on the stage of your business.

1. Financial Projections

In the body of your business plan, you summarized your financial projections and mentioned the highlights, but your appendix should provide your full financial calculations and spreadsheets. 

These should include:

• Profit and Loss Statement , also known as an income statement. This shows projected revenue and lists all costs, which are then deducted to show net profit or loss. 
• Cash Flow Statement. This shows how much cash you have on hand at any given time. It will have a starting balance, projections of cash coming in, and cash going out, which will be used to calculate cash on hand at the end of the reporting period.
• Balance Sheet. This shows the net worth of the business, which is the assets of the business minus debts. Assets include equipment, cash, accounts receivables, inventory, and more. Debts include outstanding loan balances and accounts payable.

Provide monthly projected versions of each statement for the first year, then annual projections for the following two years. You should also include a chart of your break-even analysis.

If you’ve already been running your business and have made sales, include your financial statements to date.

2. Market Research and Analysis 

If you have charts and graphs that support the market analysis of your business plan, include those as well. Also include any market information, such as market reports, that you used to do your market analysis.

Provide documentation about your target market , such as its size and demographics. If you’ve made a detailed profile of your target customer, create an infographic and include it as well.

3. Intellectual Property Documentation

If you have a patent, trademark , or copyright, include documentation of that intellectual property. Investors tend to appreciate patents, and will likely want to see them.

Include a brief history of when and how you obtained the patent or other intellectual property and how it benefits your business.

4. Legal Documents

Include your business entity documents, such as your articles of organization if you’ve formed an LLC, and your operating agreement . If you have agreements with suppliers or vendors, you can also include those. Documentation of any licenses and permits you’ve obtained should also be included, as well as any other legal documents pertaining to your business.

5. Resumes and Professional Biographies

Attach the resumes of founders and managers here or create professional biographies. Be sure to include all relevant experience, education, and achievements. Investors are very interested in the management team’s ability to execute the plan, so don’t skip this part.

6. Marketing Plan

If you’ve already created a full marketing plan, which is a good idea, include it here as well. How you’re going to get your product to market is critical, so having a detailed marketing plan will support the marketing summary in your business plan .

7. Customer Contracts

If you’re fortunate enough to have secured large customer contracts, include those as well.

8. Product Illustrations

If your product is in development, include an illustration of the design. If you’re manufacturing the product, provide an illustration of the manufacturing process.

• Tips for Creating a Strong Business Plan Appendix 

There are a few things to keep in mind when putting together your business plan appendix.

• Be selective and relevant – don’t overload the reader with too much information.
• Include anything that highlights the key points of your business plan.
• Be clear and concise. Keep your documents short and to the point.
• Use illustrations such as infographics and charts when possible.

If you’ve written a business plan that captures a potential investor’s interest enough to keep them reading all the way to the end, you’ve done great work. Now give them the cherry on top with a fantastic appendix that provides all the documentation to support your plans’ primary assertions. 

Keep it relatively short, but make it strong enough to make the reader a true believer. With any luck, you’ll get the funding you need to put your business on the road to serious success! 

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What Are Appendices in a Business Plan? A Complete Guide

A comprehensive business plan is significant for all investors or business dreamers in the competitive business world. It serves as a roadmap to business success and gives entrepreneurs the right direction to follow at every critical stage of their venture. Similarly, one of the sections in a business plan has its place due to adding an essence to your plan. It is called “Appendices”. Do stick around to learn what are appendices in a business plan.

What are appendices in a business plan?

Appendices in a business plan are additional documents or materials that provide supplementary information to support the main content of the plan and appear as the final section. It validates that you have a robust business plan with detailed data, supporting documentation, charts, graphs, legal documents, resumes of key team members, and any other relevant information that is supposed to be presented outside the main body. It intends to enhance credibility through visuals, legal documents, and other supporting documentation, which is necessary for investors, stakeholders, or lenders to fully understand the business and its viability.

Importance of Appendices

As we know, an executive summary provides a snapshot of your overall plan, whereas including a well-rounded section, such as a business plan appendix, serves as the cherry on top, exuding a sense of professionalism and preparedness that should not be ignored and must be kept digestible.

Ensure you have added anything in the appendix that is relevant to the rest of your business plan. It should be separate from the materials you’ve already covered elsewhere.

You are referencing the portion of your strategy that the data in your appendix supports can be helpful. If your business strategy is digital, include connections to other sections or use footnotes. If you need to learn how to do this, you can get assistance from a Professional business plan writer .

Your appendix is an optional supporting section of your business plan and does not necessarily need to be included.

However, this section may become an opportunity for you to score extra points and solidify the quality of your business plan design.

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Let’s further discuss each component one by one.

The common material that you can include in the appendices section of a business plan are described below.

Financial Statements : Like presenting financial projections, including income statements, balance sheets, and cash flow descriptions. Market Research : In-depth market research data, surveys, and reports provide insights into the industry, target market, and competition. Supporting Documentation : Any legal documents such as contracts, patents, licenses, permits, or other necessary paperwork relevant to the business. Resumes : Detailed resumes or profiles of prominent team members, including founders, executives, and advisors. Charts and Graphs : Visual data demonstration, such as market trends, sales projections, or organizational structure. Product or Service Information : Describe specifications in detail, designs, or technical information about the business’s products or services.

Examples of some information to add within appendices in a business plan

Here is some information you might include in your business plan appendix. Although it depends on your business plan’s niche requirements, a wide variety of items can prove beneficial for supporting your business plan. Such as

• Charts, graphs, or tables
• Financial statements and projections
• Sales and marketing materials
• Executive team resumes
• Business and/or personal tax returns
• Agreements or contracts with clients or suppliers
• License, permits, patents, and trademark documentation
• Product packaging samples
• Building permit and equipment lease documentation
• Contact numbers for attorneys, accountants, and advisors

You can include any of them in your appendix, depending on your business needs and to whom you demonstrate your business plan.

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How to Create Effective Appendices

By meticulously organizing additional information and presenting it in the appendices, here are a few tips that will help you fit the information more appropriately in its position and assist you in catching potential investors, investors and stakeholders ‘ attention. Avoid Procrastination- Try to gather important material at hand as early as possible. You shouldn’t wait until your plan is complete, and then you start gathering your resources, as it will be time-consuming and slow down your process.

Be Mindful to cover all details – Ensure that you add relevance and coherence to the main body of the business plan; otherwise, you may go unnoticed.

Add references to locate relevant information within the section- Many organizations must pay attention to your business plan to ensure that you’re legitimate; therefore, include connections to other sections or use footnotes to avoid overloading with unnecessary details.

Keep your appendix simple and attractive – making every section count by organizing it in the same order is essential. It will serve as a guide to help locate information quickly, while the primary focus should be to ensure the plan is attractive.

Follow consistency in formatting and presentation – Another thing is to maintain the flow with a complicated mess; your readers will undoubtedly make negative assumptions if they find exaggeration and the table of contents split.

Above all is about appendices and how creating appendices can complement and supplement your main content. You should keep a balance between detail and brevity in the appendices. These additional resources you are attaching to your business plan profile should be authentic, up-to-date, well-organized, clearly labeled, and referenced appropriately within the main body of the business plan.

The appendix doesn’t just complement your strategy, it elevates its credibility and persuasiveness, reassuring your supporters that you mean business and are ready to conquer the market with confidence and authenticity.

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Q1: What type of information should be included in the appendices?

A1: Following are the type of information that should be included in your business plan appendix:

• Charts, graphs, or tables that support sections of your business plan
• Business and personal tax returns
• Agreements or contracts with clients or vendors
• License, permits, and patents

Q2: Are appendices necessary for every business plan?

A2: Not really, appendices are optional, so if you want to complement your plan, go ahead.

Q3: How should the appendices be organized within the business plan?

A3: Here is the format that generally is followed in the appendices section.

• Table of Contents
• Confidentiality Statement
• Short & Simple

Q4: Are there any best practices for formatting appendices?

A4: Appendices should be formatted in traditional paragraph style and may feature text, figures, tables, equations, or footnotes.

Q5: How many appendices should a typical business plan include?

A5: These appendices typically include financial projections, resumes of key team members, market research data, legal documents, and other relevant materials.

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Business Plan - Appendices

Appendices to the Business Plan

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What is the Appendix to my Business Plan?

Material that adds to the business plan, but doesn't belong in the body. The appendices allow you to include valuable information to your business plan that does not fit neatly within the body of the plan. Generally, it is used to include exemplars of the material or information that is referenced within the business plan but does not need to be included in the body. You can include material that will serve a functional purpose in the business or that evidence key relationships. Generally, you can include any outside information necessary to support the propositions or assumptions within the business plan. 

Consider including the following information or materials in the appendix of the business plan.

• Marketing Material (Advertising) - The ability to drive sales is a critical part of the business plan. Providing samples of marketing material can provide an understanding of the brand that you are attempting to build around your product or service.
• Primary and Secondary Research - In order to effectively market your product (and establish a brand) you have to understand your target market. Further, you will need market estimates in order to accurately evaluate the market potential and potential profit from pursuing the venture. This material should support the figures that you introduce within the business plan.
• Designs or Property Layout Material - Perhaps you have designs, artwork, facility plans, etc., that provide a picture of your intended venture location, buildings, image. This can help third parties to understand your vision.
• Important Contracts - Providing proof of key contracts (such as leases, supplier contracts, etc.) add substance to otherwise seemingly hypothetical plans. Again, this will provide comfort to potential their-party investors.
• List of Key Assets - Providing a list of key assets within the business plan would be too large and cumbersome. While you will include the collective value of the assets within the plan, it may be a good idea to attach an itemized index for review. This can help in budget planning.
• Organization Chart and Employee Backgrounds - Within the business plan you provide a concise background of your employees and an organizational chart. Here, can provide a more in-depth background on your key employees and their curriculum vitae. If you have many other employees, you may want to provide their backgrounds, key roles, and responsibilities.
• Customer or Expert Endorsements - Customer or expert endorsements can serve as excellent credibility for your product/service. While you will mention these or provide brief quotations within the business plan body, you may wish to include the entirety of the endorsement or letter within the appendix.

Related Topics

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• What is a Mission Statement?
• What is a Values Statement?
• Setting Company Goals
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• Business Plan, Part 5 (Competitive Analysis)
• Business Plan, Part 6 (Marketing Plan)
• Business Plan, Part 7 (Operations)
• Business Plan, Part 8  (Management and Organization)
• Business Plan, Part 9 (Financial Projections)
• Business Plan, Part 10 (Appendices)
• Business Plan , (Final Modifications)

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What to Include in a Business Plan Appendix

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A business plan appendix is the last section that includes all the details that didn’t have a place in the business plan.

What is Included in a Business Plan Appendix?

Detailed financial projections, customer feedback, intellectual property details, key people & management, lease, contracts, and agreements, market analysis, credit history and credit score, marketing plan details, suggested resources for writing a business plan.

An appendix business plan can be short or lengthy. What goes into an appendix depends on the type of business plan and your goal of writing the business plan. 

For example, suppose you are writing a business plan to attract investment. In that case, the appendix may include greater details of the financial projections, and information about your personal or business credit score. 

Here, we will discuss appendix meaning in the business plan, what goes into a business plan appendix, how to create an appendix in the business plan, and the best practices you should follow. 

You might be wondering how to write a business plan appendix. We have made it easy for you. Put data for each of these business sections and your business plan appendix is ready. 

You have included the income statement, balance sheet, and P&L statement in the business plan. Investors and lenders might be interested in knowing more about the expected financials of your business. 

Add financial reports for intervals like a quarter, bi-annual, or annual. 

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Are you an old player in the market and people have already used your products or services? You can include the feedback or review of some of your evangelists in the appendix section of a business plan. 

Customer feedback shows the value your product or service offers and the problem it solves. It can also increase your chances of getting investment for your business idea.

If your business has any intellectual property rights, this is the place to add them. You may have a patent, a trademark, a brand name, or a license. Add the verifiable details of your business intellectual property here. 

The people section in your business plan included only the top management/owners. Here, you can mention the people with execution skills who are not among the top management but necessary for business success. 

You can also add employees’ CVs here. Some investors look at a company’s key people to see if they can make the business idea a financial success. If you have a strong team, show them here. 

Some businesses get into contracts with suppliers and vendors in the beginning before they apply for funding. If you are one of them, include any contracts or agreements here.

Did you conduct thorough research on the potential market for your business? The business plan couldn’t host your full market analysis but the appendix can. 

Include charts, presentations, documents, or anything else from your market analysis here. You can put all the data you have about your target market in the appendix. Give it a try!

Lenders may be interested in knowing your credit history to see if it is safe to give you a credit line. You can add credit reports here. This will help you build a good rapport with the lenders and may help you secure business credit. 

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Many businesses create a very detailed marketing plan. Since you have limited space available in the business plan, an appendix is a place to add your marketing plan details. 

Interested in checking the business plan appendix example? See our sample business plan for inspiration. 

• How to write a company overview for a business plan
• How to write a market analysis for a business plan?
• How to write products and services section of business plan
• How to write an operational plan in business plan?
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• How to write the marketing plan in business plan

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The business plan appendix may include documents such as resumes of key team members, market research data, financial statements, legal agreements, permits and licenses, product or service brochures, and any additional supporting documents relevant to the business.

Not all supporting documents need to be included in the business plan appendix. Include documents that are essential for understanding and validating the information presented in the main body of the business plan.

Organize the documents in the business plan appendix in a logical and coherent manner. Consider using numbered sections or tabs to make it easy for readers to locate specific documents.

Yes, including a table of contents for the business plan appendix can help readers navigate through the various documents and sections. It provides a quick overview of what is included in the appendix.

The business plan appendix is typically included as a separate attachment to the main business plan document. This allows readers to focus on the core content of the business plan while having easy access to the supporting documents in the appendix.

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What to Include in Your Business Plan Appendix

In the meticulous process of drafting a business plan, the appendix often plays an underestimated yet pivotal role. What are appendices? This segment, known as the “appendix in business plan”, serves as a reservoir for critical supporting documents and data. Far from being a mere afterthought, it is an integral component that complements the main content, offering in-depth details that investors and stakeholders might seek.

Understanding what is an appendix in a business plan is key to leveraging its full potential. It’s a section where you house vital information which, while not central to the plan’s narrative, is essential for substantiating your strategies and projections. 

Moreover, the purpose of including supporting documents in a business plan is to represent the robustness of your research, the depth of your planning, and your readiness for the challenges of the entrepreneurial journey. 

Therefore, in this guide, we will delve deep into the art and science of curating a well-structured and comprehensive business plan appendix. We’ll explore what goes into an appendix, how to organize an appendix effectively, and why a meticulously crafted appendix can be a game-changer for your business venture.

What Goes in An Appendix?

Aside from thinking of how to make an appendix , businesses also often wonder what to include in an appendix when developing a business plan. To answer this common query, this section is where you provide the supplementary material that validates your business plan. Let’s dissect the essential contents that form the backbone of a robust business plan appendix section. The appendix of a business plan might include:

• Detailed Financial Projections: As a cornerstone of appendices in business plan, this includes comprehensive revenue forecasts , cash flow statements , and break-even analysis. These documents elevate your financial strategy from theory to actionable insights.
• Market Research Data: Your business plan appendix example isn’t complete without the data that underscores your market understanding . Include demographic studies, industry analysis, and competitive landscape assessments.
• Resumes of Key Personnel: Illustrate the strength of your team by including detailed resumes. This section answers what goes in the appendix from a human resource perspective, showcasing the expertise and experience driving your business.
• Product or Service Descriptions: Here, an appendix document example involves detailed information about your products or services. This can include brochures, technical specifications, and product development plans.
• Legal Documents: Integral to what should be included in an appendix, this encompasses licenses, permits, patents, trademarks, and any other legal paperwork that is pertinent to your business operations.
• Supporting Letters: The appendix of a business plan includes any endorsements from key stakeholders, such as letters of intent from potential customers or testimonials from partners, adding credibility to your plan.
• Additional Operational Information: This might cover the appendix business plan example components like your organizational chart, facilities descriptions, and equipment listings, depending on the nature of your business.
• Marketing Materials and Strategies: These documents outline your marketing plan appendix. Marketing documentation typically includes advertising samples, press releases, and digital marketing strategies , all vital in illustrating how you intend to capture and grow your market share.

The Don’ts of a Business Plan Appendix

When crafting a business plan appendix, understanding the elements that should not be included is as crucial as knowing what to put in an appendix. The appendix should not be a dumping ground for all information. Avoid overloading it with irrelevant or redundant documents that do not directly support your business strategy .

For instance, what information should not be included in a business plan typically extends to outdated financial statements, overly technical jargon without clear explanations, and any personal or confidential information not pertinent to the business goals.

Additionally, avoid including excessively lengthy documents; the appendix in documents should complement your plan, not overshadow it. Remember, every page in your appendix should have a purpose and add value to your business plan, helping the reader understand and evaluate your business proposition effectively, without unnecessary clutter or distractions.

Understanding why a comprehensive and well-structured appendix is pivotal to business plans is key to elevating your strategy. Why do reports frequently include appendices? The appendix of a report is not just an add-on but a strategic tool that enhances the credibility and depth of your business plan. Business appendix writing should provide essential, supporting details in an organized and accessible way, complementing your vision and illustrating the thoroughness and feasibility of your proposal.

Keep in mind, the appendix is a valuable but optional section of your business plan. There’s no need to stress excessively about its contents. As you develop your plan, simply earmark any pertinent documents or data for inclusion in your appendix.

Struggling with the complexities of crafting your business plan? Get a head start with our no-cost, comprehensive business plan template . It comes complete with a predefined structure that simplifies organizing and presenting your supporting documents effectively.

Not entirely sure what to include in your business plan appendix? In a landscape where precision and foresight are invaluable, let BSBCON help you turn your business plan into a compelling and comprehensive guide to your business’s future.

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Business Plan Section 9: Appendix

The appendix section of your business plan provides information to support the 8 preceding sections. Here’s how to organize the appendix.

By now, we hope you’ve read through our series on business planning and have reached this final installment, which is what to include in Business Plan Section 9: Appendix. Think of your business plan as the narrative that tells the story, while the appendix is where you put the factual information that supports it. The appendix fleshes things out with details that help corroborate and support the plan you have presented.

Maybe you’re wondering why, if each of the preceding sections is covered so thoroughly, you even need an appendix. Why wouldn’t you just include all the information in the appropriate section? The appendix makes the rest of the plan easier to read, without taking a detour for credentials and corroboration.

In addition, your business plan can serve several different functions, and each requires a different set of documentation. Your plan can serve as a roadmap for your internal planning purposes only, it can be a recruitment tool for employees or investors, or it can support a request for funding from a financial institution. Each of these would require different documentation, and in many cases, you might not want to share some of the information with everyone. Having an appendix allows you to insert and remove items depending on who will be reading your plan.

What Goes Into Business Plan Appendix?

Again, not everything might need to be shown to everyone who reads your plan, but here is a full list of items you might want to prepare for your appendix:

• Credit histories for both the business and its owners
• Business and personal tax returns
• Resumes of the owners and key management
• Photos of your products or their prototypes
• Samples of marketing materials, logos, and mockup ads
• Reference letters from business associates and community leaders
• Details of your market research studies
• Information about your competitors
• Press clippings about you and the business
• Any relevant news articles on your product or industry
• Legal documents such as your incorporation papers, shareholder certificates, etc.
• Copies of patents, permits or licenses you hold
• Copies of your property and equipment leases or rental agreements
• Contact info for your professional staff, including your accountant and attorney
• Contracts for current or future work
• Spreadsheets and documentation for financial projections

The appendix will be the final section of your business plan, and just as with every other part, take the time to meticulously prepare these supporting materials, especially if you’re presenting the information to a potential lender or investor . The care and thoroughness you put into your backup documents will be a big clue to your readers about your general approach to business and could help sway opinion one way or the other.

The Small Business Administration suggests keeping a record of who has copies of your plan and what items you’ve included in the appendix. That way, you can update items as necessary. Do keep tight control over who you distribute it to. You may want to consider having your readers sign a Non-Disclosure Agreement, or NDA, to help protect the confidentiality of your information. SCORE, the Service Corps of Retired Executives, has a free template on its website.

And again, because of the highly privileged nature of some of what you’re providing, be very particular who you share what with. Creditors will likely need to have access to all of your documentation, but more casual readers, who might just want a bit of information about your business, don’t need to see the appendix at all, or at most, just a few select items.

How to Organize a Business Plan Appendix

Because the documents substantiate the information presented in your business plan, it’s best to keep them in the same order as they are referred to in the plan. If you have more than a few pages of documentation in the appendix, start with a table of contents page that lists each section of the business plan, broken up with letters or Roman numerals; then list each item you’ve included in the appendix for that particular section.

This will make it easier to refer to the items as you need to in the plan. For example, when you talk about your planned advertising campaign in the Sales and Marketing section, you can refer to “Appendix, Section IV” for copies of what the ads may look like.

If the appendix contains a lot of material, you can also consider using tabs to break it up, which will make it even easier to locate things. Have each document clearly labeled so readers will know exactly what they’re looking at when they refer to them, and make sure your copies are high quality, clear and legible. Do not include original documents.

Business Plan Recap

Don’t rush through the work of putting your business plan together. Whether it’s for your own use or a lender has asked for it, the information it contains and the work you do to put it together will be extremely valuable to the success of your company. It does take a lot of time and effort to research and write a solid plan, but it will come back to you in spades.

A business plan follows a specific format, so follow the guidelines we’ve set out for you in the following articles:

• Business Plans 101
• Section 1: Business Plan Executive Summary
• Section 2: Business Plan Company Description
• Section 3: Business Plan Organization and Management
• Section 4: Business Plan Products and Services
• Section 5: Business Plan Market Analysis
• Section 6: Business Plan Sales and Marketing
• Section 7: Business Plan Funding Request
• Section 8: Business Plan Financial Plan
• Section 9: Business Plan Appendix

If you’ve already read the series, you’ve heard this before: it’s imperative to always keep your audience in mind. Your goals for what you want the business plan to accomplish will dictate who your audience is, and the information you present will be shaped by that.

Finally, remember the importance of presentation. This is a reflection on you and your business, so make sure it represents you well. Proofread and check for errors in grammar and spelling. Consider hiring a writer or editor if you’re not particularly skilled with words. The business concept is yours, but a professional can help you articulate it in a way you may not be able to.

Use a standard business font for the body copy so that it’s easy to read, and be judicious in your use of italics, underlining, and bold. Business News Daily offers links to several free templates you can check out. You can follow one to put your plan together or just look at them for ideas that might work for you. There is also software available that can walk you through the process.

Have the plan printed on good paper and bind it in some fashion, whether into a booklet, in a high-quality binder or spiral binding. Add a cover with the name of your business and make sure to have your contact information easily available. Include a cover letter with the plan, because it may get passed around to other people who aren’t as familiar with your venture.

Remember the old adage, “You only get one chance to make a first impression.” Make yours count.

Next Article: 5 Tips for Sticking to Your Business Plan

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Business Plan & Pitch Presentation

• #1. Executive Summary
• #2. Description, Objectives, and Product/Services
• #3. Market Research
• #4. Marketing and Sales Plan
• #5. Financial Analysis and Projections
• #6. Appendix
• How To Pitch Your Business Plan

If deemed relevant, add content to support, confirm, and reinforce conclusions you reach in the business plan. An appendix is where you give greater details about aspects covered in the plan, and you can include specific details regarding market research, technology, location, and so forth.  

Appendix content may include, but is not limited to: 

• Letters of Intent/Key Contracts (to display customer interest/demand) 
• Endorsements (to reinforce that company is capable and the product or service is desirable) 
• Resumes of Key Managers (if resumes of key managers are impressive, consider including them) 
• Technical Information (if using or developing technology, more detailed descriptions can be added here) 
• Manufacturing information (detailed description of manufacturing process or flow chart describing process) 
• Floor Plan (layout and use of space, factory, etc.)
• << Previous: #5. Financial Analysis and Projections
• Next: How To Pitch Your Business Plan >>
• Last Updated: May 3, 2024 11:28 AM
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Maximizing Success: Understanding Appendix in Business Plan

In the realm of business planning, the appendix in a business plan plays a crucial role, serving as a repository for supporting documents that bolster the main body of the plan. This comprehensive guide aims to demystify the appendix of a business plan by exploring its significance, providing examples, and answering pertinent questions.

Table of Contents

Appendix business plan example:

In crafting a comprehensive business plan, the inclusion of an appendix can significantly enhance its effectiveness. One crucial aspect of this is providing examples that elucidate various components of your plan. For instance, you might include sample financial statements, market research data, legal documents, or organizational charts. These examples serve as practical illustrations to bolster the understanding of readers, investors, or stakeholders. By showcasing real-life instances within your business plan appendix, you provide concrete evidence of your strategies, enhancing credibility and clarity.

What is appendix in business plan:

The appendix in a business plan serves as a supplementary section that houses additional information relevant to the main body of the document. It functions as a repository for detailed data, supporting documents, and supplementary materials that enrich the understanding of key concepts outlined in the plan. Essentially, the appendix acts as a reference point for stakeholders seeking further insights into specific aspects of the business. Whether it’s detailed financial projections, market research findings, legal agreements, or operational procedures, the appendix provides a comprehensive backdrop to the overarching narrative of the business plan.

Supporting documents example:

Incorporating supporting documents into your business plan is paramount for substantiating the claims and strategies outlined in the main body. These documents serve to validate your assertions, provide evidence of market research, showcase financial projections, and underscore the feasibility of your business concept. Examples of supporting documents may include market analysis reports, customer surveys, resumes of key team members, legal agreements, licenses, permits, and any other pertinent paperwork. By including such concrete evidence, you instill confidence in potential investors, partners, and stakeholders, reinforcing the credibility and viability of your venture.

Appendix in business plan:

The appendix in a business plan is an indispensable section that complements the core content of the document. It offers a space to include supplementary information that supports and enriches the main narrative. This could encompass a diverse range of materials such as detailed financial projections, market research data, legal documents, organizational charts, and more. The appendix allows for a more in-depth exploration of key aspects of the business without cluttering the main body of the plan. By segregating this additional information into the appendix, you maintain the flow and readability of the document while ensuring that critical details are readily accessible to interested parties.

The appendix of a business plan can encompass a wide array of documents, depending on the nature of the business and the specific requirements of stakeholders. Some common examples of supporting documents include:

Financial statements (income statement, balance sheet, cash flow statement)

Market research reports and analysis

Legal documents (business licenses, permits, contracts)

Resumes of key personnel

Product/service brochures or prototypes

When determining which documents to include in the supporting documents section, it is crucial to adhere to the principle of relevance and conciseness. Only include materials that directly contribute to the understanding and validation of the business plan’s key points. Additionally, ensure that all documents are organized, labeled, and formatted in a clear and professional manner for easy reference.

The Purpose of Including Supporting Documents

The purpose of including supporting documents in a business plan is multifaceted. Primarily, it serves to enhance the credibility and persuasiveness of the plan by providing concrete evidence and data to substantiate claims and projections. Moreover, it facilitates due diligence on the part of investors, lenders, and other stakeholders, enabling them to assess the feasibility and viability of the proposed venture more thoroughly. Additionally, it demonstrates the thoroughness and attention to detail of the business owners or management team, instilling confidence in their ability to mitigate risks and capitalize on opportunities effectively.

Why Should You Include Supporting Documents in Your Business Plan?

The decision to include supporting documents in your business plan is not merely a matter of preference but rather a strategic imperative. By augmenting the main body of the plan with relevant and compelling documentation, you can significantly enhance its credibility, persuasiveness, and effectiveness as a communication tool. Moreover, it demonstrates your commitment to transparency, thoroughness, and professionalism, qualities that are highly valued by investors, lenders, and other stakeholders. Ultimately, the inclusion of supporting documents can make the difference between a mediocre plan and a compelling one that inspires confidence and trust in your business venture.

Conclusion:

In conclusion, the appendix in a business plan serves as a repository for supporting documents that substantiate and reinforce the assertions made in the main sections. By including relevant and compelling documentation, you can enhance the credibility, transparency, and persuasiveness of your plan, thereby increasing its effectiveness as a communication tool and facilitating due diligence on the part of stakeholders. Remember to choose your supporting documents wisely, focusing on relevance, conciseness, and professionalism to maximize their impact and ensure a favorable reception of your business plan.

Q: Which of the following should be included in the supporting documents section of a business plan?

A: The supporting documents section of a business plan should include materials such as financial statements, market research reports, legal documents, resumes of key personnel, product/service brochures or prototypes, letters of intent or support from potential clients or partners, and any other relevant data, charts, or graphs.

Q: What is the purpose of including supporting documents in a business plan?

A: The purpose of including supporting documents in a business plan is to enhance credibility, transparency, and persuasiveness by providing concrete evidence and data to substantiate claims and projections, facilitating due diligence on the part of stakeholders, and demonstrating the thoroughness and professionalism of the business owners or management team.

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Coffee Shop Business Plan Template

Coffee shop appendix.

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint or location lease.

COFFEE SHOP BUSINESS PLAN OUTLINE

• Coffee Shop Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan
• 10. Appendix

Start Your Coffee Shop Plan Here

Other Helpful Business Plan Articles & Templates

Chapter 16 Appendix: A Sample Business Plan

The following business plan for Frank’s All-American BarBeQue was built using Business Plan Pro software. It is for the purpose of illustration and does not represent the full capabilities of the software.

16.1 Executive Summary

Frank’s All-American BarBeQue has operated for decades in the southern Connecticut shore region. With a tradition of superlative food at fair prices served in a family-friendly atmosphere, the owners now believe it is time to open a second restaurant and expand the production and the distribution of Frank’s signature barbecue sauces. This second restaurant will be in Darien, Connecticut, and will be nearly twice as large, in terms of seating capacity, as the current Fairfield restaurant. The company also plans to ramp up production of its sauces and increase their sales fourfold in the next three years.

The owners of Frank’s All-American BarBeQue and other investors plan to put $160,000 of their own money into the second restaurant and expand the production of the signature sauces. They seek to raise an addition $175,000 from a bank loan that will be repaid in two years.

Vision Statement

To produce the best barbecue food in New England.

Mission Statement

The mission of Frank’s All-American BarBeQue is to provide the southern Connecticut shore region with the finest barbecue food in four major regional styles at affordable prices in a family-friendly setting. As we grow, we will never forget and remain faithful to those factors that have made us a success.

Keys to Success

Frank’s All-American BarBeQue has been in business for nearly forty years. It has weathered good times and bad times through all types of economic conditions. We have survived because Frank’s has remained committed to several principles.

• The only objective of a restaurant is to serve the finest food it can prepare. Good food—not more gimmicks or advertising—brings in customers and, more importantly, keeps customers.
• Preparing the finest foods means a commitment to excellence, which means obtaining the best ingredients and a dedication to cooking barbecue properly, which means cooking carefully and slowly .
• In addition to providing the finest food, we remain committed to providing excellent service. To us, this means friendly and knowledgeable staff members who make the customers feel like they are dining with family.
• We provide the right atmosphere. Our goal is to have a setting that says “barbecue.” We do not provide a fancy setting; our basic setting complements the food we serve.

Company Summary

Frank’s All-American BarBeQue has been a highly successful restaurant in Fairfield, Connecticut, for nearly forty years. It was started and is still managed by Frank Rainsford. Its food and sauces have won awards at both regional and national barbecue cook-offs. In addition, Frank’s has been voted the best barbecue establishment in Connecticut numerous times by many local newspapers and magazines.

The management team of Frank’s All-American BarBeQue has decided that now is the time to expand to an additional location. After careful analysis, a second Frank’s All-American BarBeQue can and should be opened in Darien, Connecticut. This restaurant will be larger and geared to better tap into the growing premade, take-home dinner market.

In the last few years, Frank’s has been selling its four signature barbecue sauces—Texan, Memphis, Kansas City, and Carolina—in local supermarkets. Although this represents a small portion of overall revenues, sales have been growing at a remarkable pace. This market must be exploited. Preliminary market research indicates that this segment of the business will grow at 20 percent per year for the next five years.

Company Ownership

Presently, Frank’s All-American BarBeQue is a limited liability partnership with Frank Rainsford and his wife Betty as owners. Each has a 50 percent share in the business.

The plans for expansion will bring in capital from three other investors: Robert Rainsford, Susan Rainsford Rogers, and Alice Jacobs. Robert Rainsford and Susan Rainsford Rogers are the son and daughter of Frank and Betty. Both have extensive work experience at Frank’s. Alice Jacobs has been the restaurant’s accountant for over twenty years.

To assist the financing of the expansion, Robert Rainsford and Susan Rainsford Rogers will each invest $50,000, while Alice Jacobs will invest $60,000.

The new limited liability partnership will result in the investors holding the following equity percentages:

Company History

Frank’s All-American BarBeQue was founded in 1972 by Frank Rainsford. Although a native New Englander, Frank learned about cooking barbecue while serving in the US Air Force. During his twelve years of service, he traveled across the country and learned about the four major styles of American barbecue—Texas, Memphis, Kansas City, and Carolina. His plan was to introduce people in southern Connecticut to real barbecue that entailed high-quality meats properly cooked and smoked over an appropriate length of time.

In the beginning, Frank’s All-American BarBeQue was a small facility; it could seat about thirty people. It was located near the Fairfield railroad station and was the first full-service barbecue restaurant in Fairfield. Frank’s placed an emphasis on featuring the food; it had a highly simplified decor where the tables were covered with butcher paper, not linen tablecloths. The restaurant was an immediate hit, received considerable local press, and won several food awards. This success enabled Frank’s to move to a larger facility in Fairfield on the town’s main thoroughfare—Boston Post Road. The new location was a midsize restaurant of about eighty seats. Frank has built this location into a relatively successful and locally well-known enterprise. It has been at the present location since the early 1980s. It shares a parking lot with several other stores in the small mall in which it is located.

Frank’s has won many awards at regional and national barbecue cook-offs (for both the food and the sauces), which is unusual for a barbecue business in New England. The restaurant has been written up, repeatedly, in the local and New York papers for the quality of its food and its four signature barbecue sauces. In the last few years, Frank’s has sold small lots of these sauces in local supermarkets. They have been distributed because of Frank’s personal connections with the store managers. Frank Rainsford has been approached by a major regional supermarket to sell his sauces. The supermarket is willing to find a facility that could produce Frank’s sauces in significantly larger volumes, which would represent a substantial increase in the sales of sauces. Table 16.1 "Past Performance of Frank’s All-American BarBeQue" provides a summary of key financial figures for the last three years—2008 to 2010. Figure 16.1 "Past Performance Chart" illustrates these key numbers for that period of time.

Table 16.1 Past Performance of Frank’s All-American BarBeQue

Figure 16.1 Past Performance Chart

Company Locations and Facilities

Frank’s All-American BarBeQue has been in Fairfield, Connecticut, for decades. It has a reputation throughout the southern Connecticut shore region for excellent food and has received numerous awards. The management team determined that a second location could tap into this local name recognition. Several towns in the region were evaluated for total population, population density, family income, and home value. These factors were considered because of their impact on generating traffic and consumers being able to pay for meals that are priced slightly higher than typical fast-food outlets. In addition, the average family size and the percentage of family households were considered because Frank’s is a family restaurant. Lastly, data were gathered on the average travel time to and from work for residents and the real estate tax rate. Because the new location of Frank’s will emphasize prepared meals, we felt that individuals with longer commutes would be more likely to order meals and pick them up at Frank’s. A summary of these data is provided in Table 16.2 "Demographic Data for Selected Connecticut Towns—Part 1" and Table 16.3 "Demographic Data for Selected Connecticut Towns—Part 2" .

After thorough analysis, it was concluded that Darien, Connecticut, would be the best location for the new branch of Frank’s All-American BarBeQue. It has a high-income population and a high population density, and a large percentage of its inhabitants are members of family households. They have longer commuting times, which increase the potential need for prepared meals.

Table 16.2 Demographic Data for Selected Connecticut Towns—Part 1

Table 16.3 Demographic Data for Selected Connecticut Towns—Part 2

A specific location has been identified in Darien for the second Frank’s All-American BarBeQue. It is in a small mall and is large enough to have a seating capacity of 150–160 plus takeout facilities. The mall has more than adequate parking for future customers. The mall is located three blocks from the Metro-North Darien railroad station and is four blocks from the I-95 exit. It is therefore well positioned to attract traffic from both car and rail commuters. The lease fee for a three-year contract is very reasonable for a property of this size.

Products and Services

Frank’s All-American BarBeQue specializes in the finest barbecue served in a family-friendly format. It uses the finest cuts of meats that are free of any growth hormones. It is known for a variety of slow-smoked and slow-cooked meats, such as ribs, beef, pulled pork, and chicken. These are served with Frank’s famous and award-winning sauce varieties, which represent the four major styles of barbecue cooking. Frank’s is also noted for its side dishes and desserts.

Our goal is to expand operations to a second location in Darien, Connecticut. This outlet will be significantly larger and will have a section devoted to takeout meals.

Competitive Comparison

There are approximately forty specialty barbecue restaurants in Connecticut. They are spread throughout the state, but only four (including Frank’s All-American BarBeQue) are in the southern shore region. The three competitors are smaller operations. None of the barbecue restaurants in Connecticut have the history, reputation, acclaim, or awards that match Frank’s All-American BarBeQue. It is not an exaggeration to say that Frank’s is the preeminent barbecue restaurant in Connecticut. It has a loyal following that reaches as far as New York City.

Frank’s is the only barbecue restaurant in Connecticut where supermarkets are vying for the right to market Frank’s signature barbecue sauces. This sideline business promises to be extremely profitable and support the overall marketing efforts for both locations of Frank’s All-American BarBeQue.

Fulfillment

Frank’s All-American BarBeQue has always been committed to providing the absolute best in barbecue food. This has meant assuring the highest quality ingredients in food preparation. Frank has established a decades-long relationship with suppliers in the New York and Connecticut areas. He selects nothing but the choicest selections of beef, pork, and chicken. He has always made sure that his meats come from suppliers who are committed to quality ingredients and who never use growth hormones. This long-term relationship with a variety of key suppliers enables Frank to secure the best cuts at reasonable prices. Frank is equally careful in using the finest spices for his barbecue sauces. The same is true for all the side dishes that Frank’s All-American BarBeQue offers its customers.

This commitment to quality is not limited to the selection of meats and ingredients. Frank and his staff recognize that top-quality barbecue food requires a knowledgeable and deep commitment to cooking the food properly. All meats must be cooked and smoked slowly. This requires time, effort, expense, and commitment, but the results are spectacular. Some cuts of meat at Frank’s may require as many as eleven hours of preparation and cooking. Excellence is not achieved without a commitment to effort. This effort has been recognized with numerous awards at national barbecue cook-offs. Frank has clearly recognized that the meal is clearly a function of the quality of the meat, quality ingredients, and careful preparation.

Future Products and Services

Frank’s All-American BarBeQue is ready to accept new challenges. Opening a second restaurant will significantly increase sales, but the second location is only the beginning of new directions for Frank’s. Although Frank has been selling his regional barbecue sauces in local outlets for years, he is now ready to sign a contract with a major regional supermarket chain to market and sell these sauces throughout New England. Preliminary studies indicate that Frank can anticipate a 20 percent annual growth rate in the sales of sauces for the next five years.

With the growth of two-income families, less and less time is available to prepare meals at home. Recognizing this simple fact, Frank’s All-American BarBeQue plans to offer a variety of prepackaged barbecue meals that can be picked up at the restaurant and reheated at home. As part of its new commitment to a web-based presence, customers will be able to order these meals by regular phone, with smartphones, or through the Internet. Customers will be able to select from a list of prepackaged dinner meals or any combination of items. Customers can designate the time to pick up the meals, and the meals will be ready for them. This service promises significant revenue growth.

Market Analysis Summary

Since the 1930s, the American public has spent at least 5 percent of its disposable income on eating out. Even with annual fluctuations, this is a strong indicator of the viability of this industry. This can be best illustrated by reviewing industry results for the last few years.

Both 2009 and 2010 were difficult years for the restaurant industry. In 2008, sales increased by 3.8 percent. However, sales fell by nearly 0.75 percent in 2009. This was the first year in the history of the industry that sales actually declined. The restaurant industry’s sales in 2009 were $566 billion, down from over $570 billion. Prices rose by 2.2 percent in 2009. The increase in sales for 2010 was 0.5 percent, and price increases stabilized at 0.75 percent.

It is anticipated that there will be significant price competition in every segment of the restaurant industry. Some analysts argued that the poor performances for the restaurant industry in both 2009 and 2010 could be attributed to declines in both business and personal travel. Hotel occupancy rates in 2009 were down by nearly 10 percent. A study conducted by the National Restaurant Association argued that 20 percent of the sales in casual dining restaurants might be due to travelers and visitors. Frank’s All-American BarBeQue relies to a far lesser extent on travelers as customers. A rough estimate based on credit card receipts, for the period 2006–2010, indicated that travelers represented less than 2 percent of Frank’s sales. The pressure on the restaurant industry has been felt by many chain restaurants, which significantly curtailed their expansion plans.

Even though the recession was in full bloom in 2009, many food prices rose and rose significantly. Beef prices rose between 4 percent and 12 percent, while pork prices rose between 5 percent and 13 percent. Numerous studies have indicated that the increase in commodity prices will not be a transitory phenomenon.

With 925,000 food service locations in operation in the United States, this translates into 1 restaurant for every 330 Americans.

The health-care reform bill passed in 2010 should, in the near future, provide some relief for restaurants by creating a system that will assume greater responsibility by individuals to pay for their own health-care coverage.

Restaurants must also be much more cautious in the future about the possibility of hiring illegal aliens. As a whole, the National Restaurant Association supports immigration reform. However, it is concerned that any legislation should not limit a restaurant’s ability to hire workers. It is also concerned about the cost to assure worker eligibility.

The Mintel Group, a market research firm, found that consumers who are interested in quality opt for independent restaurants over chain outlets. An increasing consumer focus on health translates into an emphasis on natural ingredients. In the barbecue industry, this translates into naturally raised meats (i.e., the avoidance of artificial growth hormones in cattle), which are a hallmark of Frank’s All-American BarBeQue.

The National Restaurant Association estimated that sales in full-service restaurants in 2010 would exceed $184 billion—an increase of 1.2 percent from 2009 sales.

Several macroeconomic factors make opening a restaurant in Darien attractive, including the following:

• Increases in the growth domestic product (GDP). The GDP is estimated to grow 1.7 percent in 2011 and 1.5 percent in 2012. The estimates for Fairfield County are significantly higher.
• Disposable personal income. The national level of personal income should rise nearly 4 percent in 2011, and there is an expectation of 3 percent growth in 2012. These numbers appear to be much stronger in the Fairfield County area.

Although 2010 was not a banner year for the restaurant industry—it was one where more restaurants closed than opened each month—there was one bright spot: Chain barbecue restaurants grew between 2 percent and 3 percent—an auspicious sign even for independent operators.

The home meal replacement market and the existing investment in restaurant equipment provide a nice growth opportunity for restaurants. It is been estimated that takeout sales in limited service chain restaurants might be as large as 60 percent of total sales. The same study found that takeout food has been growing twice as fast as the overall restaurant industry. Natural competitors in this market are supermarkets that offer prepackaged meals. However, we feel that few—if any—supermarkets provide the quality barbecue food that can be found at Frank’s.

Market Segmentation

Frank’s All-American BarBeQue views its major market segment as suburbanites in the south shore region of Connecticut. One way of further segmenting the market is by the type of meal being provided. Table 16.4 "Market Analysis" provides estimated growth rates for each type of meal (plus sauce sales) and projected number of meals (and jars of sauce) for the period 2011 to 2015. Figure 16.2 "Market Analysis" illustrates the relative contributions.

Table 16.4 Market Analysis

Figure 16.2 Market Analysis

Market Needs

We believe that the market centers on excellent barbecue food served at reasonable prices and served in a family-friendly manner. We further believe that a growing segment of the market will want prepared meals that can be conveniently picked up and served at home. Table 16.4 "Market Analysis" provides a projected breakdown of the potential customers for the next five years. This breakdown is predicated on the type of meals served and includes the sale of sauces. We provide estimated growth rates and forecasted sale of meals (and bottles of sauces) for the period 2011 to 2015. Figure 16.2 "Market Analysis" shows the breakdown of the number of meals by type in 2015.

Web Plan Summary

Presently, Frank’s All-American BarBeQue has a very simple website. The website provides minimal information—listing some of the menu items and the restaurant’s telephone number. It was created eight years ago by a college student who was working at Frank’s.

Robert Rainsford’s professional expertise is in the area of website development. After graduating from college, Robert was hired by a firm that specialized in developing web and social media presences for other companies. He worked for that firm in New York City for seven years. Robert rose rapidly through the company’s ranks, eventually becoming one of its vice presidents. His expertise in this area will enable Frank’s All-American BarBeQue to significantly enhance its web presence. Rather than just having a website that identifies the restaurant’s location and telephone number, along with a brief summary of its menu, the new website will be far richer in content and capability. It will provide a complete menu listing, identifying all items with corresponding images. The new website will enable customers to place orders through the Internet for lunch, dinner, or takeout items. The section devoted to takeout items will enable a customer to purchase prepared meals or choose from all items on the menu to develop a prepackaged meal. Customers will be able to identify the time that they will arrive for the pickup.

The website will have links to the Facebook and Twitter accounts of Frank’s All-American BarBeQue. These connections will enhance its social media presence. Customers will be asked to post comments about their dining experience and suggestions on how Frank’s can improve its operations and service. It will enable Frank’s to expand operations and still maintain the same close customer relationship that currently exists at the Fairfield restaurant.

Website Marketing Strategy

The new web presence for Frank’s All-American BarBeQue will be geared to developing a new level of customer relationships. Customers at both restaurants will be asked to fill out forms where they will supply an e-mail address and a birthdate. (This information can also be supplied through Frank’s new website.) This information will enable Frank’s to keep customers informed of specials and offer coupons and the new rewards card program for special occasions, such as holidays or birthdays.

We view the website of Frank’s All-American BarBeQue as a major component of enhancing our relationship with our customers. It should provide convenience to customers through their ability to see what is on the menu, identify new specials, and order meals and pick them up at their convenience. The use of social media will expand awareness of Frank’s and enable it to develop closer relationships with present and future customers.

Development Requirements

Robert Rainsford tapped into his expertise in social media and has already developed a far more sophisticated website for Frank’s All-American BarBeQue. He has secured the necessary server capacity to handle additional traffic on the website. In addition, he has set up several social media accounts for Frank’s All-American BarBeQue, including Facebook and Twitter. Robert also created a program linked to a database that will monitor customer purchases through the rewards card program. This program will send out birthday notices and discounts to customers and will inform them of their current status in the rewards card program.

Robert contacted several former colleagues at his former place of employment and has identified several candidates for the role of website manager. This individual will be responsible for updating the website and the social media sites on a daily basis. He or she will also be responsible for analyzing the flow of information that comes through these sites and preparing management reports.

Strategy and Implementation Summary

The core strategy of Frank’s All-American BarBeQue is to continue what has made it a success at a new location. Simply put, our strategy is to provide our customers with the finest barbecue food in Connecticut, at reasonable prices, in a family-friendly environment. In addition, we hope to improve our ability to meet customer needs by making life more convenient for our customers. We believe that these fundamentals are universally applicable.

SWOT Analysis

A strengths, weaknesses, opportunities, and threats (SWOT) analysis was undertaken for Frank’s All-American BarBeQue.

The key strength of Frank’s All-American BarBeQue is the quality of its food and service. It has been the recipient of numerous local and national awards for its foods and sauces. Other strengths include a highly knowledgeable management team with expertise in operating a barbecue restaurant, a close working relationship with suppliers of premier cuts of meats, and a loyal clientele in the south shore region.

The weaknesses associated with this business plan center on operating an additional restaurant with a much larger capacity than the Fairfield, Connecticut, restaurant. The second location will require an experienced restaurant manager. This plan calls for a significant increase in prepared (takeout) meals. Orders will be placed either by phone or through the website. Current personnel have little experience in ratcheting up the takeout portion of the business.

Opportunities

This business plan offers significant opportunities for Frank’s All-American BarBeQue. A second, larger location will translate into a significant increase in sales. Finalizing a business relationship with the regional supermarket chain will enable Frank’s to significantly increase the production and the sales of its signature sauces. The sales of sauces are expected to increase by 20 percent per year for the next five years.

Any expansion with the opening of a new location always entails some risk. The principals of Frank’s All-American BarBeQue will be investing a significant amount of capital and will be borrowing money from a bank to open a second location. It is strongly believed that the second location will capitalize on the success of the Fairfield restaurant and will become a success.

Competitive Edge

The competitive edge of Frank’s All-American BarBeQue resides mainly in the quality of its food and its commitment to serve the food in a family-friendly environment. The quality of its food is unmatched in the entire state. No other barbecue restaurant has received the awards and the accolades that Frank’s All-American BarBeQue has received for the past forty years. Its reputation for quality gives it an edge that no other barbecue restaurant or chain can match.

Marketing Strategy

The target market for Frank’s All-American BarBeQue is essentially suburban families in the south shore region of Connecticut. These people appreciate the finest barbecue food at reasonable prices. It is expected that an important group within this target market will be families with two incomes whose busy schedules would make prepared meals a very attractive option. We further assume that this market is technically sophisticated and will appreciate the convenience of ordering these meals via the Internet.

A key component of the marketing strategy of Frank’s All-American BarBeQue is to use the Internet and technology to enhance the relationship with its customer base. Frank’s will use the website, Facebook, Twitter, and e-mails to inform customers of special food items or discounts based on holidays and customers’ birthdays. We intend to use the website as a mechanism to gain an improved insight into customer needs and wants.

Frank’s All-American BarBeQue will also initiate a rewards card program. Customers will sign up for the rewards card program either at the two locations or online. They can use this program every time they make a purchase either at the restaurants or online. After a set number of visits (seven), customers will be entitled to either discounts or free items. The rewards card program will enable Frank’s All-American BarBeQue to track customers’ buying patterns and anticipate the ways in which they can better serve their customers.

Sales Forecasts

We provide a five-year forecast of the dollar value of sales broken down by the two restaurants and the sauces in Table 16.5 "Sales Forecast" . Figure 16.3 "Monthly Sales for Two Restaurants and Sauces" illustrates a forecast for the breakdown of sales on monthly basis in 2011, and Figure 16.4 "Five-Year Forecast of Sales for Two Restaurants and Sauces" illustrates the breakdown of sales for the next five years.

Table 16.5 Sales Forecast

Figure 16.3 Monthly Sales for Two Restaurants and Sauces

Figure 16.4 Five-Year Forecast of Sales for Two Restaurants and Sauces

Management Summary

Currently, Frank Rainsford is the CEO and chief operating officer of Frank’s All-American BarBeQue. He is also the restaurant manager at the Fairfield restaurant. During the week, his daughter (Susan Rainsford Rogers) often replaces Frank as the restaurant manager. The Fairfield restaurant has a full-time cook who operates under Frank’s supervision, and two other full-time employees function as waiters and waitresses. These full-time employees are supplemented by six part-time employees.

Under the new management structure, Frank Rainsford will hold the position of CEO. His wife, Betty Rainsford, will be designated the president and chief operating officer. Their daughter, Susan Rainsford Rogers, will be given the title vice president for operations. She will be responsible for the day-to-day operations of the Darien, Connecticut, restaurant. Robert Rainsford will have the title of vice president of marketing. He will be responsible for all marketing activities and the operation of the website. Alice Jacobs will be the vice president of finance and the comptroller of Frank’s All-American BarBeQue.

Organizational Structure

The new management structure of Frank’s All-American BarBeQue is a basic functional layout appropriate for this type of business and is shown in Figure 16.5 "Organizational Chart" .

Figure 16.5 Organizational Chart

Personnel Plan

Table 16.6 "Forecasts of Personnel" is a five-year breakdown of the types and costs of personnel.

Table 16.6 Forecasts of Personnel

Financial Plan

Frank’s All-American BarBeQue will be financing the creation of a second restaurant through a combination of private investment and a bank loan. The private investment will raise $160,000, and Frank’s will seek another $175,000 as a two-year loan. These funds will be used to pay for equipment and leasing expenses associated with opening a second restaurant.

Important Assumptions

The assumptions associated with the grow rates of sales each year for the next five years are the keys to the financial planning process. We began with very modest assumptions of 8 percent growth in lunch sales and 5 percent growth in dinner sales. We anticipate fairly vigorous growth in takeout meals (20 percent) and sauces (15 percent). Although these are large growth rates, we do not feel that they are unrealistic.

Key Financial Indicators

Figure 16.6 "Key Financial Indicators" provides historical (2008–2010) and forecasted (2011–2015) values for the key financial indicators.

Figure 16.6 Key Financial Indicators

Breakeven Analysis

In Table 16.7 "Breakeven Analysis" and Figure 16.7 "Breakeven Analysis" , we show the results of our breakeven analysis for Frank’s All-American BarBeQue. The results indicate that with sales of approximately $110,000 each month, Frank’s All-American BarBeQue will break even.

Table 16.7 Breakeven Analysis

Figure 16.7 Breakeven Analysis

Projected Profit and Loss

Our analysis anticipates significant growth in profits in the next five years with the opening of a second Frank’s All-American BarBeQue in Darien. The profit margins should increase from in excess of $850,000 in 2011 to nearly $1,600,000 by 2015 and should be in excess of 20 percent for all five years. A complete analysis of the profit and loss statements is in Table 16.8 "Profit and Loss" . The annual profits are illustrated in Figure 16.8 "Yearly Profits" .

Table 16.8 Profit and Loss

Figure 16.8 Yearly Profits

Projected Cash Flow

Table 16.9 "Cash Flow Forecast" is a five-year forecast of cash flows for Frank’s All-American BarBeQue. The forecast shows extremely strong and positive cash flows for each year.

Table 16.9 Cash Flow Forecast

Projected Balance Sheet

Table 16.10 "Balance Sheet Forecast" is a balance sheet forecast for Frank’s All-American BarBeQue.

Table 16.10 Balance Sheet Forecast

These figures clearly demonstrate that the proposed opening of a second restaurant is more than economically viable; it is an extremely lucrative project that promises to increase the net worth of the firm by 500 percent in five years.

Appendix: A Sample Business Plan

The following business plan for Frank’s All-American BarBeQue was built using Business Plan Pro software. It is for the purpose of illustration and does not represent the full capabilities of the software.

Executive Summary

Frank’s All-American BarBeQue has operated for decades in the southern Connecticut shore region. With a tradition of superlative food at fair prices served in a family-friendly atmosphere, the owners now believe it is time to open a second restaurant and expand the production and the distribution of Frank’s signature barbecue sauces. This second restaurant will be in Darien, Connecticut, and will be nearly twice as large, in terms of seating capacity, as the current Fairfield restaurant. The company also plans to ramp up production of its sauces and increase their sales fourfold in the next three years.

The owners of Frank’s All-American BarBeQue and other investors plan to put $160,000 of their own money into the second restaurant and expand the production of the signature sauces. They seek to raise an addition $175,000 from a bank loan that will be repaid in two years.

Vision Statement

To produce the best barbecue food in New England.

Mission Statement

The mission of Frank’s All-American BarBeQue is to provide the southern Connecticut shore region with the finest barbecue food in four major regional styles at affordable prices in a family-friendly setting. As we grow, we will never forget and remain faithful to those factors that have made us a success.

Keys to Success

Frank’s All-American BarBeQue has been in business for nearly forty years. It has weathered good times and bad times through all types of economic conditions. We have survived because Frank’s has remained committed to several principles.

• The only objective of a restaurant is to serve the finest food it can prepare. Good food—not more gimmicks or advertising—brings in customers and, more importantly, keeps customers.
• Preparing the finest foods means a commitment to excellence, which means obtaining the best ingredients and a dedication to cooking barbecue properly, which means cooking carefully and slowly .
• In addition to providing the finest food, we remain committed to providing excellent service. To us, this means friendly and knowledgeable staff members who make the customers feel like they are dining with family.
• We provide the right atmosphere. Our goal is to have a setting that says “barbecue.” We do not provide a fancy setting; our basic setting complements the food we serve.

Company Summary

Frank’s All-American BarBeQue has been a highly successful restaurant in Fairfield, Connecticut, for nearly forty years. It was started and is still managed by Frank Rainsford. Its food and sauces have won awards at both regional and national barbecue cook-offs. In addition, Frank’s has been voted the best barbecue establishment in Connecticut numerous times by many local newspapers and magazines.

The management team of Frank’s All-American BarBeQue has decided that now is the time to expand to an additional location. After careful analysis, a second Frank’s All-American BarBeQue can and should be opened in Darien, Connecticut. This restaurant will be larger and geared to better tap into the growing premade, take-home dinner market.

In the last few years, Frank’s has been selling its four signature barbecue sauces—Texan, Memphis, Kansas City, and Carolina—in local supermarkets. Although this represents a small portion of overall revenues, sales have been growing at a remarkable pace. This market must be exploited. Preliminary market research indicates that this segment of the business will grow at 20 percent per year for the next five years.

Company Ownership

Presently, Frank’s All-American BarBeQue is a limited liability partnership with Frank Rainsford and his wife Betty as owners. Each has a 50 percent share in the business.

The plans for expansion will bring in capital from three other investors: Robert Rainsford, Susan Rainsford Rogers, and Alice Jacobs. Robert Rainsford and Susan Rainsford Rogers are the son and daughter of Frank and Betty. Both have extensive work experience at Frank’s. Alice Jacobs has been the restaurant’s accountant for over twenty years.

To assist the financing of the expansion, Robert Rainsford and Susan Rainsford Rogers will each invest $50,000, while Alice Jacobs will invest $60,000.

The new limited liability partnership will result in the investors holding the following equity percentages:

Company History

Frank’s All-American BarBeQue was founded in 1972 by Frank Rainsford. Although a native New Englander, Frank learned about cooking barbecue while serving in the US Air Force. During his twelve years of service, he traveled across the country and learned about the four major styles of American barbecue—Texas, Memphis, Kansas City, and Carolina. His plan was to introduce people in southern Connecticut to real barbecue that entailed high-quality meats properly cooked and smoked over an appropriate length of time.

In the beginning, Frank’s All-American BarBeQue was a small facility; it could seat about thirty people. It was located near the Fairfield railroad station and was the first full-service barbecue restaurant in Fairfield. Frank’s placed an emphasis on featuring the food; it had a highly simplified decor where the tables were covered with butcher paper, not linen tablecloths. The restaurant was an immediate hit, received considerable local press, and won several food awards. This success enabled Frank’s to move to a larger facility in Fairfield on the town’s main thoroughfare—Boston Post Road. The new location was a midsize restaurant of about eighty seats. Frank has built this location into a relatively successful and locally well-known enterprise. It has been at the present location since the early 1980s. It shares a parking lot with several other stores in the small mall in which it is located.

Frank’s has won many awards at regional and national barbecue cook-offs (for both the food and the sauces), which is unusual for a barbecue business in New England. The restaurant has been written up, repeatedly, in the local and New York papers for the quality of its food and its four signature barbecue sauces. In the last few years, Frank’s has sold small lots of these sauces in local supermarkets. They have been distributed because of Frank’s personal connections with the store managers. Frank Rainsford has been approached by a major regional supermarket to sell his sauces. The supermarket is willing to find a facility that could produce Frank’s sauces in significantly larger volumes, which would represent a substantial increase in the sales of sauces. “Past Performance of Frank’s All-American BarBeQue” provides a summary of key financial figures for the last three years—2008 to 2010. “Past Performance Chart” illustrates these key numbers for that period of time.

Past Performance of Frank’s All-American BarBeQue

Company Locations and Facilities

Frank’s All-American BarBeQue has been in Fairfield, Connecticut, for decades. It has a reputation throughout the southern Connecticut shore region for excellent food and has received numerous awards. The management team determined that a second location could tap into this local name recognition. Several towns in the region were evaluated for total population, population density, family income, and home value. These factors were considered because of their impact on generating traffic and consumers being able to pay for meals that are priced slightly higher than typical fast-food outlets. In addition, the average family size and the percentage of family households were considered because Frank’s is a family restaurant. Lastly, data were gathered on the average travel time to and from work for residents and the real estate tax rate. Because the new location of Frank’s will emphasize prepared meals, we felt that individuals with longer commutes would be more likely to order meals and pick them up at Frank’s. A summary of these data is provided in “Demographic Data for Selected Connecticut Towns—Part 1” and “Demographic Data for Selected Connecticut Towns—Part 2”.

After thorough analysis, it was concluded that Darien, Connecticut, would be the best location for the new branch of Frank’s All-American BarBeQue. It has a high-income population and a high population density, and a large percentage of its inhabitants are members of family households. They have longer commuting times, which increase the potential need for prepared meals.

Demographic Data for Selected Connecticut Towns—Part 1

Demographic Data for Selected Connecticut Towns—Part 2

A specific location has been identified in Darien for the second Frank’s All-American BarBeQue. It is in a small mall and is large enough to have a seating capacity of 150–160 plus takeout facilities. The mall has more than adequate parking for future customers. The mall is located three blocks from the Metro-North Darien railroad station and is four blocks from the I-95 exit. It is therefore well-positioned to attract traffic from both car and rail commuters. The lease fee for a three-year contract is very reasonable for a property of this size.

Products and Services

Frank’s All-American BarBeQue specializes in the finest barbecue served in a family-friendly format. It uses the finest cuts of meats that are free of any growth hormones. It is known for a variety of slow-smoked and slow-cooked meats, such as ribs, beef, pulled pork, and chicken. These are served with Frank’s famous and award-winning sauce varieties, which represent the four major styles of barbecue cooking. Frank’s is also noted for its side dishes and desserts.

Our goal is to expand operations to a second location in Darien, Connecticut. This outlet will be significantly larger and will have a section devoted to takeout meals.

Competitive Comparison

There are approximately forty specialty barbecue restaurants in Connecticut. They are spread throughout the state, but only four (including Frank’s All-American BarBeQue) are in the southern shore region. The three competitors are smaller operations. None of the barbecue restaurants in Connecticut have the history, reputation, acclaim, or awards that match Frank’s All-American BarBeQue. It is not an exaggeration to say that Frank’s is the preeminent barbecue restaurant in Connecticut. It has a loyal following that reaches as far as New York City.

Frank’s is the only barbecue restaurant in Connecticut where supermarkets are vying for the right to market Frank’s signature barbecue sauces. This sideline business promises to be extremely profitable and support the overall marketing efforts for both locations of Frank’s All-American BarBeQue.

Fulfillment

Frank’s All-American BarBeQue has always been committed to providing the absolute best in barbecue food. This has meant assuring the highest quality ingredients in food preparation. Frank has established a decades-long relationship with suppliers in the New York and Connecticut areas. He selects nothing but the choicest selections of beef, pork, and chicken. He has always made sure that his meats come from suppliers who are committed to quality ingredients and who never use growth hormones. This long-term relationship with a variety of key suppliers enables Frank to secure the best cuts at reasonable prices. Frank is equally careful in using the finest spices for his barbecue sauces. The same is true for all the side dishes that Frank’s All-American BarBeQue offers its customers.

This commitment to quality is not limited to the selection of meats and ingredients. Frank and his staff recognize that top-quality barbecue food requires a knowledgeable and deep commitment to cooking the food properly. All meats must be cooked and smoked slowly. This requires time, effort, expense, and commitment, but the results are spectacular. Some cuts of meat at Frank’s may require as many as eleven hours of preparation and cooking. Excellence is not achieved without a commitment to effort. This effort has been recognized with numerous awards at national barbecue cook-offs. Frank has clearly recognized that the meal is clearly a function of the quality of the meat, quality ingredients, and careful preparation.

Future Products and Services

Frank’s All-American BarBeQue is ready to accept new challenges. Opening a second restaurant will significantly increase sales, but the second location is only the beginning of new directions for Frank’s. Although Frank has been selling his regional barbecue sauces in local outlets for years, he is now ready to sign a contract with a major regional supermarket chain to market and sell these sauces throughout New England. Preliminary studies indicate that Frank can anticipate a 20 percent annual growth rate in the sales of sauces for the next five years.

With the growth of two-income families, less and less time is available to prepare meals at home. Recognizing this simple fact, Frank’s All-American BarBeQue plans to offer a variety of prepackaged barbecue meals that can be picked up at the restaurant and reheated at home. As part of its new commitment to a web-based presence, customers will be able to order these meals by regular phone, with smartphones, or through the Internet. Customers will be able to select from a list of prepackaged dinner meals or any combination of items. Customers can designate the time to pick up the meals, and the meals will be ready for them. This service promises significant revenue growth.

Market Analysis Summary

Since the 1930s, the American public has spent at least 5 percent of its disposable income on eating out. Even with annual fluctuations, this is a strong indicator of the viability of this industry. This can be best illustrated by reviewing industry results for the last few years.

Both 2009 and 2010 were difficult years for the restaurant industry. In 2008, sales increased by 3.8 percent. However, sales fell by nearly 0.75 percent in 2009. This was the first year in the history of the industry that sales actually declined. The restaurant industry’s sales in 2009 were $566 billion, down from over $570 billion. Prices rose by 2.2 percent in 2009. The increase in sales for 2010 was 0.5 percent, and price increases stabilized at 0.75 percent.

It is anticipated that there will be significant price competition in every segment of the restaurant industry. Some analysts argued that the poor performances for the restaurant industry in both 2009 and 2010 could be attributed to declines in both business and personal travel. Hotel occupancy rates in 2009 were down by nearly 10 percent. A study conducted by the National Restaurant Association argued that 20 percent of the sales in casual dining restaurants might be due to travelers and visitors. Frank’s All-American BarBeQue relies to a far lesser extent on travelers as customers. A rough estimate based on credit card receipts, for the period 2006–2010, indicated that travelers represented less than 2 percent of Frank’s sales. The pressure on the restaurant industry has been felt by many chain restaurants, which significantly curtailed their expansion plans.

Even though the recession was in full bloom in 2009, many food prices rose and rose significantly. Beef prices rose between 4 percent and 12 percent, while pork prices rose between 5 percent and 13 percent. Numerous studies have indicated that the increase in commodity prices will not be a transitory phenomenon.

With 925,000 food service locations in operation in the United States, this translates into 1 restaurant for every 330 Americans.

The health-care reform bill passed in 2010 should, in the near future, provide some relief for restaurants by creating a system that will assume greater responsibility by individuals to pay for their own health-care coverage.

Restaurants must also be much more cautious in the future about the possibility of hiring illegal aliens. As a whole, the National Restaurant Association supports immigration reform. However, it is concerned that any legislation should not limit a restaurant’s ability to hire workers. It is also concerned about the cost to assure worker eligibility.

The Mintel Group, a market research firm, found that consumers who are interested in quality opt for independent restaurants over chain outlets. An increasing consumer focus on health translates into an emphasis on natural ingredients. In the barbecue industry, this translates into naturally raised meats (i.e., the avoidance of artificial growth hormones in cattle), which are a hallmark of Frank’s All-American BarBeQue.

The National Restaurant Association estimated that sales in full-service restaurants in 2010 would exceed $184 billion—an increase of 1.2 percent from 2009 sales.

Several macroeconomic factors make opening a restaurant in Darien attractive, including the following:

• Increases in the growth domestic product (GDP). The GDP is estimated to grow 1.7 percent in 2011 and 1.5 percent in 2012. The estimates for Fairfield County are significantly higher.
• Disposable personal income. The national level of personal income should rise nearly 4 percent in 2011, and there is an expectation of 3 percent growth in 2012. These numbers appear to be much stronger in the Fairfield County area.

Although 2010 was not a banner year for the restaurant industry—it was one where more restaurants closed than opened each month—there was one bright spot: Chain barbecue restaurants grew between 2 percent and 3 percent—an auspicious sign even for independent operators.

The home meal replacement market and the existing investment in restaurant equipment provide a nice growth opportunity for restaurants. It is been estimated that takeout sales in limited-service chain restaurants might be as large as 60 percent of total sales. The same study found that takeout food has been growing twice as fast as the overall restaurant industry. Natural competitors in this market are supermarkets that offer prepackaged meals. However, we feel that few—if any—supermarkets provide the quality barbecue food that can be found at Frank’s.

Market Segmentation

Frank’s All-American BarBeQue views its major market segment as suburbanites in the south shore region of Connecticut. One way of further segmenting the market is by the type of meal being provided. “Market Analysis 1” provides estimated growth rates for each type of meal (plus sauce sales) and projected number of meals (and jars of sauce) for the period 2011 to 2015. “Market Analysis 2” illustrates the relative contributions.

Market Analysis 1

Market Needs

We believe that the market centers on excellent barbecue food served at reasonable prices and served in a family-friendly manner. We further believe that a growing segment of the market will want prepared meals that can be conveniently picked up and served at home. “Market Analysis” provides a projected breakdown of the potential customers for the next five years. This breakdown is predicated on the type of meals served and includes the sale of sauces. We provide estimated growth rates and forecasted sale of meals (and bottles of sauces) for the period 2011 to 2015. “Market Analysis” shows the breakdown of the number of meals by type in 2015.

Web Plan Summary

Presently, Frank’s All-American BarBeQue has a very simple website. The website provides minimal information—listing some of the menu items and the restaurant’s telephone number. It was created eight years ago by a college student who was working at Frank’s.

Robert Rainsford’s professional expertise is in the area of website development. After graduating from college, Robert was hired by a firm that specialized in developing web and social media presences for other companies. He worked for that firm in New York City for seven years. Robert rose rapidly through the company’s ranks, eventually becoming one of its vice presidents. His expertise in this area will enable Frank’s All-American BarBeQue to significantly enhance its web presence. Rather than just having a website that identifies the restaurant’s location and telephone number, along with a brief summary of its menu, the new website will be far richer in content and capability. It will provide a complete menu listing, identifying all items with corresponding images. The new website will enable customers to place orders through the Internet for lunch, dinner, or takeout items. The section devoted to takeout items will enable a customer to purchase prepared meals or choose from all items on the menu to develop a prepackaged meal. Customers will be able to identify the time that they will arrive for the pickup.

The website will have links to the Facebook and Twitter accounts of Frank’s All-American BarBeQue. These connections will enhance its social media presence. Customers will be asked to post comments about their dining experience and suggestions on how Frank’s can improve its operations and service. It will enable Frank’s to expand operations and still maintain the same close customer relationship that currently exists at the Fairfield restaurant.

Website Marketing Strategy

The new web presence for Frank’s All-American BarBeQue will be geared to developing a new level of customer relationships. Customers at both restaurants will be asked to fill out forms where they will supply an e-mail address and a birthdate. (This information can also be supplied through Frank’s new website.) This information will enable Frank’s to keep customers informed of specials and offer coupons and the new rewards card program for special occasions, such as holidays or birthdays.

We view the website of Frank’s All-American BarBeQue as a major component of enhancing our relationship with our customers. It should provide convenience to customers through their ability to see what is on the menu, identify new specials, and order meals and pick them up at their convenience. The use of social media will expand awareness of Frank’s and enable it to develop closer relationships with present and future customers.

Development Requirements

Robert Rainsford tapped into his expertise in social media and has already developed a far more sophisticated website for Frank’s All-American BarBeQue. He has secured the necessary server capacity to handle additional traffic on the website. In addition, he has set up several social media accounts for Frank’s All-American BarBeQue, including Facebook and Twitter. Robert also created a program linked to a database that will monitor customer purchases through the rewards card program. This program will send out birthday notices and discounts to customers and will inform them of their current status in the rewards card program.

Robert contacted several former colleagues at his former place of employment and has identified several candidates for the role of website manager. This individual will be responsible for updating the website and the social media sites on a daily basis. He or she will also be responsible for analyzing the flow of information that comes through these sites and preparing management reports.

Strategy and Implementation Summary

The core strategy of Frank’s All-American BarBeQue is to continue what has made it a success at a new location. Simply put, our strategy is to provide our customers with the finest barbecue food in Connecticut, at reasonable prices, in a family-friendly environment. In addition, we hope to improve our ability to meet customer needs by making life more convenient for our customers. We believe that these fundamentals are universally applicable.

SWOT Analysis

A strengths, weaknesses, opportunities, and threats (SWOT) analysis was undertaken for Frank’s All-American BarBeQue.

The key strength of Frank’s All-American BarBeQue is the quality of its food and service. It has been the recipient of numerous local and national awards for its foods and sauces. Other strengths include a highly knowledgeable management team with expertise in operating a barbecue restaurant, a close working relationship with suppliers of premier cuts of meats, and a loyal clientele in the south shore region.

The weaknesses associated with this business plan center on operating an additional restaurant with a much larger capacity than the Fairfield, Connecticut, restaurant. The second location will require an experienced restaurant manager. This plan calls for a significant increase in prepared (takeout) meals. Orders will be placed either by phone or through the website. Current personnel have little experience in ratcheting up the takeout portion of the business.

Opportunities

This business plan offers significant opportunities for Frank’s All-American BarBeQue. A second, larger location will translate into a significant increase in sales. Finalizing a business relationship with the regional supermarket chain will enable Frank’s to significantly increase the production and the sales of its signature sauces. The sales of sauces are expected to increase by 20 percent per year for the next five years.

Any expansion with the opening of a new location always entails some risk. The principals of Frank’s All-American BarBeQue will be investing a significant amount of capital and will be borrowing money from a bank to open a second location. It is strongly believed that the second location will capitalize on the success of the Fairfield restaurant and will become a success.

Competitive Edge

The competitive edge of Frank’s All-American BarBeQue resides mainly in the quality of its food and its commitment to serve the food in a family-friendly environment. The quality of its food is unmatched in the entire state. No other barbecue restaurant has received the awards and the accolades that Frank’s All-American BarBeQue has received for the past forty years. Its reputation for quality gives it an edge that no other barbecue restaurant or chain can match.

Marketing Strategy

The target market for Frank’s All-American BarBeQue is essentially suburban families in the south shore region of Connecticut. These people appreciate the finest barbecue food at reasonable prices. It is expected that an important group within this target market will be families with two incomes whose busy schedules would make prepared meals a very attractive option. We further assume that this market is technically sophisticated and will appreciate the convenience of ordering these meals via the Internet.

A key component of the marketing strategy of Frank’s All-American BarBeQue is to use the Internet and technology to enhance the relationship with its customer base. Frank’s will use the website, Facebook, Twitter, and e-mails to inform customers of special food items or discounts based on holidays and customers’ birthdays. We intend to use the website as a mechanism to gain an improved insight into customer needs and wants.

Frank’s All-American BarBeQue will also initiate a rewards card program. Customers will sign up for the rewards card program either at the two locations or online. They can use this program every time they make a purchase either at the restaurants or online. After a set number of visits (seven), customers will be entitled to either discounts or free items. The rewards card program will enable Frank’s All-American BarBeQue to track customers’ buying patterns and anticipate the ways in which they can better serve their customers.

Sales Forecasts

We provide a five-year forecast of the dollar value of sales broken down by the two restaurants and the sauces in the following tables. “Sales”Monthly Sales for Two Restaurants and Sauces” illustrates a forecast for the breakdown of sales on monthly basis in 2011, and “Five-Year Forecast of Sales for Two Restaurants and Sauces” illustrates the breakdown of sales for the next five years.

Sales Forecast

Management Summary

Currently, Frank Rainsford is the CEO and chief operating officer of Frank’s All-American BarBeQue. He is also the restaurant manager at the Fairfield restaurant. During the week, his daughter (Susan Rainsford Rogers) often replaces Frank as the restaurant manager. The Fairfield restaurant has a full-time cook who operates under Frank’s supervision, and two other full-time employees function as waiters and waitresses. These full-time employees are supplemented by six part-time employees.

Under the new management structure, Frank Rainsford will hold the position of CEO. His wife, Betty Rainsford, will be designated the president and chief operating officer. Their daughter, Susan Rainsford Rogers, will be given the title vice president for operations. She will be responsible for the day-to-day operations of the Darien, Connecticut, restaurant. Robert Rainsford will have the title of vice president of marketing. He will be responsible for all marketing activities and the operation of the website. Alice Jacobs will be the vice president of finance and the comptroller of Frank’s All-American BarBeQue.

Organizational Structure

The new management structure of Frank’s All-American BarBeQue is a basic functional layout appropriate for this type of business.

Organizational Chart

Personnel Plan

“Forecasts of Personnel” is a five-year breakdown of the types and costs of personnel.

Forecasts of Personnel

Financial Plan

Frank’s All-American BarBeQue will be financing the creation of a second restaurant through a combination of private investment and a bank loan. The private investment will raise $160,000, and Frank’s will seek another $175,000 as a two-year loan. These funds will be used to pay for equipment and leasing expenses associated with opening a second restaurant.

Important Assumptions

The assumptions associated with the grow rates of sales each year for the next five years are the keys to the financial planning process. We began with very modest assumptions of 8 percent growth in lunch sales and 5 percent growth in dinner sales. We anticipate fairly vigorous growth in takeout meals (20 percent) and sauces (15 percent). Although these are large growth rates, we do not feel that they are unrealistic.

Key Financial Indicators

“Key Financial Indicators” provides historical (2008–2010) and forecasted (2011–2015) values for the key financial indicators.

Breakeven Analysis

In “Breakeven Analysis 1” and “Breakeven Analysis 2”, we show the results of our breakeven analysis for Frank’s All-American BarBeQue. The results indicate that with sales of approximately $110,000 each month, Frank’s All-American BarBeQue will break even.

Breakeven Analysis 1

Projected Profit and Loss

Our analysis anticipates significant growth in profits in the next five years with the opening of a second Frank’s All-American BarBeQue in Darien. The profit margins should increase from in excess of $850,000 in 2011 to nearly $1,600,000 by 2015 and should be in excess of 20 percent for all five years. A complete analysis of the profit and loss statements is in “Profit and Loss”. The annual profits are illustrated in “Yearly Profits”.

Profit and Loss

Projected Cash Flow

“Cash Flow Forecast” is a five-year forecast of cash flows for Frank’s All-American BarBeQue. The forecast shows extremely strong and positive cash flows for each year.

Cash Flow Forecast

Projected Balance Sheet

“Balance Sheet Forecast” is a balance sheet forecast for Frank’s All-American BarBeQue.

Balance Sheet Forecast

These figures clearly demonstrate that the proposed opening of a second restaurant is more than economically viable; it is an extremely lucrative project that promises to increase the net worth of the firm by 500 percent in five years.

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