The first thing anyone learns in an introductory business class is the importance of the business plan. A plan lists every preconceived element of a new business and is generally used to secure financing. Writing, editing, and even re-editing a plan correctly takes a lot of time. Starting a business is a big step and should not be ventured into lightly or unprepared. Follow these simple steps for creating a concise, accurate plan that will secure the necessary funding for starting your own business.
The first page is quite obviously the cover sheet with the basic information, such as business name and contact information. The second page, titled the “Executive Summary,” is the most important page of the entire plan. The Executive Summary should be no longer than one page, since many potential investors will not read past the first page. Make sure to summarize the business plan by highlighting only the major points and try to generate some excitement for the business.
The next two to three pages will be the “Situation Analysis.” On these pages, it is important to mention the objectives of the business and discuss personal attributes that will showcase how you will be able to make this work. Also, discuss where you see the business going in the future. Include how performance will be measured — whether based on monetary gain, number of people served or number of products delivered. This section should also outline the target market of the business. Plan your work.
The next couple of pages will deal with the “SWOT Analysis.” SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The strengths and weaknesses of the company are considered to be internal factors. This would include the ability of employees, equipment, and knowledge. Outline potential weaknesses honestly. Opportunities and threats are potentially uncontrollable external forces that may affect your business.
The “Business Resources” of the plan will encompass no more than one to two pages. This section outlines the necessary resources to get the business up and running. This will include human resources, financial resources, physical resources (building, equipment), and the necessary experience of all involved. Also include the ways in which these needs will be met to achieve the objectives of the business.
The “Business Strategy” will be the longest section of the plan. This section should be roughly three pages and should specifically spell out the objectives and strategy to reach the concrete objectives of the business: the number of products sold, people served, monetary gain, or any combination of the three. The strategies should include specific tactics to combat potential problems.
The “Financial Analysis” will be the most difficult portion of the plan because a lot of speculation is involved. This will include: projected income, expenses, cash flow and budget. This should be done for a minimum of three years. The annual budgets should read as financial statements and should be followed up with a written summary.
Finally, the “Controls and Evaluation” section will complete the plan. This will outline the quality control of the business — specific performance and production standards, including how they will be met and monitored. There should also be a plan in place for correcting ineffective quality control.
Once all of these sections are complete, it is necessary to put them together in a folder to create a professional presentation. Follow each of these guidelines and include every section above for a complete business plan to start your new business.
Work your plan.