The Business Plan - An Outline

The Business Plan is the DNA of a business. Studies show that businesses with a plan business_plan_yours_200.jpghave a much better chance of surviving and growing when they have a plan. It is not a guarantee of business success, but it has been repeatedly shown that if you fail to plan, you plan to fail. A business plan is more than a map for starting, it s a tool for management.

 The following is a generic outline for a business plan. For a more detailed look at how to create a plan contact one of our MicroEnterprise Consultants who can help you create a plan at no cost to you.

The Front Pages
      1.Cover Sheet: Name, address, telephone, email, names of principals, date of plan
      2.Summary: Products/services provided, financial needs, loan information
      3.Table of contents

I. The Business
   A. Description of the business
      1. Describe business: Legal form, new or existing business, hours, other info about business, owners/officers names & addresses, percent owned
      2. Product or service offered: Description, benefit to customers, how product or service is different and/or beneficial
      3. Location of business and why, describe facilities,  own or lease, improvements needed

   B. Marketing

      1. Target market: Age, gender, income and education of customers, other demographics
      2. Size of market: Number of potential customers, growing or declining market, your
    expected market share
      3. Marketing strategy: How you will locate, attract and keep customers. Advertising, website, other promotions
      4. Pricing strategy: Cost of goods, margins, competition

   C. Competition
      1. Describe all competitors within your business area, what you know about them and their products or services
      2. Describe the strengths and weaknesses of your competition
      3. Describe how your product or service is different or better
      4. Competitor pricing strategies

   D. Operating Procedures
      1. Identify equipment needed and cost
      2. Identify the inventory and material needs
      3. Store/plant hours, or travel time for off-site services
      4. Miscellaneous other procedures and costs

   E. Personnel
      1. Your background and experience.
      2. How you will compensate for any weakness or lack of experience
      3. Members of management team, their strengths and weaknesses, duties of each
      4. Immediate and future personnel needs to run business, hiring timeframe, employee benefits, union involvement

   F. Business Insurance


   G. Cost Data
      1. Start-up costs: Legal, accounting, leases, permits, equipment, supplies, advertising, salaries, utilities, furniture, starting inventory, remodeling, rent, owner’s salaries, etc.

II. Financial Data

A. Loan Applications: Amount to be borrowed, use of funds

B. Capital equipment and supply list: machinery, equipment, furniture, etc. to be purchased, and cost   

   C. Balance Sheet: projected opening day, and at the end of year 1, 2, 3
      1. Assets: Anything of value owned or due to the business
      2. Current Assets: Items convertible into cash within 12 mos
      3. Fixed assets: Assets not for resale -land, buildings, lease, equipment, furniture, vehicles, etc
      4. Current liabilities: Debts payable within 12 months
      5. Long-term: Debts due beyond 12 months
      6. Net worth: Owner’s equity

   D. Breakeven analysis

   E. Income and expense projections (profit and loss statements)
      1. Three-year summary
      2. Detail by month, Year 1
      3. Detail by quarters, Year 2 & 3
      4. Assumptions on which projections were based

F. Pro Forma cash flow
      1. Beginning cash plus receipts, minus cash paid out, equals ending cash
      2. Detail by month, Year 1
      3. Detail by quarter, Year 2 & 3

III. Supporting Documents

    Tax returns of principals for last three years
    Personal financial statement (all banks have these forms)
    In the case of a franchised business, a copy of franchise contract, all documents provided by the franchiser
    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.