| This document is provided solely for educational and informational purposes and does not constitute legal advice. |
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| Writing a Business Plan |
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| The elements of a
business plan include: 1. Introduction 2. Marketing 3. Finance 4. Management 5. Operations The Introduction to your business plan should: > Give a detailed description of the business. > Explain the type of business. > Discuss the ownership of the business and its legal structure. > List the skills and experience you bring to the business. > Discuss the products and services offered. > Discuss the advantages over your competitors. The Marketing section of your business plan should: > Identify the demand for your product or service. > Identify your customers and their locations. > Explain how your product or service will be advertised. > Explain how your product or service will be delivered. > Explain your pricing strategy. The Finance section of your business plan will: > Explain your source and amount of initial equity capital. > Develop a monthly operating budget for the first year. > Provide three years of projected quarterly balance sheets and profit/loss statements. > Provide monthly cash flow statements for a two-year period that tie to the yearly profit/loss statements. > Discuss your breakeven point. > Explain your personal balance sheet and how you will compensate yourself. > Discuss how and who will maintain your accounting records. > Provide ''what if'' statements to address any negative situations that may develop. The Management section of your business plan will: > Identify the owner/owners and key employees. > Discuss the skills and experience they bring to the business. The Operations section of your business plan will: > Explain how the business will be managed on a day-to-day basis. > Discuss how you will hire your employees and personnel procedures. > Discuss insurance, lease, or rent agreements and any other issues pertinent to your business. Once you have completed writing the business plan, review it with a SCORE counselor, a Small Business Development Center (SBDC) representative, or a business associate that you trust. When you feel comfortable with the content and structure, make an appointment to review and discuss it with your banker. The business plan is a flexible document that will change as your business grows. See a Sample Business Plan Outline |
| An important step in
starting your own business is to develop a business plan. The plan will
help you define what your business is all about, how you are going to
market your product, and how your business will
operate. |
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