Business Plan Outline
Non-disclosure
1.0 Executive Summary
   1.1 Mission Statement
   1.2 The Enterprise
   1.3 Key Personnel
   1.4 The Market
   1.5 The Offering
   1.6 Marketing Strategy
   1.7 Competition
   1.8 Projections
   1.9 Resource Requirements
   1.10 Key Issues
2.0 The Enterprise
   2.1 Objectives
   2.2 History
   2.3 Organization
     2.3.1 Key Personnel
     2.3.2 Personnel Count
   2.4 Operations
   2.5 The Future
3.0 The Market
   3.1 Market Segments
   3.2 Prospects
   3.3 Prospect Objectives
   3.4 Segmentation
   3.5 Size
   3.6 Environment
   3.7 Alternatives
4.0 The Offering
   4.1 Description
   4.2 Market Status
   4.3 Value
   4.4 Cost to Produce
   4.5 Support
5.0 Marketing Strategy
   5.1 Targets
   5.2 Image
   5.3 Promotion
     5.3.1 Internet Web Site
     5.3.2 Publicity
     5.3.3 Advertising
   5.4 Pricing
   5.5 Sales
   5.6 Distribution
   5.7 Logistics
   5.8 Support
6.0 Competitive Analysis
7.0 Development Program
   7.1 Objectives
   7.2 Organization
   7.3 Market Status
   7.4 Schedules
   7.5 Technology
8.0 Operations / Production
   8.1 Organization
   8.2 Suppliers
   8.3 Sub-contractors
   8.4 Technology
   8.5 Quality
   8.6 Inventory
9.0 Investment Capital
   9.1 Initial Funding
   9.2 Use of Funds
   9.3 Return on Investment
10.0 Historical Financials
   10.1 Income Statement
   10.2 Balance Sheet
   10.3 Cash Flow
11.0 Financial Projections
   11.1 Year One Income Statement
   11.2 Year Two Income Statement
   11.3 Five Year Income Statement
   11.4 Year One Cash Flow
   11.5 Year Two Cash Flow
   11.6 Five Year Cash Flow
   11.7 Balance Sheet
12.0 Financial Alternatives
   12.1 Best Case
   12.2 Worst Case
13.0 Financial Addendums
   13.1 Assumptions
   13.2 Ratios
   13.3 Income Statement Comparison
   13.4 Balance Sheet Comparison

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9.3 Return on Investment

Explanation

Any investor will want to have a clear understanding of how you expect to provide them with a return on their investment. This might involve a public offering, a leveraged buyout, acquisition of another company or any number of other innovative mechanisms.

If you expect the debt to be retired in payments over time, then the amounts and timing should be described.

Remember that since the rate of return is their most important consideration, and that a public offering is sometimes not an alternative, investors will be looking for a variety of exit strategies. Therefore, be flexible and creative in developing these opportunities, taking into consideration concepts such as merger/acquisition or strategic partnering. Although details can be worked out later, investors need to know that you understand their primary objectives as you develop your overall business strategy.

The following are examples of several of the more traditional ways for investors to realize a return on their investment.

Dividends - Beginning in the third year following investment, the enterprise will pay to the investor a dividend. Dividends will be shared among investors on a pro rata basis. The amount of the dividend will be determined by the board of directors, but in no event will total dividends issued reduce the fiscal year end cash ratio to less than .75.

Investor redemption based on a pre-defined schedule - Beginning in the third year after investment the investor will have the right to redeem their equity to the extent that the enterprise's cash ratio can be maintained at or above .6. If more than one investor wishes to redeem their equity it will be done so on a pro rata basis. Redemption will be based on the following schedule.
Year three   -   125% of original investment (10% internal rate of return)
Year four     -   190% of original investment (18% internal rate of return)
Year five      -   250% of original investment (21% internal rate of return)

Enterprise buyout of investors based on a pre-defined schedule - Beginning in the third year after investment the enterprise will have the right to buy back the investor's equity at a pre-determined price. Buy back will be based on the following schedule.
Year three   -   400% of original investment (60% internal rate of return)
Year four     -   600% of original investment (57% internal rate of return)
Year five      -   800% of original investment (52% internal rate of return)

Merger, Acquisition, IPO
In any of these circumstances it is not possible to predict what the return will be for the investor. It is assumed that any such action would be done in the best interest of the stockholders.

Convertible Note - An alternative to a direct investment is a loan from an investor. A specified interest rate would be defined with payments due at regular intervals over the term of the loan. The investor would have the option to convert the loan to a percentage interest in the enterprise for some pre-defined period of time (usually considerably less time than the term of the loan).