how to write a business plan

Business Plan – Extended

A business plan defines your business, identifies your goals, and serves as your company’s resume. The main components include a current and future (pro forma) balance sheet, a current income statement, and a cash flow analysis of your business. This will help you to allocate business resources properly, to handle unforeseen events, and to make good, solid business decisions. Because the business plan provides specific and detailed information about your company and (as an example) how you will repay a loan, a good business plan wil be a crucial part of any loan application at a bank. Additionally, it will inform your sales personnel, your suppliers, and other 3rd parties about your operations and business goals.

The importance of a comprehensive, detailed business plan can’t be overemphasized. Many important things depend on it: external funding, credit lines from suppliers, management of your operations and finances, promotion and marketing of your business, and finally achievement of your goals and business objectives.

If you are tempted to start a business without having a business plan, you will be very likely in trouble running a successful operation. A business plan is like a blue print of your business. Imagine a builder who starts building your new house without having a blue print. Writing these things down, is not the most fun event a new business owner wants to do. Make sure you spent the time and research to create a solid business plan.

Before you begin writing your business plan, consider four important questions:

What service or product does your business provide and what needs does it try to fill?

How will you attract your potential customers?

Who are the potential customers for your products and/or service and why should they purchase it from you?

Where will you get the financial resources (cash, loan, etc.) to start your business?

How does a business plan looks like?

1. Cover sheet
2. Statement of purpose
3. Table of contents

-> The Business
A. Description of your business
B. Marketing Strategy and Plan
C. Who is your competition
D. Operating procedures
E. Personnel / Staff
F. Business insurance

-> Financial Data
A. Loan applications
B. Capital equipment and supply list
C. Balance sheet
D. Breakeven analysis
E. Pro-forma income projections (profit & loss statements)
Three-year summary
Detail by month, first year
Detail by quarters, second and third years
Assumptions upon which projections were based
F. Pro-forma cash flow

-> Additional Documents
- Tax returns of principals for last three years Personal financial statement (available at your local bank)
- For franchised businesses, a copy of the franchise contracts and all supporting documents provided by the franchisor
- Copies of letters of intent from suppliers, etc. (if available)
- Copy of proposed lease contract or purchase agreement / contract for office space
- Copy of all business licenses and other legal documents (if related to the business)
- Copy of resumes of all principals / company officers

If you start a new business and do not have financial data going 3 years back, you can substitute this with solid statements of your current situation. Described above is the ideal case – adjustments need to be made if necessary. Be detailed – it’ll be to your own favor. Ask your bank so that you can work with their small business specialists. Regular tellers might be friendly, but you want to make sure that you get decent information.

What makes a good business plan?

Is it the length of a business plan? The information it contains? How well it is written, or the brilliance and excellence of the strategy it describes?No.

A business plan will be very difficult to execute unless it is simple, very detailed, realistic and complete. Even if the business plan has all the items listed, a good business plan will need someone to follow up with and check on it, too. The plan also depends on the human elements it’s build on, particularly the process of commitment and involvement.

Successful implementation for your business starts with a good business plan. There are several elements that will make your business plan more likely to be successfully implemented.

Is the plan simple and easy to understand and to act on? Does it communicate its contents easily and practically and is it making sense?

Is the plan specific and detailed? Are its objectives concrete and measurable? Is the plan realistic? Are the sales goals, the expense budget, and milestone dates realistic? Nothing prevents implementation more like unrealistic business goals. Can you achieve your set goals?

Is the plan complete at all? Does it include all the necessary elements to be successful? Requirements of a business plan may vary, depending on the actual context. There is no guarantee, that the plan will work as planned if it doesn’t cover the main bases.

Preparing the business plan has to be an organized, logical way to look at all of the important aspects of a business. Don’t use a business plan to show how much you know yourself about your business. Nobody will read a long-winded, too detailed business plan: not your bank, nor venture capitalists. Years ago, people were favorably impressed by long business plans. Today, nobody is interested in a business plan that is more than 40 or 50 pages long. Don’t waste your time and the time of others by writing a book. Write a business plan that impresses and that is short-while.

Do I need a business plan if I’m not seeking financing?

For your small business to succeed, you need to know where you’re going and how you’ll get there. Creating a business plan forces you to set your own goals, determine the resources you will need to execute your business plan, and to foresee problems that might otherwise broadside you and would prevent you from being successful.

If your business plan is not being used to solicit funding you can create an informal plan only, that serves primarily as a planning tool for yourself and a tool that will keep you on track. An informal plan can also be used to be shown to potential business associates and partners.

How do investors and bankers read a business plan, and what do they look for?

Don’t expect every person you will give your business plan to read it thoroughly. In fact, you really can only count on them to skim it. Investors and bankers know what they’re looking for in a business plan – they want to see a business that will grow rapidly and someday return a handsome profit. Bankers want to see a business that will be able to pay off the loan they are granting. Venture capital firms, for example, expect to receive an average of five times their original investment within 5 to 7 years.

Keep in mind that investors rarely put money into a “product” — they invest in a business. Many great products have floundered because the inventors did not understand how to get people to buy them. So be sure to show that you understand how to market your product or service. If your banker does not understand your business model, he will not grant you the loan you are looking for.

How long should my business plan be?

30-40 pages should suffice. Anything longer than that and you risk alienating a potential investor, or you force them to skim through the document rather than read it. You won’t be impressing anyone by creating a 200-page document – what’s contained in the plan is much more important than how long it is. The more concise, detailed, and readable your business plan is, the more focused your business will appear. Focus on those details that tell your business’ story, that set you apart from your competition, that make your business appear to be a good, solid financial investment, and that show you will be profitable.

With the fast changes taking place in industry and society, how can a business plan be helpful if it is quickly outdated?

A well written and researched business plan will not only prepare your company for today’s business and market conditions but tomorrow’s unforeseen events. All business plans should have a contingency section to accommodate for the future. Your business plan is a plan that will not just sit on the shelf for 12 months but will always be updated when new market conditions or strategic changes take place. Plan your changes thoroughly. Running a business requires patience – making changes too often and to fast might result in your business going down faster than you can re-write your business plan.

Do the readers of my business plan need to sign a non-disclosure agreement?

A non-disclosure agreement can raise red flags with your intended audience. A seasoned banker or investor is bound by client confidentiality and may find a NDA insulting. Secondly, if the business needs to protect its ideas and concept at this stage of the game than there may not be any barriers to entry for others to enter the market. A simple confidentiality clause at the front of the plan should suffice. If you are selling your business or if you are seeking a strategic alliance/partnership, a non-disclosure may be necessary. If in doubt, consult with your lawyer.

Filed Under: Business Plan Tagged With: business plan, how to write a business plan, small business management, small business resource

Becoming Wise – Wild & Free – Writing A Successful Business Plan

So you’ve decided to write your own business plan because you know the value that the experience will give you. With the books and software that are out there today you can probably sit down and complete the plan in a day or so, right? Plug in the numbers, add the notes, write the whole narrative (story), print it and get it out to the banks or investors.

If you can complete a plan in a day or so you are either an expert, that has already done all of the research, or you are heading for big trouble, because you have not done enough research. If you are like most people you have a job, a family and commitments that take up a lot of time. It would be impossible to write a business plan that quickly, even if you know your stuff. You have probably heard the old adage, ‘Rome wasn’t built in a day’ well, neither was a good business plan. To create a top quality business plan you need to research each and every aspect as diligently as possible. Take your time and think of everything, don’t leave anything to chance.

That sounds like a lot of work and a long drawn out process. How will you remember or even think of everything? How can you keep track of what you have to research? If you have to set your plan aside for a while, how will you remember where you left off? You may get tired, bored and even careless in your efforts because like most people you probably have Attention Deficit Disorder when it comes to doing this type of work.

The answer is to do your plan in steps. A good guide book or business plan software will ask you to complete work as you go, one step at a time. You read a section, do some research on the items(s) in the section and enter the information that you discovered. This way you are focused on each item as you go and never become overwhelmed. You will also be able to remember where you were when you have to set the plan aside for a few days, without having to re-read a novel. The process may still seem long but if you concentrate on doing your plan in steps it will be done before you know it.

This series of articles has been written in steps because most people don’t have the time to sit down and read a novel. You can even do your financial projections in steps, which is where I recommend that you start. Doing the projections will help you analyse the feasibility of your project before you spend a ton of time writing a complete plan that may or may not work for you.

About The Author
Written by Rod Francis – President of Advantage Venture
Systems Inc. creators of the Venture Planning System(tm)
Pro business plan software @ www.VPSpro.com
Suite 207, #1-1081 Central Ave. N.,
Swift Current, SK Canada S9H 4Z1
Check for more articles on writing a business plan at:
www.vpspro.com

Filed Under: Business Plan Tagged With: business plan, business startup, how to write a business plan, small business resource, start a small business, starting a small business

Business Plan Basics for Beginners

A business plan defines your business, identifies your goals, and serves as your company’s resume. The main components include a current and future (pro forma) balance sheet, a current income statement, and a cash flow analysis of your business. This will help you to allocate business resources properly, to handle unforeseen events, and to make good, solid business decisions. Because the business plan provides specific and detailed information about your company and (as an example) how you will repay a loan, a good business plan will be a crucial part of any loan application at a bank. Additionally, it will inform your sales personnel, your suppliers, and other 3rd parties about your operations and business goals.

Before you begin writing your business plan, consider four important questions:

What service or product does your business provide and what needs does it try to fill?
How will you attract your potential customers?
Who are the potential customers for your products and/or service and why should they purchase it from you?
Where will you get the financial resources (cash, loan, etc.) to start your business?

How does a business plan look like?

1. Cover sheet
2. Statement of purpose
3. Table of contents

>> The Business
A. Description of your business
B. Marketing Strategy and Plan
C. Who is your competition
D. Operating procedures
E. Personnel / Staff
F. Business insurance

>> Financial Data
A. Loan applications
B. Capital equipment and supply list
C. Balance sheet
D. Breakeven analysis
E. Pro-forma income projections (profit & loss statements)
Three-year summary
Detail by month, first year
Detail by quarters, second and third years
Assumptions upon which projections were based
F. Pro-forma cash flow

>>Additional Documents
- Tax returns of principals for last three years Personal financial statement (available at your local bank)
- For franchised businesses, a copy of the franchise contracts and all supporting documents provided by the franchisor
- Copies of letters of intent from suppliers, etc. (if available)
- Copy of proposed lease contract or purchase agreement / contract for office space
- Copy of all business licenses and other legal documents (if related to the business)
- Copy of resumes of all principals / company officers

Filed Under: Business Plan Tagged With: business plan, business startup, how to write a business plan, starting a small business

Success From Failure Is As Simple As Focus, Plan, Execute 1

Success From Failure Is As Simple As Focus, Plan, Execute

You excitedly signed up for that pre-made money generating website you saw in a popbehind window. You signed up for the affiliate IDs. You set up your autoresponder and signed up for several “traffic generators”. You read the writings of all the internet gurus. Then you sat back and waited to pull in those MASSIVE PROFITS!

Its now a year later and what do you have to show – 150 subscriptions to your ezine and a couple of downline affiliates. You are disgruntled, dejected and more broke than you were when you started this venture. You feel that it is time to give up.

Don’t.

A major breakthrough leading to increasing success in your home business may be just around the corner. Here are a few steps to take before throwing in the towel.

Why did you start?

When you first signed up there were circumstances in your life that led you to look for a home business opportunity. These may have been due to a job loss, desire for more time with your family or need to supplement retirement income. Whatever the reason, most likely they still exist. Write them down. Put it in big letters on a single page and post it where you will be likely to see it several times a day – on the bathroom mirror, on the refrigerator, on a kitchen cabinet, the bedroom door – somewhere that you will see it and remind yourself of the ultimate goal.

Focus

When you started you become excited about a product or service. But along the way you have been bombarded with the “next best thing”. It’s easy to get started but then but when it comes down to DOING what you start, it gets hard and doesn’t happen as fast as you would like it to.

Jack Humphrey, in his article “Focus and Fear of Success – The Biggest Monkey on Your Back?” http://tinyurl.com/5zr6e says “The problem lies with your focus and your fear of success. You must CHOOSE the opportunity you are passionate about, or create a product you stand behind and love, and then hunker down for the long-haul! Make yourself do everything you are taught to do to build your business and build it – all the way or not at all.”

Create/retool your marketing plan

You may or may not have created a plan for marketing your opportunity. The two must haves to be successful are a large and growing opt in list and massive traffic to your website. In all those forums you probably learned several methods to boost your online presence, including:

1. Listing your ezine in ezine directories
2. Signing up for pay-per-click advertising
3. Exchanging links
4. Buying leads from a lead generator
5. Signing up with traffic generators, such as searchestate
6. Buying ezine advertising

You may have tried these and several more. But did you have a plan?

Stone Evans, the Home Biz Guy, in his free ebook, 30 days to success http://tinyurl.com/63rfj, says ”Some of the key marketing activities that you should perform on a regular basis are starting to show up once every week: write and article, submit your article, create links back to your site, network in forums… I strongly recommend that you keep these vital practices up for the life of your business.”

“ You see, it is very unlikely that one BIG event is suddenly going to make you an Internet marketing success story and cause you to become rich overnight. In truth, it’s all the small things you do that add up over time and ultimately allow you to become successful in this or any business undertaking.”

Execute the plan

Now that you have refocused on your goals, narrowed in on your product and built a marketing plan all that’s left is to execute that plan. Set aside time every day that you will spend on your plan. Write an article on Monday, submit it on Tuesday, exchange links on Wednesday and so on.

Ultimate Success

You had your reasons for deciding to start your own home based business. You must always keep your reasons in the forefront of your mind. You must always be able to rely upon your own self and your dedication to the success of your business. Success is within your reach, if only you can stay focused on your goals. You must decide to reach for your goals, and then, you must have the discipline necessary to reach them.

About The Author
Timothy Spaulding is the owner of the Work At Home Business Resource Center www.workathome-awesomeopportunities.com. He has been employed in the restaurant, retail and aerospace industries.

Filed Under: Miscellaneous Tagged With: business plan, how to write a business plan, small business management, small business resource

Fail to plan… or Plan to FAIL??

Running a business, whether it be an offline multi-billion dollar company or
an online part time home business, they share many similar traits.

One of the biggest obstacles I have endeavored to translate to many, many
small business / home business people, is a very simple phrase……’ Treat It
Like a REAL business, Because It IS a REAL Business’.

The fundamental reasoning behind so many failures in small business, is the
clear lack of willingness to act like a real business. Many people may ‘ have a
go ‘, they could ‘ give it a try ‘, or ‘ let’s see what happens ‘ – all with
the.. ‘ what have I got to lose? ‘ attitude. THAT, my friends, is one of the
biggest secrets to FAILURE.

OK – so let’s assume that your small business / home business / BizOp etc.,
is NOT you main source of income. It is NOT responsible for putting food in you
family’s stomachs, it is NOT what keeps a roof over your head….. it is NOT the
sole form of income that you, your family and your Bank Manager rely upon.

So look at it like this. If it WAS, would you put as much effort into it as
you do now? I can pretty much guarantee that your efforts would be substantially
more, because everything relies on the success of your business, vis-à-vis the
money your business generates.

Well, now we have ascertained that you should be running it like a real
business…….Are you?

> Do you have a business plan?

> Do you know each step that your business will take over the next week,
month, year, three years….?

> Have you prepared your agenda for acquiring new customers, products,
joint venture partners?

> Do you have a timetable of events?

> How often do you research, analyse, read-up and check out your
competitors?

> When was the last time you contacted your client base?

> Do you offer them special offers, free resources and reports? What about
surveying them and asking for their opinions?

> How often do you do all this?

> Does your business have a ‘company objective’?

> Has your ‘company’ it’s own ‘customer mission statement’?

> Have you set yourself / your business targets….use my S.M.A.R.T.
Principle…… …….targets which must be

= Specific………….. each item / area of business must be targeted
specifically.

= Measurable…….. be able to measure your targets, how much, how often
etc.

= Achievable……..don’t think that you can sell 2 million units if your
competitors only sell 50 units.

= Realistic………….. be honest with yourself. Can it be done?

= Time-bound…….give limitations and deadlines to whatever you are
planning. Open-ended is no good.

If you want to run your BUSINESS ‘willy-nilly’, or ‘Gun Ho’ – then expect
eventual failure. However, with some applied thought, planning and foresight,
you can develop your little, part-time home business into something which
definitely has increased chances for success.

Apply time-management techniques, stick to time-tables and deadlines. Look
out for ‘Time Thieves’…….. These are people or events which steal time from
you, time which could be more effectively used elsewhere.

Example: Someone calls and asks when you can deliver a certain item, you
reply “within two days”, they are happy with your response BUT instead of the
conversation finishing, they go on to talk about weather, sports, families
etc…

…..before you know it, a one-minute call has turned into a 30 minute
episode of everything except business. Not Good. This is time you could have
efficiently used elsewhere………they have stolen your time from you. Look out
for the ‘Time Thieves’ – they are everywhere. Spot them – deal with them.

Time Management is KEY to business planning. If your plan has a tight
schedule to work to, then your management of ever-so valuable time will be very
important. Plan your time carefully, effectively and efficiently……but do
allow for some overspill and overlap…….it happens in any business!

One KEY fundamental of business planning is the ability to be flexible and
adaptable. Never assume that once you create your plan, that you must stick to
it rigidly, but flexible when necessary, but not to the detriment of the your
success. Remember, overspill and overlap work both sides of the same coin.

PLAN. Plan carefully, plan honestly, plan realistically. But you must
plan.

Final thought. Think long and hard about the ‘company / business objective’
and the ‘Customer Mission Statement’.

Put together a short (two – three sentences) paragraph for each, which
clearly defines….. A). What your business is all about. B). What your
customers can expect from your business.

Chose the words carefully, put into 2-3 sentences everything that
encapsulates both statements totally and work to these statements closely.

Plan for success, because without planning, you will fail.

Gary Durkin is the owner / CEO of
www.DoubleEdgeMarketing.com
www.247-Profit.com
www.eProfitGroup.com
www.InternetAdviceCenter.com www.AffiliateMastermindProtege.com …and the creator of
the Serling Combination® package.

Gary has enjoyed more than a decade of international business success, and
has been doing business online for 5 years.

Offline, Gary controls millions of dollars worth of global investments each
day… online he applies to skills he has developed over the years by working
with some of the World’s leading internet marketers and specialists.

Filed Under: Business Plan Tagged With: business plan, business startup, how to write a business plan, small business management