|
|
Business
Owner's Manual
Structuring Your Plan
A comprehensive business plan should include a Title Page
and the following 10 sections:
1. Executive Summary:
This is the first section the reader will see. It's important
to capture his or her attention or the rest of the plan may
be ignored. Logically, it's best to write this section last,
after you've thought through the remaining sections.
- Provide a brief summary of the plan and explain how it
is organized.
- Describe the business your product or service, your
purpose for borrowing, and investment opportunities.
2. Company Description:
This section tells the reader in more detail what your business
is all about its location, function, history, size,
etc.
- Describe the nature of the business. Is it manufacturing?
Retail? Service?
- How long has it been in business? What are the business's
short- and long-term goals?
- How is the business structured? (If you haven't already
made a decision or are rethinking your business structure,
see Structuring
a business.)
3. Description of Product
or Service:
This section provides a clear explanation of your product
or service and its function.
- Use photos and diagrams.
- If a patent or trademark is necessary, explain what steps
you are taking to secure one.
4. Market Analysis:
This section describes the conditions and trends within the
industry generally and the specific market and demand for your
product.
- Explain who will buy your product and why.
- Identify your major competitors, their strengths and weaknesses,
and how much of the market they control. Explain how your
business will differ from theirs. What makes yours special?
- Present information from independent sources to support
your business' profit potential. Include any marketing research
you have conducted, as well as historical, current, and projected
marketing data for the industry and market niche.
5. Marketing Strategy:
This section describes how you plan to reach your customers
and sell your product or service.
- Explain how you will package and position your product
in the marketplace.
- Describe in detail your plans for pricing, promoting,
and distributing your product or service.
6. Operating Plan:
This section offers a detailed description of how you will
make your product or provide your service and how you will
get it from your door to the customer. Include timelines, staffing
levels, and product cycles. For example:
- If a manufacturing business, explain where you will get
your raw materials and describe the manufacturing process
in detail, including the size of the factory, work force,
stages of production, work flow, and volume.
- If a retail business, give the location of your store,
the reasons you selected that site, the source and size of
your inventory, and where it will be warehoused.
7. Management Team:
This section identifies the key people in your organization
and explains how and why, based on their past experience, they
will contribute to the success of your business. If you have
an advisory team, also identify its members.
- Outline the responsibilities of each of the key positions.
- Provide resumes or biographies for each, including yourself.
- If the staff will be larger than four people, prepare
an organizational chart.
8. Funds Required and Expected
Uses:
(applies only when seeking financing)
This section explains why you need a loan and what you will
do with the money. You should ask for a specific amount.
Note: To
begin to understand how much you need, you'll have to calculate
your one-time start-up costs, your operating costs, and your
projected revenues. See the Financing
your business section of the Business Owner's Manual.
These calculations and projections will be the basis for
further planning and you should discuss them with a business
counselor or other advisor.
- Be
precise about the purposes of your request. Are you looking
for funds to purchase equipment? Working capital? Funds
for renovation or expansion?
- What
terms are you looking for? If appropriate, include the
projected potential of the business and proposed return
on investment, i.e., how much the lender will get back
as interest, or as an owner, if the business grows.
- Describe
your plan for repaying the loan and present a contingency
plan in case things do not go as planned.
- Make
sure your projections are consistent with the written information
in your narrative description. (Example: if you plan a
national advertising campaign and your promotion budget
is only $5,000, something might be wrong!)
9. Financial
Statements:
These
documents should demonstrate your understanding of basic
accounting and financial concepts and how they apply to your
business. You will need the following forms, which are described
in more detail in getting
ready for the lender and are available for printing or
downloading:
- Personal
Financial Statement for each owner of the business.
- Profit
and Loss Statement for the past three years or, for a start-up,
a projected profit and loss statement, called a "pro forma",
for three years.
- Cash
Flow Statement for three years, actual or projected.
- Balance
Sheet, actual or projected.
- A
statement of the assumptions underlying your financial
projections (explain how the figures were derived).
10. Appendices & Exhibits:
This
section should document any issues that can't be included
in the text: distribution agreements, contracts for
the purchase of your product, your operating licenses, any
agreement
by third persons to guarantee your loan, documentation of
the property you will use to secure the loan, etc.
SOURCES: Based on materials prepared by the
Small Business Development Center at Baruch College and the
Community Affairs Department of the Federal Reserve Bank of
New York
|