Having the Right Business Plan

When your business is starting up, you are busier than a one-armed paperhanger. You do many tasks yourself, you make-do with limited equipment and office space; you may have to short-change development or testing because of costs, and you often try to substitute effort for money - exhausting yourself and your employees. You know that your business would be more viable if you had capital to underwrite your small business start up costs and let you focus on making your vision a reality. But, getting capital from a bank, a venture capitalist, a granting institution or government organization requires that you have a sound, well-written business plan. You have to prepare a business plan that convinces skeptical lenders and investors that your start-up business can succeed.

For the majority of start-up businesses, a formal business plan is the price of admission to capital markets. A good and believable business plan is the vehicle to successfully gain funding for start-up, for expansion, and for new products. If you do not need additional capital – an unlikely scenario for a start-up business; as a leader and manager, you should want a business plan to organize your success strategy, guide your operations, measure your accomplishments against your expectations, and share your vision with employees. It is not just investors who feel more secure if they believe the organization will succeed.

Key questions to be answered by your business plan

 What does your organization expect to accomplish in the next three to seven years
 In qualitative and quantitative terms, why do you believe in the marketability of your product or service
 What are your organization’s qualifications that justify the belief that you can accomplish your objectives
 How will the money you are requesting be used to help accomplish your objectives and reach your goals
 Using a multi-year, quarterly projection, how to you see the money you receive generating a return for investors or the organization. (It is essential that your financial projections be based on real data and believable extrapolation based on market and competitor analysis and costs).

What are necessary components of an effective business plan?

 An attractive cover page with your company’s logo, location, contact information, and title
 An executive summary that includes current status, products or services, market, financial forecast, over-all objectives, how much money is required, return on investment schedule. This portion of your business plan should be no more than two pages.
 Table of contents that gives your reviewers a clear roadmap to the contents of the remainder of the document.
 Detail on the company or organization, its objectives and management team
 Projected market and your expected market share based on real data
 Analysis of your products, discriminators and competition
 Your marketing/selling strategy – how will you gain sales, customers, market share
 Financial data - income, cost of sales (material, labor, overhead), operating expenses, assets (including equipment and intellectual property), cash flow forecast, and liabilities.

The final essential step for a start up business preparing its business plan is to proof the document for grammar and typos, check for readability, and clarity. Then package your business plan in a folder or as spiral bound document for presentation.

Consider using a business plan sample when beginning to write your business plan. Having a template will get your writing up to speed much faster than starting from scratch.