A business plan is critical in that it communicates the important facts about your business.
Together with the development of your business plan, you should create an Executive Summary. The Executive Summary will include the critical factors from all the sections of the business plan which follow in more detail; it does not include financial statements or projections, except in brief summary form. Because this summary is based on the information which follows, it is usually easier to write this section last, simply picking up the key points from the more detailed sections.
The business plan body can usually be written in 6-10 pages, plus appendices that include financial projections and other pertinent information.
Description of Business
1. Overview of product or service offered
2. Legal structure of company
3. Brief company history
4. Names and positions of principals
In this section, you describe what you will sell, to whom you will sell it and how you will sell it.
1. Detailed description of product or service offered
2. Discussion of need(s) filled by product or service
3. Detailed description of potential customers, including information on how they make their decisions, (i.e. whether it is based purely on price, based on convenience, because of perceived prestige value, and so on). It should also identify how potential customers become aware of your type of product or service (by driving by your store? by looking in the telephone directory or seeing advertising? by word of mouth?).
4. Total market potential, based on your customer profile
5. Competitors, including an analysis of their strengths and weaknesses relative to your product or service
7. Action plan for how you will market your product or service to your potential customers, including a timeline and list of costs for promotions
This section highlights those skills which are necessary to successfully run your business, and demonstrates that those skills are present in the business itself. If outside resources are used to supplement your skills, this is also outlined.
1. Brief personal and work history of the principals (detailed resumes may appear in the supporting documents later in the plan)
2. Salaries, duties and responsibilities of key personnel
3. Outside resources to be used by the business for critical functions, including the cost of these resources
This information may or may not be combined with the section on management. It is a detailed discussion of how you will produce your goods or deliver your services, including:
1. Human resources necessary for the production of goods or delivery of services
2. Production methods and flow charts (if applicable)
3. How the goods or services are made available to potential customers (such as method of delivery)
Use of Funds
If the plan is being used to obtain financing, this section includes specific information on:
1. How the funds will be used
2. Why and how this use of funds will benefit the business
This is the only section not included in the Executive Summary, so the information here must be as specific and complete as possible, but presented in an easily readable form. Financial statements are most effective in obtaining financing when they follow certain generally accepted formats, which are available from your local Small Business Development Center or any basic accounting textbook. Financial information presented should include:
1. The amount, source and use of capital being invested in the business
2. Beginning balance sheet, projected balance sheets and income statements for two years, preferably by month.
3. Break-even analysis
4. Cash flow projections for at least one year (also called a "proforma" cash flow analysis)
If the business plan is being presented to a lender, you will need the following additional information to present with the plan (the lender may request further additional information):
5. A personal financial statement listing all personal assets and liabilities from all principals (these forms can be obtained from most lending institutions)
6. Two years of personal tax returns.
Many types of information can be included in this section. There are only two unbreakable rules -information must be relevant and it should communicate something worthwhile about your business. Topics which might be in this section include:
1. Resumes of the principals
2. Letters of intent from potential customers
3. Letters of recommendation (relevant to your product or service or the operation of your business)
5. Franchise Agreement
6. Special awards or recognition (relevant to your business itself or your business skills)