How to Draw Up a Business Plan

A professional-looking binder works well for distributing a business plan.

Planning for the opening and operating of a business requires a thorough and realistic foundation. That's really the basis for preparing a formal business plan. Ideas that sound good in your head don't always look good on paper.

Things You'll Need

• Research materials

Instructions

1. Brainstorm about how the business will be operated, whether you will have sufficient financial resources to operate the business and potential pitfalls.

2. Research related businesses in your field. You should use existing industry projections of financial requirements and financial ratios.

3. Print a title page on fine stationery that is visually appealing and easy to read. Put together a file folder (preferably black) that contains a place to put your business card and pockets for your cover letter on the left and the plan on the right. You also can include a few promotional materials when submitting your business plan to others.

4. The basic elements of a business plan are a mission statement, an executive summary, a company description, a marketing and promotion plan, industry analysis, exit strategy, marketing strategy, SWOT analysis (strengths, weaknesses, opportunities and threats), competition, summary of operations, management profiles, financial plan, financial projections and possibly the resumes of each member of the company's management team. Exhibits should be placed at the end, along with your financial statements.

5. Projections of financial status should, at a minimum, include a balance sheet, income statement and profit and loss statement. Use realistic, conservative projections in providing financial data.

Tips & Warnings

• Online resources sell or offer free formatted business plans to suit specific industries. You also can purchase business plan software, which usually includes numerous sample business plans.

• You'll need several copies of your business plan to submit to lenders, potential investors and possibly to other businesses and vendors.

• Many unsuccessful businesses fail because of undercapitalization. Make sure you have thoroughly estimated expenses and have sufficient financial resources to maintain your business for at least one full year.

Resources

• Read this Article in Spanish
• Office.Microsoft.com: Business Plan Template for Startup Business
• SBA.gov: Write a Business Plan
• SCORE.org: Business Plan