DEVELOPING A BUSINESS PLAN

WHAT IS A BUSINESS PLAN? A written description of the business idea and how it will be carried out Includes all major business activities A business plan should always be created whether you need financial help or not May prevent potential problems Forced owner to think about important activities, cost, and amount of time they will take

STEPS IN DEVELOPING THE BUSINESS PLAN Owner is in charge and must be familiar with all information in the plan Helps persuade lenders and investors to finance the venture Can get help writing the plan from the Small Business Administration Gather and review information – look at other business plans for reference Develop strategic alternatives and select the best alternatives Write each section of the plan

ELEMENTS OF THE BUSINESS PLAN Following are the sections of a sample business plan. Some plans include different sections.

SUMMARY (OR EXECUTIVE SUMMARY) Overview of the business Generally summarize the business

DESCRIPTION OF THE BUSINESS The business idea Major products and services Ownership structure Strengths/weaknesses Long- and short-term goals

CUSTOMER ANALYSIS Description of customers Location, number, and resources of customers Sales forecasts

OPERATIONS PLAN Organization of the company Description of major operations Analysis of resources needed Human resource plans

MARKETING PLAN Description of major marketing activities Description of marketing activities Schedule of marketing activities

FINANCIAL PLAN Start-up costs Short- and long-term financial needs The amount needed to open the business Building, equipment, inventory, supplies, licenses, etc. Short- and long-term financial needs Money needed to pay for current operating activities Short-term financing obtained for less than one year Long-term financing is needed for main resources of the business that will last many years Usually large amounts of money and usually paid over many years (financed at bank) Sources of financing Budgets and financial statements