your business plan – There are many reasons to have a comprehensive Business Plan, here are the three main ones; 1.) An objective assessment for success. 2.) A funding proposal. 3.) An operational guide for your business. All three reasons have a place and a time in the development of your business, and they mostly have to do with your audience (who are you writing the business plan for?). Most business plans have 3 sections, plus a cover page, table of contents, and executive summary. Let’s take a closer look: first let’s look at some basics:
How long should your Business Plan be? There really isn’t a correct answer. It depends on your business, the purpose of the writing, and your audience. However, there are rules if you seek financing, and since your bankers’ expectations may be based on them, you should keep these in mind when designing your plan:
o Small business start up, small loan application ———— 10 pages or less plus attachments.
POINTS – Looking for a very small business loan? Contrary to what most people tell you, a formal Business Plan is not always necessary. Many lenders will accept a Summary Sheet (see Executive Summary), accompanied by the loan application and supporting documents (usually three years of income and tax records) if the loan application is small.
o Start-up seeking $200,000. or more, or a mature company seeking financing for expansion or investment capital —-10 to 40 pages.
Okay, let’s see what each section of your business plan includes:
The cover – just that – a cover to identify your business from all the others that are probably sitting at your banker’s desk. Include your business name, your logo if you have established one, address, contact information (phone, email, and website if already established), and the names of principals.
Your executive summary – The Executive Summary is nothing more than a summary of all other parts of the plan. It goes first, but is usually written last. It’s the part of your plan that most bankers or investors will read, so make sure it yells “hey, read the rest, this is a great idea that can’t go wrong.” Every time you write for someone other than yourself, your business plan becomes a sales proposal!
Section I – Business
HAS. Description and location
1. Structure of the organization, location and Principals.
2. Products or Services sold and geographic area served.
3. Operational plan (how will the business work?).
b. The market
1. Clients or Clients (who are – or will be – your clients or clients?).
2. Marketing plan (how are you going to reach these customers or customers?)
3. Market stability and growth opportunity
against competition
1. Main Competitors.
2. Its advantages (why is it unique and capable of capturing market share?).
Section II – Financial Data and Projections
A. Beginning balance (optional for a very small business)
B. Twelve-month Cash Flow Projection
C. Three-year Cash Flow Projection (show projections by quarters)
D. Break-Even Analysis
Section III – Supporting Documents
In this section, you would attach copies of supporting documents such as; Incorporation or other organization records, state or federally required professional licenses, resumes of directors, franchise agreements (if franchise), partnership agreement (if partnership), leases, list of capital assets and any business brochures or other promotional materials you have already produced.
More information about Business Plans?? I would suggest “Write a Business Plan” from the Small Business Administration. This guide can be found on the Small Business Administration website – www.sba.gov – search for “Writing a Business Plan” under “Starting and Running a Business.” This is a great resource and a site with a lot of good information. Another source would be http://www.score.org, an SBA affiliate that provides FREE advice to small business owners.