What is a business plan? A business plan is a written document that provides guidelines for your business detailing everything from your business purpose to your marketing strategy. It provides you with a plan of action to carry out your small business venture. Business plans are not all alike, but they usually include a Cover Page, Table of Contents, Statement of Purpose, Executive Summary, History of your Business, Goals, Products or Services, Location, People in Management, Marketing Plan, Competitive Analyst and Financial Statements. Writing a business plan requires much research and work but it can prove to very helpful in planning your business.
In your business plan you set goals for your business and specify how you believe you will attain those goals. Starting a small business is full of risks so there is a chance your small business journey doesn’t turn out the way you planned. There is no guarantee that your business plan will turn out to be true for the future of your small business. However develop your business plan to the best of your abilities and if it needs tweaking in the future go ahead and tweak.
Being prepared is essential when taking on a big project such as starting a small business. A business plan helps you get on paper a solid plan to carry out your small business project by providing guidelines for you to follow. It also supplies lenders and investors with critical information about your business to help them decide if they want to invest in your business.
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Do you need help with business plan? Developing a business plan can be a difficult task for many entrepreneurs. You will have to dedicate much time and effort to researching and developing your business plan. It is a time consuming and often times stressful task but proper planning can make the difference between business success and failure. If you feel overwhelmed with the process of developing a business plan there is help you can seek.
Where can you find help for developing your business plan?
Small Business Development Centers– Counselors from Small Business Development Centers can provide you with one-on-one assistance in developing a business plan.
Service Corps of Retired Executives (SCOREs)– SCOREs is made up of professionals who volunteer their time to help entrepreneurs with their business ventures. They are experienced and knowledgeable in the field of business. They can help you as you prepare your business plan. You can meet with a SCORE volunteer in person at a SCOREs center near you or you can work with one online.
Professional Business Consultants– Professional Business Consultants offer their expert advice at a cost. Some offer a free first time business consultation. A directory of professional business consultants can be attained at your local library.
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Why make a Business Plan for your Small Business?
Why do you need a business plan for your small business? A common mistake made by Entrepreneurs is not being prepared. They like to dive into the pool without testing out the water but what if the pool is freezing cold? Then you would regret diving in wouldn’t you? Having a business plan will not only prepare you in planning your small business, but will also serve the following purposes:
- Investors, loan officers and venture capitalists will need to look at your business plan to determine if they want to invest in your small business or offer you a small business loan.
- It will force you to set down some clear goals and marketing strategies for your small business
- Writing down the details can help you visualize all the aspects of your small business.
- It can be a tool in the future to measure if your small business performs higher or lower than expected.
Keep in mind that not all business plans are the same. Below is a basic business plan outline. Don’t rush through your business plan. It is not something that can be written on your lunch break. It requires research and thinking. If you feel that you need assistance forming a business plan for your small business read Help with Business Plan.
A Business Plan should include the following:
Cover Page– Indicate the name of your company, date, owner’s name, address and phone number.
Table of contents– this will inform the reader where items are located in your business plan.
Statement of Purpose– 1-2 paragraphs about the small business you plan to start and how much money you need to start it.
Executive Summary– A short summary of the business plan.
- Historical account of your business or business idea– What inspired your business idea. Did you notice a need in your community that was not being met?
- Goals and Objectives – Outline your short term (1 year) and long term (5 years) goals. Where do you see your business in the future? Don’t make unrealistic assumptions; for example don’t say you’ll be making millions in less than 3 months.
- Your products or services– Describe the products or services your business plans to sell. What is unique about your product or service?
- Location -location is a big factor in determining the success of a small business, so make sure to include your desired location. Include demographics and statistics. For example if you were starting a daycare you could look up statistics of how many kids between the ages of 1-11 are living in your area.
- Management/ ownership– The people in management positions are a critical factor to the success of your business. State your qualifications and experience in this field as well as those of your staff. Demonstrate that you have qualified, well knowledged and experienced people holding leadership positions in your business.
- Marketing Plan– Identify your prospective customers and how you plan to market your product or service. Is there a need for your product/ service that is not being met? Include trends in the market; also forcast the growth of trends in the future. Use graphs to organize this information.
- Competitive Analysis -Is there a lot of competition out there? What do you have that they don’t? Can you offer better quality or better prices? Why should potential customers choose you over the competition?
- Current and projected financial statements–
- Financial Statements– Plan out how much you expect to make in the future.
- Identify risks– Be honest. Lenders will appreciate your honesty and see your information as credible. Lenders know that every business faces risks. List all the potential problems your small business might face and how you plan to deal with those problems.
- Investments needed– Indicate to the lender how much money you need to start your business. Describe your plan on how you are going to use that money. Also state when you plan to pay back the lender and how much interest they should expect to earn from their investment.
- Appendix– In the appendix you can include any supporting information such as resumes (to show experience in the desired field), letters of recommendation and legal documents.
TIP: The content in your business plan is important but also is the presentation of it. Make sure to present your business plan in a neat, appealing, simple fashion. It should be typed, not hand written (even if you have very nice handwriting).