It All Starts With A Business Plan

The business plan is your blueprint for success. It sets down your goals for the business, assists in analyzing the feasibility of a new business, explores the expansion of an existing business, defines your customers and competitors, and points out your strengths and weaknesses. It also details your plans for the future.

Develop the business plan yourself rather than hiring someone else to do the work. After all, it’s your business. In some areas, you may want to consult professionals for advice. Once the plan is developed, refer to it often. It should also be updated periodically, at least once a year.

Use the following basic outline to organize your own plan. There should be a separate paragraph with a heading that identifies each area you are discussing. It should be concise, factual, and easy to read. There are excellent sample business plans online (see related links below) to show how this is done.

Business Plan Outline

  1. Summary
  • Business description
    • Name
    • Location and plan description
    • Product/service
    • Market and competition
    • Management experience/expertise
    • Business goals
    • Summary of financial needs and application of funds
    • Earnings projections
  1. Market Analysis
  • Description of total market
  • Industry trends
  • Target market
  • Competition
  1. Products or Service
  • Description of product line or service
  • Proprietary position
  • Comparison with competitors’ products or services
  1. Marketing Strategy
  • Overall strategy
  • Pricing policy
  • Method of selling, distributing, and servicing products or services
  1. Management Plan
  • Form of business organization
  • Board of directors/advisors composition
  • Officers, organization chart, and responsibilities
  • Resumes of key personnel
  • Staffing plan/number of employees
  • Facilities plan/planned capital improvements
  • Operating plan/schedule of upcoming work for two years

 Financial Data

  • Personal financial statements (previous two to three years), if seeking a loan
  • Two-year financial projections
    • Income statement (profit/loss statement)
    • Balance sheets
    • Cash flow
    • Capital expenditures
    • Explanation of projections
    • Key business ratios
    • Explanation of use and effect of new funds (loans, etc.)

There are a number of outside professionals with whom a business person will want to establish a relationship.

Accountant

An accountant may be consulted to set up a good bookkeeping system for your business. Inadequate recordkeeping is a principal contributor to the failures of small businesses. Make sure that you understand the bookkeeping system you are using and that you receive and study regularly produced financial reports.

Attorney

An attorney’s services are essential not only in the planning stages of your business, but also throughout the life of the business. The attorney can assist you in choosing your legal structure, drawing up agreements and contracts, and providing information on your legal rights and obligations. There are also online resources that provide legal information.

Banker

The capital requirements of a small business make it essential that a good working relationship be established with a local banker. Bankers are a good source of financial information and financing. It is recommended that you establish a relationship with your banker prior to applying for a loan.

Insurance Agent/Broker

There are many different kinds of insurance options available for business owners. An insurance agent or broker can advise you about the type and amount of coverage that is best for your business. The agent may be able to tailor a package that meets your specific needs at reasonable rates. If you are starting a new business, the insurance agent will need in-depth information about your business in order to help you get the insurance coverage necessary. Insurance for new businesses can be expensive.

Consultants

Each of us has talents in many areas, but no one can be a master of everything. Consultants are available to assist in those areas in which you need expert help. There are business, management, and marketing consultants; promotion experts; financial planners; and a host of other specialists who can help make your business more successful.