2 Why Is It Important?A business plan is a written document that describes all the steps necessary for opening and operating a successful businessDescribe what your business will produce, how you will produce it, and who will buy itExplain who will run your business and who will supply itState how your business will win over customers from competitors and how you will keep themProvide detailed financial info that shows how your business will earn a profit successfully
3 What Will You ProduceTo convince investors that your business idea is solid, you will need a completely new product or service or one that is better or less expensive than ones that already exist.You will need to identify your target customer and show how you will obtain new customers and keep them.
4 Objectives or GoalsA business plan helps you set goals and how you plan on achieving them.GoalsShort Term: the first yearMedium Term: years 2-5Long Term: 5 years and beyondDescribes products and services to be introduced in the next five yearsPossible expansions to the business
5 ExperienceA business plan describes the background and experience of the people running the businessThis aids in the bank/investors decision based on how well they think a company can meet objectives
7 Introduction A detailed description of the business and goals The ownership of the business and legal structurePartnership, Proprietorship, CorporationThe skills and experience you bring to businessThe advantages you and your business have over competitorsPerformance, Quality, Reliability, Distribution, Price, Promotion, Public Image
8 Marketing Describe your product Identify the market Good or ServiceIdentify the marketTo whom and where will you be selling your product.What is the industry?External factors such as competition and lack of suppliersGrowth potential of industryEconomic trends of industryTechnology trends tWhere will you be located?Location, Location, LocationCan be critical to your success so therefore it is critical to investors and lenders.
9 Financial ManagementThis forces you to look at potential risks and costs and expenses of your businessIdentification of RisksInvestors will want to know potential risks and how you will face them. Do not be afraid to list potential problems. Every business faces risks.Ex: Competitors cutting prices, costs exceeding projections, demand decliningFinancial StatementsAll business plans must include projected financial statementsPro forma financial statement: a financial statement based on projected revenues and expensesFunding Request and Return on Investment (ROI)How much you need to borrow and how you plan to use the $
10 OperationsIn this section one should explain how the business will be managed on a day-to-day basis and discuss hiring and personnel procedures.Describe the equipment that will be necessary for productionHow products will be delivered should also be mentioned
11 Concluding StatementSummarize the goals and objectives you have for your businessEmphasize your commitment to the success of the business
12 Completing the Business Plan A business plan should include a cover letter: a letter that introduces and explains an accompanying document or set of documentsIt should also include a Statement of Purpose: a brief explanation of why you are asking for a loan and what you plan to do w/ the money.No more than two paragraphsAn executive summary: is a short restatement of the report. It should capture the interest and make them want to read more.
13 Executive Summary Your summary should include A description of your business concept and communication about what is unique about your ideaProjections for sales, costs, and profitsYour needs (inventory, land, building, equipment)Amount you are intending to borrow