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Business Plan:

Business Incubators

Business Plan: Executive Summary Sample

Strategic Incubator International

By Venture Planning Associates. Used by permission.

Executive Summary

THE MISSION

The objective is to develop the resources and the infrastructure that are necessary to identify early stage opportunities, and then assist client companies in the process of commercialization.

The company’s goal is to provide the infrastructure that will create the maximum probability for commercial success. The company will attempt to develop models that parallel those that have been established by such companies as Garage.Com, Vulcan Ventures, CMGI, and IdeaLabs, where initial investment, incubation, and development through to commercialization are a coordinated effort among all of the participants.

The company believes that we can provide substantial long-term investment returns by accomplishing two complementary goals:

  • Reducing financial risk by selecting the appropriate projects.

  • Maximizing the success of the projects by developing the appropriate infrastructure around the projects.

A wide range of Strategic Resources is necessary for early stage opportunities to be successful including; financing, strategic business advice, industry associated support, incubation etc. The company will develop a network that can support businesses in a number of ways.

Overview

 

Research reveals recognition by the technology industry and venture capital firms of the gaps in the process of bringing new entrepreneurial technologies from the "garage" through the various stages of funding. 

Gaps are mostly in quality management, marketing and infrastructure development around the new technology innovation.  Gaps also exist between the seed funding, angel investors and more formal venture capital financing.

The rapid growth of the technology industry, as well as an increasing commitment from research organizations to interface with industry is contributing to creating this opportunity.

Financial Summary

The current business plan, prepared by the company, shows that the business will generate gross revenues of $900,000 in year one, $7.3 million in year three and up to $50 million in year five.  Pre tax profit average 32%.   IPO or acquisitions begin in year two and finance all residual cash requirements as the company expands.  Full return of capital is possible in year three.

 

Year 1

Year 2

Year 3

Year 4

Year 5

Income

750

938

938

938

938

Mgmt Fees

200

250

250

250

250

Web Site

-

150

188

234

293

M & A

-

150

188

234

293

IPO

-

2,000

6,000

18,000

54,000

Gross

950

3,338

7,375

19,422

55,480

Expenses

 

 

 

 

 

Office

150

188

234

293

366

Salaries

750

938

1,172

1,465

1,831

Web Site

200

250

313

391

488

Marketing

200

250

313

391

488

Total Expenses

1,300

1,625

2,031

2,539

3,174

EBIDT

(350)

1,713

5,344

16,883

52,307

 

Capitalization Requirements

The company is flexible can be structured as a Partnership, Limited Partnership, C Corporation, LLC or LLP to accommodate the investors' goals and tax position.  Initially, a Limited Partnership will be structured in order to avoid double taxation and to allow return capital to investors.

The company (partnership) requires $2.5 million in startup and operating capital that can be invested in phases and will be used as follows:

  • Venture Funding

  • $2,500,000

  • Salaries

  • $630,000

  • Website

  • $250,000

  • Office

  • $200,000

  • Marketing

  • $300,000

  • Seed Funding

  • $800,000

  • Reserves

  • $300,000

The partnership can be very successful.  Note that the limited partner always receives preferential returns prior to distributions to the general partner.

The Market

 

There are over 1,000,000 new businesses started every year.  While and estimated 80% will fail within a few years, early intervention and incubation has proven to be a successful model.  Incubators tied to venture funds have been even more successful with a launch success rate of over 40% for in-house companies.

The Product and Service

  • Strategic Incubator will provide all infrastructure services to incubated companies, including, insurance, accounting, tax, personnel services, recruiting and strategic alliance services. 

  • Follow-on venture funding for those who reach their milestones and graduate to individual status

  • Incubator Companies will have a strict schedule of milestones in order to remain part of the Strategic Incubator Process.  90 days to completion of business plan and revenue model, 120 days to have a proven working pre-production model or working prototype. Final 30 days to sign two major and three minor strategic partners.

Corporate Management

Strategic Incubators’ management expertise.  Combined Entrepreneurial & Management Experience in excess of 200 years.

  • CEO, CFO, William Fisher– Venture Capital

  • CEO, CFO, COO Janice Sato, – Finance Systems

  • CEO  Paul Thornton – Corporate Strategies

  • COO  Larry Johnson – Marketing, Tech Training

  • CIO  Jason Jackson –Marketing & Web Strategy

  • COO  Robert Fall – Operations & Banking

  • HR  Sandra Smith – Administration & HR

  • PR  Peter Paulson –Strategic Communications

Further Information                                       

 

For a full prospectus and due diligence package and a demonstration disk and manual, please contact Strategic Incubator at xyz@abc.com. This is not an offer or solicitation to sell securities, or interests in a limited partnership. Please see disclaimer on the Business Plan.

Business Development Services

Venture Planning's Expertise

Venture Planning Associates is not a primary venture capital source, but rather a consulting firm dedicated to assisting the entrepreneur in developing the best possible business plan and supporting documentation that will be required by potential funding sources.

Our principal function will be to assist you in completing your financing through formal venture capital firms, companies looking for joint venture opportunities, banks, or other lending institutions, and/or state and federal assistance programs.

Basic Services

  • Guide the formation, expansion or redirection of businesses.

  • Research and feasibility studies to determine whether a given venture should be attempted.

  • Preparation of business plans and other financial documentation powerful enough to obtain bank or venture capital financing, or joint venture or strategic partners.

  • Matching a client’s invention or project with appropriate venture capital sources.

  • Valuation studies and projections, project evaluations for both pre- and post-investment analysis.

  • Negotiations and deal structuring, determining optimum debt and equity ratios, for financial plans.

  • Planning investor and owner exit strategies through mergers, acquisitions, IPO’s, LBO’s, or ESOP’s.

  • Packaging financial documentation as a marketing vehicle to obtain funding.

Contracts and Additional Services

  • Non-Disclosure:  For projects involving proprietary information, we have a standard nondisclosure statement that may be used for any and all individuals or companies involved with your project. In general, it will not be necessary to disclose such information except in the final stages of venture funding.

  • Consulting Services:  Specific service quotations and contracts will be developed and tailored directly to client needs. In general, a fixed price contract will be proposed for the project, or for each phase of the project.

  • Venture Funding:  Because of the diversity of both funding sources and projects, and the complexity of a business’ potential financial structure, these services are covered by a separate agreement that specifically outlines all fees and services required to adequately fund your project. Consulting to assist you with funding activities is conducted on a monthly retainer basis, plus expenses.

Steps of the Venture Financing Process

Venture Financing: Key Documents To Be Prepared by an Entrepreneur

  • Business Management Services:  Should you require ongoing management services to locate professional management for your company, we will provide executive search services or place one of our consultants with your organization to assist you during the transitional phase of your company’s development.

  • Manufacturing or Marketing Partners:  Many businesses require either manufacturing or marketing services. Our wide range of contacts can often provide the services you require.

Specific Services
  • Financial and Investment Planning

  • Optimum Debt/Equity Structure

  • Deal Structuring

  • Market and Feasibility Studies

  • Direct Mail Forecasting

  • Radio, TV, Print, Internet, and Direct Mail Marketing

  • Internet Strategies