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Writing Your Own Business Plan
What A Business Plan Does:
A business plan precisely defines your business, identifies your goals, and serves as your firm's resume. The basic components include a
current and pro forma balance sheet, an income statement, and a cash flow analysis. It helps you allocate resources properly, handle unforeseen
complications, and make good business decisions. Because it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan application. Additionally, it informs sales personnel, suppliers, and others about your operations and goals.
Before You Begin
Before you begin writing your business plan, consider four core questions.
* What service or product does your business provide and what needs does it fill?
* Who are the potential customers for your product or service and why will they purchase it from you?
* How will you reach your potential customers?
* Where will you get the financial resources to start your business?
Writing The Plan
What goes in a business plan? The body can be divided into four distinct sections:
1) Description of the business
2) Marketing
3) Finances
4) Management
Addenda should include an executive summary, supporting documents, and financial projections.
Although there is no single formula for developing a business plan, some elements are common to all business plans. They are summarized in the following outline:
Elements of a Business Plan
1. Cover sheet
2. Statement of purpose
3. Table of contents
I. The Business
A. Description of business
B. Marketing
C. Competition
D. Operating procedures
E. Personnel
F. Business insurance
II. Financial Data
A. Loan applications
B. Capital equipment and supply list
C. Balance sheet
D. Breakeven analysis
E. Pro-forma income projections (profit & loss statements)
Three-year summary
Detail by month, first year
Detail by quarters, second and third years
Assumptions upon which projections were based
F. Pro-forma cash flow
III. Supporting Documents
Tax returns of principals for last three years Personal financial
statement (all banks have these forms)
For franchised businesses, a copy of franchise contract and all
supporting documents provided by the franchisor
Copy of proposed lease or purchase agreement for building space
Copy of licenses and other legal documents
Copy of resumes of all principals
Copies of letters of intent from suppliers, etc.
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