Essential Business Plan Ingredients

Sep 15, 2011 | Business

Starting or running your business without a business plan is like driving without sight. Business plans can provide you with the necessary framework to consider your business from every possible angle. Not only can they highlight areas you haven't fully thought through, they can provide a good strategy for future growth.  It can help measure where you expect to be against where you actually are, and help you take corrective action as necessary.

Your business plan should always accompany your request for a business loan. Lenders and investors want to see your plan with the aim of satisfying key questions before they make their decision to grant funding. All plans should include the following, and you should consider additional information depending on your industry: 

1

Executive Summary – a page or two of highlights

2

Company Description – legal establishment, history, start-up plans, etc.

3

Product or Service – describe what you're selling focusing on customer benefits

4

Market Analysis – know your market, customer needs, where they are & how to reach them

5

Strategy & Implementation – be specific, include management responsibilities & budget

6

Management Team – include backgrounds of key members, personnel strategy and details

7

Financial Plan – include profit and loss (historical as well as projections), cash flow, balance sheet, break-even analysis, assumptions, business ratios, etc.

Collecting information for all of this can be time-consuming and difficult. The business section of your local library can be a good place to start your research. Ask the librarian about how to look up and read market research reports and how to evaluate competitors. And don’t forget the Internet. You can Google your competitors as well as the industry.

Next, you’ll need to assemble all the information into an acceptable format for presentation.  A good business plan template will show a general layout of a standard business plan. It can help with organization and also be used as a guideline, so you're not stuck trying to figure out where to start. There are several online resources available to help you write your plan in a format preferred by financial institutions and SBA lenders, including Bplans.com and SBA.gov, or you may want to enlist the assistance of your local SBDC (Small Business Development Center).