Basics of Writing a Business Plan

June 27th, 2008 admin

Writing a business plan is an essential part of creating a successful business. A business plan should always be a work-in-progress as not only will a business plan play an important role in the solicitation of investors, a well written business plan can assist a business stay on track with pre-defined objectives.

What exactly goes into writing a business plan? The SBA advises that the body can be divided into four distinct sections :

1) Description of the business
2) Marketing
3) Finances
4) Management

Agenda should include an executive summary, supporting documents, and financial projections. Although there is no single formula for developing a business plan, some elements are common to all business plans. They are summarized in the following outline:

Standard Elements of a Business Plan

  • The Cover sheet
  • The Statement of purpose
  • Table of contents

    1. The Business
      1. Description of business
      2. Marketing
      3. Competition
      4. Operating procedures
      5. Personnel
      6. Business insurance

    2. Financial Data
      1. Loan applications
      2. Capital equipment and supply list
      3. Balance sheet
      4. Breakeven analysis
      5. Pro-forma income projections (profit & loss statements)
      6. Three-year summary
      7. Detail by month, first year
      8. Detail by quarters, second and third years
      9. Assumptions upon which projections were based
      10. Pro-forma cash flow

    3. Supporting Documents
      1. Tax returns of principals for last three years
      2. For franchised businesses, a copy of franchise contract
      3. Copy of proposed lease or purchase agreement for building space
      4. Copy of licenses and other legal documents
      5. Copy of resumes of all principals
      6. Copies of letters of intent from suppliers, etc.

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For more information, visit the Small Business Association (SBA) Small Business Planner. You will find a wealth of resources regardless of your businesses size or industry.

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