Developing a Business Plan

Workshop Goals In this workshop, you will... Identify the importance of developing a strong business plan. Explore the ways to use a business plan. Review the key parts of a business plan.

What Is a Business Plan? A document that outlines your company’s financial, operational, and marketing goals.

Audiences for Your Business Plan Who should/will see your business plan? What will different audiences do with your business plan? How will lenders and investors use your business plan?

How Lenders and Investors Use Business Plans Borrowing from a lender with a promise to repay the loan with interest is called “debt financing.” Getting financing from an investor is called “equity investing.” Lenders do not typically get any equity or ownership in the company. Lenders are most interested in ensuring that the business plan is sound and that a borrower can repay the loan. Investors get a stake of ownership in the company. They may have a say in how the business is run. Investors typically are interested in scalability, growth potential or acquisition, strength of leadership, and profit.

Key Parts of a Business Plan Executive Summary Company Description Management and Organization Market Research Product or Service Line Marketing and Sales Financial Projections

Executive Summary Your company and its employees Products or services that you sell Your audience and ideal customer Your business’s future Your industry’s future The executive summary is a basic introduction to your company. It should describe the following:

Company Description Key employees Your mission statement Product or service provided Why your business is useful to customers The company description is a high-level description of your company and business model. It should describe the following:

Management and Organization Ownership information Organizational and legal structure The board of directors or advisors The management and organization section should clarify for investors how your company is organized. It should include the following:

Market Research A market and industry description Your target audience A competitive analysis Legal requirements, restrictions, and compliance Market research involves conducting research and coming to conclusions about your competitors, your primary target audience, and the market and industry’s potential for growth. The market research section should include the following:

Product or Service Line A detailed product or service description Product benefits Unique advantages Intellectual property or copyrights Product development stage Your product or service line describes what your company will offer customers. The product or service line section should include the following:

Marketing and Sales Growth strategy Communications strategy Sales strategy Marketing is the process by which companies communicate with customer bases to promote their products or services. A sale is a directed activity by which companies sell their product to those bases. The Marketing and Sales section should include:

Financial Projections A current and projected balance sheet A current profit and loss statement, as well as a projection Current and projected cash flow A break-even projection Historical financial data Financial projections are just what they sound like: a projection, or a reasonable guess, at how much your business might make based on the market and on previous sales. This section should include the following:

Resources SCORE SBDC (Small Business Development Center) Veterans Business Outreach Center Women-Owned Businesses

Remember... Summary A strong business plan is a written document that outlines the financial, operational, and marketing goals for your company. Business plans are used by lenders and investors to assess your company’s value. Each part of a business plan helps to tell your business’s story. Take advantage of local resources and others to help you develop your own business plan.