There are thousands of good ideas. It's mostly the ideas backed by a solid plan that become successful businesses.
One of the most important aspects to consider when starting up or expanding a business is making sure you have an appropriate business plan that provides a detailed analysis of such areas as your company’s description and goals, marketing plan, operations plan, financial statements and exit strategies (if any).
A good business plan is a necessity when looking for financing from investors and banks.
Comprised below is a basic outline of a business plan. This is taken from our partner business counseling organization, SCORE, which offers resources to assist companies in start-up and expansion stage.
Example Business Plan Layout
Section 1: Executive Summary
Write this section last. We suggest that you make it two pages or fewer. Include everything that you would cover in a five-minute interview. Explain the fundamentals of the proposed business: What will your product be? Who will your customers be? Who are the owners? What do you think the future holds for your business and your industry?
Make it enthusiastic, professional, complete, and concise. If applying for a loan, state clearly how much you want, precisely how you are going to use it, and how the money will make your business more profitable, thereby ensuring repayment.
Section 2: General Company Description
Briefly describe your business and your core competencies. Include your mission/vision statements. Describe in general what services you would provide to your customers. What are your company’s goals? Describe your industry. Is it a growth industry? Legal form of ownership: Sole proprietor, Partnership, Corporation, Limited liability corporation (LLC)? Why have you selected this form?
Section 3: Products & Services
Describe in depth your products or services (technical specifications, drawings, photos, sales brochures, and other bulky items belong in Appendices). What factors will give you competitive advantages or disadvantages? Examples include level of quality or unique or proprietary features. What are the pricing, fee, or leasing structures of your products or services?
Section 4: Marketing Plan
No matter how good your product and your service, the venture cannot succeed without effective marketing.
You need to do market research to make sure you’re on track. There are two kinds of market research: primary and secondary. Secondary research means using published information such as industry profiles, trade journals, newspapers, magazines, census data, and demographic profiles. Start with your local library. Primary research means gathering your own data. For example, you could do your own traffic count at a proposed location, use the yellow pages to identify competitors, and do surveys or focus-group interviews to learn about consumer preferences.
Also include facts about:
-customers (demographics, etc.)
Section 5: Operations Plan
Explain the daily operation of the business, its location, equipment, people, processes, and surrounding environment.
- How and where are your products or services produced?
- What qualities do you need in a location? Describe the type of location you’ll have.
Cost: Estimate your occupation expenses, including rent, but also including maintenance, utilities, insurance, and initial remodeling costs to make the space suit your needs. These numbers will become part of your financial plan. What will be your business hours?
-Personnel, inventory, suppliers, credit policies, A/R and A/P management, etc.
Section 6: Operations & Management Plan
Who will manage the business on a day-to-day basis? What experience does that person bring to the business? What special or distinctive competencies? Is there a plan for continuation of the business if this person is lost or incapacitated?
-Board of Directors, attorney, accountant, insurance agent, bankers, consultants, etc.
Section 7: Personal Financial Statement Plan
Include personal financial statements for each owner and major stockholder, showing assets and liabilities held outside the business and personal net worth. Owners will often have to draw on personal assets to finance the business, and these statements will show what is available. Bankers and investors usually want this information as well.
Section 8: Start-Up Expenses Plan
This is a research project, and the more thorough your research efforts, the less chance that you will leave out important expenses or underestimate them. Talk to others who have started similar businesses to get a good idea of how much to allow for contingencies. Explain your research and how you arrived at your forecasts of expenses. Give sources, amounts, and terms of proposed loans. Also explain in detail how much will be contributed by each investor and what percent ownership each will have.
Section 9: Financial Plan
The financial plan consists of a 12-month profit and loss projection, a four-year profit and loss projection (optional), a cash-flow projection, a projected balance sheet, and a break-even calculation. Together they constitute a reasonable estimate of your company's financial future. More important, the process of thinking through the financial plan will improve your insight into the inner financial workings of your company.
Section 10: Appendices
Include anything that you can refer to that will make it easier for investors to read, especially visual brochures, industry studies, blueprints, sketches, letters of support from future customers, market research studies, etc.
For more business plan templates from SCORE, click here