Writing Business Plan

Writing a
Business Plan
Writing a Business Plan
A formal business plan is an important
document for any business. Entrepreneurs
just starting out may find putting their
thoughts, goals and in some cases dreams
to paper an intimidating process.
Nevertheless, it is vital to the success of
your business. A business plan details
every aspect of business operations.
Writing a business plan need not be an
overwhelming task if you consider the
following information.
Purpose of Business Plan
Before drafting a business plan it is
important to understand why this
document is so important to the success
of your business. Your business plan will
detail all aspects of your business
operations from marketing to organization
and management. This document not only
helps owners see where the business is
headed, it is also required by most lenders
and potential investors.
9 Essential Parts of a Business Plan
There are several essential elements of a good business
plan according to the General Small Business
Administration. Focus on the following nine elements
when drafting a business plan for your small business.
1) Executive Summary
2) Market Analysis
3) Company Description
4) Management and Organization
5) Marketing and Sales Management
6) Product or Service Line
7) Request for Funding
8) Financials
9) Appendix
Executive Summary
Although this is the first section readers will
see, it should be the last section of your
business plan written. The executive summary
is an overview of the entire business plan and
will either capture the reader’s attention or
make them lose interest before reading any
further. A crucial part of the business plan, the
summary will basically tell readers the history
of your company, where it is today and what
direction it is headed; this is where you sell
other on the potential success of your business
Market Analysis
Include in this section a
description of the industry,
information on your target
market, evaluation of your
competition and market
test results.
Company Description
Brief description of your company
including the nature of your
business and factors that will make
your business a success. Include a
description of how your product
or service will meet a need and
any potential clients identified as
having that need.
Management and Organization
Details about ownership of company,
management and board of directors
(if applicable). Qualifications,
experience and education are
important to provide readers with an
insight as to how these individuals fit
into the organizational structure and
what they can bring to the table in
their designated roles.
Marketing and Sales Management
Describe the marketing strategy and
how you intend to drive sales.
Include market penetration strategy,
growth strategy, distribution
strategy and communication
strategy. Sales strategies should also
be included to provide information
on sales staff and activities.
Product or Service Line
Describe to readers what you are selling
and how the product or service will
benefit current and potential customers.
Provide evidence that your company
offers a product or service that serves as
a solution to a problem identified by your
target market. Information regarding
service or product costs, suppliers and
any new services which may be added
should be included in this part.
Request for Funding
Include current and future funding
requirements, how that funding will
be used and long range strategies
that impact funding request. Any
factors which directly impact your
ability to repay your loan should be
included, such as acquisitions, sale of
the business in future or a buyout.
Financials
Both past financial data as well as
prospective financial data will be
required by potential lenders. Include
the following financial statements for
the past three to five years; cash flow
statements, balance sheets and income
statements. The same statements
should be prepared with forecasted
data for the next five years.
Appendix
A separate section which should not be included in
the main body of the business plan is the Appendix.
Proprietary and confidential information may be
part of the appendix and as such should not be
easily accessed by all individuals requesting your
business plan. Creditors may need access to this
information; therefore it should be available on an
as-needed basis. Documents which may be included
in the appendix include market study details,
reference letters, personal and business credit
history, patents, permits, contracts and contact
information for consultants.
As you can see, writing a business
plan requires a commitment of time
and resources to ensure all relevant
information is present. A crucial
document in securing funding from
creditors and investors, the business
plan should be well organized with a
focus on specific strengths that set
your business apart from the
competition.

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