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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.
The following outline of a typical business plan can serve as a guide. You can adapt it to your specific business. Breaking down the
plan into several components helps make drafting it a more manageable task.
Introduction
- Give a detailed description of the business and its
goals.
- Discuss the ownership of the business and the legal
structure.
- List the skills and experience you bring to the
business.
- Discuss the advantages you and your business have
over your competitors.
Marketing
- Discuss the products/services offered.
- Identify the customer demand for your
product/service.
- Identify your market, its size and locations.
- Explain how your product/service will be advertised
and marketed.
- Explain the pricing strategy.
Financial Management
- Explain your source and the amount of initial equity
capital.
- Develop a monthly operating budget for the first
year.
- Develop an expected return on investment and monthly
cash flow for the first year.
- Provide projected income statements and balance
sheets for a two-year period.
- Discuss your breakeven point.
- Explain your personal balance sheet and method of
compensation.
- Discuss who will maintain your accounting records
and how they will be kept.
- Provide "what if" statements that address
alternative approaches to any problem that may develop.
Operations
- Explain how the business will be managed on a
day-to-day basis.
- Discuss hiring and personnel procedures.
- Discuss insurance, lease or rent agreements, and
issues pertinent to your business.
- Account for the equipment necessary to produce your
products or services.
- Account for production and delivery of products and
services.
Concluding Statement
- Summarize your business goals and objectives and
express your commitment to the success of your business.
- Once you have completed your business plan, review
it with a friend or business.
- When you feel comfortable with the content and
structure make an appointment to review and discuss it with your lender. The
business plan is flexible document that should change as your business grows.
SOURCE: www.sba.gov
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