Why Have a Business Plan at All?
Business plans are like resumes for the business you have proposed. The business plan turns into a calling card; this is what makes it important. If at anytime you need to go and talk to any property manager regarding leasing of space for the business you are into and also if you need to meet a potential customer, investor or lender, the business plan in a way announces who you are along with what you are there for.
Commonly, business plans are created in order to explain and also to illustrate the targets you have set for your organization and at the same time to coax others in to helping you reach that goal. To attain this, the business plan needs to reflect in writing that the organization has a very firm picture of exactly what the business would be like. It must make others believe that the business concept will be a success and that the organization possesses the skill, enthusiasm, expertise to ensure success and profit.
The importance of presenting the business plan in a manner which will allow all others to quickly understand all that you aim at accomplishing is obvious but, along with this it is important to remember to make the business plan for self use. The technique of preparing a business plan requires the focus to be exactly on what is being tried to be achieved, exactly where you’d want to go and the exact steps to get there. It generally forces one to include details of the various expenses that would be involved in opening the business but it is also crucial to remember not to include too many details and facts and figures.
All of this greatly influences the various choices that are made in the process which may include the position and the kind of location your organization might be looking for.
Elements of a Business Plan
A documented business plan for starting and running your business is critical for success. A plan that is detailed and organized will encourage investment, promote growth, and provide a map for you to follow.
There is no single method to preparing a business plan. Each plan should be tailored to the size and needs of the individual company. However, there are some basic elements that are common to all business plans.
All business plans should incorporate the following elements.
Executive Summary
The executive summary should include a narrative on your business objectives. Include your mission statement in this section.
Company Summary
The company summary should include information about company ownership and structure. A brief explanation of the company’s history or start-up plan should also be included in this section.
Products and Services
Describe the products and services you offer. Include a competitive comparison with others in the market. Explain the sourcing and fulfillment channels you have established.
Market Analysis Summary
The market analysis summary should include market needs, trends and growth potential. Provide information about the industry including industry participants, buying patterns and primary competitors.
Strategic Summary
Use the strategic summary to showcase your competitive advantage. Explain your marketing, pricing, distribution and sales strategies in this section. Be sure to include information about any strategic alliances you have developed.
Management Summary
Use the management summary to introduce your management team and explain your organizational structure. Include a description of your personnel plan.
Financial Plan
Potential investors or lenders will want to know the details of your financial plan. Include your sales forecast, break-even Analysis, pro-forma profit and loss Statement, pro-forma balance sheet, pro-forma cash flow statement, your key financial indicators and the basis for your assumptions.
Supporting Documentation
Add a section for your supporting documentation. Supporting documentation should include the tax returns of the principals for the last three years, personal financial statements for the principals, copies of contracts (franchise agreement, building lease, etc.), copies of business licenses, professional profiles of the principals, copies of Letters of Intent from customers or suppliers and copies of other legal documents.
For additional information or assistance regarding business plans, contact your local Chamber of Commerce, the U. S. Small Business Administration, your Certified Public Accountant or a business consultant.