If you want to expand your existing business or even start a new one, you need a comprehensive business plan. A business plan serves multiple purposes. For the business owner, the plan articulates a thorough definition of the business and the market. The process of writing the plan can help the business owner flesh out necessary details. For the investor, a business plan is basically a proposal that explains the viability of a business. If you need money, you will need a business plan.
Write a description of the business. Provide the background of the business and a history of its evolution. Include the vision and mission statement. Provide a thorough description of the products and services offered. This is a critical part of your proposal because if this section fails to pull investors into the plan, nothing that follows really matters. Also include:
• Legal structure, for example, sole proprietorship, partnership, S corporation or corporation
• Date established
• Markets served
• Top level revenue projections
Describe the marketing plan. To capture investor dollars, your proposal must demonstrate that you understand the market, its potential for growth and how to position your products and services profitably. You also must write about the competition and market trends. The marketing plan should explain how your products and services go to market, i.e., branding, price, distribution and promotions. This is not the detailed description of marketing activities; rather, keep the marketing plan at a strategic level.
Describe the business operations. If you manufacture products, use flow charts and diagrams to describe the process in detail. If you provide services, describe how services are delivered. Include the hours of operation and the number and location of your offices and facilities. Identify your suppliers and partners and describe any major agreements you have with them. If you have patents or specialized industry knowledge, include it here.
Write the staffing and executive team section. Describe the organization of your internal management team. Identify the members and provide an overview of their backgrounds, education and qualifications. Include resumes or curriculum vitae. Also, outline the compensation plan and benefits for your managers. If you have a board of directors or external advisors, identify them here. Describe the ownership of the company, including major shareholders and profit sharing plans. Include a staffing plan as well, with salary structure and hourly wages.
Write the financial section. Prepare detailed (monthly) proforma income statements for two years and high level (quarterly) statements for years three through five. You will need to estimate revenues, cost of goods sold, expenses and taxes to come up with profit after tax.
Tips & Warnings
- To give your plan additional polish, write a well crafted executive summary--a two- or three-page synopsis of the contents---to attach behind the cover page. This provides busy investors an overview of the multi-page document and increases your chances of attracting the money you need.
- Photo Credit Businessman image by huaxiadragon from Fotolia.com
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