on any of the topics in the Table of Contents listed below to go directly
to that discussion.
A well-thought-out business plan is a valuable tool for a new company or one seeking financing. It can also provide milestones to gauge your success. Indeed, the very process of developing a business plan will help you think through some important issues that you may not have considered yet.
Before getting down to the actual preparation of your business plan, take the time up front to explore and evaluate your business (and personal) goals. Then use this information to build a comprehensive and effective business plan that will help you reach these goals.
This Financial Guide provides a basic introduction to preparing a business plan intended to help focus your thinking about your business. It does not attempt to get into the details that should be incorporated into the plan, since those depend on your specific goals and the nature of the specific business. Professional guidance should be sought for the actual preparation of the plan, particularly for the financial components.
If the reason for preparing the business plan is that you are starting a new business, you should first examine your reasons for wanting to go into business. Some of the most common reasons for starting a business are:
Next, you need to determine, what business is "right for you." Ask yourself these questions:
Then, you should identify the niche your business will fill. Conduct the necessary research to answer these questions:
You will also need to consider several options for getting your business off the ground:
The final step before developing your plan is the pre-business checklist. You should answer these questions:
Based upon your initial answers to the questions listed above, you should formulate a business plan. A business plan formalizes the analysis of a prospective business by forcing you to put your ideas and the answers to the above questions in writing. A business plan sets forth the mission or purpose of the business venture, describes the product or services to be provided, which presents an analysis of the market state, the goals that the business has, and how it intends to achieve those goals and last, but not least, has a formal financial plan.
The business plan is necessary to obtain external capital for your business, but it serves a number of other purposes. It forces you to critically evaluate the feasibility of your business and whether it will provide a return which is appropriate to the time and money you will invest in the business. The plan provides a benchmark against which you can evaluate the success of your business in later years.
Whether you are starting a new business, seeking financing for an existing business, attempting to analyze a new market, or wanting to define and evaluate future growth, the following outline of a typical business plan can serve as a guide. However, you should adapt it to your specific business.
In the introductory section of your business plan, you should:
Products/Services and Markets
In this section, you must describe your products and/or services and:
In this section, you should:
In this section it is important to:
In the ending statement, you summarize your business goals, 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 associate. 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 should change as your business grows.
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