The process of putting together a business plan, including the thought that you put in before writing it, forces you to take an objective, critical, unemotional look at your entire business proposal. The finished written plan is an operational tool which, when properly used, will help you manage your business and work toward its success. The completed business plan is a means for communicating your ideas to others and provides the basis for the financing of your business.
The following components should be included in your business plan:
1. Table of Contents
2. Executive Summary
4. Business Environment Analysis
5. Market Analysis
7. Management Plan
8. Financial Data
The Executive Summary should capture the reader's attention and entice them to read further. It should be limited to two pages and summarize the business plan's key points. This section should be written last and include the following components:
• Simple description of your business idea and product or service, explaining how it stands out from the competition.
• Generic discussion of the target market and the competitive environment.
• Review of the management team and key personnel, emphasizing the ri credentials and specific functions.
• Identification of capital requirements needed and the general use of these funds.
• Summary of potential financial results.
The introduction should give a detailed description of your product or service and should discuss any distinctions or unique qualities, such as a more convenient location or better service. Also, outline any proprietary positions that give you a competitive edge. These can be patents, copyrights or trademarks. Be sure to include your experience, special expertise or knowledge of the product or service.
Business Environment Analysis
The environmental analysis should include three key components: 1) a discussion of current business conditions; 2) an industry analysis; and 3) an evaluation of your competitors.
This section should provide a description of the current market and future opportunities. Components include geographical trade area, customer identification, and competitive position.
Your marketing plan is one of the most important sections of the business plan. It outlines strategies for selling your product or service. Your goals and benchmarks for the operation should reflect a realistic, credible guide supported by your marketing analysis.
Included should be a discussion of your target market, sales organization, promotion strategies, marketing/advertising activities, and pricing strategy.
Key points to include in this section are personnel requirements, cost and inventory controls, credit and collection policies, and plant capacity and production scheduling if you are in a manufacturing concern.
A management plan will give you a clear understanding of your management team's strengths and weaknesses. Your management team needs the skills, experience and chemistry to successfully and profitably guide your business.
Include in this section an organization chart, descriptions of duties and responsibilities of key personnel and management executives, and resumes for yourself and any executives.
The final section of your business plan will be financial statements for your business. These financial statements integrate all your research into reasonable, realistic numbers.
Financial statements required include an income statement, cash flow statement, break-even analysis, and balance sheet along with key business ratios. You may want to create three sets of financials: best case, worse case and most likely. Projections should be prepared for three years, the first year by month and the next two by year.
If you need assistance with this section, any CPA will be able to help you prepare these statements. Assistance and information on preparing financial statements is also available at the Paris Small Business Development Center by calling 903-782-0224.
When packaging your business plan, you will want to include a cover sheet and cover letter. Every business plan should begin with the business name and the owner's name, address and telephone number. Visual aids such as charts and graphs might make your plan easier to read and more visually appealing if you have the resources with which to create them.
And lastly, think about who will be reading your plan and then try to review your plan from their point of view. Better yet, contact the Paris Small Business Development Center for a free, critical review of your plan before you approach a potential financier. You want your first impression to be the best!
The Paris Small Business Development Center has various types of information available on writing a business plan - books, pamphlets, video tapes - as well as free counseling and assistance. To obtain information or arrange an appointment, call 903-782-0224