The National Minority Business Council

The most important document for an entrepreneur wishing to grow his or her business is the BUSINESS PLAN. However, many enterprise owners regard the preparation of a business plan with dread or at least extreme distaste. Business plan writing is viewed as a necessary evil best done during periods of ‘dead time’ and even better done by outside “professional consultants” who specializes in preparing plans.

A good business plan serves you, the entrepreneur in two ways: 1) It is a selling document which can be presented to potential investors and lenders to obtain expansion financing and 2) it is a blueprint for you to best to measure your performance. With regard to the first: it is likely that eventually you will be approaching investors or banks for the financing for expansion or for working capital. These will require a complete business plan. Regarding the second purpose, without a plan you ‘will be flying blind’ without the benefit of having a road map to compare actual to planned performance

If you are serious about expanding your enterprise, you will regard the development of a business plan as a critical function, every bit as important as marketing, production or sales. It is important that you provide most of the input for the business plan. There are consultants who assert that they can write business plans which will result in successful fund raising. However, you should be extremely wary of these consultants and their services; investors and lenders can spot ‘canned’ presentations easily. Consultants are useful in assisting in structuring and packaging of plans, but the real heart of a business plan must come from you, the business owner.

When you prepare a business plan with the goal of raising capital, you should be aware of the importance of getting the attention of the target investor or lender. The typical investor sees hundreds of business plans each year. This is especially true of private equity or venture capital firms. It is a challenge to have your plan stand out in this crowded field and the correct format is essential.

The format of a standard business plan is somewhat flexible but all plans should at a minimum contain:

While this is a great deal to cover, try to be as concise and clear as possible. Plans of more than 30 pages cause readers to have the MEGO (“My Eyes Glaze Over”) effect.

Readers of business plans almost always go immediately to two sections – the Executive Summary first and then the Financial Projections. The Executive Summary has to provide a compelling story in a few words; ideally in no more than three pages. It should never be too cute or ‘gimmicky’. Your readers are serious people making serious investment decisions. The Executive Summary will cover most of the items listed above but in abbreviated form and should always contain summary financial projections going out three years. Two points which are must be, but often are not, addressed in the Executive Summary are: 1) the amount of capital sought and 2) the contact information for the company and the names and addresses of the owners/founders/entrepreneurs. Not including these points will almost automatically send your plan to the ‘circular file.’

After the Executive Summary, the typical reader will go to the financial section. This will be divided into two parts: 1) actual (historical) financial statements, and 2) financial projections. Your accountant (CPA) will prepare the actual statements whether they are compiled, reviewed or audited and will also assist in packaging the financial projections. However these projections should truly reflect your vision for the business and is the primary basis by which the investment/lending commitment will be made. They will also establish the benchmarks against which your company’s performance can be measured. Just putting year-by-year numbers on a spreadsheet is not enough; underlying the numbers should be specific, clear and well-thought out assumptions regarding every aspect of the business. A word of warning: in developing the financial projections, avoid the ‘hockey stick’ where sales and income of the business in the ‘out’ years (years 4 and 5) show huge increases over the earlier years and when graphed, take the shape of a hockey stick. While prospective investors prefer enterprises which can demonstrate ‘scalability’, that is the ability to achieve significant growth, they are sensitive to unrealistic projections and assumptions.

Finally, when you have completed your business plan, make sure to have your attorney review it.

In summary, a clear, concise and compelling business plan is critical to obtaining financing and in measuring your progress as your business grows.

January 2010

NMBC Announces New Financing Initiative for Small and Medium-Sized Businesses

Dear NMBC Member:

The National Minority Business Council is pleased to announce a new, major financing initiative designed to assist small and medium-sized enterprises in obtaining ‘permanent’ funding to grow their businesses.

The Council is partnering with a substantial private equity/ venture capital investment fund working to provide equity financing for qualified companies. This assistance will be in the form of Alternative Public Offerings (“APOs”), an attractive alternative to the traditional costly and time-consuming IPO approach. If your company meets the following criteria you may be eligible for this program:

Ø A minimum of three years of continuous operations

Ø Financial statements for the past two years prepared by an outside accountant

Ø Revenues of $3,000,000 per year or more

Ø Profitable operations in the past year

Ø Doing business in the following growth sectors: healthcare and biomedical, information technology, water pollution control, clean/green energy or infrastructure

The mechanics of the APO program are straightforward. You would merge your company into a clean public vehicle with its stock already listed either on the NYSE – AMEX or the Bulletin Board. Simultaneously we would provide the required equity financing to enable your business to move forward. This equity financing would be in the range of $2 million to $10 million depending on the size and type of company being financed. Unlike the typical private equity or venture fund we would NOT demand majority control of a firm we are financing.

There will be significant benefits to you and your firm – a few of these are:

· An infusion of permanent capital

· Control of a public company which will enable you to raise additional capital or acquire other businesses

· Publicly traded stock which will enhance your ability to hire high-talent personnel

· You will have stock which can be sold in the market at the appropriate time to provide liquidity for you and your family

If you believe your business might benefit from this Program please fill out the attached Questionnaire and forward to the NMBC at INFO@NMBC.ORG attn: John F. Robinson. We believe that this may be the best time for a company to take itself public to be ready for the improvement in the economy that is sure to happen in the next five to six months. Please consider this financial program as a way of taking your business to the next level. Any questions about this program please feel free to call me at the NMBC telephone number: (212) 693-5050.

Regards,

John F. Robinson

President & CEO

NMBC, Inc.

QUESTIONNAIRE

To qualify for the NMBC’s Equity Investment Program

Name of Company: _______________________________________________________________

Address: _______________________________________________________________

_______________________________________________________________

Phone: _______________________________________________________________

Fax: _______________________________________________________________

Email: _______________________________________________________________

State and Date of Incorporation ______________________________________________________

Type of Corporation (i.e. ‘C’, ‘S,’’ LLC’) ______________________________________________

Nature of Business: _______________________________________________________________

_______________________________________________________________

Principals: _______________________________________________________________

_______________________________________________________________

PLEASE ATTACH A ONE PARAGRAPH BIO FOR EACH PRINCIPAL OF THE BUSINESS

FINANCIAL INFORMATION: Do you have income statements for the past three years prepared by an outside accounting firm? ____Yes ____No If Yes please proved name of the accounting firm

IF YES

Total Assets for: 2009 $_________________________

2008 $_________________________

2007 $_________________________

Total Liabilities for: 2009 $_________________________

2008 $ _________________________

2007 $__________________________

Stockholders’ Equity for: 2009 $__________________________

2008 $__________________________

2007 $__________________________

Total Revenues for: 2009 $__________________________

2008 $___________________________

2007 $___________________________

Net Income after Taxes for: 2009 $___________________________

2008 $___________________________

2007 $___________________________

Please provide a copy of your Federal Corporation Income Tax for the past two years

FINANCING

1) How much capital are you seeking? ___________________

2) What will you use it for? _____________________________

3) Are you seeking funding in the form of debt (loans) or equity?

______Debt ______Equity

4) Do you have an attorney? ____ If so, please state the name of the attorney

and/or the law firm.

4) Is there any litigation ongoing or pending against the company?

______Yes ______No

Outline the vision and goals for your business. Where do you see your business by the year 2015, in terms of revenues, profits, products / services or any other criteria for success that you think are appropriate

◈RESULT OF MNBC BUSINESS SURVEY◈

Fall 2009

FROM: NMBC MEMBERS

SUBJECT: IMPORTANT BUSINESS SURVEY

● QUESTION 1

In view of the current economic situation, we would like to know whether your business has benefited from the stimulus Bill by new contract or expanded financing to your business through your local bank?

ANSWER: YES: 1 (6%)

NO: 16(94%)

COMMENTS:

1, The billions for biotechnology research awarded for NIH did not go for small biotech-IT

2, Nothing in the bill helps manufacturing, financing is tough to find

3, In the mental arena and nothing a advantage of stimulus funds, though they are dealing

with suicidal clients daily who are situations due to lost job

● QUESTION 2

Based on recent business activity during the third quarter(July, August and September, 2009) has your business profitability in creased?

ANSWER: YES: 2 (12%)

NO: 14(82%)

SAME: 1(6%)

COMMENTS:

1, Manufacturing has dried up, major corporations have no money

2, lost city contracts and competitive bids and finding the healthcare arena to stay a float

3, Business is dramatically down

●QUESTION 3

Do you feel that your business` bottom line will improve in the first quarter of 2010?

ANSWER: YES: 6(36%)

NO: 8(48%)

NOT SURE : 3(18%)

COMMENT:

1, Manufacturing is a an all time low

2, Yes but not because of the stimulus funds

3, Forecast no increases but staying about the same

We sent this survey to 300 NMBC members and 7% responded.

According to the answers most of the stimulus funds didn`t work in small business and most money floated into big company. Only 12% of the people said they had their business profitability increased during the third quarter (July, August and September, 2009). Most people said their businesses decreased and some people were worried about contracts which they lost, due to the recession. About 70% of the people think that their business’s bottom line will not improve in the first quarter of 2010.






					Financial Resource How to Write an Effective Business Plan For Financing and Business Growth Reasons for Having a Business Plan The most important document for an entrepreneur wishing to grow his or her business is the BUSINESS PLAN. However, many enterprise owners regard the preparation of a business plan with dread or at least extreme distaste. Business plan writing is viewed as a necessary evil best done during periods of ‘dead time’ and even better done by outside “professional consultants” who specializes in preparing plans. A good business plan serves you, the entrepreneur in two ways: 1) It is a selling document which can be presented to potential investors and lenders to obtain expansion financing and 2) it is a blueprint for you to best to measure your performance. With regard to the first: it is likely that eventually you will be approaching investors or banks for the financing for expansion or for working capital. These will require a complete business plan. Regarding the second purpose, without a plan you ‘will be flying blind’ without the benefit of having a road map to compare actual to planned performance If you are serious about expanding your enterprise, you will regard the development of a business plan as a critical function, every bit as important as marketing, production or sales. It is important that you provide most of the input for the business plan. There are consultants who assert that they can write business plans which will result in successful fund raising. However, you should be extremely wary of these consultants and their services; investors and lenders can spot ‘canned’ presentations easily. Consultants are useful in assisting in structuring and packaging of plans, but the real heart of a business plan must come from you, the business owner. Business Plan Format When you prepare a business plan with the goal of raising capital, you should be aware of the importance of getting the attention of the target investor or lender. The typical investor sees hundreds of business plans each year. This is especially true of private equity or venture capital firms. It is a challenge to have your plan stand out in this crowded field and the correct format is essential. The format of a standard business plan is somewhat flexible but all plans should at a minimum contain: Ø Executive Summary Ø Key Investment Considerations- the compelling reason to invest Ø Business Description Ø Summary of Products and /or Services Ø The Market – demographics, growth potential Ø Marketing Strategy and Sales Plan Ø Description of the Competition- why you are different/better Ø Technologies and Proprietary Position (where applicable) Ø Management and Ownership Ø Capital Requirements and Use of Proceeds Ø Long-Term Development and Exit Strategies Ø Financial Reports and Projections While this is a great deal to cover, try to be as concise and clear as possible. Plans of more than 30 pages cause readers to have the MEGO (“My Eyes Glaze Over”) effect. Readers of business plans almost always go immediately to two sections – the Executive Summary first and then the Financial Projections. The Executive Summary has to provide a compelling story in a few words; ideally in no more than three pages. It should never be too cute or ‘gimmicky’. Your readers are serious people making serious investment decisions. The Executive Summary will cover most of the items listed above but in abbreviated form and should always contain summary financial projections going out three years. Two points which are must be, but often are not, addressed in the Executive Summary are: 1) the amount of capital sought and 2) the contact information for the company and the names and addresses of the owners/founders/entrepreneurs. Not including these points will almost automatically send your plan to the ‘circular file.’ After the Executive Summary, the typical reader will go to the financial section. This will be divided into two parts: 1) actual (historical) financial statements, and 2) financial projections. Your accountant (CPA) will prepare the actual statements whether they are compiled, reviewed or audited and will also assist in packaging the financial projections. However these projections should truly reflect your vision for the business and is the primary basis by which the investment/lending commitment will be made. They will also establish the benchmarks against which your company’s performance can be measured. Just putting year-by-year numbers on a spreadsheet is not enough; underlying the numbers should be specific, clear and well-thought out assumptions regarding every aspect of the business. A word of warning: in developing the financial projections, avoid the ‘hockey stick’ where sales and income of the business in the ‘out’ years (years 4 and 5) show huge increases over the earlier years and when graphed, take the shape of a hockey stick. While prospective investors prefer enterprises which can demonstrate ‘scalability’, that is the ability to achieve significant growth, they are sensitive to unrealistic projections and assumptions. Finally, when you have completed your business plan, make sure to have your attorney review it. In summary, a clear, concise and compelling business plan is critical to obtaining financing and in measuring your progress as your business grows. January 2010 NMBC Announces New Financing Initiative for Small and Medium-Sized Businesses Dear NMBC Member: The National Minority Business Council is pleased to announce a new, major financing initiative designed to assist small and medium-sized enterprises in obtaining ‘permanent’ funding to grow their businesses. The Council is partnering with a substantial private equity/ venture capital investment fund working to provide equity financing for qualified companies. This assistance will be in the form of Alternative Public Offerings (“APOs”), an attractive alternative to the traditional costly and time-consuming IPO approach. If your company meets the following criteria you may be eligible for this program: Ø A minimum of three years of continuous operations Ø Financial statements for the past two years prepared by an outside accountant Ø Revenues of $3,000,000 per year or more Ø Profitable operations in the past year Ø Doing business in the following growth sectors: healthcare and biomedical, information technology, water pollution control, clean/green energy or infrastructure The mechanics of the APO program are straightforward. You would merge your company into a clean public vehicle with its stock already listed either on the NYSE – AMEX or the Bulletin Board. Simultaneously we would provide the required equity financing to enable your business to move forward. This equity financing would be in the range of $2 million to $10 million depending on the size and type of company being financed. Unlike the typical private equity or venture fund we would NOT demand majority control of a firm we are financing. There will be significant benefits to you and your firm – a few of these are: · An infusion of permanent capital · Control of a public company which will enable you to raise additional capital or acquire other businesses · Publicly traded stock which will enhance your ability to hire high-talent personnel · You will have stock which can be sold in the market at the appropriate time to provide liquidity for you and your family If you believe your business might benefit from this Program please fill out the attached Questionnaire and forward to the NMBC at INFO@NMBC.ORG attn: John F. Robinson. We believe that this may be the best time for a company to take itself public to be ready for the improvement in the economy that is sure to happen in the next five to six months. Please consider this financial program as a way of taking your business to the next level. Any questions about this program please feel free to call me at the NMBC telephone number: (212) 693-5050. Regards, John F. Robinson John F. Robinson President & CEO NMBC, Inc. QUESTIONNAIRE To qualify for the NMBC’s Equity Investment Program Name of Company: _______________________________________________________________ Address: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ Phone: _______________________________________________________________ Fax: _______________________________________________________________ Email: _______________________________________________________________ State and Date of Incorporation ______________________________________________________ Type of Corporation (i.e. ‘C’, ‘S,’’ LLC’) ______________________________________________ Nature of Business: _______________________________________________________________ _______________________________________________________________ Principals: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ PLEASE ATTACH A ONE PARAGRAPH BIO FOR EACH PRINCIPAL OF THE BUSINESS FINANCIAL INFORMATION: Do you have income statements for the past three years prepared by an outside accounting firm? ____Yes ____No If Yes please proved name of the accounting firm IF YES Total Assets for: 2009 $_________________________ 2008 $_________________________ 2007 $_________________________ Total Liabilities for: 2009 $_________________________ 2008 $ _________________________ 2007 $__________________________ Stockholders’ Equity for: 2009 $__________________________ 2008 $__________________________ 2007 $__________________________ Total Revenues for: 2009 $__________________________ 2008 $___________________________ 2007 $___________________________ Net Income after Taxes for: 2009 $___________________________ 2008 $___________________________ 2007 $___________________________ Please provide a copy of your Federal Corporation Income Tax for the past two years FINANCING 1) How much capital are you seeking? ___________________ 2) What will you use it for? _____________________________ 3) Are you seeking funding in the form of debt (loans) or equity? ______Debt ______Equity 4) Do you have an attorney? ____ If so, please state the name of the attorney and/or the law firm. 4) Is there any litigation ongoing or pending against the company? ______Yes ______No Outline the vision and goals for your business. Where do you see your business by the year 2015, in terms of revenues, profits, products / services or any other criteria for success that you think are appropriate ◈RESULT OF MNBC BUSINESS SURVEY◈ Fall 2009 FROM: NMBC MEMBERS SUBJECT: IMPORTANT BUSINESS SURVEY ● QUESTION 1 In view of the current economic situation, we would like to know whether your business has benefited from the stimulus Bill by new contract or expanded financing to your business through your local bank? ANSWER: YES: 1 (6%) NO: 16(94%) COMMENTS: 1, The billions for biotechnology research awarded for NIH did not go for small biotech-IT 2, Nothing in the bill helps manufacturing, financing is tough to find 3, In the mental arena and nothing a advantage of stimulus funds, though they are dealing with suicidal clients daily who are situations due to lost job ● QUESTION 2 Based on recent business activity during the third quarter(July, August and September, 2009) has your business profitability in creased? ANSWER: YES: 2 (12%) NO: 14(82%) SAME: 1(6%) COMMENTS: 1, Manufacturing has dried up, major corporations have no money 2, lost city contracts and competitive bids and finding the healthcare arena to stay a float 3, Business is dramatically down ●QUESTION 3 Do you feel that your business` bottom line will improve in the first quarter of 2010? ANSWER: YES: 6(36%) NO: 8(48%) NOT SURE : 3(18%) COMMENT: 1, Manufacturing is a an all time low 2, Yes but not because of the stimulus funds 3, Forecast no increases but staying about the same We sent this survey to 300 NMBC members and 7% responded. According to the answers most of the stimulus funds didn`t work in small business and most money floated into big company. Only 12% of the people said they had their business profitability increased during the third quarter (July, August and September, 2009). Most people said their businesses decreased and some people were worried about contracts which they lost, due to the recession. About 70% of the people think that their business’s bottom line will not improve in the first quarter of 2010.