How to Draw Up a Business Plan

Video Transcript

"Today's topic is how to prepare a business plan. There are four distinct areas to a business plan. Those are the description of your business, your marketing plan, your financials, and your capabilities of management. Under each of those areas, we're going to expand. Just off the cuff real quickly, the SBA.gov is a great Internet site -- tons of resources there to help you through. Also, your local small business development center is...can be incredible in helping you. Just when you think you might have your business plan where you want it, they will help identify areas that you can improve it for your end user, whether it be a bank or some other government institution that you need to submit it to. So for your business plan, when you submit, it ought to have...just like a job application, you need to have a cover sheet, state your purpose, and have a table of contents. Even though you're required to have a ton of things in this plan, you will want a table of contents in case your end user wants to jump to the areas they're most interested in. Your details under your description of your business needs to include what you do, how you do it. Under marketing, you want to include who your competition is, who you're serving, how you're serving them, and why you have the competitive edge. Getting down to your financials, you want to put in anything related to your ability to do business -- your historical data, your historical financials for three years, tax returns for three years -- you can include personal and business -- your loan applications themselves, your capital and equipment list. You want your balance sheets and income statements, your pro formas for what you're looking forward to doing for the next...for the first year, month-by-month detail. For the two years, two and three, you'll want to use quarterly summaries. And thereafter, you can just do it by year. And importantly, also, you want to include any assumptions you've made in getting to the figures that you've come up with. And finally, in the appendix or attachment section, you'll want to include any other pertinent information such as resumes, insurance forms. There's all kinds of other axillary things -- licenses, proposals, business contracts, and references."