Writing Your Business Plan

Business Plan Starter Kit

No matter what kind or size of a business you are starting, it is important to create a business plan. It is the best way to get where you want to go. It communicates your understanding of the business and it makes reasonable assumptions and forecasts of sales, expenses, and cash flow. Creating a business plan forces you to confront the reality of what you are planning to do.

When writing your business plan, it is important to keep in mind the person(s) for whom you are writing. If you are writing a business plan for an investor or a bank you should assume that they know nothing about your business and industry. Also, keep your business plan short and to the point. If you were a loan officer, would you rather read a sixty-page plan or a seven-page plan? Bankers and investors want just the facts - all the facts - but just the facts. If, on the other hand, you are writing a business plan just for yourself, your family and friends, you should construct it to suit your needs. It should include your goals and the strategies you will put in place to achieve the goals.

Writing a good plan is hard work. It requires that you look at customers, competitors, the market, and especially at yourself. It is quite normal to be a bit overwhelmed. Quoting from Business Plans for Dummies (IDG Books Worldwide):

"...for some of you, a business plan is something that you're required to put together to raise money for a startup company. At best it's a formality; at worst, it's a real pain in the neck. But a business plan isn't just there to raise money; it is also a powerful tool - one that's bound to make your company a better place to work and your business a more successful operation."

 

The real power of your plan is that it forces you to understand where you want your business to be in the future and how you will achieve that future. It then serves as a road map guiding you day-by-day through all the obstacles you will encounter on your road to success
As you prepare to start your business you will need to consult with professionals. This may include a lawyer, accountant, and business counselor. While this expense may be a burden, it is absolutely necessary. Be sure to include them in the preparation and review of your business plan.

Preface

This short Small Business Development Center (SBTDC) guide has been prepared to help you, the entrepreneur, plan a new or young business. It is based on research designed to determine those management practices most likely to lead to business success.

This guide provides guidance for a broad range of business ventures. Not all sections are equally applicable. It is suggested that the entrepreneur work with an experienced business counselor in tailoring the plan to fit his or her business.

We hope that you will consider taking a Business Plan seminar. You can find our schedule of available courses here.

Table of Contents

Regardless of how you choose to develop your plan, there are some major sections that should be included. Include the page number where each section begins. The entire plan should be numbered for reference.

Table of Contents

Executive Summary
The Plan
1.The Business
2.Customer, Market, and Industry Analysis
3.Your trategy and Plans
4.Information and Analysis
5.Management and Personnel
6.Product and Service Offered
7.Financial Data

The Executive Summary

This is a short (usually about one full-page) summary of your plan. Keep in mind that this may be all that some people read so it should emphasize your personal strengths and the power of your plan.

The Plan

1. The Business
This section describes your business and the industry you are in. Include risks, a short financial analysis and the current status of your business.

2. Customer, Market, and Industry Analysis
This section is one of the most important parts of your plan. Show that you understand your business environment by being specific, citing numbers and statistics as well as sources for your projections. The primary components of this section are:

Your Market
Your Customers
Your Competition

3. Your Strategy and Plans
This section describes your plan for success. It should include a business and marketing plan.
The Business Plan
The Marketing Plan

4. Information and Analysis
Data collection and analysis is key to managing the day-to-day operations of your business, making good decisions, identifying needed improvements, and staying ahead of the competition. This section looks at the data you will collect and how you will use it.

5. Management and Personnel
Your business is only as strong as the people running it are. This section showcases the key members of your team and their responsibilities.

6. Products and Services Offered
This section describes the product and/or services that your business provides and how you manage your key processes.

7. Financial Data
This is the most important part of your plan. Lenders have different requirements for financial data. The data in this section should refer back to other sections of your plan. Some of the data that might be requested include:
A.Loan Request
B.Sources and Uses of Funds
C.Cash Flow Projection
D.Contingency Plans
E.Balance Sheet
F.Financial Assumptions
G.Personal Financial Statements
H.Income Tax Returns
I.Current Business Statements
J.Other Supporting Documentation

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