Your Business Plan - There are many reasons to have a comprehensive Business Plan, here are the three major ones; 1.
) An objective evaluation for success.
2.
) A financing proposal.
3.
) An operating guide for your business.
All three of these reasons have a place and time in the development of your business, mostly having to do with your audience (who are you writing the Business Plan for?).
Most Business Plans have 3 sections, plus a Cover Sheet, table of content and an Executive Summary.
Let's look a little closer - First let's look at some basics: How long should your Business Plan be? There is really no correct answer.
It depends on your business, the purpose for writing, and your audience.
There are norms however if seeking funding, and since your bankers expectations may be based on them, you should keep this in mind when designing your plan: o Start-up small business, small loan request - 10 pages or less plus attachments.
TIP - Looking for a very small business loan? Contrary to what most people tell you, a formal Business Plan is not always necessary.
Many lenders 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 request is small.
o Start-up seeking $200,000.
or more, or a mature company seeking expansion funding or investor capital -10 to 40 pages.
OK - let's look at what goes in each section of your Business Plan: The Cover Page - just that - a cover to identify your business from all the rest that are probably sitting on your bankers desk.
Include your Business Name, your logo if you have established one, address, contact information (phone, Email and website if already established) and the name(s) of the principals.
Your Executive Summary - The Executive Summary is nothing more than a summary of all the other parts of the plan.
It goes first, but usually gets written last.
It is the one part of your plan that most bankers or investors will read, so make sure it shouts "hey, read the rest, this is a great idea that can't fail".
Any time you are writing for anyone other than yourself, your Business Plan becomes a Sales Proposal! Section I - The Business A.
Description and location 1.
Organization structure, location and Principals.
2.
Products or Services sold and geographic area served..
3.
Operating plan (how will the business operate?).
B.
The Market 1.
Customers or Clients (who are - or will be - your customers or clients?).
2.
Marketing Plan (how are you going to reach these customers or clients?) 3.
Market stability and opportunity for growth C.
The Competition 1.
Major Competitors.
2.
Your Advantages (why are you unique and able to capture market share?).
Section II - Financial Data & Projections A.
Beginning Balance Sheet (optional for a very small start up) 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 filings, State or federal required professional licenses, Resumes of Principals, Franchise contracts (if franchise), Partnership Agreement (if Partnership), Leases, Capital Equipment list, and any business brochures or other promotional materials you may have already produced.
More information on Business Plans?? I'd suggest "Writing A Business Plan" by the Small Business Administration.
This guide can be found on the Small Business Administration website - www.
sba.
gov - look for "Writing a Business Plan" under "Starting and Managing 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 affiliate of the SBA providing FREE counseling to small business owners.
) An objective evaluation for success.
2.
) A financing proposal.
3.
) An operating guide for your business.
All three of these reasons have a place and time in the development of your business, mostly having to do with your audience (who are you writing the Business Plan for?).
Most Business Plans have 3 sections, plus a Cover Sheet, table of content and an Executive Summary.
Let's look a little closer - First let's look at some basics: How long should your Business Plan be? There is really no correct answer.
It depends on your business, the purpose for writing, and your audience.
There are norms however if seeking funding, and since your bankers expectations may be based on them, you should keep this in mind when designing your plan: o Start-up small business, small loan request - 10 pages or less plus attachments.
TIP - Looking for a very small business loan? Contrary to what most people tell you, a formal Business Plan is not always necessary.
Many lenders 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 request is small.
o Start-up seeking $200,000.
or more, or a mature company seeking expansion funding or investor capital -10 to 40 pages.
OK - let's look at what goes in each section of your Business Plan: The Cover Page - just that - a cover to identify your business from all the rest that are probably sitting on your bankers desk.
Include your Business Name, your logo if you have established one, address, contact information (phone, Email and website if already established) and the name(s) of the principals.
Your Executive Summary - The Executive Summary is nothing more than a summary of all the other parts of the plan.
It goes first, but usually gets written last.
It is the one part of your plan that most bankers or investors will read, so make sure it shouts "hey, read the rest, this is a great idea that can't fail".
Any time you are writing for anyone other than yourself, your Business Plan becomes a Sales Proposal! Section I - The Business A.
Description and location 1.
Organization structure, location and Principals.
2.
Products or Services sold and geographic area served..
3.
Operating plan (how will the business operate?).
B.
The Market 1.
Customers or Clients (who are - or will be - your customers or clients?).
2.
Marketing Plan (how are you going to reach these customers or clients?) 3.
Market stability and opportunity for growth C.
The Competition 1.
Major Competitors.
2.
Your Advantages (why are you unique and able to capture market share?).
Section II - Financial Data & Projections A.
Beginning Balance Sheet (optional for a very small start up) 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 filings, State or federal required professional licenses, Resumes of Principals, Franchise contracts (if franchise), Partnership Agreement (if Partnership), Leases, Capital Equipment list, and any business brochures or other promotional materials you may have already produced.
More information on Business Plans?? I'd suggest "Writing A Business Plan" by the Small Business Administration.
This guide can be found on the Small Business Administration website - www.
sba.
gov - look for "Writing a Business Plan" under "Starting and Managing 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 affiliate of the SBA providing FREE counseling to small business owners.
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