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J. Roy Miller, State Director, NMSBDC<\/p><\/div>\n
Imagine you are starting a trip.\u00a0Where are you going?\u00a0How will you get there?\u00a0A plan helps you chart the best course, ensures that you follow your route, alerts you to important landmarks and reminds you of your schedule and budget.<\/p>\n
You wouldn\u2019t embark on a trip without a plan so why would you start a business without one?\u00a0Studies have shown that the failure rate of start-ups without business plans is three times higher than that of businesses whose owners prepared a plan.<\/p>\n
A business plan provides you with the analysis needed to decide whether it is in your financial interest to go into the business.\u00a0If you decide to continue exploring the idea, this analysis is critical to obtaining the main thing that fuels the business world: capital.\u00a0A plan helps the prospective investor \u2013 be it your banker or brother-in-law \u2013 determine the merits of the \u201cdeal.\u201d<\/p>\n
Plans can be as short as one page or as long as one hundred; most are between twenty-five and fifty pages in length.\u00a0Whatever length and style is suitable for you, your plan should, at a minimum, contain the following information:
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Executive Summary \u2013 A well-written summary should be precise and persuasive enough to entice powerful people to read on.\u00a0More importantly, however, it forces you \u2013 the entrepreneur \u2013 to condense the entire plan into a compact, coherent statement with which you can articulate your intentions and requirements.\u00a0Although this will be the first section in your plan, it should be the last section that you write.\u00a0Without having thought through all of the subsequent sections you simply don\u2019t have enough information to write a good executive summary.<\/p>\n
Business Description and\/or History \u2013 This section provides the background information on the business.\u00a0It should fully describe the business, significant past events or anticipated milestones and the key dates or deadlines.<\/p>\n
Product or service description \u2013 Describe in full the product or service lines of your business.\u00a0State what distinguishes them from other products on the market and outline their competitive advantages.<\/p>\n
Market Analysis and Approach \u2013 It is imperative that you understand the market for your product.\u00a0Describe your industry.\u00a0Discuss any relevant trends and expected growth.\u00a0Describe how you will approach the market, whether through distributors, outside sales representatives, telemarketing or direct response.\u00a0Discuss the anticipated demand.\u00a0Is it seasonal, steady or cyclical?\u00a0Discuss the strategy you will use and outline key advertising and promotion plans<\/p>\n
Competition \u2013 Describe your major competitors and assess their strengths and weaknesses.\u00a0If you are staking out new territory or developing a separate niche, discuss how your efforts differ from those of the competition.\u00a0Carefully think this section through.\u00a0Unrealistic assessments of the competition have doomed more than a few new ventures.<\/p>\n
Operating Plan \u2013 Consider the facilities, personnel, manufacturing or business processes, contractors and suppliers, and technologies or skills required to manufacture the product or deliver the service.\u00a0If you are manufacturing a product, outline the process and describe how the assembly line will be organized.\u00a0Discuss your operating advantages and your capacity. Account for how you will obtain raw materials.\u00a0This section may become quite lengthy as you develop the key aspects of your business.<\/p>\n
Key Personnel \u2013 Key management personnel who bring special talent to the business should be listed.\u00a0Indicate their qualifications, the contribution they will make to the enterprise and the level of position they will hold.<\/p>\n
Financial Analysis \u2013 Here you will predict the financial results you anticipate over a period of five years.\u00a0At this point you will realize it is imperative that the previous sections have been put together carefully and the assumptions tested rigorously.\u00a0If you have doubts, reconsider each section.\u00a0Think through not only your costs, but also your ideas, the state of your industry, and the affect of economic change on your customers.\u00a0Your financial analysis should contain:\u00a0Profit and loss (or income) statements; balance sheets; cash budgets; and key ratios.<\/p>\n
If all of this is beginning to sound too complicated, don\u2019t worry.\u00a0Your nearest Small Business Development Center <\/span><\/strong><\/a>has someone who can help you develop financial spreadsheets and provide feedback that is constructive and non-threatening.\u00a0Samples, courses and workshops are also available.<\/p>\n As you look at plans, listen to ideas, and find resources, don\u2019t lose sight of what sparked your initial interest in the business: your vision.\u00a0Where others see risk, you see \u2013 and can now realize \u2013 opportunity.<\/p>\n <\/a>Download 11_The Business Plan_Your Guide to Business Success PDF<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" The benefits of using a business plan to guide your business are discussed, and resources to help you write one are mentioned. Continue reading