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Create Your Business Plan

Your business plan may be your most valuable business document. In addition to helping you get a loan, there are several other reasons to complete a business plan. The process of researching and writing your plans will help you determine if you are ready to start your new venture. The plan helps you and your employees stay focused on your business goals, and shows you where you may need to make adjustments as the situation changes and evolves. Here are some tips on how to make a good one.

Use this outline to create your business plan:

 

• Cover Page—include the business name, address, phone, web site address and the names, addresses and phone numbers of the principals. 

 

• Executive Overview—summarize your business vision, purpose and basic functions to provide a context for understanding the rest of the plan.

 

• Business Description—include information about:

 

• Business form: sole proprietor, partnership, corporation, LLC, etc.

 

• Type of business: merchandising, manufacturing, or service

 

• Overview of the product or service you’ll provide

 

• Business mode: start-up, acquisition, or expansion

 

• Seasonality of the business

 

• Current industry trends and future projections. Use outside expert sources.

 

• Product/Service Descriptions—describe your products or services, their features and benefits to customers, which products or services are most popular, and which are generating or projected to generate the most revenue. If you have an existing product or service line, detail products in decline.  Explain your products’ and services’ competitive advantages over other products and services.

 

• Market—describe your customers or clients. List any specific market segment you target. Discuss market trends, and how you will attract, maintain and increase market share. Clearly detail your pricing strategy. Present your marketing strategy and how this will lead to profits.

 

• Competition—detail direct and indirect competition. Describe how they operate and market their products and services. Compare and contrast their methods with your approach. Discuss what you will you do differently and what your anticipated results will be.

 

• Business Location—describe your location, why you chose it, and the type of building you have. Note demographic or other market shifts that may positively or negatively affect your location.

 

• Management Team—summarize the background, experience, strengths and weaknesses of the entire management team, and how it relates to the successful management of this business. Make sure all duties are described and clearly defined. Include any additional resources that may be available to your business.

 

• Staff—list staff positions and current staffing levels. Detail additional staff level and skill needs, and future hiring plans. Discuss the labor pool for your industry and any risks related to this factor. Provide back-up plans for addressing these risks.

 

• Business Financing Plan—describe why you need the money, your procedure for making borrowing decisions, and your timetable for borrowing in advance of your need for funds. Explain how the funding will make your business more profitable. Examine and explain lease/buy options, if applicable.

 

• Financial Information Systems—demonstrate that you have a good accounting system set up by a competent accountant. If you cannot afford a good accountant, you are undercapitalized. If you do not understand the need for good accounting systems, you do not have sufficient management expertise to effectively manage your business. Your accounting system should generate the following statements, among others:

 

• Balance Sheet

 

• Income Statement

 

• Cash Flow Statement

 

• Risk Analysis-—dentify the potential risks to your business and to your ability to meet objectives. Explain what steps you will take to avoid or deal with the possible risks.

 

• Rationales—explain the basic assumptions and the sources of information you used to formulate your plans. Use reliable sources such as industry trade magazines, industry historical results, the Robert Morris Associates' Annual Statement Studies, or marketing studies.

 

 

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