| Why write a business plan? There are several | | | | Business Administration: |
| reasons why you might want to write a business | | | | Elements of a Business Plan |
| plan. | | | | 1. Cover sheet |
| 1. It is a tool for obtaining financing. | | | | 2. Statement of purpose |
| 2. It will help unite venture partners in a common goal. | | | | 3. Table of contents |
| 3. It can serve as a feasibility study. | | | | I. The Business |
| 4. It will serve as a goal and blueprint for your new | | | | A. Description of business |
| business. | | | | B. Marketing |
| Of all of the purposes listed, the last one is the most | | | | C. Competition |
| important. According to the Small Business | | | | D. Operating procedures |
| Administration, 95% of all businesses started, fail | | | | E. Personnel |
| within the first 5 years. One of the main reasons for | | | | F. Business insurance |
| failure is a lack of direction or goals. A business plan | | | | II. Financial Data |
| will give you that direction or goal, if it is used | | | | A. Loan applications |
| properly. | | | | B. Capital equipment and supply list |
| The Foundation For Writing A Business Plan | | | | C. Balance sheet |
| There are several things you need to consider | | | | D. Breakeven analysis |
| before beginning to write: | | | | E. Pro-forma income projections (profit & loss |
| 1. Consider whom you are writing the plan for. | | | | statements) Three-year summary Detail by month, |
| 2. Have a firm idea of what product or service you | | | | first year Detail by quarters, second and third years |
| are offering. | | | | Assumptions upon which projections were based |
| 3. Do market research to determine the demand for | | | | F. Pro-forma cash flow |
| your product or service. Learn who your potential | | | | III. Supporting Documents |
| customers are. | | | | Tax returns of principals for last three years |
| 4. Decide how you are going to sell your product or | | | | Personal financial statement (all banks have these |
| service to your potential customers. It does not | | | | forms) |
| matter how good your product is unless you are able | | | | For franchised businesses, a copy of franchise |
| to sell it for a profit. | | | | contract and all supporting documents provided by |
| 5. Determine where you are going to get the money | | | | the franchiser |
| necessary to start your business. You must have | | | | Copy of proposed lease or purchase agreement for |
| enough financial reserves to pay the expenses until | | | | building space |
| you pass the breakeven point and start making a | | | | Copy of licenses and other legal documents |
| profit. | | | | Copy of resumes of all principals |
| Writing Your Business Plan | | | | Copies of letters of intent from suppliers, etc. |
| After you have finished your research and | | | | Summary |
| background preparation, it is time to list the reasons | | | | The suggested research is the basis for writing your |
| why your business will succeed. You are essentially | | | | business plan. The business plan you are writing will |
| writing a report to yourself. Your report must | | | | be the blueprint for your new business. Consider |
| address all the areas that are obstacles to business | | | | what a house would be like if the builder did not use |
| success. Your business plan must be able to convince | | | | a blueprint. You want your business to be well built |
| a reasonable person that you can succeed. It is also | | | | like the house you live in. Just as a carefully planned |
| your goals for success. Without a goal, your aim is | | | | house will last many years into the future, you want |
| haphazard and prone to failure. | | | | no less for your business. If you do not take the |
| Business Plan Outline | | | | time necessary to develop your business plan, then |
| The following is an outline suggested by the US Small | | | | you still have a plan. It is a plan for failure. |