WRITING A BUSINESS PLAN
Why Write a Business Plan?
A Business Plan helps you evaluate the feasibility of a new
business idea
Marketing
Management
Financial
It provides an operating plan to assist you in running the
business and improves your probability of success.
Opportunities and mistakes
Develop production, administrative, and marketing plans
Show financial outcomes
It communicates your idea to others
Determine the amount and type of financing needed
Forecast profitability and investor return on investment
Forecast cash flow, show liquidity and ability to repay debt
Basic Business Plan Guidelines
SECTION ONE
It should be thorough, but concise and to-the-point.
SECTION TWO
describes in numbers the outcome of your business
strategies and plans.
SECTION THREE
contains supporting information to reinforce the first two
sections.
Business Plan Outline
Section One: The Business
A. Description of the Business
describe in detail each part (A through I) of the previous
Business Plan Outline.
B. Products/Services
In this section, describe your product offering.
C. Market Analysis
For start-ups or existing businesses, market analysis is important as the basis for the marketing plan and to help justify the sales forecast.
D. Marketing Plan
In this section, you include the highlights or your detailed marketing plan.
E. Location
Locations with greater customer traffic usually cost more to buy or rent, but they require less spending for advertising to attract customers.
F. Competition
Business by nature is competitive, and few businesses are completely new. If there
G. Management and Operations
It is important to discuss management qualifications and structure
H. Personnel
The success depends on their ability to recruit
I. Application and Effect of Loan or Investment
Is important wether you are seeking a loan
Section Two: Financial Data
A. Projected Financial Statements
B. Break Even Analysis
C. Sources and Uaes of Funds
Section Three: Supporting Documents
Supporting Documents
Ten Ways to Ruin Your Business Plan
These errors in business plan preparation and presentation will undermine the
credibility of the plan
Submitting a “rough copy”
Outdated historical financial information
Unsubstantiated assumptions
Too much “blue sky”
A lack of understanding of financial information.
Lack of specific, detailed strategies.
Especially important if the business plan is prepared for a lender:
No indication that the owner has anything at stake.
Unwillingness to personally guarantee any loans.
Starting the plan with unrealistic loan amounts or terms.
Too much focus on collateral.